BigCommerce Holdings, Inc. (“BigCommerce” or the “Company”)
(Nasdaq: BIGC), a leading Open SaaS ecommerce platform for
fast-growing and established B2C and B2B brands, today announced
financial results for its third quarter ended September 30, 2023.
“In the third quarter, BigCommerce made progress toward
long-term growth and profitability,” said Brent Bellm, CEO at
BigCommerce. “We were recognized for outstanding product and
service by several third-party organizations including IDC,
TrustRadius, and Inc. Business Media. The release of our new
Invoice Portal for B2B Edition marks a major step forward for B2B
ecommerce. In a challenging macroeconomic environment, we again
exceeded the midpoint of our guidance for revenue and
profitability. To achieve continued strong profit growth in 2024
and implement changes to our enterprise go-to-market approach,
BigCommerce is restructuring our workforce by approximately 7%.
This affects many outstanding team members who have contributed to
our success, for which we’re grateful. This positions us for
long-term profitable growth entering 2024.”
“We have made material financial progress in a number of areas
in 2023,” said Daniel Lentz, CFO at BigCommerce. “We almost hit our
2023 profitability goal a full quarter ahead of plan, and we have
delivered consistent, steady operating margin improvements over the
last five consecutive quarters. We have also made significant
improvements to the quality of our revenue and earnings results.
Deferred revenue finished Q3 85% higher than the same quarter last
year, and we have also seen improvements in working capital and
cash generation as well. While we continue to see macroeconomic
challenges in our business, I am very proud of the progress we have
made thus far in 2023.”
“We are enhancing our enterprise
sales, marketing and customer success capabilities to build a
land-and-expand motion in strategic verticals, geographies and
product use cases,” said Steven Chung, president at BigCommerce.
“Going forward, the success of existing customers will be a key
driver of net revenue retention and growth. By delivering
measurable value after we land each new project, we will earn the
right to expand to additional brands, regions and use cases across
our enterprise accounts.”
Third Quarter Financial
Highlights:
- Total revenue was $78.0 million, up 8%
compared to the third quarter of 2022.
- Total annual revenue run-rate (ARR) as of September 30, 2023
was $332.2 million, up 9% compared to September 30, 2022.
- Subscription revenue was $58.7 million, up 10% compared to the
third quarter of 2022.
- ARR from accounts with at least one enterprise plan
(“Enterprise Accounts”) was $240.6 million as of September 30,
2023, up 11% from September 30, 2022.
- ARR from Enterprise Accounts as a percent of total ARR was 72%
as of September 30, 2023, compared to 71% as of September 30,
2022.
- GAAP gross margin was 76%,
unchanged from the third quarter of 2022. Non-GAAP gross margin was
77%, unchanged from the third quarter of 2022.
Other Key Business Metrics
- Number of enterprise accounts was
5,951, up 7% compared to the third quarter of 2022.
- Average revenue per account (ARPA) of enterprise accounts was
$40,431, up 4% compared to the third quarter of 2022.
- Revenue in the Americas grew by 7% compared to the third
quarter of 2022.
- Revenue in EMEA grew by 23% and
revenue in APAC grew by 2% compared to the third quarter of
2022.
Operating Loss and Non-GAAP Operating
Margin
- GAAP operating loss was ($22.2)
million, compared to ($30.6) million in the third quarter of
2022.
- Non-GAAP operating margin was
($1.2) million, compared to ($11.5) million in the third quarter of
2022.
Net Income (Loss) and Earnings Per Share
- GAAP net loss was ($20.3) million,
compared to ($30.3) million in the third quarter of 2022.
- Non-GAAP net income (loss) was $686 thousand or 1% of revenue,
compared to ($11.2) million or (16%) of revenue in the third
quarter of 2022.
- GAAP net loss per share was ($0.27) based on 75.4 million
shares of common stock, compared to ($0.41) based on 73.5 million
shares of common stock in the third quarter of 2022.
- Non-GAAP net income (loss) per
share was $0.01 based on 75.4 million shares of common stock,
compared to ($0.15) based on 73.5 million shares of common stock in
the third quarter of 2022.
Adjusted EBITDA
- Adjusted EBITDA
was ($102) thousand, compared to ($10.5) million in the third
quarter of 2022.
Cash
- Cash, cash equivalents, restricted
cash, and marketable securities totaled $266.5 million as of
September 30, 2023.
- For the nine months ended September 30, 2023, net cash used in
operating activities was ($37.5 million), compared to ($86.7)
million for the same period in 2022. We reported free cash flow of
($40.7) million.
- For the three months ended September 30, 2023, net cash used in
operating activities was ($31.4) million, compared to ($50.8)
million for the same period in 2022. We reported free cash flow of
($32.5) million. Excluding the Feedonomics acquisition anniversary
related payment, net cash provided by operating activities would
have been $1.1 million for the three months ended September 20,
2023.
Business Highlights:
Corporate highlights
- On October 31, 2023, BigCommerce acquired Makeswift, Inc.
(“Makeswift”), the world’s most powerful visual editor for Next.js
websites. Makeswift is a visual no code builder for Next.js, which
makes any React component visually editable. We believe Makeswift
will bring to ecommerce unprecedented, true enterprise multi-user
visual design, publishing, and no-code editing.
