Financial Performance - Total revenue for the three months ended March 31, 2023, was $71,757,000, an increase of 8.6% from $66,050,000 in the same period of 2022[127] - Net loss for the three months ended March 31, 2023, was $22,120,000, a significant improvement compared to a net loss of $37,037,000 in the same period of 2022[122] - Revenue increased by $5.7 million, or 8.6%, to $71.8 million from $66.1 million, driven by a $5.8 million, or 12.1%, increase in subscription solutions revenue[209] - Gross profit for the three months ended March 31, 2023, was $54,311 thousand, an increase of $5,364 thousand or 11.0% from $48,947 thousand in 2022[237] - The gross margin for the three months ended March 31, 2023, was 75.7%, compared to 74.1% in the previous year[237] Cash Flow and Liquidity - Cash and cash equivalents decreased to $61,070,000 as of March 31, 2023, down from $91,573,000 as of December 31, 2022[116] - Cash flows used in operating activities for the three months ended March 31, 2023, were $(20,836,000), a slight improvement from $(21,985,000) in the same period of 2022[122] - Net cash used in operating activities was $(20,836) thousand, compared to $(21,985) thousand in the previous year, showing a decrease of $1,149 thousand[215] - The company expects to continue incurring operating losses and negative cash flows for the full year 2023, potentially requiring additional capital resources[214] Assets and Liabilities - Total assets decreased to $461,506,000 as of March 31, 2023, compared to $474,056,000 as of December 31, 2022[116] - Total liabilities slightly decreased to $427,066,000 as of March 31, 2023, from $428,384,000 as of December 31, 2022[116] - As of March 31, 2023, $33.8 million in contingent consideration is to be paid, with $31.8 million potentially settled in shares of common stock[193] Revenue Breakdown - Subscription solutions revenue reached $53.8 million, up from $48.0 million, primarily due to growth in mid-market and enterprise activity[209] - Partner and services revenue decreased by $0.1 million, or 0.6%, to $18.0 million, attributed to a decline in revenue-sharing activity with technology partners[209] - Deferred revenue increased primarily due to increases in SaaS-related subscriptions, indicating growth in subscription solutions[145] Expenses - The company recognized $4.1 million in acquisition-related expenses during the three months ended March 31, 2023, down from $12.7 million in the same period of 2022[136] - General and administrative expenses increased by $0.6 million, or 4.1%, to $16.5 million from $15.9 million, primarily due to increased spending in various areas[211] - Research and development expenses are expected to increase in absolute dollars but decrease as a percentage of total revenue over time[205] - Research and development expenses decreased by $0.1 million, or (0.5)%, to $20.8 million from $20.9 million, as a result of cost-cutting measures[238] Strategic Initiatives - The company’s differentiated Open SaaS technology approach aims to provide flexibility and customization, enhancing competitive advantage for businesses[180] - The company focuses on strategic partnerships to enhance its ecommerce platform and earn high-margin revenue shares from technology partners[304] Other Financial Metrics - The provision for expected credit losses was $1.075 million, with accounts written off totaling $1.476 million, resulting in a balance of $9.594 million as of March 31, 2023[151] - The effective tax rate for the three months ended March 31, 2023, was approximately (0.90)%, lower than the U.S. federal statutory rate of 21%[297] - The company calculates annual revenue run-rate (ARR) by summing contractual monthly recurring revenue and trailing twelve-month non-recurring revenue[305] Acquisitions and Restructuring - The acquisition of Bundle B2B Inc. in April 2022 had a total purchase price of $7.7 million, with $7.3 million attributed to goodwill[284] - The company incurred $3.6 million in severance and other compensation charges related to the 2022 Restructure, with an additional $0.4 million in compensation charges during the three months ended March 31, 2023[274] - The company has $0.2 million accrued as of March 31, 2023, related to the 2022 Restructure, with no further material charges expected under this plan[274]

PART I [Business](index=4&type=page&id=Item%201.%20Business) BigCommerce provides a SaaS ecommerce platform, leveraging an 'Open SaaS' strategy and partner ecosystem, with 2022 revenue of $279.1 million - The company operates a SaaS ecommerce platform simplifying online store creation with a unique combination of ease-of-use, enterprise functionality, and flexibility[249](index=249&type=chunk) - BigCommerce targets three main business segments based on annual online sales: **SMBs (under $1M)**, the **mid-market ($1M to $50M)**, and **large enterprises (over $50M)**[279](index=279&type=chunk)[236](index=236&type=chunk)[251](index=251&type=chunk) Total Revenue (2020-2022) | Year | Total Revenue (in millions) | | :--- | :--- | | 2022 | $279.1 | | 2021 | $219.9 | | 2020 | $152.4 | - The company's strategy relies heavily on its partner ecosystem for adjacent services like payments, shipping, and marketing, allowing focus on core platform R&D and high-margin revenue share[237](index=237&type=chunk)[238](index=238&type=chunk) - As of December 31, 2022, the company had **1,500 full-time employees**, with **75% located in the United States**[289](index=289&type=chunk)[286](index=286&type=chunk) [Risk Factors](index=8&type=page&id=Item%201A.%20Risk%20Factors) The company faces significant risks from operating losses, intense competition, partner dependency, security breaches, and international conflicts - The company has a history of operating losses, incurring a net loss of **$139.9 million in 2022** and an accumulated deficit of **$529.9 million** as of December 31, 2022[269](index=269&type=chunk) - Competition is intense from established players like Magento (Adobe), Salesforce Commerce Cloud, and Shopify Plus, who may have greater financial and technical resources[334](index=334&type=chunk)[389](index=389&type=chunk) - The business is dependent on its partner-centric strategy; failure to maintain or expand relationships with technology and agency partners could harm revenue growth[273](index=273&type=chunk)[274](index=274&type=chunk) - Security risks are significant, as a compromise of the platform or third-party partner systems could lead to loss of customers, significant liabilities, and reputational harm[340](index=340&type=chunk) - Operations at the strategic development center in Kyiv, Ukraine have been impacted by the ongoing military action by Russia, which could materially adversely affect business and operations[445](index=445&type=chunk)[415](index=415&type=chunk) [Properties](index=34&type=page&id=Item%202.