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Thank you for standing by and welcome to Commerce Second Quarter 2026 Earnings Call. I'd like to remind everyone that this call is being recorded and that all lines have been placed in mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again.

Thank you. Good morning, and welcome to Commerce's second quarter of 2026 earnings call. We will be discussing the results announced in our press release issued before today's market open. With me are Commerce's Chief Executive Officer, Travis Hess, and Chief Financial Officer and Chief Operating Officer, Daniel Lentz. Today's call will contain certain 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, as well as our expected future business and financial performance, financial condition, and our guidance for both the third quarter of 2026 and the full year 2026. These statements can be identified by words such as expect, anticipate, intend, plan, believe, seek, and plan. committed, 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 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 measure, 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. website at investors.commerce.com. With that, let me turn the call over to Travis.

Q2, 2026 was another quarter of steady execution for commerce. We delivered revenue of $84.5 million within our guidance range and non-GAAP operating income of $8.1 million above the high end of our guidance range of 4 million to 5 million. GMV grew 14% year over year to 8.2 million We generated positive gap net income for the second consecutive quarter, and net revenue retention improved sequentially for the third consecutive quarter to 95.8%. These results reinforce the priority that we've discussed over the past several quarters, building a business with a more durable earnings profile. We believe the structural changes we are making are improving the quality of our revenue, strengthening execution, and positioning commerce for more sustainable long-term growth. As we look to the second half of the year, we are also making several deliberate decisions that affect our near-term outlook. Those decisions reflect both the realities of today's market and where we believe commerce is headed over the long term.

Daniel will discuss the financial implications in more detail shortly. Before discussing the quarter further, I want to spend a few minutes on the broader context because it explains both our investment priorities and the decisions we are making today. Commerce is undergoing one of the most significant structural shifts in more than a decade. B2C replatforming activity remains softer than we've seen historically, while AI is changing how merchants evaluate technology investments and delaying monetization across portions of the industry. At the same time, product discovery is becoming increasingly distributed across marketplaces, retail media, AI search, shopping agents, and other emerging buying experiences, rather than beginning and ending on a merchant's website. We believe changes require a different approach. Rather than optimizing for every possible source of near-term revenue, we are concentrating our investments where we believe we have the greatest differentiation, the strongest right to win, and the opportunity to create the most durable long-term value for merchants and shareholders.

We believe one of those areas is product intelligence. AI agents, marketplaces, retail media networks, search engines, and emerging buying experiences all depend on structured, enriched, and continuously optimized product data. As commerce becomes more distributed, we believe product intelligence is becoming foundational infrastructure for modern commerce. That is why Feedonomics has become such an important part of our strategy. Today, Feedonomics synthesizes and transforms more than 1 trillion product listings every month, giving us unique insight into how product information is structured, enriched, and optimized across the global commerce ecosystem. We believe that scale positions us to play an increasingly important role as AI-driven discovery and agentic commerce continue to evolve. We've intentionally organized commerce around three complementary layers or control planes that reflect how we believe modern commerce is evolving.

If we E-Dynomics is our product intelligence layer, helping merchants structure, enrich, optimize, and distribute product information wherever discovery or emerging buying experiences occur. MakeSwift is our experience layer, enabling merchants to create consistent content and brand experiences across an expanding number of digital touchpoints. Big commerce is our transaction layer, powering pricing, checkout, orders, APIs, and the operational workflows merchants rely on every day. Each layer is designed to operate independently through an open architecture. Our objective is not to replace everything a merchant already has. It is to allow merchants the flexibility to adapt the capabilities that create the most value while preserving flexibility across an increasingly distributed commerce ecosystem. More importantly, this framework shapes how we run the company.

As commerce undergoes structural change, we do not believe success comes from trying to participate in every opportunity. It comes from concentrating our capital, engineering resources, and partnerships where we have the greatest differentiation, the clearest right to win, and the opportunity to create the most durable long-term value. That philosophy has led us to make a series of deliberate decisions this year. We have narrowed portions of our partner ecosystem, focused our embedded payment strategy around a smaller group of strategic partners, increased investment in product intelligence and AI, and deliberately kept merchant storefronts broadly accessible to AI agents, even though doing so creates an additional infrastructure cost today. Collectively, those decisions reduce certain near-term revenue opportunities and increase investment in others. They also position commerce more effectively for where we believe the market is heading. trade-offs are reflected in the outlook Daniel will discuss shortly. That operating philosophy is reflected across four priority investment areas.

First, AI and agentic commerce. Momentum continued following Commerce Live 2026 as we expanded merchant distribution across leading AI assistance, commerce platforms, and payment ecosystems. We also continued to see growing adoption of Commerce Companion within the BigCommerce platform, helping merchants automate workflows, analyze data, and become more productive. Looking ahead, we remain excited about several new capabilities launching in the second half of this year. In Q3, we expect to introduce new data enrichment offerings across both feedonomics and big commerce that improve and measure how products are discovered across traditional and AI-driven channels. In early Q4, we expect to launch the B2C brand agent and conversational search for BigCommerce. sequencing is intentional. We believe intelligent commerce begins with high-quality product intelligence, and each of these capabilities becomes more valuable as the underlying catalog becomes richer, more complete, and better optimized. Second, Feedonomics Surface and MakeSwift. Surface continues extending the power of Feedonomics to SMB and mid-market merchants through a self-service experience, making enterprise-grade product intelligence accessible to a much broader segment of the market.

We continue to see encouraging adoption and stronger GMV growth among surface merchants, reinforcing our conviction that product intelligence should be accessible regardless of merchant size. MakeSwift also remains on track for a year-end freemium launch within BigCommerce, bringing modern visual editing directly into the platform. Together, Surface and MakeSwift expand our addressable market, strengthen our product-led growth strategy, and create additional opportunities to increase customer adoption over time. Third, BigCommerce payments. BigCommerce payments continued building momentum following its US launch earlier this year. Merchant adoption and payment volume continue to exceed our expectations. We have expanded availability to additional merchant cohorts and we remain on track for a UK launch later this year. Strategically, payments represents much more than another product offering.

It expands how commerce participates in the growing volume of commerce flowing across our platform. GMV grows, payments creates an opportunity to deepen merchant relationships, increase monetization, and further strengthen the long-term economics of our business. Finally, B2B. We also continued investing in the capabilities that matter most for manufacturers, distributors, and other complex commerce businesses. remains one of the areas where we believe we have a durable competitive advantage and we continue to invest accordingly. That leadership was recognized again this quarter as BigCommerce earned all 24 possible medals across the enterprise and mid-market editions of the 2026 Paradigm B2B Combine for the fourth consecutive year, including recognition for vision and strategy, ability to execute, and customer support. Taken together, these investments reflect a common theme. We are concentrating our resources behind the areas where we believe commerce has the strongest differentiation, the clearest right to win, and the greatest opportunity to create durable long-term value for both merchants and shareholders. Beyond our product roadmap, we also continue to see encouraging execution across the business.

Our strategic partnership with Accenture continued to build momentum during the quarter, including a product intelligence win with one of the world's largest branded footwear and apparel manufacturers. As we've said before, we believe our product intelligence and agentic suite creates a significant long-term opportunity to expand our relationship with Accenture, and we look forward to sharing more as that process progresses. partnership continues to evolve. We also announced a strategic distribution partnership with WP Engine that enables high-growth brands to add BigCommerce's commerce capabilities while preserving their existing WordPress content, SEO, and customer experiences. We believe this is another strong example of the advantages of our open architecture, allowing merchants to modernize incrementally rather than forcing costly, disruptive platform replacements. Across the quarter, we continued adding global customers spanning B2B and consumer commerce, demonstrating the breadth of businesses our platform supports. While the industries and use cases vary considerably, they share a common need for flexibility, openness and increasingly product intelligence. We believe those strengths continue to differentiate commerce in the market.

Earlier this year, we introduced our updated pricing and packaging strategy, including big commerce payments and a more focused embedded payments ecosystem. Those changes became effective on June 1st and remain aligned with the broader operating philosophy I've discussed today. This was never intended to be a broad-based price increase. It was a strategic decision designed to deepen alignment with a focus group of embedded payment partners, improve the long-term economics of the platform, and better position commerce to participate in the growing payment volume flowing across our ecosystem. As I step back, I believe the first half of 2026 demonstrates that our strategy continues to evolve in exactly the direction we've been discussing over the past several quarters. We are executing against our roadmap. Product adoption continues to expand. GMV continues to grow.

Profitability continues to improve. Net revenue retention has sequentially improved. And we're making disciplined decisions to concentrate our investments behind the areas where we believe commerce has the strongest differentiation and the clearest right to win. Some of these decisions affect our near-term outlook, but they do not change our strategy. They reinforce it. We believe they strengthen the quality of the business, improve our long-term economics, and position commerce to create greater value over time. With that, I will turn the call over to Daniel. Thanks, Travis. Let me start with some additional detail on our financial results in the quarter. Q2 revenue was $84.5 million. Subscription solutions revenue was $63.1 million, and partner and services revenue was $21.4 million.

Non-GAAP operating income was $8.1 million, above the high end of our guidance range of $4 million to $5 million. Our non-GAAP operating margin in Q2 was 9.6%, up nearly 400 basis points year-over-year. ARR ended the quarter at $360.5 million, up sequentially from $359.8 million in the prior quarter. We delivered positive GAAP net income for the second consecutive quarter, and we remain on track to deliver GAAP profitability for the full year 2026. Our balance sheet remains strong. We ended the quarter with just over $157 million in cash, cash equivalents, restricted cash, and marketable securities. This reflects significant improvement in cash generation in this business. with our net cash position up nearly 22 million year over year. Our cash and investments continue to exceed our long term debt outstanding with no material debt maturities until 2028.

For the first half of 2026 we generated operating cash flow of 23.5 million and free cash flow of 14.1 million compared to 14 million and 9 million a year ago respectively. In Q2, operating cash flow was $5.1 million and free cash flow was $0.1 million, the difference being capital expenditures, which stepped up to $5 million from $1.7 million a year ago as we fund our 2026 product investment. On GMV, we delivered 14% growth year-over-year, reaching nearly $8.8 billion. Over the prior four quarters, we facilitated nearly $34 billion in GMV. B2B GMV growth was particularly strong, increasing 17% year-over-year. Our current GMV mix is weighted towards B2B, where card-based payment volume represents a smaller portion of transactions and generates less partner revenue share. As a result, platform activity is growing faster than revenue, narrowing that gap through payments, monetization, product cross-sell, and higher attach rates remains a top priority for the business.

On NRR, net revenue retention was 95.8%, up sequentially compared to 95.4% in Q1 2026. This marked our third consecutive quarter of sequential improvement in NRR for the total business. Remaining performance obligations and deferred revenue were up 11% and 25% year-over-year in Q2, respectively. These remain important forward-looking indicators of contracted customer commitments and the quality and duration of our bookings. We continue to manage dilution and stock-based compensation responsibly as well. Stock-based compensation was a part of the approximately 4.7% of revenue in Q2, down from 8.7% in the same quarter last year, and 7% for the full year 2025. For the three months ended June 30, 2026, we had approximately 82.6 million common shares outstanding and 82.8 million fully diluted shares outstanding.

As Travis outlined, we are revising our 2026 guidance to reflect three deliberate management decisions that we believe strengthen the long-term quality of the business, partner ecosystem concentration, targeted R&D investment, and infrastructure support for AI-driven discovery. We are also incorporating a more cautious view of second-half new account bookings, reflecting continued softness and B2C replatforming activity and a broader software spending environment that remains measured. For Q3 2021, we are working with the U.S. we expect revenue between 82.5 million and 85.5 million, and non-GAAP operating income between 3.3 million and 5.3 million. For the full year 2026, we are updating our outlook, reflecting revenue between 336.5 million and $344.5 million, and finally, non-GAAP operating income between $28 million and $34 million. Let me cover the factors behind our updated guidance in a bit more detail. As Travis discussed, we have decided to concentrate our efforts on a smaller number of deeper, healthier technology partner relationships. The ones we believe create the best merchant outcomes and the most durable aligned economics for commerce.

In the near term, that means we will forego some partner revenue we would have captured under our prior approach. We're doing this because we believe that revenue was less durable. than the revenue we expect to generate over time through product intelligence, payments, data services, AI-driven discovery, and a more curated partner ecosystem. This does not mean we are limiting choice for our merchants. We remain open and composable. This is a controlled management-led decision that we believe will improve merchant outcomes and the long-term quality of our revenue base. We are also taking a more cautious view of new account bookings in the second half of the year, particularly in areas of the market where B2C replatforming activity remains subdued and customers continue to evaluate how AI affects longer-term technology decisions. We believe the updated outlook is prudent and gives us a foundation from which to execute in the second half of the year. Our current guidance represents an $18 million reduction in revenue at the midpoint compared with our prior outlook, reflecting roughly an even mix between our deliberate partner ecosystem decision and a prudent new account bookings assumption.

Our updated non-GAAP operating income outlook represents a $12.5 million reduction at the midpoint, reflecting a $12.5 million reduction in revenue at the midpoint. including the revenue adjustment, as well as targeted R&D investment and higher infrastructure costs associated with AI-driven discovery, which is partially offset by additional operating efficiencies. We continue to see healthy engagement in our strategic areas of focus, particularly B2B, payments, surface, and AI-driven discovery. But the broader software spending environment remains uneven. Sale cycles remain scrutinized, and we believe it is prudent to reflect that environment in our updated outlook rather than assume a sharper second-half recovery. Our incremental product investment is targeted at specific parts of our roadmap, B2B, big commerce payments, AI and agentic capabilities, MakeSwift, and feedonomics surface. These are the areas we believe most directly drive attach rates, retention, and monetization over time. Our non-GAAP gross margin came down sequentially from 77.4% in Q1 to 75.7% in Q2.

The primary driver was higher hosting costs to support merchant storefronts, largely due to an increase in traffic from AI crawlers and agents indexing and retrieving product data from our merchant sites. We believe keeping access open is the right decision for our merchants today, because this traffic reflects real and growing demand from the AI surfaces where product discovery increasingly happens. We view this traffic as valuable, not incidental. While it creates incremental cost in the near term, we believe it is the right long-term decision, particularly given the operational efficiencies we have generated elsewhere in the business. Importantly, these decisions are being made from a position of operational strength. We have continued to identify efficiencies across the business and have already redirected those savings towards these strategic investments, allowing us to absorb a meaningful portion of these incremental costs within our updated outlook. To be clear, our long-term financial objectives have not changed.

Our near-term path, however, is different from what we previously anticipated. We now expect lower new account bookings in the second half of the year, less revenue from portions of the partner ecosystem, and higher targeted infrastructure in our investment. We believe these changes establish a more prudent operating baseline while preserving our ability to invest in the areas with the greatest long-term monetization potential. We also continue to make good progress with BigCommerce payments. Since launch, merchant adoption has been strong, with GMV running more than 30% ahead of our internal plans. Based on these early results, we have begun expanding availability to select performance plan merchants in the United States. We remain on track for a UK launch later this year, and we continue to enhance the platform with additional payments methods and value-added services.

While still early, we are encouraged by both adoption and monetization trends. Let me close with a few reasons we remain confident in commerce's trajectory. GMV growth remains strong, reflecting the health and scale of our platform. NRR is trending in the right direction, with three consecutive quarters of sequential improvement and a clear roadmap of cross-sell and monetization initiatives ahead of us. We operate at approximately 360% of our business. $3.5 million in ARR, and we remain on track to deliver GAAP profitability for the full year. We believe that combination of disciplined execution and continued investment positions commerce for stronger monetization and more consistent growth over time.

With that operator, let's open it up for questions. We will now begin the question and answer session. this session we will allow one question and one follow-up per person. If you would like to ask a question please press star then the number one on your telephone keypad. Please To draw your question, press star 1 again. Our first question comes from the line of Scott Berg from Needham. Please go ahead.

Hi, everyone. Thanks for taking my questions here today. I just want to talk about the re-platforming environment, Travis. Obviously something took at least somewhat of a step down today versus nine days ago. I just wanted to maybe try to have you unpack what's, I guess, a little bit different in the last 90 days. commerce for an extremely long time. You obviously have a really strong background in space, What's driving the lower reply force today, do you think, because this is a short-term part of the cycle? We've seen historically last maybe, I don't know, six to 12 months, it's been kind of a multi-year, with the new wall face, just trying to help them understand, you know, what's different and what actually maybe powers them forward here.

Yes, I don't think it's killed it. It's a good question, Scott. Thanks for the question. It definitely hasn't killed it. We're seeing longer cycles. I think what's contributing to that, I won't opine on macro conditions because I think it would be conjecture, but I think AI most notably, what we're seeing in increased demand and some of the adjacent demand, agentically oriented products, I think is a leading factor to what's making maybe folks deliberate a little bit longer in some of the replatforming. They want to make sure that discoverability right now in agentic is front and center. And I think people have come to the conclusion that replatforming everything is not necessarily addressing that issue specifically. And so I just, Discovery is taking kind of front chair in what people are addressing, and as a result, as a byproduct, you're just seeing decisions take a little bit longer.

I think people are evaluating how they themselves are going to leverage AI. I think upmarket, that might be doing more things internally, downmarket, it just might be making sure they get this right. seeing things drop completely out. You're just seeing decisions push, and you're just not seeing as much aggression to do that. And as we obviously get in the back half of the year now, with timing and holidays, obviously, that obviously usually softens this time of year as well, and why we're being a little bit prudent, obviously, in the numbers. Just given what we're shipping, the question is how quickly will people adopt with holiday prep and everything else going on. It's just hard to tell at this point.

Understood. Thank you. And then from a payments perspective, obviously it launched in the quarter and your commentary on initial traction seems to be positive. You're pressing out a little bit more, but I guess what have you seen in terms of wind rates? Is it improving maybe the pipeline, especially with the smaller customers out there, even though the reply forming's been a little bit soft, just any anecdotal evidence on, I don't know, GMB is trending higher, but anything from a competitive dynamic that you think is helping.

Yes, payments specifically, that has exceeded our expectations, quite frankly. Excited about that. I think we've been pretty deliberate about sort of a crawl, walk, run approach there that we've been transparent about since we launched it at the end of Q1. So that's very positive as far as the momentum and ahead of schedule. I think pipeline for us overall, I would describe it as healthy and concentrated where we're investing. B2B has been fantastic. I just alluded to payments earlier. We're seeing a lot of demand and efficacy from Surface, which we launched late last year, and then certainly product intelligence data enrichment, which we're launching next quarter. A tremendous amount of demand. We've been in beta for the last quarter or so on that with a lot of large merchants participating.

So all of that's been really healthy. How quickly it monetizes in the second half of the year is still debatable. A lot of the product intelligence stuff is with some of the largest retailers and brand and manufacturers. in the world, so these are big, complicated, heavily matrixed organizations, which is exciting, but at the same time, hard to predict how quickly things get digested and implemented. And Scott, this is Daniel. I would add to that, like we said in our prepared remarks, we're tracking about 30% ahead of our internal targets in terms of GMV on the branded solution, which I think is really important. encouraging. We're seeing really good progress in terms of new accounts using our branded payment solution as well as existing accounts migrating. We've also been pleasantly surprised that some of our larger accounts actually opting to start using it as well, even though the initial versions of the product were very much focused on kind of more small businesses or maybe mid-market businesses as well. So I think that's an encouraging sign.

We're about to launch in the UK as well. And then also, very importantly, we're continuing to evaluate what the next phases are in what we're doing in payments. This is very much kind of like a still very low-risk model booked on a net basis. We're going to continue to evaluate what's... the next evolution in that roadmap looks like going into next year. The underlying growth in GMB on the platform is really high. The revenue growth needs to get closer to the underlying platform growth, and this is a very, very big area of focus for us to help close that gap.

Thank you for taking my questions. Our next question comes from the line of Ken Wong from Oppenheimer. Please go ahead.

Fantastic, thanks for taking my question. Travis, I wanted to circle back on the kind of the cautious customer bookings commentary. Yes, it sounds like the way you guys are framing it is maybe it's a bit more of a push out than lost deals. I guess one, I wanted to confirm that. Is there anything changing in terms of your win rates? And then second, you guys did make that pricing tweak that was effective June 1st. I guess any reason to think that there's some correlation there? pushback from customers, any potential turn events that we should be aware of?.

No, thanks for the question, Ken. Good question. I'll unpack the first part of it. I'll turn it over to Daniel. As far as win rates, close rates, no. I would say it's actually ticked up in some segments, but no. There's been nothing material there. As far as win-loss, nothing material there at all. I've said this on earnings, I think the last two quarters, You can check me on that.

Maybe it's been three quarters. We've seen some softness in B2C replatforming for a while for us. And we're seeing longer, a bit longer cycles there with evidence that, again, evaluations are taking a little bit longer. People are being a little bit more deliberate about what's going on. They don't always give rationale for it. Maybe it's macro, maybe it's internal things and optics for them internally. But yes, I think that's on the B2C replatforming side is where the softness is. We've seen no material change on B2B or product intelligence, some of the other things that we're doing.

It's really been very specific to the B2C. platform, re-platforming. And then I'll turn it to Daniel on the, on the packaging changes. Yes, I can, uh, to the, your question on pricing, we have not seen any indication that the action that we took on pricing has had any effect on pipeline or conversion or anything else. Um, The pricing action, just kind of as a reminder for everybody on the call, it was very small in terms of the amount of ARR in our business that was actually even impacted by that. Any customer on a negotiated agreement, which is the lion's share of our ARR, had no effect whatsoever from that at all. It was really more geared towards our small business plans, and even then it was more more of a change in discount slopes and how we went after payments. So from a price elasticity perspective and how it's affecting pipeline, we're not seeing any effect from that whatsoever.

This is really much more macro-driven and in particular in B2C.

Our next question comes from the line of DJ Hines from Canaccord.

Hey guys, thank you. Travis, Shopify talked a lot about catalog yesterday and the importance of that product and the shift towards agentic, which I think feeds into your product intelligence thesis. Can you just remind us the difference between what they're doing with catalog and what you have with feedonomics? And then, Daniel, the follow up to you would be how fast is feedonomics growing and how bad is it?.

How big is that business? Yes, thanks, DJ. They did, and it wasn't lost on me, I think, unquestionably reinforces what we've been talking about the last several quarters around product intelligence and how important catalog is. I think the biggest difference, I can't speak for them, for us, I think we're dealing with a different cohort. The primary install base for feedonomics are, again, I think we're working with 30% of the So, a lot of large brand manufacturers and retailers globally. And I think I've mentioned this in last earnings, the value is accruing in different parts of commerce now. And I think most notably around discoverability, which is being driven by product enrichment and intelligence, which we think is a nice thing to do. tailwind for us on the feed economic side. And you'll see that more in the second half of the year, seeing it through our partnership expressed through Accenture.

But because we're dealing with larger merchants and because a lot of these services are still gated in many capacities, meaning you need permission to go into Oakland AI and to UCP and things like that, that because of the complexity of these catalogs, we're operating at the velocity of those actually gated channels. So it's not from a lack of demand. Many of these merchants want to be there and want to be there for the right reasons, but at the same time, they also demand and need a tremendous amount of control and governance about how they're there, what's being enriched, how it's being enriched. how they show up and things like that. You're dealing with probably a much more complicated use case in many capacities, which is what is, you know, we're operating at their mercy, but we're certainly really enthused and excited. I agree with that hypothesis that product intelligence is, you know, in many capacities, is one of the most important elements of where the value is accruing now in a GenTech in particular. And it's going to drive a lot of what we're seeing and what we're building towards in the future.

And DJ, to your question on feedonomics and the size of that business, give or take, it's probably roughly 20% of the business, maybe a little bit less than that from an ARR point of view. And it's growing at a bit faster rate than the business as a whole. In terms of comparative growth rates, I would say feedonomics and B2B are growing faster than the business overall as a whole, and B2C is. lagging a little bit behind the overall business growth rate. I'll add one other piece of color just to give you some compare and contrast for folks listening. The way they're approaching is very vertically oriented, whereas for us, I think a lot of it is centered around data and merchant sovereignty, right? We believe Feudanomics has always been agnostic and that product and technology intelligence layer being agnostic and independent of architecture, stack, or ecosystem is a material aspect of our strategy there, meaning merchants, regardless of protocol or service, should be able to participate whatever is out there for them without being overly reliant on any one of them. And I think that's been a very deliberate take. taken with feedonomics, and I think it's why it's so appealing to merchants that are upmarket. We would expect that same value to be brought more down in mid-market as this entire model evolves, and we'll have more to talk about that in next quarter to come.

Okay, that's helpful color. Daniel, follow up for you. So GMV grew 14%. PSR was up only three. It's the first time I recall seeing a Q1 to Q2 decline in PSR revenue. Can you just unpack what's going on there? Yes.

DJ, we had talked last quarter about the fact that we had some arrangements within PSR tied to the launch of BC Payments that hit in Q1. The sequential difference between Q1 and Q2, that step down was driven by that. When I think about the guide and what that means in terms of the back half of the year, what I always kind of do is a sanity check with our business to think about that. the front half to back half mix in revenue. At the midpoint of the implied guide, we're about 50-50 front half back half in terms of revenue. Normally we're more like 49-51, something like that, in terms of front half to back half. The reason it looks a little different in the guidance for the back half is part one, because we We had that payment up front with the release of BC payments in Q1, which is a little bigger than what we would normally see in Q1. And then the second reason is the decision we described about focusing on a smaller number of partners that have better predictability in terms of driving better GMV growth for merchants.

A lot of that more long-tail revenue would have normally been come in the back half of the year, particularly right towards the end of the year in Q4, which is why you see a little bit of a difference in terms of the quarter-to-quarter sequential this year versus what you would have seen in prior years. Yes. Okay. Got it. Thank you. Welcome.

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

Hi, thanks for taking the question. This is John on for Brian. I guess I wanted to start on the B2B side. Can you maybe talk about the demand profile there? What you're seeing in funnel activity and maybe quantify, you know, what you're seeing in the pipeline this year versus last year, and then any color on the early payments attached you're seeing there. I know there's more products on the roadmap focused on B2B on the payment side there, but just curious on any early color on payments for B2B.

I'll start on the B2B side, and I'll turn it over to Daniel. Good question. I think we've seen this trend for some time now, and you're seeing the mix of business. By definition, the majority of new bookings over the last year and a half or so has been B2B oriented. I think it lends itself to the platform and the organic differentiation in the platform of what we do better than many in market as it relates to particularly manufacturers and distributors who tend to have more complex operational requirements, more complicated data requirements, multiple catalogs, account tiering, permissions workflows, and lots of sophistication and complexity in the back end So it just lends itself to the openness of the platform, the configuration of the platform, the extendability of the platform. So it doesn't surprise me that we sort of lead in that space and continue to see a lot of momentum there. The buying cycles are a little different. It's not as cyclical as B2C where you see buying cycles heavily favored towards the first half of the year, no knowing most folks want to go live before holidays.

So it's a little less predictable there, but I'm seeing exactly what I think we've expected to see. We had bifurcated our go-to-market team about a year and a half ago between B2B and B2C, which has helped maybe accelerate some of the efficacy there. And I would continue to see that momentum going forward. I don't think it's gotten, materially different other than it's just been building over time. Win rates remain pretty consistent, if not maybe ticked up a little bit higher. And we've got some exciting things we're shipping around those capabilities, some of which will also be agnostic to platform that we'll put in market probably early next year that works. But yes, we're excited about the momentum there and certainly the right to win.

It's just, as Daniel's mentioned before, the monetization of PSR with that B2B versus B2C is a little more nuanced. Yes, and John, just to add some color on that as well. B2B versus B2C in the business. B2B pipeline is growing at a faster rate. GMV is growing at a faster rate. We said in the prepared remarks, GMV from B2B customers was up 17 year over year versus 14 for the platform as a whole. So better pipeline growth, better GMV growth.

Win rates are actually higher in B2B as well. Gross retention rates are higher in B2B as well. The difference is just that you see fewer credit card transactions in B2B. So there's a mixed effect difference in terms of what you see on overall revenue and in PSR in particular. We knew that the business was mixing this direction. We've been making investments in order to double down on this area because it's a particular area of strength for the business. It's also part of why we wanted to update our disclosures at the beginning of the year with respect to GMV and net revenue retention and other things, because we wanted to be very transparent with investors about what we're seeing in the market. the underlying business, that the platform is growing and very healthy.

We're operating the business well, we're profitable, we're cash flowing, but we have this monetization thing that we're working through like anybody that's selling and doing so well with B2B businesses that we need to have a payment strategy that not just focuses on the credit card transactions, but finds other ways of getting into that monetization stream with B2B customers, but it will always look different than B2C because there's just a lower credit card mix. And so it's always going to be a little different, but the underlying point is it's a big position of strength for the business that we are doubling down on, and we expect that we can get the growth rate of the business to get closer to the underlying GMV growth rate over time. that's why we're adding dollars in R&D and other places because we think underlying is very healthy. We just, we need to get better at that monetization gap.

Thanks for the color there. And then I wanted to ask about international too, specifically EMEA. We'll take Bright Spot. I realize there's some FX benefit there, but maybe could you unpack what's driving a little bit of the divergence you're seeing there? What's resonating in that market? Is it the open architecture? Are you benefiting from B2B? Is it partner coverage? And then are win rates materially different?.

outside of the US versus inside the US? Good question, Daniel. I'll take that one. Win rates are pretty consistent globally, actually. There's no FX benefit to the international business, actually, because we do all of our sales in US dollar for the most part. We have some short exposures in foreign currencies, but it's not very material. So it's truly just underlying progress in the business. I think the complexity in some of the use cases in EMEA particular is higher than it is in some cases in the States you have more multi geography multi storefront multi currency requirements and our platform does really well with that type of complexity which I think lends us to really benefit in EMEA. We have a great leadership team over those as well that we think does a really, really good job.

It's a bright spot for us and it's an area we're going to continue to invest.

Thanks very much. You bet. That will conclude our question and answer session. I will now turn the call back over to Travis Hess, Chief Executive Officer for Closing Remarks.

