Wix.com Stock Climbs 4.8% Following Strong Earnings - What's Behind the Rally?

In the past month, Wix.com (WIX) has delivered a solid performance, climbing 4.8% and outpacing broader market benchmarks. The stock’s strength stems from the company’s impressive third-quarter results and its recalibrated full-year guidance. But what exactly triggered this upward momentum, and can it sustain?

The Earnings Surprise That Started It All

Wix delivered a major beat in its most recent earnings announcement, reporting non-GAAP EPS of $1.68 for Q3 2025—far exceeding the Zacks consensus forecast of $0.39. This represents a solid improvement from $1.50 in the year-ago period. Revenue growth remained robust at 14% year-over-year, reaching $505.2 million and surpassing the consensus estimate of $502.65 million as well as management’s own guidance range of $498-$504 million.

The standout story, however, isn’t just about topping expectations. It’s about the strategic inflection point the company has reached with Base44, its natural language application development platform, which has become a significant growth driver for the business.

Base44: The Game-Changer

Base44 emerged as the quarter’s unexpected breakout success. Market penetration expanded dramatically from low single digits in June to over 10% by quarter-end. The platform is on track to generate at least $50 million in annual recurring revenue (ARR) by the end of 2025, demonstrating accelerating customer adoption and strong product-market fit.

Management signaled confidence by ramping up marketing investments to capitalize on the momentum, while expecting the division to achieve margin profiles comparable to the core business by 2026. This signals that Base44 isn’t just a short-term growth pop—it’s shaping up as a sustainable profit center.

Breaking Down the Business Segments

Creative Subscriptions continues to be the revenue engine, representing 70.5% of total revenue. This segment grew 12% year-over-year to $356.2 million, with annualized recurring revenues climbing 11% to $1.5 billion. The stability and consistent growth in this core segment provides a solid foundation.

Business Solutions, the smaller but faster-growing division at 29.5% of revenues, posted even more impressive metrics. Revenue surged 18% to $149 million, while transaction revenues jumped 20% to $65.3 million. This segment is clearly capturing accelerating market share in Wix’s broader addressable market.

On the bookings front—a leading indicator of future revenue—total bookings reached $514.5 million, up 14% year-over-year. Creative Subscriptions bookings rose 12% to $366.4 million, while Business Solutions bookings climbed 20% to $148.2 million.

Geographic diversification is another strength. North America led with 61% of Q3 revenue (up 13% YoY), followed by Europe at 25% (up 14%), Asia at 11% (up 11%), and Latin America at 4% (up 8%). Partners revenue also showed resilience, jumping 24% to $192.1 million.

By quarter-end, Wix had amassed 299 million registered users on its platform.

The Financial Picture

From an operational standpoint, non-GAAP gross margin held steady at 69% year-over-year. Creative Subscriptions achieved a 84% gross margin, while Business Solutions maintained a 34% margin. Non-GAAP operating income improved to $89.9 million from $88.4 million in the prior-year quarter.

The balance sheet remains healthy. As of September 30, 2025, Wix held $889.6 million in cash and equivalents, up from $693 million three months prior. Operating cash flow totaled $128.7 million, while free cash flow reached $127.3 million. Notably, the company also returned $175 million to shareholders through repurchases, demonstrating confidence in the business and commitment to shareholder value.

Revised 2025 Guidance Points to Sustained Strength

The company raised its full-year outlook, signaling management’s confidence in near-term execution. Bookings guidance was increased to $2,060–2,078 million (13–14% growth) from the prior range of $2,040–2,075 million. Full-year revenue guidance was tweaked to $1,990–2,000 million (13–14% growth) from $1,975–2,000 million, with the adjustment reflecting a shift toward multi-year contracts that delay revenue recognition but improve long-term predictability.

Gross margin expectations were slightly reduced to 68–69% due to elevated AI infrastructure costs stemming from Base44’s stronger-than-expected uptake. Operating expenses are now expected to represent about 50% of full-year revenue, up from the previous 49%, as the company increases marketing investments to capitalize on demand.

Free cash flow guidance was elevated to approximately $600 million (30% of revenue) for the full year, compared to the previous estimate of $595–610 million (30–31% of revenues). For Q4 2025, management anticipates revenue between $521–531 million, representing 13–15% year-over-year growth.

What the Market Reaction Tells Us

The 4.8% stock appreciation over the past month reflects investor optimism about Wix’s trajectory. However, recent estimate revisions have trended downward in the past 30 days, with the consensus shifting -53.59%. The stock currently holds a Zacks Rank #3 (Hold) and a VGM Score of B, suggesting an in-line return outlook over the coming months.

The disconnect between the strong earnings beat and subsequent estimate downgrades suggests the market is pricing in normalizing growth after an exceptional quarter, though Base44’s trajectory could provide upside surprises ahead.