Filing summary: BigCommerce Holdings, Inc. — Q2 2021 Form 10-Q
Entity note: The filing identifies the registrant as BigCommerce Holdings, Inc., not Commerce.Com, Inc. The filing covers the quarter and six months ended June 30, 2021; dollar amounts below are in millions unless noted.
Business context and reporting period
BigCommerce operates a single-segment SaaS ecommerce platform for merchants, with subscription solutions and partner and services revenue. At June 30, 2021, it reported serving approximately 58,000 online stores in about 147 countries. The filing is unaudited interim reporting and cautions that first-half results are not necessarily indicative of full-year results.
Financial and operating metrics
| Metric | Q2 2021 | Q2 2020 | Six months 2021 | Six months 2020 |
|---|---|---|---|---|
| Revenue | $49.0 | $36.3 | $95.7 | $69.5 |
| Subscription solutions revenue | $34.0 | $23.9 | $66.0 | $47.5 |
| Partner and services revenue | $15.1 | $12.4 | $29.7 | $22.0 |
| Gross profit / gross margin | $38.8 / 79.2% | $28.5 / 78.4% | $76.2 / 79.7% | $54.2 / 78.0% |
| Operating loss | $(12.3) | $(7.4) | $(20.8) | $(14.8) |
| Net loss | $(12.2) | $(8.5) | $(20.8) | $(12.5) |
| Adjusted EBITDA (non-GAAP) | $(3.5) | $(5.4) | $(5.9) | $(11.2) |
| Operating cash flow | $(4.6) | $(7.0) | $(17.4) | $(17.0) |
Q2 revenue rose 35.0% year over year; first-half revenue rose 37.7%. Subscription growth was attributed mainly to mid-market and enterprise activity and retention. Partner and services growth reflected increased partner revenue sharing and improved monetization. Gross margin improved in both comparisons. Operating expenses rose substantially, including general and administrative expense, which increased 70% in Q2, partly from higher staffing, stock-based compensation, and public-company costs.
At June 30, cash and cash equivalents were $172.9, restricted cash $1.2, and current marketable securities $30.4. Total liabilities were $55.4, including operating lease liabilities; the company reported no outstanding debt and said its debt facilities had been repaid or terminated in 2020. The balance sheet shows current assets of $243.1 and current liabilities of $42.7. The cash flow statement reports $174.0 of cash, cash equivalents, and restricted cash at period end. First-half investing cash use was $32.0, primarily purchases of marketable securities ($30.4) and property and equipment ($1.6).
Other indicators: ARR was $209.3 at June 30, up from $151.8 a year earlier; ARR attributable to Enterprise Accounts was $122.7. Accounts with ACV above $2,000 totaled 10,986, and their share of ARR was 85%. Reported annual NRR for this cohort was 113% for 2020; the filing does not provide a Q2 2021 NRR.
Material changes versus the prior comparable period
- Revenue growth was broad-based, while gross margin increased 0.8 percentage points in Q2 and 1.7 points for the first half.
- Net loss widened year over year, although Adjusted EBITDA loss narrowed. First-half operating cash use was broadly similar to 2020.
- Stock-based compensation increased to $6.5 in Q2 and $11.7 for the first half, versus $1.1 and $2.2, respectively, in 2020.
- General and administrative costs grew faster than revenue, reflecting staffing, stock compensation, and public-company expenses. The company also recorded $1.1 of acquisition-related costs.
- Cash and cash equivalents fell from $219.4 at December 31, 2020, while $30.4 was reallocated into marketable securities. The company had no debt outstanding at quarter end.
Outlook, management commentary, risks, and unusual items
- Management expects continued operating losses and negative operating cash flows, but stated that existing cash and cash equivalents should meet working-capital and capital-expenditure needs for at least 12 months. It may seek additional capital depending on growth, investment, and economic conditions. No specific revenue or earnings guidance is provided in the supplied filing text.
- Management plans continued investment in sales and marketing, R&D, international expansion, and its “Open SaaS” partner strategy, while expecting operating leverage over time. COVID-19 accelerated ecommerce demand and benefited the business, but management cautioned that those effects may not persist and near-term revenue could be variable.
- On July 23, 2021, after quarter end, BigCommerce entered into an agreement to acquire Feedonomics LLC. Consideration was approximately $145.0: $80.0 payable at closing and up to $65.0 in two annual installments or earlier on specified milestones; the later payments may be made in cash or shares at the company’s discretion. The MD&A says $81.4 of cash and cash equivalents and restricted cash was used for the acquisition. Integration, realization of synergies, employee and customer retention, and possible share dilution are identified risks.
- Key risks include competition; dependence on technology and referral partners; cybersecurity, privacy, and service availability; uncertain post-pandemic ecommerce trends; international and regulatory exposure; and continued losses. Management reported disclosure controls were effective and no material change in internal control over financial reporting during the quarter. It reported no pending or threatened legal matter expected to have a material adverse effect.
Most important facts for investors to verify
- Confirm the registrant identity: this source is BigCommerce Holdings, Inc., despite the request metadata naming Commerce.Com, Inc.
- Reconcile working capital: the balance-sheet figures imply approximately $200.4, while MD&A reports $201.4. The filing also reports differing accumulated-deficit figures in different sections.
- Review the Feedonomics closing cash outlay, remaining milestone or anniversary payments, payment form, and integration results.
- Track subscription growth, partner revenue share, ARR and retention, and whether pandemic-related demand persists.
- Assess cash burn and liquidity alongside rising stock-based compensation and the company’s continuing operating losses; treat Adjusted EBITDA as a non-GAAP measure with the exclusions described in the filing.