%20Properties) The company's Austin, Texas headquarters is partially subleased, with additional offices in San Francisco, Sydney, and London - The worldwide corporate headquarters is in Austin, Texas, under a lease for **70,682 square feet** that expires in 2028[291](index=291&type=chunk) - In December 2022, the company decided to put **40,540 square feet** of its Austin headquarters up for sublease[463](index=463&type=chunk)[291](index=291&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=35&type=page&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq under 'BIGC' since August 2020, with no cash dividends paid or anticipated - The common stock trades on the Nasdaq Global Select Market under the symbol **"BIGC"** since August 5, 2020[467](index=467&type=chunk) - The company has never declared or paid cash dividends on its common stock and does not plan to do so in the foreseeable future[468](index=468&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=page&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses 2022 financial results, highlighting revenue growth, a widened net loss due to increased operating expenses, and sufficient liquidity [Key Business Metrics](index=39&type=section&id=Key%20Business%20Metrics) The company tracks key metrics including ARR, enterprise accounts, and NRR, with total ARR reaching **$311.7 million** in 2022 Key Business Metrics (as of Dec 31, in thousands) | Metric | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | **Total ARR** | $311,670 | $268,665 | $181,166 | | **Subscription ARR** | $238,395 | $203,743 | $132,504 | | **Enterprise Accounts** | 5,786 | 5,036 | 3,365 | | **Enterprise ARR** | $223,964 | $172,858 | $100,771 | | **Enterprise ARR % of Total** | 72% | 64% | 56% | | **Enterprise ARPA** | $38,708 | $34,324 | $29,947 | - Net Revenue Retention (NRR) for enterprise accounts was **111%** for the year ended December 31, 2022, compared to **118%** for 2021[514](index=514&type=chunk) [Results of Operations](index=43&type=section&id=Results%20of%20Operations) In 2022, revenue grew to **$279.1 million**, but increased operating expenses led to a **$140.6 million** operating loss and **$139.9 million** net loss Revenue Breakdown (2020-2022, in thousands) | Revenue Source | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Subscription solutions | $205,800 | $154,933 | $103,706 | | Partner and services | $73,275 | $64,922 | $48,662 | | **Total revenue** | **$279,075** | **$219,855** | **$152,368** | - Cost of revenue increased **44.4% to $70.0 million** in 2022, primarily due to higher hosting and personnel costs, leading to a gross margin decrease to **74.9% from 77.9%** in 2021[11](index=11&type=chunk) - Sales and marketing expenses increased **35.7% to $134.8 million** in 2022, driven by higher personnel costs and additional marketing spend[558](index=558&type=chunk) - Research and development expenses grew **36.7% to $88.2 million** in 2022, mainly due to higher staffing costs and Feedonomics acquisition expenses[14](index=14&type=chunk) - The company incurred restructuring charges of **$7.3 million** in 2022 related to a reduction in workforce and impairment of a right-of-use asset[16](index=16&type=chunk) [Liquidity and Capital Resources](index=47&type=section&id=Liquidity%20and%20Capital%20Resources) As of December 2022, the company had **$305.0 million** in liquidity, with net cash used in operations increasing, supported by convertible senior notes Summary of Cash Flows (in thousands) | Cash Flow Activity | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | $(89,357) | $(40,300) | $(26,529) | | Net cash used in investing activities | $(116,526) | $(186,877) | $(1,964) | | Net cash provided by financing activities | $209 | $305,274 | $239,950 | - In September 2021, the company issued **$345.0 million** in **0.25% Convertible Senior Notes due 2026**, significantly increasing its liquidity[569](index=569&type=chunk)[600](index=600&type=chunk) - Management believes existing cash and cash equivalents are sufficient to fund operations for at least the next twelve months, despite continued operating losses and negative cash flows[564](index=564&type=chunk) [Critical Accounting Policies and Estimates](index=49&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Critical accounting policies involve significant judgment in revenue recognition, deferred costs, equity-based compensation, business combinations, and restructuring - Revenue recognition requires significant judgment in identifying distinct performance obligations and allocating transaction prices, especially for contracts with multiple services[634](index=634&type=chunk)[27](index=27&type=chunk) - Deferred sales commissions are amortized over an estimated customer relationship period of approximately **four years**[573](index=573&type=chunk) - Equity-based compensation is valued using the Black-Scholes model, which requires subjective inputs like expected volatility and term[635](index=635&type=chunk)[574](index=574&type=chunk) - Business combination accounting requires management to estimate the fair value of acquired assets and liabilities, with any excess purchase price allocated to goodwill[606](index=606&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=51&type=page&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risks include minimal interest rate risk, unhedged foreign currency exposure, and managed credit risk - Interest rate risk is considered low due to the short-term maturities of cash, cash equivalents, and marketable securities; a **0.125%** change would impact annual interest expense by approximately **$0.4 million**[55](index=55&type=chunk) - Foreign currency exchange risk is present as some operating expenses are in foreign currencies, but all revenue is transacted in U.S. dollars; the company does not currently hedge this exposure[32](index=32&type=chunk)[609](index=609&type=chunk)[56](index=56&type=chunk) - Credit risk is managed by holding cash and investments with high-credit-quality financial institutions and adhering to an investment policy that limits concentration[33](index=33&type=chunk) [Financial Statements and Supplementary Data](index=51&type=page&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for 2020-2022, with an unqualified opinion from Ernst & Young LLP - The financial statements were audited by Ernst & Young LLP, which issued an unqualified opinion on both the financial statements and the company's internal control over financial reporting as of December 31, 2022[105](index=105&type=chunk)[662](index=662&type=chunk) [Consolidated Balance Sheets](index=65&type=section&id=Consolidated%20Balance%20Sheets) As of December 2022, total assets decreased, liabilities slightly increased, and stockholders' equity significantly decreased Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $91,573 | $297,561 | | Total Assets | $474,056 | $555,460 | | Long-term debt | $337,497 | $335,537 | | Total Liabilities | $428,384 | $417,172 | | Total stockholders' equity | $45,672 | $138,288 | [Consolidated Statements of Operations](index=66&type=section&id=Consolidated%20Statements%20of%20Operations) In 2022, total revenue reached **$279.1 million**, with a **$139.9 million** net loss, or **($1.91)** per share, due to increased operating expenses Consolidated Statement of Operations Highlights (in thousands, except per share data) | Account | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Total Revenue | $279,075 | $219,855 | $152,368 | | Gross Profit | $209,095 | $171,376 | $118,242 | | Loss from Operations | $(140,567) | $(75,943) | $(38,697) | | Net Loss | $(139,919) | $(76,677) | $(37,560) | | Net Loss Per Share | $(1.91) | $(1.08) | $(0.99) | [Consolidated Statements of Cash Flows](index=69&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) In 2022, net cash used in operating activities increased to **$89.4 million**, resulting in a net decrease of **$205.7 million** in cash, ending with **$93.0 million** Consolidated Statement of Cash Flows Highlights (in thousands) | Cash Flow Activity | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | $(89,357) | $(40,300) | $(26,529) | | Net cash used in investing activities | $(116,526) | $(186,877) | $(1,964) | | Net cash provided by financing activities | $209 | $305,274 | $239,950 | | **Net change in cash** | **$(205,674)** | **$78,097** | **$211,457** | [Controls and Procedures](index=51&type=page&id=Item%209A.