Website building platform Wix (NASDAQ: WIX) met Wall Street’s revenue expectations in Q1 CY2026, with sales up 14.3% year on year to $541.2 million. Its non-GAAP profit of $0.68 per share was 44.2% below analysts’ consensus estimates.
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Wix (WIX) Q1 CY2026 Highlights:
- Revenue: $541.2 million vs analyst estimates of $543.6 million (14.3% year-on-year growth, in line)
- Adjusted EPS: $0.68 vs analyst expectations of $1.22 (44.2% miss partly due to acquisition costs)
- "...maintaining our previous full year 2026 outlook and continue to expect both bookings and revenue to grow at mid-teens percentage on a year-over-year basis"
- "For the second quarter of 2026, we also expect revenue to grow at a mid-teens percentage on a year-over-year basis"
- Adjusted Operating Income: $27.79 million vs analyst estimates of $68.76 million (5.1% margin, 59.6% miss partly due to acquisition costs)
- Adjusted Operating Income: $27.79 million vs analyst estimates of $68.76 million (5.1% margin, 59.6% miss)
- Operating Margin: -12.9%, down from 7.9% in the same quarter last year
- Free Cash Flow Margin: 13.9%, down from 29.7% in the previous quarter
- Annual Recurring Revenue: $1.90 billion (38.7% year-on-year growth)
- Billings: $590.1 million at quarter end, up 15.5% year on year
- Market Capitalization: $4.42 billion
“As innovation in the web and app building space has accelerated over the past few quarters, my conviction in its long-term value and Wix’s market positioning remains strong,” said Avishai Abrahami, Wix Co-founder and CEO.
Company Overview
Powering over 263 million registered users worldwide with its AI-driven tools, Wix (NASDAQ: WIX) provides a cloud-based platform that helps individuals and businesses create and manage professional websites without requiring coding skills.
Revenue Growth
A company’s long-term sales performance can indicate its overall quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, Wix grew its sales at a 13.9% compounded annual growth rate. Though this growth is acceptable on an absolute basis, we need to see more than just topline growth for the software sector, which can display significant earnings volatility. This means our bar for the sector is particularly high, reflecting the non-essential and hit-driven nature of the products and services offered. Additionally, five-year CAGR starts around Covid, when revenue was depressed then rebounded.
Long-term growth is the most important, but within software, a half-decade historical view may miss new innovations or demand cycles. Wix’s annualized revenue growth of 13.2% over the last two years aligns with its five-year trend, suggesting its demand was consistently weak. 
This quarter, Wix’s year-on-year revenue growth was 14.3%, and its $541.2 million of revenue was in line with Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 14.2% over the next 12 months, similar to its two-year rate. Although this projection suggests its newer products and services will catalyze better top-line performance, it is still below the sector average.
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Annual Recurring Revenue
While reported revenue for a software company can include low-margin items like implementation fees, annual recurring revenue (ARR) is a sum of the next 12 months of contracted revenue purely from software subscriptions, or the high-margin, predictable revenue streams that make SaaS businesses so valuable.
Wix’s ARR punched in at $1.90 billion in Q1, and over the last four quarters, its growth was fantastic as it averaged 24.2% year-on-year increases. This alternate topline metric grew faster than total sales, which likely means that the recurring portions of the business are growing faster than less predictable, choppier ones such as implementation fees. That could be a good sign for future revenue growth. 
Customer Acquisition Efficiency
The customer acquisition cost (CAC) payback period represents the months required to recover the cost of acquiring a new customer. Essentially, it’s the break-even point for sales and marketing investments. A shorter CAC payback period is ideal, as it implies better returns on investment and business scalability.
Wix is quite efficient at acquiring new customers, and its CAC payback period checked in at 34 months this quarter. The company’s rapid recovery of its customer acquisition costs indicates it has a strong brand reputation, giving it more resources pursue new product initiatives while maintaining the flexibility to increase its sales and marketing investments.
Key Takeaways from Wix’s Q1 Results
Revenue in the quarter was in line and revenue guidance for next quarter was roughly in line as well. On the other hand, EPS missed partly due to acquisition costs. Overall, this was an unexciting quarter with not much coming in above expectations. The stock traded down 2.3% to $74.14 immediately following the results.
Wix’s earnings report left more to be desired. Let’s look forward to see if this quarter has created an opportunity to buy the stock. What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).