- We announced the results of our commissioned Total Economic
Impact study conducted by Forrester Consulting. The study, which
evaluated the cost savings and business benefits of five anonymous
merchants using BigCommerce to determine financial impact over a
three-year period, found that a composite organization composed of
merchants with experience using BigCommerce achieved a 211% return
on investment (ROI) with a payback period of eight months after
migrating from legacy platforms.
- The Company recognized the winners of our 2023 Make it Big
Customer Awards, spotlighting and celebrating online retailers’
achievements on the BigCommerce platform across four categories:
design, innovation, emerging brand and global strategy.
- TrustRadius recognized BigCommerce with a Top Rated Ecommerce
Platform award for the fourth consecutive year. BigCommerce is one
of only two vendors to receive this year’s recognition, which is
based on hundreds of user reviews, affirming the platform’s
easy-to-use enterprise-grade functionality, customization and
performance enabling online businesses to scale and accelerate
growth.
- BigCommerce was also honored with an IDC SaaS CSAT Award in the
Digital Commerce category. The awards recognize vendors with the
highest customer satisfaction scores based on IDC’s SaaSPath
Survey, which includes input from thousands of customer
organizations assessing vendors on 30 different customer
satisfaction metrics, including brand trust, data security, user
experience, customer support and ease of integration and
implementation.
- We also were named to Inc. Business Media’s 2023 Power Partner
Awards list. BigCommerce was recognized as a trusted business
partner in the ecommerce category for our ongoing commitment to
equipping brands and retailers with enterprise-grade functionality,
customization and performance to unleash innovation and drive
growth.
Restructuring
- In September 2023, we committed to a restructuring plan to
reduce our current workforce by approximately 7 percent, effective
today. We recorded an expense associated with the restructuring
plan of approximately $5.5 million in our fiscal 2023 third
quarter. This expense primarily relates to severance payments,
employee benefits and other costs related to the restructuring
plan. Actual charges may differ from the estimate disclosed above.
We expect that the majority of these charges will be incurred in
the third quarter of 2023 and that the restructuring plan will be
substantially completed during the next fiscal year.
- We currently estimate that we will incur cash payments of
approximately $3.1 million in the fiscal fourth quarter of 2023 and
approximately $2.1 million in fiscal 2024 in connection with the
restructuring plan (primarily consisting of severance payments,
employee benefits and related costs).
- We may incur other one-time expenses or cash payments not
currently contemplated due to unanticipated events that may occur
as a result of or in connection with the restructuring plan. We
intend to exclude these charges from our Non-GAAP financial
measures, including Non-GAAP Operating Income, Adjusted EBITDA and
Non-GAAP Net Income (Loss).
Product highlights
- In September, we launched our new B2B Edition Invoice Portal
for large B2B suppliers, manufacturers, distributors and
wholesalers to modernize the invoice payment process. The B2B
Edition Invoice Portal provides an enterprise-grade, out-of-the-box
invoice payment experience that enables B2B merchants to
incorporate invoice payments into a centralized online purchasing
workflow through the B2B Edition Buyer Portal. B2B merchants now
have the potential to improve transaction efficiency, reduce
operational burdens and deliver seamless user experiences that can
drive brand loyalty and repeat business. The Invoice Portal
signifies a major step forward in B2B ecommerce by offering an
innovative solution to the antiquated and cumbersome process of
invoice payments that has long stood as an obstacle to the smooth
flow of business. The new B2B Edition Invoice Portal serves as a
vital B2B Edition component of a comprehensive suite of B2B
functionalities that enhance the online selling experience for B2B
businesses.
Customer
highlights
- Coldwater Creek, a leading U.S. specialty
retailer of women’s apparel, launched a new ecommerce site with a
modernized tech stack and elevated brand look with a heightened
customer experience.
- Asahi Beverages, a leading Australian beverage
company, launched two new websites on BigCommerce: Club
Connect uses our B2B Edition product to allow sports clubs
to register and purchase beverages and earn credit to be redeemed
against future purchases or withdrawn as cash. Drinks
Cart is a platform for company staff, friends and family
to purchase Asahi Beverages products at a reduced price or by
redeeming points.
- UK-based fashion and apparel brand White Stuff
launched a new composable commerce site leveraging MACH Alliance
architecture and several BigCommerce partners, including Vue
Storefront, Amplience and Adyen.
- Iconic UK luxury fashion retailer Harvey
Nichols launched a new headless storefront as part of a
broader digital transformation project to improve customer
engagement and provide shoppers better visibility into product
inventory for shipping and in-store pickup, as well as improved
loyalty program integration.
- Feedonomics, a BigCommerce company, also added several new
customers to its roster, including The Dom,
Vista Outdoors, LG,
Skullcandy and Build-A-Bear.
Q4 and 2023 Financial Outlook:
For the fourth quarter of 2023, the Company currently
expects:
- Total revenue between $79.8 million to
$83.8 million, implying a year-over-year growth rate of 10% to
16%.
- Non-GAAP operating income is
expected to be between $1.1 million to $4.1 million.
For the full year 2023, the Company currently expects:
- Total revenue between $305.0 million
and $309.0 million, translating into a year-over-year growth rate
of 9% and 11%.
- Non-GAAP operating loss between
($6.9) million and ($9.9) million.
The Company’s fourth quarter and 2023 financial outlook is based
on a number of assumptions that are subject to change and many of
which are outside the Company’s control. If actual results vary
from these assumptions, the Company’s expectations may change.
There can be no assurance that the Company will achieve these
results.