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of December 2022, and a material weakness in IT general controls from 2021 was successfully remediated - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2022[642](index=642&type=chunk) - A material weakness in IT general controls identified in the fiscal year 2021 was successfully remediated as of December 31, 2022[643](index=643&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=54&type=page&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information for this item is incorporated by reference from the company's 2023 Proxy Statement - The information required by this item will be included in the Proxy Statement for the 2023 annual meeting of stockholders and is incorporated by reference[647](index=647&type=chunk) [Executive Compensation](index=54&type=page&id=Item%2011.%20Executive%20Compensation) Information for this item is incorporated by reference from the company's 2023 Proxy Statement - The information required by this item will be included in the Proxy Statement for the 2023 annual meeting of stockholders and is incorporated by reference[618](index=618&type=chunk) PART IV [Exhibits, Financial Statement Schedules](index=55&type=page&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists documents filed as part of the Annual Report on Form 10-K, including consolidated financial statements and an index of all exhibits - This section includes the consolidated financial statements and a schedule of exhibits filed with the report[67](index=67&type=chunk)[44](index=44&type=chunk)

Financial Data and Key Metrics Changes - Total revenue for Q4 2022 was $72.4 million, representing a 12% year-over-year increase, while full year 2022 revenue grew to $279.1 million, up 27% year-over-year [73][101] - Non-GAAP operating loss for Q4 was $9.4 million, with a full year loss of $47 million [73] - Adjusted EBITDA was negative $8.6 million for Q4, improving from negative $12.1 million in Q4 2021 [5] - Cash and cash equivalents at the end of Q4 totaled $305 million, with operating cash flow of negative $2.7 million compared to negative $8.8 million a year ago [93] Business Line Data and Key Metrics Changes - Annual Recurring Revenue (ARR) grew to $311.7 million, up 16% year-over-year, with enterprise account ARR at $224 million, up 30% year-over-year [3][102] - Subscription revenue for Q4 increased by 14% year-over-year to $53.3 million, while partner and services revenue grew by 6% year-over-year to $19.1 million [90] - Enterprise accounts increased by 750 accounts or 15% year-over-year, totaling 5,786 accounts [151] Market Data and Key Metrics Changes - Revenue growth in the Americas and EMEA was 28% and 33% respectively, while APAC grew by 9% year-over-year [118] - EMEA revenue grew by 22% in Q4, while APAC revenue decreased by 6% compared to the prior year [150] Company Strategy and Development Direction - The company is focused on achieving global leadership in enterprise and reaching profitability on an adjusted EBITDA basis by Q4 2023 [80][104] - Strategic pillars include open SaaS, disruptive innovation, and commerce as a service, with a focus on enterprise growth and profitability [78][80] - The company aims to increase enterprise accounts to nearly 80% of total ARR by the end of 2023 or early 2024 [155] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging operating climate but expressed confidence in the company's ability to adapt and achieve profitability [1][74] - The company anticipates a modest deceleration in same-store platform GMV and order growth year-over-year, impacting subscription pricing upgrades and PSR growth [154] - Management remains optimistic about enterprise momentum, citing a 30% ARR growth for enterprise in 2022, significantly higher than the overall e-commerce growth [158] Other Important Information - The company has implemented cost reductions and focused on high ROI segments like enterprise and B2B [5][76] - The restructuring has improved operational efficiency and is expected to lead to better profitability [76][116] Q&A Session Summary Question: What is the outlook for the enterprise segment growth? - Management expressed confidence in achieving over 20% enterprise ARR growth in 2023, supported by strong partnerships and product capabilities [137][158] Question: How is the company addressing the competitive environment? - The company highlighted its unique positioning in the market, emphasizing its open SaaS model and superior enterprise offerings compared to competitors [139] Question: What are the drivers of EMEA growth? - Management noted that EMEA growth is driven by establishing a network of merchants and partners, with strong traction and wins in the region [140]

3Q 2022 Financial Results BECOMMERCE Disclaimer This presentation has been prepared by BigCommerce Holdings, Inc. ("we," "us," "our," "BigCommerce" or the "Company"). 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," "believe," "budget," "can," "continue," "committ," "control," "could," "estimate," "expect," "intend," "may," "ongoing," "plan," ...

Call Start: 17:00 January 1, 0000 6:10 PM ET BigCommerce Holdings, Inc. (NASDAQ:BIGC) Q3 2022 Earnings Conference Call November 03, 2022, 17:00 ET Company Participants Daniel Lentz - SVP, IR Brent Bellm - Chairman, President & CEO Robert Alvarez - CFO Conference Call Participants Gabriela Borges - Goldman Sachs Clarke Jeffries - Piper Sandler Daniel Reagan - Canaccord Genuity Koji Ikeda - Bank of America Merrill Lynch Terrell Tillman - Truist Securities Ryan Bressner - Morgan Stanley John Godin - Needham & ...

Revenue Growth - As of September 30, 2022, BigCommerce reported a total annual revenue run-rate (ARR) of $305.32 million, up from $295.95 million as of June 30, 2022, representing a growth of approximately 4.6%[148] - Subscription ARR reached $233.13 million as of September 30, 2022, compared to $225.76 million on June 30, 2022, indicating a growth of about 3.5%[148] - Revenue for the three months ended September 30, 2022, increased by $13.1 million, or 22.1%, to $72.4 million compared to $59.3 million for the same period in 2021[174] - For the nine months ended September 30, 2022, total revenue increased by $51.7 million, or 33.4%, to $206.6 million from $154.9 million in the prior year[175] - Subscription solutions revenue for the nine months rose by $44.4 million, or 41.1%, to $152.5 million, with Feedonomics contributing $24.0 million to this increase[175] Customer Metrics - The number of enterprise accounts increased to 5,560 as of September 30, 2022, from 5,418 on June 30, 2022, reflecting a growth of 2.6%[148] - The ARR attributable to enterprise accounts was $216.20 million, which constitutes 71% of the total ARR, up from 70% in the previous quarter[148] - Average revenue per account (ARPA) for enterprise accounts was $38,885 as of September 30, 2022, compared to $38,133 as of June 30, 2022, showing an increase of 2%[148] - The number of accounts with an annual contract value (ACV) greater than $2,000 reached 13,198, up from 13,006 in the previous quarter, marking a growth of 1.5%[148] - Net revenue retention (NRR) for accounts with ACV greater than $2,000 was reported at 116% for the year ended December 31, 2021, indicating strong customer retention and expansion[151] Expenses and Costs - Cost of revenue for the three months ended September 30, 2022, was $17.5 million, up from $12.4 million, reflecting a 41.3% increase[176] - Sales and marketing expenses for the three months ended September 30, 2022, were $34.4 million, compared to $26.1 million in the same period last year[169] - Research and development expenses for the three months ended September 30, 2022, increased to $22.2 million from $16.5 million, reflecting ongoing investments in platform