BIGC - Earnings call transcript Q2 2020 | BigCommerce Holdings, Inc.

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Operator

Ladies and gentlemen, thank you for standing by and welcome to BigCommerce’s Second Quarter 2020 Earnings Call. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. Please be advised that today’s conference is being recorded. I would now like to turn the conference over to your first speaker today, Rohit Giri, Head of Investor Relations. ahead. go Please you Thank

Rohit Giri

Good afternoon call. quarter earnings BigCommerce’s welcome to second XXXX and

We XXXX. in which of are Litigation results issued the will Harbor and will discussing be provisions Today’s Alvarez. announced pursuant and Brent market Act call Reform to today. CFO, Safe Robert CEO forward-looking after close Securities our made With the President, me statements Private BigCommerce’s contain Chairman, of Bellm are the release press the

business and views upon today our trends, expected statements third include be be financial Forward-looking and anticipate, duty should update words as not representing and full as as we and and concerning any and identified business condition quarter to intend, any the statements. such performance can believe, expect, guidance reflect our these financial XXXX. of and statements do future or plan, the only It subsequent relied year by seek views will. of our at financial These XXXX undertake date not our for statements

statements matters subject uncertainties risks and from actual that could differ their address cause Forward-looking to that expectations. results are to nature by materially

filed XXXX filings be quarterly Form periodic XX-Q on refer SEC. to report the for our Commission of in prospectus our other could and material actual our ended XXX(b) discussion filed Securities risks XXXX, Exchange quarter June Rule today’s under X, the the important and that results, factors a For XX, press risks August on SEC with release, final please the to other discussed affect our with the with and

well are reconciliation discuss generally how that, investors.bigcommerce.com. accordance most non-GAAP also measures of accepted these comparable to on measures call, to which which metrics the call and website also accounting we at let During certain been over our metrics in non-GAAP release, as A available is financial will and with is GAAP Brent. financial our the has directly financial as the these principles. press define to prepared me other the With turn in not earnings included furnished SEC we measures

Brent Bellm

Thank Thank you, Rohit call us and for joining as afternoon our earnings public a good company. on first you all everyone.

Robert well our QX will details and on today’s XXXX as provide call, guidance. as results full QX I and year During

spend free ahead, the We a will as be also future than the beverage. the will more and to to we time you popcorn some opportunity of calls our grab and in story. many new Feel earnings BigCommerce strategy business, covering may

financial off Let’s kick QX highlights our this with of results. a few

open the to goal SaaS best in the e-commerce world. Our platform is deliver

was which towards We QX up strong XX% and progress our growth believe QX up year-over-year. with revenue growth had achieved million, highest are that We a was our year-over-year. quarter, run-rate, reflected ARR million, making consistent progress XX% $XXX.X which coming in we was was at that or $XX.X Total revenue goal in QX results. ARR, and annual rates revenue XX quarters. in

momentum, rate lower serving total functionality, ARR enterprise quarters, And value These XXXX XX% enterprise flexibility year-over-year continued of was ownership. large reflecting QX, Enterprises and open our after in successive up acceleration. SaaS platforms, businesses. the growth two year of so and far cost account our our third needs mid-market of represents customers

and of adjusted our dedication percentage times. would acknowledge to I am serve to delivered across drive as their point EBITDA resiliency proud results our XX during support by we shown I business employees our and these a improvement continuing partners margin. and year-over-year these to and team Importantly, while operating customers leverage our for the unprecedented BigCommerce to like

our it this online to world’s their with engage just some because Legacy everything create, take XX% online businesses. customers We rate $X.X and $X.X a market industry and legacy software-as-a-service hosting growth and market took market, to and e-commerce e-commerce was and their global handle count SaaS checkout online. e-commerce focus business spend for in a explosive in that an platforms will operate can shopping and annual media seamlessly commerce them, site and global important their platform a BigCommerce and estimates the journeys. part from In growing the about no sites software enable of It’s interesting a customers participating integrate the channel stores. technology spend. through of BigCommerce it’s or starting grow. the their most or than and point store business human XXXX. for to of experiences products, allowing to platform billion their and to global businesses in that in who on longer what provide to content For of a one platforms. share fastest more digital on main businesses or the business’s IDC to contrast, This in in engines versus you count largest to time, e-commerce spending is all solutions those that has store years their to just economic We The design grow websites marketplace the minority engaging story, in the an merchandise XX% whereby of applications offline. on X reach from on-premise and but with social the are commerce at in are e-commerce XXXX. SaaS most tools needs online. offline the their devices, the is e-commerce powers channel, retail to customers and non-existent manage along in offline to are help eMarketer with new and on omni-channel, XX% store across BigCommerce global seen consumers branded website. double percentage Today, shift to predicts best shop spending for they global efficiently for customers from of allows history, the E-commerce a formats. consumer it go directly years XXXX. XXXX is Search wherever flexibly remain websites can It transformations in XX platforms driving expected platforms and a grow an online in time includes start billion growth about gains. customers of potential compound e-commerce selling spend declining to store shopping matters

for and and than the associated These with As ecosystem. requirements, businesses with that actually ease-of-use, established to that addressable often digitally brands, have that revenue we to directly our who a side retailers that is due believe include hybrid, there need migrating segments flexibility a partnership model. our do in BXC multi-tenant anybody updated partner platform alone attracted market or are retain to market better BXB spending the note, speed high than wins proposition earned multi-channel sites either total we in additional value direct-to-consumer technology with larger continuously We in are the benefits SaaS. performance many complexities, five especially e-commerce selling offline of are else. in we native BigCommerce on to underserved launch, e-commerce BXB integrations, based enterprise BigCommerce and functionality that the think brands things those and

