Latest news with #CommerceInc
Yahoo
7 days ago
- Business
- Yahoo
Stifel Lowers Price Target for Commerce.com (CMRC), Keeps Buy Rating
Inc. (NASDAQ:CMRC) is one of the 14 Best Technology Penny Stocks to Buy According to Analysts. On July 31, Stifel reduced its price target for Inc. (NASDAQ:CMRC) from $9 to $8 while keeping a Buy rating. This decision came after the company reported Q2 2025 results and announced that it is rebranding its corporate name to Inc. (NASDAQ:CMRC). This brings together the company's three market-leading solutions, BigCommerce, Feedonomics, and Makeswift, to support the next era of agentic commerce. Inc. (NASDAQ:CMRC) has restructured its go-to-market strategy and positioned itself to benefit from the agentic commerce trend. The company's Q2 2025 results met Wall Street's expectations. Stifel described these results as 'a clean print across the board.' Despite lowering the price target, Stifel still believes Inc. (NASDAQ:CMRC) has a good risk/reward profile. The firm expects the company to experience a slight acceleration in revenue and margin improvements over the mid-term. Inc. (NASDAQ:CMRC) provides an open, AI-driven commerce ecosystem. The company offers solutions, tools, and systems that empower businesses to innovate, grow, and thrive. While we acknowledge the potential of CMRC as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 12 Best Performing AI Stocks So Far in 2025 and 14 Best Aggressive Growth Stocks to Buy According to Analysts. Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
7 days ago
- Business
- Yahoo
Stifel Lowers Price Target for Commerce.com (CMRC), Keeps Buy Rating
Inc. (NASDAQ:CMRC) is one of the 14 Best Technology Penny Stocks to Buy According to Analysts. On July 31, Stifel reduced its price target for Inc. (NASDAQ:CMRC) from $9 to $8 while keeping a Buy rating. This decision came after the company reported Q2 2025 results and announced that it is rebranding its corporate name to Inc. (NASDAQ:CMRC). This brings together the company's three market-leading solutions, BigCommerce, Feedonomics, and Makeswift, to support the next era of agentic commerce. Inc. (NASDAQ:CMRC) has restructured its go-to-market strategy and positioned itself to benefit from the agentic commerce trend. The company's Q2 2025 results met Wall Street's expectations. Stifel described these results as 'a clean print across the board.' Despite lowering the price target, Stifel still believes Inc. (NASDAQ:CMRC) has a good risk/reward profile. The firm expects the company to experience a slight acceleration in revenue and margin improvements over the mid-term. Inc. (NASDAQ:CMRC) provides an open, AI-driven commerce ecosystem. The company offers solutions, tools, and systems that empower businesses to innovate, grow, and thrive. While we acknowledge the potential of CMRC as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 12 Best Performing AI Stocks So Far in 2025 and 14 Best Aggressive Growth Stocks to Buy According to Analysts. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
Globe and Mail
31-07-2025
- Business
- Globe and Mail
Commerce Announces Second Quarter 2025 Financial Results
AUSTIN, Texas, July 31, 2025 (GLOBE NEWSWIRE) -- Inc. (Nasdaq: BIGC) (formerly BigCommerce Holdings, Inc.), a provider of an open, intelligent ecosystem of technology solutions that empower businesses to unlock data potential and deliver seamless, personalized experiences at scale, today announced financial results for its second quarter ended June 30, 2025. Earlier this morning, BigCommerce announced the launch of its new parent brand, Commerce, and that it has officially changed its corporate name to Inc. ('Commerce' or the 'Company'), unifying BigCommerce, Feedonomics and Makeswift to power the next era of agentic commerce. In connection with the name change and rebranding, the Company will change its ticker to the symbol 'CMRC' on the Nasdaq Global Market effective on or about August 1, 2025. 'The second quarter was a defining period for our company, and today we mark an important milestone as we reintroduce ourselves as Commerce,' said Travis Hess, CEO of Commerce. 'The strategy, product and go-to-market engine we have built over the past year came together behind a singular focus: powering an AI-driven commerce ecosystem at scale. Our transformation phase is over. We have moved fully into execution and growth.' Second Quarter Financial Highlights: Total revenue was $84.4 million, up 3% compared to the second quarter of 2024. Total annual revenue run-rate ('ARR') as of June 30, 2025 was $354.6 million, up 3% compared to June 30, 2024. Subscription solutions revenue was $63.7 million, up 3% compared to the second quarter of 2024. ARR from accounts with at least one enterprise plan ('Enterprise Accounts') was $269.3 million as of June 30, 2025, up 6% from June 30, 2024. ARR from Enterprise Accounts as a percent of total ARR was 76% as of June 30, 2025, compared to 73% as of June 30, 2024. GAAP gross margin was 79%, compared to 76% in the second quarter of 2024. Non-GAAP gross margin was 80%, compared to 77% in the second quarter of 2024. Other Key Business Metrics Number of enterprise accounts was 5,803, down 3% compared to the second quarter of 2024. Average revenue per account ('ARPA') of enterprise accounts was $46,403, up 9% compared to the second quarter of 2024. Revenue in the United States grew by 3% compared to the second quarter of 2024. Revenue in EMEA grew by 7% and revenue in APAC declined by 4% compared to the second quarter of 2024. Loss from Operations and Non-GAAP Operating Income (Loss) GAAP loss from operations was ($6.8) million, compared to ($13.5) million in the second quarter of 2024. Included in GAAP loss from operations was a restructuring charge of $1.6 million. Non-GAAP operating income was $4.8 million, compared to $1.9 million in the second quarter of 2024. Net Income (Loss) and Earnings Per Share GAAP net loss was ($8.4) million, compared to ($11.3) million in the second quarter of 2024. Non-GAAP net income was $3.2 million or 4% of revenue, compared to $4.1 million or 5% of revenue in the second quarter of 2024. GAAP basic net loss per share was ($0.10) based on 80.1 million shares of common stock, compared to ($0.15) based on 77.5 million shares of common stock in the second quarter of 2024. Non-GAAP basic net income per share was $0.04 based on 80.1 million shares of common stock, compared to $0.05 based on 77.5 million shares of common stock in the second quarter of 2024. Adjusted EBITDA Adjusted EBITDA was $5.7 million, compared to $3.0 million in the second quarter of 2024. Cash Cash, cash equivalents, restricted cash, and marketable securities totaled $135.6 million as of June 30, 2025. For the three months ended June 30, 2025, net cash provided by operating activities was $13.6 million, compared to $11.7 million provided by operating activities for the same period in 2024. We reported free cash flow of $11.9 million in the three months ended June 30, 2025. Business Highlights: Corporate Highlights Former Adobe Fellow and Vice President of Technology Anil Kamath joined the Company's Board of Directors. In July, BigCommerce scored 24 out of 24 total medals in the 2025 Paradigm B2B Combines for Digital Commerce Solutions (Enterprise and Midmarket Editions) for the third consecutive year. The Company advanced its rankings in five categories in both Editions and achieved more Gold medals in Midmarket than other platforms. In July, BigCommerce also announced the launch of the B2B Quick Start Accelerator, a partner-led implementation program built to help mid-market B2B sellers launch faster, reduce risk and realize ROI sooner. TrustRadius recognized Commerce with a 2025 Top Rated Award for ecommerce, based on the Company's strong customer reviews. Customer Highlights Minerva Beauty, a large salon and spa equipment showroom in the United States, launched a new storefront in partnership with Commerce agency partner Forix, featuring a custom shipping app that improves service and transparency for clients. Great Star Tools, a leading manufacturer of innovative hand and power tools, used Commerce's Multi-Storefront functionality to