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Bigcommerce (BIGC) 2025 Conference June 03, 2025 10:50 AM ET Speaker0 Well, thanks everybody for joining us. I'm Colin Sebastian. I follow Internet and Internet services here at Baird and we're really happy to have with us today, BigCommerce and Daniel Lentz who's CFO. I've been with the company for a number of years. So we're going to have a presentation for those of you who may be less familiar with BigCommerce and their position within the broader e commerce technology landscape. And then we'll switch ov ...

Core Insights - BigCommerce Holdings, Inc. will present at the Baird Global Consumer, Technology & Services Conference on June 3, 2025, at 10:50 a.m. Eastern Time [1] - The presentation will be accessible via a live webcast on the BigCommerce investor relations website, with a replay available afterward [2] - BigCommerce is a leading open SaaS and composable ecommerce platform, serving B2C and B2B brands, retailers, manufacturers, and distributors globally [3] Company Overview - BigCommerce provides professional-grade functionality, customization, and performance with ease-of-use for its customers [3] - The platform supports tens of thousands of companies across 150 countries, including notable brands like Coldwater Creek and Harvey Nichols [3]

Core Insights - BigCommerce has partnered with Moore & Giles to launch new DTC and B2B websites, enhancing their digital presence and operational efficiency [1][2][8] Group 1: Platform Features and Benefits - The new websites are built on BigCommerce's flexible Stencil framework, allowing Moore & Giles to execute bold marketing and merchandising strategies [2][3] - The implementation includes ERP and PIM integrations for real-time syncing of product, pricing, and inventory data, improving operational efficiency [3][4] - The DTC site accommodates three distinct product categories: Finished Goods, Furniture, and Wholesale Leather, each tailored to its audience [4] Group 2: Customer Experience Enhancements - Key features of the new storefronts include a 360° Product Viewer, Dynamic Product Badging, and Enhanced Filtering for improved product discovery [5] - The B2B storefront streamlines sample ordering for trade professionals, enhancing efficiency and maintaining consistency across interactions [4][5] - Gated content by customer group ensures a curated experience for logged-in users, showing custom product assortments and pricing [5] Group 3: Marketing and Content Management - The marketing team benefits from a highly agile content management setup with over 30 custom widgets and drag-and-drop functionality, reducing time to market [6] - Since the launch, Moore & Giles has seen measurable improvements in design flexibility, site speed, and overall performance [7] Group 4: Recognition and Industry Position - Moore & Giles received the 2025 Shopper Experience Award from BigCommerce, recognizing their exceptional customer and user experiences [8] - The company joins a growing list of fashion and apparel brands utilizing BigCommerce, indicating the platform's increasing adoption in the industry [9]

Core Insights - BigCommerce reported revenue of $82.37 million for Q1 2025, a year-over-year increase of 2.5% [1] - The EPS for the same period was $0.07, compared to $0.06 a year ago, resulting in a surprise of +16.67% over the consensus estimate [1] - The reported revenue was slightly below the Zacks Consensus Estimate of $82.45 million, with a surprise of -0.09% [1] Financial Performance Metrics - ARR attributable to enterprise accounts was $263.80 million, slightly below the average estimate of $264.78 million [4] - Total Annual Revenue Run-rate (ARR) was $350.80 million, compared to the estimated $351.15 million [4] - Revenue from partner and services was $20.26 million, exceeding the estimate of $20.19 million, representing a year-over-year increase of +4.4% [4] - Revenue from subscription solutions was $62.11 million, slightly below the estimate of $62.26 million, with a year-over-year change of +1.9% [4] Stock Performance - BigCommerce shares have returned -7.6% over the past month, contrasting with the Zacks S&P 500 composite's +11.3% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Group 1 - BigCommerce reported quarterly earnings of $0.07 per share, exceeding the Zacks Consensus Estimate of $0.06 per share, and showing an increase from $0.06 per share a year ago, representing an earnings surprise of 16.67% [1] - The company posted revenues of $82.37 million for the quarter ended March 2025, slightly missing the Zacks Consensus Estimate by 0.09%, but up from $80.36 million year-over-year [2] - BigCommerce has surpassed consensus EPS estimates four times over the last four quarters and topped consensus revenue estimates three times during the same period [2] Group 2 - The stock has underperformed the market, losing about 15% since the beginning of the year compared to the S&P 500's decline of 4.3% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to those expectations [4] - The current consensus EPS estimate for the coming quarter is $0.04 on revenues of $84.38 million, and $0.27 on revenues of $345.63 million for the current fiscal year [7] Group 3 - The Zacks Industry Rank places the Internet - Software sector in the top 37% of over 250 Zacks industries, indicating that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8] - The estimate revisions trend for BigCommerce is mixed, resulting in a Zacks Rank 3 (Hold), suggesting the shares are expected to perform in line with the market in the near future [6]