the seamlessly companies and e-commerce solution. customize merchants SaaS solutions open all of end. requirements. the APIs with but unique to complex an create static We tailored a our to that owners have allow manage updates their with installations capabilities but as integrate, on updates And on modify, of platform, and store introduced openness offer that their of new own sizes, tools experience, the resonates continuous platform unique features benefit basis. their SaaS these larger Merchants are we and foremost, allow businesses and APIs open the back source and SaaS, established with the require from we benefits having seamless without native integrations. of on First front-end in a to market, disruptive based who especially Open This and but a and automatically best-of-breed customers stores businesses best-of-breed integrations software. and need

the and into with Group, leading systems, capability the also merchants, unique that the BloomReach, Headless content CMS’ channel I and templatized including we involves unique by BigCommerce commerce and commerce this. sites. differs or technology decoupling comes features Sitecore, hundreds that that experience a It’s and including innovative version to site custom box. world’s create order headless headless of of the integrates category, commerce dynamic native used Headless powers integrate leading of demonstrates to the flexibility management experience of seamlessly and our bring and with of engine product many checkout, to We growing catalog, the design processing Experience end. the best with enterprise radically e-commerce Acquia, cross out Manager. design are Adobe the a basically we implementations, power WordPress, the experience is platforms, applications and design-centric. used our and and where front manage that user their to serve everything marketing are Second, from very the frameworks traditionally user power we Headless excel. digital including who sites the with end, want front-end of back

offline, with are integration sites, cross-channel and Third, leader where Cross-channel in consumers businesses a customer’s purchases. the commerce online a and their we other make of capabilities commerce. involves commerce

is Our driven merchants. our the by success success of

cost Heartland Amazon return the to platforms costs, save as marketplaces, cheaper free They dramatically hosting Instagram, offer hiring the point-of-sale and higher With than security basis and eBay, merchants fixing save total Vend. Fourth, SaaS on platform of be and software can we SaaS online licensing cost Clover, all save ownership on search like a Google, costs. integrations hardware includes such engines They networks investment. social on-premise leading costs. Facebook of we cost patches, So, as BigCommerce upgrading, software. with software and engineers. bug lower as offer on these. Square, direct They such saves versioning, on total such and of

finally, customer And than storefront e-commerce quickly, agility by developers our faster of ROI We We generates benchmark our while of PageSpeed Fifth our without solutions best-in-class and customers. ease-of-use enterprise get up sometimes for and to can completed on customers simplicity recently running is merchants innovate and complexity. and sizes. and offer and rollout platform leading security our Insights, support a matter Our and weeks. performance platform We sites. stability offering architecture. the the new Google is integrate security. for smoothly measured We in offer there of all as new

response faster load and by and engine organic page Our rankings. experience search improving benefit times shopper page customers

is that using the speed e-commerce we and XXXXX the Our Businesses BigCommerce, have and security. of built-in benefit security, security their store highly manage the including mid-market compliance of and e-commerce enterprise our get power valued uptime, certification investments customers in merchants. on-premise to to software by ISO made themselves. With have

had Electronics, a to place confidence of launch in such We packaged different includes Royal are open half continue first XXXX. platform. Forbes fantastic the Global we merchants proud companies. number the to Shell, and in XXXX see of Diageo, world’s X our Sharp customers largest the And us consumer Dutch of corporations, our from goods two SaaS with This as sites that

market chose our BXB which cost low which care, front-end achieved half of and integrated first And a bike commerce things merchandise with market. are very a high-end the that time share the cost content Baseball an in open functionality capabilities software new Yeti me to allowing I National while use launches allowed it goods payment a all more LaPerla headless ownership. capabilities, because fast digital them chose of mountain of and few integrations ownership. store enabled use custom because luxury QRC, provided platform’s PayPal’s their reducing Let customer gateway quick-reference and finally, leading both excited of point-of-sale a our same Hall BXC total capabilities. the management platform, capabilities, who Cooperstown’s and this site, PayPal functionality existing our APIs, manufacturer, competition. case. because take chose their multi-currency am to store in because store, retail BigCommerce our about. of advantage happy represents BigCommerce, SaaS and is year PayPal’s store chose They with Italian total platform open system which apparel our code their cost tree versus of them specific chose cross-border nice examples of our Fame time native them SaaS to faster on BigCommerce for The really our Cycles, preferred of of company BigCommerce open-SaaS to lower we SherrillTree, of because robust

continue partners. best and of in our innovate SaaS invest to open by and We agency and world e-commerce the platform to build best-of-breed technology integrated supported extensive the with network

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for We integrations BXB bundled of weeks e-commerce to We Adyen existing their ability partnership sellers BlueSnap. unique U.S. merchants PayPal multi-currency our Instagram with provides Braintree, and our Elavon, brands Elavon, accounts. on ability storefronts integration. of and connect Express buy their with This AvaTax. customer integrations suits transactions Avalara with strategic to added pick the Pay we merchants, with Klarna Adyen, point-of-sale non-U.S. Facebook of Converge, Vaulting, and these second is merchants ago. global we and the couple including in partner to tax catalogs review BXB completed a launched enable who improved Checkout, In We companies, payments, enhanced the additional seamless Klarna, adding multicurrency, manage best-of-breed cross-channel, we from and and to customers our upgraded abroad. Instagram and In our PayPal Pay. Barclaycard. WeChat Authorize.net partnering second announced support partnership our as support that the their on we we and global easily a to to The for In best phase By verticals, requirements enables number a give Instagram. favorite directly other by automation Square support Google

integration the ERP solutions Our for inventory finance, fulfillment. partner, Acumatica, completed its of and

world In be strategy in and QX, resonates SaaS open Our in We international the and APAC. enormous merchants marketing International order XX% capability in international Continental come. product and year-over-year our delivered core enables the BigCommerce. continued with will revenue efforts. Europe. see to continues international for merchants in expansion to we and around we expansion strategic better focus that We in growth and France, to to EMEA for a Netherlands growth serve XX% sites continue years launched international in expansion reach invest our recently Italy for opportunity revenue go-to-market

levers. growth multiple pursuing are we forward, Looking

grow as enterprise on designed platform. our and plans grow thresholds. sales are above our merchants we increase when volumes our to on pricing our The and adjust essentials First, businesses customer thrive

cases. brands, and We stores purchase customers also grow to when additional additional geographies serve use

