Commerce.com, Inc. Q1 FY2025 earnings call

Strategic Priorities - Accelerating revenue growth profitably, disciplined and focused operational execution, execution of go-to-market transformation plan. ### Leadership Changes - Senior Vice President of Engineering assumed full leadership of engineering organization; welcomed Vipul Shah as Chief Product Officer, both with extensive experience in tech companies. ### B2B and B2C Investment - B2B continues to grow as a percentage of overall business, with new enterprise accounts and major enhancements like multi-company hierarchy support and upgraded configure-price-quote tool. B2C focuses on non-traditional fashion, beauty, and apparel verticals, with strong momentum in underserved categories and successful launches like EuroOptic and Kittery Trading Post. ### Investor Day Initiatives - On track to launch self-serve versions of Feedonomics and Makeswift, BigCommerce Payments solution, and bundled solutions with key partners. ### AI Application - Leveraging AI for sales and support efficiency, internal tools for architectural recommendations, developer docs automation, and partnerships with leading AI platforms to enhance customer experiences.

In Q1 2025, BigCommerce delivered non-GAAP operating income of $7.6 million, a 530-basis point margin improvement year-over-year. Annual revenue run-rate (ARR) reached $351 million, a year-over-year improvement of 3%. Revenue reached $82.4 million, growing 3% year-over-year. The company serves 5,825 enterprise accounts alongside tens of thousands of small business accounts. Non-GAAP gross margin strengthened to 80.3%, up 240 basis points year-over-year. Average revenue per enterprise account finished just over $45,000, a 9% increase year-over-year. Operating cash flow came in at approximately $400,000, an improvement of nearly $4 million year-over-year. The company has a solid balance sheet with $121.9 million in cash, cash equivalents, and marketable securities, and net debt reduced to $32.2 million.

Q2 Guidance - Expect revenue between $82.5 million and $83.5 million, and non-GAAP operating income between $2.7 million and $3.7 million. ### Full-Year 2025 Guidance - Widened revenue guidance range to $335.1 million to $351.1 million to reflect underlying business strength and macroeconomic uncertainty, and expects non-GAAP operating income between $16 million and $28 million. The current environment increases the potential range of revenue growth results, with the company maintaining a cautious view but seeing potential upside to previous revenue growth guidance while acknowledging macroeconomic uncertainty could impact growth.

Macro Economic Uncertainty - Closely monitoring shifting trade policies and increased tariffs affecting customers' operating environments, particularly for international sellers and brands. Potential impact on partner and services revenue (PSR, ~25% of total revenues) and pipeline generation/conversion rates. While no material impact seen yet, maintaining a cautious view and partnering with customers to provide support.

Q: Raimo Lenschow asked about pipeline signs and tariff impact.

A: Travis Hess mentioned positive pipeline trends, especially in B2B, and Daniel Lentz noted monitoring tariffs and keeping an eye on macros.

Q: Ken Wong inquired about pipeline close rates and guidance upper end.

A: Travis Hess said larger deals have slower conversion, and Daniel Lentz explained guidance range accounts for macro uncertainty and need for certain things to not happen and certain things to happen to reach upper end.

Q: Koji Ikeda asked about payment plans and client tier downgrades.

A: Travis Hess explained pricing model is based on order volume, not GMV basis like some competitors, and Daniel Lentz discussed impact of macro on potential tier downgrades.

Q: David Hynes asked about enterprise accounts decline and gross margin.

A: Daniel Lentz said focus on average revenue per account growth, and gross margins are healthy with plans to sustain high 70s to low 80s.

Q: Maddie Schrage asked about Freemium progress and margin upside.

A: Travis Hess said Feedonomics self-serve in beta, Makeswift self-serve late 2025/early 2026; Daniel Lentz said can sustain high 70s to low 80s, with payments potentially slightly dilutive to margins.

Q: Josh Baer asked about AI investment opportunities.

A: Travis Hess highlighted AI as largest opportunity in catalog and inventory data optimization, with active partnerships; Daniel Lentz elaborated on product investment and discipline in AI spending.

Q: Arti Vula asked about tariff impact on customers and resiliency.

A: Daniel Lentz said monitoring supply chain effects, not seeing full impact yet, and inventory levels may affect resiliency.

Q: Scott Berg asked about new customer behavior after tariff commotion.

A: Travis Hess said too early to tell, but B2B has cost savings thesis driving pipeline.

Q: Brian Peterson asked about search traffic and product portfolio response.

A: Travis Hess said actively optimizing for discoverability and inventory availability through product and feed data optimization, heavy investment area.