Commerce.com, Inc. 10-Q Summary: Q1 2026
Business Context and Reporting Period
This filing covers the quarterly period ended March 31, 2026. Commerce.com, Inc. (trading as CMRC) operates as a unified, open, AI-driven commerce platform encompassing BigCommerce, Feedonomics, and Makeswift. The company provides SaaS infrastructure for B2B, B2C, and small business merchants to manage product data, storefronts, and transactions. The company operates as a single reportable segment.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Revenue | $86.8 million | $82.4 million |
| Gross Profit | $66.7 million | $65.4 million |
| Gross Margin | 76.7% | 79.4% |
| Operating Income | $5.8 million | ($2.4 million) loss |
| Net Income | $3.7 million | ($0.4 million) loss |
| Diluted EPS | $0.05 | ($0.00) |
| Operating Cash Flow | $18.4 million | $0.4 million |
| Cash & Marketable Securities | $157.0 million | $143.0 million |
| Total Debt (Convertible Notes) | $156.8 million | $157.0 million |
Material Changes vs. Prior Period
- Profitability Turnaround: The company reported a net income of $3.7 million in Q1 2026, compared to a net loss of $0.4 million in Q1 2025. Operating income improved from a $2.4 million loss to a $5.8 million profit.
- Revenue Growth: Total revenue increased 5.4% year-over-year. Partner and services revenue grew 14.4%, while subscription solutions grew 2.5%.
- Expense Reduction: Total operating expenses decreased 10.2% to $60.9 million. Sales and marketing expenses dropped 13.7% and R&D expenses fell 6.1%, driven by the "2025 Restructure" and reduced stock-based compensation.
- Margin Compression: Gross margin decreased to 76.7% from 79.4%, primarily due to increased software and web hosting costs.
- Debt Restructuring: The company exchanged approximately $161.2 million of 2026 Convertible Notes for $150.0 million of new 2028 Convertible Notes (7.50% interest) in August 2024. A small portion of the 2026 notes ($4.1 million principal) remains outstanding.
Outlook, Risks, and Unusual Items
- Restructuring: The company is executing a 2025 Restructure plan. Q1 2026 included $0.9 million in restructuring charges. Management estimates additional costs of $2.0 million to $4.6 million through fiscal 2026 for retention benefits and professional services.
- Stockholder Rights Plan: On April 13, 2026, the Board adopted a stockholder rights plan ("poison pill") to discourage unsolicited takeovers. Rights expire April 12, 2027.
- Product Strategy: The company is transitioning plan structures (Core, Growth, Scale, Performance) and launched BigCommerce Payments in March 2026 to improve monetization and retention.
- Risks: Key risks include geopolitical conflicts (Israel/Iran, Russia/Ukraine) affecting international operations, foreign currency fluctuations, and the ability to realize benefits from the restructuring plan.
- Tax Position: The company maintains a full valuation allowance on U.S. federal and state net deferred tax assets but is monitoring evidence for potential release given recent profitability.
Investor Verification Checklist
- Debt Maturity: Verify the remaining principal of the 2026 Convertible Notes ($4.1 million) and the terms of the 2028 Convertible Notes ($150.0 million at 7.50% interest).
- Restructuring Costs: Monitor the actual run-rate of the remaining $2.0M–$4.6M in estimated restructuring costs against the budget.
- Valuation Allowance: Watch for announcements regarding the release of the valuation allowance on deferred tax assets, which could impact future effective tax rates.
- GMV Trends: Gross Merchandise Volume (GMV) declined 6.7% sequentially in Q1 2026; verify if this is a seasonal trend or indicative of broader merchant activity slowdowns.
- Stockholder Rights: Review the specific terms of the newly adopted rights plan and its potential impact on future M&A activity.