Commerce.com, Inc. Q1 FY2026 earnings call

• Commerce is shifting from a destination to a system, with product intelligence, experience, and transaction layers (Feedonomics, MakeSwift, BigCommerce). - Endorsed Google's universal commerce protocol, demonstrated with Accenture at Google Cloud Next, agentic checkout live on multiple platforms. - Released BigCommerce Model Context Protocol, advanced AI capabilities in BigCommerce platform, launched BigCommerce Payments. - Expanded channels in Surface, added new customers, shipped faster checkout and other core platform improvements. - Updated pricing and packaging on BigCommerce platform, replacing prior plans with new ones and introducing payment provider fee changes.

Q1 2026 revenue was $86.8 million, up 5% year over year. Subscription solutions revenue was $63.7 million, partner and services revenue was $23.2 million. Non-GAAP operating income was $12.4 million. GMV was $8.3 billion, growing 14% year over year. Total ARR ended the quarter at $359.8 million. Generated operating and free cash flow of $18.4 million and $14.1 million respectively. Ended Q1 with approximately $157 million in cash, cash equivalents, and marketable securities. Dollarized Net Revenue Retention improved sequentially to 95.4%

• Q2 2026 revenue expected between $84.5 million and $85.5 million, non-GAAP operating income between $4 million and $5 million. - Full year 2026 revenue between $347.5 million and $369.5 million, non-GAAP operating income between $34 million and $53 million, non-GAAP operating margins 10% to 14%.

Q: Hey, good morning, guys. Thank you. Travis, I want to start with BigCommerce payments. I'm curious what success with that effort would look like to you and how investors should measure your progress and kind of key milestones against this goal as it, you know, continues to mature?

A: Hey, good morning. Thanks for the question. I'm measuring it in a couple different ways. One was actually delivering it, delivering it on time and within scope, which was accomplished, obviously, by the end of the quarter, which was exciting. Also measuring it by the feedback of the merchants that have been participating, which has been overwhelmingly positive. As that offering evolves, obviously the monetization of it becomes more and more important. But the real thesis here was to remove friction, create a better experience for our merchants based on feedback, and do that in partnership, at least initially with PayPal, and kind of go from there. I'll turn to Daniel as it relates to the financial aspects of it. Yeah, from the financial side, DJ, I think number one is just what's the adoption that we're driving, both amongst the existing base but also for new account signups where that's really kind of the default in the onboarding flow for small businesses and even maybe medium-sized businesses as well. I think another success criteria we're really paying attention to is kind of what's the relative retention rate and GMV growth that those merchants are seeing. And the number one thing that we're focused on is whether or not that product is helping our customers be more successful and grow faster. We believe that it can. We believe that it will. So far, we're doing well. We're ahead of our expectations in the first month or so in terms of GMB adoption. In the long run, I think if it's going well, not only will we see it in retention, we'll also see better PSR attach rates as well over time because obviously not only do we think it can be better for merchants, but we also think it can pick up some incremental revenue share for us in that part of the business.

Q: Gotcha. Yeah, I appreciate the question. Listen, the board and management teams are focused on maximizing value. And obviously, we're going to carefully review any serious offer we receive. This particular proposal implied a 50% discount to the current trading price. which is not a serious proposal from a financial point of view. So as we've stated quite publicly and multiple times, we don't believe this warrants any further engagement. Yeah, then I'll adjust the shareholder rights plan. So the board determined that adopting a limited duration rights plan is the right next step to protect stockholder interest. And it's a very normal thing, I would think, under the circumstances for us to do. Under that plan, rights become exercisable if a person or a group acquires, I think, 10% of shares of the company stock or 20% if it's for passive investors. The intent of that is just to discourage accumulations of shares and control without protections for stockholders and providing the board time to evaluate proposals in kind of a prudent and careful manner. So ultimately, we think it's about making sure that shareholders are treated equitably. And as Travis said, our position on this has not changed. The proposal really undervalues the company. It's not attractive to stockholders, and we don't think it warrants any further engagement.

