Commerce.com, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to BigCommerce First Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. After this 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, Head of Investor Relations. You may begin.

Good afternoon and welcome to BigCommerce's first quarter 2022 earnings call. We will be discussing the results announced in our press release issued after today's market close. 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 second quarter of 2022 and the full year 2022. 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 Commission. 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, and thanks, everyone, for joining us. On today's call, Robert and I will review our first quarter results, and I'm excited to share with everyone that BigCommerce reported an excellent first quarter. Our team continues to deliver on our vision to be the leading e-commerce open SaaS provider, empowering B2C and B2B merchants around the globe. Today, I will share an update on the status of our business, recap initiatives we announced in the quarter, and give a brief review of recent product launches and partnership agreements. We will conclude today's call by updating you on our second quarter and 2022 full-year guidance, along with our key priorities for 2022. First, let's take a moment to review our Q1 results. Our growth in Q1 was strong, despite some post-pandemic normalization of e-commerce and consumer spending seen across our industry. Total revenue grew to $66.1 million, up 42% year-over-year, which was our ninth consecutive quarter of posting 30% or higher revenue growth. We're pleased with our progress. and we are particularly pleased with the increasing third-party validation from customers, partners, and industry analysts who are rating us the world's best platform for businesses that value best-of-breed functionality and the flexibility to address complex business requirements. We concluded Q1 with ARR, or Annual Revenue Run Rate, at $280.4 million, up 43% from last year. Enterprise Account ARR was $189 million, up 68% year-over-year. ARR From accounts greater than $2,000 in annual contract value, or ACV, totaled $249.5 million, up 52% year-over-year. These results reflect our continued momentum moving upmarket with ever-larger and more complex enterprises, choosing BigCommerce to modernize their e-commerce offerings and accelerate their online growth initiatives. Our non-GAAP operating loss was $12.4 million, which was consistent with the guidance range we initially provided. These operating results benefit from the multiple investment areas that we discussed on our prior earnings call in February, including international expansion, commerce as a service, omnichannel, headless commerce, and B2B. We are excited about this year's shift back to in-person marketing and industry events, which we believe is to our advantage as a partner-centric OpenSAPS platform. We participated in or hosted several events with our agency and technology partners during Q1, ranging from Shop Talk in the USA to One to One Monaco to the Retail Global Conference in Australia, where BigCommerce was just named Solution Provider of the Year. The feedback has been overwhelmingly positive and consistent across the globe. Merchants crave a flexible, open SaaS platform that they can customize to meet their growing list of technical and operating requirements. Combining our B2C, B2B, and omnichannel tools, merchants are empowered to boost sales across multiple channels and geographies. That's powerful, and we're proud to be a part of this evolution in e-commerce. This positioning particularly resonates with enterprise merchants, which now make up the majority of our business. I want to take a minute to review the state of our enterprise footprint in particular. At the end of 2018, enterprise accounts represented 45% of ARR. Today, they're 67%. We are a majority enterprise company that delivers the benefits of best-of-breed functionality and open SaaS flexibility to companies of all sizes. Large global apparel brands like Ted Baker and La Perla demonstrate the unique power of our platform. Enterprise ARR has grown at a compound annual growth rate of 52% over the last four years, including the 68% year-over-year growth in our most recent quarter. A recent launch of multi-storefront functionality firmly positions us at the top end of enterprise SaaS e-commerce platforms. Multi-storefront enables merchants to use a single big commerce control panel to manage multiple storefronts that serve different regions, brands, and or customer segments like B2B. Although multi-storefront is considered enterprise functionality, we plan to bring this to the masses of small businesses as well, soon enabling them to add storefronts with the click of a button. To highlight some of the feedback our technology and market leadership is receiving, I draw your attention to the latest Forrester Wave B2C Commerce Solutions Report issued last week. Forrester rated BigCommerce as a leading e-commerce provider with one of the strongest strategies and most trusted offerings in the market. In their Wave report, up and to the right indicates success. And overall, we outperformed incumbent enterprise leaders like Salesforce, Adobe Magento, SAP, and Oracle. We also significantly outperformed Shopify Plus. Let me share a few quotes. BigCommerce has a strong partner ecosystem and good performance against its product vision by unifying and simplifying administration of both first-party and third-party functions. Its roadmap is one of the strongest in this evaluation and includes plans for deeper integration of third-party apps and additional native integrations with complementary solutions such as customer data platforms. Reference customers are enthusiastic about BigCommerce as a trusted partner, and it garnered the highest marks from references in this evaluation. Both of the newly published Forrester Way B2C and B2B Commerce Solutions reports are very positive about BigCommerce. Switching to the B2B report, we scored the third highest ranking for current offering among global enterprise B2B platforms, and that was before our acquisition of bundle B2B announced last week. A short seven years ago, when I assumed the leadership of BigCommerce from our terrific founders, we were exclusively a small business platform. We embarked on a strategy to bring the benefits of SaaS, including scalable performance, ease of use, value, and continuous innovation, to the world's complex businesses. This required opening our platform via APIs and microservices, and it required building enterprise functionality on top of those APIs. We branded this open SaaS, as our alternative to open source. At the time, Magento's open source was the undisputed global leader in the mid-market and large