The Company does not provide guidance for operating loss, the
most directly comparable GAAP measure to Non-GAAP operating loss,
and similarly cannot provide a reconciliation between its
forecasted Non-GAAP operating loss and Non-GAAP net loss per share
and these comparable GAAP measures without unreasonable effort due
to the unavailability of reliable estimates for certain items.
These items are not within the Company’s control and may vary
greatly between periods and could significantly impact future
financial results.
Conference Call Information
BigCommerce will host a conference call and webcast at 7:00 a.m.
CT (8:00 a.m. ET) on Wednesday, November 8, 2023, to discuss its
financial results and business highlights. The conference call can
be accessed by dialing (833) 634-1254 from the United States and
Canada or (412) 317-6012 internationally and requesting to join the
“BigCommerce conference call.” The live webcast of the conference
call and other materials related to BigCommerce’s financial
performance can be accessed from BigCommerce’s investor relations
website at http://investors.bigcommerce.com.
Following the completion of the call through 11:59 p.m. ET on
Wednesday, November 15, 2023, a telephone replay will be available
by dialing (877) 344-7529 from the United States, (855) 669-9658
from Canada or (412) 317-0088 internationally with conference ID
6526889. A webcast replay will also be available at
http://investors.bigcommerce.com for 12 months.
About BigCommerce
BigCommerce (Nasdaq: BIGC) is a leading open
software-as-a-service (SaaS) ecommerce platform that empowers
brands and retailers of all sizes to build, innovate and grow their
businesses online. BigCommerce provides its customers sophisticated
enterprise-grade functionality, customization and performance with
simplicity and ease-of-use. Tens of thousands of B2C and B2B
companies across 150 countries and numerous industries use
BigCommerce to create beautiful, engaging online stores, including
Ben & Jerry’s, Molton Brown, S.C. Johnson, Skullcandy,
SoloStove, Ted Baker and Vodafone. Headquartered in Austin,
BigCommerce has offices in London, Kyiv, San Francisco, and Sydney.
For more information, please visit www.bigcommerce.com or follow us
on Twitter, LinkedIn, Instagram and Facebook.
Forward-Looking Statements
This press release contains “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. In some cases, you can identify forward-looking statements
by terms such as “anticipate,” “believe,” “estimate,” “expect,”
“intend,” “outlook,” “may,” “might,” “plan,” “project,” “will,”
“would,” “should,” “could,” “can,” “predict,” “potential,”
“strategy,” “target,” “explore,” “continue,” or the negative of
these terms, and similar expressions intended to identify
forward-looking statements. However, not all forward-looking
statements contain these identifying words. These statements may
relate to our market size and growth strategy, our estimated and
projected costs, margins, revenue, expenditures and customer and
financial growth rates, our Q4 and 2023 financial outlook, our
plans and objectives for future operations, growth, initiatives or
strategies. By their nature, these statements are subject to
numerous uncertainties and risks, including factors beyond our
control, that could cause actual results, performance or
achievement to differ materially and adversely from those
anticipated or implied in the forward-looking statements. These
assumptions, uncertainties and risks include that, among others,
our business would be harmed by any decline in new customers,
renewals or upgrades, our limited operating history makes it
difficult to evaluate our prospects and future results of
operations, we operate in competitive markets, we may not be able
to sustain our revenue growth rate in the future, our business
would be harmed by any significant interruptions, delays or outages
in services from our platform or certain social media platforms,
and a cybersecurity-related attack, significant data breach or
disruption of the information technology systems or networks could
negatively affect our business. Additional risks and uncertainties
that could cause actual outcomes and results to differ materially
from those contemplated by the forward-looking statements are
included under the caption “Risk Factors” and elsewhere in our
filings with the Securities and Exchange Commission (the “SEC”),
including our Annual Report on Form 10-K for the year ended
December 31, 2022, our Quarterly report on Form 10-Q filed with the
SEC on November 8, 2023, and the future quarterly and current
reports that we file with the SEC. Forward-looking statements speak
only as of the date the statements are made and are based on
information available to BigCommerce at the time those statements
are made and/or management's good faith belief as of that time with
respect to future events. BigCommerce assumes no obligation to
update forward-looking statements to reflect events or
circumstances after the date they were made, except as required by
law.
Use of Non-GAAP Financial Measures
We have provided in this press release certain financial
information that has not been prepared in accordance with generally
accepted accounting principles in the United States (“GAAP”). Our
management uses these Non-GAAP financial measures internally in
analyzing our financial results and believes that use of these
Non-GAAP financial measures is useful to investors as an additional
tool to evaluate ongoing operating results and trends and in
comparing our financial results with other companies in our
industry, many of which present similar Non-GAAP financial
measures. Non-GAAP financial measures are not meant to be
considered in isolation or as a substitute for comparable financial
measures prepared in accordance with GAAP and should be read only
in conjunction with our consolidated financial statements prepared
in accordance with GAAP. A reconciliation of our historical
Non-GAAP financial measures to the most directly comparable GAAP
measures has been provided in the financial statement tables
included in this press release, and investors are encouraged to
review these reconciliations.
Annual Revenue Run-Rate
We calculate annual revenue run-rate (“ARR”) at the end of each
month as the sum of: (1) contractual monthly recurring revenue at
the end of the period, which includes platform subscription fees,
invoiced growth adjustments, feed management subscription fees,
recurring professional services revenue, and other recurring
revenue, multiplied by twelve to prospectively annualize recurring
revenue, and (2) the sum of the trailing twelve-month non-recurring
and variable revenue, which includes one-time partner integrations,
one-time fees, payments revenue share, and any other revenue that
is non-recurring and variable.
