CMRC

Core Strategic Shift

• Commerce is undergoing a major structural shift driven by two industry changes: softer-than-historical B2C replatforming activity, and the rise of AI-driven distributed product discovery across AI agents, marketplaces, retail media, and search, rather than only on merchant websites.
• Management is shifting from pursuing all near-term revenue opportunities to concentrating investment in areas with the greatest differentiation and long-term value, centered on a three-layer open architecture strategy: Feedonomics (product intelligence layer), MakeSwift (experience layer), and BigCommerce (transaction layer), all designed to operate independently to preserve merchant flexibility.

Priority Investment Areas

• AI and agentic commerce: The company is expanding merchant distribution across leading AI assistants and commerce platforms, with growing adoption of the Commerce Companion AI tool for BigCommerce. New data enrichment offerings will launch in Q3 2026, followed by B2C brand agent and conversational search capabilities in early Q4 2026, with sequencing prioritized to build on high-quality foundational product data.
• Feedonomics Surface and MakeSwift: Feedonomics Surface makes enterprise-grade product intelligence accessible to SMB and mid-market merchants via self-serve, expanding the company's addressable market. MakeSwift is on track for a year-end freemium launch within BigCommerce, bringing modern visual editing directly to the platform.
• BigCommerce Payments: Following a strong US launch, the offering has exceeded adoption and volume expectations, with expansion to additional merchant cohorts underway and a UK launch on track for late 2026. Payments enables deeper merchant relationships, increased monetization, and stronger long-term business economics.
• B2B: BigCommerce maintained its leading market position, earning all 24 possible medals across enterprise and mid-market categories in the 2026 Paradigm B2B Combine for the fourth consecutive year. B2B is a core competitive advantage with strong pipeline and win rates, so it remains a key investment focus.

Quarterly Operational Highlights

• Delivered positive GAAP net income for the second consecutive quarter, with net revenue retention improving sequentially for the third consecutive quarter to 95.8%.
• Total GMV grew 14% year-over-year to $8.8 billion, with trailing four-quarter GMV reaching nearly $34 billion.
• Secured a product intelligence win with a major global apparel and footwear manufacturer via the Accenture strategic partnership, and announced a new distribution partnership with WP Engine that lets merchants add BigCommerce capabilities while retaining existing WordPress infrastructure.
• Updated pricing and packaging changes took effect June 1, focused on aligning with strategic embedded payment partners and improving long-term platform economics, not a broad price increase.

• The company revised its 2026 full-year guidance downward, with a midpoint revenue reduction of $18 million from the prior outlook, split evenly between deliberate partner ecosystem concentration and more cautious new account booking assumptions. The new full-year 2026 revenue guidance range is $336.5 million to $344.5 million.
• Full-year 2026 non-GAAP operating income guidance is also revised downward to a range of $28 million to $34 million, a $12.5 million reduction at the midpoint, reflecting the revenue adjustment, increased targeted R&D investment, and higher infrastructure costs for AI discovery, partially offset by operating efficiencies.
• Q3 2026 revenue guidance is set at $82.5 million to $85.5 million, with non-GAAP operating income guidance of $3.3 million to $5.3 million.
• The company maintains its long-term financial objectives, and remains on track to deliver full-year GAAP profitability for 2026 as planned.

Overall Q2 2026 revenue was $84.5 million, broken into two core revenue segments: Subscription Solutions revenue of $63.1 million (74.7% of total revenue) and Partner and Services revenue of $21.4 million (25.3% of total revenue). By product business segment (as a share of total ARR of $360.5 million): Feedonomics (product intelligence) is approximately 20% of total ARR, growing faster than the overall business. B2B is another fast-growing segment, with 17% year-over-year GMV growth, outpacing the overall company's 14% GMV growth, and represents the majority of new bookings over the past 18 months. B2C is the lagging segment, growing slower than the overall business, with continued softness in B2C replatforming activity. BigCommerce Payments, the company's new branded payment offering, is running more than 30% ahead of internal GMV targets, with strong adoption across both small/mid-market and larger accounts. MakeSwift (experience layer) remains on track for a year-end freemium launch, and Feedonomics Surface (self-serve product intelligence for SMB/mid-market) is seeing encouraging adoption and stronger GMV growth among its merchants.

• B2C replatforming activity has remained soft for multiple quarters, with extended sales cycles as merchants delay decisions to evaluate how AI will impact their long-term technology needs, and prioritize discovery investments over full platform replatforming.
• Broader software spending remains uneven, with high levels of customer scrutiny on purchase decisions creating uncertainty around near-term booking and monetization timelines.
• Open access to merchant storefronts for AI crawlers and agents has increased hosting and infrastructure costs, pressuring near-term gross margins (non-GAAP gross margin fell 170 basis points sequentially to 75.7% in Q2 2026).
• There is a structural monetization gap: platform GMV is growing faster than total revenue, particularly due to B2B's higher overall GMV share which has lower card-based transaction volume and thus lower partner revenue share. Closing this monetization gap is an ongoing priority with no guaranteed timeline.

Q: What has changed in the B2C replatforming slowdown over the past 90 days, and when might activity rebound?

A: Management notes the slowdown is not a collapse, but simply longer decision cycles. AI is the primary driver, as merchants want to ensure agentic discoverability is addressed before committing to full replatforming, pushing out decisions as they evaluate their own AI strategies. The upcoming holiday season also typically softens decision-making in the second half, so management took a prudent approach to guidance. There has been no material change in win rates, just pushed decisions rather than lost deals, with softness isolated entirely to B2C replatforming.

Q: How does Commerce's Feedonomics product intelligence strategy differ from Shopify's recently announced catalog offering for agentic commerce, and what is Feedonomics' current size and growth?

A: Shopify's approach is vertically oriented, while Commerce's Feedonomics strategy is explicitly agnostic to a merchant's existing stack, architecture, or ecosystem, centered on merchant sovereignty. This open approach appeals particularly to upmarket merchants. Feedonomics makes up roughly 20% of Commerce's total ARR, and grows faster than the overall business, along with B2B. Feedonomics processes over 1 trillion product listings monthly, giving it unique scale and insight into global product data optimization.

Q: What impact has the June 1 pricing and packaging change had on customer pipeline and retention, and is the softness in new bookings related to this change?

A: Management confirms the pricing change had no material impact on pipeline, conversion, or customer pushback. The change affected very little of the company's total ARR: all customers with negotiated agreements (the majority of ARR) were entirely unaffected, and changes were limited to discount structures for small business plans tied to the embedded payments strategy. The softness in new bookings is entirely isolated to B2C replatforming and broader AI-driven decision delays, not the pricing change.

Q: Why did partner and services revenue decline sequentially from Q1 to Q2, and what drives the uneven front half/back half revenue split in the new guidance?

A: The sequential Q1-Q2 decline was driven by one-time partner arrangement revenues tied to the BigCommerce Payments launch that were recognized in Q1. The revenue split in guidance is also impacted by the company's decision to narrow its partner ecosystem: lower-margin, long-tail partner revenue that would have come in the back half (especially Q4) is being foregone to focus on deeper, more durable strategic partnerships.