BigCommerce Holdings, Inc. — FY2020 Form 10-K
Reporting period: Fiscal year ended December 31, 2020; Q4 ended December 31, 2020. The filing identifies the registrant as BigCommerce Holdings, Inc. (NASDAQ: BIGC), not Commerce.Com, Inc.; verify the intended issuer.
Business context
BigCommerce operates a multi-tenant ecommerce software-as-a-service platform for merchants ranging from small businesses to large enterprises. Revenue comes from subscription solutions and partner and services activities. At year-end, the company served approximately 60,000 online stores in about 155 countries. Management said pandemic-driven shifts from in-store to online commerce benefited new subscriptions, existing customer sales, and partner transaction activity, but cautioned that these trends may recede.
Financial performance
| Metric | FY2020 | FY2019 |
|---|---|---|
| Revenue | $152.4 million | $112.1 million |
| Gross profit / gross margin | $118.2 million / 77.6% | $85.1 million / 75.9% |
| Operating loss | $(38.7) million | $(41.0) million |
| Net loss | $(37.6) million | $(42.6) million |
| Adjusted EBITDA, non-GAAP | $(24.5) million | $(35.5) million |
| Cash used in operating activities | $(26.5) million | $(40.0) million |
Revenue grew 35.9% year over year. Subscription solutions revenue rose 25.4% to $103.7 million; partner and services revenue rose 65.4% to $48.7 million. Gross margin improved 1.7 percentage points. Operating expenses increased 24.5% to $156.9 million, including a 62.7% increase in general and administrative expense, principally reflecting higher staffing, stock-based compensation, and public-company costs. Stock-based compensation rose to $11.1 million from $3.2 million.
In Q4, revenue was $43.1 million, up 39.1% from $31.0 million in Q4 2019. Gross profit was $32.9 million and gross margin was approximately 76.3%, compared with $23.0 million and approximately 74.0% a year earlier. Operating loss widened to $(13.8) million from $(9.8) million; net loss widened to $(14.2) million from $(10.3) million.
At December 31, 2020, cash and cash equivalents were $219.4 million and restricted cash was $1.2 million; working capital was $208.2 million. Total liabilities were $59.9 million, including operating lease liabilities; the company reported no outstanding debt after repaying and terminating its credit facility in December. Operating lease obligations totaled $18.7 million and purchase obligations $10.5 million.
Changes, outlook, and risks
- Revenue growth accelerated from 22.0% in 2019 to 35.9% in 2020. EMEA revenue grew 68.2% and APAC revenue 37.8% in 2020.
- Enterprise ARR grew 51% in 2020, compared with 44% in 2019. Net revenue retention for accounts above $2,000 ACV was 113%, versus 106% in 2019.
- The 2020 IPO and follow-on offering generated net proceeds of $171.1 million and $65.1 million, respectively. Convertible debt converted to equity in connection with the IPO; the company also paid $12.8 million in preferred dividends.
- Management expected existing cash and operating cash flows to fund working capital and capital expenditure needs for at least 12 months, while also expecting continued operating losses and negative operating cash flows. No specific revenue or earnings guidance for 2021 is provided in the supplied filing text.
- Management attributed strong demand partly to COVID-19 and warned that elevated new bookings and partner transaction volumes could diminish as restrictions ease. Other material risks include intense competition, dependence on technology and referral partners, cybersecurity and service reliability, privacy and regulatory compliance, international operations, and the ability to reach profitability.
- A $4.4 million gain from a change in fair value of an embedded option reduced reported loss in 2020; it was recorded in Q1 and was noncash. The company reported no material pending legal proceedings. Disclosure controls were assessed as effective at a reasonable assurance level; management’s internal-control assessment and auditor attestation were omitted under the transition relief for newly public companies.
Important facts for investors to verify
- Confirm the intended issuer: the request metadata says Commerce.Com, Inc., while this filing is for BigCommerce Holdings, Inc.
- Assess how much growth is recurring subscription revenue versus partner and services revenue, and monitor partner concentration: one strategic partner represented 15% of 2020 revenue and 24% of year-end receivables.
- Track post-pandemic demand, customer retention and expansion, and whether Enterprise ARR growth and 113% net revenue retention persist.
- Evaluate the path to profitability and cash burn, including the effect of rising stock-based compensation and public-company expenses.
- Review dilution from equity awards and future share issuance, as well as the company’s reliance on third-party cloud infrastructure and key technology partners.