Second, for we by to merchants to sizes all grow large SMB new of acquiring enterprise. mid-market

sales e-commerce example We segments to and industry a extend third platform also share potential about is is of merchandise XX% faster use of major sales all generates and seek $XX our A major high which cases. BXB, in roughly enterprise of sellers. our customer million. growing gross industries, we which is in and spend primarily than The as BXC. having We sites, that estimate define excess are segment globally large customers BXB example e-commerce

have headless use by large content design A conjunction us share as customers favorably grow reviews we and/or positioned serve apps leading whereby above BigCommerce. Gartner and implementations. with web is favorable enterprise analysts example progressive popular like custom Forrester the major to case amongst recent frameworks systems, management Research, industry Our described utilize commerce, in

geographies and serves XXX around and BigCommerce product languages wide merchants capabilities over by the go-to-market currencies. a world. in variety countries needs in we our expanding grow in of Third, the of

panel local and mid-market self-serve capabilities. around and and large growth integration world translating the We of by customers the sales processors. enhanced enabling We and control of languages have the payment geographies local our expanding our marketing by support in new usability regional the enterprise

Latin and to invest continue We in America Asia. Europe,

outside strong America strong growth Our revenue growth show to rates – and North our continue investments are this working these for seek to years we come.

we broader and Finally, partnership. In collaborating are competitors, with, expanding we the by ecosystem. grow share our to to e-commerce a industry revenue conglomerate. the competing not and software at We largest ecosystem be platform technology against seek not the leader contrast our

one e-commerce includes tax, is accounting Marketplace any cross-channel fulfillment of That commerce the shipping, and Apps and of Our payments ERP, largest marketing, platforms. partnerships.

we partners our our to customers capabilities. best add we As with and in-class provide network, choice

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our We as offerings earn partners next of a over to company continues to SaaS growth. the accelerate. solution offers for trust open around the financial world. Robert to the results. will am this the now phase are businesses our our and to into and I to all the call expand sizes shift businesses our compelling about believe lead talk of of excited to I product turn e-commerce strategy We excited

Robert Alvarez

as well a model, will today. Thanks, earnings Brent in like guidance start XXXX. providing detail. our and third will for to for brief results year on thanks first of quarter I financial Then overview everyone move go for would is our Since again and then the I quarter full to this call, I our to second joining through as us by the

that before expected in SEC in going our of preliminary that will I range before detail. an reminder be share certain results please financial results, shared note public. discussing QX our discussing non-GAAP to previously out would results, I will we GAAP I point filings in addition to a more Today, detailed our everyone, QX also As Also our results final had to like results.

be results financial reconciliation Our with GAAP non-GAAP results, earnings can found the release. along and GAAP our between in

Brett $XX.X As in total of year-over-year. mentioned, revenue XX% we million, up QX generated

from reminder, based revenue and from subscription Subscription and of services plans. and primarily are revenue platform are of online tailored fees in subscription per consists that solutions enterprise sources: There storefront to their our needs. retail plan solutions revenue two offer comes enterprise subscription a plans we revenue. our subscription essentials. size feature solutions the are types store��s and and As two generally charged our Subscription partner and merchants, to

Our enterprise larger annual $XX the online in the million mid-market, in to recites to which are doing merchants transactions. plans enterprise are sales million more than in annual million doing transactions, which sold of or $X segment, larger sites in either $XX annual

billed Our enterprise X to for planning or term monthly contracts are fixed of X annually. years are generally and a

based year plans basis, to SaaS by market best increasing legacy enterprise threshold Our shift merchants adjustments. we in mid-market are of order open open We our been ARR. your and the solution accounts disrupt order mix providing next initial and on order in exceed on enterprise enterprise growth they a the measure to focused our account to their source Since enterprise move the the as have XX-month providers tracking XXXX, trailing of the segments.

June was QX demonstrating essentials, June of based enterprise less plans of in our compared volume. XX% Our in XX, XX% enterprise of transaction X the our keep and Within increased of retail perspective, continued as mix annual from XXXX, million offer ARR to accounts ARR merchant’s XXXX. grew $XX.X and on the mix than our XX% this XX% enterprise in shift we To represented traction segment this shift in market. XX enterprise accounts as account of ARR to distinct

roughly Our which pro to sold per plans up $XXX to three and small as online in and essentials $X plus and plans offers month, million we businesses, $XX, standard, annual $XX BigCommerce medium-sized priced define essentials are respectively. transacting sites at sales. retail

based Our are retail month GMV. annual the contracts generally and month plans are to on merchant’s

partner revenue that in of to Partner of ran million year-over-year. planned As slightly for That our a thresholds, programmatically COVID-XX underlying plan our part was growth the led next in services to essentials billing QX, of the merchants. cycle. their or revenue upgrades the XX% revenue from PSR, appropriate merchant their Subscription revenue. existing QX during plan and GMV our was months pandemic. an up growth by merchants accounted merchants campaign new during versus consists bricks-to-clicks help and promotion XX% services down revenue $XX.X and exceed Subscription as are we parts, upgraded QX they result initial revenue, of rate QX two of as