Financial Data and Key Metrics Changes - In Q1 2025, the company reported a non-GAAP operating income of $7.6 million, reflecting a margin improvement of 530 basis points year over year [10] - The annual revenue run rate (ARR) reached $351 million, a year-over-year increase of 3% [25] - Total revenue for the quarter was $82.4 million, also growing 3% year over year, with operating cash flow approximately $400,000, an improvement of nearly $4 million year over year [10][25] - Non-GAAP gross margin strengthened to 80.3%, up 240 basis points year over year, while non-GAAP operating income margin finished at 9.2%, up 530 basis points from Q1 2024 [25] Business Line Data and Key Metrics Changes - The company serves 5,825 enterprise accounts, with average revenue per enterprise account exceeding $45,000, a 9% increase year over year [25] - B2B continues to grow as a percentage of overall business, with new capabilities tailored to complex B2B needs being released [15][16] - In B2C, the company is focusing on operationally complex categories outside traditional sectors, achieving successful launches with brands like Euro Optic and Kittery Trading Post [17][18] Market Data and Key Metrics Changes - The company is closely monitoring global trade and tariff changes, which could impact customers operating across borders [28] - Partner and services revenue (PSR) constitutes approximately 25% of total revenues, driven by transaction volumes from technology partners [28] Company Strategy and Development Direction - The company has set three strategic priorities for 2025: accelerating revenue growth profitably, disciplined operational execution, and executing a go-to-market transformation plan [9] - Key initiatives include launching a self-serve version of MakeSwift and Feedonomics, and developing bundled solutions with partners [20][21] - AI is a major focus area, with plans to leverage AI for sales and support efficiency, as well as enhancing product data syndication [22][23] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that 2025 will be challenging but sees tremendous opportunities ahead [11] - The company is maintaining a cautious view on macroeconomic uncertainties and is prepared to provide flexible solutions to customers [28][29] - Guidance for Q2 expects revenue between $82.5 million and $83.5 million, with a full-year revenue guidance range widened to $335 million to $351 million [30] Other Important Information - The company has reduced its net debt position to $32.2 million, a 59% decrease year over year [26] - The leadership team has been strengthened with new hires in key positions, enhancing product and engineering capabilities [14] Q&A Session Summary Question: Can you discuss the encouraging signs mentioned regarding the pipeline? - Management noted a significant increase in the size of the pipeline, particularly in B2B, and highlighted the completion of the leadership team as a positive internal indicator [35] Question: How flexible is the company regarding investment levels in light of macro changes? - Management indicated a cautious approach to spending while maintaining the ability to invest in high ROI areas, particularly in AI [39][40] Question: What is the status of the payment strategy and its integration with existing partners? - The company aims to provide optionality to customers, with Klarna becoming a preferred partner and plans for an integrated payment solution expected in early 2026 [54][56] Question: How does the company handle potential downgrades in subscription tiers due to GMV changes? - Management explained that their pricing model is based on order volume, which moderates the impact of sudden changes in GMV, making revenue more predictable [60][61] Question: What is the profile of the new sales representatives added? - The company is focusing on hiring experienced sales representatives while also bringing in younger talent, with an expected onboarding period of about six months [66][70] Question: What needs to happen for the company to reach the high end of its guidance? - Management indicated that continued pipeline growth and effective marketing investments are crucial, while avoiding recessionary pressures is also important [48][49]

This presentation has been prepared by BigCommerce Holdings, Inc. ("we,ˮ "us,ˮ "our,ˮ "BigCommerceˮ or the "Companyˮ). This presentation may contain forward-looking statements which constitute the views of the Company with respect to future events which can be identified by the use of forward-looking terminology such as "anticipate,ˮ "believe,ˮ "budget,ˮ "can,ˮ "continue,ˮ "commit,ˮ "control,ˮ "could,ˮ "estimate,ˮ "expect,ˮ "intend,ˮ "may,ˮ "ongoing,ˮ "plan,ˮ "potential,ˮ "predict,ˮ "project,ˮ "should,ˮ "wi ...

