Wix.com Beats Q3 Estimates But Stock Slides After BofA Double-Downgrade and FCF Margin Cut

Wix.com reported third-quarter fiscal 2026 revenue of $570.2 million, up 13% year-over-year and ahead of the $566 million consensus estimate. Adjusted EPS came in at $1.42, topping expectations of $1.39, though that figure was down 15% from a year earlier. Total ARR grew 15% year-over-year to $2.0 billion, with Creative Subscriptions revenue rising 14% to $406.7 million and Business Solutions up 10% to $163.5 million. Non-GAAP gross margin held flat at 69%, while total bookings reached $573.0 million, up 11% year-over-year, and free cash flow was $74.5 million.

The headline strategic development was Base44, Wix's AI platform, with ARR nearing $250 million and a current non-GAAP gross margin of 58%. The company launched Studio Two, described as an advanced AI-powered open ecosystem creation platform, and announced that co-founder Nir Zohar was appointed Co-CEO effective immediately, alongside co-founder and CEO Avishai Abrahami.

For full-year FY26, Wix guided for low- to mid-teens revenue growth and low-teens bookings growth, while lowering its free cash flow margin outlook to approximately 16%, down from a prior high-teens target, citing aggressive investment in Base44. Q4 guidance calls for low-double-digit revenue growth with bookings growth lagging revenue, while Base44 non-GAAP gross margin is expected to exceed 60%.

Despite the earnings beat, the stock came under pressure after Bank of America issued a double-downgrade, cutting Wix to Underperform from Buy and slashing its price target to $68 from $75, citing revenue concerns. Jefferies moved in the opposite direction, raising its price target on AI growth momentum. Wedbush reiterated a Neutral rating with an $80 target. Unusual put option volume and rising implied volatility in WIX options were also flagged by market monitors during the session.