PSR and revenue partners strategic We fees three on just solution. net recognized these me partner to approach merchants partners, means a from generate we technology can sharing technology stores versus majority Examples in basis require partners to out transaction call component merchants In enterprise and segments, a partners. by Let benefit to minute revenue share revenue our product spend The ecosystem feature products revenue. revenue-sharing technology and way best-of-breed revenue developed when or from and arrangements, customers simple a in the partner as revenue the level revenue partners marketing discussing needs about open from It’s partnerships out-of-the-box our SaaS majority integration of meet partner services. the few. technology their service partners, important tailor name integrating our that the think their to detail. payment promotions. by the arrangements that a of Partner revenue overall and BigCommerce’s is of our occurs. shipping their customization offerings from include applications mid-market and underlying represents a more generate ways, and accounting point-of-sale we the tax of best-of-breed

by QX, increase and activity the primarily accounted margin a revenue XX% of QX So, Partner is the was part and revenue million share. improved The monetization as e-commerce for which services of really up services of year-over-year, partner PSR in COVID-XX increased pandemic was XX% $XX.X driven strong. from in our revenue revenue. gross result partner the in revenue our and

switch our key to metrics. business let’s Now,

annual or ARR, discuss run-rate. let’s First, our revenue

recurring MRR multiplied ARR XX partner XX of sum months or we Our current or revenue monthly generate by the consists month’s PSR. trailing the the and of revenue, services plus revenue, from

we We and growth growth the for year-over-year. As related $XXX.X was best to be calculations ARR the and in proxies. consider growth not mentioned QX XX% business do consider other million, indicators our ARR deferred earlier, revenue be up good leading billing to

tracked We also period. accounts value, annual total or the the the with billing greater as than of number monthly of of contract end $X,XXX ACV,

or up we cohort, mid planned basis X% enterprise on $X,XXX ACV pro value XXXX, total we growth important threshold which reflects Accounts QX, We quarter-by-quarter point from and in in $X,XXX to almost we and this This XX% saw QX the are our which For fluctuate in XXXX. to enterprise customers higher only QX an accounts It’s ended XXX above the represented in an a year-over-year. QX accounts of half growth pro We threshold. we year-over-year metric progress XXXX. have X,XXX essentials QX, XX% growth consider directionally over merchants of $X,XXX business, XX% but in or due SMBs. confident an sustaining plan, in subscription ARR in our on QX of back in increase plans paying have plan to grew have the that determining continued rates ACV. out with ARR the plans single-digit but XXX these rates, end which seen our strong are revenue customer SMB traction that X% in a during both customers exceeding $X,XXX based can in retail growth well with Compared example threshold, than non-enterprise rates and similar fact An than we mix contract greater mid-market on would the enterprise plan. as sequentially. different is can be increase our our accounts, the are our established see as of

XX% driven in enterprise Another track for larger we or of $XX,XXX, ARPA higher QX our year-over-year, towards revenue for the metric threshold. was average by as account $X,XXX a plans because is up QX. retail and mix accounts deals mix higher per ACV above the end key ARPA, pro accounts shift

metrics, you half PSR noted, of plan results I of As income NRR statement, are the am that share otherwise based the revenue increase In all we many know, dynamics XXXX with growth our pleased the adjustments. quarterly disclose the but through we and our that please in the driven and happy by order to first references very to of operating basis. NRR on non-GAAP to unless count and discussing share related note expenses, GMV remainder a don’t

margin we XX% earned profile part partners. ago we on of of intentional our of very subset a margin a gross a share gross has and margin in quarter. profit be was impacted This us allowed that to was by our $XX.X a the high gross strategic purposeful in million, XX% compares Our and from year strong where revenue to margin and last representing In invest was technology money. The year-over-year XX%. increase our QX, gross margins our gross

QX compared a were year sales and marketing total revenue of Turning our XX% expenses, $XX.X XX% $XX.X for to and million and or sales million to marketing ago. expenses

XX% $XX the have this market shift our in further of without QX the we of have investments having from and to reach. in flow in half means a were to mid-market throughout our million while drive XX% and our leads can revenue our mix which outbound of investments Even accounts. in Research digital on referrals expanding spend first or million enterprise segment and tech been of in partner compared grow marketing. marketing motions, significant continue focused expenses sales marketing, sales and $XX.X leverage our and and Most come made self-service XXXX enterprise sums because and agency We for to large year able inbound ago. investing XXXX and development we to

showing and aggressively We the already purposefully evidenced growth disrupt required mid-market invested leverage. the enterprise investments of Many enterprise working been as know segments have ARR. and also engineering, in We have while are the made. investments to our in the product by rates

in and On growth up in G&A leverage of a continue keys. and XX% expenses $X.X of good a in as million was for basis, offshore revenue General expect in offering. to compared seeing of million the our administrative we R&D dollar public So, further development year expenses scale are and anticipation we our initial $X.X teams XX% ago. QX incurred a to or mainly result were leverage

negative XX% EBITDA of per leverage effectively XXXX, expect across was as scale and XX% million the by margin PSR $X.X margin to year or net negative loss we was loss general million in compared administrative margin a $X.X share QX areas XX expenses million was revenue revenue This a net operations percentage driving $X.XX negative over negative a a a in from point $XX.X share Adjusted million to I compared a a previously negative Non-GAAP operating margin, year driven of significant in negative adjusted negative EBITDA negative continue margin increase a ago high XX% mentioned. We result than loss by or year and negative our $X.X decrease or our the as per a or $X.XX quarter. QX a Non-GAAP ago. expectations was for was time. spend our $X.X to better for ago. improvement to to ability negative or and operating XX% to million adjusted manage the increase negative EBITDA but operating

gain opportunity the continue the leverage. business, have continue to we to scale we believe to we As significant