enhancements[169] - Cost of revenue increased by $19.7 million, or 61.7%, to $51.5 million for the nine months ended September 30, 2022, primarily due to higher hosting and personnel costs[178] - Gross margin decreased to 74.7% from 79.7% for the nine months ended September 30, 2022, mainly due to the acquisition of Feedonomics[178] Cash Flow and Financing - Net cash used in operating activities was $86.7 million for the nine months ended September 30, 2022, compared to $31.5 million for the same period in 2021[197] - As of September 30, 2022, the company had $308.1 million in cash, cash equivalents, restricted cash, and marketable securities, a decrease of $101.4 million from $409.5 million as of September 30, 2021[195] - Net cash provided by financing activities for the three months ended September 30, 2022, was $0.2 million, a significant decrease from $300.8 million in 2021[200] - For the nine months ended September 30, 2022, net cash provided by financing activities was $0.1 million, compared to $303.6 million in 2021[200] - The company anticipates continuing to generate negative operating cash flow and may require additional capital resources to execute strategic initiatives[191] Strategic Initiatives - BigCommerce's platform supports a wide range of customers, including notable brands such as Ben & Jerry's and Vodafone, enhancing its market presence[138] - The company emphasizes its "Open SaaS" strategy, which combines the flexibility of open-source software with the benefits of multi-tenant SaaS, aiming to provide a competitive advantage in the ecommerce space[140] - BigCommerce's acquisition of Feedonomics on July 23, 2021, has contributed to its subscription revenue, expanding its service offerings in feed management solutions[154] - The acquisition of Feedonomics requires up to $32.5 million for the remaining annual installment, contingent on certain product and financial milestones[192] Financial Instruments and Risks - The company issued $345 million principal amount of 0.25% Convertible Senior Notes due 2026 in September 2021[201] - The initial conversion rate for the Convertible Notes is 13.6783 shares per $1,000 principal amount, equating to an initial conversion price of approximately $73.11 per share[201] - A one-eighth percent change in interest expense would impact annual cash interest expense by approximately $0.4 million[206] - The company currently does not hedge foreign currency exposure but may consider it in the future[209] - The company has not experienced any losses on cash and cash equivalents deposits, which are monitored to mitigate credit risk[210]

2Q 2022 Financial Results BECOMMERCE Disclaimer This presentation has been prepared by BigCommerce Holdings, Inc. ("we," "us," "our," "BigCommerce" or the "Company"). 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," "believe," "budget," "can," "continue," "control," "could," "estimate," "expect," "intend," "may," "ongoing," "plan," "potential ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ | --- | --- | |---------------------------------------------------------------------------------------|--------------------------------- ...

BigCommerce Holdings, Inc. (NASDAQ:BIGC) Q2 2022 Earnings Conference Call August 4, 2022 5:00 PM ET Company Participants Daniel Lentz - Head of IR Brent Bellm - President, CEO & Chairman Robert Alvarez - CFO Conference Call Participants Gabriela Borges - Goldman Sachs Clarke Jeffries - Piper Sandler Daniel Reagan - Canaccord Genuity Koji Ikeda - Bank of America Samad Samana - Jefferies Matt Pfau - William Blair. Brian Peterson - Raymond James Operator Ladies and gentlemen, thank you for standing by, and wel ...

PART I. FINANCIAL INFORMATION This section presents the unaudited condensed consolidated financial statements and management's discussion and analysis for BigCommerce Holdings, Inc [Item 1. Financial Statements](index=2&type=section&id=Item%201.%20Index%20to%20Financial%20Statements) This section provides an index to the unaudited condensed consolidated financial statements for BigCommerce Holdings, Inc., including the Balance Sheets, Statements of Operations, Comprehensive Loss, Stockholders' Equity (Deficit), and Cash Flows, along with their accompanying notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement presents the company's financial position, detailing assets, liabilities, and equity at specific points in time Condensed Consolidated Balance Sheets Summary | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :----------------------------------- | :---------------------------- | :----------------------------- | | Total Assets | $535,011 | $555,460 | | Total Liabilities | $425,134 | $417,172 | | Total Stockholders' Equity | $109,877 | $138,288 | - Total assets decreased by **$20.4 million** from December 31, 2021, to March 31, 2022, primarily driven by a decrease in cash and cash equivalents[6](index=6&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This statement outlines the company's financial performance over a period, showing revenue, expenses, and net loss Condensed Consolidated Statements of Operations Summary | Metric | Three months ended March 31, 2022 (in thousands) | Three months ended March 31, 2021 (in thousands) | | :------------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Revenue | $66,050 | $46,660 | | Gross Profit | $48,947 | $37,410 | | Loss from Operations | $(36,179) | $(8,542) | | Net Loss | $(37,037) | $(8,544) | | Basic and Diluted Net Loss Per Share | $(0.51) | $(0.12) | - Revenue increased by **41.6% year-over-year**, but net loss significantly widened from **$(8.5) million** in Q1 2021 to **$(37.0) million** in Q1 2022, largely due to increased operating expenses, particularly acquisition-related expenses and amortization of intangible assets[8](index=8&type=chunk) [Condensed Consolidated Statements of Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) This statement presents the net loss and other comprehensive income or loss components, leading to total comprehensive loss Condensed Consolidated Statements of Comprehensive Loss Summary | Metric | Three months ended March 31, 2022 (in thousands) | Three months ended March 31, 2021 (in thousands) | | :--------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net Loss | $(37,037) | $(8,544) | | Net Unrealized Gain (Loss) on Marketable Debt Securities | $(613) | $0 | | Total Comprehensive Loss | $(37,650) | $(8,544) | - Total comprehensive loss for the three months ended March 31, 2022, was **$(37.7) million**, primarily driven by the net loss and an unrealized loss on marketable debt securities[10](index=10&type=chunk) [Condensed Consolidated Statement of Stockholders' Equity (Deficit)](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Stockholders'%20Equity%20(Deficit)) This statement details changes in stockholders' equity, including additional paid-in capital and accumulated deficit Condensed Consolidated Statement of Stockholders' Equity (Deficit) Summary | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :--------------------------- | :---------------------------- | :----------------------------- | | Additional Paid-in Capital | $537,779 | $528,540 | | Accumulated Deficit | $(427,105) | $(390,068) | | Total Stockholders' Equity | $109,877 | $138,288 | - Total stockholders' equity decreased from **$138.3 million** at December 31, 2021, to **$109.9 million** at March 31, 2022, mainly due to the net loss of **$(37.0) million** and accumulated other comprehensive loss[12](index=12&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement reports the cash generated and used by operating, investing, and financing activities over a period Cash Flow Summary | Metric | Three months ended March 31, 2022 (in thousands) | Three months ended March 31, 2021 (in thousands) | | :------------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net Cash Used in Operating Activities | $(21,985) | $(12,758) | | Net Cash Used in Investing Activities | $(24,813) | $(18,854) | | Net Cash Provided by Financing Activities | $184 | $1,741 | | Net Change in Cash and Cash Equivalents and Restricted Cash | $(46,614) | $(29,871) | - The company experienced a net decrease in cash and cash equivalents and restricted cash of **$(46.6) million** in Q1 2022, primarily driven by cash used in operating and investing activities[14](index=14&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information supporting the condensed consolidated financial statements [1. Overview](index=9&type=section&id=1.