Wix Posts $76 Million Quarterly Loss Amid Base44 Acquisition Costs and Restructuring

Wix deepened its losses in the second quarter of 2026, reporting a net loss of $76.4 million compared to a profit of $57.7 million in the same period last year. This sharp decline follows the company's acquisition of Base44, a move that has driven significant growth but also heavy financial burdens. Earlier in the year, Wix recorded a $57.5 million loss in Q1 and subsequently announced a major workforce reduction, cutting 1,000 of its approximately 5,000 employees to manage rising costs exacerbated by the strengthening Israeli shekel and accelerated AI adoption.

The company currently employs 4,300 people but faces uncertainty about maintaining this headcount. Financial reports reveal Wix paid an additional $41 million to Maor Shlomo after Base44 exceeded its original acquisition targets set in summer 2025, pushing the total deal value beyond $150 million. The losses are also attributed to soaring expenses related to Base44’s natural language programming operations, including high computing costs and increased marketing outlays, which surged 67% to $173 million in Q2.

Looking ahead, Wix is focusing on Base44’s evolving business model, recently launching Base 1, its first dedicated language model. This innovation is expected to significantly reduce compute and inference costs, potentially boosting Base44’s gross margin to about 60% in the second half of 2026, up from near zero earlier in the year. Despite anticipated profitability improvements, Wix plans to reinvest savings into marketing to accelerate growth and expand market share.

Meanwhile, Wix’s cash flow declined to $61 million, partly due to a costly $1.6 billion share buyback funded largely from cash reserves, which backfired as the stock price fell nearly 50% since the buyback. On the revenue front, Wix posted $563.1 million in Q2, a 15% increase driven mainly by Base44’s growth, which cannibalized some partner business revenue. For Q3, Wix expects low double-digit revenue growth and improved adjusted operating margins in the latter half of the year, maintaining its annual growth forecast of just over 10%.