BigCommerce Holdings, Inc.

at investors.bigcommerce.com. With that, let me turn the call over to Brent.

Thanks, Daniel, and thanks, everyone, for joining us. On today's call, I will walk through our results for the quarter and year, share my thoughts on the e-commerce business climate, outline progress against our five strategic priorities, and finally share perspectives on our approach to 2023. RA will also share some of the assumptions on which we have built our 2023 financial plan He will conclude with our high level expectations for 2023 in his discussion on full year guidance. In a challenging year for global e-commerce, BigCommerce grew faster than the broader e-commerce industry. And our Q4 results showed strong progress in both profitability and operating cash flow. We also delivered on our full year opening guidance set last February, highlighted by our 27% full year top line revenue growth. Let's discuss the details. In Q4, Total revenue grew to $72.4 million, up 12% year over year. Full year 2022 revenue grew to $279.1 million, up 27% year over year. Our Q4 non-GAAP operating loss was $9.4 million, and the full year was $47 million. We concluded Q4 with an annual revenue run rate, or ARR, at $311.7 million, up 16% year over year. That represents a sequential growth in ARR of $6.4 million. Enterprise account ARR was $224 million, up 30% year over year. The enterprise segment now represents 72% of our total company ARR. Let me now share some perspectives on our results. Without a doubt, 2022 was a challenging year in global e-commerce. As macroeconomic conditions deteriorated in the first half, We took decisive action to reduce planned spending and focus efforts on our enterprise business. I am confident these choices are yielding the proper balance between necessary tactical adjustments to near-term economic conditions and steady long-term investments in the strategic initiatives that will drive profitable growth in the years ahead. Our results reflect this challenging climate and our response to it. We continue to see market progress moving upmarket into larger, more complex enterprise opportunities. However, as a reflection of the macro economy, enterprise opportunities have longer sales cycle times and reduced aggregate deal pipeline relative to before 2022. Those are two common themes we all hear across many enterprise software segments. Inflation and consumer spending also remain difficult to predict, and RA will discuss this later in his remarks. Overall, our results demonstrated the resiliency of our business and the commitment and competence of our team to deliver, even in a tough economy. Most importantly, by growing 27% for the year and restructuring for profitability in 2023, we firmly positioned ourselves for continued healthy e-commerce leadership in the years ahead. As we look ahead to 2023, the economic conditions of 2022 motivated us to prioritize profitability as our number one goal by year end. Obviously, rising inflation and interest rates have made the cost of growth funded by operating losses unattractive, to both us and our shareholders. Whereas we began 2022 with a plan to achieve profitability by the second half of 2024, we have now restructured our operations to target profitability in Q4 of this year, 2023. The restructuring has already made us a better company. Our go-to-market spend now focuses entirely on our highest ROI segments like enterprise, B2B, and omni-channel. Operations throughout the company have been streamlined unnecessary and excessive expenditures have been eliminated, company focus and alignment are better than ever. In sum, we believe we are an even stronger company, operationally and financially, than we were prior to the December restructuring. Longer term, we reiterate our belief that our business can achieve operating profit margins of 20% or higher, thanks in part to our strong gross margins of 75% plus. As RA will outline, This operational excellence and rapid path to profitability is reflected in our guidance for 2023. Next, I'll provide an update on the substantial progress relative to our core strategic initiatives in 2022. At this time last year, I walked through our three strategic pillars, open SaaS, disruptive innovation, and commerce as a service, and the five strategic priorities that support them. Today, I'll briefly review those and discuss the progress we made in 2022 as well as our commitment to these areas this year. Our differentiated Open SaaS technology approach is our first strategic pillar. It combines a truly modern approach to API-first composability with the inherent benefits of multi-tenant SaaS, including built-in performance, security, usability, innovation, and lower total cost of ownership. This combination helps businesses turn digital transformation into competitive advantage. our software conglomerate competitors attempt