Accounts with Greater than $2,000 ACV
We track the total number of accounts with annual contract value
(“ACV”) greater than $2,000 (the “ACV threshold”) as of the end of
a monthly billing period. To define this $2,000 ACV cohort, we
include only subscription plan revenue and exclude partner and
services revenue and recurring services revenue. We consider all
stores and brands added and subtracted as of the end of the monthly
billing period. This metric includes accounts that may have either
one single store or brand above the ACV threshold or multiple
stores or brands that together exceed the ACV threshold.
Enterprise Account Metrics
To measure the effectiveness of our ability to execute against
our growth strategy, particularly within the mid-market and
enterprise business segments, we calculate ARR attributable to
Enterprise Accounts. We define Enterprise Accounts as accounts with
at least one unique Enterprise plan subscription or an enterprise
level feed management subscription (collectively “Enterprise
Accounts”). These accounts may have more than one Enterprise plan
or a combination of Enterprise plans and Essentials plans.
Average Revenue Per Account
We calculate average revenue per account (ARPA) for accounts
above the ACV threshold at the end of a period by including
customer-billed revenue and an allocation of partner and services
revenue, where applicable. We allocate partner revenue, where
applicable, primarily based on each customer’s share of GMV
processed through that partner’s solution. For partner revenue that
is not directly linked to customer usage of a partner’s solution,
we allocate such revenue based on each customer’s share of total
platform GMV. Each account’s partner revenue allocation is
calculated by taking the account’s trailing twelve-month partner
revenue, then dividing by twelve to create a monthly average to
apply to the applicable period in order to normalize ARPA for
seasonality.
Adjusted EBITDA
We define Adjusted EBITDA as our net loss, excluding the impact
of stock-based compensation expense and related payroll tax
expense, third party acquisition-related costs, and other
acquisition related expenses, including contingent compensation
arrangements entered into in connection with acquisitions,
depreciation, amortization of acquisition-related intangible
assets, interest income, interest expense, restructuring charges,
other non-operating income and expense and our provision for income
taxes. The most directly comparable GAAP measure is net loss.
Non-GAAP Operating Loss
We define Non-GAAP Operating Loss as our GAAP Loss from
operations, excluding the impact of stock-based compensation
expense and related payroll tax expense, third party
acquisition-related costs, and other acquisition related expenses,
including contingent compensation arrangements entered into in
connection with acquisitions, amortization of acquisition-related
intangible assets, and restructuring charges. The most directly
comparable GAAP measure is our loss from operations.
Non-GAAP Net Income (Loss)
We define Non-GAAP Net Income (Loss) as our GAAP net loss,
excluding the impact of stock-based compensation expense and
related payroll tax expense, third party acquisition-related costs,
and other acquisition related expenses, including contingent
compensation arrangements entered into in connection with
acquisitions, amortization of acquisition-related intangible
assets, and restructuring charges. The most directly comparable
GAAP measure is our net loss.
Non-GAAP Net Income (Loss) per Share
We define Non-GAAP Net Income (Loss) per Share as our Non-GAAP
Net Loss, defined above, divided by our basic and diluted GAAP
weighted average shares outstanding. The most directly comparable
GAAP measure is our net loss per share.
Free Cash Flow
We define Free Cash flow as our GAAP cash flow from operating
activities plus our GAAP purchases of property and equipment
(Capital Expenditures). The most directly comparable GAAP measure
is our cash flow used in operating activities.
Media Relations ContactBrad
HemPR@BigCommerce.com