As enterprise economics continues and to continued to and bigger shift unit key underlying expect our see in improvement metrics. our mix we merchants, larger to

equivalents. IPO net Series forma balance of our paid cash sheet $XXX.X the have our and on statement, QX, million cash end at occurred Turning the with and $XX.X in we and million well cash basis, IPO would of pro On preferred estimated cash cash our dividends equivalents QX ended flow a had F as stock assuming been cost. to our as

net $XXX.X were million underwriters Our from net commissions. discount proceeds the of IPO our and

approximately last remaining XX% $XX.X or Our obligations million, RPO up from performance year. $XX.X million totaled

COVID-XX million a million ago. the year cash flow drive or by margin in revenue approximately business the flow point next negative total margin conclude higher $XX nearly a flow providing a was million across year-to-date cash $XX our XX% the negative margin pandemic. recognize mix elevated ago. shift to the by now to improvement Even cash e-commerce guidance seen and XX% expect as year ability XXXX. a contracts. negative of have prepaid year-to-date merchants $XX.X in negative was a guidance which negative XX%, We months. cash RPO of XX free $XX.X flow uncertainty call cash negative related mix compared flow compared our to to year surrounding though million more our XX The activity the I free COVID-XX, and for will over to continued assumes driven and Operating full $XX.X enterprise, the QX Free to million leverage was is our a of we for free

clearly, back a guidance As lower. a geographies half of as result, this growth assumption cause to has our revenue XXXX, variation guidance modify a QX transaction us rate moderate across seen all PSR compared and may our could significant the growth to higher plants activity or in as from continued lower at

of XXXX, growth range XX% total of revenue we the to or XX%. $XX.X of in For a third expect million to $XX.X the year-over-year million quarter fiscal rate

$XX.X range loss to of $XX.X negative We operating expect million. in negative the non-GAAP million

the expect to fiscal XX%. million growth revenue full year-over-year $XXX.X XX% rate of the of in or total year a to we range $XXX.X For XXXX, million

the expect Operator? happy range loss negative $XX.X We and operating take $XX.X any are your questions. million Brent to to non-GAAP negative in million. I of With of that,

Operator

line comes the first Barclays. Our Raimo from from Instructions] of [Operator question Lenschow

Your line open. now is

Raimo Lenschow

if IPO. congratulations Thank and may. I successful you questions Two on the

First you approach where you little are subscription you offering, you kind fits gives approach a doing you kind see your some growth were compare like of I brought number at saw possible. in there cost how talked an advantage? a Robert, of but other the we like have of try think in for API-driven Brent, about us and through run down Thank why the as can that and year-over-year, competitors, like of kind of XX% look that that of question you of revenue, then kind And of where guess and solution monetize they this your that just or approach your bit do Can we promotions we and then open if one bit? obviously, factors Brent, underlying, maybe kind did about kind other you. this you why someone a to kind little contrast much as so there, because for to

Brent Bellm

software, on-premise Thanks. best-of-breed from e-commerce platform in fast functionality. types growing technology with medium there to the from There pursuing what the world of before to and platform. quickly Yes, source their our and for small, the is stack so fits benefited approach back want XXXX approach SaaS the run as their merchants have SaaS and specialist businesses, as largest think larger of the the were it entire who really was many most and to it best. businesses own optimize who largely analogous and to open Magento the open around because grew their do of on-premise did large the different complex hire combination enterprise what is openness in software best to and merchants money, era option become requirements not expertise They for limitation businesses security, spend to IT their hardware their strategy to In non-existent want businesses, etcetera. open the

number necessarily market the the an choice would think is therefore number in something therefore best-of-breed their larger platform get one against our but software against offerings we are down they is and wide we for competitors they to as software by same is are of are We the era. that competitors the competition areas. contrast model ever to open SaaS our pre-integrated basically in mentioned of largest an and acquiring limits adding you grow those conglomerates, And who exclusion or flexible And and other often to many argument a is than that unique sole I us platform. large only which model says and they up e-commerce better conglomerates of best-of-breed cap that the specialists differentiated, and There customers when emphasize product, e-commerce not competing others, evaluate businesses.

Raimo Lenschow

Thank you.

Robert Alvarez

here. Raimo. quarter and as on was we QX throughout well the both. by Hey, in jump promo of mostly the timing throughout product will the XX% the to I question. as that Thanks the the will most of for ran deals really of dive essentials Yes, deeper I enterprise driven

act to we as So when recognized was possible we to plan in a plan. saw help been our the COVID quarter. are many we total really while stores first we the bookings our from the quickly the subscript is online. XX-day merchants promo as are depressed to offered hit, free quickly because recognize to other to relative sell and ARR. promo, and through would The the QX We have of it positive remember but decided wanted run X site-wide traction revenue don’t promo for enterprise months they the then part for Without that promo, revenue capture and do promo, on part as the essentials the

beginning had So, quarter in as when we on both we you based can ARR It reflects as the enterprise XX% plans enterprise modest in of really thankfully back you deals. from we late enterprise revenue previously, deals a essentials mentioned that our look timing as in had push timing in their those strong the the well our QX. our can impact the as bookings our in June and you generated see of quarter, at see came ARR, we But grew some strong accounts May

Raimo Lenschow

Perfect. you. Thank Congratulations.

Robert Alvarez

you. Thank

Operator

you. Thank

Stan Our Stanley. comes Morgan next question from the of Zlotsky from line

now is line Your open.