build B2B and B2C sites for its companies Primeline Parts and Arrow Tool Group. Belami e-Commerce, a fast-growing online retailer and ecommerce services provider launched three storefronts on Catalyst and Makeswift using Commerce's Multi-Storefront functionality and leveraging Commerce's integration with PayPal Fastlane. N anoTemper Technologies, a manufacturer of high-quality biophysical instruments and solutions that deliver reliable, precise results to customers, primarily laboratories, across Europe and the United States, launched a new storefront using Commerce's B2B Edition. Bright SG, a software company that provides cloud-based solutions for accounting, payroll, and HR to businesses across the UK and Ireland, worked with Commerce partner Brave Bison to implement a custom recurring payment solution using Stripe and Bright's ERP system, Maxio, along with a custom WordPress integration. Partner Highlights In June, Commerce announced their customers now have access to cutting-edge AI-powered search engine Perplexity to optimize visibility and relevance for brands in AI search results. Commerce now provides Perplexity with pre-optimized, structured product data, ensuring that the LLM understands and recognizes merchants' products, leading to superior search results that favor the brand. In July, Commerce announced a deepened partnership with Google Cloud to accelerate merchant performance using Google Cloud's next-generation AI tools. In July, Commerce announced the launch of a powerful ecommerce accelerator purpose-built for the UK building materials industry. Developed in collaboration with leading digital agency Brave Bison, Product Information Management technology provider Pimberly, and construction industry consultant The Journey, the 'Branch of the Future' accelerator provides building merchants with a comprehensive toolkit to digitize operations, meet the expectations of next-generation buyers and future-proof their businesses. Q3 and 2025 Financial Outlook: For the third quarter of 2025, we currently expect: Total revenue between $85 million to $87 million. Non-GAAP operating income is expected to be between $2.3 million to $3.3 million. For the full year 2025, we currently expect: Total revenue between $339.6 million and $346.6 million. Non-GAAP operating income between $19 million and $25 million. Our third quarter and 2025 financial outlook is based on a number of assumptions that are subject to change and many of which are outside our control. If actual results vary from these assumptions, our expectations may change. There can be no assurance that we will achieve these results. We do not provide guidance for loss from operations , the most directly comparable GAAP measure to Non-GAAP operating income, and similarly cannot provide a reconciliation between its forecasted Non-GAAP operating income and Non-GAAP income per share and these comparable GAAP measures without unreasonable effort due to the unavailability of reliable estimates for certain items. These items are not within our control and may vary greatly between periods and could significantly impact future financial results. Conference Call Information The financial results and business highlights will be discussed on a conference call and webcast scheduled at 7:00 a.m. CT (8:00 a.m. ET) on Thursday, July 31, 2025. The conference call can be accessed by dialing (833) 634-1254 from the United States and Canada or (412) 317-6012 internationally and requesting to join the 'Commerce conference call.' The live webcast of the conference call can be accessed from Commerce's investor relations website at Following the completion of the call through 11:59 p.m. ET on Thursday, August 7, 2025, a telephone replay will be available by dialing (877) 344-7529 from the United States, (855) 669-9658 from Canada or (412) 317-0088 internationally with conference ID 7863771. A webcast replay will also be available at for 12 months. About Commerce Commerce empowers businesses to innovate, grow, and thrive by providing an open, AI-driven commerce ecosystem. As the parent company of BigCommerce, Feedonomics, and Makeswift, Commerce connects the tools and systems that power growth, enabling businesses to unlock the full potential of their data, deliver seamless and personalized experiences across every channel, and adapt swiftly to an ever-changing market. Trusted by leading businesses like Coldwater Creek, Cole Haan, Harvey Nichols, King Arthur Baking Co., Melissa & Doug, Mizuno, Patagonia, Perry Ellis, Puma, SportsShoes, and Uplift Desk, Commerce delivers the storefront control, optimized data, and AI-ready tools businesses need to grow, serve diverse buyers, and operate with confidence in an increasingly intelligent, multi-surface world. For more information, visit or follow us on X and LinkedIn. Forward-Looking Statements This press release contains 'forward-looking statements' within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In some cases, you can identify forward-looking statements by terms such as 'anticipate,' 'believe,' 'estimate,' 'expect,' 'intend,' 'outlook,' 'may,' 'might,' 'plan,' 'project,' 'will,' 'would,' 'should,' 'could,' 'can,' 'predict,' 'potential,' 'strategy,' 'target,' 'explore,' 'continue,' or the negative of these terms, and similar expressions intended to identify forward-looking statements. However, not all forward-looking statements contain these identifying words. These statements may relate to our ability to successfully execute our rebranding initiative, our increased focus on AI enablement, market size and growth strategy, our estimated and projected costs, margins, revenue, expenditures and customer and financial growth rates, our Q3 and fiscal 2025 financial outlook, our plans and objectives for future operations, growth, initiatives or strategies. By their nature, these statements are subject to numerous uncertainties and risks, including factors beyond our control, that could cause actual results, performance or achievement to differ materially and adversely from those anticipated or implied in the forward-looking statements. These assumptions, uncertainties and risks include that, among others, our business would be harmed by any decline in new customers, renewals or upgrades, our limited operating history makes it difficult to evaluate our prospects and future results of operations, we operate in competitive markets, we may not be able to sustain our revenue growth rate in the future, our business would be harmed by any significant interruptions, delays or outages in services from our platform or certain social media platforms, and a cybersecurity-related attack, significant data breach or disruption of the information technology systems or networks could negatively affect our business. Additional risks and uncertainties that could cause actual outcomes and results to differ materially from those contemplated by the forward-looking statements are included under the caption 'Risk Factors' and elsewhere in our filings with the Securities and Exchange Commission (the 'SEC'), including our Annual Report on Form 10-K for the year ended December 31, 2024 and the future quarterly and current reports that we file with the SEC. Forward-looking statements speak only as of the date the statements are made and are based on information available to Commerce at the time those statements are made and/or management's good faith belief as of that time with respect to future events. Commerce assumes no obligation to update forward-looking statements to reflect events or circumstances after the date they were made, except as required by law. Use of Non-GAAP Financial Measures We have provided in this press release certain financial information that has not been prepared in accordance with generally accepted accounting principles in the United States ('GAAP'). Our management uses these Non-GAAP financial measures internally in analyzing our financial results and believes that use of these Non-GAAP financial measures is useful to investors as an additional tool to evaluate ongoing operating results and trends and in comparing our financial results with other companies in our industry, many of which present similar Non-GAAP financial measures. Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable financial measures prepared in accordance with GAAP and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. A reconciliation of our historical Non-GAAP financial measures to the most directly comparable GAAP measures has been provided in the financial statement tables included in this press release, and investors are encouraged to review these reconciliations. Annual Revenue Run-Rate We calculate annual revenue run-rate at the end of each month as the sum of: (1) contractual monthly recurring revenue at the end of the period, which includes platform subscription fees, invoiced growth adjustments, feed management subscription fees, recurring professional services revenue, and other recurring revenue, multiplied by twelve to prospectively annualize recurring revenue, and (2) the sum of the trailing twelve-month non-recurring and variable revenue, which includes one-time partner integrations, one-time fees, payments revenue share, and any other revenue that is non-recurring and variable. Enterprise Account Metrics To measure the effectiveness of our ability to execute against our growth strategy, we calculate ARR attributable to Enterprise Accounts. We define Enterprise Accounts as accounts with at least one unique Enterprise plan subscription or an enterprise level feed management subscription (collectively 'Enterprise Accounts'). These accounts may have more than one Enterprise plan or a combination of Enterprise plans and non-enterprise plans. Average Revenue Per Account We calculate average revenue per account ('ARPA') for accounts in the Enterprise cohort at the end of a period by including customer-billed revenue and an allocation of partner and services revenue, where applicable. We allocate partner revenue, where applicable, primarily based on each customer's share of gross merchandise volume ('GMV') processed through that partner's solution. For partner revenue that is not directly linked to customer usage of a partner's solution, we allocate such revenue based on each customer's share of total platform GMV. Each account's partner revenue allocation is calculated by taking the account's trailing twelve-month partner revenue, then dividing by twelve to create a monthly average to apply to the applicable period in order to normalize ARPA for seasonality. Adjusted EBITDA We define Adjusted EBITDA as our net loss, excluding the impact of stock-based compensation expense and related payroll tax costs, amortization of intangible assets, acquisition related costs, restructuring charges, depreciation, gain on convertible notes extinguishment, interest income, interest expense, other expense, and our provision or benefit for income taxes. Acquisition related costs include contingent compensation arrangements entered into in connection with acquisitions and achieved earnout related to an acquisition. Restructuring charges include severance benefits, right-of-use asset impairments, lease termination gain, software impairments, accelerated depreciation and amortization, and professional services costs. Depreciation includes depreciation expenses related to the Company's fixed assets. The most directly comparable GAAP measure is net loss. Non-GAAP Operating Income (Loss) We define Non-GAAP Operating Income (Loss) as our GAAP Loss from operations, excluding the impact of stock-based compensation expense and related payroll tax costs, amortization of intangible assets, acquisition related costs, and restructuring charges. The most directly comparable GAAP measure is our loss from operations. Non-GAAP Net Income (Loss) We define Non-GAAP Net Income (Loss) as our GAAP net loss, excluding the impact of stock-based compensation expense and related payroll tax costs, amortization of intangible assets, acquisition related costs, restructuring charges, and gain on convertible notes extinguishment. The most directly comparable GAAP measure is our net loss. Non-GAAP Basic and Dilutive Net Income (Loss) per Share We define Non-GAAP Basic and Dilutive Net Income (Loss) per Share as our Non-GAAP net income (loss), defined above, divided by our basic and diluted GAAP weighted average shares outstanding. The most directly comparable GAAP measure is our basic net loss per share. Free Cash Flow We define Free Cash flow as our GAAP cash flow provided by (used in) operating activities less our cash paid for website domain name and GAAP purchases of property, equipment, leasehold improvements and capitalized internal-use software (Capital Expenditures). The most directly comparable GAAP measure is our cash flow provided by (used in) operating activities. BigCommerce,® the Commerce logo, and other brands are the trademarks or registered trademarks of BigCommerce Pty. Ltd. Third-party trademarks and service marks are the property of their respective owner. (1) Amounts include stock-based compensation expense and associated payroll tax costs, as follows: Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Cash flows from operating activities Net loss $ (8,382) $ (11,255) $ (8,735) $ (17,647) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization expense 3,845 3,512 8,126 6,998 Amortization of discount on convertible notes 165 497 352 994 Amortization of premium on convertible notes (408) 0 (810) 0 Stock-based compensation expense 7,236 10,009 12,445 18,397 Provision for expected credit losses 1,598 850 2,528 1,713 Gain on convertible notes extinguishment 0 0 (3,931) 0 Other 0 (37) 0 (37) Changes in operating assets and liabilities: Accounts receivable (9,005) (6,790) (5,985) (9,378) Prepaid expenses and other assets 2,159 3,935 (2,925) (1,025) Deferred commissions 747 (402) 2,682 (191) Accounts payable 444 (356) 1,122 (1,245) Accrued and other liabilities 8,078 4,168 (59) (433) Deferred revenue 7,080 7,607 9,148 10,175 Net cash provided by operating activities 13,557 11,738 13,958 8,321 Cash flows from investing activities: Cash paid for website domain name 0 0 (2,444) 0 Cash paid for acquisition 0 (100) 0 (100) Purchase of property, equipment, leasehold improvements and capitalized internal-use software (1,651) (1,064) (2,476) (1,870) Maturity of marketable securities 13,000 62,525 41,579 91,965 Purchase of marketable securities (32,572) (1,037) (40,517) (36,602) Net cash provided by (used in) investing activities (21,223) 60,324 (3,858) 53,393 Cash flows from financing activities: Proceeds from exercise of stock options 1,973 271 3,069 1,245 Taxes paid related to net share settlement of stock options (126) 0 (1,351) (1,325) Payment of convertible note issuance costs 0 0 (217) 0 Repayment of convertible notes and financing obligation 0 (137) (54,528) (271) Net cash provided by (used in) financing activities 1,847 134 (53,027) (351) Net change in cash and cash equivalents and restricted cash (5,819) 72,196 (42,927) 61,363 Cash and cash equivalents and restricted cash, beginning of period 53,248 62,012 90,356 72,845 Cash and cash equivalents and restricted cash, end of period $ 47,429 $ 134,208 $ 47,429 $ 134,208 Supplemental cash flow information: Cash paid for interest $ 0 $ 6 $ 5,685 $ 445 Cash paid for taxes $ 259 $ 42 $ 479 $ 182 Right-of-use asset obtained in exchange for new operating lease liability $ 0 $ 0 $ 5,516 $ 0 Noncash investing and financing activities: Capital additions, accrued but not paid $ 735 $ 117 $ 735 $ 117 Fair value of shares issued as consideration for acquisition $ 0 $ 248 $ 0 $ 248 Revenue by Geography: Three months ended June 30, Six months ended June 30, (in thousands) 2025 2024 2025 2024 Revenue: United States $ 64,405 $ 62,428 $ 127,026 $ 123,567 EMEA 9,889 9,281 19,854 18,473 APAC 6,118 6,343 12,043 12,597 4,021 3,777 7,880 7,552 Revenue $ 84,433 $ 81,829 $ 166,803 $ 162,189 Reconciliation of net loss & basic net loss per share to Non-GAAP net income & Non-GAAP basic and diluted net income per share: Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 (in thousands) Revenue $ 84,433 $ 81,829 $ 166,803 $ 162,189 Net loss $ (8,382) $ (11,255) $ (8,735) $ (17,647) Plus: Stock-based compensation expense and associated payroll tax costs 7,325 10,021 12,744 18,612 