Thanks. I appreciate everyone's questions today. As we look at this business, we're executing well against foundational elements of our strategy. We've been talking about building a more durable business for several quarters now, and I believe the evidence is beginning to show up in the numbers. We've delivered gap profitability for two consecutive quarters, improved net revenue retention sequentially for three straight quarters, continued to grow GMV, and we've maintained disciplined execution while continuing to invest in the areas that we believe we have the greatest difference differentiating, clearest right to win in. Those results aren't isolated. They reflect the deliberate decisions we've been making over the past several quarters to improve the quality of the business while positioning commerce for the next phase of the market. And while there's lots of work to do, certainly, I'm encouraged by the progress we're making, proud of what our team continues to accomplish. in our strategy and our ability to execute. I really appreciate and thank everyone for joining today.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

This live transcript is auto-generated without human intervention or review.

[Call has ended.]

Thank you for standing by. My name is Gail, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Commerce's First Quarter 2026 Earnings Call. [Operator Instructions]

It is now my pleasure to turn today's call over to Tyler Duncan, Senior Vice President of Finance and Investor Relations. Please go ahead.

Good morning, and welcome to Commerce's first quarter 2026 earnings call. We will be discussing the results announced in our press release issued before today's market open. With me are Commerce's Chief Executive Officer, Travis Hess; and Chief Financial Officer and Chief Operating Officer, Daniel Lentz.

Today's call will contain certain 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 as well as our expected future business and financial performance, financial condition and our guidance for both the second quarter of 2026 and the full year 2026. These statements can be identified by words such as expect, anticipate, intend, plan, believe, seek, committed, 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 measure 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.commerce.com.

With that, let me turn the call over to Travis.

Thanks, Tyler. Q1 2026 was a strong start to the year. We delivered revenue of $86.8 million, non-GAAP operating income of $12.4 million and GMV of $8.3 billion, growing 14% year-over-year, an acceleration of GMV growth from the 12% we reported for full year 2025.

We also delivered positive GAAP net income of $3.7 million, which is a milestone that reflects the sustained operational discipline this team has applied over the past several years. We also generated operating and free cash flow of $18.4 million and $14.1 million, respectively, and ended Q1 with approximately $157 million in cash, cash equivalents and marketable securities, with no material debt maturities until 2028.

Historically, most investors and operators have described Commerce as storefront-centric, traffic, conversion, checkout. Platform value tied to owning the destination and the transaction. That model isn't wrong. It's just no longer sufficient to explain where value in the Commerce ecosystem is actually accruing.

Commerce is now better understood as data-centric, distributed and orchestrated. Product data needs to be structured, enriched and understood. Discovery and engagement happen across many surfaces, not just via an owned website. And multiple systems need to coordinate customer experience, pricing, inventory management and transaction optimization.

More simply, Commerce is shifting from a destination to a system. We have deliberately transformed and rebranded this business to lead this change.

By bringing together Feedonomics, Makeswift and our core BigCommerce platform, we believe we have built a highly differentiated solution that provides 3 integrated control planes across product intelligence, experience and transaction. That flexibility is increasingly valuable as AI reshapes how Commerce works. We are not replacing the storefront. We are extending it into every product discovery and shopping surface where Commerce is happening, and those surfaces are multiplying fast.

Feedonomics is our product intelligence layer. It creates clean, enriched, structured understanding of products. It owns normalization, enrichment, attribute modeling, taxonomy and syndication across marketplaces, ad channels and AI search and shopping channels.

In an agentic world, AI does not browse. It queries, structured data and returns confident answers. If merchants' product data is not clean, correctly categorized and enriched, those products do not get surfaced. They end up invisible to the customers that merchants seek to reach. Feedonomics makes merchants visible in the places that matter, and that job gets harder and more valuable with every new AI surface and protocol that emerges.

Makeswift is our experience layer. It composes and governs what the customer sees across web, mobile and emerging AI interfaces. It owns UI composition, content, personalization and experience orchestration across channels. AI can produce content, but it still needs to be governed to ensure it's on-brand and consistent across surfaces at scale. AI does not solve this problem, but Makeswift does and its importance only grows as the number of surfaces multiplies.

BigCommerce is our transaction layer that executes transactions and commerce logic. It owns cart, checkout, orders, pricing, promotions and APIs for Commerce operations. As Agentic Commerce matures, the question of which systems can be trusted to execute transactions reliably and at scale becomes more important, not less. This layer is the system of record, and the systems of record become more crucial to merchants as Commerce complexity grows.

What is important, and often underappreciated is how this also plays out in B2B. In B2C, agentic search and shopping capabilities are changing how products are discovered and in certain categories, shopped. In B2B, it is currently changing how they're specified, priced and ordered across systems. That is a more complex problem and one where data, orchestration and flexibility matter even more than checkout.

We also have real momentum here. Manufacturers, distributors and wholesalers require multi-company hierarchies, complex quoting workflows and pricing logic that few closed ecosystems can handle cleanly. We can. And critically, in B2B, the cost of bad data or a failed transaction is not a lost sale, it's a broken business relationship.

There is a version of the story where some believe that AI threatens Commerce infrastructure. We believe the opposite. AI answer engines and agentic workflows do not bypass the need for structured product data, governed experience layers and reliable transaction systems, they depend on them. What materially changes is that the bar for each of those layers gets higher, and our architecture reflects exactly that. Modular but integrated. Open, API-first and channel agnostic.

Our largest competitor built a transaction layer and closed an ecosystem around it. We built across all 3 layers and did it openly, which means we can be a merchant's full stack or we can be the data and orchestration layer running alongside Commerce platforms they are already on. The intention is to work interoperably with a merchant's architecture, not against it. That is not a positioning statement. It's a structural decision we made deliberately, and it aligns to where Commerce is going.

Now let me walk through what we accomplished in Q1. At launch, Commerce was 1 of only 2 platforms to endorse Google's Universal Commerce protocol. We have fully built to the UCP protocol, connecting BigCommerce and Feedonomics, enabling enhanced discovery, orchestration and direct buying within Google's AI experiences with merchants retaining merchant-of-record status and full ownership of their customer data.

Two weeks ago, at Google Cloud Next, we took the stage with Accenture and demonstrated their prebuilt agentic operating system, which incorporates Commerce's capabilities natively on GCP and GECX, handling discovery, personalization, checkout and fulfillment end-to-end. Agentic Commerce is not a notional product launch on our road map. It is already running. Beyond Google, our Agentic Checkout is now live on Perplexity, Copilot and Meta via our PayPal StoreSync integration.

When a shopper completes the purchase in this model on an LLM chat surface, the order lands in BigCommerce. Enterprise organizations like Dell are using Feedonomics to make their products discoverable on OpenAI and other LLMs, while our Feedonomics Enrichment tools are driving agentic engine optimization or AEO performance across channels.

We also released BigCommerce model context protocol, otherwise known as MCP to make it easier than ever for agents to securely interact with BigCommerce stores. We advanced AI capabilities directly within the core BigCommerce platform. Commerce Companion, our AI assistant built into the admin experiences, helps merchants analyze business data, automate routine tasks and accelerate time-to-value. This is AI that works inside the merchant's daily workflow, not just in discovery channels.

We launched BigCommerce Payments built with PayPal in Q1, an embedded payment solution that gives merchants a unified view of their finances, and flexible payment options, including PayPal Pay Later, Venmo, Apple Pay, Google Pay, and cards, all from within the BigCommerce control panel.

We expanded the number of channels available within Surface, our self serve version of Feedonomics, to now include Meta, Google Ads, Pinterest ads, TikTok ads and Microsoft ads. We are laying the groundwork for additional agentic and AI channel integrations, which will roll out in the coming months.

On the customer side, H&M, The RealReal, Petco, and Grainger adopted Feedonomics to enhance product visibility and performance across digital channels. We also added new industrial manufacturing, and distribution customers like StatLab, a leading supplier of histology and pathology consumables and launched brands such as Helix, Linear, a precision motion components manufacturer servicing industrial automation, robotics, aerospace and defense. These customers are examples of where our B2B capabilities resonate most strongly and where the depth of our platform is compelling.

On the core platform, we shipped 37% faster checkout. We added advanced promotions with coupon stacking, margin-protective caps and bulk coupon code generation as well as multi-language support with automatic URL subfolders and end-to-end translated storefronts. And we introduced backorder controls and improved catalog management.

On storefronts, Makeswift on Stencil is in beta, and native hosting for Catalyst moves to open beta soon, deploying to Cloudflare at no additional cost to merchants. In B2B, we launched our purchase order agent. The agent extracts, validates and routes POs to check out automatically. We also shipped cascading price lists, expanding the complexity of pricing use cases we can handle in B2B.

Finally, we recently announced some updates to our pricing and packaging on the BigCommerce platform. Effective June 1, we've replaced our prior standard, plus, pro, and enterprise plans with core growth, scale and performance plans. The vast majority of platform ARR comes from our enterprise plans. Those are sales-assisted plans on defined contract duration and terms. Customers formally using enterprise plans will see no change whatsoever beyond the name change to performance.

We are also introducing a fee that applies to orders processed through payment providers, not on our embedded payment provider list. I want to be clear about what this is and what it is not. Contracted customers on our new performance plan, formerly our enterprise plan, pay no additional fees, no matter what payment partner they select.

For the vast majority of our remaining merchants, their fee will also be zero, because their orders already run through one of the many providers on our embedded list. We are talking about more than a dozen deeply integrated payment partners: Stripe, PayPal, Braintree, Adyen, Amazon, Klarna, Worldpay, Afterpay, BigCommerce Payments and more, not just a single proprietary gateway. Our merchants have real choice, and that choice comes with 0 fees.

This change is not a broad-based price increase. It is a deliberate decision to go narrower and deeper with our payment partners, investing more meaningfully in fewer relationships to deliver better integrations, better checkout experiences, more local payment methods and better conversion for our merchants.

We have completed the core elements of our transformation, a unified platform and brand, a clear investment thesis, a leadership team aligned around execution and a strong financial profile give us the leverage and flexibility to deliver on the growth potential of this platform. You are starting to see our product velocity increase meaningfully as a result of these changes over the past 18 months.

Our product agenda is in motion, the monetization levers are in place, and our focus is squarely on execution for the remainder of 2026. We are delivering healthy GMV growth, cash flow and profitability, and the business is well positioned for growth.

With that, I will turn it over to Daniel.

Thanks, Travis. Q1 was a good start to the year across many facets of the business. Q1 revenue was $86.8 million and up 5% year-over-year, above the high end of our guidance range of $82.5 million to $83.5 million. Subscription Solutions revenue was $63.7 million, and partner and services revenue was $23.2 million.

Non-GAAP operating income was $12.4 million, above the high end of our guidance range of $9.3 million to $10.3 million. Our non-GAAP operating margin in Q1 was approximately 14.3%, reflecting continued leverage in our operating model.

Total ARR ended the quarter at $359.8 million, up sequentially from $359.1 million at year-end 2025. GMV of $8.3 billion grew 14% year-over-year, an acceleration of GMV growth from the 12% we reported for full year 2025 and reached nearly $33 billion across the prior 4 quarters.

We also achieved positive GAAP net income in Q1 2026. This was our first quarter of GAAP profitability in our history as a public company. This margin improvement is the direct result of the strong operational discipline that we've shown over the last several years, simplifying our cost structure, driving leverage and reinvesting savings into our highest impact product initiatives. We also expect to deliver GAAP earnings profitability for the full year 2026.

As Travis said, in Q1, we generated operating and free cash flow of $18.4 million and $14.1 million, respectively. And we ended Q1 with approximately $157 million in cash, cash equivalents and marketable securities with no material debt maturities until 2028.

Our strong balance sheet is a direct result of our operating cash flow improvements and disciplined capital management. We said we would eliminate our remaining net debt by mid-2026, and we delivered that result a quarter early in Q1. Our cash, cash equivalents and marketable securities now exceed our total long-term debt outstanding.

This balance sheet position gives us meaningful financial flexibility to invest in our products and growth and to pursue strategic opportunities from a position of strength.

Remaining performance obligations and deferred revenue increased year-over-year in Q1. This is an important forward-looking indicator that reflects healthy bookings activity, customer commitments that have been contracted but not yet recognized, and strong demand visibility for the second half of the year. We continue to handle dilution and stock-based compensation responsibly as well.

According to a recent Needham research note, stock-based compensation as a percentage of revenue for public software companies was 13.2% in Q4 2025. We ran at approximately 5.4% in the same period, less than half the peer average. That's not an accident. It reflects the same operational discipline that's driven our margin expansion and GAAP profitability.

As I mentioned earlier, we facilitated $32.7 billion in GMV over the prior 4 quarters, and we have delivered consistent double-digit growth in this metric for multiple years. GMV captures the economic activity flowing through Commerce infrastructure across B2C and B2B, BigCommerce and Feedonomics, and it gives investors a clearer picture of the scale of our business.

Many of our product investments and organizational changes are focused on narrowing the gap between GMV growth and revenue growth. This gap reflects primarily our strong B2B growth, where credit card transactions represent a smaller share of the payments. As we scale BigCommerce payments and drive higher payments monetization, we expect that gap to narrow.

Dollarized net revenue retention, or NRR, improved sequentially in Q1, increasing from 95.2% to 95.4%. Driving sustained improvement in NRR is one of the most important operational priorities that we have as a company. And this quarter's sequential improvement is an early but meaningful signal that our product investments are translating into better customer outcomes.

NRR improvement is fundamentally a cross-sell and retention story. We are focused on driving higher attach rates for Surface, Feedonomics and BigCommerce payments within our existing customer base, improving time to value and tighter integration across our entire platform to make the full Commerce ecosystem stickier.

Each of these levers has a direct impact on expansion and churn. We have more work to do here, but the trajectory is moving in the right direction.

For Q2 2026, we expect revenue between $84.5 million and $85.5 million. We expect non-GAAP operating income between $4 million and $5 million. And for the full year 2026, we are reaffirming our overall outlook. That is revenue between $347.5 million and $369.5 million and non-GAAP operating income between $34 million and $53 million.

This outlook represents between 2% and 8% full year growth rates with non-GAAP operating margins of 10% to 14%. On a Rule of 40 basis, our non-GAAP guidance implies combined growth plus margin performance of approximately 11% to 22%, depending on how we execute within our ranges across the year.

Now let me close with the core reasons why we believe Commerce is well-positioned to deliver long-term value for our shareholders. We facilitated $32.7 billion in GMV over the prior 4 quarters with 14% growth in Q1, clear evidence of our platform scale and its continued momentum. We operate at approximately $359.8 million in ARR, with non-GAAP gross margins in the high 70s, generating meaningful non-GAAP operating income and cash flow.

We achieved positive GAAP net income in Q1, and we are on track for full year GAAP profitability for the first time in our history. Our strong balance sheet gives us financial flexibility to invest and operate with confidence, and we are executing on the product investments, payments, agentic infrastructure, surface and B2B, all of which we believe will drive durable ARR growth and expanding monetization in 2026 and beyond.

The business has never been better positioned. We have the scale, infrastructure, financial profile and product momentum to deliver on the full growth potential of this platform.

With that, Operator, let's open it up for questions.

[Operator Instructions] Okay, so your first question comes from the line of DJ Hynes with Canaccord.

Travis, I want to start with BigCommerce payments. I'm curious what success with that effort would look like to you and how investors should measure your progress and kind of key milestones against this goal as it continues to mature.

Thanks for the question. I'm measuring it in a couple of different ways. One was actually delivering it, delivering it on time and within scope, which was accomplished, obviously, by the end of the quarter, which was exciting. I'm also measuring it by the feedback of the merchants that have been participating, which has been overwhelmingly positive.

As that offering evolves, obviously, the monetization of it becomes more and more important. But the real thesis here was to remove friction, create a better experience for our merchants based on feedback and do that in partnership, at least initially with PayPal and kind of go from there. I'll turn it to Daniel as it relates to the financial aspects of it.

Yes. From the financial side, DJ, I think number one is just what's the adoption that we're driving, both amongst the existing base, but also for new account sign-ups where that's really kind of the default in the onboarding flow for small businesses and even maybe medium-sized businesses as well. And I think another success criteria really paying attention to is kind of what's the relative retention rate and GMV growth that those merchants are seeing.

And the #1 thing that we're focused on is whether or not that product is helping our customers be more successful and grow faster. We believe that it can. We believe that it will. So far, we're doing well. We're ahead of our expectations in the first month or so in terms of GMV adoption.

In the long run, I think if it's going well, not only will we see it in retention, we'll also see better PSR attach rates as well over time because obviously, not only do we think it can be better for merchants, but we also think it can pick up some incremental revenue share for us in that part of the business.

Yes. Makes sense. That's helpful color. Maybe as a follow-up, I don't know if we've talked about this publicly before, but can you just address the resolve proposal from your perspective and why the company decided to invoke a stockholder rights plan?

Got you. Yes, I appreciate the question. Listen, the Board and management teams are focused on maximizing value. And obviously, we're going to carefully review any serious offer we receive. This particular proposal implied a 50% discount to the current trading price, which is not a serious proposal from a financial point of view. So as we've stated quite publicly and multiple times, we don't believe this warrants any further engagement.

Yes. And then I'll address the shareholder rights plan. So the Board determined that adopting a limited duration rights plan is the right next step to protect stockholder interest. And it's a very normal thing, I would think, under the circumstances for us to do.

Under that plan, rights become exercisable if a person or a group acquires, I think, 10% of shares of the company's stock or 20% if it's for passive investors. The intent of that is just to discourage accumulations of shares in control without protections for stockholders and providing the Board time to evaluate proposals in kind of a prudent and careful manner.

So ultimately, we think it's about making sure that shareholders are treated equitably. And as Travis said, our position on this has not changed. The proposal really undervalues the company. It's not attractive to stockholders, and we don't think it warrants any further engagement.

Your next question comes from the line of Ken Wong with Oppenheimer.

I wanted to ask about the pricing changes to BigCommerce subscription plans. When should we expect the impact of non-enterprise customers to hit top line? And then for the enterprise customers, what's the path to potentially true up those contracts?

Ken, thanks for asking this question. Let me take a little bit of time to kind of walk through what this is. So just to be really, really clear about what we've done on the pricing and packaging side on the platform side. We've done a name change of all of our core products, and we've changed kind of what's included in each of those bundles.

For your second question on Enterprise plans, it's really a name change to Performance, and there's no other change associated with that nor are we contemplating any further changes with those customers as well. We introduced a fee associated with using payments providers outside of our embedded payment provider list.

To be very clear, all customers on kind of negotiated term agreements, formerly Enterprise plans are completely exempt from that. There is no charge that they receive that's incremental no matter what payments provider that they choose.

What we are wanting to do, though, for the other 3 plan types, core growth and scale, we really wanted to drive better concentration of resources into a smaller group of payment providers where, to be very clear, we see better GMV growth and results for customers on those providers than we see on what I would call kind of the long tail of partners that we have in the business.

And so customers have complete freedom to choose among a list of, I think, like 20 different payments providers, including BC Payments in that list with no fee structure whatsoever. So it's actually a very small amount of volume that we would expect to be impacted by this.

To be really clear, we're not trying to create a new revenue line item out of that in particular. Really, this is about trying to drive volume towards payments providers that just see much better GMV growth and service delivery for customers. And that will take effect in June when we make those changes. We've also made some minor changes to service offerings in a couple -- in areas like that.

But Travis has talked a lot in the past about the fact that we want to be a little bit more opinionated about what we think is the right architecture and the right selection of partners that we think our customers should be using. We are fundamentally, though, there's no change. We are an open platform. People can use whatever partners they want to use, but we'd like to try to concentrate volume a little bit more on the smaller list.

This is also very different from our largest competitor where, yes, there's a fee structure that's similar, but that fee applies unless you use their proprietary payment solution, just one, where we're saying you can use up to 20 with no fee whatsoever, no matter what size the customer is.

Understood. And then second, I just wanted to touch on guidance. So very solid first quarter reiterated the full year, but 2Q does tick down sequentially. Can you just walk us through the seasonal dynamics there?

Yes, there's just a small timing difference actually. We expected originally to ship BC payments in Q2, and we had some revenue associated with the go-live on that with a partner. We actually shipped it earlier than what we expected. So it actually went out the door at the end of March, which is a good thing. So we end up with a little bit of extra revenue in Q1 associated with that, that we had originally anticipated actually to come through in Q2.

Once you account for that timing, it's actually a very normal kind of period-to-period seasonality for what we're seeing in Q1 and Q2. That's really the main driving reason behind that. It's kind of a no news item from my perspective, honestly. In terms of the sequential step down you referred to, Ken. Yes.

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

So maybe a follow-up to Ken's, but more on the margin side. So Daniel, if we think about the investments, was there any timing differences or margin aspects as we think about the first quarter outperformance and how we're thinking about margins for the rest of the year?

Nothing major. I would say Q2 sequentially always has -- is going to have a little bit of a step-up in OpEx for us because we actually have our kind of annual salary increase cycle occurs at the end of Q1. So Q2 is the first time that we actually see like the full effect of like merit promotions within our cost structure. That's the major difference that you see actually in the guide from period to period on the profit side.

In addition, it's that issue. The profit also is affected a little bit in Q2 by the timing difference I mentioned. on the revenue side. And then finally, we said on our last call that we were planning to step up investments in R&D on kind of like a cash investment basis, about 30% on a full year basis.

And we're continuing to ramp up engineering hiring. We're kind of almost the full hiring that we intended behind that reinvestment, but we're seeing a little bit more carrying cost on that step up as you would -- as you see in Q2, and that's reflected in the guide.

We're really encouraged by what we're seeing in that investment, by the way. I think if you just look at what Travis covered in his prepared remarks, the volume efficacy, quality of the stuff that we're seeing shipped, going out the door right now is really encouraging. And it's equally focused on retention and expansion of the base as it is on features that are really speaking to new offerings and new customers, which I'm sure there'll be questions for Travis coming on this. But I'd say I am very encouraged by what I'm seeing from a product quality and velocity behind that investment.

No, that's great to hear. And maybe Travis, just a follow-up for you. I know it's kind of early days on Agentic Commerce, but I think there's some debate in the investment community about is that really just an incremental channel that has higher conversion? Or will that lead to a significantly higher growth opportunity for merchants overall? Would love to just kind of weigh in on that and maybe any milestones that you're kind of looking for in 2026.

It's a great question. I think it depends on the model. I think in my prepared remarks, I talked about how we were deliberately -- our neutrality was deliberate and modular in nature, knowing that just to be candid, agents don't have a lot of opinions, right? They're going to navigate and surface what's in the best interest of the consumer, at least that's the thesis behind it. And so the neutrality, the openness of how we've done this and how we've architected, we think is a massive advantage.

I mean, that's not even touching on the B2B side of this. I think the use cases for agentic and B2B will actually be more material sooner as it relates to the impact on those customers. I think cost savings in general is a general thesis in those sorts of engagements and stripping out manual labor and obviously optimizing workflows and things like that, we're seeing incredible use cases as well as almost once-in-a-lifetime blending of front office and back office and a lot of ERP upgrades and implementations where a lot of that stuff was done 10, 15, 20 years ago was purely back office.

Now with agentic, it's forcing everything to come forward and have that blend. I think that's going to accelerate agentic in that space. But generally speaking, I think people want optionality. I think partnering with the best of the best in market around payment providers, around hyperscalers, around other ISVs and partners and controlling, again, for us, data experience and transaction. And really, a lot of it's around governance, quite frankly. I think that's where most people have the angst.

I don't think governance was a sexy term in the investment community a couple of years ago. It's going to be front and center as we start talking about this complicated orchestration we've led into for a long time. The governance piece of this is what keeps us really durable and really differentiated. So that's my opinion on it.

I would expect it to accelerate mostly upmarket. I think large retail, think large global branded manufacturers, folks that are most directly impacted by the traffic drop-off. I think that will gradually ease into mid-market and eventually become reasonably relevant for SMB. Really depends on the SMB. But I think you're going to see a big push on enterprise B2B here sooner rather than later.

They're just not obvious use cases because most of that stuff is behind log-ins and the average general human being doesn't necessarily experience that on a day-to-day basis.

[Operator Instructions] Your next question comes from the line of Scott Berg with Needham.

I guess, Travis, I just want to start off coming off your conference event -- company conference event last week. I guess what are you hearing on B2B e-commerce replacement cycles out there? How are you viewing, I guess, calendar '26 here relative to maybe the last couple of years in terms of the activity that might be out in the end market?

Yes, we're seeing similar trends, Scott, it's a great question. I've been pretty public about this, too. B2B has been as a platform business for us, has been the majority of net new opportunities have been B2B oriented or hybrid, but mostly B2B. I see that continuing.

I think what I just alluded to in the previous question around this ERP movement, front office and back office blend, that has a positive and an indirect negative impact. The positive is it brings everything front and center, and I think there's a lot of prioritizations around optimizing B2B, particularly around agentic.

And what I mean by that for us specifically, Feedonomics and the data layer, so think of what Feedonomics is doing around product intelligence and enrichment for B2C, think of how massively and tangibly relative to that is in a B2B environment. You've got massive catalogs, distributed data. A lot of those guys grow inorganically, so they're acquiring other technologies, other businesses, synthesizing all of that and serving it up in very unique and complex ways is a natural fit.

And then we've also, through the release of our MCP tooling recently, right, it's going to make our merchant stores for B2B agent addressable. So again, you've got all these new use cases that are going to allow these organizations to take faster advantage of speed to market and efficacy, which I think is going to improve the velocity.

The one -- and this is just hypothetical, ERP tends to suck a lot of air out of the room. And so I think the danger in this is you're going to have a lot of things going on at once for very large organizations and the sequencing of that transformation is kind of out of our control.

I'm not alluding that it's impacted pipeline in this capacity at all. It has not. I'm just thinking I'm putting my services hat back on and being objective about, there's a sequencing element of this.

So for us, I think the sequencing favors us because I think the cost savings from blending front office to back office through agentic is real, and I think that can help fund a lot of the back office stuff that's going to be pretty material as these companies go through these either forced upgrades or reimplementations of ERP. So I think time will tell, but I'm materially encouraged with what's going on in that space, in particular.

Understood. Helpful. And then, Daniel, as we think about the model in the next couple of years, I know payments is early and at least with the new payment platform, and we certainly don't have much for expectations and contribution this year. But how does it impact gross margins as we start thinking about maybe calendar '27 and '28? Is the new payments infrastructure accretive to your current gross margin profile? Or does it create maybe some headwinds there?

It's actually accretive. So the way that we've set this up, we are acting as a reseller and kind of a partner in building out the tech that's behind that alongside PayPal. We are not taking on the credit risk of merchants, and therefore, we're not taking on a lot of interchange at all that goes along behind that. And so it's still fundamentally the same economic model where we had before. So I'd say it's accretive to margins.

Now if we decide in the future to become -- take on more of a PSP role as we build out this solution, that may change. That will obviously come with different top line revenue recognition treatment and margin structure, but we're not there yet.

What I would say, though, and I want to be clear about this, this is kind of the first of many products that we're thinking about within financial technology where we think we can start to build out solutions. We don't have a specific time line or a road map yet on when we're going to add on different things. But -- this is obviously something that we think customers can benefit from by having more integrated solutions, particularly smaller customers, where we have tens of thousands of customers in that size that we want to continue to build out.

But I don't see this being dilutive anytime soon. And if it does, it would come with favorable revenue treatment anyway. And if and when we decide to take a step down that direction, obviously, we would talk about that on earnings call so that everybody can build that into their models. But for now, I think you can just model it as it being accretive and a tailwind in that respect. And if that changes in the future, we'll talk about it then.

Thank you, everyone. And that concludes our Q&A session for today. I will now turn the call back over to Travis Hess.

I want to thank everyone for joining. Obviously, Daniel and I are excited about where the business is right now. Obviously, a lot of execution against our strategy for the remainder of the year, and we look forward to seeing all of you in the interim and next quarter's call.

All right. Good afternoon, everyone. Before we begin the Q&A, please note that legal as maybe say this. But please note that our discussion today will include forward-looking statements regarding Commerce's business direction and future plans. These statements are for informational purposes only and are not committed -- are not a commitment to deliver specific materials or functionality because these plans involve risks and uncertainties. Actual results may differ materially. We encourage you to review our SEC filings included in our most recent 10-K for a detailed discussion of these risks. We may also reference non-GAAP financial measures today. You can find the relevant reconciliations in our investor materials.

So over the next 90 minutes, you're going to hear directly from Travis, our CEO, followed by a panel with our Chief Product Officer, Vipul Shah; and 3 of our product leaders, sharing on AI, Makela Weber on Payments and Lance Owide on B2B and then we'll close with our CFO, Daniel Lentz.

The format is open Q&A for those in the room. We have some questions to get things going, but we want to make sure we answer any questions that you might have. [Operator Instructions]

With that, let's get started with our CEO, Travis Hess. So Travis, for those who are online...

Maybe tell us a little bit about how the event is going, what the event is for and what you're most excited about coming out of Commerce Live.

Let's start with what the event is for. Generally speaking, this has been an accumulation of partners both on the tech and the agency side as well as merchants, both existing merchants and prospective merchants certainly and then a bunch of folks in between, it's really a product show to me, right? It's demonstrating where we are with the business, where we are with the product, what's coming, right, validating folks in the building that currently run on one of our products of knowing what it is that we're doing, where it is that we're going and why it is that we're going there and also creating a lot of interactive forms and mediums by which to solicit feedback. It's actually one of the most invaluable mediums for us, particularly around our customer and partner advisory boards where a lot of the prioritization or the inputs to the prioritization framework for product and road map actually come to conversations.

So it's really trying to foster think of it less of it as a captive sales pitch, more of it as an input to what we could be doing better, where do we have gaps, where do we have opportunities and at the same time, articulate where it is that we're going and why and obviously taking input both during the sessions and after the sessions and from there, obviously helping synthesize what it is that we're doing. So that's the general gist of it. It's the one time of the year that we bring everybody together. We just did this in EMEA a couple of weeks ago in London at Wembley Stadium. We tend to pick really fancy sporting venues over there. And over here, it's a little more subtle, although I think the venue here is fantastic despite it being April in Chicago could have been much colder.

So you talked about on stage how -- in the last 1.5 years, we went through a lot of transformation, but now we're in execution mode. Can you tell us a little bit about what that means for you?

Well, I think I've been pretty open about the amount of change that we needed to metabolize and digest. I think it started with admitting where I felt there were a lot of gaps mostly around go-to-market, obviously, coming in. I think it was confusing in many capacities, just given the 3 products that we owned, we had not yet integrated. And the fact that the legacy brand was named after the platform, I think I mentioned in my opening remarks today, just Commerce in general is becoming less storefront sense. That doesn't mean the storefront is going away. But I think in my speech, I talked about Commerce moving into more of an environment that is very data center, very distributed and very orchestrated. And what I mean by that is it's never been more important to have enriched organized data as everyone probably in this room uses LLMs on a daily basis, multiple times at least I do, where to be surfaced in those interactions, which are very contextual and very conversational as sharing -- does say and put this in my mind, we've taught robots how to speak human.