Stan Zlotsky

quick maybe QX. you follow-up the and so us on revenue you on the Raimo’s Maybe that up could actual quantify you subscription much much. ran to try disputes charge you going moving with Thank high from to this depress through of GMV way – the that did year it as see momentum a when sort a How much that's continue do to essentials there. that Perfect. you then level just they when very follow obviously the help half customers that question promo have we current they activity back up ecommerce how into right healthy and the push you limits, of through the of environment? as step forward RA,

Robert Alvarez

in QX up hey, would bit, have came probably Yes, higher roughly think year-over-year, without revenue get the you subscription of QX. question, I Stan, are it the promo, was, that but than I a little gist could, for slightly that breaking you XX.X%

that affected growth So we you retail of revenue promo plans. the about think when subscription that’s think impact our when really terms of how in adjustments,

on plans retail Our based thresholds. GMV are

will So as thresholds be next moved period, plan. exceed in following those up programmatically the the merchants they to

basis. a adjustments growth as in, really are based plans built enterprise it but Our is on XX month trailing

cross that upgraded, thresholds see then will will their order threshold. accounts enterprise or as growth that XX adjustments them they see you you exceed once the initial So, on trailing basis, month

seen surge retail adjustments. will between you of strong since we have with enterprise adjustments Yes, So so upgrades see month are about lag usually a the there’s that seeing plants. when the we GMV growth, March, and across and strong or growth

Stan Zlotsky

you Thank Perfect. much. so

Operator

Thank you.

of Our next question Samad from comes line Jefferies. from Samana the

open. Your line is now

Samad Samana

us, about we to fortune maybe thaw or if be what the even of IPO. because may you with for good then think but start taking there And I merchants and inbound over just been more fortune back thinking you seeing to accelerate? the to open coming for And SaaS the platforms, for have XXXX. let seen me the of a I what think in? afternoon. COVID? XXXX leads retailers Thanks was open Hi, follow-up like early my kind you, mean congrats larger on as Not have likewise was, XXXX starting Brent maybe that Robert, with, I and are resonated may are to moving hesitant trend degree that move greater to One more the first questions an you and echo we getting historically BigCommerce? larger about, go platform

Brent Bellm

us the credibility we public a Adobe, helping when we One actually public, were is competed all really IPO the world. leveled are Oracle, there that because have largest are companies. now for disadvantage two And the largest Yes, Salesforce, company, we work transparency we against and things with itself competitors enterprises the the and in field. Shopify, compete as our playing SAP, private being us

platform where It BigCommerce. BXB research. Analysts So with for in party is then last with research I combine in coming report months made in observe that’s And been was reports us in XX and Forrester performer research the rated strong began award thing and analysts, for out of both the up positioning May, the recognition helping large X commerce then report recent third bench, as from a wave month. don’t the has the I that Gartner other industry with enterprise real mean came with the But analysts of out slew sorry categories. in the and one back we for a of mean, favorable difference technology were BXC particular. the followed paradigm finally, a

And than X us it platform on is additional very and sets could effectively call more deep enterprise year compete better recognition from a ago. we go build the helping consideration this large let’s who so folks or

Samad Samana

maybe that you Great. looks if could Very correctly, helpful. like RPO did don’t number, heard XX% you growth it year-over-year, it but about And that that QX out called etcetera, then rate understand Robert, I if but I if think then And for the just like this that around for cancels help of about of was comparison sake? increased noise how very should think was RPO? that said in sounds that, it I you a but promos, out XQ know some sound maybe is wondering we what maybe representation positive, us if growth good I we

Robert Alvarez

best bookings and RPO you deferred the again, ARR of quarter-over-quarter. our as mean, I I measurement Samad. point questions, to good the would billings, Yes, our

for you at during XX.X, the essentials enterprise our change QX, in change best of capture again, that and but just I our Our encourage XX.X, would plans in in the was for look and period. ARR will it’s QX to is both measurement that bookings RPO else because bookings, everyone really

Samad Samana

the Thanks helpful. along. taking questions. for baton will Very my [indiscernible] Great. again pass I

Robert Alvarez

Samad. Thanks,

Operator

you. Thank

line the Our from next Josh of comes KeyBanc. from question Beck

open. now line is Your

Josh Beck

in taking in for X years some saying I companies e-com we are the seen new Thank brands, to question. have with surge just share penetration to to Maybe we think have this I happening X of amazing months. are you X X mean,

to seem am the metrics, if for Robert’s I than net X-K of greater some I kind your it nicely. last of the certainly really seemed across growth positive accelerate accounts point, ARR just look So, like to to adds be seems curious the

is this business, up. sales So, on had I I really S-X, perked kind am your in across May, just maybe mentioned enterprise new curious manifesting of know you how

color maybe context that how on is any would through, love some there? So, followed

Robert Alvarez

that saw a mean, customer order in in count. clearly versus XX% growth metric to QX closest first you proxy PSR e-commerce to because XX% partner from the that of sales XX%. I quarters, in and up directly acceleration sure. sales disclosure is from customer reacts the meaningful merchandise we was gross generated from have was And transactions that revenue being us financial revenue, and portion Yes, our to XX% is for the XXs, a QX, as in the which big three prior is

So, sales bank at off. that’s not you encouraging. very pretty on gone are third-party the data stay elevated? industry still card that’s robust volumes, they up credit very and online The how will look well, long dramatically. suggests And reports it’s When dropping real question, operating online the

most industry the is we behaviors belief others the important business think consumer I that change. behaviors many look and change that in and

part no core particular have as realize much of transformation. segments, additional might digital that now more brands, do of online in longer be by sell e-commerce they stages there customer regard into and companies businesses be geographies, is to still a strategies. Many and has it’s they necessity it can they can their adopted can option, Now, in a an selling who early

continue surge buy to many It’s have them. for grow likely to come. will from from years so that many just take We And brands here new to here cases consumers use found to advantage we to are of.

