Bigmerce (US:BIGC)2023-05-05 01:22Financial Data and Key Metrics Changes - In Q1, total revenue was $71.8 million, up 9% year-over-year, with subscription revenue growing 12% year-over-year to $53.8 million [26][63] - Q1 non-GAAP operating loss was $6.4 million, an improvement from a loss of $12.4 million in the prior year [2][3] - Gross margin was 77%, up 192 basis points from the previous year, while gross profit was $55.5 million, up 11% year-over-year [1] Business Line Data and Key Metrics Changes - Enterprise account ARR was $228.8 million, up 21% year-over-year, representing over 72% of total company ARR [27][66] - Non-enterprise account ARR was $87.9 million, showing slight sequential growth but down slightly year-over-year as expected [27] - Subscription ARR was up $5.1 million compared to Q4 and up 15% year-over-year [66] Market Data and Key Metrics Changes - Revenue in the Americas was up 7%, while EMEA revenue grew 27% and APAC revenue was up 1% compared to the prior year [63] - The sales pipeline for enterprise accounts as of the start of Q2 was approximately 20% higher than the previous year [28][70] Company Strategy and Development Direction - The company is focusing on cash flow improvements and aims to reach breakeven on adjusted EBITDA by the end of Q3 [7][12] - There is a strategic shift towards the mid-market and enterprise segments, with plans to build a scalable, self-serve small business segment [13][42] - The company is investing in B2B functionalities and expanding its omnichannel capabilities to enhance customer experiences [44][45] Management's Comments on Operating Environment and Future Outlook - Management remains conservative in guidance due to macroeconomic uncertainties, expecting total revenue for Q2 in the range of $72.1 million to $74.1 million, implying a year-over-year growth rate of 6% to 9% [8][9] - The company is optimistic about the potential for growth in the mid-market and enterprise segments, despite challenges in the sales cycle for larger enterprise deals [39][92] Other Important Information - The Q1 net loss included over $6 million in expenses from third-party acquisition costs related to the acquisition of Feedonomics [6] - The company has launched several new features and partnerships, including a strategic partnership with WPP for omnichannel solutions [48][50] Q&A Session Summary Question: Can you speak to the pipeline for new deals comparing to last quarter? - Management indicated that the pipeline for enterprise is roughly 20% higher than last year, with strong month-on-month performance in Q2 [70][71] Question: How do you view the competitive environment with Shopify's commerce components? - Management emphasized their commitment to an open SaaS strategy and their leadership in headless and composable ecommerce, which they believe provides a competitive advantage [74][75] Question: What are the growth expectations for Feedonomics? - Management expects Feedonomics to grow at or above the pace of the enterprise business, with strong demand signals from agency partners [105] Question: Are you seeing any changes in the growth algorithm for enterprise ARR? - Management noted that they are seeing larger merchants coming onto the platform and expect this trend to continue [81][82] Question: What are the expectations for retail accounts as an anchor to growth? - Management expressed confidence in the health of the non-enterprise segment and anticipates positive revenue impacts from recent pricing changes [87][90]