Key Takeaways
- Wix plans to eliminate approximately 1,000 positions — representing roughly 20% of total staff — in its most significant workforce reduction to date.
- Shares plummeted following disappointing Q1 results that erased one-third of market value in 24 hours; the stock has declined approximately 50% this year.
- First-quarter financials revealed a $57.5 million deficit despite 14% revenue growth reaching $541 million, while operating costs surged 50%.
- Base44, the AI coding platform purchased for $80 million, reached $150 million in annual recurring revenue by May but continues driving substantial expenses.
- The company deployed $1.6 billion toward share repurchases, yet the initiative hasn’t restored market confidence.
Wix.com disclosed a first-quarter deficit of $57.5 million, marking a dramatic turnaround following multiple consecutive profitable periods. While topline sales increased 14% to reach $541 million, operational expenditures ballooned 50% to $423 million. Operating cash flow contracted 21% to $112 million.
Shares have declined nearly 50% year-to-date. Following last week’s quarterly announcement, the stock tumbled an additional third during a single trading session.
The workforce reductions are now imminent. Wix is preparing to eliminate approximately 1,000 positions — about 20% of its 5,277-person workforce. Over 60% of employees are located in Israel.
Management cited artificial intelligence as a catalyst for the reorganization. As AI tools increasingly handle development and design functions, numerous positions are becoming obsolete.
Earlier this year, leadership mandated a full return-to-office policy, which encountered significant employee pushback. During Q1, headcount decreased by only 63 individuals. The forthcoming reductions represent a substantially more aggressive adjustment.
Base44: Rapid Expansion at Steep Cost
A significant portion of Wix’s current expansion narrative centers on Base44, the vibe-coding solution acquired for $80 million. Created by Maor Shlomo, the platform enables users to develop applications through natural language instructions.
Base44’s annual recurring revenue reached $150 million by May, surpassing internal projections. However, this expansion carries substantial financial implications. Aggressive marketing investments, escalating computational expenses, and ongoing acquisition-related compensation to Shlomo are pressuring profitability.
Wix compensated Shlomo $38 million during Q1 alone, with additional payments anticipated later this year. The company broadcast two Super Bowl advertisements — one promoting Wix, another featuring Base44 — further inflating marketing expenditures.
Wix is simultaneously developing a proprietary AI model to drive Harmony, its artificial intelligence website creation platform. CEO Avishai Abrahami indicates it will eventually enhance precision and reduce inference expenses, though it currently represents another significant cost center.
Share Repurchase Program Fails to Restore Confidence
In March, Wix initiated a $1.6 billion stock buyback program — depleting nearly all cash holdings, which dropped to $900 million. The strategy aimed to demonstrate management conviction to shareholders.
The effort has fallen short. Shares continue declining amid widespread concerns that the core website development business faces obsolescence as artificial intelligence enables virtually anyone to create websites for minimal monthly fees.
Investor apprehension surrounding software companies has intensified broadly. While Wix doesn’t function as a conventional SaaS enterprise, it’s been swept up in the negative market sentiment.
Operating expenses as a percentage of revenue jumped from 21% in Q1 2025 to 35% in Q1 2026 — a trajectory that has alarmed investors. Wix’s market capitalization currently hovers around $2 billion.
Base44’s ARR achieved $150 million in May 2026, according to company disclosures.
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