Financial Performance - As of March 31, 2025, BigCommerce served 5,825 enterprise accounts, a slight decrease from 5,884 accounts as of December 31, 2024[137]. - Annual revenue run-rate (ARR) reached $350.835 million as of March 31, 2025, up from $349.599 million at the end of 2024[156]. - Subscription annual revenue run-rate (Subscription ARR) was $264.922 million as of March 31, 2025, compared to $264.541 million at the end of 2024[156]. - ARR attributable to enterprise accounts was $263.815 million, representing 75% of total ARR as of March 31, 2025[156]. - Average revenue per account (ARPA) increased to $45,290 as of March 31, 2025, from $44,458 at the end of 2024[156]. - Total revenue increased by $2.0 million, or 2.5%, to $82.4 million for the three months ended March 31, 2025, compared to $80.4 million for the same period in 2024[177]. - Subscription solutions revenue rose by $1.2 million, or 1.9%, to $62.1 million, primarily due to increased Feedonomics activity[177]. - Partner and services revenue increased by $0.9 million, or 4.4%, to $20.3 million, driven by revenue share activity[177]. Cost and Expenses - Cost of revenue decreased by $1.5 million, or 7.9%, to $16.984 million, resulting in a gross margin increase to 79.4% from 77.1%[178]. - Total operating expenses decreased by $2.353 million, or 3.4%, to $67.796 million, representing 82.3% of total revenue[180]. - Sales and marketing expenses decreased by $2.066 million, or 6.4%, to $30.366 million, accounting for 36.9% of total revenue[180]. - Research and development expenses decreased by $0.782 million, or 3.9%, to $19.206 million, representing 23.3% of total revenue[180]. - General and administrative expenses decreased by $1.285 million, or 8.6%, to $13.644 million, accounting for 16.6% of total revenue[180]. - Restructuring charges of $1.912 million were recorded, reflecting a significant operational adjustment[180]. - Restructuring charges increased for the three months ended March 31, 2025, compared to the same period in 2024, primarily due to severance and consulting costs related to workforce reduction and changes in go-to-market strategy[188]. Cash Flow and Financing - Net cash provided by operating activities was $401,000 for the three months ended March 31, 2025, a significant improvement from a net cash used of $3.4 million in 2024[196]. - Net cash provided by investing activities was $17.4 million for the three months ended March 31, 2025, compared to a net cash used of $6.9 million in 2024, primarily from the sale and maturity of marketable securities[197]. - Net cash used in financing activities increased to $54.9 million for the three months ended March 31, 2025, from $485,000 in 2024, mainly due to the repayment of convertible notes[198]. - As of March 31, 2025, the company had $53.2 million in cash, cash equivalents, and restricted cash, a decrease of $8.8 million from $62.0 million in 2024[194]. - The company believes existing cash and cash equivalents will be sufficient to meet working capital and capital expenditure needs for at least the next twelve months[201]. - The company issued $150.0 million in aggregate principal amount of 7.50% convertible senior notes due 2028 in August 2024[204]. - The company repurchased approximately $59.1 million of its 2026 Convertible Notes for about $54.4 million in cash, resulting in a net gain of approximately $3.9 million[212]. - As of March 31, 2025, approximately $4.0 million principal amount of 2026 Convertible Notes remain outstanding[212]. - The company issued 2028 Convertible Notes with an aggregate principal amount of $150.0 million, which has a fixed interest rate of 7.50 percent[219]. Interest and Market Risks - Gain on convertible note extinguishment was $3.9 million for the three months ended March 31, 2025, representing a 100% increase from zero in the same period of 2024[189]. - Interest income decreased by 59.1% to $1.3 million for the three months ended March 31, 2025, down from $3.2 million in 2024, attributed to lower yields on cash equivalents and marketable securities[190]. - Interest expense increased by 253.2% to $2.5 million for the three months ended March 31, 2025, compared to $720,000 in 2024, due to the exchange of convertible notes at a higher effective interest rate[191]. - An immediate increase or decrease in interest rates of 100 basis points could result in a $0.8 million market value change of the company's cash equivalents[218]. - The company maintains its cash equivalents in a variety of investment-grade securities to minimize interest rate risk[218]. Currency and Credit Risk - All revenue and most expenses for the three months ended March 31, 2025, were transacted in U.S. dollars, minimizing foreign currency exchange risk[220]. - The company currently does not hedge foreign currency exposure but may consider using derivative financial instruments in the future[222]. - The company has not experienced any losses on deposits of cash and cash equivalents, indicating effective credit risk management[223]. Strategic Initiatives - BigCommerce plans to launch its new payments offering in 2026, aimed at small and medium-sized customers[149]. - The company is integrating artificial intelligence across its platform to enhance personalization and operational efficiency[150]. - BigCommerce continues to invest in its core B2B and B2C product offerings to meet evolving customer needs[144]. - The company is advancing initiatives to expand platform capabilities and support revenue growth, including a beta launch of Feedonomics self-serve[147]. Accounting and Reporting - There have been no material changes to the company's critical accounting policies and estimates compared to previous reports[215]. - The company has no off-balance sheet arrangements as of March 31, 2025[213].