You've got to be able to have hygiene in your product data and actually have that orchestrated syndicated out to the proper channels where you want to show up. So one of the big changes we've made in the transformation was to integrate our 3 products in a way that not only works better with the core base of customers and depending on what product that they're currently consuming, but also sets them up for the future. It is very often showing up across surfaces, regardless of channel and driving value regardless of where someone may buy your good or service and making that as frictionless as possible. So a lot of the theme here is how did we transformatively bring these products together? How did we create a foundation where we can evolve those products in a very clean and transparent way? How can we modernize them in a way where we can react quickly to market conditions? And how do we just make it easier to do business with, meaning how do we make Feedonomics available, not just way up market with the largest branded manufacturers, retailers in the world, but also for the installed base of e-commerce that didn't exist until Q4 of last year when we launched Surface. How do we move Makeswift and BigCommerce upmarket organically in ways that are now mapping quite nicely to what's going on in the agentic and do that in Harmony and do it responsibly in a way under one brand where, again, we're making a statement as to where this model is going and then obviously earning that credibility over with events like these soliciting that input and evolving the product accordingly.

But this is very much a synthesis of a lot of the changes we made behind the scenes, a lot of the cost that we cut where we're reinvesting kind of the fruit of that labor, so to speak, and then give [indiscernible] about where we're operating going forward. But this is very much a product-driven business. Most of this to me I think we have an amazing product team here that's all been demonstrated on stage. And the emphasis here is if we were a restaurant, the product is our food. So we're here kind of giving everybody a taste of the food, and we hope that it's good. And I think not to say we need to be imperfect anywhere else. But I think we haven't spent enough time on the food. We spent a lot of time on the ambulance in the past. And I think it's been a misgiving and it's just in a model now in the market where things are moving so quickly. If you're not foundationally set up for success, the pace by which this model and the market is evolving is such that you can't -- a month behind and us being 6 months to 12 months.

So I think we're in a much, much better space with the asset right now. I think it's been hard at times, obviously doing this publicly. But I feel really excited and really enthused about where we are. And I think its momentum from here on out as we ship more product and we drive more customer outcomes and more value. That's the intent.

All right. We have a lot of partners here. What are you hearing from our partners? What are they most excited about? What are the concerns? What are you kind of hearing out there? .

Yes. I think I've tried to take having come out of the services side of the business. I know what it's like to live with these products, implement the products and have merchants of all shapes and sizes digest the products. So I think, a, accessibility to senior leadership, I think, is very well received by partners, I think, cluing them more in on the road map we haven't always been as public as we'd like to be about what it is that we're doing for obvious reasons, maybe some less obvious reasons. I think the big theme, we kind of teed up a year ago was trying to go narrower and deeper with partners of all shapes and sizes. So I think that's probably been the best received input I've gotten is they feel like the partnership, I know it sounds cosmetic. But going deeper with those partners, obviously, AI has disrupted the services business pretty tremendously. So I think anybody investing in our suite of services needs to feel comfortable that they can wrap enriching services around what it is that we're doing.

So they like to feel like, a, they're part of that input and b, by proxy, that investment continues to make sense. So we oftentimes need to think like a services provider as well and understand what's enriching for them and what's valuable for them. Because at the end of the day, it's not just self-service software. You need a lot of these partners, whether they're tech partners or payment partners or service providers they're ultimately the ones that are helping execute and reinforce the customer outcomes that we're trying to drive. So that's not something we've done particularly well in the past, not for any nefarious reason. It's just the business tended to be very compartmentalized where we've actually rolled all of our partnerships, both tech and agency under one leader under one group that has never been done before that allows us to run at a pace that we've not been able to run, obviously. And I think that's enthused folks as well where they feel like both sides of that is now harmonized in one group, which didn't exist until about 6 months ago.

[Operator Instructions].

Scott Berg, Needham & Company. Travis, you talked about partners. I know distribution has been a big focus of yours in general, trying to get in more deals over the last 18 months or so. Partners are incredibly important in the space and they're obviously not going away. You lived it last time I checked. But how are you making progress or traction kind of within that to help them either cosell or lead some of these opportunities with you and just getting you more involved? .

Yes. I think it's a couple of motions there, Scott, I think on the -- and let's just talk cohort. Enterprise side, I tried to be pretty clear with this. Most of that distribution is going to be through GSIs. It's going to be through the Accentures, the Deloittes, the EPAMs, PwCs, folks that are embedded globally with the largest merchants in the world, largest retailers, primarily in branded manufacturing as well as manufacturers and distributors. So that's been a distribution channel. I've been very keen on and have come out of that model. I know what works, what doesn't work and how it works. So understand the mechanics of what motivates those distribution channels is obviously an advantage coming in. It allows you to spend a lot much -- a lot less time and lose a lot less hair kind of going and trying to figure out the manage of how the machine works.

And also to the point I just made a few minutes ago, also has to be enriching for those organizations, right? If Accenture can't sell high-margin valuable services by way of leveraging our product suite, they're just not in a position to invest in what it is that we're doing, and hence, you lose the distribution. So for us, we've been very particular about triangulating this in a way that maps not only to say their best-in-class capabilities and reach. And they all have different nuances and different mechanics and how they operate. So on the enterprise side, for us, we knew we need to get way more efficient in sales and marketing efficiency. We weren't going to be able to go do this and go it alone. So we needed to do this through GSIs. I think that motion has been very exciting and a lot of momentum there, especially with the cohort of feedonomics.

On the mid-market side, which is where you're going to see most of the SG&A and the investment for us and where we've lived historically on the platform side and by proxy Makeswift, that's a bit more of a nuanced kind of verticalized solution. So think of with partners pre composing and predefining industry and sub-industry level accelerators, right, where we are aligning those accelerators by industry and by cohort, we could T-shirt size, like even in regulated industries, right? They have specific nuances across not only tech partners but also service providers that have that expertise. So how do we go deeper with those folks with less of them where the product feels very innate to the merchant. We can get them live much faster than we normally would. It mitigates risk. It obviously accelerates revenue recognition. And it actually drives customer outcome and value, and it also allows those service providers to go wrap in valuable services around that, that's typically based on business outcome.

On the small business side, it's been less obviously, service partner oriented. We tried to do a new motion where it's more product-led growth that we've not really had and certainly supporting that with prescriptive payment and technical partners. You've seen that I want to sell [indiscernible] on BigCommerce payments, certainly is a motion there where we feel we can improve our take rate and obviously reduce friction outside of any sort of service providers. I don't know a lot of service providers are going to get rich implementing small business regardless of platform. So that's really been the triangulation. We're in a much better spot to do that. We've got a lot better visibility in how we're doing, and we've got a lot more governance around how well we're actually doing this along the way, which wasn't always the case 1.5 years, 2 years ago when I first got here.

John Masina, Raymond James. So lots of new product announcements today focused around this. But just curious how you think about the size of agentic Commerce for your business over the next few years? Where you see your natural advantage? And maybe what signals you're watching for to see if they're materializing in your time line there? .

That's a great question, John. I think there's a lot of enthusiasm, and Sharon will talk to this way more tangibly than that which she lives it every day. There's a lot of enthusiasm, obviously, upmarket. So a lot of these LLM have been gated in nature. So they're not letting everybody in. Google with UCP has been very pragmatic on how old it out. So there's a lot of demand for discoverability right now. Certainly, that's front and center. And arguably, these guys aren't stupid, right? They're not going to allow people to just syndicate and to be discovered. They want, obviously, them to be transacted. That's the thesis, obviously, going forward.

I think at first, maybe a little more hesitation by brands not understanding what that experience is going to look like, what the governance model is going to look like. I think it plays well to us, and I'll get to that in a minute. But a lot of enthusiasm upmarket in that cohort, particularly around retail, larger branded manufacturers. I'll let Lance opine on the B2B side. I think we see some really tangible use cases there, maybe rather than later, but it's less obvious because these are typically behind paywalls and logins and things like that, that aren't necessarily obvious to the general public.

Mid-market and down intrigue, but less immediacy, right? It's not, oh, my gosh, get me there tomorrow. Some more than others, depending on market, depending on brand. Certainly, I think we need to display credibility there that we're going to put them in a really good spot when that makes sense for their business, whatever that maturity level is. And I think the big advantage for us listen, the iteration of the restructuring has allowed us to go back to really being a product-centric company, allowing us to ship really credible differentiating product very quickly based on a number of different inputs. I think you're seeing that today and a lot of the talk tracks you're going to see it and what we've shipped to market and what will continue to ship. That's been a big shift from where we've gone before. I think it said in my opening remarks, we're going to ship more in the next 6 months than this company has in its entire lifetime, which goes to a lot of credit, other folks in this room that are way more important than I am as it relates to designing and building product and shipping it.

So I would encourage you to ask them about it. I think for us, the biggest differentiation, I think the term gets overused this open versus closed or interoperable versus monolithic and things like -- I think people get confused by the vernacular. The reality of it is robots don't care, honestly, like we can give them governance and guidelines and empower merchants to try to give that as much as they possibly can. But they don't really care who your payment provider is as long as it's mapped to the spec. And I think for us, by definition, I said this in my opening remarks as well, I think the value is accruing in a number of different areas that historically accrue different places.

Before it accrued at your storefront, right? How do I get folks to my storefront? How do I create this amazing frictionless, immersive experience and how do I get them to check out. That's not going away. There are going to be a lot of -- everyone looks logically and goes, "Yes, I'm not going to have an agent buy a custom couch for me, right? And arguably, I might not buy custom couch online either. I'm many wanting go in the furniture store and I want to touch the fabric and look at the watches. And by the way, last time I checked, and I've learned this the hard way.

Generally speaking, when you buy furniture, it's not in stock. Surprised. So yes, there's going to be industries and sub industries that are never going to leverage this in the way that people would think like agent to agent per se, but the foundation and the rails need to be such where that could take place. And it's ultimately going to make that experience more immersive and smarter. I think being agnostic and open, being interoperable componentizing these 3 products in the way that we've done, I think, is brilliant and differentiating. Again, I don't mean that to sound with Bravada or arrogance. I just think it maps way better to where the world is going in the space because not everyone wants to use all 3 of our products. And to make that argument, regardless of who you are, I think, is a fool's errand. I don't care what platform that might have worked 10 years ago just like Super Target works for a lot of people, but I don't particularly enjoy buying my produce there. I buy it because it's convenient and that may work for some.

Most people want best-in-class now and in the future. I think we've been really deliberate about how we've set this up that -- we've got a lot of feedonomics clients that don't use BigCommerce as a platform and never will. That's okay. I still want to serve that market with best-in-class feedonomics. And you may make the same argument with MakeSwift, running on different services or in different ecosystems and make the same argument with components of our cart, right, that may sit through agenetic services, but a merchant doesn't use anything else but that.

So anyway, my point in all of this is we want the optionality. We want the agnosticism to make sure that we're not operating in a weird way and compensating to try to commercialize this in a way that doesn't map back to what's in a merchant's best needs. By definition, open is harder to articulate and explain which I think frustrates probably folks in this room and frustrates folks in the world. We need to be better about articulating what this all means and why I think that will get easier to digest as you have real live use cases in market, and you've got real client outcomes that they're testifying against. But we're in early days. I think it's exciting. There's obviously a lot of buzz and a lot of noise, and it's very distracting. But I think, again, real client outcomes, real client use cases, this becomes a bit more tangible understanding going forward.

So Travis, you mentioned a few times that we're going to ship more product in the next 6 months than we have in the last 2 years. Can you give us a few examples or things that you would highlight that you want folks to know about?

Well, I mean I think the obvious ones -- I've not been shy by this. I think feedonomics surface we shipped that on time, first and foremost, back in, I think, late October early November, I can't remember the exact date. It was in Q3, Q4. Bringing that into the core base of BigCommerce customers, I think, is fascinating. And again, early days. The early results we're seeing from those folks that are using those merchants using feedonomics is material year-over-year in improvements. And again, never made that available before you had a product that was very service-oriented that was niched very upmarket. It just wasn't a digestible -- wasn't a digestible offering for the vast majority of our BigCommerce versus the tens of thousands of merchants running on the platform. So for surface is one, [indiscernible] sitting on stencil, obviously, is another that's an obvious replacing what I would consider a fairly arguably outdated UI of Page Builder, which is natively running on the platform. I think it received the largest applause last year at the Summit when we announced MakeSwift is going to be on tensile.

Also another one that we're really excited about. I think BC Payments, Michaela will talk about here in a minute. Again, a lot of pressure and input outside, how do we improve our take rate, how do we reduce friction for our merchants and things like that. And then, listen, I think there are a lot of genic capabilities and a lot of brilliant basic capabilities that don't sound sexy, but the fact that we're able to ship them as quickly as they are. It's just -- it's like anything else in life, it's a bunch of little things that bother people. It's not big things. And I think Brilliant Basics is a bunch of little things we're able to kind of close gaps, which again, just reinforces the durability and the ability of Platform. I mean our moat honestly, is our installed base. We've just -- we're never set up to ship or sell product to that installed base, regardless of product. That's one of the big foundational changes we've made. So just that motion, that infrastructure in and of itself, human capitalized, systems-wise, product-wise, commercial-wise, we're launching new packaging and pricing coming up here shortly.

Like just things that we probably should have done a while ago. But again, it's chicken and egg. We didn't have these things integrated. And that, in and of itself, will also reduce a lot of friction. We'll reduce downgrades and things like that. That's the spirit behind it. Like being better at feature gating our products, right? These things were just stuff that we're in our way, but it's hard to triangulate all at once. So a lot of enthusiasm there. I can see Lance's eyes on me on the B2B side, which gets not as much press I think our dominance there, particularly in mid-market, B2B has been fascinating. Those folks have been very laggardy in general. So a lot of momentum there and really excited about taking that continuing to take that product up market on the platform side is folks like SAP or forcing upgrades and things like that.

We're seeing a fascinating moment in time where there's more ERP replatforms in market right now than I've ever seen and it's a fascinating opportunity to marry front office with back office which was never part of the consideration set 10, 15 years ago when this happened the first time. So that's another opportunity we can take advantage of...

Scott from Needham again. I wanted to just follow up on your pricing and packaging comment in particular. There's a lot of focus amongst soft investors for the platforms that are rolling out some of these agentic functionality to really around the concern being around gross margins in particular and trying to understand how you price and monetize it effectively is how do you think about monetizing some of these AI products? Are you going to get to a more modular type of pricing opportunity? Or does it get built in the core product platform pricing just kind of gets raised and trying to help us think how you think about that.

Yes. I mean listen, I think that's where it's going to go in a least case. I mean people are already talking about it now around tokens and and usage and things like that. I'll let Sharon and Daniel weighing upon more than I will there. I think historically, an order-based pricing model, I think favors you in certain use cases in industry, certainly B2B when conversion is 100% to try to charge that based on JV as a fool's errand. I think that's an advantage. I think you see it in other subverticals like luxury as an example.

If I'm [indiscernible] Berg and I'm selling a $3,000 dress, do I really want to pay a percentage of revenue to sell an AOV that high as an example, not to pick on Diane who's lovely at [indiscernible] ones. There are industries where we've got flexibility around the commercial model and pricing. I think this will organically evolve. And it's part of kind of the plumbing and the wiring that we put in here and kind of tried to signal to the market that we know this is evolving very quickly. .

We're very open to adapting to where this is going to go. We're not kind of backed into a corner in any capacity. I think just natively, we've got some advantages there and just the way that we've had a line in my talk track this morning is we're trying to work with your architecture like to think having come from services to think that people are going to blow up their architecture and what they've invested in, again, is foolish to think that that's going to happen. We've got to figure out how to work alongside of it and optimize and map what it is that we're doing, how it is that we're doing and how it is that we're charging for it. So I think, Scott, we talked about this a year from now. It's a fascinating question because I want to see everyone else is considering the same things. I think it will evolve. I think it has to evolve. Daniel, do you want to cover...

It's Daniel. I'll jump in the lens as well. So a couple of points I would just kind of reinforce on this is that fundamentally, our products are -- we consider part of the infrastructure layer withinCommerce. And the trends that are happening in agentic, I think, actually reinforced the monetization model. And meaning we're not on a seasons-based model. We're not -- we don't have to make a big change as a result of this. What we have fundamentally is a consumption-based pricing model.

As we end up with more and more surfaces that are either from a discovery or transactions flowing through, it just reinforces the importance of the pipes that are actually processing the orders on the checkout side, we would monetize that through orders on our rails the same way we would and have in the past. Agenetic just makes kind of a more diversified inbound where those orders come from, which actually just reinforces the importance of the pipe. So we still monetize on orders. We still monetize on a share basis payments and a whole host of other things on the platform. That doesn't change necessarily when things go through agentic.

And then on the feedonomics side of the business, that's based on SKUs that are going out to these surfaces those. As you see more disparate sourcing of volume feedonomics becomes a more core part of the infrastructure with a consumption-based model in a lot of ways based on SKUs. So I'm oversimplifying a little bit. But I think in general, the pricing model doesn't need to shift. I think there's some improvements and changes that we can make to it to kind of make sure we're capturing a better take rate for the strong GMV growth that we're seeing on the platform. But by and large, we actually are encouraged by where this is going. I don't think we really move into kind of a token-based not necessarily, but I don't think we need to do that, at least not in the short term.

All right. Travis, before we open it up to the product team, last question. If you had to leave our investors with one thing about Commerce, if they may not understand what message would you leave with them?

Well, hopefully, the theme of today is that we've actually built the foundation and integrated the assets to where this has been harmonized, right, under that brand. I think Commerce, by definition, the rebranding process is challenging, just based on availability and domains and how do you name yourself something that doesn't back you into a corner. I think the most encouraging thing is you've got an integrated foundation that is back to being product-centric that's going to ship at speed and map to where the model is ultimately headed.

And again, depending on cohort, we're going to see that happen at faster paces than others. But I think, ultimately, at the end of the day, I meant what I said in my speech, this is becoming less storefront centric long term. It doesn't mean it goes away. It's expanded. It's really Again, it's data centric, it's distributed and it's orchestrated. I think I explained that in my speech this morning, but it happens everywhere. And merchants, regardless of size need to show up where their customers want to engage them with value regardless of where they buy their good product. we feel like we've got the best infrastructure and market to enable that to happen at scale.

And we need to go execute on that market. That's ultimately where we are at this point. But we're finally at a point where we can go run that offense in market. A lot of the last 18 months has been kind of putting the pieces in place to get there. So I'm relieved to be through a lot of the Reno and I feel like Daniel and I and everyone else has been living in it with the dust and everything else, which isn't always convenient. But we've got to go out and execute on what it is we put in place from a strategy standpoint. So that's exciting.

Thank you very much, Travis. Invite the product team to come up. All right. As we get started with the product team. I'm actually going to ask if you guys wouldn't mind introducing yourselves and maybe give a little bit about your background before we get started.

Hi, everybody. My name is Vipul Shah. I'm the Chief Product Officer here at Commerce. I've been with the company for exactly 1 year. Today is my 1-year anniversary. Thrilled to be here with you all and very excited about the momentum that we're building here. Prior to this, a couple of decades in banking and payments on the banking side with the likes of JPMorgan and Wells Fargo, on the technology side with Google and PayPal. So spent a good chunk of my life, enabling merchants, connecting consumers and bringing technology to bear to help consumers and merchants. So thank you.

Hi, everyone. I'm Michaela Weber. I run the payment product and financial services business working for -- my background is in payments and financial services. I was at Goldman Sachs and JPMorgan and then moved over to payments, working at Worldpay and Molly, the Blackstone backed European payments scale up.

My name is Sharon Gee. I'm the Senior Vice President of Product for our Feedonomics product vertical and then a horizontal AI portfolio offerings across BigCommerce, Feedonomics and Makeswift reporting to Vipul.

Lance Owide. I run our B2B product, which is B2B addition and then working cross-functionally with every product team to make sure that we're building for manufacturing distributor use cases. My background a little bit different similar to kind of Michaela. I was on kind of your side of the fence at UBS and then at Apollo private equity. So great to be speaking with you guys today.

Yes. Thanks, everybody. So it's kind of a loaded question because there's a lot going on in each one of our areas. But what are you most excited about in your product area?

Seeing as I have the mic, I guess, I'll go first. And it's kind of harkens back actually to a question that was asked earlier, you kind of asking what's the size of the potential with AI and B2C, that's harder to answer, and I'll leave that to Sharon. But in B2B, if you think about transactions, it's all about efficiency. I don't need an experience where I can see the shoe I'm buying or where I can feel like I understand the brand and the texture that [indiscernible] about. It's about buying widgets and getting it done really efficiently. And you saw on stage we announced our purchase order agent. That's about -- it's about driving real efficiency through the transactions that are occurring and bringing more of them online.

And I think as we start to see AI penetrate into the B2B space, the number of transactions that are going to be touched by AI and improved by AI is going to be dramatic. And that's what's really exciting me, things like that purchase order agent and what we build on top of that with agents to automate workflows and reduce friction are going to be great drivers of efficiency for B2B businesses in the back office and for their buy as well. And that's what's exciting me.

I think in the agenetic space, merchants have 2 problems. They are no longer as discoverable as they once were on the channels that they are used to acquiring customers on and then they need to run efficiently like you said. And so what agentic, there was a good question that said, what is the opportunity in agentic and how big is it going to be? Well, it depends on the category, and it depends on who define agentic. Agentic experiences live across both third-party services like ChatGPT and Gemini, but also one of the biggest opportunities is for merchants to launch their own Agentic experiences within their own properties, right? So a shopping assistant that can help you buy a gift for -- based on everything it knows about you.

Our merchants understand all of this. And so when I think about what I'm the most excited about, it's the agentic's foundation that in this new world, Commerce is an infrastructure layer. It's no longer just a destination of a storefront on a dot-com. The dot-com is just another channel. It's another front end. And in agentic, it becomes the brain. It becomes the foundation that knows everything about your customers, what they've ordered, what their pricing -- their unique pricing is what their loyalty is and that beating heart, that foundation externalizes to all the channels right, that data that you're improving the catalog, the inventory, the shipping in rules, that becomes the foundation that powers experiences on Gemini, ChatGPT and agentic experience on Slack or WhatsApp, and it's all underpinned by this brain. So I'm the most excited about building that foundation because it becomes critical infrastructure because in agentic merchants are still merchant of record. So they need this in order to be able to participate at scale.

On the payment side, we're making a lot of VB positive changes to reduce the number of partners that we work with and invest more heavily in a select group of integration think one of the unexpected negative outcomes from Commerce being so open to partners for so long with that we had literally over 70 payment partner integrations and especially for our self-serve merchants, the retail plan merchants, they want help. They're not payments experts. They're running their business on a day-to-day.

And so while we thought we were doing the right thing by showing them in Travis' word the Cheesecake Factory menu -- actually an enterprise merchant that has a really specific set of needs. They may bring their own payment provider but with the launch of BigCommerce payments, being able to have -- give the option to a merchant to select a bundle that is going to work really well with their storefront plan -- that's something we've had really positive initial feedback. And then we're actively working on taking partners off the platform who haven't updated their integrations who are not having good acceptance rates who are harming our customers' conversion, and you've seen that with some of the pricing and packaging changes we've announced to really move towards still a very generous list of payment providers that our self-serve merchants can choose from, but helping them choose providers that we have a strong relationship with, who are invested in their integration who are going to offer Apple Pay, who are going to work well with our standard one-page checkout. These are really important changes for our merchants to help them run their business better and for us to support their growth. And we know that the net revenue retention is higher for merchants who use one of our core payments partners. So that's what I'm super excited about.

Yes, I'm excited about all those things and the benefit of going last year but probably most importantly, about bringing these assets together and the people assets as well, not just the software assets into cohesion, right? I think Travis settle to really bring Makeswift and BigCommerce and Feedonomics together. There's a real synergy there. We think we're starting to see the benefit of that with our customers, whether it be mix with on stencil whether it be agentic checkout, which allows us to bring agentic Commerce to customers that aren't even on our platform right now, as Sharon has discussed on stage or whether it's stencil, right, bringing multichannel capabilities to the tens of thousands of customers on our platform. So I'm excited about the connective tissue, they're building from a product perspective. between the assets that we have. And then from a people perspective, having been with some of the best companies in the world and the best talent, I'd say this team is right up there with them and really pleased about the team coming together as well.

How do you think about prioritizing? There's a lot of good things going on in Commerce. Travis talked about how we're going to ship more products in the next 6 months than we have in the last 2 years. As a product leader, how do you think about prioritizing the launch of those new products?

It's a great question. All of us product leaders kind of grapple with that. There's always more to do than we have the resources to do -- but I think fundamentally, it's about anchoring in our merchants' needs. We're here in events like this, but even outside of this, the real conversations are happening one-on-one with various customers across the spectrum, right, small, middle, large to understand what the needs are and to understand where we get the maximum leverage in our investments, right, to benefit the larger set of customers. .

So a lot of our work is around understanding sort of the common denominator across diverse customer sets that we serve and deploying capital in a way that allows us to get the maximum lift in that, right? So these conversations here today and many happening outside of this room are essential to that prioritization and then working obviously with our finance teams making sure that we get the return on that investment that is absolutely necessary, right?

So my background is banking. I come from the finance function as well prior to going over the product side of things. So I understand the need to serve customers, but also to make sure that we're driving value for our shareholders. So there's a disciplined effort, as you know, teller around how we think about value at a project level, how we crystallize that value. And that discipline, I think, is an important part of the prioritization as well.

Maybe one for you, Sharon. So Agentic Commerce has meant a lot of things, and it seems to get thrown to a very broad category. Can you maybe dive down and get specific about what Agentic Commerce means for Commerce and how we compete.

Yes. It's helping our merchants be discoverable on Agentic third-party services like you've seen the announcements with our partnership with Google around Universal Commerce protocol to be able to make Commerce catalogs shoppable, discoverable and shoppable on AI surfaces within Google, our announcements with CoPilot and perplexity and PayPal and Amazon Shop Direct. So it's about discoverability. That's one category of Agentic. And then the other is, it's really about being able to run with agents. So how can you make Europe is more efficient with the launch of BigCommerce companion directly within the control panel, the ability to have a companion that knows everything about how to run a BigCommerce store, how to knows everything about your data and any of the orders that you've had and can be a companion to you and in helping run a store more efficiently to save your team's time.

So -- and then lastly, I would say, merchants who are launching agentic experiences that interface with their customers. So when we think about a storefront agent, these are the areas that we're investing in because merchants know so much about their customers. They know what they've ordered and everything. And so when we look at the like the purchase order agent for B2B merchants or a shopping assistant that lives on the front end of a merchant site that can answer, where is my order, tell me about these products? What should I buy my wife for her birthday. These are the kinds of interactions that our merchants are going to be able to turn on very seamlessly with the launch of BigCommerce MCP as of yesterday, that's available to all the Commerce stores. So when we break it down to kind of 3 different areas.

And then the fourth, I would say is being able to build the Commerce experiences and Commerce experiences more effectively with agents. So when we think about launching BigCommerce MCP and CLI soon, all of these things are making it possible for Claude to be able to help you build these experiences even more effectively.

Very good. Sharon, one more for you, actually. So these products, they sound really good. Do we have them in hands of merchants right now? And who's using them? And what's the reaction that these products were rolling out?

Yes, we do. You may have seen the public announcement with Dell yesterday about us supporting Dell's Agentic catalog exports to open AI to Google. And so we've been working with Dell for years. We've been sending -- they've been working with Feedonomics to send global catalog in many multiple languages to Google, Meta, Amazon, various different channels from ads, social and sometimes marketplaces perspective, depending on the customer.

And then now, increasingly, the identic channels because it's additional data fields that need to go to channels like Google to support Universal Commerce protocol or it's new data completely that's being sent to someone like OpenAI or Perplexity. So when we look at that capability, Dell, Live, for live. We are live with agentic check out kit with PacSun. They run on Salesforce Commerce Cloud, but they're using our infrastructure for the catalog from Feedonomics, the back-end headless checkout capability, that's integrated with PayPal Store Sync that just launched, makes PacSun's catalog shoppable on Perplexity, CoPilot and soon Google as well. And we're working with all of the partner who have major inroads in the agentic. So PayPal, Stripe, Amazon, all the major players in Meta, all of those folks.

So one for Michaela. Michaela, for those new to our payment story, can you talk a little bit about what our journey was to get to BCP, why it's important and how it helps merchants?

Sure. I mentioned earlier that there was open SaaS principles for a long time, which involved really allowing -- partnering with everyone taking a very democratic partner approach to allowing merchants to bring their own provider and then really offering a huge range of payment providers and wallets and some local payment methods for our merchants. And that has resulted in -- I think I mentioned earlier bit of a mixed experience, especially for some of the smaller merchants who really are looking to their platform for guidance on what the best payment provider for them will be for enterprise merchants. It also has resulted in them sometimes not being able to get on an optimal integration because they're, again, choosing from a list.

And also, to be totally directed financially, there wasn't an optimized take rate set up. So some of the payment partners that we work with that have volume with our merchants, we don't have attractive rev share economics with, some we do. And so to, number one, be very focused on improving the overall merchant experience and store performance. We took steps to reduce the number of payment providers we're working with to kind of form this more cohesive embedded list, but then also to take the step to launch our own embedded payment solution BigCommerce payments. We did select PayPal as the provider behind that. We're really proud to have announced on March 30 that solution is do have merchants live on the solution today, both self-serve merchants and enterprise merchants.

Primarily, we're offering the solution in a product-led growth motion through the BigCommerce control panel. So if you saw the product session, there is within the BigCommerce control panel, a tab where merchants can see BigCommerce payments. We also are rolling out a comprehensive marketing campaign to eligible merchants for whom we think this would be a great fit. And the best thing about the BigCommerce payments is -- not only is it an embedded payment experience within your control panel, which for a merchant saves you from having to log in to 2 different places to see the same thing. But we're also coming to them with a bundle of the payment methods that we know are going to help you run your business, Venmo, PayPal Wallet, Google Pay, Apple Pay, Basic wallet, you'd be shocked by the number of payment providers that we have on our platform who don't offer Apple Pay.