Q: Ken, thanks for asking this question. Let me take a little bit of time to kind of walk through what this is. So just to be really, really clear about what we've done on the pricing and packaging side, on the platform side, We've done a name change of all of our core products and we've changed kind of what's included in each of those bundles. For your second question on enterprise plans, it's really a name change to performance and there's no other change associated with that, nor are we contemplating any further changes with those customers as well. We introduced a fee associated with using payments providers outside of our embedded payment provider list. To be very clear, all customers on kind of negotiated term agreements, formerly enterprise plans, are completely exempt from that. There is no charge that they receive that's incremental no matter what payments provider that they choose. What we are wanting to do, though, for the other three plan types, core, growth, and scale, we really wanted to drive better concentration of resources into a smaller group of payment providers where, to be very clear, we see better GMV growth and results for customers on those providers than we see on what I would call kind of the long tail of partners that we have in the business. And so customers have complete freedom to choose among a list of, I think, like 20 different payments providers, including BC Payments in that list with no fee structure whatsoever. So it's actually a very small amount of volume that we would expect to be impacted by this. To be really clear, we're not trying to create a new revenue line item out of that in particular. Really, this is about trying to drive volume towards payments providers that just see much better GMV growth and service delivery for customers. And that will take effect in June when we make those changes. We've also made some minor changes to service offerings in areas like that. But Travis has talked a lot in the past about the fact that we want to be a little bit more opinionated about what we think is the right architecture and the right selection of partners that we think our customers should be using. We are fundamentally, though, there's no change. We are an open platform. People can use whatever partners they want to use, but we'd like to try to concentrate volume a little bit more on a smaller list. This is also very different from our largest competitor where, yes, there's a fee structure that's similar, but that fee applies unless you use their proprietary payment solution, just one, where we're saying you can use up to 20 with no fee whatsoever, no matter what size the customer is.

Q: Yeah, there's just a small timing difference, actually. We expected originally to ship bc payments in q2 and we had some uh revenue associated with the go live on that with a partner we actually shipped it earlier than what we expected so it actually went out the door at the end of march which is a good thing so we end up with a little bit of extra revenue in q1 associated with that that we had originally anticipated actually to come through in q2 once you account for that timing it's actually very normal kind of period to period seasonality for what we're seeing in q1 and q2 that's really the main driving driving reason behind that It's kind of a no-news item from my perspective, honestly, in terms of the sequential step down you referred to, Ken.

Q: Nothing major. I would say Q2 sequentially always is going to have a little bit of a step up in OPEX for us because we actually have our kind of annual salary increase cycle occurs at the end of Q1. So Q2 is the first time that we actually see the full effect of merit conversions within our cost structure. That's the major difference that you see actually in the guide from period to period on the profit side. In addition, it's that issue. The profit also is affected a little bit in Q2 by the timing difference I mentioned on the revenue side. And then finally, we said on our last call that we were planning to step up investments in R&D on kind of like a cash investment basis, about 30% on a full year basis. and we're continuing to ramp up engineering hiring. We're kind of almost a full hiring that we intended behind that reinvestment, but we're seeing a little bit more carrying cost on that step up as you see in Q2, and that's reflected in the guide. We're really encouraged by what我们're seeing in that investment, by the way. I think if you just look at what Travis covered in his prepared remarks earlier, The volume, efficacy, quality of the stuff that我们're seeing shipped going out the door right now is really encouraging. And it's equally focused on retention and expansion of the base as it is on features that are really speaking to new offerings and new customers, which I'm sure there'll be questions for Travis coming on this. But I'd say I am very encouraged by what我'm seeing from a product quality and velocity behind that investment.