Amortization of intangible assets 2,520 2,452 4,855 4,919 Acquisition related costs 111 334 444 667 Restructuring charges 1,614 2,572 3,526 2,572 Gain on convertible notes extinguishment 0 0 (3,931) 0 Non-GAAP net income $ 3,188 $ 4,124 $ 8,903 $ 9,123 Basic net loss per share $ (0.10) $ (0.15) $ (0.11) $ (0.23) Non-GAAP basic net income per share $ 0.04 $ 0.05 $ 0.11 $ 0.12 Non-GAAP diluted net income per share $ 0.04 $ 0.05 $ 0.11 $ 0.12 Shares used to compute basic net loss per share and basic Non-GAAP net income per share 80,122 77,456 79,482 77,041 Shares used to compute diluted Non-GAAP net income per share 80,988 79,291 80,660 79,085 Non-GAAP net income as a percentage of revenue 3.8 % 5.0 % 5.3 % 5.6 % Reconciliation of net loss to adjusted EBITDA: Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 (in thousands) Revenue $ 84,433 $ 81,829 $ 166,803 $ 162,189 Net loss $ (8,382) $ (11,255) $ (8,735) $ (17,647) Plus: Stock-based compensation expense and associated payroll tax costs 7,325 10,021 12,744 18,612 Amortization of intangible assets 2,520 2,452 4,855 4,919 Acquisition related costs 111 334 444 667 Restructuring charges 1,614 2,572 3,526 2,572 Depreciation 946 1,060 2,190 2,079 Gain on convertible notes extinguishment 0 0 (3,931) 0 Interest income (1,171) (3,196) (2,471) (6,374) Interest expense 2,522 720 5,065 1,440 Other expenses 23 111 130 443 Provision for income taxes 221 132 745 422 Adjusted EBITDA $ 5,729 $ 2,951 $ 14,562 $ 7,133 Adjusted EBITDA as a percentage of revenue 6.8 % 3.6 % 8.7 % 4.4 % Reconciliation of Cost of revenue to Non-GAAP cost of revenue: Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 (in thousands) Revenue $ 84,433 $ 81,829 $ 166,803 $ 162,189 Cost of revenue $ 17,739 $ 19,811 $ 34,723 $ 38,250 Less: Stock-based compensation expense and associated payroll tax costs 720 1,028 1,466 1,684 Non-GAAP cost of revenue $ 17,019 $ 18,783 $ 33,257 $ 36,566 As a percentage of revenue 20.2 % 23.0 % 19.9 % 22.5 % Reconciliation of Sales and marketing expense to Non-GAAP sales and marketing expense: Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 (in thousands) Revenue $ 84,433 $ 81,829 $ 166,803 $ 162,189 Sales and marketing $ 35,071 $ 34,425 $ 65,437 $ 66,857 Less: Stock-based compensation expense and associated payroll tax costs 1,820 3,138 3,595 5,005 Non-GAAP sales and marketing $ 33,251 $ 31,287 $ 61,842 $ 61,852 As a percentage of revenue 39.4 % 38.2 % 37.1 % 38.1 % Reconciliation of General and administrative expense to Non-GAAP general and administrative expense: Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 (in thousands) Revenue $ 84,433 $ 81,829 $ 166,803 $ 162,189 General & administrative $ 15,855 $ 15,436 $ 29,499 $ 30,365 Less: Stock-based compensation expense and associated payroll tax costs 2,045 2,582 1,901 5,174 Non-GAAP general & administrative $ 13,810 $ 12,854 $ 27,598 $ 25,191 As a percentage of revenue 16.4 % 15.7 % 16.5 % 15.5 %
Yahoo
31-07-2025
- Business
- Yahoo
Commerce Announces Second Quarter 2025 Financial Results
Second Quarter Total Revenue of $84.4 Million, an Increase of 3% Versus Prior Year. Total ARR of $354.6 Million, an Increase of 3% Versus Prior Year. Enterprise ARR of $269.3 Million, an Increase of 6% Versus Prior Year AUSTIN, Texas, July 31, 2025 (GLOBE NEWSWIRE) -- Inc. (Nasdaq: BIGC) (formerly BigCommerce Holdings, Inc.), a provider of an open, intelligent ecosystem of technology solutions that empower businesses to unlock data potential and deliver seamless, personalized experiences at scale, today announced financial results for its second quarter ended June 30, 2025. Earlier this morning, BigCommerce announced the launch of its new parent brand, Commerce, and that it has officially changed its corporate name to Inc. ('Commerce' or the 'Company'), unifying BigCommerce, Feedonomics and Makeswift to power the next era of agentic commerce. In connection with the name change and rebranding, the Company will change its ticker to the symbol 'CMRC' on the Nasdaq Global Market effective on or about August 1, 2025. 'The second quarter was a defining period for our company, and today we mark an important milestone as we reintroduce ourselves as Commerce,' said Travis Hess, CEO of Commerce. 'The strategy, product and go-to-market engine we have built over the past year came together behind a singular focus: powering an AI-driven commerce ecosystem at scale. Our transformation phase is over. We have moved fully into execution and growth.' Second Quarter Financial Highlights: Total revenue was $84.4 million, up 3% compared to the second quarter of 2024. Total annual revenue run-rate ('ARR') as of June 30, 2025 was $354.6 million, up 3% compared to June 30, 2024. Subscription solutions revenue was $63.7 million, up 3% compared to the second quarter of 2024. ARR from accounts with at least one enterprise plan ('Enterprise Accounts') was $269.3 million as of June 30, 2025, up 6% from June 30, 2024. ARR from Enterprise Accounts as a percent of total ARR was 76% as of June 30, 2025, compared to 73% as of June 30, 2024. GAAP gross margin was 79%, compared to 76% in the second quarter of 2024. Non-GAAP gross margin was 80%, compared to 77% in the second quarter of 2024. Other Key Business Metrics Number of enterprise accounts was 5,803, down 3% compared to the second quarter of 2024. Average revenue per account ('ARPA') of enterprise accounts was $46,403, up 9% compared to the second quarter of 2024. Revenue in the United States grew by 3% compared to the second quarter of 2024. Revenue in EMEA grew by 7% and revenue in APAC declined by 4% compared to the second quarter of 2024. Loss from Operations and Non-GAAP Operating Income (Loss) GAAP loss from operations was ($6.8) million, compared to ($13.5) million in the second quarter of 2024. Included in GAAP loss from operations was a restructuring charge of $1.6 million. Non-GAAP operating income was $4.8 million, compared to $1.9 million in the second quarter of 2024. Net Income (Loss) and Earnings Per Share GAAP net loss was ($8.4) million, compared to ($11.3) million in the second quarter of 2024. Non-GAAP net income was $3.2 million or 4% of revenue, compared to $4.1 million or 5% of revenue in the second quarter of 2024. GAAP basic net loss per share was ($0.10) based on 80.1 million shares of common stock, compared to ($0.15) based on 77.5 million shares of common stock in the second quarter of 2024. Non-GAAP basic net income per share was $0.04 based on 80.1 million shares of common stock, compared to $0.05 based on 77.5 million shares of common stock in the second quarter of 2024. Adjusted EBITDA Adjusted EBITDA was $5.7 million, compared to $3.0 million in the second quarter of 2024. Cash Cash, cash equivalents, restricted cash, and marketable securities totaled $135.6 million as of June 30, 2025. For the three months ended June 30, 2025, net cash provided by operating activities was $13.6 million, compared to $11.7 million provided by operating activities for the same period in 2024. We reported free cash flow of $11.9 million in the three months ended June 30, 2025. Business Highlights: Corporate Highlights Former Adobe Fellow and Vice President of Technology Anil Kamath joined the Company's Board of Directors. In July, BigCommerce scored 24 out of 24 total medals in the 2025 Paradigm B2B Combines for Digital Commerce Solutions (Enterprise and Midmarket Editions) for the third consecutive year. The Company advanced its rankings in five categories in both Editions and achieved more Gold medals in Midmarket than other platforms. In July, BigCommerce also announced the launch of the B2B Quick Start Accelerator, a partner-led implementation program built to help mid-market B2B sellers launch faster, reduce risk and realize ROI sooner. TrustRadius recognized Commerce with a 2025 Top Rated Award for ecommerce, based on the Company's strong customer reviews. Customer Highlights Minerva Beauty, a large salon and spa equipment showroom in the United States, launched a new storefront in partnership with Commerce agency partner Forix, featuring a custom shipping app that improves service and transparency for clients. Great Star Tools, a leading manufacturer of