Commerce.com, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to BigCommerce's fourth quarter and fiscal year 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, Daniel Lentz, VP of Finance and Investor Relations. Thank you. Please go ahead.

Good afternoon, and welcome to BigCommerce's fourth quarter and fiscal year 2020 earnings call. We will be discussing the results announced in our press release issued after the market closed today. With me are BigCommerce's President, CEO, and Chairman, Brent Bellum, and CFO, Robert Alvarez. Today's call will contain forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning financial and business trends, our expected future business and financial performance and financial condition, and our guidance for the first quarter of 2021 and the full year 2021. These statements can be identified by words such as expect, anticipate, intend, plan, believe, seek, will, or similar words. These statements reflect our views as of today only. and should not be relied upon as representing our views at any subsequent date, and we do not undertake any duty to update these statements. Forward-looking statements, by their nature, address matters that are subject to risks and uncertainties that could cause actual results to differ materially from expectations. For a discussion of the material risks and other important factors that could affect our actual results, please refer to the risks and other disclosures contained in our filings with the Securities and Exchange Commissions. During the call, we will also discuss certain non-GAAP financial measures, which are not prepared in accordance with generally accepted accounting principles. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures, as well as how we define these metrics and other metrics, is included in our earnings press release, which has been furnished to the SEC, and is also available on our website at investors.bigcommerce.com. With that, let me turn the call over to Brent.

Thanks, Daniel. Welcome, everyone, and thanks for joining us today from ice-cold Austin, Texas. I hope everyone has had a great start to the new year. Let's jump right into our fourth quarter performance. Our results reflect the success of our open SaaS strategy, product innovation, execution, and best-of-breed partner ecosystem. We had a strong fourth quarter with Q4 revenue coming in at $43.1 million, up 39% year-over-year, an ARR of $181.2 million, up 41% year-over-year. Our success meeting the needs of fast-growing and large businesses was reflected in the Q4 growth in ARR from enterprise accounts, which grew 51% year-over-year. More broadly, ARR from accounts with more than $2,000 in annual contract value, which includes both enterprise and pro accounts, grew 48% year-over-year. Q4 capped off a landmark year in the history of big commerce. We completed our initial public offering in August and concluded our third successive year of accelerating revenue growth rate. Most importantly, our employees and partners worked tirelessly to help our customers weather the storm of the COVID-19 pandemic. We believe the pandemic accelerated the migration to e-commerce, and selling online is no longer a nice-to-have but a must-have. The growth opportunities before us are greater than ever, and I couldn't be more excited to build upon our platform, team, and partnerships to as e-commerce continues to evolve. Our strategy has three core pillars. First, we are focused on disruptive innovation, adding functionality and performance to our core product that enables us to serve the needs of businesses from the smallest to the world's largest. Second, we are pioneering in e-commerce what we call Open SaaS. Open SaaS is our strategy for incorporating flexibility, configurability, and extensibility and every area of our SaaS platform so that each customer can easily assemble an optimal approach to e-commerce for their specific needs in conjunction with our best of breed partners. Finally, we build our business using a repeatable growth strategy with four components. First, we invest in the success and growth of existing customers. Second, we acquire new customers across an ever-widening range of business categories, size ranges, and use cases. Third, We earn incremental revenue from partners and services on top of our core subscription revenues. And fourth, we replicate our growth model in geographies around the world. For the full year, revenue was $152.4 million, up 36% year over year. Net revenue retention for accounts with more than $2,000 in annual contract value finished at 113% in 2020, up from 106% in 2019. We added new SMB, mid-market, and enterprise customers at an estimated LTV to cap ratio of 4.9 to 1, up from 4.4 to 1 in 2019. We also made continued progress on margins. Gross margins improved to 78% in 2020, a two-point improvement compared to 76% in 2019, while adjusted EBITDA margins improved to negative 16% in 2020, a 16-point improvement compared to the negative 32% adjusted EBITDA margin in 2019. Let me walk you through the highlights that contributed to the success we saw in 2020 and provide some insights to the plans we have for the coming year. We deployed Page Builder, our easy-to-use widget-based drag-and-drop page design tool, which helps merchants tell their brand story and bring their products to life without the complexity of editing HTML files. Further, this tool is open to enable developers to create custom widgets, such as AI-powered merchandising or social media feeds that plug into Page Builder, allowing marketing managers and merchandisers to publish rich website pages without having to write any code. In the area of headless commerce, we invested heavily in opening APIs that power headless storefronts and shopping experience, which gives merchants and developers choice of frameworks, and tools to create unique shopping experiences. We now have reference implementations for most major progressive web apps, content management systems, and digital experience platforms. We also invested in cross-border features to help merchants reach new markets and grow their businesses. We introduced support for multi-currency across our top payment solutions, which is the ability to