If you're a B2C merchant today, Apple Pay is a no-brainer, right? Some of our regulated merchants aren't able to offer Apple Pay, but let's set that to the side. So really ensuring that merchants can have this embedded experience and the initial feedback has been great. So we're really pleased to have launched this journey. I think very importantly, enterprise merchants still have a range of solutions they can choose from. So enterprise merchants can bring their own payment provider on the self-serve side. So are historically retail plan merchants. We have launched an embedded list. BigCommerce Payments is one of the embedded payment providers they can choose from, and it is the only payment provider that has within the control panel experience for customers to manage their payouts and view their balance.

All right. We had a couple of questions.

It seems like you did a really good job moving the product to next level. I'd be curious from your perspective. What you have that you think is truly differentiated from the competition as opposed to where you've just caught up? And then how do you get that differentiation out there from a sales and marketing perspective, to your point, to turn the products into actually growth, right? Because I mean, the business needs to start growing again. So like how are you going -- how are you wrapping sales and marketing and market and that messaging to make it very clear and easy to see why you guys and not Shopify somebody else.

Yes. So I'll start with one. One of the biggest differentiators is in this new era, you need control of the data. You need data governance. You need the ability to understand what data you have and then know what you're missing in order to be able to send it to all the channels because that will require different data. And then you need to be able to tune that generated data with a brand tone, right? So yes, you can go tell Claude to rewrite your product descriptions, but how do you know that it's not going to -- how do you know it's going to sound like the brand tone that you need.

However, you know it's going to include the right content and that it's not going to experience drift when you're doing more than 100 SKUs. You need control and data governance layers and observability. We were meeting with one of our customers. And so we are uniquely positioned to do that because Feedonomics has done it with the biggest platforms in the world for over 10 years. We have customers on those other platforms who use Feedonomics for that specific reason. So we have merchants on other e-commerce platforms who know that they need that capability for data governance and so when you think about bringing those 3 things together in terms of differentiation by nature, our ability to understand what data destination scheme as required and then auto generate the best version of that to deliver you the best outcome is a unique differentiator. It's not -- it's about bringing all 3 of the powers together because in this new era, you need not only the flexibility to be able to make sure that works with the text that you have else be forced into a different model that doesn't meet our business requirements, particularly if you're B2B or otherwise.

And so the differentiators are both that we give you data control and governance and freedom of choice to be able to make that work with your stack, it's one of the biggest differentiators that exists and why merchants on other platforms use of our components, whether it's front end like Makeswift or data control orchestration capabilities of feedonomics?

I feel quite proud to be able to sit up here and say, our B2B product is pretty differentiated and pretty market-leading, especially in the mid-market. Andy Ho, who is an analyst that just focuses on B2B, last year, he ranked us the #1 B2B mid-market e-commerce platform, which is awesome. And he did that because we've built an incredible set of features that meet the needs and use cases of those businesses, quoting, invoicing approval workflow -- it's built in. It's out of the box. It's ready to go. But if you need to customize it, you can, that's how we support businesses that are doing some $30 billion down to those doing $10 million, the [indiscernible] distribution, right? That was your question.

How do we get that out -- and that's what Travis spoke about. It's about getting that story out there with the GSIs for the large enterprise, right? You'll see Accenture here, Deloitte was here, I was meeting with them 1.5 hours ago, talking about exactly that. How do we get our story out. And in fact, in a couple of weeks, I'll be presenting to the Deloitte sales team about Bigcommerce B2B. We need to do a better job there. It's about technology partners as well. Folks like Acumatica, you'll see them, they have a booth out there. That's an ERP platform that's growing -- I misquote it. So it's growing incredibly fast.

And we have a huge joint customer base, over 300 customers. We can keep growing that. We're working with their product team to build better and stronger integrations, and that's a pipeline I'm really excited about. And so it's about -- obviously, we just bought JD on board as our new SVP of Partnerships. So working with him both on the agentic side to bring in more of those leads, but also with the technology partners that sit downstream of us, mostly those ERPs in NetSuite, Acumatica, Dynamics, et cetera, to build those relationships and drive more leads over. And a lot of it's an education and positioning problem, but we're working on that and solving that with the vision that Travis set out.

And I would echo that on the channel partners, right? You may have seen an announcement with PayPal today as well as many, many others in the past few months. We go to market with folks like Google and perplexity and Microsoft because if they're advocating, hey, you get really good data from this partner who can support these experiences that we're launching, certainly, that's distribution that we need.

And I think on the differentiation on the payment side, with some of our really standout opportunities with B2B. One of the things that I've been working very closely with Lance on how we continue to innovate on the B2B payment side to ensure that, that is something else that we can take as an asset when we go to market out to win those deals. .

Yes. I'll just add one more thing. Back to the Unity, right? I think you guys might have been expecting for some time now that Makeswift platform, Feedonomics come together and you start to see the fruit of that. And I think to me, that's probably the biggest competitive advantage we have, which is these amazing assets. Business isn't happening in compartments. Customers benefit when we can bring these things together for them in Harmony. And I think with this team, and with the connections we're building between the products, it's just a much more seamless experience for merchants that I think is unparalleled in the industry..

Scott from Needham. Kind of a 2-part question, one for Michaela and one for Sharon. But both of them surround how you think about the future opportunity in your respective areas. I guess on the payment side, Michaela is you have one particular competitor out there that forces all their customers to use their payments. Obviously, on the platform, otherwise, they charge a high fee. But -- how do you think about adoption amongst your customer base if we're looking out 4 or 5 years from now of BigCommerce payments in particular? Just trying to understand the impact there. Both on the existing customer side and maybe what it does for attracting new customers there, helping try to take that friction out.

And then Sharon, on the genic side, and I've had a couple of conversations on UCP and what can do in the environment. But what are you starting to hear from some other merchants out there. There's not a lot of volumes out there. I know merchants are kind of slow, but at the same point, they want to run fast there. But as you think about the impact of the business a couple of years out, is this opportunity small, large, too early to define. I'd love to hear how you think about your areas over the next couple of years?

Sure. For the payments adoption question. So we have a benchmark for what we think are best-in-class payments adoption is for merchants using an embedded solution. So we kind of understand what we're working towards. One change that you would see if you signed up for a BigCommerce storefront today is in the self-serve boarding flow, BigCommerce payments is the only prominent tile. So we are -- we have worked very closely with our product and design team to not force merchants to take it, but to make that an attractive option with a very clear call to action and product differentiators and we've been very pleased with the results since we've been live on the new flow of the percentage of new self-serve merchants that have adopted the solution. Our focus right now has been especially lifting and shifting with the support of PayPal, some of our existing PayPal customers onto the new experience.

As we move into more of an enterprise motion. Obviously, that's something where currently merchants can choose their own solution. So we would need to ensure that the solution is competitive in terms of features and payment methods with some of the larger solutions that we have on the platform. We have a clear marker internally of what we think good looks like in terms of percentages. But certainly, for our B2C merchants and with some of the developments we have on B2B in terms of adding ACH, for example, and B2B payment methods, we feel really good at the applicability of the solution to a broad set of our customer base.

My response, I'm going to give you agentic once again, I don't think about it as only third-party channels like Gemini and otherwise, right? So the answer is it depends on adoption. So certainly, discovery is critical on these channels right now, right? I want to be discovered on people are asking questions to ChatGPT and Gemini every day. I want my product to be discoverable there. It's early days in terms of GMV flowing through those channels. So I think too early to tell on that.

But certainly, it will be by -- it will be different by category. Imagine the mascara that I know that I like to buy, it's not -- it's very easy for me to think I will use a thumbprint to buy that. What about a custom couch and I need to schedule quick delivery for. So it will be different by category, depending on what merchants sell. And then the other thing I would say is it depends on whether you're on owned Agentic. So I think B2B owned Agentic, where you can -- using an agent to automatically build a purchase order to make it easier than ever for a sales team to sell agent informed B2B purchasing, I think, is a really huge opportunity. So I think about it maybe a little bit differently than just third-party agentic channels for discovery.

Yes. I know you didn't ask me, Scott. I think the thing that people often miss in UCP is that it has a logged-in state. And so if you go to Gemini, Gemini knows you when you're searching for a product, you're not looking at your orders and your history for that particular store. But for B2B, where it's an owned agents. And here I mean, we all -- a lot of you work at large companies. You're not allowed to go on Gemini and just give it all your data. You're in your own workspace. A lot of enterprise B2B, that's what they look like. They'll be building their own agents internally. And they can use UCP to log into their suppliers agent and get their bespoke catalog, their bespoke pricing and up-to-date inventory.

A lot of B2B today is just data files going back and forth. And now they're dumb pipes really done. And now it's going to be smart. And so I actually think while yes, in B2C, there's a big opportunity, especially around discovery. In B2B, the opportunity is bigger because we can replace a lot more of the tech stack today that is dumb pipes of filed XML files going back and forth with this new logged in agent state -- that means if I buy and I'm looking -- I have 10 suppliers I can purchase from the only ones I can purchase from. That's a lot of big B2B businesses out there. They're not allowed to just go and type in Gemini find me this product. It's not how it works, right?

I can't go and purchase products for BigCommerce. I have no, I cannot exactly. I have a list. And I could just go into that agent and say, "Hey, I need this product don't find the suppliers that have actually tell me the price to my work is available and get it for me. UCP enables that. And I actually think the opportunity in B2B is bigger than in B2C. It's a really big opportunity because you could see a huge transformation in the way the transactions occur.

I realize -- sorry, John Masina, Raymond James. I realize a major focus here has been unifying BigCommerce, Feedonomics and Makeswift into a more integrated experience -- but I think you're also kind of focusing on maintaining that stand-alone value. So maybe how do you think about the right balance between deeper integrations while also enhancing the solution so we continue to standalone.

Stand-alone? That's a good question. I think right now, the stand-alone offers are reasonably well understood. So Feedonomics for example, right? I think as a category leader, I think merchants really understand it for the value that it can generate independent of the platform independent of makes with platform itself been around for 15 years, and I think people understand that independent of Feedonomics. I think -- for customers that want to purchase a la carte, they'll continue to have the ability to do that.

Composability, the componentization of our infrastructure overall Commerce infrastructure is going to be a fundamental principle. We'll continue to abide by, right? That openness will not a weight. But I think where we can make big strides are in some of the examples I cited, whether it be Makeswift on stencil or Feedonomics surface or agentic checkout is just bringing those together in more seamless ways, right, for customers that are looking for the package, and we know that many of them are as they navigate this complex world of solutions and particularly in the world of Agentic, I think they're looking for more connected solutions, and that's where I think we have a big opportunity to do so, right? So I think we'll be looking at a number of different opportunities to componentize our technology stack to the extent that customers can avail of a capability, ala carte, we'd like to provide that capability and functionality but for many others, we're finding that, that unification is quite beneficial, and we want to pave way for that as well. Anybody want to add anything to that?

John, go ahead, .

Maybe just to follow up on the payment side. I realize that we -- GA a month ago. But just curious if you could talk about how you're thinking about the international rollout there, the opportunity internationally. And then it's been referenced quite a few times on the B2B side. But then as we think about B2B payments as a category here. Maybe can you talk more about where that investment needs to go, so you can continue to serve those merchants well or expand into the B2B payment side? .

Sure. So let's talk about the international rollout. And I would say this is all subject to obviously -- this is in our plans. So the next market we're launching in is the U.K. And then we're planning to launch some select European markets. So the U.K. and some of Europe is Q3. Some of this is dependent on PayPal. We are distributing in this view of some regulators of PayPal solution. So obviously, by market, there's some nuances there. But we're excited about getting to market in those countries where we think this is a really competitive solution. And then I think in terms of rest of world being available in 160 countries, I don't think that, that thing that we view as a differentiator.

We want to focus on the core markets where we have both installed customer base and where we know that this is going to be a competitive solution with good adoption.

In terms of B2B payments, obviously, B2B payments get a lot of focus because B2B TAM is enormous, and so there's tons of companies focused on how to crack B2B payments. You've heard from Lance. There's so many companies that we work with and in the world from B2B that are using quite manual processes. So our focus is really coordinated with some of the Agentic solutions, some of the B2B developments we have how can we make it easier for merchants to use some of those features and also loop in payments. So invoicing is a great example where there are opportunities to incorporate an easy payments flow where we know and B2B customers would benefit. They are using card payments in some cases.

And then also to have that opportunity -- so invoicing is a great example. Just really working through our B2B purchase order flow. We have the new purchase order agent, which is so exciting. So really keeping payments in concert with that because if you have a great purchase order agent that's awesome. But if you're still getting a check payment or COD, which is actually a payment method that we see today from some of our customers, that's slowing down your business process. And so the education also for us with some of our merchants who are heavily allergic to a card payment or anything beyond a manual PO. And one of the journeys that we've been on is trying to help them understand that and also for some of the card volumes, there are regionally compliant surcharging programs that some of our payment provider partners offer and so it's something that we've been discussing is that something that could be attractive to our B2B customers, they'd be able to offer a card payment, but could pass on in a compliant way, the payment processing fee. Would that encourage them to accept card payments.

So really focus on B2B payments. It's great if you've got the Ferrari, but if you've got the golf cart engine because you're still accepting very manual payments, like you're not going to be fully optimized so how can we build that in concert with Sharon and Lance and the things they're working on.

Bringing it back to Commerce Live. You're talking to a lot of partners ask us of Travis, but curious to get your opinion. What are our partners talking to you about? What are their concerns? What are they excited about? What's it like out there?

Yes. Well, I think a lot of merchants their data is not ready. And so with the data enrichment capability of Feedonomics, there's a lot of excitement around that because a lot of merchants know my data is in disarray and in order to be able to participate at speed and with relevance in this agentic era, they have to get attributed data ready together. And so a lot of excitement around that product release, which is the ability for us to use GenAI to understand what data you have auto generate up to 4 additional attributes that can be leveraged to better answer the queries of answer engines to make you more discoverable, lots of excitement around that product.

Yes. I think from a partner perspective, it's -- let's get out there and tell the story. I mentioned that with delight, but that's what I'm hearing across the board. And then from a B2B merchant perspective, they're all getting pressure from their boards, what's your AI strategy? And they're looking to us to give them the deck that says, here's take this. And I think the purchase order agent, that's why I get so many of them excited because they can take that to the Board, and they can say, look, here's something we can deliver. It's live on customer sites today. You can go on AS color as I showed on color.com as unique log in, it's logged in only right now for their customers, but you'd be able to do it if you could log in and you've put a PO in and that's because they have customer specific pricing you can't go into.

And that we can roll that out onto customer stores. And the way you should think about that is how do we think about that as grabbing operational efficiency? Wolf Automation, there are $5 million to $10 million business. They're here in the audience today. They have a single individual. They pay $80,000 a year. All they do is process POs that's it. They're in the alpha. They're going to be using this tool instead. We get to extract that value. And not only are we providing those merchants with an answer to what's my strategy, I'm doing something, and I'm driving operational efficiency, we're going to save money as we do.

I would say, from the payments and financial services side, we're getting a lot of questions about road map planning together. You saw we launched our Strike OCS integration, updated link integration. We've shipped over 30 new local payment methods on native integrations in the past 12 months. We're working with some of our partners on a forward-looking basis. What features do you have coming out? What do we need to make road map capacity for. We've got a couple of exciting merchant implementations with large partners where they have specific local payment method needs, making sure that those get in the road map that we're working closely with those teams. .

So really forward looking. And then I would say all the partners want to co-market with us co-sell, it's big themes of how can we do more together, show up together, especially with some of the accelerators and verticalized industry go-to-market place we've been talking about?

All right. Last question before we bring on Daniel. What's the last thing. If you had one thing to say to our investors, what would you leave them with? How would you describe Commerce and our product team.

I'll go first on holding the mic. I think the product team has been -- is a great source of energy for the organization. I'm so proud of being part of the team and all the new features and developments that we've shipped and what's coming on the road map. And the thing I would leave you with is we are making step changes in the payments business that are really exciting and going to make a big difference long term. And I'm really excited about the time and effort the team has put in to shaping that and the ongoing work ahead of us to continue to improve payments and financial services.

I think the thing I would leave you with is in an era where you need to get your data together, owning the market leader for data capabilities across channels that has been a market leader for 30% of the Internet Retailer 1000 is a really good position to be in. The market needs the thing we have right now, and we are working to make sure that all parts of our customer base across BigCommerce, feedonomics and Makeswift can access that at speed and that it's empowered with agentic capabilities. And so I think that's what I would leave you with is it's a good moment to need to be a data vendor when everybody needs good data.

We have a market-leading product. We are building on that and innovating to deliver more solutions that give us greater attraction that we can charge for. And that's, I think, really what I would leave you guys with. And as we think about how do we distribute more, you have Travis talk about it, and we're working on it. So we have the product. We continue to innovate, greater attach in our customer base and now we're working on that distribution piece.

Yes. And I would just leave you with, we've got a bunch of product people and engineers as well, focused on building great things. That's product people and engineers by Spirit, and that's what they do. I think the one big step change in the last year or so has been the focus on value. So not that each engineer is going to be residing weighted average cost of capital or doing dissertations on Cap M and stuff like that. But every single person in our product and engineering team now knows that what we build needs to make a big difference for our customers and for our shareholders.

So there's a level of scrutiny there that hasn't existed in a long, long time. And so I just want to leave you with -- we're not here to just build widgets for widgets sake and get it numbered by this is an agentic thing we built or this is some fancy widget. This is stuff very deeply rooted in customer value and in share value Okay? That's all.

Thank you, Hess, very much. Appreciate it. We'll bring up Daniel Lentz, CFO and COO.

All right. So Daniel, first question for you. For those who are not familiar with the story, maybe just give a little background and give the financial profile of the business, just to kick us off. .

Yes. So we do about $32 billion a year in GMV. It's grown 11% and 12% over the last couple of years. We do roughly $350 million a year in ARR, give or taking a little more than that. I think we finished last year, maybe $355 million, something like that. It's profitable business. Last year, we did about nearly $30 million in non-GAAP operating income, almost as much in operating cash flow as well. Historically, the business, I'd say, for several years, like a lot of companies within SaaS. It was growing really fast, was burning a lot of cash. That changed a lot over the course of the last 3 years. And we've really made a ton of progress in terms of balance sheet health, profitability, cash generation, where we are as a business is we're not monetizing that GMV growth as well as we need to be. That's fundamentally where we're at.

So when I get questions about kind of where we're at as a business, it's kind of a tale of 2 things. If you look at the fundamental core health of the business, it's a very large scale business. $32 billion in GMV within the Commerce space is very, very large. It's probably the #2 or #3 largest platform on an independent basis, I would say. Where we've had struggles is just the take rate on that GMV. And there are several reasons for that.

Michaela mentioned several of those. We just -- we get a lot of revenue share from payments. B2B customers don't do as much credit card transactions, and so we don't see quite as much revenue share there. And then there's other parts of the business where it wasn't really configured to focus on kind of having a really good congruency between customer GMV growth and then revenue growth to the business. And we try to be very transparent about that with our shareholders because a lot of the decisions that we've been making over the course of the last couple of years are really, really laser-focused on improving monetization gap to really show the growth that's proportionate to the scale of the business and also do it in a way that's really healthy underlying net revenue retention dynamics, which I would say are not nearly where they need to be as a business, which we've we started disclosing that metric last quarter as well.

So just if you step back and look at the business, it's a healthy, profitable cash flowing business. we're trading where we're trading because we're not growing fast enough. We're not monetizing the growth in the GMV scale that we have, the way that we need to, and that's really, really where the business has been focused.

So we recently announced some pricing changes that are going to go into effect on June 1. Would you mind walking through those, what it is, what it is and why we went about making this pricing change.

Yes. So really glad you asked this question, actually. So soft, we have -- traditionally, we've had 4 plans that we sell on the platform side. And what we announced is the pricing change on the BigCommerce product. We have other changes we're going to be contemplating in the future on other products. But for now, all we've talked about is BigCommerce. We had 4 plans, which were called Standard Plus Pro and then enterprise accounts. Really the differentiation between them is the first 3 were bought just in a served fashion. We've called them retail. We've called them small business. In a lot of different ways, they're misnomers because you may have really large customers that are building test sites on a pro plan, but we're calling it a retail business, but they're actually B2B is really confusing in the way that we name them. And then enterprise plans were exclusively sold through a sales assist motion, but we have small businesses that are in term agreements that are buying enterprise plans, and it leads to just a lot of confusion and market sometimes we get this question, where you have a customer that's doing $1 million a year in GMV.

You know that's not an enterprise merchant, right? Like that's a small business. Yes, we know there's a lot of things that were kind of confusing in that, and we said, okay, well, let's do a couple of different things here. Fundamentally, we needed to rethink how we are going about packaging the core platform products. So first, we said, look, let's wipe the light clean in terms of the naming because the naming is a little bit strange in some ways and has been for quite some time. And so we switched the 4 platform products into core growth, scale and performance. Performance plans, it's really the same exact thing as what we had before with enterprise plans. It's literally just a name change. So there's no effect on any customer that is in a negotiated term plan from anything that we have done on the pricing side at all, which is the vast majority of the ARR and GMV that's on the platform.

For the other 3 plans that are primarily sold through a self-service motion, we made a couple of different changes. Number one, the entry-level plan, we made a change to the service that goes as a part of that. So we used to offer unlimited free phone technical support if you're buying a $30 a month plan very generous. I don't know of any other competitor that offers that because from a cost to serve basis, it's really difficult to make that work. You get 1 or 2 technical support calls that are challenging, and you may end up paying more than that on the cost side versus what you're getting on the revenue. So we needed to kind of get, I'd say, more in line with best practice and in line with everybody else in the space. So it's unlimited chat. You can a la carte buy to be able to get an upgrade with that plan type in order to get phone technical support, but you have unlimited phone support starting on our growth plans and on up, no change for those at all.

Two other changes that we made as a part of this. We also wanted to make sure that all of our customers, as they grew in GMV on the platform product, we're getting a progressively lower take rate, the more that they grew and scaled on the platform. This is not rocket science, this is how pricing works. We had some strange the snow though with our 2 lowest level plans or actually as they would upgrade. Their take rate would sometimes go up and down as they upgraded and it just led to some real confusion for customers. It almost felt like they were being penalized for growth as they were going up some of these self-serve plans.

So we needed to change the way the discount slopes worked so that customers had a much more linear improving kind of declining marginal cost as they went up the curve. I sound like such a nerd here as I'm talking about this, but this is the thinking behind it. It was important. And then the last piece is we introduced an open payments provider fee. I mean let me just explain kind of what this is. It only applies to the 3 plans that are available through self-serve, which is very much a minority of the ARR on the platform, but it is a large number of customers that is on the platform it's almost identical to how our largest competitor does this with 1 very notable exception. It is not -- we are not trying to force customers to use BigCommerce payments. I want to be really, really clear about this. We are an open platform.

As Michaela was talking about earlier, we have over 100 probably different payments providers that we have built connections into. That's very, very good when customers need that, but it also comes with a lot of overhead cost and complexity for us. where we're carrying a lot of cost to maintain all of those different integrations. And when customers are using our kind of top flight payments providers, we see a demonstrable difference in their GMV growth rates, the net revenue rates that we see on the business -- and so we want to remain open, but we're going to be a little bit more opinionated when we think it gives benefit to the merchants.

And so what we've done, what's very different from Shopify as an example, is I think we have 15 or 20 different providers that merchants can choose from and not be subject to any of those open payment provider fees. But if you're going outside of that kind of 20 list that is the best -- have the best integrations has the highest quality product experience, the best growth. Then it carries extra cost for us that can be fairly significant. So we've introduced a fee when you go outside of those top 20. But to be very frank, I want to be clear about this from the CFO and of view. We're not trying to make any money off of that. Like the goal is not to make money off of that fee. It's to really help get merchants on to the payment providers that have Apple Pay and have all of these things are going to make them more successful but ultimately allow us to have a lot better concentration of resources within R&D to focus on a smaller number of partners where we can have the best ingressions possible. And it's really expensive to say, choose your own adventure, you can use any 1 of 200 different payment providers. But I want to be clear, if you're on one of our negotiated agreements, one of our performance plans, there is no open provider fee whatsoever. You still have complete choice and freedom to use whoever you want. That's very core to our ethos as a company. If you're a multinational company operating in 5 different markets. It's very unlike we're going to want to use the exact same credit card provider in Germany that you want to use in Brazil and that you want to use in the United States.

And we're not going to put some sort of a financial disincentive in place on really large customers that have that type of complexity to try to get them to go down that path. But for smaller customers, we're really they're going to benefit from having an integrated experience in the coal panel anyway. We wanted to make sure that we incorporated that as well. So the pricing changes are really more about packaging and rightsizing the way that we did discounting we have kind of some cost to serve things in mind, but it actually impacts a fairly small amount of the actual ARR in the business.

We've talked a lot about products and Travis again had said, we're going to launch more products in the next 6 months than we have in the last 2 years. What your CFO hat on, how do you think about that? What are you most excited about with launching all these new products?

The monetization models that come with them, actually, that's a complete CFO question or [indiscernible], I recognize that. But I've talked about this a lot over the years in a lot of ways, our business was overly reliant on a sales assist motion to drive growth. We had a self-serve way for small businesses to buy the platform product directly. But once they were on the platform, there were not a lot of additional monetization paths that were available in order to grow the business. I think if you look at some of our competitors, whether it's Wix, who I think does a really nice job in this area and several others. They have a really good revenue retention even among small customers because I think they've done a nice job in thinking about what is that customer experience how do they need to grow with the business? And then how do you develop product that has congruency between their growth and the monetization?

And so with a lot of the things that we're launching, we're introducing new monetization models that can drive long-term growth in net revenue retention that pulls us away from having such a disproportionate weightedness towards a sales assist motion. So the Feedonomics surface product is an example, which we've launched, that's actually our first freemium pricing model that I can think of that we've launched in the time that I've been here, and I've been here almost 8 years, where you use the product, it's free up to a certain amount of usage or a certain number of channels. And if for a lot of our customers, that's all they may need, they may never need to pay anything extra for surface, and that's okay. We will make our money with higher retention of the core platform product, and that I'm totally fine with that. But for the customers that are really more sophisticated, and are growing faster because their product is discoverable on more surfaces, then as they use that product, they will get more and more benefit.

And then we have monetization models that kick in behind that. And whether you look at features and how we're setting up Makeswift on stencil, it will have a freemium pricing model baked in behind that. And you may have noticed when we were going through the background of the product leaders that are up here, there's a consistency across all of them that they all come from a Commercial background. And that was a very, very deliberate choice that we had as we were staffing out our leadership team as we wanted folks that were on the product leadership team from my perspective that we're customer-centric, that really, really were strong in product, and we're also very, very good commercially.

And so that we can have, as Vipul said, a really good congruency between what's right for the customer, but also what's right for the shareholder. And that's different I think that's a market difference in what I see and what we're launching is now it's much easier for me to see the relationship between the shareholder outcome and what we're launching on product. Whereas before over the last few years, sometimes it felt like we were launching features, but it didn't have as much focus on what that was going to do for the P&L and what was it going to do for our monetization rates. And I get really excited about that. The question in the back of the room.

John [indiscernible] Raymond James. Maybe following up on that. So you've obviously emphasized investments in a number of different categories. So -- just kind of want to double-click on how you think about those as growth levers over time. Which one you expect to see ramp the fastest? And then any impact that could have on sort of the model, right, just from AI, higher compute costs, things like that, just how it can flow through?

I think the disproportionate grower that I would expect is B2B. This has been true. I think it will continue to be true. We are growing disproportionately. I think B2B has probably been the majority of new customer acquisitions for maybe the last 2 years. I'm looking at you teller, it sounds about right. I think that's going to continue. Now what it means from a business model point of view is it puts a lot of focus on the work that Michaela and others are doing and finding ways to better breadth of monetization options to the business for B2B payment methods because it's different.

If you look at some of our competitors, as they grow in B2B, they've struggled if they're especially if they're really, really focused on credit card monetization as a primary means of driving revenue growth -- that's not really the core in B2B, and we're not trying to force B2B customers into things that are not good for them, but the payment methods are really quite different. And so it has a little bit of a different effect on what it does from a take rate basis. And so I talked about on our last earnings call as an example, like part of the reason that we have had take rates, the GMV growth has exceeded where we've been on the revenue growth side, that's -- the disproportionate growth of B2B is one of the reasons behind that.

Now as we thought about the disclosures we wanted to make and what metrics we're wanting to share, we wanted to be very deliberately transparent with investors to show what exactly is the underlying health of the platform -- and what are some of these issues that we're having to tackle so that we could provide some context behind the product development decisions that we're making because they're very much acutely focused on issues like that. So I think we're going to continue to see a lot of growth in a lot of areas in the business. There's a lot of areas in B2C, where I think we're still doing a very, very good job. We're not going to go after digitally native start-ups in B2C as an example. That's not really an area where we tend to focus.

But for complex businesses in B2C, especially whether it's multilevel marketing or just different use cases and stuff in the B2C space, whether it's regulated industries and things like that, we do very, very well there. And then everything that we're doing that Sharon was describing on the AI front, I think, is a good thing for us. I don't think of that necessarily as its own separate business necessarily because we're working so hard to integrate the functionality of those things into all of the core products. Like there's a lot of great things that we're doing to try to help drive agentic shopping. We're seeing a lot more traction, I would say, on agentic discovery, then agenetic checkout today as an example, but the tooling benefits that are good for our customers, whether it's the PO example that Lance talked about, that you could get that excited about drag on dropping a PDF into -- into the control plan will be amazed. It's revolutionary, but it actually is. That's an agentic function that's actually an operational improvement, even though it's not directly affecting shopping.

And so I think that when I think about what's going on in the AI world, it's just as much about usability for the customer as it is whether or not it's going to be affecting a direct checkout transaction. And if you look at what we're doing in the product road map, we're not being myopic in my opinion. We're not -- I think we're doing it right. We're not just trying to play soundbiting go about AI and how every transaction that's going to come online is going to come through an agent. It's going to increase in share but that's not going to be the dominant thing.

I also care a whole lot about things that may not be as appealing but are directly applicable to our B2B customers or B2C customers like, can you automate the way that I can get PO data input without having to pay somebody to literally do data entry like at 1992, right, those are important things. I think we're going to keep focusing on that.

So last question, Daniel. For those investors who might be on the fence or those investors who are here, what would you leave them with? What would be your pitch be for Commerce?