innovative hand and power tools, used Commerce's Multi-Storefront functionality to build B2B and B2C sites for its companies Primeline Parts and Arrow Tool Group. Belami e-Commerce, a fast-growing online retailer and ecommerce services provider launched three storefronts on Catalyst and Makeswift using Commerce's Multi-Storefront functionality and leveraging Commerce's integration with PayPal Fastlane. NanoTemper Technologies, a manufacturer of high-quality biophysical instruments and solutions that deliver reliable, precise results to customers, primarily laboratories, across Europe and the United States, launched a new storefront using Commerce's B2B Edition. Bright SG, a software company that provides cloud-based solutions for accounting, payroll, and HR to businesses across the UK and Ireland, worked with Commerce partner Brave Bison to implement a custom recurring payment solution using Stripe and Bright's ERP system, Maxio, along with a custom WordPress integration. Partner Highlights In June, Commerce announced their customers now have access to cutting-edge AI-powered search engine Perplexity to optimize visibility and relevance for brands in AI search results. Commerce now provides Perplexity with pre-optimized, structured product data, ensuring that the LLM understands and recognizes merchants' products, leading to superior search results that favor the brand. In July, Commerce announced a deepened partnership with Google Cloud to accelerate merchant performance using Google Cloud's next-generation AI tools. In July, Commerce announced the launch of a powerful ecommerce accelerator purpose-built for the UK building materials industry. Developed in collaboration with leading digital agency Brave Bison, Product Information Management technology provider Pimberly, and construction industry consultant The Journey, the 'Branch of the Future' accelerator provides building merchants with a comprehensive toolkit to digitize operations, meet the expectations of next-generation buyers and future-proof their businesses. Q3 and 2025 Financial Outlook: For the third quarter of 2025, we currently expect: Total revenue between $85 million to $87 million. Non-GAAP operating income is expected to be between $2.3 million to $3.3 million. For the full year 2025, we currently expect: Total revenue between $339.6 million and $346.6 million. Non-GAAP operating income between $19 million and $25 million. Our third quarter and 2025 financial outlook is based on a number of assumptions that are subject to change and many of which are outside our control. If actual results vary from these assumptions, our expectations may change. There can be no assurance that we will achieve these results. We do not provide guidance for loss from operations , the most directly comparable GAAP measure to Non-GAAP operating income, and similarly cannot provide a reconciliation between its forecasted Non-GAAP operating income and Non-GAAP income per share and these comparable GAAP measures without unreasonable effort due to the unavailability of reliable estimates for certain items. These items are not within our control and may vary greatly between periods and could significantly impact future financial results. Conference Call Information The financial results and business highlights will be discussed on a conference call and webcast scheduled at 7:00 a.m. CT (8:00 a.m. ET) on Thursday, July 31, 2025. The conference call can be accessed by dialing (833) 634-1254 from the United States and Canada or (412) 317-6012 internationally and requesting to join the 'Commerce conference call.' The live webcast of the conference call can be accessed from Commerce's investor relations website at Following the completion of the call through 11:59 p.m. ET on Thursday, August 7, 2025, a telephone replay will be available by dialing (877) 344-7529 from the United States, (855) 669-9658 from Canada or (412) 317-0088 internationally with conference ID 7863771. A webcast replay will also be available at for 12 months. About Commerce Commerce empowers businesses to innovate, grow, and thrive by providing an open, AI-driven commerce ecosystem. As the parent company of BigCommerce, Feedonomics, and Makeswift, Commerce connects the tools and systems that power growth, enabling businesses to unlock the full potential of their data, deliver seamless and personalized experiences across every channel, and adapt swiftly to an ever-changing market. Trusted by leading businesses like Coldwater Creek, Cole Haan, Harvey Nichols, King Arthur Baking Co., Melissa & Doug, Mizuno, Patagonia, Perry Ellis, Puma, SportsShoes, and Uplift Desk, Commerce delivers the storefront control, optimized data, and AI-ready tools businesses need to grow, serve diverse buyers, and operate with confidence in an increasingly intelligent, multi-surface world. For more information, visit or follow us on X and LinkedIn. Forward-Looking Statements This press release contains 'forward-looking statements' within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In some cases, you can identify forward-looking statements by terms such as 'anticipate,' 'believe,' 'estimate,' 'expect,' 'intend,' 'outlook,' 'may,' 'might,' 'plan,' 'project,' 'will,' 'would,' 'should,' 'could,' 'can,' 'predict,' 'potential,' 'strategy,' 'target,' 'explore,' 'continue,' or the negative of these terms, and similar expressions intended to identify forward-looking statements. However, not all forward-looking statements contain these identifying words. These statements may relate to our ability to successfully execute our rebranding initiative, our increased focus on AI enablement, market size and growth strategy, our estimated and projected costs, margins, revenue, expenditures and customer and financial growth rates, our Q3 and fiscal 2025 financial outlook, our plans and objectives for future operations, growth, initiatives or strategies. By their nature, these statements are subject to numerous uncertainties and risks, including factors beyond our control, that could cause actual results, performance or achievement to differ materially and adversely from those anticipated or implied in the forward-looking statements. These assumptions, uncertainties and risks include that, among others, our business would be harmed by any decline in new customers, renewals or upgrades, our limited operating history makes it difficult to evaluate our prospects and future results of operations, we operate in competitive markets, we may not be able to sustain our revenue growth rate in the future, our business would be harmed by any significant interruptions, delays or outages in services from our platform or certain social media platforms, and a cybersecurity-related attack, significant data breach or disruption of the information technology systems or networks could negatively affect our business. Additional risks and uncertainties that could cause actual outcomes and results to differ materially from those contemplated by the forward-looking statements are included under the caption 'Risk Factors' and elsewhere in our filings with the Securities and Exchange Commission (the 'SEC'), including our Annual Report on Form 10-K for the year ended December 31, 2024 and the future quarterly and current reports that we file with the SEC. Forward-looking statements speak only as of the date the statements are made and are based on information available to Commerce at the time those statements are made and/or management's good faith belief as of that time with respect to future events. Commerce assumes no obligation to update forward-looking statements to reflect events or circumstances after the date they were made, except as required by law. Use of Non-GAAP Financial Measures We have provided in this press release certain financial information that has not been prepared in accordance with generally accepted accounting principles in the United States ('GAAP'). Our management uses these Non-GAAP financial measures internally in analyzing our financial results and believes that use of these Non-GAAP financial measures is useful to investors as an additional tool to evaluate ongoing operating results and trends and in comparing our financial results with other companies in our industry, many of which present similar Non-GAAP financial measures. Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable financial measures prepared in accordance with GAAP and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. A reconciliation of our historical Non-GAAP financial measures to the most directly comparable GAAP measures has been provided in the financial statement tables included in this press release, and investors are encouraged to review these reconciliations. Annual Revenue Run-Rate We calculate annual revenue run-rate at the end of each month as the sum of: (1) contractual monthly recurring revenue at the end of the period, which includes platform subscription fees, invoiced growth adjustments, feed management subscription fees, recurring professional services revenue, and other recurring revenue, multiplied by twelve to prospectively annualize recurring revenue, and (2) the sum of the trailing twelve-month non-recurring and variable revenue, which includes one-time partner integrations, one-time fees, payments revenue share, and any other revenue that is non-recurring and variable. Enterprise Account Metrics To measure the effectiveness of our ability to execute against our growth strategy, we calculate ARR attributable to Enterprise Accounts. We define Enterprise Accounts as accounts with at least one unique Enterprise plan subscription or an enterprise level feed management subscription (collectively 'Enterprise Accounts'). These accounts may have more than one Enterprise plan or a combination of Enterprise plans and non-enterprise plans. Average Revenue Per Account We calculate average revenue per account ('ARPA') for accounts in the Enterprise cohort at the end of a period by including customer-billed revenue and an allocation of partner and services revenue, where applicable. We allocate partner revenue, where applicable, primarily based on each customer's share of gross merchandise volume ('GMV') processed through that partner's solution. For partner revenue that is not directly linked to customer usage of a partner's solution, we allocate such revenue based on each customer's share of total platform GMV. Each account's partner revenue allocation is calculated by taking the account's trailing twelve-month partner revenue, then dividing by twelve to create a monthly average to apply to the applicable period in order to normalize ARPA for seasonality. Adjusted EBITDA We define Adjusted EBITDA as our net loss, excluding the impact of stock-based compensation expense and related payroll tax costs, amortization of intangible assets, acquisition related costs, restructuring charges, depreciation, gain on convertible notes extinguishment, interest income, interest expense, other expense, and our provision or benefit for income taxes. Acquisition related costs include contingent compensation arrangements entered into in connection with acquisitions and achieved earnout related to an acquisition. Restructuring charges include severance benefits, right-of-use asset impairments, lease termination gain, software impairments, accelerated depreciation and amortization, and professional services costs. Depreciation includes depreciation expenses related to the Company's fixed assets. The most directly comparable GAAP measure is net loss. Non-GAAP Operating Income (Loss) We define Non-GAAP Operating Income (Loss) as our GAAP Loss from operations, excluding the impact of stock-based compensation expense and related payroll tax costs, amortization of intangible assets, acquisition related costs, and restructuring charges. The most directly comparable GAAP measure is our loss from operations. Non-GAAP Net Income (Loss) We define Non-GAAP Net Income (Loss) as our GAAP net loss, excluding the impact of stock-based compensation expense and related payroll tax costs, amortization of intangible assets, acquisition related costs, restructuring charges, and gain on convertible notes extinguishment. The most directly comparable GAAP measure is our net loss. Non-GAAP Basic and Dilutive Net Income (Loss) per Share We define Non-GAAP Basic and Dilutive Net Income (Loss) per Share as our Non-GAAP net income (loss), defined above, divided by our basic and diluted GAAP weighted average shares outstanding. The most directly comparable GAAP measure is our basic net loss per share. Free Cash Flow We define Free Cash flow as our GAAP cash flow provided by (used in) operating activities less our cash paid for website domain name and GAAP purchases of property, equipment, leasehold improvements and capitalized internal-use software (Capital Expenditures). The most directly comparable GAAP measure is our cash flow provided by (used in) operating activities. BigCommerce,® the Commerce logo, and other brands are the trademarks or registered trademarks of BigCommerce Pty. Ltd. Third-party trademarks and service marks are the property of their respective owner. Media Relations Contact Investor Relations Contact Brad Hem Tyler Duncan PR@ InvestorRelations@ Consolidated Balance Sheets(in thousands) June 30, December 31, 2025 2024 (unaudited) Assets Current assets Cash and cash equivalents $ 46,265 $ 88,877 Restricted cash 1,164 1,479 Marketable securities 88,190 89,283 Accounts receivable, net 51,767 48,117 Prepaid expenses and other assets, net 14,722 14,641 Deferred commissions 7,556 8,822 Total current assets 209,664 251,219 Property and equipment, net 8,983 9,128 Operating lease, right-of-use-assets 7,114 1,993 Prepaid expenses and other assets, net of current portion 5,797 3,146 Deferred commissions, net of current portion 4,143 5,559 Intangible assets, net 14,906 17,317 Goodwill 51,927 51,927 Total assets $ 302,534 $ 340,289 Liabilities and stockholders' equity Current liabilities Accounts payable $ 8,775 $ 7,018 Accrued liabilities 3,464 3,194 Deferred revenue 55,738 46,590 Operating lease liabilities 1,766 2,438 Other liabilities 28,538 28,766 Total current liabilities 98,281 88,006 Convertible notes 157,545 216,466 Operating lease liabilities, net of current portion 6,709 1,680 Other liabilities, net of current portion 1,233 768 Total liabilities 263,768 306,920 Stockholders' equity Common stock 7 7 Additional paid-in capital 669,068 654,905 Accumulated other comprehensive income 114 145 Accumulated deficit (630,423 ) (621,688 ) Total stockholders' equity 38,766 33,369 Total liabilities and stockholders' equity $ 302,534 $ 340,289 Consolidated Statements of Operations(in thousands, except per share amounts)(unaudited) For the three months ended June 30, For the six months ended June 30, 2025 2024 2025 2024 Revenue $ 84,433 $ 81,829 $ 166,803 $ 162,189 Cost of revenue (1) 17,739 19,811 34,723 38,250 Gross profit 66,694 62,018 132,080 123,939 Operating expenses: Sales and marketing(1) 35,071 34,425 65,437 66,857 Research and development(1) 18,310 20,287 37,516 40,275 General and administrative(1) 15,855 15,436 29,499 30,365 Amortization of intangible assets 2,520 2,452 4,855 4,919 Acquisition related costs 111 334 444 667 Restructuring charges 1,614 2,572 3,526 2,572 Total operating expenses 73,481 75,506 141,277 145,655 Loss from operations (6,787 ) (13,488 ) (9,197 ) (21,716 ) Gain on convertible note extinguishment 0 0 3,931 0 Interest income 1,171 3,196 2,471 6,374 Interest expense (2,522 ) (720 ) (5,065 ) (1,440 ) Other expense (23 ) (111 ) (130 ) (443 ) Loss before provision for income taxes (8,161 ) (11,123 ) (7,990 ) (17,225 ) Provision for income taxes (221 ) (132 ) (745 ) (422 ) Net loss $ (8,382 ) $ (11,255 ) $ (8,735 ) $ (17,647 ) Basic net loss per share $ (0.10 ) $ (0.15 ) $ (0.11 ) $ (0.23 ) Shares used to compute basic net loss per share 80,122 77,456 79,482 77,041 (1) Amounts include stock-based compensation expense and associated payroll tax costs, as follows: For the three months ended June 30, For the six months ended June 30, 2025 2024 2025 2024 Cost of revenue $ 720 $ 1,028 $ 1,466 $ 1,684 Sales and marketing 1,820 3,138 3,595 5,005 Research and development 2,740 3,273 5,782 6,749 General and administrative 2,045 2,582 1,901 5,174 Consolidated Statements of Cash Flows(in