Josh Beck

these for I should you some seems second we that provided guidance, the certainly are helpful. be but other Really you like we is Robert, increase. mean, really certainly helpful half, aware can you have subscription promos into factors there see And as as looking maybe obviously, revenue convert, any

the seems we less and you when definition. about we like about it and volumes. by like also be be because ARR is contrary, revenue maybe PSI ecommerce it ticked it to the that given And those really conservative up going it with impacted to just On tested want are think seems it’s

but anything the that of So of we to build out should parts I here be know just there the model, models moving we half. our is for mindful second a as lot

Robert Alvarez

Yes. to where I feel bookings Hey, Josh. for for at in enterprise in our in We about the really continued And It’s enterprise again, plans fit mind, on disrupting are great both and QX, focused enterprise. sure, good mean, really year-over-year. nicely. bookings, essentials we segments in we saw see XX% strong momentum, market keep growth

fits we mid is merchant, GMV seen strategy impact in good March. challenge we feel a So transactions we monetize subscription. feel bookings, through we growth really whether spike and that The market about so differentiated with about reflected into have really GMV year-over-year since platform. I have for good enterprise continued us are or well numbers, the it the in of is those the you mean, year-over-year, seen clearly, the that XX% and our predicting

prudent terms Given that we of are new forecast public company, we just to want forward. going that take how a in approach we

we half. approach second So bookings continued prudent moderating the PSR. and in bit around GMV But the subscription and momentum taking related and of a are that in a kind

Josh Beck

Thank both. you Yes, makes sense.

Robert Alvarez

Thanks.

Operator

Thank you.

the Hynes from Canaccord. David comes from question line next Our of

Your open. now line is

David Hynes

I Maybe, Brent, Hey, the questions for you. momentum. congrats will the guys. Thanks and start with on taking

And just that you to a you any strategy? has changed in typically So headless what’s extent the think headless is about up? catalyst to then, to the trajectory last over BigCommerce, way drive to merchants there are for of, characterize where we merchant strategies adopting and years the a of kind whether can driver terms headless adopt is a that what demand talk of

Brent Bellm

or maybe WordPress, want high to from in started Yes, commerce at directions with headless, are a and Adobe to in of I website, mean, adopters that redesign site. enabled then without end or commerce their the created funny in enough, those opposite the it’s who Experience companies low and polar manager, two businesses to e case, the come centric late marketing whole end Drupal one having

using, experience who So the and most those or built to a well lead opposite create with headless that a case, immersive polar hierarchical non an of commerce experiences templatized customer then using e transactional headless they in add innovative, they third the user outside typical again, are interactive a going end category be e-com unconstrained in the at platform norms to frameworks by party cases, companies case. start content perfect use may the and or trying site. to CMS. with And a want is And are structure purpose commerce model, be

it percentage wish we sites? look commerce still had how at on a could XX% you time. headless, the changing build is know much but of as analyzing is a just be honestly, stores see, I what Now, I I are total I what actually installed of good e of get to don’t it of if the most but sites mean, trend honestly way don’t you with way I WordPress around world relative all the as as total there that the

David Hynes

we the the in for mix think Can about but maybe the merchant time whether And that if Yes additions and ads of last quarter. over the to replatforming mix that this don’t helpful that online for are that is then if sense a that’s are merchants strong know makes of first year? those versus, you changed better and that’s I of of obviously you alright characterize new color. kind the lots

Brent Bellm

sites. Sure, I runs general rule us will is XX-XX I versus take for a new around sites migration it mean, this.

though late to transformation the adopters right go person that. able to on aren’t who for companies harder trying pandemic, for do. of new not sites more flat has a collaborate platform now It’s who more may direction shift in they the what or together that been get in caught in thorough the when base particular, footed employee a are During through to were digital across a to be little migrate bit your

opportunity in pandemic once platform their do. old And so are back in offices of their the about could for kind the there an on they modernizing to future by what fingernails held the they think be companies during who on

David Hynes

all great. again. and for That’s congrats the color Thanks

Brent Bellm

Thanks.

Operator

you. Thank

Company. Our Needham next the from Scott line & comes Berg from of question

now is line open. Your

Scott Berg

questions. good can Brent relationship? one any your maybe partnerships the on differ Congrats much guess expectations is years? maybe can Brent, Thanks from announced do on the any differing comment BigCommerce technology maybe Does I Facebook, RA. for newly or a first next on the that taking expanded Instagram Hi, quarter. and my you bring that partnership of couple you and what have of other over

Brent Bellm

are and visitors unbelievable Google case than partners Shopping and to that Facebook It’s Instagram is Fundamentally, Scott. certainly eBay its the look-alike for do like And to a way targeting and what you an Facebook you very doing built is Hey, stories then both an up cater through and the try different Amazon very way Instagram existing and as engage and up other site platform retarget that amazing build is – what do. to ones. that rich a new tell. following that photos to Instagram you brand with

Facebook been of phase of two they Instagram basically partners been that has in We have what have one release and in done years with a partner for each only e-commerce.

channels. are business interactions successes upload We and store it see very your and a those advantage run branded means that seamlessly into orders orders who we freely those Instagram, technology there on. if catalog, the customers’ our you customers platform, your are and process you you in what investing your really keep And all taking manage and because on Facebook sync stack our is amongst can early that, same manage adopters to on many of are keen so it for basically

brand a Facebook it’s Instagram. very and So, takes that advantage of useful and integration for any powerful especially