%20Overview) This note describes BigCommerce's business model as a SaaS e-commerce platform and its corporate history - BigCommerce operates a software-as-a-service (SaaS) platform for e-commerce, offering ease-of-use, enterprise functionality, and flexibility for online stores and cross-channel connections[16](index=16&type=chunk)[17](index=17&type=chunk) - The company was formed in Australia in **2003** as Interspire Pty Ltd and reorganized in Delaware as BigCommerce Holdings, Inc. in **2013**, with its headquarters in Austin, Texas[18](index=18&type=chunk) [2. Summary of Significant Accounting Policies](index=9&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the key accounting principles and methods used in preparing the financial statements, including revenue recognition and segment reporting - The financial statements are prepared in accordance with GAAP for interim financial information, with certain disclosures omitted as permitted by SEC rules[19](index=19&type=chunk)[20](index=20&type=chunk) - The company operates as a single operating and reportable segment, with revenue primarily from the Americas (U.S.), followed by EMEA and APAC[25](index=25&type=chunk) Revenue by Geographic Region | Geographic Region | Three months ended March 31, 2022 (in thousands) | Three months ended March 31, 2021 (in thousands) | | :------------------ | :--------------------------------------------- | :--------------------------------------------- | | Americas – U.S. | $51,500 | $36,117 | | Americas – other | $2,684 | $1,734 | | EMEA | $6,284 | $4,397 | | APAC | $5,582 | $4,412 | | Total Revenue | $66,050 | $46,660 | - The COVID-19 pandemic has benefited the business by accelerating the shift to online shopping, but future trends remain uncertain and could adversely affect financial results[24](index=24&type=chunk) Allowance for Credit Losses | Allowance for Credit Losses (in thousands) | Amount | | :--------------------------------------- | :----- | | Balance at December 31, 2021 | $3,867 | | Provision for Expected Credit Losses | $1,313 | | Accounts Written Off | $(637) | | Balance at March 31, 2022 | $4,543 | [3. Revenue Recognition and Deferred Costs](index=14&type=section&id=3.%20Revenue%20Recognition%20and%20Deferred%20Costs) This note details the company's policies for recognizing revenue from subscription solutions and partner services, and accounting for deferred costs - Revenue is primarily derived from subscription solutions fees and partner and services fees, with subscription solutions being the largest component[50](index=50&type=chunk)[58](index=58&type=chunk) Revenue by Source | Revenue Source | Three months ended March 31, 2022 (in thousands) | Three months ended March 31, 2021 (in thousands) | | :------------------- | :--------------------------------------------- | :--------------------------------------------- | | Subscription Solutions | $47,987 | $32,004 | | Partner and Services | $18,063 | $14,656 | | Total Revenue | $66,050 | $46,660 | - Deferred revenue increased due to SaaS-related subscriptions, with **$7.2 million** of previously deferred revenue recognized in Q1 2022[64](index=64&type=chunk)[65](index=65&type=chunk) - Remaining performance obligations totaled **$153.5 million** as of March 31, 2022, with approximately **50%** expected to be recognized as revenue in the next **12** months[66](index=66&type=chunk) - Deferred sales commissions are amortized over an estimated three-year customer relationship period, with **$1.6 million** deferred and **$1.1 million** amortized in Q1 2022[69](index=69&type=chunk)[70](index=70&type=chunk) [4. Fair Value Measurements, Cash Equivalents and Marketable Securities](index=16&type=section&id=4.%20Fair%20Value%20Measurements,%20Cash%20Equivalents%20and%20Marketable%20Securities) This note describes the valuation methods for financial instruments, including cash equivalents and marketable securities, and their fair value hierarchy - Financial instruments carried at fair value include cash and cash equivalents, restricted cash, marketable securities, and embedded put options[71](index=71&type=chunk) Financial Assets at Fair Value | Financial Assets (in thousands) | March 31, 2022 (Level 1) | March 31, 2022 (Level 2) | March 31, 2022 (Total) | | :------------------------------ | :----------------------- | :----------------------- | :--------------------- | | Money Market Funds | $220,362 | — | $220,362 | | U.S. Treasury Securities | $40,200 | — | $40,200 | | Corporate Securities | — | $84,976 | $84,976 | | Total Financial Assets | $260,562 | $84,976 | $345,538 | - The estimated fair value of the **0.25% Convertible Senior Notes due 2026** was approximately **$262.1 million** as of March 31, 2022, categorized as Level **2**[77](index=77&type=chunk) [5. Business Combinations](index=17&type=section&id=5.%20Business%20Combinations) This note details the acquisitions of Feedonomics and B2B Ninja, including their financial impact and the allocation of purchase price - In July **2021**, BigCommerce acquired Feedonomics for **$81.1 million** in cash, integrating its product feed management platform; Feedonomics contributed **$8.8 million** in revenue and a **$0.7 million** net loss to Q1 2022 results[78](index=78&type=chunk)[79](index=79&type=chunk) - The Feedonomics acquisition resulted in **$41.3 million** in goodwill, expected to be tax-deductible, and **$37.0 million** in identifiable intangible assets[80](index=80&type=chunk)[82](index=82&type=chunk) Feedonomics Identifiable Intangible Assets | Identifiable Intangible Assets (Feedonomics) | Estimated Fair Value (in thousands) | Weighted Average Amortization Period (in years) | | :------------------------------------------- | :---------------------------------- | :---------------------------------------------- | | Developed Technology | $11,794 | 4.0 | | Customer Relationship | $22,525 | 5.7 | | Tradename | $2,470 | 5.0 | | Non-compete Agreement | $162 | 3.0 | | Total | $36,951 | | - Contingent compensation arrangements for Feedonomics employees total **$65.0 million**, payable in two annual installments, with **$12.2 million** recognized as expense in Q1 2022[81](index=81&type=chunk) - In November **2021**, BigCommerce acquired Quote Ninja, Inc. (dba B2B Ninja) for **$2.0 million** in common stock, adding B2B e-commerce capabilities[83](index=83&type=chunk) [6. Goodwill and Intangible Assets](index=18&type=section&id=6.