Yes. I think that we are trading where we are trading because we're not growing fast enough. That's, I think, the fundamental issue. But I think it's really important to separate -- where are we with the fundamentals of the sales the profitability and the cash flow of the business while also being transparent and acknowledging the issues that we need to work with. If you look at where we are as a business, we're a $350-plus million ARR business from -- we guided on our last call, the profit is going to be up almost 60% year-over-year. Profit margins in the kind of mid-teens. You've got 80 million shares outstanding and it's just -- it's a very, very healthy cash flowing business. We have almost no net debt left, really strong cash generation. We're not growing fast enough.

Why is that the case? It's because our net revenue retention hasn't been as strong as it needs to be. A lot of that is in product decisions that we are actively investing correct. I mentioned on the last call, we took a lot of painful, but I think good actions over the course of the last year to actually get smaller in certain departments, many of whom report to me so that we could invest more capital back into what we're doing on product and engineering. And I'm really encouraged by what I'm seeing in not only the velocity, but the quality of what we are shipping and what we're putting out in market.

I'm more encouraged about that than I have been about anything we've been putting out on the R&D side in the last 8 years that I've been here, and I'm sincere about that. And so I feel really good about what we're seeing in that area. And I think over time, we have the right people in place to also improve what we're doing from a monetization rate basis. But this is a $32 billion GMV business that's trading at less than 1x revenue. While it's cash flowing, has almost no net debt. It's a very, very healthy business. We need to grow faster. And I think we're trying to be very transparent about what are the issues that are behind that, that we're trying to tackle. But I think it's a fundamentally very sticky business. It's an infrastructure business that as AI is starting to really cause more of a disparate inbound channels of where order volume is coming from what we have effectively isCommerce pipes, right? That makes it more important that you have very reliable pipes to actually transact from all those disparate surfaces and we have a product like Feedonomics that's been #1 in this area for over [indiscernible] with huge brands running on it.

I think we haven't done a great job in articulating how those 3 assets come together. We've been working on it. I'd say we've done just okay. We still need to do a lot better at that. But there's a lot of things here that I'm really encouraged by that. I think it's I'm not going to speculate on share price. The markets are where they are. But I think fundamentally, the business is a very, very healthy business. We need to be growing faster.

All right. That concludes today's event. So I want to thank all the speakers, those in the room and those who listened online. Thank you.

All right. Before we begin, got some disclosures. For important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. And if you have any questions, please reach out to your Morgan Stanley sales representative.

I'm Josh Baer, software analyst here at Morgan Stanley. We are thrilled to have Daniel Lentz, CFO of Commerce, join us for this first session day 1. Great to have you. Thanks for coming.

I want to kick it off with a discussion of all of the strategic transformation that's been going on at Commerce. If you could walk some of the details of the evolution and really how that all the transitions are impacting your company's competitive positioning, the go-to-market approach, value proposition, that would be a great plan.

There's been a lot going on. I think maybe I'll start with talking about kind of broadly what we see happening within Commerce as a whole and where Travis has been taking things since he stepped in as CEO about 1.5 years ago, and I'll kind of then lead into what that means for the company specifically.

So Travis' point of view ever since he took over as CEO is that -- and we talked about this in our Investor Day about a year ago, was that Commerce was going to be moving more and more towards data and Commerce orchestration and infrastructure more so than kind of the more human UI storefront interacting way of the past.

I think what's happened over the course of the last year with AI and Agentic commerce, which is a buzzword that I don't think really gets explained very well, which we can talk more about in a minute. I think it's gone very much a lot of the ways that Travis saw it going. I just think it's gone a little faster perhaps than certainly what we anticipated maybe some others did.

And so what we've been working on essentially is positioning the company to be integrated across all the assets that we have. And over the last year, we came out with new branding. Really the intent behind the new branding was not because we thought that simply changing the company name was going to in and of itself lead to dramatically faster growth or anything like that. It was really about harmonizing and connecting the brands.

We have Feedonomics is an asset that does data orchestration and catalog enhancement, which is really key in the AI world. It's a totally platform-agnostic solution. A lot of customers were confused because they thought you would need to switch to BigCommerce as a platform in order to use Feedonomics because we owned Feedonomics. And it actually was kind of impairing our funnel in some ways. So we looked at that and said, okay, we need to kind of harmonize the assets and bring it together under the story of where we believe the market was going with Commerce infrastructure and orchestration beyond just kind of normal storefront.

I'm going to launch a website and do a direct thing, which is kind of where the business has been and Commerce has been more in the past. So started with saying, let's harmonize the assets, bring them together and integrate them well. That led to changes that we needed to make on the go-to-market side of things to drive better success in how we were cross-selling assets to our existing base.

We had decent success with that, but we really saw a lot of opportunities to really improve cross-sell within the platform as a whole. We needed to get to lower price points in order to do that based on our existing customers, and I'm sure we'll get to this later. But in our most recent quarter, we disclosed where we are for total GMV on the platform, which reached about $32 billion last year. And GMV is growing at a healthy rate. It's growing faster than what we're seeing in revenue, however, because we've got this monetization gap problem that we're working on.

And so we've kind of looked at this as a whole and said, all right, well, we need to harmonize the assets, bring them together. We need to match the go-to-market structure around that. We need to bring in new leadership team in a lot of cases that can help us get to that next phase. And that's kind of where we've been over the course of the last year.

I think there's areas that have gone well, and there's some areas that we need to continue to get a lot better. I'd say areas where we've done well, company financial health is, I think, very good, very healthy balance sheet. We have almost no net debt remaining. We have no material debt maturities until 2028.

Our profit outlook for this year at the midpoint of our guide is up almost 60% year-over-year, and that's despite not getting to the revenue growth rates that the business is capable of. So I would say we're running the business very, very efficiently. We're deploying capital well.

The biggest issue though is we're not getting the growth that the business is capable of. And part of that is because we need to make improvements on monetization rates with existing customers, which I'm sure we'll get to.

Yes. Great overview of all the changes, and we will unpack a lot of that. Maybe taking a step back, I want to just get a better sense, this is a giant market, a giant market opportunity. Like where is your focus? How do you balance between B2B versus D2C in your customer mix, SMB versus enterprise? Any thoughts on like your target customer and segmentation?

Yes. So I would classify our sweet spot in 3 areas that we focus. 2, I would say, on the platform side and one on the Feedonomics kind of data enrichment and orchestration area.

Feedonomics historically has been very upmarket, very large customers. The IR 1000 like we have huge market share with really large customers on the Feedonomics side, lululemon, Dell, Nike, huge, huge, huge customers.

On the platform side of things, there's really 2 areas where we focus the most. That's complex manufacturers and distributors on the B2B side of things. We also sell to just simple kind of more B2C looking wholesale use cases, but we really tend to thrive in true complex B2B and B2B use cases.

On the B2C side of things, we have a huge installed base there as well. We tend to do the best in what I would describe as kind of more complex B2C use cases, whether that's multilevel marketing, regulated industries, things like that. Our product has a lot of configurability and customization that we can handle that a lot of our competitors cannot. And so we tend to really do well in merchants that have kind of more complex use cases.

Regardless of size, size is not always the best proxy for customer complexity. We can have customers that are doing $20 million in GMV a year, but have a really complex business model and who they need to support, and we tend to do very well in those areas.

Okay. Great. Maybe just jumping into the topic of Agentic and AI. I want to talk through some of the opportunities and then some of the risks. So to start, I mean, you've got partnerships with Perplexity and Google, Stripe, PayPal, OpenAI, Copilot. Just want to help investors understand what Agentic commerce really means for your business model over the next few years? And how do you think about that opportunity and monetization?

Yes. So I think this is the best topic, I think, to really spend time on today, and I think it's most important for investors to understand. My personal opinion over the last 6 months, there's been a lot more press releases than there has been substance and what's going on in this area.

I feel like everybody is trying really hard to get things that are out in the market about what everybody is doing in Agentic and Agentic. What does that mean to Commerce from our perspective? Agentic commerce, I would describe as the trend that moves from e-commerce shopping being dominated by human users browsing websites to increasingly more agents doing discoverability, influencing purchase decisions and then eventually transacting on behalf of those shoppers.

What ends up changing as a part of that actually is more and more of the Commerce discoverability experience for merchants is based around the actual Commerce infrastructure and the data discoverability just as much as like what traditionally has been more of a content-driven browsing experience on behalf of humans. So what does that mean for our business? We believe this is actually a structural advantage for where things are going in our business.

So if you think about what is Commerce as a whole, we've been focused on being the Commerce infrastructure layer because we have both BigCommerce and Feedonomics, we're a platform-agnostic solution that allows customers to get their catalog data discoverable in shopping channels.

From our perspective, in a lot of ways, all of the increase in volume in discoverability and transactions eventually that goes to the LLMs that looks like another shopping surface to us. It's a more complex receiving algorithm for sure. But we believe over time that merchants are going to benefit from infrastructure partners that enable them to interact with agents that's API-driven, more than human UI-driven types of experiences. And we believe that over time, LLMs are going to gain share in shopping, but it's not going to be like the exclusive channel.

What this means for us from a monetization perspective, I think, is actually a tailwind over time. We monetize our platform through transactions and GMV. We're responsible for all of the compliance requirements, catalog management requirements, security requirements, all of those things. That's all back-end infrastructure fundamentally. The storefront that gets served up in shopping is one of many surfaces that our customers can have their products discovered through.

But the focus of our business has always been to kind of agnostically make sure that those products -- that data is enriched and transformed for the needs of the receiving algorithm in each one of those channels. That's the advantage of Feedonomics as an asset, and I think how we are unique and different. We're an open platform that basically can say to merchants, look, we're going to handle all of the back-end infrastructure that's really, really painful for you.

And then we are going to integrate the product such that when you are out -- if you have merchants that are shifting discovery from SEO to GEO, that just looks like a different surface that we can help you in discovery with. But the monetization rails remain exactly the same. As GMV goes through the system, we monetize -- we get paid on orders, we get paid rev share on payments. I haven't seen a lot of indications that the LLMs are interested in necessarily getting into that back-end infrastructure because it's pretty hairy.

Most of the time, the revenue that they make on that is more front end, almost like the ad channel like aspects of that, like Google's SEO business. That seems to be more and more of the activity is. So I think the back-end infrastructure monetization for the players in the space like us remains very much consistent. It just looks like a new channel.

It also, though, for us, I think, opens up new monetization paths for us that are very interesting because now those APIs and the data connections creates new ways for us to monetize that than where we've been in the past. Yes, you can make money on the actual processing of orders.

You can also make money through Feedonomics on actually how those products are being discovered in the data transformation so we can actually start to monetize things more and more through the data pipes in addition to the actual transactions.

Really helpful. Can we go a step further on the complexities of this back end and the infrastructure and really wondering if you can answer that, it will really help think about some of the risks that are coming up in some conversations around could large merchants try to build their own Commerce just given the affordability and efficiency around coding? Or to your point, you touched on could the LLM providers be interested in in digging into the back end, creating something there? Like so what is so complex and...

Yes. Said differently, I think the real question that I think everybody is really wrestling with is what is the disintermediation risk? Where does it sit within the sector, right? Does it sit with everybody in software? Does it just simply all of software is facing disintermediation risk for AI? Or is somebody slightly different?

The way I would look at this is to say even in how we look at the use of AI in our business, if you are a bespoke front-end solution that is not an infrastructure solution, but you are in customer prospect data enhancement or I don't want to call out specific companies necessarily, but I'd say there are certain things that you can replace much more easily than others.

Even in our own business, there's parts of my spend in software where I'm looking to cut things out. And I have people on my team saying, hey, we pay X, Y or Z. I don't think we need them anymore because I can actually just use XYZ tool in order to kind of just do data scrape and kind of do this data enhancement on its own for prospect data as an example.

But that's very different than saying, I want to take on tax compliance. I want to manage all the APIs and connections in order to make sure when that product is discovered in a channel that I know the inventory, I know the pricing, I know the availability depending on all those different stores, and I can process all of those orders in a way that's compliant with regulations in all the different countries all over the world.

I think it's a lot harder to vide code that than it is something that's purely front-end experience oriented. I think right now, the fear though is to say, well, does this just mean everybody in software is facing disintermediation risk. I think things are going to change, but I think the trend of where things going actually plays itself well to the advantage of folks that are really on the infrastructure side of Commerce like us.

The other part of your question though, I think it's at like, well, what level of almost vertical integration could you see either from the merchants themselves or do you see it from the LLMs? Let's start with the LLMs and go to the merchant. Here's how I think about this. And I don't know that I'm right because I think this is all happening so fast.

Everybody is still trying to figure some of this out. But even if the LLMs were to start wanting to get into that merchant of record Commerce lane, well, there's 3 ways people primarily make money in e-commerce. It's the processing of orders, it's the processing of payments, and it's monetizing discoverability typically through some sort of ad revenue model, right? For the LLMs, even if they started going more into commerce-like solutions, from the merchant point of view, you still need one infrastructure solution that can handle inbound order volume and routing to your ERP systems and everything else that is agnostic across channels.

Like I can't think of a single merchant that is so enamored with any AI surface that they're going to want to completely have 100% of their Commerce solution completely embedded into one AI channel. That would be analogous to like why exactly is it that despite all of the growth and success in marketplace sales and e-commerce for years, whether it's Mercado Libre or Amazon or a whole host of these others, brands have hesitancy in giving all of their volume into a marketplace because in a lot of ways, arguably, you're commoditizing your product by seeding that front-end discovery experience to the marketplace.

I would argue in some ways, it could be similar with LLMs. You want the discoverability, you want the volume, but you're not going to want to seed the brand loyalty experience and how you influence payments and all the rest of it. And so you're still going to need one kind of harmonious back-end system that can connect all of these things together, which is really where we're focused.

From the merchant perspective, if they want to create their own bespoke Commerce solution and take on the security risk, regulatory risk, processing payments, all the rest of that kind of stuff, good luck. I think that's very, very complicated. I think there's a lot of moats purely in the embedded complexity of that type of business.

So maybe just to round out the conversation around Agentic and AI, what actual products and capabilities do you have? And like where is the market as far as adoption and interest?

It's moving really fast. I would say in terms of products, we have a whole bunch of things that we're working on. Already, you can go to Feedonomics and take your entire catalog, whether you're running on BigCommerce or Salesforce Commerce Cloud or Shopify or whatever, it doesn't matter. And you can take that entire catalog and have that catalog data enriched to optimize your discovery results in channels, whether they're ad channels, marketplace channels or AI-driven LLMs. That's available today.

We're also, though, taking that kind of Feedonomics capability and bringing it into the core BigCommerce customer where the kind of the average size of a BigCommerce customer is smaller than the average size of a really large Feedonomics customer. So we had a price point disparity problem there, which is why we launched Feedonomics Surface. It essentially allows you to take that Feedonomics capability and make it available at a lower price point to a larger set of customers.

So for example, we're working on things like auto catalog enrichment where customers actually can pay to have their catalogs automatically transformed and push a button to be able to connect it to each one of those different surface channels and say, well, I want to have my catalog now connect to all these channels like I used to, but I want to have the data automatically transformed by Feedonomics, and I'm willing to pay in order to do that so that it's optimized for all those channels. That's stuff we're working on today, and there's a whole host of other additional features that we're bringing in at the same time.

Great. You are the CFO. Maybe we should talk a little bit, well you are also the COO. But...

I stressed in more than one area now, yes.

Yes, but let's talk some number.

Let's talk money, yes.

Yes, some financials. Let's start with growth. And in your opening remarks, you talked about really healthy GMV growth and overall revenue growth profile where there's some gap. I think it's 12% GMV growth and...

3% to 4-ish revenue.

Revenue growth. And so how do you narrow that gap?

Yes. So let me kind of step back a little bit and talk about why we made some of the changes to our reporting metrics because I've gotten a lot of questions about this. And any time you make major changes to the numbers that you're sharing with investors, I think you always need to clarify why you're doing that and make sure people understand the intentions behind it.

Our intention was to add transparency and comparability between us and other folks within the space. We look at the platform and what Travis and I have seen for several years now as we've looked at the business is we say, look, when you look at where we are from a total business net revenue retention basis, we think we're 10 points below where we need to be to be best-in-class within SaaS or even good, right? We know we have issues there that I'll get to in a second. That's kind of point one.

We have been talking about net revenue retention results, but for a subset of customers that were buying our largest plans, those are still a very important subset of customers. But the underlying economics of what we're seeing from small business customers that are buying self-serve platform plans are much healthier now than at any point in time in the 7 years that I've been at the company doing this, which is -- it created a lot of optionality for us from a competitive perspective because now there's a lot more ways that we can fuel growth in the business than just winning competitive market share and platform displacements upmarket, which is where we've really been focused over the course of the last several years.

And so when we looked at the metrics, we said, okay, we want to add transparency about net revenue retention for the business as a whole. I think that that's just best-in-class, even though it's not a number that I think is anywhere close to where it needs to be, I think it's important for transparency.

The other issue is where were we on a GMV basis? Why were we not disclosing GMV before historically? Because I've gotten questions about this for years, ever since the IPO. Well, the big reason for that is because historically, the correlation between our revenue growth, particularly partner and services revenue, which is more transactions rev share based, the correlation has strengthened over time over the course of the last probably 2 to 3 years in particular, where now I believe it is more predictive of where things are going as a business.

And in addition, because we weren't sharing that number, I think, broadly speaking, in the market, I think our size and scale has been underestimated. We're sitting at $32 billion in GMV that's running through the platform, and it's growing reasonably healthy. The issue that we've been looking at is saying, okay, customers that are staying on the platform are growing quite well.

What we don't have is strong enough ways to grow our revenue and wallet share, so to speak, with those customers as they're growing on the platform. That's the core problem that we see driving NRR and the core business -- the core problem that's kind of driven where we've been deploying capital over the course of the last 1.5 years and why we've been so focused on creating products that can create upsell vectors within our existing base that don't require involving salespeople all the time.

What I would say broadly speaking, and I know we've talked about this a bit in the past, I may be a little weird among CFOs because I talk as much about the warts as I do the things that are going extremely well because I just want our investors to know what we're working on, right? We have been overly reliant on a sales assist competitive displacement motion to win really large customers in replatforming.

When customers are on the platform, because we haven't been very opinionated about which technology partner solutions they use or finding kind of traditional product-led growth vectors to expand once they're already on the platform, we've really been too reliant on new account wins in order to power our growth rate. And I think over the course of the last 2 years, depending on the metrics you see, cost of acquiring new customers has gone up almost 100%. I think some of the benchmark data I've seen is it's gone up about 90% since interest rates kind of became normal. I think that's only going to continue to grow.

We really needed to find ways to expand existing customers better. That's the #1 reason why NRR is not where it needs to be. It's not fundamentally a gross retention problem. We don't have enough of a spread between gross and net retention today in the business. That needs to improve. So we are directing capital in that direction in order to lead to kind of that better floor NRR and narrow that gap between GMV growth, which is fundamentally healthy. Customers are doing well on the platform. We're just not capturing enough of that growth and value for our shareholders on the revenue side, which is driving where we're putting capital.

That makes sense. And so one of those levers to narrow that gap could be newly -- relatively newly announced BigCommerce payments. Can you talk a little bit about the decision to roll out BigCommerce payments now and how that can contribute? And anything else to call out from like a specific product perspective with regard to the NRR?

Yes, absolutely. I'm not going to spend a ton of time expounding why it makes sense for Commerce platforms to have a branded payment solution. I think there's plenty of examples of where that's been successful over time. I wish we would have probably moved into it earlier, to be frank. Why now? There's a real opportunity, we believe, to narrow the aperture in where we are focused from a payments and fintech point of view, just in general.

We've historically been completely agnostic to whatever payment solution any one of our customers want to use. There's a reason for that. We tend to work with customers, as I said, that have more complex use cases, right, which means if you're in a regulated industry and you are in tobacco or sporting goods or something like that, there are certain payments partners that will work with those merchants, and there's other payments providers that will not.

We're not going to turn away business because the payments partner that we happen to have a joint solution with, doesn't tend to work with customer A, B or C. We need to offer all of the payments optionality that customers need with complex use cases in order to be successful on the platform. But what we can do is go from a place where we are investing to maintain 100 different payments partners to say, okay, we're going to narrow the aperture and really focus on 6 or really, really focus on 5 that we think cover the breadth of the use cases and complexity that our customers need.

But in kind of narrowing that aperture, we can get a lot deeper in the integration that we have with those partners, so we can have a better technology solution that's more integrated. And then it also will enable us to have more volume on GMV going through more advantageous monetization agreements as well to help narrow the gap.

So when I think about what we're doing in terms of our payment strategy, it's not just about the launch of BigCommerce payments. We have multiple partners that we work with, some of whom we're not doing a payment solution with that remain critical partners. I mean I take Adyen as an example, as a fantastic solution for large customers.

Many of our customers, especially in Europe, are going to use them and need to use them. I'm not going to turn them away or try to force them into a solution that may not be fit for purpose for what they need in Europe. I'm just going to say Adyen is fantastic, use them or Stripe or Worldpay or many others that I can name that are really fantastic in the areas where they play.

But in addition, there's a huge portion of our base where one solution integrated into the control panel and everything built into the core product can get a lot of value and just having an out-of-box payment solution that's just set up and preconfigured that just works. And we think PayPal is a fantastic partner for that. They're really leaning in with us on that and building that out. That's going to be available. It's on track to be launched by the end of this quarter, which I'm really excited about.

We're going to be integrating that into how we approach kind of our core packaging and the platform product. I think some of our competitors have done, frankly, a really, really nice job in using payments and other services and differentiation to create better stratification and differentiation between their planned levels, which I think also helps drive upgrades. It can prevent downgrades. And we're looking to do very similar things.

Sometimes your competitors do things really well, and it makes a lot of sense to follow them and do it the same way. So we're going to use the launch of BigCommerce payments as a way to build some very, very similar setups in our pricing and packaging as well. That will come out. We'll kind of start talking about that kind of by the end of this quarter, we'll have a lot more to say on that on our next earnings call as well.

So is it too early to talk about expectations for adoption and kind of contribution?

What I would say is, I mean, obviously, built into the guide. That's a canned answer, but it's the truth. We have a lot of customers that are obviously already working with PayPal that we believe we can move into the solution immediately and kind of start with a good critical mass and then grow it from there.

We don't really have intentions to go out and try to get them to switch from -- if we had a small subset of embedded partners like I was describing, we're not going to be trying to get everybody to move into that white labeled solution.

If the other solution is delivering great value for the merchant and we're really getting good economics from that agreement as well, there's no reason to do so. But some of the more long-tail partners where the integrations aren't as good, it's not really what's best for the customer anyway, and we can drive more volume there. That's what we're going to be focusing on.

And how are your sales reps incentivized around the BigCommerce payments opportunity? And do you have to wait until your merchants come off contracts of their existing payments providers? Like what should we keep in mind on the pace of the...

Yes. So where customers have locked in with existing payments contracts, obviously, you're going to have to wait until some of those expire in order to move them over. So it's not like all of a sudden, $32 billion worth of GMV is going to switch into a branded payment solution. I wish that were the case. Even if you look at some of our competitors, they report on an equivalent of GPV on a branded solution versus GMV on total.

We're kind of looking at how we have some similar metrics we can share in the future. But it's always going to be hard to get 100% of it over. We're trying to get as much as we can initially moved over out of our existing base by having as much of the PayPal installed base move over, which I think is a good start.

And then really driving as much new account acquisition into that motion as possible. And there will be some motions where we have to try to get merchants that may be on a solution that isn't as good that we think isn't as fit for purpose for what they're doing, we think we can move them into kind of this narrow subset. We'll do that over the course of the next year or so as well -- or year or 2 as well. But it's going to take time. That's why I think I used the phrase in our earnings call that it's incremental benefit.

I just -- I don't want to get ahead of ourselves here on the expectations of adoption. Like it's going to take time in order to do this, but we think, obviously, that this is a really good first step. And we're looking at -- and Travis has a very set point of view on this where he just says, look, by driving simplicity with a smaller number of partners, you can have better merchant outcomes. And in so doing, you can narrow the gap between GMV and revenue growth. So we're looking at what we can do in a lot of other areas within the fintech stack where we think we can have similar arrangements that can make a lot of sense. We're starting with payments.

Excellent. Can we come back to the 2026 revenue guidance, which was wider than typical. Could you talk a little bit about why the wider range and what assumptions are embedded at the low end and the high end?

Yes. I think the wideness of the range just reflects kind of where I see the potential range of outcomes, at least the start of the year. We have more new product and features shipping in the next 6 months than probably what I've seen in the last 2 to 3 years combined. And I'm not being hyperbolic. I'm being very literal in looking at our product road map.

Part of that is due to increase in investment. Part of it is just -- I'm just seeing a lot of excitement in our product engineering teams and what they can do. And part of it is also efficiencies that we're seeing from use of AI internally and a whole host of tools, which we could get into if we want to. But we're seeing throughput increases that are really exciting.

Because we have so many things kind of coming at once, it's hard for me to have a really easy comparative precedent because we have more good things that could happen this year than what I've seen in years past, thus the wideness of the range. That said, there's still a lot of other factors that kind of move the other direction, like we talked about on our call. There's a lot of excitement about what's going on in the AI and Agentic world, like leading into the holiday period, there was much more conversation about with our merchants with them saying, look, I'm seeing a 30% drop-off in Google search volumes. And I've known how to optimize SEO for 20 years.

Now all of a sudden, all of this discoverability is shifting into these channels that I don't know how to optimize yet. I don't know that they know how to optimize it yet, to be frank. We talk to them all the time. I mean we were one of only 2 platforms mentioned by Google in the UCP announcement, like we're in all of these conversations all the time. And it's complicated. And I think merchants are looking at saying, look, now especially on the B2C side, I don't know if this is the time I really want to be focusing on a big replatform exercise. I just want to make sure that I understand where my volume is coming from.

And so I think that kind of takes a little bit of the air out of the room a little bit on the B2C side of things on replatforming. And so when I was contemplating the range, I just looked at this and said, look, there's a lot of upside that can be here on this business. But I also want to be realistic about what could the lower end of this look like. And I think we'll obviously tighten that range pretty -- a lot as we get through the year.

Great. I want to ask you 1 or 2 on competition and then finish on profitability. Yes. I was hoping you could lay out like given how we started with your segmentation, like who do you see as your core competitors today, but also where do you win? How -- or when do you win against Shopify? Like how big of the opportunity is with the legacy players still? Like how do you think about the competitive landscape and your right to win?

Well, I would say it's fairly different between B2B and B2C. On the B2C side, obviously, at Shopify. We run into them all the time. Magento, obviously as well. The B2B side run into Magento a fair amount. Shopify are more of the simplistic B2B use cases. I would say they have a reasonable solution for more like wholesale.

The more it looks like B2C, the better they tend to do is the way I would describe it. And I don't mean that as a knock. There's a lot of volume there. And I think they do a nice job serving a lot of that. So I think it really kind of depends on the segment, but in a lot of ways, it's obviously going to continue to run into Shopify.

The second part of your question was what again, sorry?

Just thinking about how much of the opportunity is replacing the legacy vendors.

I think it's obviously still there. But what I would say is we are on the platform side of things, obviously going to continue to focus on those competitors. But I think where things are shifting plays itself a lot more towards thinking about this as an agnostic infrastructure layer, where I think Feedonomics is really, really key.

Fundamentally, who is Commerce? Yes, we have a branded Commerce platform solution. But what we're really fundamentally about is we are about merchants need to get product catalog data to surfaces where those products can be discovered and purchased. And then they need to route that order so they can get it to -- at the right price from the right distribution center and do it in a way that's regulatory and compliant. That's fundamentally all our business is.

We are platform agnostic with Feedonomics, payments partner agnostic, channel agnostic. Like our whole value proposition would be for a merchant, if you're trying to get the back-end infrastructure layer that allows you to have your products be discoverable wherever customers are shopping, and we handle all of the hairy back-end infrastructure part of that, whether that's data catalog management, data enrichment and optimization for specific receiving algorithms across all these channels to the tax compliance, security, connections to ERP and order processing, all that kind of hairy nasty back-end part of it, that's really where we thrive. And I think that where things are moving in the market actually gives us more and more advantage as we head towards the future in that.

Excellent. So you've done a tremendous job expanding margins over the last several years. Like how should we think about the pace of margin expansion in the next couple of years?

Well, we announced a restructuring recently that essentially took a chunk of what we had been spending in G&A and the go-to-market functions, redeployed a fair amount of that capital on a cash basis into R&D and then just a lot that we just took out to deliver back out to shareholders.

Why did we do that? Was it some sort of mission of a gigantic problem? I'd say more so, we're doing the same motion that we announced over a year ago. We just don't need the same number of resources to do it as where we thought a year ago. We're deploying a lot of tools on the go-to-market side, whether it's actively or other tools that just allow us to get more efficiency than where we were and enabled us to kind of free up dollars out of the go-to-market funnel and deploy it back into the core product.

And in addition to that, I've been pretty laser-focused on sales and marketing expense efficiency, and it hasn't been anywhere close to where it needs to be for the last year or 2. So this has been an area of focus for all of us for quite a while.

What it means for pace of margin expansion? At the midpoint of our profit guide, non-GAAP operating income was up, I think, 57% year-over-year, and that's despite us not getting to the revenue growth rates that we think the business is capable of. Really proud of that. It's a whole lot easier to drive margin expansion when you're growing like crazy than when you're having to just get really, really narrowly focused on how you're delivering the business and operations.

I'm really proud of the fact that we -- despite the fact we haven't gotten to the revenue that I think we're capable of, we have gotten to a really, really healthy balance sheet. We've increased profitability in a really big way and freed up a lot of cash to reinvest back in R&D without having any negative consequence on what we're doing on the profitability side. Like on a cash investment capital basis, R&D investment is up like 20%, 20%, 30% year-over-year, which I think is really, really outstanding.

To get to the high side of the profit range, I want us to land on the higher side of the revenue range. What we're not going to do is start just plowing taking money out of the business to deliver incrementally a few more basis points in profit at the expense of growth.

What I've looked at in the trade-offs is say, look, I believe by investing in the core product and creating more expansion opportunities with the existing base, we can grow net revenue retention, which ultimately I think is the ultimate barometer of a really healthy business, increased kind of that floor growth rate, which is a much more efficient way of doing it from a sales and marketing basis because you're investing in the core product, you're better off on a gross retention basis and you get a much better flywheel effect versus where in the past, I think we've been plowing more of our capital into new account acquisition, which is just a very expensive way of doing it.