display, transact, and settle in multiple currencies. We also launched integrations with top global tax providers, such as Avalara, Vertex, and TaxJar, helping merchants collect tax and geographies around the globe in a compliant way. To further build our omni-channel offering, we introduced Channel Manager, which allows merchants to promote and sell their products wherever consumers are, branded e-commerce stores, offline stores, content sites, social networks such as Facebook and Instagram, and marketplaces such as Amazon and eBay. while enabling merchants to discover, install, and manage these channels centrally. This enables merchants to drive growth through an omnichannel strategy. In support of this, we released our Channels Toolkit, which allows third parties to build channel integrations in a manner that feels native to our platform. Using the Channels Toolkit, we'll work with partners to efficiently increase selling channels for our customers and partner revenue for big commerce. In social commerce, We partnered with Facebook to build native integrations to Facebook Shops and Checkout on Instagram, which enable our customers to advertise and sell their products to consumers on Facebook and Instagram. For merchants, orders automatically synchronize back to BigCommerce for fulfillment and management. We enhanced our open checkout features by giving developers access to the source code of our feature-rich and highly tuned checkout, enabling them to create bespoke checkout experiences which is important for many large merchants and especially for merchants in the rapidly expanding B2B market. 2020 also brought market advancements in our international expansion strategy through the launch of new country-specific websites in France, Italy, the Netherlands, and more recently in Mexico, Germany, and Spain, and more to come in 2021. We continue to invest in our global presence and in offering native language web experiences that further strengthen our ability to connect more directly with prospects and customers in each region. BigCommerce is proud to be a partner-centric platform. Since launching in 2009, BigCommerce has focused on creating the world's best open SaaS e-commerce platform for all stages of business growth. Building on and enhancing that core functionality has and will continue to be our primary focus. Unlike our closest competitors, BigCommerce does not act like a conglomerate, competing with partners in adjacent categories. We focus instead on building the world's best platform, and we partner with the world's best in every other category. In 2020, BigCommerce welcomed many new and expanded technology and solution partnerships, including Adyen, Barclays, Clover, Deliver, Facebook, Vercel, Wish, and many others. In November, BigCommerce joined the Mock Alliance, a newly formed group of independent tech companies dedicated to advocating for an open, S3 technology ecosystem for enterprise e-commerce that is API-first, cloud-native SaaS, and headless-enabled. In 2020, we received significant industry-wide recognition. BigCommerce was recognized by a number of influential technology analyst firms, including placement as a leader in IDC's market skates for both B2C and headless digital commerce. We also received similar placements from Forrester, Gartner, and Paradigm B2B. As a company that followed the disruptive innovation model of moving up market only after first building scale serving small businesses, BigCommerce has worked hard to earn tech analyst recognition for our enterprise capabilities. With that recognition, we now compete aggressively and with credibility for the e-commerce business of the world's largest and most complex companies. I'd like to turn now to highlight a sample of the exciting new stores that launched in Q4. An established leader in home health wellness innovations, Pometix, migrated three enterprise stores to BigCommerce, thanks to BigCommerce's superior ease of use compared to other platforms. HMD Global, the official licensee of Nokia brand mobile phones and services, chose BigCommerce for its first direct-to-consumer offering. Already, HMD has launched nine regional sites on BigCommerce, including a Nokia.com slash phones. The Artisanal Spirits Company Limited, owner of the Scotch Malt Whiskey Society, needed an intuitive, easy-to-use e-commerce platform that could support its business growth and selected BigCommerce after receiving a recommendation from a trusted partner. Spiceology, one of the fastest-growing private spice companies in America, moved to BigCommerce. We believe their selection of BigCommerce will help them gain more control over their comprehensive site experience and enable B2B and B2C sales on the same site. Prima Supply, a B2B supplier of coffee equipment accessories, needed a flexible and scalable platform that would give them the ability to manage complex data and order flows. We believe they selected BigCommerce for our ability to support intricate B2B workflows and fulfillment processes. which can give the Prima supply team back time needed to focus on servicing and growing their customer base. Looking ahead, 2021 will be a year of continued product innovation and global expansion. At the heart of this is an unwavering commitment to the success of our customers, which we believe to be the fundamental prerequisite to all components of our business strategy. Our product team has outlined an ambitious roadmap for the year that extends and strengthens our platform for customers of all sizes, and our partner team is pursuing new partnerships that unlock innovation, growth, and flexibility across our ecosystem. Over time, I'm particularly excited about and committed to geographic expansion, including current initiatives in continental Europe and Latin America. I'll end by saying a sincere thank you. 2020 marked a historic year for BigCommerce. It's nearly impossible to have reached this point without the dedication of our employees who faced a challenging year with both grace and fortitude. as well as the ongoing trust placed in us by our amazing customers and partners who inspire us each and every day. Now I'd like to turn over to Robert for a deeper discussion of our financial results.