Key Highlights

  • Base44 annual Recurring Revenue is close to USD 250 million, less than two years after the Business was founded, and its non-GAAP gross Margin reached 58% in the third quarter, management said.
  • Total non-GAAP gross margin was 69%, matching the prior-year quarter and up 2 points from the second quarter, while non-GAAP Operating Income was 12% of revenue.
  • Full-year free Cash Flow margin, excluding Acquisition and restructuring costs, is now expected at about 16%, down slightly from a previous target of the high teens.
  • The company ended the third quarter with about USD 1.05 billion in cash and cash equivalents against USD 1.63 billion of short-term and long-term debt, according to the CFO.

Base44 Demand Prompts a Heavier Marketing Push

Wix (NASDAQ:WIX) held its third-quarter 2026 Earnings Call on November 10, 2026. Management said Base44, its AI app-building product, has run ahead of internal models in the second half, so it is raising marketing spend to capture demand while the category is forming. Annual plans made up more than 20% of subscriptions bought by the September 2026 cohort, compared with about 5% for the September 2025 cohort. Retention of the first quarterly cohort beat expectations at the 12-month mark. The CFO said fourth-quarter sales and marketing will rise from the third quarter but stay inside return guardrails set last quarter, and an enterprise sales team for Base44 is being built.

Gross Margin Improves While Free Cash Flow Target Slips

Total non-GAAP gross margin was 69%. Base44 gross margin was 58% and is expected to be higher in the fourth quarter, implying about 60% for the second half. Management said AI costs for free users fell by more than 50% from the prior quarter as traffic shifted to its own Base 1 model, and it expects total AI costs for free and paid users to be below 30% of bookings in the second half. Non-GAAP operating income was 12% of revenue, which the CFO tied to higher sales and marketing. The 2026 free cash flow margin target of about 16% also reflects a Working Capital headwind of about USD 10 million in the fourth quarter from prepaying GPUs.

Guidance Held, Co-CEO Change and New Products

Top-line guidance was maintained. Management expects bookings to grow at a low-teens rate and revenue at a low- to mid-teens rate for 2026, with fourth-quarter revenue growth at a low double-digit rate and bookings lagging revenue. Because most Base44 subscriptions bill monthly, the CFO said ARR strength should reach bookings and revenue gradually. Separately, Nir Zohar became Co-CEO alongside Avishai Abrahami. Management also cited Symphony, a multi-agent system for small businesses with ARR in the millions, and the Wix Studio Two editor. The company said headcount was 25% below the end of 2022. The material gives no Q3 revenue or Earnings Per Share figures.

Where Things Stand

Wix (NASDAQ:WIX) is spending more because management sees Base44 demand outrunning its models and wants Market Share while the vibe coding category is young. The cost is visible in a lower free cash flow target of about 16%, a 12% non-GAAP Operating Margin and a GPU prepayment. Offsetting that, Base44 margin rose and AI costs fell. Risks include monthly billing that delays revenue, competing AI agents and the need for marketing returns to stay within guardrails. Next markers are fourth-quarter bookings, Base44 margin nearing core Wix levels next year and early Symphony monetization.