So I think we can continue to expand margins even with modest revenue growth rates. I think we've demonstrated that clearly in the 3 years or so that I've been CFO. But I'd like us to be growing a lot faster than we are. And then at that point, this is a reinvestment discussion. And I think I am a large shareholder. I think I speak on behalf of all of us. I would much rather have faster growth, but I'd rather have 5 points more growth than an extra 500 basis points of profit margin at the moment. And -- but we are going to be disciplined. We are going to continue to run a disciplined business. We're not going to be dumping capital at things that aren't clearly showing strong ROI.

Excellent. We are out of time. Daniel, thank you so much.

Welcome.

Really appreciate it. Thank you so much for conversation. Thank you so much.

Ladies and gentlemen, thank you for standing by, and welcome to the Commerce Fourth Quarter and Fiscal Year 2025 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to turn the conference over to your first speaker today, Tyler Duncan, Senior Vice President, Finance and Investor Relations. You may begin.

Good morning, and welcome to Commerce's Fourth Quarter and Fiscal Year 2025 Earnings Call. We will be discussing the results announced in our press release issued before today's market open. With me are Commerce's Chief Executive Officer, Travis Hess; Chief Financial Officer and Chief Operating Officer, Daniel Lentz.

Today's call will contain certain 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, as well as our expected future business and financial performance, financial condition and our guidance for both the first quarter of 2026 and the full year 2026.

These statements can be identified by words such as expect, anticipate, intend, plan, believe, seek, committed, 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.commerce.com.

With that, let me turn the call over to Travis.

Thanks, Tyler. 2025 was an important year for Commerce, a year in which we achieved meaningful operational improvements and laid the foundation for sustainable growth. We delivered revenue of $342 million, up approximately 3% year-over-year, and non-GAAP operating income finished at $28 million with strong improvements to cash generation. We also delivered our highest sequential improvement in subscription ARR in over 1.5 years in Q4.

Over the past 12 months, we have executed on a long-term strategy focused on 3 priorities: Simplifying the business, realigning investment around our highest value initiatives and building the infrastructure to scale as AI and agentic Commerce reshapes how merchants engage with buyers. We've improved efficiency, reinvested savings in the product innovation and increased profitability and cash flow, allowing us to operate with greater leverage and speed.

We also reintroduced ourselves to the market under a unified brand, Commerce, which reflects how we now operate, as a connected platform across storefronts, product data, experience and payments. Importantly, 2025 was not just about internal alignment. It was about accelerating our pace of innovation and driving sustainable growth.

We continue to see strong momentum in B2B with B2B-oriented customers representing the majority of our new platform, ARR over the past 3 quarters. Subscription ARR from customers using BigCommerce B2B addition grew nearly 20% in 2025 and delivered the highest retention rates across our product portfolio. During Q4, we added several new industrial manufacturing and distribution customers, including Build It Right, a leading distributor of specialized drilling equipment, premier water tanks, a water truck manufacturer hawk Research Labs, a provider of high-performance refinishing coating systems; and KH Industries, a manufacturer of electrical and AV components. These wins, together with the continued performance of our existing customer base, underscore both the durability of B2B demand and the stickiness of our differentiated B2B capabilities.

We are also seeing continued momentum with leading consumer brands. H&M, The RealReal and Petco have adopted Feedonomics' data optimization platform to enhance product visibility and performance across digital channels alongside Grainger, one of the largest industrial distributors in North America. On the BigCommerce platform, we added European apparel brand, Lascana and successfully renewed our long-standing relationship with luxury department store, Harvey Nichols, reinforcing our ability to support complex, global retail use cases across both new and existing customers.

In parallel, we advanced our product innovation and product-led growth agenda with a late Q3 launch of Surface, our self-service version of Feedonomics. Surface enables BigCommerce merchants to enrich and syndicate their product catalog across Google Shopping, Meta and soon additional agentic advertising and marketplace channels. The early results are compelling. In Q4, merchants using Surface saw an average 24 points higher GMV growth compared to nonusers, a strong early proof point that better data leads to better discovery and conversion. Notably, that material difference in GMV growth was from only the advertising channels built into the initial release. We plan to quickly roll out additional advertising, marketplace and agenetic channels within surface in the coming months to drive broader adoption and value to our merchants while also driving monetization growth within our customer base.

We also expanded partnerships with OpenAI, Microsoft CoPilot, Google Gemini and Perplexity to position Commerce is an AI-ready infrastructure layer. These integrations are built to help our merchants bolster visibility and conversion and next-gen shopping and discovery flows with no added integration work or technical lift on their side. Notably, Commerce is one of only two commerce platforms featured in Google's announcements of its new Universal Commerce protocol, further reinforcing our strategic alignment with leading AI and discovery platforms.

We partnered with PayPal to introduce BigCommerce payments, which remains on track to launch around the end of Q1 2026. We expect that this new solution will give small and midsized merchants, a fast, integrated way to activate payments, simplify onboarding and drive higher monetization of GMV.

We've now completed many key elements to our transformation. We've integrated our products and brought them under a unified brand, we have the leadership team in place to drive growth, we have realized material efficiencies in our operations to fuel reinvestment in our products. And in 2026, we are increasing R&D investment by nearly 30%, focusing on 4 clear priorities that will drive growth.

First, we are delivering AI capabilities directly into our core Commerce platform for both B2B and B2C customers, while extending Feedonomics as the data enrichment and infrastructure layer for agentic commerce. This drives optimized product discovery and shopping experiences across branded storefronts as well as advertising, marketplace and agentic channels, accelerating time to value and retention across our installed base.

Second, we are expanding Feedonomics surface into more channels for our BigCommerce merchant, which we believe is a powerful driver of both customer outcomes and monetization.

Third, we are rolling out BigCommerce payments, starting with the integration of our PayPal powered solution to simplify onboarding for merchants and improved monetization of GMV.

And fourth, we are expanding Makeswift, first as a modern visual editor and page builder for our BigCommerce customers and then launching a stand-alone version that extends our reach to third-party content and Commerce ecosystems. These represent just a sample of what we plan to bring to market this year. These initiatives are designed to increase platform usage, improve attach rates across BigCommerce, Feedonomics and Makeswift and unlock new monetization via payments, data and bundling. And we are doing this in a commerce environment that is rapidly fragmenting across AI services.

Buyers are increasingly starting their journey in AI interfaces, not on a brand site. Our role is to make sure our merchants are discoverable, trustworthy and transactable wherever that journey begins or ends. To better reflect this evolution, we are introducing two new key metrics. First, gross merchandise volume, otherwise known as GMV, which is a clear measure of the scale of our platform. Our platform delivered GMV of nearly $32 billion in 2025 and with consistent double-digit growth over the last several years.

Second, net revenue retention, otherwise known as NRR, which reflects our ability to grow within our customer base across product lines and services across our entire business, not just a subset of customers or products. Daniel will elaborate on these metrics in more detail shortly, but I would like to offer my perspective on their importance and what they reflect about our business.

Commerce operates one of the largest installed bases in GMV footprints in e-commerce, with GMV growing 12% in 2025 and 11% in 2024. GMV growth and NRR at a total business level, provide a clearer picture of our scale, health and the growth opportunity ahead, driving improvement in both metrics is a top priority for us in 2026. The opportunities ahead across AI-driven discovery and checkout first-party payments and product data infrastructure are significant and expanding. While I'm pleased with the strong foundation we have built through improvements to efficiency, profitability and product innovation in 2025, we have not yet delivered on the full growth potential of this business for our shareholders. That changes in 2026 as we shift from foundation building to execution and monetization.

With that, I will turn it over to Daniel.

Thanks, Travis. Commerce serves tens of thousands of merchants globally and facilitates nearly $32 billion in annual GMV across B2C and B2B customers on the BigCommerce platform. Feedonomics remain central to our data strategy, powering discovery, performance and monetization across both traditional and AI-driven channels.

Q4 revenue was $89.5 million, up 3% year-over-year. We expanded full year non-GAAP operating margin by 230 basis points versus 2024 and 990 basis points versus 2023, underscoring efficiency gains and organizational simplification. We ended the year with $359 million in ARR and continued strengthening our underlying business fundamentals.

Operating cash flow was $3 million and $27 million for Q4 and 2025, respectively, which reflects more disciplined operating controls and improved working capital management. We closed the year with $143 million in cash, cash equivalents and marketable securities with no material debt maturities until 2028, providing flexibility to reinvest in our products to accelerate growth.

We reduced our net debt position from $33 million in 2024 to $11 million in 2025, a decrease of nearly 67% year-over-year. For the 3 months ended December 31, 2025, we had approximately 81.4 million common shares outstanding and 82.0 million fully diluted shares outstanding.

As Travis mentioned previously, we are adjusting certain metrics disclosures to better reflect business performance and incorporate investor feedback. Enterprise ARR ended the year at $287 million, Enterprise customer count was 6,648, up 897 accounts sequentially, and Enterprise account ARPA, or average revenue per account, was 43,200 down 8% sequentially. The increase in customer count and decrease in ARPA was partially driven by a Q4 go-to-market program to upgrade select customer accounts from our essentials plans to Enterprise plans.

While we were encouraged by the progress and healthy engagement and retention across our Enterprise accounts last quarter, we believe that driving dollarized expansion across the entire business and customers of all sizes is a better indicator of underlying performance than the growth of a select subset of customers alone. Beginning this quarter, we are retiring Enterprise ARR and related metrics because expansion is increasingly driven by product cross-sell, data services, payments and bundled capabilities that cut across legacy plan definitions.

In place of those disclosures, we will begin sharing quarterly two new metrics that better capture our scale and monetization efficiency. First, starting this quarter, we are now sharing total GMV, which reached nearly $32 billion in 2025 and grew 11% and 12% in 2024 and 2025, respectively. We have a significant opportunity to better scale ARR growth at a similar rate to GMV. The gap between GMV growth and our top line growth reflects several factors, primarily our strong growth in B2B, where credit card transactions represent a smaller percent of the payments mix and yield lower revenue share than B2C. To be clear, we do not expect ARR to grow in lockstep with GMV, but we do expect the gap to narrow over time as we drive higher payments monetization mix, product cross-sell and new product-led monetization models.

Second, we will now share company-wide net revenue retention to provide greater visibility into expansion trends across our entire business. NRR was 95.2% in Q4, up from 95.0% in Q4 2024. Driving improvement in this metric is central to our company's strategy and underpins many of our investment priorities. Specifically, improving time to value for our customers, cross-product adoption and retention through tighter integration of Feedonomics payments and storefront capabilities, the areas that most directly influence expansion and churn. We believe this shift in reporting aligns more closely with how we are building and operating the business and provides clearer transparency and comparability for our investors.

Now let me walk through guidance. For Q1 2026, we expect revenue between $82.5 million and $83.5 million, and we expect non-GAAP operating income between $9.3 million and $10.3 million. For the full year 2026, we expect revenue between $347.5 million and $369.5 million and non-GAAP operating income between $34 million and $53 million. This outlook represents 2% to 8% full year growth with non-GAAP operating margins of 10% to 14% at the revenue guidance midpoint. Our guidance exceeds current Street consensus both on revenue and profitability, reflecting the progress we have made in 2025.

Importantly, after giving effect to anticipated operational restructuring payments, we anticipate cash and cash equivalents to exceed total long-term debt by mid-2026, and we expect to deliver GAAP profitability for the full year 2026, the first time in Commerce's history. This milestone is a direct result of disciplined execution and expanding product model and meaningful operational leverage. On a Rule of 40 basis, our non-GAAP guidance implies the combined growth plus margin performance of approximately 11% to 22%, depending on how we execute within our ranges.

Let me close with a few reasons we believe Commerce is positioned to deliver long-term value. We operated nearly $360 million in ARR with gross margins approaching 80%. We are generating meaningful profit and cash flow and expect to continue to do so this year with non-GAAP operating income 57% higher year-over-year at the midpoint. We facilitate nearly $32 billion in annual GMV with consistent double-digit growth. This business has yet to reach its full potential. We see meaningful opportunities to drive faster growth while maintaining the discipline that has delivered substantial improvements to profitability over the last 2 to 3 years. This is a structurally stronger business than it was a year ago. Our focus is squarely on execution, driving stronger growth and sustainable margin expansion.

With that, operator, let's open it up for questions.

[Operator Instructions] The first question comes from Raimo Lenschow from Barclays.

This is Koji on for Raimo. I wanted to talk about where you're seeing the agentic commerce landscape as we've seen the Commerce integrations. And as that sort of evolves, where do you see the biggest opportunity for your platform? And how do you expect that -- how do you expect to capture that over the near and the long term?

Thanks for the question. That's a good one. Listen, we're seeing lots of momentum. I think as others in the market have as well, obviously, aligning with the major players, certainly, Stripe and PayPal are two massive partners and valuable partners to us. We've aligned to their standards and schemas. We're doing the same across the answer engines, all which have their own intricacies. I think we've been pretty public about where we are with several of them. We are in a position that have mapped to schemas across all the answer engines. Ultimately, a lot of these things are dated, particularly as it relates to checkout. So as an example, Perplexity, we've demoed a genetic checkout and have been live on that surface for some time now. In the case of OpenAI, we've mapped to their schema, but again, that is gated currently by OpenAI. They are not openly accepting merchants. So we're at the mercy of their thresholds. And they're in to table as far as sequencing. Same for Google. We are mapped to their schema. We're in testing right now to get BC merchants on there, but UCP only works with data and check out and check out is also gated that's going on a case-by-case basis. We're in a good position to take advantage of that, and we'll be testing with Google over the next quarter.

The next question comes from the line of Ken Wong from Oppenheimer.

Travis, it was good to see that GMV has grown 12%. It does show that you guys are driving some sustainability there. Yet when I do the math, it looks like take rate perhaps kind of inch down a little bit. And as you talk about moving from foundation to monetization, how should we kind of anticipate what happens to take rate? Maybe you can talk about the partnership with PayPal, your own payment product. What's the path going forward there?

Yes, Ken, great question. I'll take the first part of it and then turn it to Daniel for a minute. Monetization is going to come from a couple of different capacities. One, obviously, we're shipping more product and really focusing on the existing installed base to monetize that as laid out in some of the opening remarks by Daniel. Part of that is BigCommerce payment. Obviously, I think this is a dramatically different approach than where the company was a year ago, where we really didn't talk about this in any capacity. We've taken a more opinionated approach. We'll continue to see that evolve over time as would be expected to monetize. We're also looking at ways to better monetize the B2B installed base. As Daniel also laid out by definition, has a slightly different nuance to it, which is reflective in those numbers. But I would expect monetization to come really twofold. Growth from existing customers through the shipment of new products whether that's product-led growth or enhancements or new AI SKUs, certainly, as well as obviously monetizing payment. I'll turn it over to Daniel as it relates to take rate and things like that.

Yes. Ken, I think it's a great question because I think it gets that why we felt it made a lot of sense to introduce the new metrics that we introduced. I think, by and large, I would say, our platform is larger than probably what it was known to be within the market. I think it's also growing faster as you mentioned on the GMV metric than probably what was broadly known. What I don't think was as well known and what we really wanted to create some transparency around is some of the why behind the things that we are doing here within the company. Take rate is not where it can be. And part of that is because of the fact that B2B customers just do fewer credit card transactions, so we make less payments rev share. But beyond that, we also have an opportunity to better retain and expand the base. And you see that in the NRR number, which is not where it needs to be, but we wanted to be transparent about where it is. I don't think the metrics should be surprising relative to previous NRR disclosures that we made. I think it's pretty consistent with that. But what it really shows is an interesting story of opportunity within the business where it's a large, growing and stable platform. We just haven't had enough focus and success in having our growth rates track along with the growth rate of the underlying GMV on the platform. That gets into why we're taking a different point of view on how we're approaching payments. We're starting with kind of a white labeled version with PayPal as our first partner, which we think is great. But that's not the end of where that's going. And when you look at a lot of the product launches and initiatives that we have coming, they have embedded new monetization models that lead to better NRR and expansion of our existing base, which is also a lower customer acquisition cost, which can allow the business to not only grow faster but grow more profitably in the process. And so we just thought it was really important to add transparency around that really because we think it reflects the opportunity that has Travis and I so excited. We have a lot of work to do. I think that's evident in the numbers as well. But there's a lot of really good opportunities underneath that, that we're excited about.

Understood. Very helpful. And Daniel, second, just on the guidance range for fiscal '26 to $20 million plus revenue range, much larger than the $8 million range you guys started off with in '25. I'd argue there's probably more uncertainty going into '25 versus what the foundation you guys have laid for '26. Can you help me understand what's being considered in the guidance that would create such a large delta?

Yes, great question, and I expected this question actually. So let me kind of go on either end of the range. So if you look at where we are from like a Q1 guide, it looks a little conservative. That's just because we took a little bit of conservatism exiting the holiday GMV that we saw in the period, which was a little bit different -- a little bit lower than where we thought it was going to be what you see in the Q4 results, which wasn't a real big deal. But we kind of carried that into a little bit of conservatism in Q1 and carrying that forward in case we start to see. Just some sort of like macro issues. There's just been a lot of uncertainty, I'd say, in the labor market in tech, in particular. So the low end of the range kind of reflects that. But the reason we have such a higher dispersion than normal is because we also see a lot more upside this year than where we've been in years past because we have so much innovation that we have on the road map that's coming this year. .

Now take payments as an example. We're not going to be having gross accounting, it's going to be net, like it's we are expecting to see strong incremental growth on that over time, but that's one of probably 5 or 6 different things that are coming that have us optimistic about where the year can go. We still need to deliver on that, and we think the midpoint fairly reflects where we see the business at this time, but we thought it was important for investors to understand kind of the range of outcomes and what we see in the business. We have a lot more going on right now at the beginning of the year from an innovation and what we're trying to ship and what we've had at any other time in the 7 years that I've been here, but we got to deliver on those things, and we felt that having a broader range than we have in the past accurately reflects that.

We now have a question from the line of DJ Hynes from Canaccord.

Daniel, I'll start with you and then one for Travis after. So starting on the numbers, absent the program to upgrade select customers from Essentials to Enterprise. What was core enterprise ARR growth in the quarter?

It was slightly up apart from that. That was a big driver on why we saw that move that we saw. It was in line to a little better probably than where we were in prior quarters. We didn't make that change because we were trying to kind of be unclear about what's going on in the underlying. We just feel overall, it was better to kind of pivot the focus to where, frankly, Travis and I are running the business, which is looking at how are we monetizing underlying GMV. And if you look, in particular, DJ, like what we launched on Surface, the self-service version of Feedonomics as an example, that's primarily focused on smaller customers, not our larger customers. And so as we been talking over the last several quarters that our focus is on dollarized expansion, not particular count of a subset of customers while it's important, it's an indicator, but not the most important ones and not how we were running the business anyway. And so we felt it was important to make this pivot.

Yes. And just a clarification on the metrics going forward. I understand we're not going to talk about enterprise ARR anymore. Are you not talking about ARR at all?

Let me clarify this. We are going to continue to disclose ARR every single quarter. There is no change to that. We are also going to continue to talk about subscription ARR, which is simply the difference between total ARR in the last 12 months of partner and services revenue. So no change there. All we're going to be doing, I would say, is additive, which is we're going to start disclosing GMV on a quarterly basis beginning next quarter. So you'll be able to see the quarter over -- like quarter-over-quarter versus prior year going forward. We're also going to be sharing total NRR on a total business level, every single quarter, which that number kind of definitionally is a rolling prior 12-month metric. And so it's going to make it very easy for investors to see how are we doing in terms of total platform growth and stability on the GMV side. How are our initiatives making progress or not depending on how results go and driving better monetization and realizing the opportunity to better track overall top line ARR growth underneath it. The only thing that we're going to be doing is taking away enterprise-specific metrics. But if anything, I actually think this adds better transparency to what's going on into the business to be really clear, that's the intent.

Yes. Okay. Very clear. And then the follow-up for Travis. So it sounds like Shopify's agentic plan, which I talked about yesterday, is directly competitive with Feedonomics, right? I mean they talked about using that for non-Shopify customers kind of in the same way that you talked about Feedonomics. Is that right? And if so, maybe you can kind of go a little deeper on what positions the Commerce and Feedonomics to win versus what Shopify is doing?

Yes. There's some overlap there, but I would say, by definition, first of all, it's a completely different cohort of where those products historically serve. I would say with Feedonomics, it served primarily what I would define as enterprise, you're talking about the largest branded manufacturers and retailers in the world. We do have a large subset of those clients that actually run on Shopify for platform but use Feedonomics. That's for a reason, and it's not because it costs less. It's because they can't get the value out of the data enrichment from what Shopify does or how they do it, that they get from Feedonomics because, again, that product data is enriched bespokely for the surfaces by which they show up on the syndication of which will eventually become commoditized. I mean all these all these protocols will become open, they'll become standardized so that agents can interact with them. So there's no value proposition in the syndication. The value proposition is in the data enrichment and orchestration. And it's not just orchestration of the data, it's also the orchestration of, say, inventory availability.

So as people get into contextualized conversations, and you're looking for something that you need for next weekend, that contextualized input as to marry against what inventory is available, just like Google ads do today as far as what's available close to you by a particular time frame. So it's doing a lot of things behind the scenes that by definition is different. It is agnostic to platform. So we accept the fact that there are a lot of merchants that are happy with their current platform, are in cable of moving current platforms, but still have a material need to show up relatively and valuably across services their customers want to meet them. Our responsibility is to enrich and syndicate that agnostically and at scale. That's the biggest difference.

We are not trying to monetize this through a checkout. We are trying to drive merchant value to the extent that also overlaps with BigCommerce. And to Daniel's point earlier, the self-service version of dynamics, which has been one of the things we hadn't done yet here having bought Feedonomics is having a self-service version to make it available for smaller merchants. That's what we're most excited about. That will overlap probably the most with what Shopify is doing and the overlap is really we're offering it for a similar cohort on our platform that they're offering on their platform. I'm not saying one is better than the other. It's just by definition, native to the platform itself, and we've just begun running -- rolling that out over the last quarter, if that's helpful.

The next question comes from the line of Maddie Schrage from KeyBanc CM.

My first one is just on the payments offering. Could you walk us through the cadence of PSR contributions throughout 2026? And I guess, could you walk us through how that would also touch margins?

Yes. So we are on track to launch BigCommerce payments roughly around the end of Q1, that's the plan today. We're also going to be making some changes to kind of underlying pricing and packaging on our platform plans around the same time to correspond with the integration of BigCommerce payments into our core offerings. One of the reasons we're excited to partner with PayPal is we have such a huge installed base of existing customers that are already using PayPal, which makes it far easier for us to ship as many existing customers into BigCommerce payments after launch and then start incrementally growing it over time. We're going to have, I'd say, a two-pronged effort. One is to get as many new merchants that are signing up to go into that solution, which is going to be primarily focused at the outset on small business and mid-market customers, I would say. There will be more features we'll launch more across the back half of the year that I think will make it more relevant for large corporate and enterprise customers. But -- so we can kind of wave one is we want to get as many new customers into that as possible, but we're also going to have a lot of ways that we are going to look at other customers within our base and see where we can get them to switch into that, where it makes sense, and it doesn't conflict with existing arrangements, obviously, with other partners where we have we have wonderful relationships with a number of payment partners, including Stripe and Adyen and others and we're not. We have no intention of disrupting that.

So I think from a margin perspective, we do expect it to be additive across the year. It takes the place of other existing agreements with PayPal. So it's not all 100% greenfield on top of where we already were, which we baked in the guidance and factored that into the range. But we see this really -- Maddie, I think it's important. This is a start of how we're thinking about the strategy here. This is a very demonstrable pivot from how we've thought about this in the past. We think it's very possible and good to be both open and opinionated. In the past from a fintech point of view or a payments point of view, it's been very much saying, look, use whoever you want, we will continue to allow customers to have huge wide choice in who they want to use on the payment side. But we'd like to be able to bring more focus to a smaller number of partners and included the branded solution so that we can have better technical integrations and better results for customers by focusing on perhaps a smaller number of partners going forward. And then over time, might we expand this further and start investigating whether we want to take further steps towards the PSP or things like that.

Those are certainly things we're still evaluating. We just felt it was prudent as a first step. Let's start with this. see how we can drive adoption on this, get margin improvement over time and then expand this further as we go to better link up our overall growth rate to GMV growth rate on the platform, which as we said, has been really strong and stable for several years.

Understood. And then I guess my second question kind of piggybacks off of that. But as you guys become more penetrated on the B2B side of things, and that's lower credit card penetration, how does that kind of offset what the take rates would be going forward?

I think you see that and why our take rates -- to the question we got earlier, like take rates, if you just derive total ARR into GMV. So it went down slightly over the course of the last quarter. A lot of that's B2B mix and that's the issue that you described. Some of that's somewhat inevitable. I mean, like I think what we're really looking at is to say, okay, we have a lot of really unique competitive differentiation in B2B, and we want to encourage merchants to have all great services in all of the different ways that they need their customers to be paying us, whether that's ACH or going through POs and invoicing or credit card transactions. What we're going to do is narrow the aperture of the number of partners that we're really focusing on within B2B so that we can have better solutions offerings for customers that have expanded payments opportunities and monetization opportunities for us over time as well. it's always going to look a little different than the B2C side of things because of the credit card mix, but we still think there is a lot of opportunity to incrementally improve monetization of B2B. Even if on an apples-to-apples basis, it's intrinsically always going to be a little different than B2C. There's a lot of ways that we still see that we can improve that and make -- and create upside there even within the B2B cohort.

[Operator Instructions] The next question comes from the line of Koji Ikeda from Bank of America.

I wanted to ask about the NRR metric being 95. Being sub-100 raises a lot of questions on growth durability. And so how should we be thinking about the core drivers to expand this metric in the near term? And what sort of NRR assumptions are baked into the 2026 guide?

This is Daniel. I'll take that one. So that the number for the total business is 95. I don't believe should be surprising when the metric for Enterprise accounts and that prior disclosure was around 100. And I had said it was kind of in the 99 to 100 range. I think we finished last year, I think at 98. So the fact that at a total business level, we're 300 basis points lower than that, I don't think really should be surprising. The core to the question is, obviously, we do not consider that number acceptable, and it's nowhere near best-in-class in where it needs to be. I think it reflects the fact that we have not add the focus that we need on delighting and expanding our existing customers. And if you look at why -- why did we make the changes that we made from a restructuring basis in the announcement that we made last quarter, is because, one, we can run the business a lot more efficiently than where we had before. Like this is not a pivot or a change. We're running the same plan that we've been talking about for the last year. We can just do it with less capital in the go-to-market side in particular, which is what's enabling us to redeploy dollars into R&D and investments that are directly focused on what we're doing on the NRR side of things. And I think the fact that we're able to increase our capital investment in R&D in 2026, nearly 30%, while having a midpoint guide that's nearly 60% higher profit growth year-over-year, I think shows how much wins we've seen within the business and how we're operating that creates efficiency to free up capital to reinvest.

If you look at just the initiatives that Travis mentioned in his prepared remarks, in particular, I would argue almost every single one of them is focused on getting NRR to the number where it should be. Launching Surface, great. We had 24 points higher GMV growth for customers that are using it that weren't. And that was only with two advertising channels built into the initial release, that drives better retention and it's a new monetization path that didn't exist before. Launching Makeswift as our new page builder, which is going to happen roughly in the next quarter or so. Same thing that has new monetization models built in. And a lot of the places where we're directing dollars is on core product performance to delight our customers to help improve retention and expansion.

Yes. And I think foundationally, Koji, over the last year, 1.5 years, we've laid the foundation to be able to actually execute on this. I know it hasn't been sexy or super exciting and a lot of the changes that we've made, certainly, but they were intentional. And intentional to get to this point, it's still to Daniel's point, we've got a lot of work to do, like it's certainly not mission accomplished by any stretch, but we actually have the foundation in place to take advantage of this. I think that's reflected in the guide. And certainly will be measured in ongoing capacity on efficacy against this, but we think net revenue retention is the ultimate metric of the business and where we are. And given that transparency to The Street, we think is helpful and less confusing than guiding on a particular type of plan that might be misconstrued, which is where we were in the past around Enterprise.

And one last point, Koji, I would make. Just to your specific question at the end, essentially what's baked into the guide. What's baked into the guide is incremental improvements across the year, but not so dramatic in improvement that it's something that's unrealistic, and we feel like we can achieve within the 12-month period. I think if you just look at the pace of new account additions and growth over the course of the last 2 years or so, it's been pretty stable. We want to see that inch up incrementally. But we have a lot of levers to pull to improve this, and we don't need to see some dramatic improvement that's unrealistic in order to get to the numbers that we've included in our guidance. We need to get better, but we think that it's certainly achievable.

Got it. Maybe a question for either of you. Travis, in your prepared remarks, you talked about Commerce.com becoming successful in the AI-ready infrastructure layer for B2B and B2B Commerce -- B2B and B2C Commerce strategies. Like if you guys are successful with that, what would it mean for customer buying patterns of the three big products, BigCommerce, Feedonomics and mix with? Does that change the algorithm at all?

I think it -- well, it's going to organically change just because those three products would be more easily available certainly to the installed base, which was the intention, I think, I've said this publicly a couple of times now. We have not focused enough on the existing customer installed base, quite frankly. We weren't in a situation to be able to do it because these other products weren't installed. And there was a lot of duplicity in both cost and just distraction and overall road map unintended duplicative -- duplicative, sorry. Duplicative, it's early in the morning. anyway, we weren't in a position to take advantage of that. So that's part of the thesis here was integrating those products and making it available.

To your point, there's also a slightly different wedge strategy as well now as well. Feedonomics being agnostic. We've talked about make Swift going on from a distribution perspective into other ecosystems. We now have creative new ways to access business outside our own 4 walls at the same time and a land and expand motion, which is also something we didn't have the systems, we didn't have the infrastructure didn't have the motion to be able to do that. So I think that will impact AI is obviously accelerating all of those things. So it's allowing us to go at a much faster, more efficient pace which is allowing us to do more with less. That's probably the biggest impact as far as cadence and things are concerned. So if you'd asked this 2 years ago, if we thought we had accomplished this in the time frame. Without AI, I don't think that would be possible. So I think the speed by which we will deliver product and are delivering product, the speed by which we're enabling our sales folks and go-to-market teams and the speed by which we're actually able to take things to market and drive efficacy is obviously radically improved.

We now have a question from the line of Josh Baer from Morgan Stanley.

