Wix (WIX) Q2 2025: Base 44 ARR Hits $50M, Accelerating AI-Driven Platform Shift

August 6, 2025 | By EarningsIQ Research

Wix’s Q2 revealed a decisive inflection in AI-driven creation, with proprietary Generative Engine Optimization and Base 44’s $40–$50M ARR run-rate redefining the company’s addressable market. Surging new user cohorts and deepening product adoption signal a durable step-up in platform monetization, underpinned by AI and low-code expansion. With guidance raised and free cash flow margin stability, Wix is now positioned to lead the evolving intersection of visual web creation and AI-powered application development.

Summary

  • AI Momentum Unlocks New Users: Proprietary AI onboarding and search optimization tools are expanding Wix’s reach and retention.
  • Base 44 Integration Drives Growth: Low-code platform acquisition delivers immediate ARR and opens new developer markets.
  • Cohort Strength Fuels Outlook: Record new user bookings and conversion rates underpin raised guidance and long-term growth confidence.

Performance Analysis

Wix delivered double-digit top-line growth in Q2, with total revenue up 12% year-over-year and bookings advancing 11%. This performance was anchored by robust new user cohort momentum, particularly in core markets like the US, UK, and Europe. The company’s partners revenue segment rose 24% year-over-year, reflecting increased adoption by agencies and professionals leveraging the Wix Studio suite. Transaction revenue, driven by commerce activity and payment solutions, climbed 18% as gross payment volume (GPV) grew 11% to $3.6B, with partners now making up 55% of total GPV.

AI-driven operational leverage was evident in margin expansion, as non-GAAP gross margin reached 70%, up from 69% the prior quarter, benefiting from AI automation in customer care and vendor optimizations. Operating income rose to $110M, or 22% of revenue, while free cash flow hit $148M, sustaining a 30% margin. Wix also initiated its $400M buyback, repurchasing $100M in shares, reflecting confidence in ongoing cash generation. Notably, Base 44, acquired in June, is tracking to $40–$50M ARR by year-end, already contributing to the raised full-year outlook.

  • New User Cohort Acceleration: Q2 cohort bookings grew 14% over the prior year, with July bookings up over 20% year-over-year, excluding Base 44.
  • Commerce and Payments Expansion: Wix Payments and new fintech offerings like Wix Capital and Wix Checking are driving higher merchant monetization.
  • AI Product Adoption: AI marketing agent and onboarding flows are increasing paid tool adoption and user engagement, supporting conversion and retention.

Wix’s growth is now increasingly driven by higher-intent, commerce-oriented users, with both new and existing customers opting for longer-term subscriptions and broader product adoption, reinforcing platform stickiness and monetization.

Executive Commentary

"AI momentum, combined with our early innovation, has set us on a strong trajectory, clearly reflected in the strength of our new cohorts. Recently we developed proprietary algorithms that help our users' content surface prominently in AI-generated responses with our Generative Engine Optimization offering. Wix empowers users to understand, monitor, and actively improve how their brand appears in LLM-based search engines. Wix is the first CMS to offer this kind of AI visibility natively, setting a new benchmark for AI search optimization tools within website platforms and demonstrating our first mover advantage."

Abhishek Abrahami, CEO and Co-founder

"Total bookings grew to $510 million in Q2, up 11% year-over-year. This solid performance was driven primarily by increasingly stronger new user cohorts joining the platform, as well as deeper adoption of our AI and studio offerings. Partners revenue grew 24% year-over-year to $183 million, driven by continued adoption in the professional audience segment of our platform and studio. We continue to see studio bookings grow with an increasing number of partners building multiple projects on the platform."

Lior Shemesh, CFO

Strategic Positioning

1. AI-Driven Platform Differentiation

Wix’s proprietary Generative Engine Optimization (GEO), a native AI search optimization tool, is a first-mover advantage in the CMS (content management system) market, helping users gain visibility in LLM (large language model)-driven search. This capability, paired with AI onboarding and marketing agents, is making the platform more accessible and effective for both creators and businesses, driving higher conversion and engagement.

2. Low-Code Expansion with Base 44

The acquisition of Base 44, a low-code/“vibe coding” platform, immediately broadens Wix’s addressable market to include developers, product teams, and enterprises building applications, not just websites. Base 44’s rapid ARR ramp—projected to reach $40–$50M this year—demonstrates strong product-market fit and validates Wix’s bet on the future of application development blending intuitive visual editing and AI-powered coding. Management sees Base 44 as complementary, not cannibalistic, to Wix’s core drag-and-drop web creation, with integration synergies in hosting, security, and payments infrastructure.