Revenue Performance - Total revenue for Q1 2025 was $82.4 million, representing a 3% increase compared to Q1 2024[6] - Total annual revenue run-rate (ARR) as of March 31, 2025, was $350.8 million, up 3% year-over-year[6] - Subscription solutions revenue reached $62.1 million, a 2% increase from Q1 2024[6] - Revenue for the three months ended March 31, 2025, was $82,370,000, representing a 2.5% increase from $80,360,000 in the same period of 2024[39] - Revenue from the United States was $62,621,000, up from $61,138,000 in the previous year, indicating strong domestic performance[44] Profitability Metrics - GAAP gross margin improved to 79%, up from 77% in Q1 2024, while non-GAAP gross margin was 80%, compared to 78% in the prior year[6] - Non-GAAP operating income for Q1 2025 was $7.6 million, compared to $3.2 million in Q1 2024[6] - Adjusted EBITDA was $8.8 million, an increase from $4.2 million in the same quarter last year[8] - GAAP net loss narrowed to ($0.4) million from ($6.4) million in Q1 2024[12] - Net loss for Q1 2025 was $353,000, significantly reduced from a net loss of $6,392,000 in Q1 2024[39] - Non-GAAP net income for Q1 2025 was $5,715,000, up from $4,999,000 in Q1 2024, indicating a growth of 14.3%[46] Cash Flow and Assets - Cash and cash equivalents totaled $121.9 million as of March 31, 2025[12] - Free cash flow for the three months ended March 31, 2025, was $401,000, a turnaround from a cash outflow of $3,417,000 in the same period of 2024[41] - Free cash flow for Q1 2025 was $(2,868,000), an improvement from $(4,223,000) in Q1 2024[51] - Total current assets decreased to $192,680,000 as of March 31, 2025, down from $251,219,000 at the end of 2024[37] Expenses - Non-GAAP cost of revenue decreased to $16,238,000 in Q1 2025 from $17,783,000 in Q1 2024, a reduction of 8.7%[47] - Non-GAAP sales and marketing expenses were $28,591,000 in Q1 2025, down from $30,565,000 in Q1 2024, a decrease of 6.5%[48] - Non-GAAP research and development expenses were $16,164,000 in Q1 2025, slightly down from $16,512,000 in Q1 2024, a decrease of 2.1%[49] - Non-GAAP general and administrative expenses increased to $13,788,000 in Q1 2025 from $12,337,000 in Q1 2024, an increase of 11.8%[50] Future Projections - For Q2 2025, total revenue is expected to be between $82.5 million and $83.5 million, with non-GAAP operating income projected between $2.7 million and $3.7 million[21] - Average revenue per account (ARPA) for Enterprise Accounts was calculated by including customer-billed revenue and partner revenue allocations[28]