Investor Relations ContactDaniel
LentznvestorRelations@BigCommerce.com
|
Consolidated Balance Sheets(in thousands) |
|
|
|
September 30, |
|
|
December 31, |
|
|
|
2023 |
|
|
2022 |
|
|
|
(unaudited) |
|
|
|
|
Assets |
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
69,779 |
|
|
$ |
91,573 |
|
Restricted cash |
|
|
1,107 |
|
|
|
1,457 |
|
Marketable securities |
|
|
195,590 |
|
|
|
211,941 |
|
Accounts
receivable, net |
|
|
51,797 |
|
|
|
51,899 |
|
Prepaid
expenses and other assets |
|
|
15,673 |
|
|
|
11,206 |
|
Deferred
commissions |
|
|
7,585 |
|
|
|
6,171 |
|
Total current assets |
|
|
341,531 |
|
|
|
374,247 |
|
Property
and equipment, net |
|
|
10,538 |
|
|
|
9,083 |
|
Operating lease, right-of-use-assets |
|
|
4,681 |
|
|
|
5,887 |
|
Prepaid
expenses, net of current portion |
|
|
596 |
|
|
|
470 |
|
Deferred
commissions, net of current portion |
|
|
7,397 |
|
|
|
7,037 |
|
Intangible assets, net |
|
|
21,484 |
|
|
|
27,583 |
|
Goodwill |
|
|
49,749 |
|
|
|
49,749 |
|
Total assets |
|
$ |
435,976 |
|
|
$ |
474,056 |
|
Liabilities and stockholders’ equity |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
Accounts
payable |
|
$ |
6,265 |
|
|
$ |
7,013 |
|
Accrued
liabilities |
|
|
3,091 |
|
|
|
2,937 |
|
Deferred
revenue |
|
|
31,269 |
|
|
|
17,783 |
|
Current
portion of long-term debt |
|
|
403 |
|
|
|
0 |
|
Current
portion of operating lease liabilities |
|
|
2,535 |
|
|
|
2,609 |
|
Other
current liabilities |
|
|
23,491 |
|
|
|
48,444 |
|
Total current liabilities |
|
|
67,054 |
|
|
|
78,786 |
|
Deferred
revenue, net of current portion |
|
|
807 |
|
|
|
1,759 |
|
Long-term debt |
|
|
339,394 |
|
|
|
337,497 |
|
Operating lease liabilities, net of current portion |
|
|
8,090 |
|
|
|
10,008 |
|
Other
long-term liabilities, net of current portion |
|
|
756 |
|
|
|
334 |
|
Total liabilities |
|
|
416,101 |
|
|
|
428,384 |
|
Commitments and contingencies (Note 7) |
|
|
|
|
|
|
Stockholders’ equity |
|
|
|
|
|
|
Common
stock, $0.0001 par value; 505,051 shares authorized at September
30, 2023 and December 31, 2022, respectively; 76,082 and 73,945
shares issued and outstanding at September 30, 2023 and December
31, 2022, respectively. |
|
|
7 |
|
|
|
7 |
|
Additional paid-in capital |
|
|
611,767 |
|
|
|
576,851 |
|
Accumulated other comprehensive loss |
|
|
(417 |
) |
|
|
(1,199 |
) |
Accumulated deficit |
|
|
(591,482 |
) |
|
|
(529,987 |
) |
Total stockholders’ equity |
|
|
19,875 |
|
|
|
45,672 |
|
Total liabilities and stockholders’ equity |
|
$ |
435,976 |
|
|
$ |
474,056 |
|
|
|
Consolidated Statements of Operations(in
thousands, except per share amounts)(unaudited) |
|
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
78,045 |
|
|
$ |
72,391 |
|
|
$ |
225,245 |
|
|
$ |
206,644 |
|
Cost of
revenue (1) |
|
|
19,054 |
|
|
|
17,525 |
|
|
|
55,256 |
|
|
|
51,488 |
|
Gross
profit |
|
|
58,991 |
|
|
|
54,866 |
|
|
|
169,989 |
|
|
|
155,156 |
|
Operating expenses: (1) |
|
|
|
|
|
|
|
|
|
|
|
|
Sales
and marketing |
|
|
36,253 |
|
|
|
35,973 |
|
|
|
105,898 |
|
|
|
105,645 |
|
Research
and development |
|
|
21,703 |
|
|
|
22,245 |
|
|
|
63,951 |
|
|
|
65,584 |
|
General
and administrative |
|
|
14,342 |
|
|
|
18,932 |
|
|
|
45,264 |
|
|
|
52,304 |
|
Acquisition related expenses |
|
|
1,067 |
|
|
|
6,260 |
|
|
|
9,317 |
|
|
|
31,441 |
|
Restructuring charges |
|
|
5,795 |
|
|
|
0 |
|
|
|
6,215 |
|
|
|
0 |
|
Amortization of intangible assets |
|
|
2,033 |
|
|
|
2,016 |
|
|
|
6,099 |
|
|
|
6,062 |
|
Total
operating expenses |
|
|
81,193 |
|
|
|
85,426 |
|
|
|
236,744 |
|
|
|
261,036 |
|
Loss
from operations |
|
|
(22,202 |
) |
|
|
(30,560 |
) |
|
|
(66,755 |
) |
|
|
(105,880 |
) |
Interest
income |
|
|
3,059 |
|
|
|
1,431 |
|
|
|
8,310 |
|
|
|
2,130 |
|
Interest
expense |
|
|
(721 |
) |
|
|
(706 |
) |
|
|
(2,165 |
) |
|
|
(2,120 |
) |
Other
expenses |
|
|
(301 |
) |
|
|
(376 |
) |
|
|
(333 |
) |
|
|
(828 |
) |
Loss
before provision for income taxes |
|
|
(20,165 |
) |
|
|
(30,211 |
) |
|
|
(60,943 |
) |
|
|
(106,698 |
) |
Provision for income taxes |
|
|
(145 |
) |
|
|
(86 |
) |
|
|
(552 |
) |
|
|
(241 |
) |
Net
loss |
|
$ |