to lock customers into their proprietary suites. In contrast with Open SaaS, we provide a configurable and flexible platform that enables complex businesses to adopt best-of-breed technology solutions and customize their e-commerce approach to their specific needs. Our next strategic pillar, disruptive innovation, is the business strategy to extend upmarket propelled by an ever-higher performing product at a lower total cost of ownership than established incumbents. Our enterprise capabilities enable high-end merchants to expand faster and further at a much lower cost, while providing advanced functionality to smaller businesses that allows them to grow and scale without ever having to re-platform. Our final strategic pillar, commerce as a service, describes our ability to enable partners to create and sell customized commerce solutions powered by our platform technology. We aim to leverage our Open SaaS platform to empower our ecosystem, not compete with it. And through commerce as a service, our partners can combine the power of our platform with their unique use cases and competitive offerings to create comprehensive solutions for their target markets. The three pillars of Open SaaS, disruptive innovation, and commerce as a service remain core to our strategy in 2023. We are laser focused on two big objectives this year. achieving global leadership in enterprise and reaching profitability on an adjusted EBITDA basis in Q4. By prioritizing our investments in staffing to focus on enterprise growth, we are confident we can both grow our enterprise e-commerce leadership position and accelerate our profitability timeline. The continued success of an investment in our five strategic priorities will be critical to deliver these goals. In 2022, We delivered our biggest advancements to date in terms of true enterprise-grade functionality and composability. Our launch of multi-storefront capabilities was a major milestone. This enables businesses to easily launch and manage multiple storefronts from a single BigCommerce backend. Customers can now launch additional brands, geographies, and customer segments, such as B2B in addition to B2C, at much lower operational costs and complexity than with distinct infrastructures for each storefront. We also bolstered flexibility for enterprise merchants through our launch of multi-location inventory APIs. These APIs enable customers to execute more complex order fulfillment scenarios, including buy online, pick up in store, and multi-warehouse shipping optimization. Major new brand launches during 2022, including Ted Baker, Taste of Chicago, One Kings Lane, Ollie Pets, Mountain Equipment Company, and Lifetime Brands, Leverage enterprise capabilities like these to power their growth. Our omnichannel offering helps customers advertise and sell successfully through more channels than they could on competitive platforms. In 2022, we made remarkable progress following our 2021 acquisition of Feedonomics, the industry's best solution for managing product catalog integrations at scale into more than 100 of the world's foremost search, advertising, social network, and marketplace channels. Major channels enabled include Amazon, Walmart, Target+, Google, Microsoft, MercadoLibre, Facebook Instagram, TikTok, and most recently, Snap. Just last week, we announced a new strategic partnership with WPP to offer omni-channel solutions to help WPP clients drive growth and maximize sales across hundreds of advertising channels and marketplaces. This innovative partnership will give WPP priority access to new product tools on both BigCommerce and Feedonomics, in addition to providing APIs and data sets that will enable WPP agencies to develop unique insights for clients across product, trends, and purchasing data. New Feedonomics customers added in 2022 included Tottenham Hotspur, a marquee English Premier League football club for both advertising and marketplace channels, Landmark Group, one of the largest retail and hospitality conglomerates in the Middle East, Africa, and India, and Les Mills, a $150 million-plus fitness company headquartered in Auckland, New Zealand, as well as many others across multiple e-commerce platforms. Feedonomics is a platform-agnostic solution. We will continue to invest in Feedonomics' ability to meet the needs of the world's largest merchants and advertising and marketplace partners, whether they are using big commerce or competing e-commerce platforms. Within BigCommerce, we launched our new certified omnichannel partner programs, both for agency and technology partners. This enterprise-focused initiative gives partners new ways to generate revenue by helping merchants on any e-commerce platform achieve omnichannel success. Armed with numerous tools, services, and exclusive channel partner programs, partners can educate and guide merchants on how to strategically