thousands)(unaudited) Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Cash flows from operating activities Net loss $ (8,382 ) $ (11,255 ) $ (8,735 ) $ (17,647 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization expense 3,845 3,512 8,126 6,998 Amortization of discount on convertible notes 165 497 352 994 Amortization of premium on convertible notes (408 ) 0 (810 ) 0 Stock-based compensation expense 7,236 10,009 12,445 18,397 Provision for expected credit losses 1,598 850 2,528 1,713 Gain on convertible notes extinguishment 0 0 (3,931 ) 0 Other 0 (37 ) 0 (37 ) Changes in operating assets and liabilities: Accounts receivable (9,005 ) (6,790 ) (5,985 ) (9,378 ) Prepaid expenses and other assets 2,159 3,935 (2,925 ) (1,025 ) Deferred commissions 747 (402 ) 2,682 (191 ) Accounts payable 444 (356 ) 1,122 (1,245 ) Accrued and other liabilities 8,078 4,168 (59 ) (433 ) Deferred revenue 7,080 7,607 9,148 10,175 Net cash provided by operating activities 13,557 11,738 13,958 8,321 Cash flows from investing activities: Cash paid for website domain name 0 0 (2,444 ) 0 Cash paid for acquisition 0 (100 ) 0 (100 ) Purchase of property, equipment, leasehold improvements and capitalized internal-use software (1,651 ) (1,064 ) (2,476 ) (1,870 ) Maturity of marketable securities 13,000 62,525 41,579 91,965 Purchase of marketable securities (32,572 ) (1,037 ) (40,517 ) (36,602 ) Net cash provided by (used in) investing activities (21,223 ) 60,324 (3,858 ) 53,393 Cash flows from financing activities: Proceeds from exercise of stock options 1,973 271 3,069 1,245 Taxes paid related to net share settlement of stock options (126 ) 0 (1,351 ) (1,325 ) Payment of convertible note issuance costs 0 0 (217 ) 0 Repayment of convertible notes and financing obligation 0 (137 ) (54,528 ) (271 ) Net cash provided by (used in) financing activities 1,847 134 (53,027 ) (351 ) Net change in cash and cash equivalents and restricted cash (5,819 ) 72,196 (42,927 ) 61,363 Cash and cash equivalents and restricted cash, beginning of period 53,248 62,012 90,356 72,845 Cash and cash equivalents and restricted cash, end of period $ 47,429 $ 134,208 $ 47,429 $ 134,208 Supplemental cash flow information: Cash paid for interest $ 0 $ 6 $ 5,685 $ 445 Cash paid for taxes $ 259 $ 42 $ 479 $ 182 Right-of-use asset obtained in exchange for new operating lease liability $ 0 $ 0 $ 5,516 $ 0 Noncash investing and financing activities: Capital additions, accrued but not paid $ 735 $ 117 $ 735 $ 117 Fair value of shares issued as consideration for acquisition $ 0 $ 248 $ 0 $ 248 of Revenue Disaggregated Revenue: Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Subscription solutions $ 63,656 $ 61,796 $ 125,769 $ 122,755 Partner and services 20,777 20,033 41,034 39,434 Revenue $ 84,433 $ 81,829 $ 166,803 $ 162,189 Revenue by Geography: Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Revenue: United States $ 64,405 $ 62,428 $ 127,026 $ 123,567 EMEA 9,889 9,281 19,854 18,473 APAC 6,118 6,343 12,043 12,597 Rest of World 4,021 3,777 7,880 7,552 Revenue $ 84,433 $ 81,829 $ 166,803 $ 162,189 IncReconciliation of GAAP to Non-GAAP Results(in thousands, except per share amounts)(unaudited) Reconciliation of loss from operations to Non-GAAP operating income: Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Revenue $ 84,433 $ 81,829 $ 166,803 $ 162,189 Loss from operations $ (6,787 ) $ (13,488 ) $ (9,197 ) $ (21,716 ) Plus: Stock-based compensation expense and associated payroll tax costs 7,325 10,021 12,744 18,612 Amortization of intangible assets 2,520 2,452 4,855 4,919 Acquisition related costs 111 334 444 667 Restructuring charges 1,614 2,572 3,526 2,572 Non-GAAP operating income $ 4,783 $ 1,891 $ 12,372 $ 5,054 Non-GAAP operating income as a percentage of revenue 5.7 % 2.3 % 7.4 % 3.1 % Reconciliation of net loss & basic net loss per share to Non-GAAP net income & Non-GAAP basic and diluted net income per share: Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Revenue $ 84,433 $ 81,829 $ 166,803 $ 162,189 Net loss $ (8,382 ) $ (11,255 ) $ (8,735 ) $ (17,647 ) Plus: Stock-based compensation expense and associated payroll tax costs 7,325 10,021 12,744 18,612 Amortization of intangible assets 2,520 2,452 4,855 4,919 Acquisition related costs 111 334 444 667 Restructuring charges 1,614 2,572 3,526 2,572 Gain on convertible notes extinguishment 0 0 (3,931 ) 0 Non-GAAP net income $ 3,188 $ 4,124 $ 8,903 $ 9,123 Basic net loss per share $ (0.10 ) $ (0.15 ) $ (0.11 ) $ (0.23 ) Non-GAAP basic net income per share $ 0.04 $ 0.05 $ 0.11 $ 0.12 Non-GAAP diluted net income per share $ 0.04 $ 0.05 $ 0.11 $ 0.12 Shares used to compute basic net loss per share and basic Non-GAAP net income per share 80,122 77,456 79,482 77,041 Shares used to compute diluted Non-GAAP net income per share 80,988 79,291 80,660 79,085 Non-GAAP net income as a percentage of revenue 3.8 % 5.0 % 5.3 % 5.6 % Reconciliation of net loss to adjusted EBITDA: Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Revenue $ 84,433 $ 81,829 $ 166,803 $ 162,189 Net loss $ (8,382 ) $ (11,255 ) $ (8,735 ) $ (17,647 ) Plus: Stock-based compensation expense and associated payroll tax costs 7,325 10,021 12,744 18,612 Amortization of intangible assets 2,520 2,452 4,855 4,919 Acquisition related costs 111 334 444 667 Restructuring charges 1,614 2,572 3,526 2,572 Depreciation 946 1,060 2,190 2,079 Gain on convertible notes extinguishment 0 0 (3,931 ) 0 Interest income (1,171 ) (3,196 ) (2,471 ) (6,374 ) Interest expense 2,522 720 5,065 1,440 Other expenses 23 111 130 443 Provision for income taxes 221 132 745 422 Adjusted EBITDA $ 5,729 $ 2,951 $ 14,562 $ 7,133 Adjusted EBITDA as a percentage of revenue 6.8 % 3.6 % 8.7 % 4.4 % Reconciliation of Cost of revenue to Non-GAAP cost of revenue: Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Revenue $ 84,433 $ 81,829 $ 166,803 $ 162,189 Cost of revenue $ 17,739 $ 19,811 $ 34,723 $ 38,250 Less: Stock-based compensation expense and associated payroll tax costs 720 1,028 1,466 1,684 Non-GAAP cost of revenue $ 17,019 $ 18,783 $ 33,257 $ 36,566 As a percentage of revenue 20.2 % 23.0 % 19.9 % 22.5 % Reconciliation of Sales and marketing expense to Non-GAAP sales and marketing expense: Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Revenue $ 84,433 $ 81,829 $ 166,803 $ 162,189 Sales and marketing $ 35,071 $ 34,425 $ 65,437 $ 66,857 Less: Stock-based compensation expense and associated payroll tax costs 1,820 3,138 3,595 5,005 Non-GAAP sales and marketing $ 33,251 $ 31,287 $ 61,842 $ 61,852 As a percentage of revenue 39.4 % 38.2 % 37.1 % 38.1 % Reconciliation of Research and development expense to Non-GAAP research and development expense: Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Revenue $ 84,433 $ 81,829 $ 166,803 $ 162,189 Research and development $ 18,310 $ 20,287 $ 37,516 $ 40,275 Less: Stock-based compensation expense and associated payroll tax costs 2,740 3,273 5,782 6,749 Non-GAAP research and development $ 15,570 $ 17,014 $ 31,734 $ 33,526 As a percentage of revenue 18.4 % 20.8 % 19.0 % 20.7 % Reconciliation of General and administrative expense to Non-GAAP general and administrative expense: Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Revenue $ 84,433 $ 81,829 $ 166,803 $ 162,189 General & administrative $ 15,855 $ 15,436 $ 29,499 $ 30,365 Less: Stock-based compensation expense and associated payroll tax costs 2,045 2,582 1,901 5,174 Non-GAAP general & administrative $ 13,810 $ 12,854 $ 27,598 $ 25,191 As a percentage of revenue 16.4 % 15.7 % 16.5 % 15.5 % Reconciliation of net cash provided by operating activities to free cash flow: Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Net cash provided by operating activities $ 13,557 $ 11,738 $ 13,958 $ 8,321 Cash paid for website domain name 0 0 (2,444 ) 0 Purchase of property, equipment, leasehold improvements and capitalized internal-use software (1,651 ) (1,064 ) (2,476 ) (1,870 ) Free cash flow $ 11,906 $ 10,674 $ 9,038 $ 6,451 Sign in to access your portfolio
Yahoo
10-04-2025
- Business
- Yahoo
SPS Commerce: Its risks might move it up
