BigCommerce Holdings, Inc. — Q2 2023 Form 10-Q
Reporting period: Three and six months ended June 30, 2023. The filing identifies the registrant as BigCommerce Holdings, Inc.; this differs from the request metadata company name, Commerce.Com, Inc.
Business context
BigCommerce operates a single reportable-segment SaaS ecommerce platform, generating revenue from subscription solutions and partner and services. It reported 5,929 enterprise accounts at June 30, 2023.
Key financial metrics
| Metric | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 |
|---|---|---|---|---|
| Revenue | $75.4 million | $68.2 million | $147.2 million | $134.3 million |
| Gross profit | $56.7 million | $51.3 million | $111.0 million | $100.3 million |
| Gross margin | 75.1% | 75.3% | 75.4% | 74.7% |
| Operating loss | $(20.9) million | $(39.1) million | $(44.6) million | $(75.3) million |
| Net loss | $(19.1) million | $(39.6) million | $(41.2) million | $(76.6) million |
| Operating cash flow | $14.7 million | $(13.9) million | $(6.1) million | $(35.9) million |
At June 30, 2023, cash and cash equivalents were $74.5 million, restricted cash $1.1 million, and marketable securities $222.9 million. Total current assets were $371.1 million and current liabilities $91.5 million. Debt carrying value, net of issuance costs, was $339.4 million, including $345.0 million principal of 0.25% convertible notes due 2026 and approximately $1.0 million of term debt. Accumulated deficit was $571.2 million.
ARR was $331.1 million, up from $295.9 million at June 30, 2022; subscription ARR was $255.6 million versus $225.8 million. Enterprise-account ARR was $236.4 million, or 71% of total ARR. The company reported enterprise-account NRR of 111% for 2022; it does not update NRR quarterly.
Material changes versus prior comparable periods
- Q2 revenue grew 10.6% year over year. Subscription solutions revenue increased 9.5% to $56.1 million; partner and services revenue rose 14.1% to $19.3 million, primarily reflecting increased partner revenue-sharing activity.
- H1 revenue rose 9.6%. Subscription solutions increased 10.7%, while partner and services rose 6.5%.
- Q2 gross margin edged down to 75.1%, which management attributed to higher hosting and transaction-processing costs. H1 gross margin improved to 75.4%, which management attributed primarily to restructuring-related cost reductions.
- Operating expenses fell, notably acquisition-related expenses: $4.1 million in Q2 versus $12.5 million, and $8.3 million in H1 versus $25.2 million. Net losses narrowed in both comparisons.
- Q2 operating cash flow was positive $14.7 million versus negative $13.9 million a year earlier, while H1 operating cash use improved to $6.1 million from $35.9 million. H1 cash, cash equivalents and restricted cash declined by $17.4 million.
Outlook, risks and unusual items
Management expects operating losses and negative operating cash flow for full-year 2023, but believes available cash, cash equivalents, marketable securities and operating cash flows will cover working capital and capital expenditure needs for at least 12 months. It notes that additional financing may be needed for strategic initiatives and may not be available on acceptable terms.
In July 2023, after quarter-end, the company paid the final $32.5 million cash installment under the Feedonomics contingent compensation arrangement and issued 89,285 shares related to the Bundle transaction. The balance sheet included $33.1 million of acquisition-related compensation in other current liabilities at June 30.
Key risks include adapting to fast-changing technology, customer needs and industry standards, competition, and developing or integrating new technologies, including potential AI and machine-learning offerings. The filing also identifies exposure to economic and geopolitical conditions, interest-rate and foreign-exchange movements, and credit risk on deposits exceeding FDIC-insured limits. Management reported no pending or threatened legal matters expected to have a material adverse effect, and stated that disclosure controls were effective.
Important facts for investors to verify
- Confirm the registrant identity: the filing is for BigCommerce Holdings, Inc., not Commerce.Com, Inc.
- Track revenue growth, enterprise-account ARR, and retention alongside whether growth translates into improving operating cash flow and profitability.
- Assess liquidity after the $32.5 million post-quarter Feedonomics payment, and reconcile cash and securities with continuing cash burn and debt obligations.
- Review the $345.0 million convertible notes’ 2026 maturity, conversion terms, and potential dilution, as well as acquisition-related compensation obligations.
- Monitor hosting and transaction costs, restructuring savings, and the company’s ability to maintain product competitiveness amid technological change.