Q: Thanks, guys. That's a great question. I think it depends on the model. I think在my prepared remarks, I talked about how we were deliberately, our neutrality was deliberate and modular in nature, knowing that, you know, just to be candid, agents don't have a lot of opinions, right? They're going to navigate and surface what's in the best interest of the consumer and At least that's the thesis behind it. And so the neutrality, the openness of how we've done this and how we've architected, we think is a massive advantage. I mean, that's not even touching on the B2B side of this. I think the use cases for agentic and B2B will actually be more material sooner as it relates to the impact on those customers. I think cost savings in general is a general thesis. And those sorts of engagements and stripping out manual labor and obviously optimizing workflows and things like that, we're seeing incredible use cases. as well as almost once in a lifetime blending of front office and back office in a lot of ERP upgrades and implementations, where a lot of that stuff was done 10, 15, 20 years ago. It was purely back office. Now with agentic, it's forcing everything to come forward and have that blend. I think that's going to accelerate agentic in that space. But generally speaking, I think People want optionality. I think partnering with the best of the best in market around payment providers, around hyperscalers, around other ISVs and partners, and controlling, again, for us, data. experience and a transaction. And really, a lot of it's around governance, quite frankly. I think that's where most people have the angst. I don't think governance was a sexy term in the investment community a couple years ago. It's going to be front and center as we start talking about this complicated orchestration we've led into for a long time. The governance piece of this is what keeps this really durable and really differentiated. So That's my opinion on it. I would expect it to accelerate mostly upmarket. Think large retail. Think large global brand and manufacturers, folks that are most directly impacted by the traffic drop-off. I think that will gradually ease into mid-market and eventually become reasonably relevant for SMB. It really depends on the SMB market. but I think你're going to see a big push on enterprise B2B here sooner rather than later. They're just not obvious use cases because most of that stuff is behind logins, and the average general human being doesn't necessarily experience that on a day-to-day basis.

Q: Hi, everyone. Nice quarter, and thanks for taking my questions. I guess, Travis, I just want to start off, you know, coming off your conference event, company conference event last week. I guess, what are you hearing on B2B e-commerce replacement cycles out there? How are you viewing it? I guess calendar 26 year relative to maybe the last couple years in terms of the activity that might be out in the end market.

A: Yeah, we're seeing similar trends. Scott, it's a great question. I've been pretty public about this too. B2B has been as a platform business for us has been the majority of net new opportunities have been B2B oriented or hybrid, but mostly B2B. I see that continuing. I think what我just alluded to in the previous question around this ERP movement, front office and back office blend, that has a positive and an indirect negative impact. The positive is it brings everything front and center, and I think there's a lot of prioritizations around optimizing B2B, particularly around agenting. And what I mean by that for us specifically, you know, feedonomics and the data layer, so think of what feedonomics is doing around product intelligence and enrichment for B2C, Think of how massively and tangibly relative that is in a B2B environment. You've got massive catalogs, distributed data. A lot of those guys grow inorganically, so they're acquiring other technologies, other businesses. Synthesizing all of that and serving it up in very unique and complex ways is a natural fit. And then我们've also, through the release of our MCP tooling recently, it's going to make our merchant stores for B2B agent addressable. So again, you've got all these new use cases that are going to allow these organizations to take advantage faster advantage of speed to market and efficacy, which I think is going to improve the velocity. The one, and this is just a hypothetical, ERP tends to suck a lot of air out of the room, and so我think the danger in this is你're going to have a lot of things going on at once for very large organizations, and the sequencing of that transformation is kind of out of our control. I'm not eluding that it's impacted pipeline in this capacity at all. It has not. I'm just thinking, I'm putting my services hat back on and being objective about there's a sequencing element of this. So for us, I think the sequencing favors us because I think the cost savings from blending front office to back office through agentic is real. And I think that can help fund a lot of the back office stuff that's going to be pretty material as these companies go through这些either forced upgrades or or re-implementations of ERP. So I think time will tell, but I'm materially encouraged with what's going on in that space in particular.

Q: It's actually accretive. So the way that we've set this up, we are acting as a reseller and kind of a partner in building out the tech that's behind that alongside PayPal. we are not taking on the credit risk of merchants, and therefore we're not taking on a lot of interchange at all that goes along behind that. And so it's still fundamentally the same economic model where we had before. So I'd say it's accretive to margins. Now, if we decide in the future to take on more of a PSP role as we build out this solution, that may change. That would obviously come with different top-line revenue recognition treatment and margin structure, but we're not there yet. What I would say, though, and I want to be clear about this, this is kind of the first of many products that we're thinking about within financial technology where we think we can start to build out solutions. We don't have a specific timeline or a roadmap yet on when we're going to add on different things, but this is obviously something that we think customers can benefit from by having more integrated solutions, particularly smaller customers, where we have tens of thousands of customers in that size that we want to continue to build out. But I don't see this being dilutive anytime soon. And if it does, it would come with, you know, favorable revenue treatment anyway. And if and when we decide to take a step down that direction, obviously we would talk about that on earnings call so that everybody can build that into their models. But for now, I think你can just model it as it being accretive and a tailwind in that respect. And, you know, if that changes in the future, we'll talk about it then.