enterprise segments. Today, in 2022, SaaS is the present and future of e-commerce. We're delighted that leading tech analysts like Forrester and IDC advocate for this and rate BigCommerce ahead of many of our legacy enterprise competitors. On our last earnings call, we outlined investment across five strategic priorities and one new growth pillar in which we intend to lead the future of e-commerce. Our decision to invest does consider the uncertainty in our macroeconomic and geopolitical environments, but we are focused on the long term, and we are emboldened by the success we're seeing every day across these initiatives. We believe we can shape the present and future of global e-commerce, and we are investing to do so. In Q1, our international expansion efforts made strong progress, as we now operate in the sixth largest Western European economies. In the coming quarter, we will increase our European presence by expanding into the Nordic countries. Building from our recent launch in Mexico, we will also launch our first operations in South America. We're supporting new languages, adding new geographies, and integrating new payment methods for local markets. We're in the early innings of global expansion, and our growth rates in EMEA, APAC, and non-U.S. Americas give us confidence that expansion will pay off in the near and long term. In Omnichannel, we plan to launch a self-service tool that brings premium features embedded in feedonomics to the mass market. Feedonomics, which we acquired last year, enables merchants to syndicate and optimize their product offering to the world's leading advertising, search engine, social network, and marketplace channels. It powers Omnichannel for many of the world's leading online retailers, and in time, we will bring its capabilities to self-serve merchants of all sizes. We believe Feedonomics is the world's best feed management tool for expanding reach, acquiring new customers, optimizing return on ad spend, and selling through marketplaces. Last quarter, we formally introduced a new pillar to our growth strategy, Commerce as a Service. Commerce as a Service enables partners to create and sell customized commerce solutions powered by our platform technology. This announcement has been well received in our partner community. In Q1, we enabled five new reseller partnerships, including Clover, a leading North American point-of-sale and business management solution owned by Fiserv. Overseas, we launched Freedom, Local.fr, ValueComPay, and Abisam. These partnerships expand our reach to new merchants through the sales and marketing efforts of established, category-specific technology solution providers. This gives BigCommerce the opportunity to onboard new merchants with marginal cost to us, thereby building additional distribution and a flywheel to scale our revenue model profitably. While we are still in the early phase of commerce as a service, as a strategic pillar for our company, we are pleased that it has already generated three of the largest recurring revenue deals in BigCommerce's history. In June 2021, we expanded our B2B functionality with the introduction of B2B Edition. We recently added our 200th B2B Edition customer, and last week we announced the acquisition of Bundle B2B, the partner behind that successful B2B edition offering. At a time when B2B e-commerce continues to boom, this acquisition cements our commitment to being the best and most powerful SaaS e-commerce platform for B2B merchants. Near-term priorities include embedding Bundle B2B functionality into our native user experience, improving its compatibility with our ERP partners, and opening its functionality to our agency and technology partners. While the overall deal doesn't have a material impact on our 2022 financials, it does come with a small amount of incremental investment in B2B, which Robert will discuss further as we provide our updated full-year guidance. Let's now shift gears to partnerships. In Q1, we announced an expanded relationship and merchant of record integration with Digital River. This enables big commerce merchants to unlock global sales and sell into international markets seamlessly, through their solution for international payments, tax, shipping, and compliance. In March, we announced an expanded strategic partnership with Bolt, a leading network checkout company. Our upgraded integration enables small, medium, and enterprise merchants to set up Bolt one-click checkout in a self-serve manner within minutes. Bolt can be pre-built into merchants' big commerce stores, allowing them to deliver secure, one-click transactions for customers without the need for accounts, passwords, and logins. This month, we will launch a new store for Tottenham Hotspur, one of the world's premier football brands. The Spurs are leveraging the BigCommerce platform to improve fan experience not only in the UK, but also North America and Asia. Tottenham is taking advantage of our recently launched multi-storefront capability to support multiple stores around the world in multiple languages and currencies. They chose BigCommerce over other options because of our SaaS approach and ecosystem of integration partners. Representative enterprise merchants recently launched on our platform include BoxHub, a U.S.-based merchant that makes it easy to buy, sell, and trade shipping containers, and All E-Pets, which provides customized meal plans for pets using our headless functionality. Van Cafe launched its new site for Volkswagen auto parts, leveraging the BigCommerce Acumatica ERP connector to accompany customer data, inventory, products, and third-party apps. Eurosport Tuning, a supplier of European auto parts, recently launched a new B2C site on our platform and are taking advantage of multi-storefront for their upcoming B2B site. In addition to those, let me name just a few more important brands that launched on BitCommerce during the quarter. Edible Blooms, PoolZoom, Alico Products, the Perstorp Group, HK Living, International Tool Supplier ITS, the School of Life, and Louisiana Crawfish. In reflecting on the quarter, I'm energized by our results and traction across strategic initiatives, including enterprise, international, B2B, omnichannel, headless, and commerce as a service. We are investing in global leadership in each of these areas. In time, we believe these investments will generate continued above-market growth, exceptional customer and partner success, and attractive long-term profitability. For more details on our progress and plans, I'm pleased to share that on Wednesday, May 25th, we will be hosting our first Analyst and Investor Day as a public company. This event will be held virtually, and we will be posting details on how to access that event on our investor relations site in the coming weeks. With that, I'll turn it over to Robert.