%20Goodwill%20and%20Intangible%20Assets) This note provides information on the company's goodwill and definite-lived intangible assets, including amortization and impairment policies - Goodwill is not amortized but tested for impairment annually; no impairment was recorded as of March 31, 2022[84](index=84&type=chunk) - Definite-lived intangible assets are amortized on a straight-line basis, with amortization expense of **$2.0 million** for Q1 2022[85](index=85&type=chunk) Definite-Lived Intangible Assets Net Carrying Amount | Definite-Lived Intangible Assets (in thousands) | March 31, 2022 Net Carrying Amount | December 31, 2021 Net Carrying Amount | Weighted Average Remaining Useful Life (years) | | :---------------------------------------------- | :--------------------------------- | :------------------------------------ | :--------------------------------------------- | | Developed Technology | $10,763 | $11,643 | 3.2 | | Customer Relationship | $19,780 | $20,776 | 5.0 | | Tradename | $2,130 | $2,253 | 4.3 | | Non-compete Agreement | $124 | $138 | 2.3 | | Other Intangibles | $198 | $222 | 2.1 | | Total | $32,995 | $35,032 | | Expected Amortization Expense for Intangible Assets | Expected Amortization Expense (in thousands) | Amount | | :------------------------------------------- | :----- | | 2022 (April 1st through December 31st) | $5,968 | | 2023 | $7,958 | | 2024 | $7,823 | | 2025 | $6,134 | | 2026 | $3,395 | | Thereafter | $1,717 | | Total | $32,995 | [7. Commitments, Contingencies, and Leases](index=19&type=section&id=7.%20Commitments,%20Contingencies,%20and%20Leases) This note outlines the company's commitments, potential liabilities from contingencies, and details of its operating lease agreements - The company records liabilities for loss contingencies when probable and estimable, and is currently unaware of any material adverse claims[88](index=88&type=chunk) - Operating lease agreements for facilities expire through **2028**, with cash paid for operating lease liabilities of **$1.3 million** in Q1 2022[90](index=90&type=chunk)[93](index=93&type=chunk) Operating Lease Information | Operating Lease Information | March 31, 2022 | | :-------------------------- | :------------- | | Weighted-average remaining lease-term | 5.2 years | | Weighted-average discount rate | 5.41% | Future Maturities of Operating Lease Liabilities | Future Maturities of Operating Lease Liabilities (in thousands) | Amount | | :---------------------------------------------------- | :----- | | 2022 (April 1st through December 31st) | $2,757 | | 2023 | $3,258 | | 2024 | $2,985 | | 2025 | $2,775 | | 2026 | $2,528 | | Thereafter | $2,852 | | Total Minimum Lease Payments | $17,155 | | Less Imputed Interest | $(2,273) | | Total Lease Liabilities | $14,882 | [8. Other Liabilities](index=20&type=section&id=8.%20Other%20Liabilities) This note provides a breakdown of other current liabilities, including sales tax, payroll, and acquisition-related compensation Other Current Liabilities | Other Current Liabilities (in thousands) | March 31, 2022 | December 31, 2021 | | :--------------------------------------- | :------------- | :---------------- | | Sales Tax Payable | $813 | $679 | | Payroll and Payroll Related Expenses | $10,795 | $17,315 | | Acquisition Related Compensation | $22,559 | $14,309 | | Other | $3,043 | $3,951 | | Total Other Current Liabilities | $37,210 | $36,254 | - Other current liabilities increased to **$37.2 million** at March 31, 2022, primarily due to a significant increase in acquisition-related compensation[95](index=95&type=chunk) [9. Debt](index=20&type=section&id=9.%20Debt) This note details the company's convertible senior notes, including their principal balance, issuance costs, and interest expense - In September **2021**, BigCommerce issued **$345.0 million** in **0.25% Convertible Senior Notes due 2026**, with net proceeds of approximately **$335.0 million**[96](index=96&type=chunk) - The notes are senior, unsecured obligations with an initial conversion rate of **13.6783** shares per **$1,000** principal amount, subject to certain conversion conditions and redemption options[98](index=98&type=chunk) Convertible Notes Carrying Value | Convertible Notes (in thousands) | March 31, 2022 | December 31, 2021 | | :------------------------------- | :------------- | :---------------- | | Principal Balance | $345,000 | $345,000 | | Unamortized Issuance Costs | $(8,975) | $(9,463) | | Carrying Value, Net | $336,025 | $335,537 | Interest Expense on Convertible Notes | Interest Expense (in thousands) | Three months ended March 31, 2022 | | :------------------------------ | :-------------------------------- | | Contractual Interest Expense | $221 | | Amortization of Issuance Costs | $488 | | Total | $709 | - The company also entered into capped call transactions using **$35.6 million** of the note proceeds to reduce potential stock dilution upon conversion, with an initial cap price of **$106.34** per share[100](index=100&type=chunk) [10. Stockholders' Equity (Deficit)](index=22&type=section&id=10.%20Stockholders'%20Equity%20(Deficit)) This note outlines changes in stockholders' equity, including stock option and RSU grants, and stock-based compensation expense - During Q1 2022, BigCommerce granted **876,584** stock options with a weighted average exercise price of **$20.25** and **1,888,396** Restricted Stock Units (RSUs) with a weighted average grant-date fair value of **$20.26**[104](index=104&type=chunk)[105](index=105&type=chunk) Stock-Based Compensation Expense | Stock-Based Compensation Expense (in thousands) | Three months ended March 31, 2022 | Three months ended March 31, 2021 | | :---------------------------------------------- | :-------------------------------- | :-------------------------------- | | Cost of Revenue | $862 | $387 | | Sales and Marketing | $2,583 | $1,579 | | Research and Development | $2,526 | $1,148 | | General and Administrative | $2,991 | $2,057 | | Total | $8,962 | $5,171 | - Total stock-based compensation expense increased to **$9.0 million** in Q1 2022 from **$5.2 million** in Q1 2021[106](index=106&type=chunk) [11. Income Taxes](index=23&type=section&id=11.%20Income%20Taxes) This note discusses the company's effective tax rate, valuation allowances, and unrecognized tax benefits - The effective tax rate for Q1 2022 was **(0.31)%**, primarily due to valuation allowances offsetting forecasted losses in the U.S., Australia, and the UK[108](index=108&type=chunk)[109](index=109&type=chunk) - The company had **$396 thousand** in tax-effected unrecognized tax benefits as of March 31, 2022, which would affect the effective income tax rate if recognized[111](index=111&type=chunk) [12. Net Loss Per Share](index=23&type=section&id=12.%20Net%20Loss%20Per%20Share) This note provides details on the calculation of basic and diluted net loss per share, including potentially dilutive securities - Basic and diluted net loss per share were both **$(0.51)** for Q1 2022, compared to **$(0.12)** for Q1 2021, as potentially dilutive securities were anti-dilutive due to net losses[8](index=8&type=chunk)[112](index=112&type=chunk) Potentially Dilutive Securities | Potentially Dilutive Securities (in thousands) | March 31, 2022 | March 31, 2021 | | :--------------------------------------------- | :------------- | :------------- | | Stock Options Outstanding | 6,307 | 7,491 | | Restricted Stock Units | 4,094 | 1,868 | | Acquisition Related Compensation | 2,835 | — | | Convertible Debt | 4,719 | — | | Total Potentially Dilutive Securities | 17,955 | 9,359 | [13. Subsequent Events](index=23&type=section&id=13.