BigCommerce Holdings, Inc. — FY2021 Form 10-K
Issuer note: The supplied filing is for BigCommerce Holdings, Inc. (Nasdaq: BIGC), not Commerce.Com, Inc. It covers the fiscal year ended December 31, 2021; it is an annual report, not a standalone fourth-quarter report.
Business context
BigCommerce provides a subscription-based ecommerce software platform for small businesses, mid-market companies, and large enterprises, including B2B and B2C merchants. Its strategy emphasizes an open, multi-tenant SaaS platform integrated with third-party technology partners. At year-end, it reported approximately 60,000 online stores and 12,754 accounts with annual contract value above $2,000.
Financial and operating results
| Metric | FY2021 | FY2020 | Change |
|---|---|---|---|
| Revenue | $219.9 million | $152.4 million | +44.3% |
| Subscription solutions revenue | $154.9 million | $103.7 million | +49.4% |
| Partner and services revenue | $64.9 million | $48.7 million | +33.4% |
| Gross profit / margin | $171.4 million / 77.9% | $118.2 million / 77.6% | Margin +0.3 percentage points |
| Operating loss | $(75.9) million | $(38.7) million | Loss widened |
| Net loss | $(76.7) million | $(37.6) million | Loss widened |
| Net loss per share, basic and diluted | $(1.08) | $(0.99) | Loss per share increased |
| Cash used in operating activities | $(40.3) million | $(26.5) million | Use increased |
Cash, cash equivalents, restricted cash, and marketable securities totaled $401.0 million at year-end, including $297.6 million cash and cash equivalents and $102.3 million marketable securities. Current assets were $454.5 million versus current liabilities of $62.8 million. The company reported $345.0 million principal amount of 0.25% convertible senior notes due 2026; their year-end carrying value, net of issuance costs, was $335.5 million. Lease liabilities totaled $12.9 million. Management stated existing cash and expected operating cash flows should cover working capital and capital expenditure needs for at least 12 months, while also anticipating continued operating losses and negative operating cash flow.
Key growth indicators included total ARR of $268.7 million, up from $181.2 million; ARR from Enterprise Accounts of $172.9 million, up from $100.8 million; and 116% net revenue retention for accounts above the $2,000 ACV threshold, compared with 113%. These company-defined metrics include Feedonomics only from its July 2021 acquisition date.
Changes, transactions, and unusual items
- Revenue growth accelerated from 35.9% in 2020 to 44.3% in 2021. Subscription revenue growth reflected mid-market and enterprise customer gains and international expansion; Feedonomics contributed $14.4 million of 2021 revenue after acquisition.
- Operating expenses rose to $247.3 million from $156.9 million. The 2021 total included $23.3 million of acquisition-related expense, including $21.5 million associated with post-acquisition compensation arrangements, and $3.3 million of acquired-intangible amortization.
- In July, the company acquired Feedonomics for approximately $81.1 million cash at closing, with up to $65.0 million in additional payments tied to anniversaries or milestones. It also acquired Quote Ninja (B2B Ninja) for approximately $2.0 million in stock, plus contingent compensation.
- In September, BigCommerce issued $345.0 million of 0.25% convertible notes due 2026, receiving approximately $335.0 million net of offering costs. It spent $35.6 million on capped-call transactions intended to reduce potential dilution or offset conversion payments.
- Investing cash outflow was $186.9 million, mainly the $81.1 million Feedonomics cash payment and $107.0 million purchases of marketable securities. Financing cash inflow was $305.3 million, principally from the notes issuance.
Outlook, risks, and controls
The filing gives no numerical revenue or earnings guidance. Management plans continued investment in product development, sales and marketing, partnerships, and international expansion, while seeking operating leverage as revenue scales. It cautions that pandemic-driven ecommerce demand, customer bookings, and transaction volumes may moderate, and that the pandemic’s effects are increasingly difficult to isolate.
- The company has a history of losses and reported an accumulated deficit of $390.1 million at December 31, 2021; profitability is not assured.
- Management and the auditor identified a material weakness in IT general controls over program change management. Management concluded internal control over financial reporting was ineffective at year-end, and the auditor issued an adverse opinion on internal control. The financial-statement audit opinion was unqualified; management reported the weakness did not require financial-statement modifications. Remediation was underway, with completion expected as early as practicable in 2022.
- The company had 106 employees at its Kyiv development center and warned that Russia’s invasion of Ukraine could disrupt operations, increase costs, and affect the broader economy.
- Other principal exposures include intense competition, reliance on third-party cloud infrastructure and technology partners, cybersecurity and privacy regulation, international expansion and foreign exchange, and possible dilution or cash obligations related to convertible notes and acquisition payments.
- No pending legal matter was reported as likely to have a material adverse effect. The filing disclosed $40.5 million of unconditional purchase obligations at year-end.
Important facts for investors to verify
- Whether revenue growth, ARR growth, and 116% net revenue retention persist as pandemic-related ecommerce effects normalize.
- Feedonomics’ and B2B Ninja’s contribution to growth, integration progress, acquisition-related costs, and remaining contingent payments.
- Progress in remediating and independently testing the ITGC material weakness, including whether acquired businesses are incorporated into control assessments.
- Cash burn and liquidity relative to the $345.0 million notes principal, potential conversion or repurchase obligations, and acquisition-related payments.
- The durability of gross margin and the path toward profitability as operating expenses and stock-based compensation increase.