Wanted to follow up on the '26 guidance range question, which you answered from a growth perspective. On the margin side, the range for operating income also wide. I guess the question is really like is there -- how should growth and revenue coincide with margins, is there a framework? Is it a scenario where the upside on revenue is payments, net recognition that drops to the bottom line and drives the higher margins? Or is it a scenario where the slower growth you lean into profitability?

That's a great question, Josh. It's Daniel, I'll take that one. I would say just the way that Travis oo I are operating this approach in the year, growth is paramount. That is the focus. We are confident. I think we've demonstrated this over the course of the last several years. We run a disciplined business. We run a disciplined P&L. We need to be growing faster. I'm very confident as we grow, we are going to deliver strong margins as we go through. And I think the fact that we delivered such a materially higher guidance and profit that I think probably where the Street expected us to be for 2026, while reinvesting in growth shows that priority. If we end up on the high side of the range, obviously, that's going to throw off extra profit that would take us to the higher part of the range. But if we're landing on the high side of where we talked about on the revenue guide, Travis and I are going to look for opportunities to reinvest that further into growth. We're going to do it in ways that we think are prudent. We're not going to throw money after high cost of acquisition, low ROI things like we need to get materially better in sales and marketing efficiency. And that's one of the reasons we made some of the redeployments and changes that we made because we see that in the numbers the same way that our investors have over the course of the last year or 2. But where we have opportunities to reinvest, if we're coming in on the high side of the revenue range, we're going to do that because we want to plow more back into growth as we get momentum going further.

Okay. That makes sense. So if we come in at the high end on revenue, we will see more investment because the return is there. And if we're at the low end on revenue, like that's going to be a negative for the margins coming at the...

Let me just clarify. If we come in on the lower side of the revenue guidance range, we're going to tighten the belt where we can to make sure that we deliver within the range that we provided on profit, right? If we end up on the high side of the revenue range, we run an 80% gross margin business. A lot of that is going to flow to the bottom line, and we're not going to reinvest every single dollar. A lot of what we would put in, we'd probably put into additional capital in R&D and you've got normal capitalized software rules and things like that, that we would need to go through. So it would end up generating additional profit. So we probably -- high side of revenue range is high side of profit range even with reinvestment, but we're going to do it in a way that we think is really, really prudent. We're not just going to go throwing money around everywhere. I think we've shown really clearly that's not how we run the business.

Exactly. Okay. That's super helpful. And then on the disclosures, one follow-up. With the removal of the Enterprise related metrics. Like is there a customer count disclosure now going forward? And just really wondering how you think it's best that we track an important element of the business around net new customers, market share and go-to-market initiatives and progress.

Yes. We're not going to have a specific customer count metric going forward. It's something that we will speak to. So investors kind of understand where it is. We think one of the best ways to understand how we're doing on a market share basis is how are we doing on GMV growth? And I think for a long time, we got questions from a lot of investors specifically about that because that's also how they were trying to understand overall market share growth because our customer count metric that we were disclosing was a subset metric anyway. It didn't represent the breadth of the count of customers on the platform to begin with. I mean -- okay, we're talking we have 6,000 accounts that happen to buy our enterprise plans, tens of thousands of customers that are running on the platform. If you look at B2B by count, we think we're probably one of the biggest B2B platforms in the world and that's at a subset. But I think the most important thing is, are those customers being retained and expanding. That's reflected in NRR. There's some goodness there in some of the underlying parts, but we need to get a lot better. But if you look, importantly, if the overall GMV metric, the scale of this business and the health of the growth and what we see in the underlying platform, is good. We need to do a better job orienting the business to drive monetization of that growth down to our shareholders, and that's where we are focused and where we've been focused for the last year, we just didn't think that the metrics that we have are really providing a good enough why to connect the dots between where we were applying capital and where we see opportunity to drive monetization of the business.

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

Travis, maybe to start, I wanted to get your perspective on how agentic commerce may be impacting replatforming opportunities? On one hand, I could see it driving a lot of innovation and people looking at new purchases. And I also could see it maybe slowing purchasing decisions. Any perspective on what you're seeing from the impact of agentic, if at all?

Yes, Brian, great question. Certainly, in 2025, it impacted it on the B2C side, most notably, I would say the back half of the year. Obviously, we were disappointed in what we delivered in the back half of the year, I think we expected more there. I think the good news is we've got great product market fit for agentic. We're obviously in the midst of a lot of positive things there, but the downside is the collateral damages you've got brands and retailers where traffic has dropped off, obviously, and that's become the importance as opposed to replatforming. It's not killed it. We certainly have a healthy pipeline. But yes, I don't think it's been helpful in speeding up platforms, particularly upmarket on B2C. I would expect it to change a little bit, but I think what's also happening through agentic is it's spawning new commercial models, right, where you're seeing components of different aspects like our agentic checkout product, as an example, is an easy use case of an existing Feedonomics client where we're enriching and syndicating that catalog either directly or through financial partners like PayPal, where again, that checkout may happen on our rails with our cart and our order orchestration capabilities within Fido into somebody else's order management system.

Are you going to see more and more of those sorts of things? So different commercial models, different components and things and mixing coming together. I think our North Star and all of this is to remain agnostic to what's best for our merchants. So if we're providing all of that infrastructure, fantastic, that makes the most sense. We're providing a portion of it, and that makes the most sense. I think in the example earlier, I think Ken made ask the question around to Feedo. One of the biggest differentiators for us on the Feedonomics side and how it differentiates in market are the control mechanisms within that product. Larger brands, enterprise, branded manufacturers and retailers need those controls. And they also need the agnosticism because if they're going through agentic checkout regardless of infrastructure, they want to make sure that, that aligns with their back-office systems, meaning their point of sale and other channels by which people may transact. So if I buy something agentically, through say ChatGPT, and I want to return that product in store that needs to have interconnectivity there. And that technology isn't agnostic and they're forced to use different rails, that sink is off and it creates a bad customer experience and increased cost for the merchant. So I know these are weird use cases that nobody thinks about because shopping just happens to the customer, but these are very complicated, nuanced expensive mistakes in the back end, and that's where you're seeing a lot of hesitation from the more enterprise-oriented branded manufacturers and retailers. They know how complicated this is, they know how hard it is and they know how expensive it is to go create friction in those buying experiences. So when they do this, they want to make sure they do it right and they adjust accordingly, and we're allowing them to do that through some of our components and some of our capabilities. And that's what's probably slowing up more of the replatforming than anything else certainly upmarket, if that's helpful.

No, that's great color. And Daniel, maybe one for you. I appreciate all the new disclosures. But any perspective that you can give us on how the split of GMV growth in 2025 looked of B2B versus B2C?

Yes. I would say -- I mean we called out last year, customers using B2B addition, ARR from those customers grew almost 20%. GMV was similar. B2B is a disproportionate grower as a share of GMV, which is why you see some of the kind of derived slight decline in net take rates when you look at ARR as a percentage of total GMV again, it's a high-class problem. It's growing really, really well. It's differentiated. It's doing great in market. It's kind of fun to be able to look to our product leaders and say, look, we got to get monetization up. You're doing a great job driving growth in the platform. We need to close the gap between monetization between B2B and B2C. Some of that spread is inevitable. It just is, but there's a lot of opportunities for us to improve that.

This concludes our question-and-answer session. I would like to turn the conference back over to Travis Hess, CEO, for any closing remarks.

Thank you. I want to thank everyone, obviously, for attending. We're excited to execute against our strategy laid out and look forward to discussing further with you all next quarter. Thanks very much.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

All right. Thanks for joining us.

Let's start kind of big picture a little bit, like we have Cyber Week -- like how did that play out for you guys? Like just more end demand question?

Yes, I'd say, by and large, we're off to a good start on the quarter. I want to see where the quarter finishes up. I mean some quarters are interesting where we have really, really heavy on Friday or it stretches across the Cyber 5. Sometimes it's really good a little bit after. I want to wait and see how we get through the full holiday season, but I'd say so far, so good.

Nothing nothing so different to kind of changes in my thinking about where we were from an overall guidance perspective for the quarter. So I'd say off to a good start.

And then the -- what do you -- are there any kind of new trends or things you see in terms of industry, not so much about you now, but like what your customers are saying, seeing?

Yes. I think this has been a really fascinating year because I feel like it's almost like back being in another case study class in business school about how emerging technology can affect an industry in a really, really quick way. I think in a lot of ways, this year, at the start of the year, I thought this was going to be a year about tariffs.

And actually, in a lot of ways, I feel what it actually ended up is a year about technology-changing discoverability traffic and I would say for the LLM and all this type of stuff. I feel like the adoption of the technology by the consumer has gone faster than the e-commerce industry's ability to actually help our customers be able to understand where the traffic is going, moving from and how to optimize that.

And so I think it made it very interesting from a holiday traffic perspective because I feel that for a lot of merchants, they're seeing traffic coming in, but they have lost visibility to where some of that traffic is coming from because they don't have the same pixel tracking that they had from Google and other places. And also discoverability in agentic commerce is very different from Checkout in agentic commerce.

So I feel like right now, to be honest in the industry, I feel like it's almost like a press release war, where the substance is not always there because the tech is still sorting itself out. But it's ended to being a very interesting year because a lot of brands are having to scramble and figure out what are we going to do about this area.

In some ways, I think it's made the demand environment a little different than I expected at the beginning of the year, I had some concerns about to what extent would tariffs become very inflationary across the year. We haven't seen a lot of really negative signs in that area. There may also just be absence of data or maybe early. It's hard to say.

It's hard for me to, at least in the U.S. domestic market for tariff increases as much to not become inflationary. So let me injury in out on that. But I think that's been a little bit less of an effect on the absolute demand environment on the platform side -- as much as I think a lot of just the oxygen in the room has been really kind of sucked out and sent towards concerns about traffic shift changes and stuff on the agentic side of things.

So I mean if you're a brand that's got a substantial change in traffic sourcing. If your Google search traffic is going down 20% or 30%, and you don't necessarily see that much of a drop in top of funnel, but you've lost visibility to where a lot of that is coming from. That's a very immediate problem that you want to sort out and think through, and that's something where Feedonomics can actually be quite helpful.

So it's an opportunity area for our business in particular. But I think a lot of the real focus this year has shifted to that. And it's kind of if you're doing a geeking out on a Michael Porter's 5 forces analysis, it's like this great example of where like a new technology really affects barriers to entry in an interesting way and then having that all rush right up to a holiday period. It's been kind of an interesting thing to watch for sure.

Yes. I can't imagine it. Is that -- by the way, like it's slightly off topic, but -- is that something for you as well? Like if you look search optimization was kind of -- and I don't know how much of your kind of prospect customers you get from that sort of stuff. But is that something that you guys have to think about?

Yes, we've seen it too, even within our own marketing department. We split our group from just search engine optimization and now we have generative engine optimizations. We actually have the GEO team and the SEO team.

Which by the way, is probably just by putting GEO in your job title, you probably are entitled to higher than what you've had before being in SEO. But we've seen the same thing in our own business, right? Where you're just saying, okay, we're not seeing that change in search traffic, but where it's coming from, it's just it's made certainly marketers life a little bit more of a headache going into the holiday period than where I thought it would be at the beginning of the year. It's moved very quickly.

Yes, yes, yes. Yes, it's a fascinating world. And the -- let's talk about commerce a little bit. The 1 big thing for you guys is besides a new name is kind of the big transformation plan just to get everyone on the same page, like can you kind of frame a little bit like what you're trying to do?

Yes. So I get this question a lot because in a lot of ways, we're a company that's going through a lot of transformation right now. Now I think it's helpful to understand a little bit of the history and what exactly is going through and changing. In a lot of ways, and I mean, just as a side, I tend to be very blunt, very direct, that you and I talk about this all time.

I'm as straightforward and honest about the places where we need to make operational improvements as the areas where I feel like we're doing really, really well. There are some things, I think, over the years that we haven't done the right way that we're in the process of getting corrected. A few examples of this would be we did acquisitions, but didn't fully integrate the assets, right?

So as an example, BigCommerce is a platform company, primary customers, mid-market and maybe the lower end of enterprise. Growing disproportionately in B2B, but we have B2B and B2C success, obviously. We buy Feedonomics. Feedonomics is probably the world's best data enrichment platform to get product data, unstructured and structured data syndicated into channels and optimized. It's a premium price point, right?

If you look at -- there's a lot of managed service aspects to that. We intended to release a self-serve version of Feedonomics to our base so that we can get it to a price point that the BigCommerce customer could pay -- and I think we're 2 years later than we should have been in actually doing that. We're in the process of releasing that now. So if I think about just overall, where are we from a transformation perspective, all of that has been kind of symptomatic of what I would describe as a bit of an overreliance on sales-led growth, right?

If you are Salesforce or SAP or these really, really large companies, well, I have in negotiations with Salesforce all the time, and we also buy Tableau, and we also buy Slack and all these other things. Our average customer size is not that gigantic by comparison. And so being very sales reliant has made it to where when you don't have enough just new accounts to drive the growth rate, you need a lot more ways on a cost-effective way to expand the base.

And I think some of our competitors transparently have done a better job than we have from a growth model perspective, and having ways to expand and monetize the space. And so if you look at a lot of the product initiatives that we're coming out with, these are not rocket science things that we're doing. We're probably the only platform provider that didn't have a branded payments product.

As 1 example I can give you the history on the thinking on why I wish we would have made the change earlier. But okay, we can do that. It captures incremental economics, start heading in that direction, bake it into our core platform pricing. And it creates ways to expand our base in a way that's much healthier. And so there's kind of a multistep process that we've been going through from a transformation side of things since Travis took over as CEO in Q4 of last year, he wanted to start with the leadership team and say, okay, do we have a lot of commerce expertise, a lot of SaaS expertise to kind of move where he wants it to go.

And with the exception of myself and a couple of other people, he turned over almost the entire senior leadership team. The folks we had before were great, great individuals. He just wanted to slightly different profile in a few areas. So you want to start on the human capital side. Next wanted to move to branding. Why did we rebrand?

Well, 1 simple reason for that. We had top of funnel Feedonomics opportunities that would be slowed down because they were confused by the fact they were owned by BigCommerce. And they're a Shopify customer that may be totally happy on Shopify and things they, therefore, can't use Feedonomics because it's owned by BigCommerce. Oh, I have to replatform with BigCommerce. No, you don't, but the brand is confusing, right? So okay, we'll fix that problem.

And now it's looking into saying, okay, we're transforming a lot of stuff on the go-to-market side and the business model to have a lot more product-led growth motion. So none of this is new to the world revolutionary stuff and what we're doing as a business. It's a lot of within our control basics, so to speak, a lot of basics that can get that's where I think we can go -- to get to an appropriate growth rate for the business, which I don't believe we've delivered in the last couple of years.

So going back to your point in terms of sales led growth. So -- if I look at the market or other pieces, like basically, you have like 1 new module after a number coming and then you go back and you cross-sell, you engage the customer. That's kind of the motion that -- the motion I was missing?

Yes. So even if you look at Feedonomics Surface is a product that we just launched in the last 3 months. All it is a freemium business model, version of Feedonomics that can hit a lower price point because it has more back-end automation. So okay, starting features, you can do data transformations to Google and Meta, and we're going to be releasing many more paid channels in Q1 and Q2 of next year.

Okay, you would like to add that channel. It cost you this much extra per month. We charge you on a per SKU basis for the number of SKUs you send to the transformation engines. The more channels you are sending those SKUs to the you pay extra a little extra for the channel, and you're paying more for the SKUs. Again, this is not revolutionary.

This is the introduction of a freemium model, which everybody in SaaS has had, we just haven't had enough of them. And so when I look at it from the operator point of view, not as a product guy, and I say, okay, look at all of the things that we are launching -- they are exciting. They're really good for our customers. I get very excited about them though because it's very easy for me to see a line between that product launch and how it hits the P&L in a good way for our shareholders by introducing ways to expand customers in a much more cost-effective way than what we've been doing.

And I think if you look at just some of our efficiency metrics, I'm really proud of what we've done with profit and cash flow, but I still think there's a lot of opportunities where we need to get significantly more efficient in what we're spending to drive growth and where we've been for the last 2 years.

Yes. Okay. Perfect. And then how do you think about when you start on this journey of looking how you can change the organization, what was the envelope for use in terms of the growth that I'm kind of working towards? Like what was it like the bigger thinking like, okay, and maybe start like the growth rates now versus like where it should be or where you want to see it eventually?

Yes. So I -- in the last 2 years, our net revenue retention rate for our largest accounts are accounts buying our enterprise plans has been right around 100%. That's nowhere close to where it should be. I think minimum for a good B2B SaaS company should be a 105% to 108% probably. And that's really like your floor growth rate.

What we talked about at our Investor Day in New York back in March. On the platform business, the BigCommerce business, probably 2/3 of that ARR is sitting in accounts that are either mid-market accounts or the upper end of small business. But a lot of where we've been focusing our R&D investment has been on landing new, very large enterprise accounts.

And we want to continue to do that, but I don't want to do that to the detriment of that floor growth rate that the business can generate by having NRR in a better place on the core business. And so as we're kind of lining up AOV for next year, as I'm going through and making approvals on where we're going to allocate capital, the first question I'm asking are product teams and our engineering teams when they're talking about the things that they're going to release as. Walk me through how our existing customers can use this fast, easy, very simple to migrate to this if it requires a migration.

Let's talk later about what this means with new accounts. We already have a lot of features that are allowing us to sell up into new accounts. It's just from a growth algorithm basis, just very normal way of thinking about them starting with gross retention, saying, how do we just make our current customer base happier and stickier? How can we expand them better? The more healthy, retained expanding customers the much easier it becomes to land new customers because you have a lot more virality and positive reputation that leads to a lower cost of acquisition of new accounts, right?

Yes. So product is 1 thing, and I'm going to ask about payment in a second. The other thing is like is the organization in terms of like tracking renewals, fee, like is the customer happy, et cetera? Are you doing any changes on that side as well?

Yes. We're focused -- we're going to be focusing more and more on renewal and also getting ahead of those renewals by trying to make sure customers are getting full and growing utilization of the dollars that they're spending with us. And we have different vendors that I work with, I think, do a really nice job on this and say, look, you're spending this amount of money you're not using quite as much of this product as you thought you were going to.

Let me get you into this product as well for the same amount and just getting very -- I think some of our vendors are really good job being proactive to make sure, frankly, that I feel good about the money that I'm spending with them, if I'm not, I'm going to cut them off and they know that and thinking the same way about things with our merchants.

Yes, yes, yes. Okay. And if you think about it like so now let's go -- I don't know, if you can or want to talk about payment, but you and I have been talking for years now and -- that was always like 1 of those, why not?

No, let's talk about it. So for folks that may be new to the story, what's been different about BigCommerce in the past is that we have not had a branded payment solution. I've gotten so many questions about this over the years. Why are we not doing that? Does that make sense?

And I would say the following. We've been focused very much on landing larger and larger accounts and landing new and larger accounts. For a lot of those multinational companies, multi-geography companies, they may want to use payments provider, a, in North America and payments provider b, in Europe.

We will keep the ability for them to do that. We're never going to not let them use the provider of their choice. The change in philosophy with change in some of the leadership team that would be to say, okay, for a lot of our existing customer base and small business and mid-market, they don't have necessarily the complexity that would require them in order to need multiple payment providers, what they need is a very simple and integrated solution.

I think, Wix has done a good job with this. I think Shopify has done a good job with this. And so as we evaluated this, we said, okay, we want to be true to our ethos as a company to say, "Look, the customer needs to have the freedom to pick who they want to use from a technology stack point of view." But we can also benefit merchants by making it easier for them to integrate and see payments and the actual platform to be able to say what's the status of not just the orders, but the payments and the charge backs and all the rest of it.

And so just under new leadership, it's just a very different philosophy and how we thought about that. Travis feels very different about this than maybe some of the ways we've thought about it in the past. We brought on a new Chief Product Officer 6 months ago, named Vipal Shah, who's outstanding. He comes from JPMorgan and PayPal.

Obviously, so he knows a lot about this area as well. Our focus very much is on how can we continue to have openness and flexibility, which I think differentiates us and market, but do so in a way that makes the product simpler and easier to use I think we've had some of our competitors, I think, just frankly, are just a little bit from a user interface perspective, that's a little easier to use and set up, and I think we can make some improvements in that area.

And in doing that, can that unlock additional expansion revenue opportunities such as payments. I'm going to jump on those opportunities all day long. So for us, we're not going to become a payment service provider at day 1. Might we head down that path in the future? Yes, we might. I think from my perspective, in the past, on the payment side, we were essentially a risk-free recipient of referral revenue share from our payments partners.

Kind of the next step up from that was to become a VAR and say, look, we're going to get a buy rate, we're going to take on the pricing risk. We're going to bundle this into our core packaging and get to know how this part of the business works.

Might we evolve in the future into a place where we take on know your customer and charge back risk and credit risk. And then you end up with different accounting treatment when you go down on that path. Might we head down that way?

Absolutely. I mean that's definitely on the table. It's just not something we're going to be doing in our initial launch. I didn't think that was prudent from a balance sheet risk management perspective. 1 step at a time and then see where this goes.

And if you think about it, like the there are certain aspects on broadening out where you think like, do you need to do fulfillment, like debatable like and probably for you, not like -- but if you think about like Feedonomics is one, and you got that for the acquisitions, payment an obvious one, how do you think about like that's kind of going broader versus deeper?

I would say I am most -- this is an M&A question, how -- what's the aperture on M&A and what circumstances and how...

Not necessarily because you could develop it as well.

I was going to say, it's built by partners. And how does M&A fit into that? From my perspective, from a use of capital point of view, M&A is not something I'm going to be focusing on very much. Prohibitively dilutive for you to issue equity and not something that I want to spend a lot of cash on. So that leaves build and partner. I want to focus, build on the core products and the core offering, and I want to have partnerships that are so tight. If they are so well integrated with a smaller number of partners than what we've done in the past, that it looks almost as if there's been M&A that has occurred.

I would much rather have a very small list of partners and say, look, we're going to focus on recommending this list of 10 to 15 partners, not take away customers flexibility to pick somebody outside of that strike zone, but say, look, these are our premier partners, right? We have the best integrations with these partners and focus on those areas and use that as a way of kind of expanding the product offering.

And frankly, I think we can move faster that way, then we would by trying to build everything ourselves. We're not so big. We don't have the scale that I want to go out and what I'm going to try to invent a new tax solution. No, I'm just going to integrate with Avalara. It doesn't make any sense.

Yes, yes. And then on that development side, like the world is changing with AI. We have AI commerce now, et cetera. Like how do you think about that what you need to deliver through the platform versus actually it's more on a kind of marketing kind of agency side because they need to kind of do the path towards buying differently, like talk me through that dynamic is changing a lot.

Yes. Well, that's where the changes in the technology look very interesting. So -- if you look at our partnership with Accenture as an example, which is in early phases of what we're evaluating, we're not trying to become a services business. But what does that do? Well, Accenture has a tremendous capability to lead client transformations and technology transformations.

They have big brands and clients that are saying, look, I want to be ahead of the curve in where things are going with LLM from a discoverability perspective and potentially a checkout perspective as well. And so we are partnering with them, bundling our -- the Feedonomics asset into their services offering. So they can say, "Look, we can help run a transformation of which Feedonomics is a core part of this to say, look, you need to do data transformations to get them into all these different channels."

Let me work with you about how your data is set up, how your branding is set up around that and everything else. And then we use commerce for the pieces that we can connect as a part of that. I'm not trying to compete with them. I would rather just say, look, if you're going to own that services delivery part of it, I think that's great.

But I think there's a number of ways where we need to invest in the core platform itself, where there are certain features that are just going to be expected to work out of the box. So if you look as an example today, not even using Feedonomics like with Perplexity through our partnership with Perplexity and PayPal, BigCommerce merchants today can actually do a genetic checkout through Perplexity without even using Feedonomics, if you look at Franklin Planners as an example, is 1 of the clients that's already doing this. Were you actually go into Perplexity search.

You see that in discovery, and click immediately in the window from Perplexity and do checkout. That is kind of using a partnership, whereas something that's native on the platform. They're just going to expect to be able to use AI features to do page design, site build and construction to build out product descriptions.

And I think there's opportunities through the Feedonomics asset to also have paid features to do data transformations native in the BigCommerce catalog. Click here to have Feedonomics optimize and transform your catalog and send it to these channels for you. That's what the surface is aiming to do.

So what I would say is I am very focused on directing capital towards those features that I feel merchants are going to expect the platform to have natively and stop there. Once you get past that line, we're going to be partner first. We're not going to go build our own competing model for commerce that doesn't make any sense or to say, look, there's 4 primary ones that are doing very well. We're going to partner with all 4 of them and try to be the pipes of preference so to speak.

Yes. Okay. The other question on that subject is like do you think that your market in terms of competition will fundamentally change? Because yes, you had a couple of big folks, but like this is like a new world and that changeover usually causes disruption. So how do you think about that kind of...

So this gets into barriers to entry in the individual lanes through which folks make money within e-commerce. 3 primary lanes in which people make money in e-commerce today. You've got the discoverability lane typically monetized through ad revenue. You've got the merchant of record lane, where people are making money by processing orders and then you've got the fintech role where folks are making money by processing payments.

For the most part, those lanes are pretty well defined. And there's regulatory requirements and compliance requirements that tends to have people land in 1 lane or another. So today, if you look at the LOMs are taking share from traditional search in a really fast way. In my opinion, it's a superior search experience.

I would expect them to continue gaining share over time. Today, the main LOMs don't have an ad revenue model. They're burning a lot of cash. They're going to have to figure that out. They're going to have to build a revenue model somehow, okay? Have I seen evidence that they're wanting to get into the merchant of record order processing lane.

No, I haven't seen that. That's catalog management and tax compliance and all of the stuff that, okay, today, that's where BigCommerce or Magento or Salesforce Commerce Cloud or Shopify or Wix or others, that's how they're driving a lot of their money. You go to the payment side of things, could I picture the barriers to entry changing such that new AI entrants would come in, in the payments world.

I could see them becoming PSPs, maybe taking on white label solutions, but it's hard for me to imagine them wanting to take on the financial visibility responsibilities of actually becoming a payments provider really. And so I think a lot of this is very unsettled. I think for all the different players, including us, we're all saying, okay, this is the lane. This is where we have compliance.

We all need each other to figure out the tech, right? If you are a merchant, for example, an example I always use, like let's say you're going on a hiking trip and you go into a search in a normal Google search and you say hiking boots, and it's just going to pop up a bunch of search results above the fold, probably the first 3 or 4 spots are going to be SEM, probably not even all that relevant.

Right. I don't even have you started on the payout on SEM, don't love it. Okay. You go into an LLM -- you say, "Well, I'm going on a trip to this place. In this amount of time, here's my budget." Based on what you know about me, what would you recommend? Well, the that's a way more complex algorithm search than what just a traditional search term is.

Okay. Well, then when that result pops up, how do those 3 lanes play themselves out in that experience, okay, the LLM are the discoverability part. How are they going to introduce an ad revenue part without their users being like, "Oh, wait a minute, I thought this was an unbiased search result." Well, we got over it in Google. Google search, I'm sure they will figure out a way to help everybody get over that on the LLM side of the right?

Okay. Well, now you pop up a result and say, well, well, here are the 3 boots I would recommend for you, Daniel, as you go on your trip. You could click on the boot and out click directly to a branded website, in which case their normal platform is processing the orders, the payments processors going through there. You could do an agentic check out and say, would you like me to purchase it for you.

Okay. Well, if it pops up with a PayPal button or a strike button or something like that, do you trust your PayPal wallet to buy it on your behalf. Sure. The order is still going to route to whoever that boot is platform that they are on, right? So I think in a lot of ways, these lanes are fairly defined. It's the partnership and collaboration between the different players within those lane. That's interesting.

The example I gave about Franklin Planners, I think, is an interesting one. In order to make that happen, it took BigCommerce as the merchant of record, PayPal as the payments provider and Perplexity as a search engine to put together a package to enable people to go in and search and just click a button within the Perplexity discovery result and actually transact stated within that.

So I don't know if that's a brand new entrance, but there's lots of people that have been in businesses before that said, no, there's no what me worry? There's always a way that people can be disintermediated. I haven't seen evidence of it. I think the mix shift may take its own form though.

I think that who ends up winning, like who ends up taking a lot of the share from Google Search? As that progresses, I think you may see a lot of changes in that area. I don't know that it means you're going to end up with a completely new entrant, but we'll see.

Yes, yes. Okay. The last few minutes, I wanted to talk about like margins -- like -- and I think a lot of that is your achievement like you guys turned it from kind of cash burning, negative margins kind of around very quickly. And it's tough to do, and I'm sure they would like trade-offs -- like how do you think about that journey? And where do you go from here?

Yes. If I look at where we are from a profile point of view right now, financially, we're very healthy. Balance sheet is in a really good place. We don't have excessive debt. We're profitable. We're cash flowing. But relative to the amount that we are spending to fund growth, we're not growing fast enough. Is reality of it.

Pick any metric you want to look at, whether it's magic number of sales and marketing efficiency, we need to make a lot of improvements in that area. So you could beg the question and say, "Well, did you cut too much? Or did you limit growth too much?"

Yes.

No. I have this conversation with my peers all the time. The issue is not money, there's plenty of money. Look at the efficiency. We need to have lower customer acquisition cost ways of expanding revenue than always needing to have it go salespeople that gets back to the product-led growth discussion that I started with.

The root of what I look -- when I look at our P&L and getting to a better growth rate at better profitability, that's a lot of the root of the issue that we need to get to. So I actually think that there's a lot of opportunities for us to actually make some changes within the cost structure and still show the type of growth that we've been showing and do some optimization there.

Like my #1 focus is just improving the value of the asset. The #1 thing that our investors want to see is higher growth. That's the #1 thing. With the type of growth that we're posting, I think our investors also want to see better generation of profit and cash and have better just efficiency of capital and where it's going into the business.

We haven't set up any of our plans for next year. It's still just stuff that we're kind of working through, but I think that we can definitely do both. I wanted us to be further along at this point in the year from a growth rate perspective and a setup for next year than where we are. I mentioned that on call I've already talked about that in public settings before. And I tend to be pretty conservative.

So we'll think more about guidance and what that means as it goes into next year and as we locked down plans. But I don't think that we've taken up too much. I think we've done a really good job. I mean, while not getting to the top line targets, we want it, we still wiped out over 90% of our net debt in the last 18 months, which I think is pretty outstanding.