(20,310 |
) |
|
$ |
(30,297 |
) |
|
$ |
(61,495 |
) |
|
$ |
(106,939 |
) |
Basic
net loss per share |
|
$ |
(0.27 |
) |
|
$ |
(0.41 |
) |
|
$ |
(0.82 |
) |
|
$ |
(1.46 |
) |
Shares
used to compute basic net loss per share |
|
|
75,387 |
|
|
|
73,508 |
|
|
|
74,778 |
|
|
|
73,027 |
|
|
(1) Amounts
include stock-based compensation expense and associated payroll tax
costs, as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Cost of revenue |
|
$ |
1,323 |
|
|
$ |
1,091 |
|
|
$ |
3,802 |
|
|
$ |
2,946 |
|
Sales
and marketing |
|
|
3,626 |
|
|
|
3,254 |
|
|
|
10,059 |
|
|
|
9,795 |
|
Research
and development |
|
|
4,124 |
|
|
|
3,144 |
|
|
|
11,570 |
|
|
|
8,749 |
|
General
and administrative |
|
|
3,028 |
|
|
|
3,296 |
|
|
|
8,680 |
|
|
|
9,337 |
|
|
|
Consolidated Statements of Cash Flows(in
thousands)(unaudited) |
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities |
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(20,310 |
) |
|
$ |
(30,297 |
) |
|
$ |
(61,495 |
) |
|
$ |
(106,939 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
3,137 |
|
|
|
2,983 |
|
|
|
8,981 |
|
|
|
8,630 |
|
Amortization of discount on debt |
|
494 |
|
|
|
490 |
|
|
|
1,481 |
|
|
|
1,468 |
|
Stock-based compensation |
|
11,773 |
|
|
|
10,646 |
|
|
|
33,550 |
|
|
|
30,186 |
|
Provision for expected credit losses |
|
(47 |
) |
|
|
3,608 |
|
|
|
1,461 |
|
|
|
7,007 |
|
Other
noncash expenses |
|
171 |
|
|
|
0 |
|
|
|
171 |
|
|
|
0 |
|
Changes
in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Accounts
receivable |
|
401 |
|
|
|
(5,764 |
) |
|
|
(1,359 |
) |
|
|
(15,265 |
) |
Prepaid
expenses |
|
(2,087 |
) |
|
|
(4,961 |
) |
|
|
(5,571 |
) |
|
|
(3,951 |
) |
Deferred
commissions |
|
(1,002 |
) |
|
|
(459 |
) |
|
|
(1,774 |
) |
|
|
(2,514 |
) |
Accounts
payable |
|
(220 |
) |
|
|
935 |
|
|
|
(748 |
) |
|
|
(994 |
) |
Accrued
and other liabilities |
|
(26,858 |
) |
|
|
(28,638 |
) |
|
|
(24,753 |
) |
|
|
(7,386 |
) |
Deferred
revenue |
|
3,119 |
|
|
|
653 |
|
|
|
12,534 |
|
|
|
3,094 |
|
Net cash
used in operating activities |
|
(31,429 |
) |
|
|
(50,804 |
) |
|
|
(37,522 |
) |
|
|
(86,664 |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
Cash
paid for acquisition |
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
(696 |
) |
Purchase
of property and equipment |
|
(1,055 |
) |
|
|
(720 |
) |
|
|
(3,135 |
) |
|
|
(4,206 |
) |
Maturity
of marketable securities |
|
83,135 |
|
|
|
22,050 |
|
|
|
206,207 |
|
|
|
64,650 |
|
Purchase
of marketable securities |
|
(55,681 |
) |
|
|
(90,614 |
) |
|
|
(189,075 |
) |
|
|
(169,887 |
) |
Net cash
provided by (used in) investing activities |
|
26,399 |
|
|
|
(69,284 |
) |
|
|
13,997 |
|
|
|
(110,139 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
Proceeds
from exercise of stock options |
|
1,455 |
|
|
172 |
|
|
|
3,700 |
|
|
|
64 |
|
Taxes
paid related to net share settlement of stock options |
|
(1,039 |
) |
|
|
0 |
|
|
|
(3,269 |
) |
|
|
0 |
|
Proceeds
from debt |
|
0 |
|
|
|
0 |
|
|
|
1,081 |
|
|
|
0 |
|
Repayment of debt |
|
(131 |
) |
|
|
0 |
|
|
|
(131 |
) |
|
|
0 |
|
Net cash
provided by financing activities |
|
285 |
|
|
|
172 |
|
|
|
1,381 |
|
|
|
64 |
|
Net
change in cash and cash equivalents and restricted cash |
|
(4,745 |
) |
|
|
(119,916 |
) |
|
|
(22,144 |
) |
|
|
(196,739 |
) |
Cash and
cash equivalents and restricted cash, beginning of period |
|
75,631 |
|
|
|
221,881 |
|
|
|
93,030 |
|
|
|
298,704 |
|
Cash and
cash equivalents and restricted cash, end of period |
$ |
70,886 |
|
|
$ |
101,965 |
|
|
$ |
70,886 |
|
|
$ |
101,965 |
|
Supplemental cash flow information: |
|
|
|
|
|
|
|
|
|
|
|
Cash
paid for interest |
$ |
442 |
|
|
$ |
431 |
|
|
$ |
873 |
|
|
$ |
903 |
|
Cash
paid for taxes |
$ |
129 |
|
|
$ |
0 |
|
|
$ |
341 |
|
|
$ |
32 |
|
Noncash investing and financing activities: |
|
|
|
|
|
|
|
|
|
|
|
Changes
in capital additions, accrued but not paid |
$ |
224 |
|
|
$ |
2 |
|
|
$ |
224 |
|
|
$ |
107 |
|
Fair
value of shares issued as consideration for acquisition |
$ |
921 |
|
|
$ |
6 |
|
|
$ |
921 |
|
|
$ |
4,620 |
|
Reconciliation of cash, cash equivalents and restricted