3. Cohort-Driven Growth Model

Wix’s business model leverages strong new user cohorts, with bookings from the Q2 2025 cohort up 14% over last year and July bookings up more than 20% year-over-year. This cohort layering effect, combined with improved conversion rates and longer-term commitments, is expected to drive durable top-line acceleration and margin stability into 2026 and beyond.

4. Commerce and Fintech Monetization

Commerce activity and fintech expansion are key revenue drivers, with transaction revenue up 18% and continued growth in payments adoption. New offerings like Wix Capital (merchant financing) and Wix Checking (business banking) are opening new monetization avenues, while partnerships such as the expanded PayPal integration further extend platform reach.

5. Capital Allocation and Margin Discipline

Wix is balancing growth investments with cash generation, maintaining a 30%+ free cash flow margin while integrating Base 44 and scaling AI initiatives. The company is repaying convertible debt with cash and returning capital via a $400M buyback, signaling balance sheet strength and discipline even as it invests for growth.

Key Considerations

Wix’s Q2 reflects a business at the crossroads of AI innovation and low-code expansion, with execution, product breadth, and capital discipline all moving in the right direction. Several factors warrant close investor attention as the company pivots toward a broader platform vision.

Key Considerations:

  • AI Product Adoption Trajectory: Sustained momentum in AI onboarding and marketing tools will be critical to maintaining conversion and retention gains.
  • Base 44 Integration Pace: Realizing cross-platform synergies and scaling Base 44 ARR beyond $50M will test Wix’s integration and go-to-market capabilities.
  • Cohort Layering and Monetization: The durability of recent cohort strength and upsell into longer-term, higher-value plans underpins growth guidance.
  • Commerce Platform Expansion: Adoption of Wix Payments, fintech solutions, and partner-driven GPV growth are key to expanding ARPU (average revenue per user).
  • Margin and Capital Allocation Discipline: Ongoing investment in AI and new markets must be balanced against operating leverage and free cash flow commitments.

Risks

Wix faces competitive threats from emerging low-code and AI-native platforms, with Base 44’s rapid growth highlighting both opportunity and vulnerability to new entrants. Organic search traffic declines and the complexity of LLM-driven discovery could pressure user acquisition costs and require ongoing innovation in AI visibility. Execution risk around integrating Base 44 and scaling new fintech offerings also remains, with incremental investments potentially impacting near-term margin expansion.

Forward Outlook

For Q3 2025, Wix guided to:

  • Total revenue of $498–$504 million, up 12%–13% year-over-year

For full-year 2025, management raised guidance:

  • Total bookings of $2.04–$2.075 billion (11%–13% growth)
  • Total revenue of $1.975–$2 billion (12%–14% growth)
  • Free cash flow of $595–$610 million (30%–31% margin)

Management cited stronger new cohort bookings, Base 44 contribution, pricing optimizations, and ramping Studio and AI products as drivers of the outlook, while highlighting:

  • Minimal revenue impact from acquisitions in the second half given timing
  • Incremental AI and headcount investments offset by higher bookings

Takeaways

Wix’s Q2 marks a strategic pivot toward hybrid visual and AI-powered creation, with Base 44’s ARR ramp and proprietary AI tools setting the company apart in a rapidly evolving market.

  • AI and Low-Code Platform Synergy: The integration of Base 44 and native AI capabilities positions Wix as a leader across both web and application creation, expanding its TAM (total addressable market).
  • Cohort Strength as a Growth Engine: Record new user bookings and improved conversion rates provide a durable foundation for revenue acceleration.
  • Watch for Execution on Integration and Monetization: Investors should monitor Base 44’s continued growth, cohort monetization, and the scaling of commerce and fintech solutions in the coming quarters.

Conclusion

Wix is now executing on a multi-pronged growth strategy, leveraging AI innovation and low-code expansion to drive both short-term acceleration and long-term platform leadership. With raised guidance and a robust balance sheet, the company is positioned to shape the next era of online creation.

Industry Read-Through

Wix’s Q2 results signal a broader industry shift toward AI-native and low-code platforms, with legacy CMS and web builder players now compelled to invest aggressively in AI onboarding, LLM search optimization, and application-layer extensibility. The rapid ARR ramp of Base 44 underscores investor appetite for hybrid visual and code-driven solutions, while Wix’s fintech and payments expansion highlights the growing importance of embedded financial services in SaaS ecosystems. Expect increased M&A, product bundling, and competitive intensity as incumbents and challengers race to capture the evolving needs of creators, businesses, and developers in the age of AI-driven digital presence.

WIX Technology Software AI Low-code Commerce Fintech Platform