%20Subsequent%20events) This note reports on significant events occurring after the balance sheet date, specifically the acquisition of Bundle B2B Inc - On April **26**, **2022**, BigCommerce acquired Bundle B2B Inc., a B2B e-commerce solution, and is finalizing the accounting for this transaction[114](index=114&type=chunk)[115](index=115&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides an overview of BigCommerce's financial condition and results of operations, highlighting key business metrics, revenue sources, operating expenses, and liquidity. The company experienced significant revenue growth but also increased operating losses, influenced by acquisitions and strategic investments [Special Note Regarding Forward-Looking Statements](index=25&type=section&id=Special%20Note%20Regarding%20Forward-Looking%20Statements) This section cautions readers that the report contains forward-looking statements subject to risks and uncertainties that may cause actual results to differ - The report contains forward-looking statements regarding revenue, expenses, market trends, investments, competition, growth management, intellectual property, international expansion, regulatory changes, cybersecurity, COVID-19 impact, and financing needs[117](index=117&type=chunk) - These statements are subject to risks and uncertainties, and actual results may differ materially from expectations, as detailed in the 'Risk Factors' section[118](index=118&type=chunk)[119](index=119&type=chunk) [Overview](index=26&type=section&id=Overview) This section describes BigCommerce's 'Open SaaS' e-commerce platform, its customer base, and strategic approach to partnerships - BigCommerce provides an 'Open SaaS' e-commerce platform, combining flexibility of open source with benefits of multi-tenant SaaS, serving approximately **60,000** online stores and **12,972** accounts with over **$2,000** in annual contract value as of March 31, 2022[122](index=122&type=chunk) - The platform offers comprehensive e-commerce solutions including store design, catalog management, hosting, checkout, order management, reporting, and third-party integrations[123](index=123&type=chunk) - The company's strategy involves strategic partnerships with technology providers to complement its core platform and generate high-margin revenue share[126](index=126&type=chunk) [Key Business Metrics](index=26&type=section&id=Key%20business%20metrics) This section presents the key performance indicators used to evaluate the company's growth and operational efficiency, including ARR and ARPA - Key metrics include Annual Revenue Run-rate (ARR), Accounts with greater than **$2,000** ACV, Average Revenue Per Account (ARPA), and ARR Attributable to Enterprise Accounts[129](index=129&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk) Key Business Metrics Summary | Metric | March 31, 2022 | December 31, 2021 | March 31, 2021 | | :------------------------------------------------------- | :------------- | :---------------- | :------------- | | Total ARR (in thousands) | $280,426 | $268,665 | $196,274 | | Accounts with ACV greater than $2,000 | 12,972 | 12,754 | 10,509 | | % of Total ARR attributable to accounts with ACV > $2,000 | 89% | 88% | 83% | | ARPA attributable to accounts with ACV > $2,000 | $19,234 | $18,598 | $15,582 | | ARR Attributable to Enterprise Accounts (in thousands) | $188,983 | $172,858 | $112,350 | | % of Total ARR attributable to Enterprise Accounts | 67% | 64% | 57% | - Total ARR increased to **$280.4 million** as of March 31, 2022, up from **$196.3 million** a year prior, with a growing percentage attributable to accounts with ACV greater than **$2,000** and Enterprise Accounts[133](index=133&type=chunk) - Net Revenue Retention (NRR) for accounts with ACV greater than **$2,000** was **116%** for the year ended December 31, 2021, indicating strong revenue expansion from existing customers[135](index=135&type=chunk) [Components of Results of Operations](index=28&type=section&id=Components%20of%20results%20of%20operations) This section explains the various revenue streams and expense categories that contribute to the company's financial results - Revenue is generated from subscription solutions (platform fees, recurring professional services) and partner and services (revenue share, technology integrations, marketing services)[136](index=136&type=chunk)[137](index=137&type=chunk)[138](index=138&type=chunk)[139](index=139&type=chunk)[140](index=140&type=chunk) - Cost of revenue includes personnel, hosting, payment processing fees, and overhead, expected to increase in absolute dollars due to growth and international expansion[141](index=141&type=chunk) - Sales and marketing expenses are expected to increase in absolute dollars due to hiring and global expansion, while research and development expenses will also increase with continued investment in product development[142](index=142&type=chunk)[143](index=143&type=chunk)[144](index=144&type=chunk) - General and administrative expenses are rising due to public company operations and business growth, and acquisition-related expenses include third-party costs and contingent compensation[145](index=145&type=chunk)[146](index=146&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20operations) This section analyzes the company's financial performance for the period, detailing revenue growth, gross margin changes, and operating expense increases Consolidated Results of Operations | Metric | Three months ended March 31, 2022 (in thousands) | Three months ended March 31, 2021 (in thousands) | Change Amount (in thousands) | % Change | | :----------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :--------------------------- | :------- | | Revenue | $66,050 | $46,660 | $19,390 | 41.6% | | Cost of Revenue | $17,103 | $9,250 | $7,853 | 84.9% | | Gross Profit | $48,947 | $37,410 | $11,537 | 30.8% | | Gross Margin | 74.1% | 80.2% | -6.1% | | | Sales and Marketing | $32,173 | $20,809 | $11,364 | 54.6% | | Research and Development | $20,944 | $13,535 | $7,409 | 54.7% | | General and Administrative | $17,312 | $11,608 | $5,704 | 49.1% | | Acquisition Related Expenses | $12,660 | $0 | $12,660 | N/A | | Amortization of Intangible Assets | $2,037 | $0 | $2,037 | N/A | | Loss from Operations | $(36,179) | $(8,542) | $(27,637) | 323.5% | | Net Loss | $(37,037) | $(8,544) | $(28,493) | 333.5% | - Total revenue increased by **41.6%** to **$66.1 million**, driven by a **49.9%** increase in subscription solutions revenue (including **$8.8 million** from Feedonomics) and a **23.2%** increase in partner and services revenue[155](index=155&type=chunk) - Gross margin decreased to **74.1%** from **80.2%** due to higher hosting costs, personnel costs, and expenses from the Feedonomics acquisition[156](index=156&type=chunk) - Operating expenses significantly increased across all categories, with acquisition-related expenses of **$12.7 million** and amortization of intangible assets of **$2.0 million** being new significant costs in Q1 2022[157](index=157&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk)[161](index=161&type=chunk) - Net loss widened substantially to **$(37.0) million** in Q1 2022 from **$(8.5) million** in Q1 2021, primarily due to increased operating expenses[151](index=151&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20capital%20resources) This section assesses the company's ability to meet its short-term and long-term financial obligations, including cash flow and debt - The company has incurred losses and anticipates continued negative operating cash flow but believes existing cash, cash equivalents, and marketable securities are sufficient for at least the next **12** months[163](index=163&type=chunk)[164](index=164&type=chunk)[165](index=165&type=chunk) - Future capital requirements depend on growth rate, revenue levels, sales and marketing expansion, market acceptance, business initiatives, new product introductions, and the ongoing impact of the COVID-19 pandemic[165](index=165&type=chunk) - The Feedonomics acquisition includes up to **$65.0 million** in contingent compensation, payable in cash or Series **1** common stock, which may require additional financing or dilute stockholders[166](index=166&type=chunk) Cash Flow Summary | Cash Flow Summary (in thousands) | Three months ended March 31, 2022 | Three months ended March 31, 2021 | | :--------------------------------------- | :-------------------------------- | :-------------------------------- | | Net Cash Used in Operating Activities | $(21,985) | $(12,758) | | Net Cash Used in Investing Activities | $(24,813) | $(18,854) | | Net Cash Provided by Financing Activities | $184 | $1,741 | | Net Increase in Cash, Cash Equivalents and Restricted Cash | $(46,614) | $(29,871) | - Cash, cash equivalents, and restricted cash decreased by **$46.6 million** in Q1 2022, primarily due to cash used in operating and investing activities[168](index=168&type=chunk)[169](index=169&type=chunk)[170](index=170&type=chunk) - The company holds **$345.0 million** in **0.25% Convertible Senior Notes due 2026**, which are senior, unsecured obligations[173](index=173&type=chunk) [Critical Accounting Policies and Estimates](index=35&type=section&id=Critical%20accounting%20policies%20and%20estimates) This section highlights accounting policies requiring significant judgment and estimation, which could materially impact financial results - The preparation of financial statements requires significant estimates and assumptions, which could differ from actual results[177](index=177&type=chunk) - No material changes to critical accounting policies and estimates were made, except for those related to the Feedonomics acquisition (purchase price allocation and valuation of acquired intangibles)[177](index=177&type=chunk) [Recent Accounting Pronouncements](index=35&type=section&id=Recent%20accounting%20pronouncements) This section discusses the adoption of new accounting standards and their impact on the company's financial reporting - The company early adopted ASU No. **2021-08**, 'Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,' on January **1**, **2022**, using the prospective method[48](index=48&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the company's exposure to market risks, including interest rate risk, foreign currency exchange risk, and credit risk, and outlines strategies for managing these risks - The company's interest-earning instruments carry interest rate risk, but due to short-term maturities, a one-eighth percent change in interest expense would have an annual impact of approximately **$0.4 million**[180](index=180&type=chunk) - Foreign currency exchange risk is increasing as international operations expand, particularly for operating expenses denominated in Australian dollars and British pounds sterling, though currently considered relatively small[181](index=181&type=chunk)[182](index=182&type=chunk) - Credit risk is managed by limiting investments to high credit quality securities and financial institutions, with cash balances monitored to mitigate risk[184](index=184&type=chunk) [Item 4. Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) This section addresses the effectiveness of the company's disclosure controls and procedures and internal control over financial reporting, noting a material weakness in IT program change management - As of March 31, 2022, disclosure controls and procedures were deemed not effective due to a material weakness in internal control over financial reporting related to IT program change management[185](index=185&type=chunk)[187](index=187&type=chunk) - Management is dedicating significant efforts and resources to remediate the identified material weakness throughout **2022**[188](index=188&type=chunk) PART II. OTHER INFORMATION This section provides additional information not covered in the financial statements, including legal proceedings, risk factors, and equity sales [Item 1. Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to various claims in the normal course of business but believes there are no pending or threatened claims that would have a material adverse effect on its financial position, liquidity, or results - The company is not aware of any pending or unasserted claims that would materially adversely affect its financial position, liquidity, or results[191](index=191&type=chunk) [Item 1A. Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) This section updates previously disclosed risk factors, emphasizing new and ongoing risks related to international operations, geopolitical crises (specifically the Russian invasion of Ukraine), the lingering impacts of the COVID-19 pandemic, and inflation - International expansion creates operational challenges, including geopolitical crises like the Russian invasion of Ukraine, which could disrupt operations, impact employees, and affect global markets[193](index=193&type=chunk)[195](index=195&type=chunk)[196](index=196&type=chunk)[197](index=197&type=chunk) - The company has a significant development center in Kyiv, Ukraine, and the ongoing conflict poses risks to personnel, infrastructure, and could lead to increased cybersecurity incidents[196](index=196&type=chunk)[197](index=197&type=chunk) - The COVID-19 pandemic continues to present uncertainty, potentially impacting revenue growth rates, global supply chains, and operational disruptions due to remote work and employee health[198](index=198&type=chunk) - Inflation could adversely affect liquidity, business, financial condition, and results of operations by increasing costs and potentially decreasing customer spending[200](index=200&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=40&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports on the company's unregistered sales of equity securities and the use of proceeds, noting no significant activity in January or March 2022, and a minimal purchase in February 2022 - No unregistered equity securities were sold, and no proceeds were used during the reporting period[202](index=202&type=chunk) Unregistered Sales of Equity Securities | Month | Total number of shares purchased (in thousands) | Average price paid per share | | :------------ | :---------------------------------------------- | :--------------------------- | | January 2022 | — | — | | February 2022 | 1 | $3.22 | | March 2022 | — | — | | Total | 1 | $3.22 | [Item 3. Defaults Upon Senior Securities](index=40&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - No defaults upon senior securities were reported[202](index=202&type=chunk) [Item 4. Mine Safety Disclosures](index=40&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company has no mine safety disclosures to report - No mine safety disclosures are applicable[202](index=202&type=chunk) [Item 5. Other Information](index=40&type=section&id=Item%205.%20Other%20Information) This section indicates that there is no other information to report beyond what is already disclosed - No other information is reported in this section[202](index=202&type=chunk) [Item 6. Exhibits](index=41&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including various agreements, corporate documents, certifications, and XBRL-related files - The exhibit index includes the Asset Purchase Agreement for Feedonomics, corporate organizational documents, the Indenture for Convertible Senior Notes, Capped Call Confirmation, and certifications from executive officers[205](index=205&type=chunk)[204](index=204&type=chunk) - XBRL instance, schema, calculation, definition, and presentation linkbase documents are also included[204](index=204&type=chunk)[207](index=207&type=chunk) SIGNATURES This section contains the official signatures of the company's executive officers, certifying the accuracy of the report - The report is signed by Brent Bellm, President and Chief Executive Officer, and Robert Alvarez, Chief Financial Officer, on May **4**, **2022**[210](index=210&type=chunk)