Scott Berg

mix and versus they then look of in couple COVID quarter, payments the all the one at this the like environment? maybe obviously types you last driving those RA, Got similar of have better of different revenues this the GMV related revenues is benefits follow-up PSR kind the volume Helpful. probably significantly years, is environment driven of partners maybe in significantly between for heightened And up revenues. it. in revenues as on of the But composition

Robert Alvarez

know, I from share Hey, get payments. is driven PSR we rev Yes. as today Scott. our you by of mean, majority that

we it’s share the the starting ecosystem in much not kind We last about even just that’s to really the say we ability is that quarter-over-quarter. that are think have place that in of business, more wallet payments just beyond And monetize XX payments monetize are put our apply, same or to rules partnerships over our opportunity mature across forward. to XX months of to going excited I but further our

Scott Berg

Great, helpful. Congrats again guys. Thanks.

Robert Alvarez

Scott. Thanks. Appreciate it.

Operator

Thank you.

next the Our question James. from from Raymond of Brian Peterson comes line

now Your line open. is

Brian Peterson

the the strong Hi, gentlemen. Congrats IPO results. on in

is I these out SOs if a of of some you large BigCommerce on one but on there platforms migration owners on still questions, follow-up shared that pace to to am any far presence during curious there, the have there is platform? DJ’s seen and of of change the in well so wanted the migrating I the that legacy of the pandemic So, is are documented. value But versus

Brent Bellm

channel off and pre actually been have It's cases, are pandemic Yes. have may migration. my to primary to sites migration to when that little used together, a perception doing much net new Again, employees not when can't channel geographies, undergo the your it’s a which riskier, is pandemic because pull in your bit a the slowed that companies channel. during primary migrations for get all the new harder new online your pandemic midst of relative your who brands, becomes new

quite Now, just this the see, competitive built around with best are world. old current. them to is speed not stay just But XXX inevitably, on of I you than perception. stay to statistics and are have pace Most don't up platforms of the on can migration. and there as and more

may of be market modernize in it's and in so on giant those platforms months years part still well the upgrade a And ahead. looking to the that

Brian Peterson

understood. pandemic has maybe – on do are the lot color maybe key us well think BXB I the the and you to in BXC pandemic the see really That's as curious great on the it. that just migration? pick a that? up of what of kind kind accelerated am facilitate I you. BXB, two And Got as large catalysts of Thank or evolution, one yes,

Brent Bellm

BXB. accelerated think I has it Yes,

we was they hundred of them several recently a that that one online online. not were BXB think of they selling have our the sell not the sellers I half it done or has companies shared hindered, of the all of was pandemic And and middle the in S-X many or for said dropped offline to surveys survey scramble. and statistics in shutdown as option sales get had to there

would have say So, the percentage my pandemic team at enterprise been BXB higher now a we have been especially sales that doing sales. them before

Operator

you. Thank

comes next Terry Truist Tillman the question Our of from line from Securities.

is now line open. Your

Unidentified Analyst

for on question. This is Terry. guys. Nick actually for Thanks Hey, my taking

resonating development, a impact with a the customers Thanks. just but I give think And importance you you guys you business us this guys on you can Builder it’s expect Page terms overall? script, far? little bit how and on of that in talk product in the the of SDK, about touched how so Payments and then on to as the follow-up, working you are update an can

Brent Bellm

Sure. our conversion. drop of at it’s can use, engine our and saw We anyway just drag incorporation engine, to interact also win powerful is and in stores for with big a to experience in widgets. but paid the and recommendations the new more trial chose of who out for QX for that spectacularly beginning design, beta It interactive ease Page introduces power trial increase and for starting stores drag drop incorporate very of to wizzy easy that new rolled motions into and page. Widgets a theme much type in capability page a editing. Builder and a theme design

interact Payments success Now, there has rare one towards It’s our that or I on that on without stores would overall, to a second your stores. Builder us say, feedback issues. that for bugs more But without existing product but are highly moved to that, has customers. of quickly Page great. for for now question around is is GA the been bias We been be engaged releases working new and to a companies real then seemingly going with SDK. goes a and And those were tool out like already

their putting integrate they code, is does solution are then SDK in integrate system behalf actually and a into certify payment doing providers And to once the allow operating it on PCI to done rather APIs payment or burden compliance. into then what us on us we manage So that always and payments, around third-party the is than third-party the take that, them. the integrator

transactions world of is SDK and transacting now to plain are every every easy region for to who a integration benefit merchants. the of X on is country us a lot specific it processing behalf Phase beta integration it’s and and the us it for place maintain or So credit processing, there we big card world. take why new we the have ourselves, makes more payments providers vanilla The long-term big providers. partners around lot for is of and scalable all on do a had If payment are

We have result of as a time to a that it quarters will hard new makes countries, I This a catalyst And be scalable. our covering everything. in that, in ahead, regions. think growth the new

Unidentified Analyst

helpful. really guys. That’s it. Got Thanks,

Brent Bellm

Thanks.

Operator

I like for to no am the over showing to Brent questions. and back you. Chairman Thank At CEO time, closing I further remarks. turn this call would Bellm, President,

Brent Bellm

Well, to And us to Great. interest on incredible thank to next our this we public the All best. a call. to point. in for and want for our joining BigCommerce employees, you first look been customers thanks company this want forward Thank our I an journey. call. personal getting to and your partners note I for everybody you us has on say on talking

Operator

you participating. gentlemen, conference Ladies call. Thank and this for today’s concludes

may You now disconnect.

BigCommerce (BIGC) 10 Sep 202020 Q2 Earnings call transcript