cash within the condensed consolidated balance sheet to the amounts
shown in the statements of cash flows above: |
|
|
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents |
$ |
69,779 |
|
|
$ |
100,609 |
|
|
$ |
69,779 |
|
|
$ |
100,609 |
|
Restricted cash |
|
1,107 |
|
|
|
1,356 |
|
|
|
1,107 |
|
|
|
1,356 |
|
Total
cash, cash equivalents and restricted cash |
$ |
70,886 |
|
|
$ |
101,965 |
|
|
$ |
70,886 |
|
|
$ |
101,965 |
|
|
Disaggregated Revenue:(unaudited)
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
(in
thousands) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Subscription solutions |
|
$ |
58,709 |
|
|
$ |
53,231 |
|
|
$ |
168,652 |
|
|
$ |
152,503 |
|
Partner
and services |
|
|
19,336 |
|
|
|
19,160 |
|
|
|
56,593 |
|
|
|
54,141 |
|
Revenue |
|
$ |
78,045 |
|
|
$ |
72,391 |
|
|
$ |
225,245 |
|
|
$ |
206,644 |
|
|
Revenue by Geography:(unaudited)
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
(in
thousands) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
Americas – U.S. |
|
$ |
60,019 |
|
|
$ |
56,293 |
|
|
$ |
172,374 |
|
|
$ |
160,553 |
|
Americas
– other |
|
|
3,499 |
|
|
|
3,321 |
|
|
|
10,273 |
|
|
|
8,993 |
|
EMEA |
|
|
8,631 |
|
|
|
7,000 |
|
|
|
25,263 |
|
|
|
20,086 |
|
APAC |
|
|
5,896 |
|
|
|
5,777 |
|
|
|
17,335 |
|
|
|
17,012 |
|
Revenue |
|
$ |
78,045 |
|
|
$ |
72,391 |
|
|
$ |
225,245 |
|
|
$ |
206,644 |
|
|
Reconciliation of GAAP to Non-GAAP
Results(in thousands, except per share amounts)
Reconciliation of operating loss to Non-GAAP operating
margin:(unaudited)
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
(in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
$ |
(22,202 |
) |
|
$ |
(30,560 |
) |
|
$ |
(66,755 |
) |
|
$ |
(105,880 |
) |
Less: stock-based compensation
expense |
|
|
11,773 |
|
|
|
10,646 |
|
|
|
33,550 |
|
|
|
30,186 |
|
Less: payroll tax associated with
stock-based compensation expense |
|
|
328 |
|
|
|
139 |
|
|
|
561 |
|
|
|
641 |
|
Less: third-party acquisition
related costs |
|
|
1,067 |
|
|
|
6,260 |
|
|
|
9,317 |
|
|
|
31,441 |
|
Less: restructuring charges |
|
|
5,795 |
|
|
|
0 |
|
|
|
6,215 |
|
|
|
0 |
|
Less: amortization of intangible
assets |
|
|
2,033 |
|
|
|
2,016 |
|
|
|
6,099 |
|
|
|
6,062 |
|
Non-GAAP operating margin |
|
$ |
(1,206 |
) |
|
$ |
(11,499 |
) |
|
$ |
(11,013 |
) |
|
$ |
(37,550 |
) |
Non-GAAP operating margin
(%) |
|
|
(2 |
) |
|
|
(16 |
) |
|
|
(5 |
) |
|
|
(18 |
) |
|
Reconciliation of net loss & net loss per share to
Non-GAAP net income (loss) & Non-GAAP net income (loss) per
share:(unaudited)
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
(in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(20,310 |
) |
|
$ |
(30,297 |
) |
|
$ |
(61,495 |
) |
|
$ |
(106,939 |
) |
Less:
stock-based compensation expense |
|
|
11,773 |
|
|
|
10,646 |
|
|
|
33,550 |
|
|
|
30,186 |
|
Less:
payroll tax associated with stock-based compensation expense |
|
|
328 |
|
|
|
139 |
|
|
|
561 |
|
|
|
641 |
|
Less:
third-party acquisition related costs |
|
|
1,067 |
|
|
|
6,260 |
|
|
|
9,317 |
|
|
|
31,441 |
|
Less:
restructuring charges |
|
|
5,795 |
|
|
|
0 |
|
|
|
6,215 |
|
|
|
0 |
|
Less:
amortization of intangible assets |
|
|
2,033 |
|
|
|
2,016 |
|
|
|
6,099 |
|
|
|
6,062 |
|
Non-GAAP
net income (loss) |
|
$ |
686 |
|
|
$ |
(11,236 |
) |
|
$ |
(5,753 |
) |
|
$ |
(38,609 |
) |
Non-GAAP
net income (loss) per share |
|
$ |
0.01 |
|
|
$ |
(0.15 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.53 |
) |
Shares
used to compute basic and diluted net income (loss) per share |
|
|
75,387 |
|
|
|
73,508 |
|
|
|
74,778 |
|
|
|
73,027 |
|
Non-GAAP
net income (loss) margin (%) |
|
|
1 |
|
|
|
(16 |
) |
|
|
(3 |
) |
|
|
(19 |
) |
|
Reconciliation of net loss to adjusted
EBITDA:(unaudited)
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
(in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(20,310 |
) |
|
$ |
(30,297 |
) |
|
$ |
(61,495 |
) |
|
$ |
(106,939 |
) |
Stock-based compensation
expense |
|
|
11,773 |
|
|
|
10,646 |
|
|
|
33,550 |
|
|
|
30,186 |
|
Payroll tax associated with
stock-based compensation expense |
