Commerce.com, Inc. Q3 FY2025 earnings call

• AI is reshaping commerce, with traditional e-commerce flows shifting to conversational discovery. Commerce's Feedonomics syndicates product data into AI services, and Makeswift empowers marketers to build AI-optimized site experiences. • B2B momentum remained strong in Q3, with new clients like ADI Global, Big Ass Fans, and Pantone. IDC and Gartner validated the platform's impact. • Launched Feedonomics Surface, a feed management product for BigCommerce merchants. Planned launch of Makeswift on Stencil in 2026. Brought Feedonomics order orchestration capabilities to BigCommerce and Shopify customers. Announced new embedded payments offering with PayPal. • Focus on scaling profitable, sustainable growth, with efforts on sales and marketing expense efficiency, partner-led distribution, and tighter resource alignment.

In Q3, Commerce delivered revenue of $86 million, in line with guidance. Non-GAAP operating income reached $8 million, significantly exceeding profitability guidance. Operating cash flow was just under $11 million. For the 12 months ending September 30, 2025, total revenue was $340 million and non-GAAP operating income was just above $30 million. The annual revenue run-rate was approximately $356 million, with 76% of ARR coming from enterprise plans and average revenue per enterprise account exceeding $46,800. Q3 revenue was a 3% year-over-year increase, non-GAAP operating income was 9% of revenue, and ARR ended the quarter at $356 million, up 2% year-over-year.

• For Q4, expected revenue between $87.8 million and $92.8 million and non-GAAP operating income between $4.3 million and $9.3 million. • For full year 2025, updated revenue guidance to between $340.6 million and $345.6 million, and non-GAAP operating income to between $24.7 million and $29.7 million, with a midpoint of $27.2 million, a $5.2 million increase from prior midpoint.

Q: Could you address the sequential decline in enterprise ARR and downtick in enterprise customers?

A: Daniel Lentz said it reflects progress through the year, primarily a function of net revenue retention, and they're focused on existing customer expansion.

Q: Travis, expand on strong signals into the holiday season?

A: Travis Hess mentioned momentum around AI, with large manufacturers/retailers in closed beta, and strong GSI motion with Accenture, with most momentum on B2C side on data and AI front.

Q: Competitive dynamics of discoverability related to answer engines?

A: Travis Hess said quality of data (structured and unstructured) is key, being open and agnostic is an advantage, with existing client relationships and data enrichment as strengths.

Q: Talk about new product rollouts excited for in 2026 and early learnings from Feedonomics Surface?

A: Christopher Hess was excited about Feedonomics Surface, which is the most downloaded app, plans to expand channels, and Feedonomics is agnostic, with Makeswift on Stencil next year also a focus.

Q: RPO expectation in 4Q related to PayPal partnership?

A: Christopher Hess explained that elements of agreements with partners, including development fees, hit RPO, and Q4 results will reflect this due to new agreements like with PayPal.

Q: Impact of PayPal partnership on P&L?

A: Daniel Lentz said it's high margin revenue as they won't recognize full interchange in cost of revenue, and Travis Hess mentioned leaning in aggressively on this opportunity in 2026.

Q: Unbundling of Feedonomics order orchestration and pricing/packaging?

A: Christopher Hess said unbundling helps with order orchestration complexity, and Daniel Lentz talked about giving customers choice, product-led growth, and focusing on self-serve upgrade motions.

Q: Demand environment and AI initiatives impact on merchants?

A: Christopher Hess said B2B demand is consistent, but on B2C side, agentic has shifted focus, with energy on optimizing data strategy and protecting brand experience through AI-driven solutions.