expand into new channels that can drive more traffic with higher shopper intent improve return on ad spend, and generate more GMV. We welcomed Amazon Buy with Prime into the program, and in January, BigCommerce became the inaugural partner for the launch of Buy with Prime, which allows BigCommerce merchants to easily sync their existing catalog across Amazon and BigCommerce and deploy the Buy with Prime button on their sites. In January, we also started a new partnership with Microsoft Ads and Listings, allowing big commerce merchants to create and manage ad campaigns across Microsoft's extensive properties. B2B e-commerce has gone through a major evolution over the last few years. B2B buyers increasingly expect a modern experience similar to what they see in consumer-focused e-commerce. That means B2B businesses must provide speed and ease of use without compromising the complexity and uniqueness of the B2B buying journey. Building on the 2021 launch of B2B Edition, our 2022 acquisitions of Bundle B2B and B2B Ninja completed a foundation for BigCommerce to become the world's most flexible and easy to deploy B2B platform. Bundle B2B powers the functionality of our B2B Edition and B2B Ninja offers best-in-class B2B quoting capabilities. By incorporating this range of functionality natively within BigCommerce, we have made B2B e-commerce practical and attractive for businesses of all sizes. Our B2B offering has achieved widespread industry recognition from leading analysts including Gartner, Paradigm, and Forrester. We further enhanced our international footprint with notable 2022 country launches in Germany, Austria, Spain, Denmark, Norway, Sweden, Mexico, and Peru. Expansion markets contributed to revenue growth of 34% in EMEA and 42% in Latin America. Notable international brand launches included British Airways IAG Loyalty, Jimmy Brings, MKM Building Supplies, Industrial Tool Supplies, and Mexico's Chivas Soccer Club. In addition, we collaborated with partners to grow our presence in markets including China, Korea, Poland, India, and UAE. The last of our five strategic priorities is composable commerce, of which headless is an important subset. Composable commerce gives merchants the freedom to mix, match, and combine best-in-breed tech vendors to create a customized and robust technology stack. With BigCommerce's open commerce approach and commitment to mock alliance principles, B2B and B2C merchants can make smart technology investments that are agile, functional, and flexible. In an unpredictable economy, flexibility and composability are especially important. Our open platform is unrivaled in its ability to let merchants build the technology stack that best serves the needs of their customers and their businesses. Finally, I'd like to conclude by speaking at a high level about our plans and operating focus for this year. How we are investing and winning in market has not changed. Our strategic focus and initiatives have not changed. We have a great product and leadership position in global e-commerce. I believe continued leadership requires commitment, discipline, and resolve, staying on strategy, even as market conditions may require tactical adjustments from one year to the next. We intend not to overreact or overcorrect in a way that disrupts long-term growth. Our actions over the last several months reflect this. We chose to focus our time and go-to-market spend on the superior economics of the enterprise segment. Last quarter, we shifted sales and marketing resources away from non-enterprise prospects with shorter sales cycles to enterprise prospects with longer sales cycles. We did this knowing it may impact bookings growth in the first half of 2023 because the superior retention profile of enterprise businesses makes this the right priority for the medium and long term. We saw that effect in our Q4 results as well. In addition, we restructured elements of the business to accelerate our timeline to profitability in the Q4 of this year while still maintaining key investments in our long-term strategic priorities. These were not easy decisions, but they've already made us an even stronger company with an accelerated timeline to profitability. In conclusion, a challenging operating climate requires leadership to adapt, improve, and strengthen both strategy and execution. I believe our team successfully rose to the challenges of 2022 while positioning us for continued success in 2023 and beyond. Our plans reflect the prioritization of improved operating margins and cash flow, balance with focused investment and enterprise such that we continue to grow our leadership position in global e-commerce. Profitability and enterprise focus are the commitments of our leadership team to our customers, partners, and shareholders. We remain proud and excited to serve you all. With that, I'll turn it over to RA.