|
|
328 |
|
|
|
139 |
|
|
|
561 |
|
|
|
641 |
|
Third-party acquisition
related costs |
|
|
1,067 |
|
|
|
6,260 |
|
|
|
9,317 |
|
|
|
31,441 |
|
Restructuring charges |
|
|
5,795 |
|
|
|
0 |
|
|
|
6,215 |
|
|
|
0 |
|
Depreciation |
|
|
1,104 |
|
|
|
967 |
|
|
|
2,882 |
|
|
|
2,568 |
|
Amortization of intangible
assets |
|
|
2,033 |
|
|
|
2,016 |
|
|
|
6,099 |
|
|
|
6,062 |
|
Interest income |
|
|
(3,059 |
) |
|
|
(1,431 |
) |
|
|
(8,310 |
) |
|
|
(2,130 |
) |
Interest expense |
|
|
721 |
|
|
|
706 |
|
|
|
2,165 |
|
|
|
2,120 |
|
Other Expenses |
|
|
301 |
|
|
|
376 |
|
|
|
333 |
|
|
|
828 |
|
Provision for income
taxes |
|
|
145 |
|
|
|
86 |
|
|
|
552 |
|
|
|
241 |
|
Adjusted EBITDA |
|
$ |
(102 |
) |
|
$ |
(10,532 |
) |
|
$ |
(8,131 |
) |
|
$ |
(34,982 |
) |
Adjusted EBITDA Margin
(%) |
|
|
(0 |
) |
|
|
(15 |
) |
|
|
(4 |
) |
|
|
(17 |
) |
|
Reconciliation of cost of revenue to Non-GAAP cost of
revenue:(unaudited)
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
(in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue |
|
$ |
19,054 |
|
|
$ |
17,525 |
|
|
$ |
55,256 |
|
|
$ |
51,488 |
|
Less:
stock-based compensation expense |
|
|
1,252 |
|
|
|
1,063 |
|
|
|
3,709 |
|
|
|
2,903 |
|
Less:
payroll tax associated with share-based compensation expense |
|
|
71 |
|
|
|
28 |
|
|
|
93 |
|
|
|
43 |
|
Non-GAAP
cost of revenue |
|
$ |
17,731 |
|
|
$ |
16,434 |
|
|
$ |
51,454 |
|
|
$ |
48,542 |
|
As a
percentage of revenue |
|
|
23 |
|
|
|
23 |
|
|
|
23 |
|
|
|
23 |
|
|
Reconciliation of sales and marketing expense to
Non-GAAP sales and marketing expense:(unaudited)
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
(in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
$ |
36,253 |
|
|
$ |
35,973 |
|
|
$ |
105,898 |
|
|
$ |
105,645 |
|
Less:
stock-based compensation expense |
|
|
3,563 |
|
|
|
3,207 |
|
|
|
9,900 |
|
|
|
9,642 |
|
Less:
payroll tax associated with share-based compensation expense |
|
|
63 |
|
|
|
47 |
|
|
|
159 |
|
|
|
153 |
|
Non-GAAP
sales and marketing |
|
$ |
32,627 |
|
|
$ |
32,719 |
|
|
$ |
95,839 |
|
|
|
95,850 |
|
As a
percentage of revenue |
|
|
42 |
|
|
|
45 |
|
|
|
43 |
|
|
|
46 |
|
|
Reconciliation of research and development expense to
Non-GAAP research and development expense:(unaudited)
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
(in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
$ |
21,703 |
|
|
$ |
22,245 |
|
|
$ |
63,951 |
|
|
$ |
65,584 |
|
Less:
stock-based compensation expense |
|
|
4,031 |
|
|
|
3,102 |
|
|
|
11,421 |
|
|
|
8,657 |
|
Less:
payroll tax associated with share-based compensation expense |
|
|
93 |
|
|
|
42 |
|
|
|
149 |
|
|
|
92 |
|
Non-GAAP
research and development |
|
$ |
17,579 |
|
|
$ |
19,101 |
|
|
$ |
52,381 |
|
|
$ |
56,835 |
|
As a
percentage of revenue |
|
|
23 |
|
|
|
26 |
|
|
|
23 |
|
|
|
28 |
|
|
Reconciliation of general and administrative expense to
Non-GAAP general and administrative
expense:(unaudited)
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
(in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
General & administrative |
|
$ |
14,342 |
|
|
$ |
18,932 |
|
|
$ |
45,264 |
|
|
$ |
52,304 |
|
Less:
stock-based compensation expense |
|
|
2,927 |
|
|
|
3,274 |
|
|
|
8,520 |
|
|
|
8,984 |
|
Less:
payroll tax associated with share-based compensation expense |
|
|
101 |
|
|
|
22 |
|
|
|
160 |
|
|
|
353 |
|
Non-GAAP
general & administrative |
|
$ |
11,314 |
|
|
$ |
15,636 |
|
|
$ |
36,584 |
|
|
$ |
42,967 |
|
As a
percentage of revenue |
|
|
14 |
|
|
|
22 |
|
|
|
16 |
|
|
|
21 |
|
|
Reconciliation of net cash used in operating activities
to free cash flow:(unaudited)
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
(in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in operating activities |
|
$ |
(31,429 |
) |
|
$ |
(50,804 |
) |
|
$ |
(37,522 |
) |
|
$ |
(86,664 |
) |
Purchases of property and equipment |
|
|
(1,055 |
) |
|
|
(720 |
) |
|
|
(3,135 |
) |
|
|
(4,206 |
) |
Free
cash flow |
|
$ |
(32,484 |
) |
|
$ |
(51,524 |
) |
|
$ |
(40,657 |
) |
|
$ |
(90,870 |
) |
|
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