But ultimately, we need to deliver both better profit and cash growth and better top line growth. And I actually think we can improve that by getting more focused and more disciplined, not by having to add a ton back in.

I mean, like let's how I enjoy our conversation like listening to you, like it seems like you're very metric-driven. It's not like you're kind of counting for the sake of it. You kind of know where you talk magic numbers, which is kind of music to my ears.

Well, I just -- I mean every quarter, internally, I do in all hands, I call it investor insights. Where I go through quarterly scorecard of everything, how we're doing, I actually will sometimes take sell-side quotes to explain like what's the feedback and how things are going.

Ostensibly, it's about that, but it's really my opportunity to talk about the metrics in the numbers and help our employees understand, these are why we are directing capital in the areas that we are because to your original question, we've got -- we're going through a lot of transformation. And I think it's just really helpful context for employees to see that. And I see the same metrics in our business that our investors do.

Like if I look at -- I know the business is capable of growing faster than what we have posted. And I know the building blocks that are necessary in order to get that turned around. It's not going to be chasing silver bullets, like this 1 thing is going to get out there and then I'm jumping into agenetic bingo, where I've got like a list of 20 terms that I'm just trying to drop into every conversation, what do I want to see?

I want to see improving gross retention, improving net retention and I want to see a lower customer acquisition cost. I think we do all of those things, the growth rate is better, profitability and cash flow better and we're going to be delivering better returns for the shareholders.

Yes. Good closing statement. Yes. Thank you. Daniel, good to see you here. Thank you

Ladies and gentlemen, thank you for standing by, and welcome to the Commerce Third Quarter 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to turn the conference over to your first speaker today, Tyler Duncan, Vice President, Finance and Investor Relations. You may begin.

Good morning, and welcome to Commerce's, formerly BigCommerce's Third Quarter 2025 Earnings Call. We will be discussing the results announced in our press release issued before today's market open. With me are Commerce's Chief Executive Officer, Travis Hess; and Chief Financial Officer, Daniel Lentz.

Today's call will contain certain 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 as well as our expected future business and financial performance, financial condition and our guidance for both the fourth quarter of 2025 and the full year 2025.

These statements can be identified by words such as expect, anticipate, intend, plan, believe, seek, committed, 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.comerce.com.

With that, let me turn the call over to Travis.

Thanks, Tyler, and good morning, everyone. Q3 marked another solid step forward for Commerce. We delivered revenue of $86 million, in line with our guidance range. Non-GAAP operating income reached $8 million, which significantly exceeded the high end of our profitability guidance while operating cash flow came in just under $11 million. For the 12 months ending September 30, 2025, we had total revenue of $340 million and non-GAAP operating income just above $30 million. For the 3 months ended September 30, 2025, we had approximately 80.8 million common shares outstanding and 81.3 million fully diluted shares outstanding.

We are now in full execution mode, and our focus is on scaling profitable, sustainable growth across each of our core offerings. AI is reshaping how customers discover, evaluate and purchase products. The future of commerce is intelligent, composable and agentic. Traditional e-commerce flows are shifting to conversational discovery, personalized curation and increasingly autonomous purchase journeys. AI agents like ChatGPT, Gemini, CoPilot and Perplexity are fast becoming the entry point for commerce.

This requires a fundamental shift in how merchants think about visibility, relevance and conversion. When product discovery begins with a prompt, not a home page, it is the quality of data that determines whether you get seen, chosen and purchased. We've architected commerce to meet this shift head on. Feedonomics syndicates enriched structured product data into all major AI services. Merchants can surface their catalogs in the exact context where intent is detected and decisions are made. We are building and launching new products anchored by Feedonomics to meet this need, and we see strong pipeline signals emerging as we head into the holiday period.

Similarly, Makeswift empowers marketers to build and update AI optimized site experiences in real time without writing code. Through our open modular platform, merchants can seamlessly integrate AI-driven services whether it's agent-assistant support, dynamic pricing, intelligent fulfillment or automated merchandising directly into their stack and at their own pace.

Last week, PayPal reinforced our shared vision by publicly announcing a new initiative focused on enabling agentic Commerce and named Commerce as a strategic partner in that effort. This recognition underscores our leadership position for an AI-led future. It further validates the architecture, openness and data infrastructure we built over the last year. This isn't a theoretical road map. It's already happening. Our partnerships with Perplexity, Microsoft, Google and Stripe and PayPal are examples of how we're building for an agent-led world where intelligent commerce needs to be fast, adaptive and always on.

Whether the buyer is a person, an algorithm or a fully autonomous agent, Commerce ensures our merchants remain discoverable, performant and in control of their customer experience. Our B2B momentum also remained strong in Q3. We continue to attract some of the world's most respected brands. We welcomed ADI Global, a leader in security and low-voltage distribution.

Big Ass Fans, a global manufacturer known for its high-performance industrial and commercial fans, and Pantone, the world authority on color standards and design tools. We also celebrated successful new launches from innovators like F&C distributors. Hengstler-Dynapar and Fisher Tools Handles all choosing Commerce to modernize and scale their businesses.

In Q3, IDC validated our platform's impact through its study The Business Value of BigCommerce B2B Edition. IDC found that B2B Edition customers achieved a remarkable 391% 3-year ROI, a 24% boost in sales productivity and an 82% improvement in platform stability. In addition, Gartner once again recognized BigCommerce for its fully integrated B2B capabilities, including native CPQ, our strategic partnership with PROS and the continued evolution of our catalyst storefront for B2B experiences.

When we announced our new Commerce parent brand last quarter, I committed to take steps to unify our product portfolio. Today, I want to share a couple of steps we have taken in this area that also demonstrate strategic progress with small business customers. In Q3, we launched Feedonomics Surface, a feed management product available to all BigCommerce merchants. Surface gives merchants an easy way to connect and optimize product feeds across Google and Meta directly from their control panel.

It represents a clear step forward to bring enterprise-grade capability down market. Future upgrades will include additional paid features such as advertising channels and agentic channels, data enrichment tools and AI-powered feed optimization features. We also remain on track with the planned launch of MakeSwift on Stencil in 2026.

We are also proud to announce that we are bringing Feedonomics order orchestration capabilities to BigCommerce customers through Feedonomics Order Orchestration. This capability was previously available only through the larger Feedonomics bundled product suite. It gives merchants the ability to optimize fulfillment across locations with efficiency and control and is now available a la carte to pilot merchants on both BigCommerce and Shopify.

It is another step towards realizing our vision of unified commerce from feed to fulfillment. Earlier this week, we announced the launch of new capabilities for Shopify merchants through 2 applications: Feedonomics for advertising and Feedonomics for listings and orders. These 2 Feedonomics applications are available on the Shopify App Store and provide a robust foundation that empowers merchants and partners to manage complex cross-platform operations.

Shopify merchants can improve product discoverability, increase advertising performance and drive additional revenue for their businesses. In Payments, we announced a new embedded payments offering in partnership with PayPal, BigCommerce payments powered by PayPal. This new co-branded solution will launch in early 2026 and will offer full stack payment capabilities embedded directly into the BigCommerce control panel.

Merchants will be able to manage balances, payouts, currency conversion and settlement, all from within our platform. We believe this will strengthen retention, expand wallet share and bring modern payment functionality to thousands of small and midsized customers.

Looking back on our progress so far in 2025, I see a lot to be proud of and a lot that must still improve. We drove a tremendous amount of organizational change this year, changes in strategy, operations and leadership. That said, we need to grow faster, and we need to do so more profitably. That is our focus as we enter 2026 planning. We see a clear path to greater sales and marketing expense efficiency through multiple levers, including partner-led distribution with global system integrators like Accenture, simplified product packaging and pricing for mid-market customers, and tighter resource alignment across key verticals. Taken together, our rebrand to Commerce, our bundling strategy, and our leadership position in agentic commerce are all aligned to deliver measurable results for both our customers and our shareholders. With that, I'll turn it over to Daniel to walk through the financials

Thanks, Travis. For those of you who are newer to our story, Commerce serves tens of thousands of accounts globally, including just under six thousand accounts using our enterprise plans. Our platform powers both B2C and B2B ecommerce for leading brands and manufacturers, with capabilities that span storefront infrastructure, data syndication, and visual design. Our Feedonomics product sits at the center of our data strategy. It ingests, enriches, and syndicates product catalog data across channels like Google, Meta, Amazon, and, increasingly, AI-driven surfaces like OpenAI, Perplexity, Gemini, and Copilot. This enables merchants to increase discoverability, drive marketing spend performance, and optimize channel-level return on ad spend.

As of the end of Q3, our annual revenue run-rate was approximately $356 million, with 76% of ARR coming from customers using enterprise plans and corresponding average revenue per account exceeding $46,800. Our multi-product model combines recurring subscription revenue from our core platform and Feedonomics with revenue share from a curated ecosystem of technology and service partners, all underpinned by a disciplined operating model and strong balance sheet. We remain focused on delivering profitable, high-quality growth by expanding share of wallet within our installed base, acquiring new merchants, and scaling emerging self-serve product lines across small and mid-market businesses. In Q3, we delivered revenue of $86 million, a 3% increase year-over-year and consistent with our guidance range. Non-GAAP operating income landed at $8 million, or 9% of revenue, which exceeded the high end of our profitability guidance by nearly $5 million. This represents a 413 basis point improvement year-over-year

Operating cash flow was approximately $11 million, marking our second consecutive quarter of double-digit operating cash flow margin and further demonstrating the operating leverage in our model. ARR ended the quarter at $356 million, up 2% year-over-year. Enterprise ARR represented 76% of total ARR compared to 74% in the prior year with average revenue per enterprise account reaching 46,806, a 7% increase from Q3 of last year.

Non-GAAP gross margin came in at 79%, and we maintained cost discipline even as we reinvested in product development and sales enablement. Partner and services revenue grew modestly to just above $21 million, up 2% year-over-year. We also strengthened our balance sheet. We closed Q3 with approximately $143 million in cash, cash equivalents and marketable securities. Our net debt position is now just under $11 million, reflecting an 86% decrease since Q3 of 2023.

Additionally, as of December 31, 2024, the company had net operating loss or NOL carryforwards for U.S. federal income tax purposes of approximately $249.7 million which we expect to continue to offset taxable income in future periods. For the 3 months ended September 30, 2025, we had approximately 80.8 million common shares outstanding and 81.3 million fully diluted shares outstanding. This strong financial position gives us the flexibility to invest where we see compelling ROI opportunities and maintain discipline in our operating model.

Before I turn to guidance, I want to briefly discuss how AI is also helping drive monetization opportunities across our business as more discovery and decision-making shift to agent-led interactions. The value of structured high-quality data and the platforms that manage it increases significantly. This trend plays directly into our core strengths. Feedonomics Surface, which we launched this quarter, starts as a free product for big commerce merchants. It also includes a clear and scalable monetized upgrade path.

As merchants grow, adopt more channels or require deeper feed customization and optimization, we can monetize that growth through premium feature tiers. Similarly, BigCommerce Payments powered by PayPal set to launch next year, will generate monetization upside through payment economics and deeper merchant engagement, all within a model that keeps us aligned with merchant success. In both cases, these are product-led growth motions designed to start simple, scale with the customer and create sustainable revenue streams that improve average revenue per unit and strengthen retention over time.

Let me now turn to guidance. For Q4, we expect revenue between $87.8 million and $92.8 million and non-GAAP operating income between $4.3 million and $9.3 million. For the full year 2025, we are updating guidance to reflect our Q3 execution and improved visibility into year-end performance. We now expect full year revenue between $340.6 million and $345.6 million. We expect full year non-GAAP operating income between $24.7 million and $29.7 million, with a midpoint of $27.2 million, representing a $5.2 million increase from our prior midpoint of $22 million.

As we look ahead, we are focused on efficiency and operating leverage and top line revenue motions. We're focused on scaling responsibly, growing profitably and driving continued operating leverage across our business. We believe the investments we're making in product innovation, solutions, bundling and go-to-market efficiency will continue to deliver meaningful returns in 2025 and beyond.

With that, Travis and I are happy to take your questions.

[Operator Instructions]

The first question today comes from Ken Wong with Oppenheimer.

Fantastic. I want to start with you, Daniel, hoping you could maybe address the sequential decline in enterprise ARR and the downtick in enterprise customers would just love a sense of kind of what's happening there and maybe what you're seeing in terms of how that might trend going forward?

Yes, Ken, thanks for the question. I think what we're seeing there is kind of just a reflection of where we're at in progress through the year. We wanted to be a little bit further along in booking by this point in the year than where we are. Really, it's a function primarily of net revenue retention last year and the year before, we were around 98% or 99% in net revenue retention.

So far this year, we're in a very similar place. And we are absolutely focused on what we're doing in that area of the business and focusing on our existing customers and existing customer expansion to help drive that. I think broadly speaking, what we're seeing in the market, a lot of the energy and focus is in what's going on in AI and agentic which is good for us because we've got a ton of stuff coming through there, which Travis will speak to here in a minute that we think is going to build a lot of momentum there. It's been just a little bit tougher on the platform side, which I think is what's really reflected in those numbers.

Perfect. And then, Travis, in your prepared remarks, you alluded to seeing some strong signals into the holiday season. I would love if you could perhaps expand on that and just help us think through how things might play out this Black Friday, Cyber Monday, Christmas season and kind of how that's kind of baked into your expectations?

Yes. Thanks, Ken. Yes, I think a lot of the momentum, as Daniel just alluded to, is certainly around the AI piece. We've had several very large brand manufacturers, retailers in closed beta for the last couple of months around AI readiness. We're kind of adding to that on a weekly basis. We'll share more about that, obviously, in next quarter's call. But that's where a lot of the peak demand is in.

It's a lot of what we're doing in some of the larger GSI motion around distribution, particularly with Accenture, having had a tremendous amount of shared clients between themselves and us, particularly on the Feedonomics side where that's on the B2C side is where almost all of the momentum is right now just given the time of the year. So right now in discovery, it's starting to trickle into shopping, but certainly, that's where most of the efforts, most of the energies are and to Daniel's point, we're sitting in a, I think, a really nice spot with obviously the existing installed base on the Feedonomics side, and that will trickle into more Makeswift stuff as we get into more brand agents, merchant agents, things like that, that are expanding pretty quickly in here into Q4 that we'll have more to share obviously in next quarter's call.

But that on the B2C side is there. On the B2B side, we've had strong momentum on platform for most of the year. We kind of talked about that in the prepared remarks. We're continuing to see that into Q4 as well. But on the B2C side, it's been mostly on the data front on the AI front. That's helpful.

Next question comes from DJ Hynes with Canaccord.

So Travis, we've obviously seen a number of e-commerce platforms start to partner with these answer engines, right? It feels like a little bit of a land grab, which makes sense given where we are in the cycle. Can you guys maybe talk about competitive dynamics of discoverability as it relates to these answer engines. Is it going to come down to who has the most store front? So has the most traffic stores? What has the best product data? I guess I'm curious if it's a function of who has the better product or who gets there first? Any color there would be helpful.

Yes, it's a great question. We very much believe it's the quality of the data. It's not just the structured data. It's going to be unstructured data. That's combined. And what I mean by unstructured data is anything from product spec sheets to brand guidelines to call center transcripts to articles, to blogs, to ratings and reviews, user-generated content, you name it. All of those assets can be combined with typical structured data that were already enriching and syndicating and that quality of that data and how it's being syndicated into these answer engines per their spec and ultimately, the hypothesis of how we're optimizing to potential prompts and the feedback and analytics associated with that is ultimately going to drive the most amount of efficacy in our opinion. .

Obviously, we're sitting on many, many of some of the largest branded manufacturers and retailers on the Feedonomics side today. I mean that is our moat, the fact that we have the most enriched basis of their catalog and their product data today to syndicate that in we feel very strongly. As it relates to shopping and monetization, we very much view being open and agnostic is a massive advantage.

We don't have a walled garden. We don't need to commercialize it by pushing it through our checkout. We're seeing several different models where that would go through other people's rails, some models now that would disrupt traditional channels where we go through our rails. You saw our announcement around PayPal last week. You're starting to see some of the payment providers that have broad reach that have security and identification capabilities that are starting to play in this as well.

I think the reality of it is embracing the standard and [indiscernible] the enrichment of both structured and unstructured data, the enrichment of such and being able to syndicate that at scale agnostically regardless of the commercial model or regardless of where the market takes us, we think, is the ultimate advantage. And it's hard to read the tea leaves for those not in the space because it seems like every week, it's changing and seems to be, one, trying to disintermediate somebody else.

But the reality of it is that openness coupled with the existing client relationships and what we're doing on a day in and day out basis, we feel is a massive advantage for where we are. That's helpful.

Yes. Yes. No, it's super helpful. And then, Dan, maybe a follow-up for you. I mean, obviously, margin progression has been a bright spot during this period of slower growth. You gave us a really wide range for Q4, wider than you normally do? Just talk about what you're contemplating in that? What kind of gets you to the high end of the guidance, what gets you to the low end of the guidance? Or how are you thinking about planned investments for Q4? Any color there would be helpful.

Yes. Let me first just address the guidance question really quickly, and then let me just talk about kind of progress in general. So from a guidance range perspective on the revenue side, we've got a range of about $5 million. A lot of that for me really lands based upon where things come out with the consumer and where is the holiday shopping season and where does that land? I think we're just giving ourselves a little bit of room there to see how that can shake out.

Just based on the fact that there's a lot of things we see that are really resilient and good on the macroeconomic side of things, but there's also just some signals that just make us be a little bit cautious in that. But we were not intending to signal some sort of bigger risk level than what we've seen in previous holiday period, some of that's just conservatism. What I'd say like just to focus on what I liked so far and what we've seen in the year and what we've seen, particularly on the quarter. I mean we've posted stable revenue growth. We've got new products launching with more in pipeline that we think can drive stronger growth in 2026. That's really the focus. The pace of new launches, what we've already shown, whether it's Feedonomics Surface or a whole host of other things. I'm really encouraged by, we have more new products coming out in the AI space, particularly in Feedonomics. I can't even keep up with how many of them there are, actually, which is a big shout out to our product team, which I appreciate.

We delivered revenue in line with expectations. Like you said, we had really meaningful improvement to profit and cash flow. Profit margins were up 413 basis points versus a year ago. Operating cash nearly doubled versus a year ago. And we've eliminated nearly 90% of our net debt in the last 18 months without reaching our growth potential to get there, which I'm really proud of. We're still seeing good improvements in average revenue per account, was 7% last quarter.

I'd also call out there that's broad-based across all customer sizes. We're actually seeing, in some cases, even better ARPA growth with some of our smaller customers that aren't buying enterprise plans, which gives Travis and I a lot of bullishness going in planning for next year and thinking about what's the upside we see in this business, even with some of our small and medium-sized customers, which is, I think, really encouraging for next year.

And we're also -- last thing I'd just call out is, we're still seeing really good progress on bookings quality. Deferred revenue was up 28% versus a year ago. And I expect RPO to go up meaningfully in our Q4 results as well, now that we have a new agreement signed with PayPal and some other agreements as well. So by and large, I mean, like you said, in terms of quality of bookings and quality of revenue I feel really good about it. Going into next year though we think that we can do a lot better, not just in growth, but really delivering value to shareholders next year, looking at what we're doing in profit and cash flow and what we think we can do with that.

We're not at all satisfied with what we've been able to deliver so far this year, and we are kind of laser-focused on how we can deliver better shareholder returns on those areas next year.

Next question comes from Madi Schrage with KeyBanc.

My first one is just maybe could you talk about which of your new product rollouts you're most excited for in 2026. And then I'm also curious, are there any early learnings from feedonomics Surface? And is the intention to always keep this only for big commerce customers or maybe open it up later.

Madi, thanks for the question. Oh, gosh, to pick a favorite, I'm going to have folks on the product side, someone's going to be [indiscernible]. Honestly, Feedo Surface coming out probably, I will say, too, Feedo Surface, which we just released to GA, it's the most downloaded app in that App Store for us. There's only 2 channels today. We're obviously looking to expand that substantially. Really excited about that. We've not had a lot of product-led growth here.

Quite frankly, it was one of the big things that I wanted to change when I first came in, kind of started with leadership, went into go-to-market, evolved into, obviously, the rebrand and the last is really product. We've had a high reliance on growth based on landing new accounts. When I got here, it's just not a sustainable model. We need to be able to sell more into the existing installed base and obviously, service is the first of many in doing that. So really, really excited about that.

To the second part of that question, yes, the plan is that feedo already runs agnostically today. You saw us in the prepared remarks, talked about partnership with Shopify, we've been supporting that for a long time. We have many, many Feedonomics clients that use Shopify as a commerce platform, which is great for them. They use Feedonomics for all of the enrichment and syndication across ads and marketplaces and presumably at some point into LLM depending on the brand and the merchant.

So really excited about that as well. And then on the Makeswift side, we talked about this in the prepared remarks as well. When we bought Makeswift, it was put into play by way of catalysts. So very high-end headless architecture. It was really targeted to some of our most sophisticated merchants that were net new, it was limited to net new. Obviously, putting that out on Stencil next year is going to be a massive move and upgrade similar to Feedo Surface. So really excited to do that. We're also exploring Makeswift on other surfaces as well as a Visual Editor. So very much taking an agnostic approach there as well, which we feel from a distribution perspective, could be very enriching to shareholders.

And 1 thing -- this is Daniel. Let me just add on that. Just to be really clear, we have already through Feedonomics given customers access to hundreds of channels. And it's not rocket science for us to extend those channels into Surface but do it at a price point that makes it much more sellable for -- not only our installed base, but to your point, we definitely think there's an opportunity in the future to extend Feedo Surface on to other platforms.

I think we've been very deliberate, and I think Travis is being very deliberate in his language to reflect the fact that Commerce is a platform-agnostic company. We have a platform product that works for the part of the market that we're targeting. But we also partner with a lot of the other platforms that we compete with, with big commerce, and we think Feedonomics Surface in the future could potentially be something that could be great for other platforms to use with their customers as well.

[Operator Instructions] The next question comes from Scott Berg with Needham.

Daniel, I just wanted to follow up on a comment you made a moment ago around your expectation that I think you said RPO is going to be up in 4Q with regard to the PayPal partnership. Can you maybe give a little bit more color upon that, at least I view the opportunities you have there are going to be more transactional than something that would be maybe hitting RPO.

That's a good question, Scott. What I mean by that is there's a lot of elements within our agreements with different technology partners, some of which are purely volume-based, where you get a certain amount of take rate based on volume. Those elements to your point, don't typically hit RPO, but there's a whole lot of other economic arrangements within those agreements, whether it's the equivalent of slotting fees or development fees and otherwise. That does end up hitting RPO and part of why we've seen a flattish more looking RPO over the course of the last few quarters is because we've been approaching the end of the agreement with PayPal and needed to get to renewal. And that's where we will see that effect reflecting in the Q4 numbers.

Understood. Helpful. And then following on kind of the PayPal theme here is the Commerce for payments that you know are going to release early next year is as you're further down that road right now and starting to think about '26 I know you're certainly not guiding for anything financially in '26. But how should we think about that impacting the P&L? Is it really just upside opportunity within the PSR revenue line item? Or is there maybe another impact there that I haven't considered yet?

Yes. Let me -- I'll address the question on the P&L side really quickly and then turn it over to Travis to talk about kind of what the long-term vision is for what this looks like. We talked at our Investor Day about the fact that we are at this time, not kind of going kind of as a full in payments processor. We're going to be taking on pricing, getting incremental spread from that, but we're still going to be recognizing this net on P&L. So I don't anticipate anytime soon, we're going to end up with a P&L that looks like fintech. We think this is going to be high margin revenue because of the fact that we're not going to be recognizing full interchange in cost of revenue.

Yes, Scott, I'll just [indiscernible] for a second. I think directly and indirectly signaling, I feel very differently than previous leadership about this. This is kind of the first step in monetizing this capability. And I would expect us to [ go ever here ] into 2026, we'll probably have a little bit more to share about that in the next quarter's call as we set kind of guidance for 2026. But yes, hopefully, this is a shot over the bow that we're open to this. We think it's an interesting opportunity to bring value not only to shareholders, but to our merchants. And to the extent we continue to do that and accelerate it, we'll lean in pretty aggressively.

The next question comes from Josh Baer with Morgan Stanley.

Katty Keyser on for Josh Baer. I appreciate the question. Interesting to hear about kind of the unbundling of the Feedonomics order orchestration, you being kind of available a la carte for merchants. So maybe just a pricing and packaging question. I mean, first, how do you expect kind of the unbundling dynamic to drive this better adoption of the product? And then just related any broader updates on pricing and packaging strategies, where are you leaning into kind of simplification and bundling relative to other areas of the platform that could be run kind of more a la carte like this?

You bet. That's a great question. On the order orchestration piece, I've kind of alluded to this a few times in previous calls that with agentic in particular, Obviously, it's front and center in discovery right now that, that's going to evolve into, obviously, shopping and will introduce a fair amount of complexity around order orchestration in particular, which feedo was already doing behind the scenes. We've not touted it as a stand-alone SKU? Or is a product that just kind of organically travels with a lot of these larger merchants as it relates to sinking inventory and pricing and availability across all these different channels as they're selling across different surfaces and channels.

That's obviously extending in to what we've talked about and offering it a la carte. I think there's a lot of investment going into that product, and we'll evolve it appropriately in market for availability just as things get more complicated as merchants are selling across different services. We view this as very much a cost savings element as well, maintaining obviously positive customer experiences by sinking all of this data is obviously pertinent in that experience as folks are selling across different channels, making sure they're not overselling certain capacities. And so we'll continue to roll out elements of this to the point we made earlier. Sometimes it will be a la carte, sometimes it will be properly bundled. I'll let Daniel allude to some of the bundling and packaging strategy we've got coming up.

But any time we see an opportunity as the market evolves to bring value and monetize or make it easier for a merchant, certainly, we're going to take an opportunity to go do that. This is kind of the first of many in the evolution of that product as it maps to what the demand and changes in markets.

And what I would add on top of that, look, we're always pretty transparent. We try to be really transparent about what we think has gone well and what we think needs to improve. If you look at where we are as a business, I think it reflects the fact that we've -- we are and will always be an open company and the way that we think about things. We want to give customers freedom of choice. We want them to be able to pick the solutions that are right for them. But we also want to create products that make it easy and seamless for customers to use the products. [ It's just ] easy to use.

What that creates is an opportunity for us to actually improve the business model by creating more opportunities for cross-sell bundling or unbundling to your point, depending upon how we think about the product. The business historically has not focused enough on having a typical SaaS product-led growth self-serve upgrade motion, and it's reflected in the net revenue retention results that I spoke about earlier, and this is why it's been a huge area of focus for our entire leadership team to do this.

So if you look at Feedonomics surface or [ BC Payments ], that's 2 examples of that. We've had Feedonomics as an upmarket product for a very long time, but it's at a price point that made it difficult to cross-sell into our mid-market customers. And we have tens of thousands of them on the platform, right?

So by launching Feedonomics Surface, it's a free product to start with, but we're going to be introducing additional channels that will have either paid channels or paid features. So as customers adopt and grow and use the product, they are going to grow and expand what they're spending with us as a company. And there's a lot of ways that we're looking across the business model to say, how can we augment the existing product offering through bundling and partnerships and picking a couple of partners that are best in their area and building their solution into our so that it looks almost native. That's the bundling strategy.

There's also another version of that where you can take the products that we have, like Feedonomics and say, "Look, we're going to put this at a price point that our core customers can buy, so we can expand adoption and usage"-- We are also, again, in our ethos, open and we are agnostic. So how can we then extend that to Shopify customers? How can we extend it to [ WooCommerce ] customers and Wix customers. It's just a philosophically different way of approaching things that shores up the business model and we think creates a lot of upside to growth and efficient growth next year.

But when Travis went through his list of areas of focus and the last one he mentioned was investments in product, we're not talking about new features and functions and things that we launched. What we're focusing on here are things that we think can be transformative to the economics of the business model and ultimately make this a lot more profitable for shareholders in the long run.

The next question comes from Brian Peterson with Raymond James.

just 1 for me. Just as we're thinking about the overall demand environment and the pipeline of opportunities, would you say that's changed overall in 2025. And as some of the larger merchants are potentially thinking about AI initiatives, has that accelerated their investment in innovation or maybe that's taken a step back in terms of them evaluating alternatives? Would love to get some color there.

Yes. I think we both alluded to it earlier, the demand for B2B has been consistent and solid. I think that was expected kind of coming into the year, and it's something that we've seen since I've been here to be the norm. On the B2C side, I think the behavioral change really over the last 6-or-so months as agentic has become front and center, obviously, that sucked a lot of the air out of the room, just given organic traffic dropping for a lot of these brand manufacturers and retailers, which has probably softened their demand for wanting to replatform.

I'm not saying we're not winning deals out there. There's certainly deals out there to be one. But I would say, especially the larger ones, agentic has shifted their focus I think you're seeing a blending of marketing and commerce organizationally. It's starting to catalyze a lot of transformation. We've been very deliberate in our partnerships, particularly around Accenture and how how astute they are around digital transformation. They're obviously front and center of this as well with a lot of shared clients. And what you're seeing is a lot of energy and effort going towards optimizing one's data strategy within the organizations and how the organization needs to ultimately support that, where again, getting ready particularly around, obviously, Discovery right now is front and center.

And then as this evolves into shopping, what does that look like from a branded manufacturer or retailer perspective, how do I protect that experience? How do I make sure that I'm serving up relevant contextual content and experience and product availability through those conversations? How do I protect the monetization of the brand experience? How do I protect my AOV? How do I ingest loyalty and think about security and everything else. And obviously, we're front and center in a lot of those conversations across all the different services and people are still figuring out some of those commercial models as well on the answer engine side. So that's where you're seeing a lot of the energy and the effort.

I can't speak tangibly to what the monetary investment is at the merchant level. I can just tell you from an effort and an importance and an inks perspective, this is absolutely front and center and taking most of the air out of the room versus a replatform. I think folks know that replatforming is not going to solve this challenge. If you solve this challenge, it may do other things, but I think that's what's front and center right now if that's helpful.

This concludes our question-and-answer session. I would like to turn the conference back over to Travis Hess, CEO, for any closing remarks.

Thanks, everyone, for joining today. Looking forward to our Q4 call, where we'll share much more about 2026 and kind of the evolution of what we alluded to today around partnerships advancement momentum and lots of things we're excited for going into next year. So thank you all.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.