Thanks, Brent, and thank you, everyone, for joining us today. During my prepared remarks, I'll walk through our Q4 results. provide details on some of the key assumptions behind our 2023 plans, and conclude with discussion on our Q1 and full-year revenue guidance. In Q4, total revenue was $72.4 million, up 12% year-over-year. Subscription revenue grew 14% year-over-year to $53.3 million, while partner and services revenue, or PSR, was up 6% year-over-year to $19.1 million. For the full year 2022, revenue finished at $279.1 million, up 27% versus 2021. Subscription revenue and PSR were up 33% and 13%, respectively, year over year. In Q4, revenue in Americas was up 12%, while EMEA revenue grew 22%, and APAC revenue was down 6% compared to prior year. For the full year 2022, Americas and EMEA revenue were up 28% and 33% respectively year over year, while APAC grew 9% year over year. 2022 was a tough environment for e-commerce and SaaS software. Despite those headwinds, we posted solid growth in subscription revenue, especially in the Americas and EMEA where we launched in new markets. We also generated PSR growth that outpaced consumer spending in e-commerce as a whole. I'll now review our non-GAAP KPIs. Our ARR grew to 311.7 million, up 16% year-over-year. That represents a sequential growth in total ARR of 6.4 million. Enterprise account ARR was 224 million, up 30% year-over-year, and is up more than 2.2 times from where it was just two years ago. As we have outlined previously, the change in total subscription ARR which can be calculated by subtracting the trailing 12 months of PSR from total ARR, is a good indicator of our underlying change in net bookings during the period. Subscription ARR was up $5.3 million versus Q3 and up 17% year-over-year. As Brent mentioned, like many other enterprise software companies, we continue to see longer sales cycles and a tighter deal pipeline. QCOR subscription ARR growth reflected the challenges of that dynamic. Again, we are confident that the investment choices we are making are the correct ones, focusing on long-term profitable growth with enterprise accounts. We expect subscription ARR growth rates to improve in time as our pipeline investments and prioritization choices are fully realized and as we close larger and larger accounts. At the end of Q4, we reported 5,786 enterprise accounts, up 750 accounts, or 15% year-over-year, including phenomics. ARPA, or average revenue per account, for enterprise accounts was $38,708, up 13% year-over-year. Enterprise ARPA was approximately flat quarter-over-quarter as sales cycle times at some enterprise merchants lengthened. We have built our 2023 plans conservatively in line with this dynamic. Finally, net revenue retention, or NRR, from enterprise accounts was 111% in 2022 compared to 118% in 2021. 2022 NRR was impacted by tightening consumer spending that led both to PSR growth rates below that of 2021 and fewer orders driven subscription upgrades. I'll now shift to the expense portion of the income statement. As a reminder, unless otherwise stated, all references to our expenses, operating results, and per share amounts are on a non-GAAP basis. Q4 gross margin was 76%, up 57 basis points from the previous year, while gross profit was $55.2 million, up 12% year over year. In Q4, sales and marketing expenses totaled $30.5 million, up 10% year over year, This represented 42% of revenue, down 69 basis points compared to last year. Sales and marketing expenses were down 1 million, sequentially from Q3, driven by expense reductions and demand generation activities focused on the non-enterprise segment of the business. Research and development expenses were 19 million, or 26% of revenue, down 147 basis points from a year ago, on approximately flat spending sequentially from Q3. We have prioritized product roadmap initiatives that aim to bring greater enterprise functionality to merchants of all sizes. And we are working diligently to maintain the investments needed to fuel enterprise product improvements, while also realizing better operating results on the bottom line. Finally, general and administrative expenses were 15.1 million, or 21% of revenue, down 224 basis points from a year ago. This is down $1.8 million sequentially compared to Q3 due to lower staffing costs and continued operational improvements. In Q4, we reported a non-GAAP operating loss of $9.4 million, a negative 13% operating margin. This compares with an operating loss of $11.6 million, or a negative 17.9% operating margin in Q4 2021. and an operating loss of 11.5 million or a negative 15.9% operating margin in the prior quarter. Recall that we guided to a non-GAAP operating loss range for the quarter of 12.3 to 14.3 million. We delivered strong underlying cost reductions apart from any restructuring efforts, which reinforces our confidence that we will achieve profitability on an adjusted EBITDA basis in Q4 as we announced in December. Adjusted EBITDA was negative $8.6 million, a negative 11.9% adjusted EBITDA margin, compared to negative 16.8% in Q4 of 2021. Non-GAAP net loss for Q4 was negative $7.7 million, or negative $0.10 per share, compared