Commerce.com, Inc. 10-Q Summary: Q2 2026
Business Context and Reporting Period
This filing covers the quarterly period ended June 30, 2026. Commerce.com, Inc. (CMRC) operates an open, AI-driven commerce platform comprising BigCommerce (transaction layer), Feedonomics (product intelligence), and Makeswift (experience layer). The company serves B2B, B2C, and small business customers globally, operating as a single reportable segment.
Key Financial Metrics
| Metric | Q2 2026 (3 Months) | Q2 2025 (3 Months) | YTD 2026 (6 Months) | YTD 2025 (6 Months) |
|---|---|---|---|---|
| Revenue | $84.5 million | $84.4 million | $171.4 million | $166.8 million |
| Gross Profit | $63.5 million | $66.7 million | $130.2 million | $132.1 million |
| Gross Margin | 75.2% | 79.0% | 76.0% | 79.2% |
| Operating Income | $2.7 million | ($6.8 million) | $8.5 million | ($9.2 million) |
| Net Income | $1.1 million | ($8.4 million) | $4.8 million | ($8.7 million) |
| Diluted EPS | $0.01 | ($0.10) | $0.06 | ($0.11) |
| Operating Cash Flow | $5.1 million | $13.6 million | $23.5 million | $14.0 million |
| Cash & Equivalents | $57.2 million | $44.3 million | $57.2 million | $44.3 million |
| Marketable Securities | $99.2 million | $96.8 million | $99.2 million | $96.8 million |
| Total Debt (Convertible Notes) | $156.5 million | $157.0 million | $156.5 million | $157.0 million |
Material Changes vs. Prior Period
- Profitability Turnaround: The company returned to profitability in Q2 2026, reporting $1.1 million in net income compared to a net loss of $8.4 million in Q2 2025. Operating income improved from a loss of $6.8 million to a profit of $2.7 million.
- Revenue Growth: Total revenue remained flat quarter-over-quarter (+0.1%) but grew 2.7% year-to-date. Growth was driven by a 2.9% increase in Partner and Services revenue, offset by a slight decline in Subscription Solutions revenue.
- Expense Reduction: Total operating expenses decreased by 17.2% year-over-year to $60.8 million. Significant reductions were seen in Sales and Marketing (-21.6%) and Restructuring charges (-99.7%), reflecting ongoing cost optimization initiatives.
- Gross Margin Compression: Gross margin declined to 75.2% from 79.0% in the prior year, primarily due to increased web hosting costs and the expiration of usage credits in the prior period.
- Debt Structure: The company holds $150 million in 2028 Convertible Notes (7.5% interest) and $4.1 million in 2026 Convertible Notes (0.25% interest) maturing in October 2026.
Outlook, Risks, and Management Commentary
- Strategic Focus: Management emphasizes an "open, AI-driven" strategy, leveraging Feedonomics for product intelligence and Makeswift for digital experiences. The company is prioritizing capital-efficient customer acquisition and transitioning customers to annual contracts to improve cash flow.
- Restructuring: The company expects to incur an additional $1.0 million to $3.0 million in costs related to the 2025 Restructure through the first half of fiscal 2027.
- Liquidity: Management believes existing cash, cash equivalents, and operating cash flows are sufficient to meet working capital needs and repay the $4.1 million 2026 Convertible Notes maturing in October 2026 for at least the next 12 months.
- Stockholder Rights Plan: A "poison pill" plan was adopted in April 2026, expiring April 2027, which could discourage unsolicited takeover attempts.
- Risks: Key risks include geopolitical conflicts (specifically citing Iran, Israel, and Russia-Ukraine), foreign currency fluctuations, and the ability to realize benefits from restructuring efforts.
Investor Verification Checklist
- Debt Maturity: Verify the company's ability to repay or refinance the $4.1 million 2026 Convertible Notes maturing October 1, 2026.
- Revenue Quality: Analyze the sustainability of the flat revenue growth and the shift in mix toward Partner and Services revenue.
- Margin Trajectory: Monitor if gross margins can recover to prior levels as hosting costs stabilize.
- Restructuring Costs: Track actual spending against the $1.0M–$3.0M estimate for remaining restructuring costs in 2027.
- Valuation Allowance: Watch for potential release of the full valuation allowance on deferred tax assets, which could impact future effective tax rates given recent profitability.