Commerce.com, Inc. Q4 FY2024 earnings call

• Added key leaders: Michelle Suzuki as CMO, Rob Walter as CRO, Marcus Groff as SVP of Engineering, and Tracy Turner as SVP of Revenue Operations. - Rearchitected sales, marketing, strategic partnerships, customer success, and operations around B2C, B2B, and Small Business offerings, integrating the three products (BigCommerce, Feedonomics, Makeswift) operationally and commercially. - Leveraged AI to enhance sales efficiency, product support, and core features. - Launched Catalyst, an accelerated reference architecture, and plans to introduce more bundled solutions in 2025. - Streamlined operations, reduced headcount by approximately 10%, and improved profitability and cash flow.

In fiscal year 2024, BigCommerce finished with $333 million in revenue, up 8% year-over-year. The ARR ended at nearly $350 million, a 4% increase. Enterprise ARR grew 7% to $262 million, representing 75% of total company ARR, while non-enterprise ARR declined 4% to $88 million. Non-GAAP operating income exceeded $19 million in 2024, a $25 million improvement over 2023, with non-GAAP operating margin expanding by 767 basis points and operating cash flow at $26 million, a $50 million improvement from 2023.

• Q1 2025: Expected revenue of $81.2 million to $83.2 million and non-GAAP operating income of $4 million to $5 million. - Full-year 2025: Expected revenue of $342.1 million to $350.1 million and non-GAAP operating income of $20 million to $24 million. - Target mid-single-digit growth rates for the full year, with ARR growth gradually accelerating, and aiming for low-to-mid single-digit operating margin expansion in 2025.

• Macro-economic uncertainties affecting consumer spending and business investment, which contribute to the conservative outlook. - Dependence on successful execution of transformation initiatives to achieve growth and margin targets.

Q: Time to execute. Realizing that revenue will lag some of the progress you make, any key kind of benchmark KPIs that you would steer us to kind of gauge success and any thoughts on a timeline for when we might see some of these improvements?

A: Travis Hess said leading indicator initially is pipeline and quality of pipeline year-over-year, quarter-over-quarter, expecting to see improved bookings halfway through the year, with external messaging starting to change mid-March around the ShopTalk Show.

Q: How dependent are the whole plans on the macro and what are you seeing out there?

A: Travis Hess said they take a conservative outlook, expecting this year to look a lot like last year, starting to see signs of encouraging pipeline build and projects resurfacing but taking a cautiously optimistic view due to macro uncertainties.

Q: Hey, guys. So, Travis, you've had a couple of questions on direct sales investments. Let me take the other side of that, and ask about partners. How has the engagement been with those folks as you've kind of reshuffled the leadership team and what are they asking for from BigCommerce?

A: Travis Hess said partner engagement has been bullish, with a focus on composability and making ingestion of third-party ISVs and partners easier, and they're concentrating on doubling down with agencies and ISVs for deeper partnerships.

Q: On the strategic priorities, you did reference operating with this blended focus, maybe eliminating other non-core initiatives. Have there been things that you've identified that you'll continue to deemphasize throughout this year? Or is a lot of that work largely been done here and we should think about this as being more of a clean slate approach as we progress through 2025?

A: Travis Hess said it's very much a clean slate, with Q1 being the last of some cleanup, having a couple of initiatives that don't align to the longer-term vision, and aiming to have that wrapped up by end of Q1.