to negative $12.1 million, or negative $0.17 per share last year. We ended Q4 with $305 million in cash, cash equivalents, restricted cash, and marketable securities. For the three months ended December 31, 2022, operating cash flow was negative $2.7 million compared to negative $8.8 million a year ago. We reported free cash flow of negative $3.7 million or a negative 5% free cash flow margin. For the 12 months ended December 31, 2022, Operating cash flow was negative $89.4 million, declining from negative $40.3 million a year ago. We reported free cash flow of negative $94.6 million, or a negative 34% free cash flow margin. Note, both full-year operating cash flow and free cash flow results include $32.5 million paid in Q3 as part of the Fedonomics first anniversary acquisition-related payments. These full-year results compare to negative 43.6 million and a negative 20% free cash flow margin in 2021. The remainder of my remarks focuses on our outlook and guidance for 2023. For the first quarter, we expect total revenue in the range of 69.7 million to 72.7 million, implying a year-over-year growth rate of 6% to 10%. For the full year 2023, we expect total revenue between $301 million to $313 million, translating to a year-over-year growth rate of approximately 8% to 12%. I'll now discuss some of the expectations underlying this top line guidance. Q4 subscription ARR grew at a slower pace than we have seen in recent quarters. We have built our financial plans assuming similar conservative bookings growth in 2023. We believe we can generate 20% or higher enterprise ARR growth rates in 2023, which we expect to be offset by the contraction in the non-enterprise segment of our business in the mid to high single digits. This guidance also includes the estimated impact of announced pricing changes to take effect across Q1 and Q2. While we were encouraged by the resiliency in consumer spending that we observed in Q4, We observed moderation in platform orders and GMV as we exited Q4. This is consistent with recent economic reports, including recent U.S. Department of Commerce data highlighting lower e-commerce growth in Q4 than in recent years. While we are hopeful that macroeconomic forecasts and consumer spending will prove conservative, we have built our 2023 financial plan, assuming a modest deceleration in same-store platform GMV and order growth year-over-year. We expect this to impact subscription pricing upgrades and PSR growth, and we have tightened budgeted spending accordingly. For Q1, our non-GAAP operating loss is expected to be $8.2 million to $12.2 million. For the full year, we expect a non-GAAP operating loss between $15.7 million and $22.7 million. Our entire industry faces an uncertain macroeconomic climate. Consequently, 2023 will be a year focused on driving profitability while focusing our go-to-market resources on enterprise accounts. Our plans anticipate strong spending discipline across our business while accounting for prudent top-line growth assumptions. Hiring will remain limited compared to prior years. We are not planning material expansion into new countries or geographies in 2023. Rather, we will focus our international investments on gaining scale in existing, recently launched countries. We are confident that the expense reduction actions we have taken, combined with limited hiring and tight expense management, will enable us to deliver our commitment and hit profitability in Q4 of this year. We see strong, durable, underlying health in the business that gives us great confidence in the success of these efforts. Enterprise retention rates and LTV to CAC results remain strong. Win rates remain healthy. The complexity and size of deals in our pipeline continue to move upmarket. We have an outstanding product, gaining widespread recognition across our industry. We have more excitement and momentum with our agency and technology partners than ever before. We have a strong balance sheet, and our business is heavily concentrated in established merchants with enterprise requirements. These are strong, healthy merchants that prove durable even in down economic cycles. As I said earlier, we believe we can generate 20% or higher enterprise ARR growth rates in 2023, which we expect to be partially offset by contraction in the non-enterprise segment of our business in the mid to high single digits. We also believe enterprise accounts could represent nearly 80% of total ARR by the end of 2023 or early 2024. Our plan puts us on a path to end the year with a strong base of enterprise accounts and sales pipeline as a profitable company, all while maintaining a strong balance sheet. This is a strong profile on which to base our 2023 plan. Finally, I'd once again like to thank all of our incredible employees, merchants, and partners. 2022 was not an easy year. Our results reflect the resilience and dedication of our employees, and the care and attention that we feel for our merchants and partners. I'm proud of our results in a tough climate, and I'm very excited about the progress this business will make in 2023. With that, Brent and I are happy to take any of your questions. Operator?