SPS Commerce Inc. (NASDAQ:SPSC) creates software to help retailers with their supply chain management. It specializes in Electronic Data Interchange (EDI) services that help businesses automate and streamline communications across supply chains. Although its main customer target has been retailers, it's now expanding to other areas as well. Warning! GuruFocus has detected 2 Warning Sign with SPSC. The company's year-over-year growth was 19% in 2024, well above its target model of ?15%. This growth equates to an 8-year CAGR (2016-2024) of 16%, demonstrating sustainable long-term growth. Recurring revenue now represents 94% of total revenue, demonstrating excellent revenue stability, which is helpful in a sector with high volatility. The current penetration of ~ 16% suggests significant room for expansion on a $11.1B global TAM (Total Addressable Market), with $6.5B in the U.S. alone Some of the drivers of the revenue growth are: Increasing customer base through retail programs, channel sales, and marketing Increasing wallet share (annualized average recurring revenues per recurring revenue customer) through upselling and cross-selling additional products Consolidation through customer, product, technology, and geographic expansion. This is why the company has been making acquisitions: Carbon6, SAP B1 SPS Integration Technology, and TIE Kinetics. The company expects to continue growing revenues at 15% or more, and analysts forecast a 16.01% 3-year CAGR. Unlike other tech companies, SPS Commerce has been profitable since at least 2018, after a relatively small dip in income. Its net income margin has been stable at 12% over a 4-year period, but one major concern is that its EBITDA margin of ~29% is below the target of 35% - close to the industry average of 33.84%. However, that's where an investor can see the first opportunity. Given the target of 35%, the company's management knows it's achievable. When that happens, the share price will follow the increase in earnings. And with a target EBITDA growth of 15-25% annually, that does not seem far away. As context, the change over a 10-year period is presented below for EBITDA. Trendline higher than the mentioned growth target Another metric that raises concern is the 1% YoY customer growth in 2024. This is a decrease from the 6% achieved in 2023. This can mean the competition is getting ahead of the company and capturing new customers. However, another opportunity is presented here. Management has noted this and is now focusing on accelerating customer acquisition and increasing wallet share. With the last acquisitions adding products in new areas and the plan for geographical expansion, growth on those fronts can be achieved. Also, given the company's strong balance sheet, it has the potential to initiate strategic acquisitions to expand product capabilities and market reach even further. The company has maintained a lean balance sheet with $241M in cash and cash equivalents, no long-term debt, healthy stockholders' equity of $854.7M, and total assets reaching $1031.2 in 2024. This puts the company in a position to move quickly into areas of opportunity like acquisitions, customer expansion, developing new products, and market expansion. And, in case of economic downturns or increased competition pressure, there is more room to fight back. Some other points that provide a favorable outlook are The network effect creates a defensible moat with 45,000+ recurring revenue customers. Also, the cost of changing to another supplier of these software services is high and prevents existing customers from migrating at the first problem with the software. Instead, there is an incentive to help the company improve the product. Relationships with 3,500 buying organizations and 2,000+ 3PLs (Purchase Lines) Integration with 400+ system partners (Microsoft, Intuit, Oracle, SAP, etc.) enhances product features and makes it easy for companies that already use them to adopt these partners' services. The viral lead generation model through retailer change events creates efficient marketing. A high percentage of recurring revenue (94%) creates stability With the multiple acquisitions, the company may face difficulties integrating different teams, systems, processes, and cultures. If problems arise in this regard, product development and geographical expansion will be affected, and as a consequence, customer acquisition and wallet share expansion will slow down. Due to the nature of the software sector, the company is exposed to a highly competitive environment. With competitors like IBM, Open Text Corp, E2Open, and more, any mistake the company makes can and will be used by the competitors. Also, the supply chain technology space is evolving as more workloads are moved to cloud-based operations. Another common concern with software companies is their valuations. With premium multiples based on high growth expectations, failure to post continued growth can lead to devaluation. Macroeconomic factors can affect the whole industry. Retail sectors might be at higher risk of being disrupted by economic factors like trade wars or recessions. This threat is a significant concern because a considerable portion of the company's customer base is small and medium-sized businesses. Using GuruFocus tools, investors can have an idea of the target price for the company's shares. With the following assumptions as input for a DCF model: A growth rate of 25% based on the company's plans going well, specifically regarding customer acquisition and wallet share expansion. Terminal stage growth rate of 4%, close to the US GDP growth of 3.1% (1947-2024) WACC of 9.69% as the discount rate Book Value of 22.69M (from company data) The following result is computed (Note: for some reason, the growth and discount rates do not show the updated values, but the result uses the correct values) The Free Cash Flow graph is shown below as context. The FCF growth rate for the DFCF model is 19.94%, while it has been 35.50% over the 10-year period shown on the graph. The tool also tells us that growth is achievable. These numbers show that the company is considerably undervalued. Its potential upside is 29.13%, which can be realized quickly once other investors start looking into it. One of the gurus who is heavily investing in SPS Commerce is Ken Fisher (Trades, Portfolio), who has been consistently increasing his position, reaching 265,326 shares (0.710% of outstanding shares) If we look at the volume of guru trades, we see that almost all the trades done have been buys One could argue that tariffs are a risk for the company, but I think they could actually boost adoption. Tariffs will impact supply chains worldwide; in that case, a tool like the one provided by SPS Commerce is of much help. If we look at the financials during another event disrupting supply chains, the 2019/2020 pandemic, we find no significant effects. Moreover, this situation could raise awarness of companies like SPSC, potentially attracting investors. SPS Commerce presents an attractive investment case for investors expecting high returns while being able to compromise on risk. The company has demonstrated the ability to grow revenue at ~19% while maintaining healthy profitability and strong cash flow. Based on the company's consistent financial performance, ample market opportunity, and strategy moving forward, it is well-positioned to continue growing. The primary growth concern is slowing customer acquisition, which is partially offset by the positive expansion in wallet share among existing customers. Given its multiple growth pathways and significant market opportunity, the company's expectation of ?15% revenue growth going forward appears reasonable. The strong balance sheet with no debt and substantial cash reserves provides flexibility for strategic investments, acquisitions, and changes in direction. The company's high percentage of recurring revenue, paired with low churn, creates predictability, while the strong network effects build a defensible competitive position. The key investment consideration would be valuation, as high-quality SaaS companies often trade at premium multiples. There might be companies with equal or more upside potential with less risk; I'm open to reading about them in the comments. This article first appeared on GuruFocus.
