• Revenue: $333 million for 2024, up 8% year-over-year; Q4 revenue of $87 million, up 3% year-over-year.
• Non-GAAP Operating Income: Exceeded $19 million for 2024, a $25 million improvement over 2023; $10 million in Q4 2024.
• Non-GAAP Operating Margin: Expanded by 767 basis points in 2024; nearly 6% for the year.
• Operating Cash Flow: $26 million for 2024, a $50 million improvement from 2023; $12 million in Q4 2024.
• Annual Revenue Run Rate (ARR): Nearly $350 million, a 4% increase year-over-year.
• Enterprise ARR: Grew 7% to $262 million, representing 75% of total company ARR.
• Non-GAAP Sales and Marketing Expenses: 36% of revenue, improved from 41% in 2023.
• Net Debt: Approximately $28 million after repurchasing convertible notes.
• 2025 Revenue Guidance: $342.1 million to $350.1 million.
• 2025 Non-GAAP Operating Income Guidance: $20 million to $24 million.

• Warning! GuruFocus has detected 3 Warning Signs with BIGC.

Release Date: February 20, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• BigCommerce Holdings Inc (NASDAQ:BIGC) achieved a significant improvement in non-GAAP operating income, exceeding $19 million, which is a $25 million improvement over 2023.
• The company expanded its non-GAAP operating margin by 767 basis points and generated $26 million in operating cash flow, marking a $50 million improvement from the previous year.
• BigCommerce Holdings Inc (NASDAQ:BIGC) successfully reduced ineffective sales and marketing spend and decreased headcount by approximately 10%, contributing to improved financial performance.
• The company has recruited top leaders with expertise in commerce, including a new Chief Marketing Officer and Chief Revenue Officer, to drive the next phase of growth.
• BigCommerce Holdings Inc (NASDAQ:BIGC) launched Catalyst, an accelerated reference architecture, which has received positive feedback for its cost, time, and complexity benefits in composable architectures.

Negative Points

• BigCommerce Holdings Inc (NASDAQ:BIGC) did not achieve its revenue growth targets for 2024, with revenue increasing only 8% year-over-year to $333 million.
• Net revenue retention for enterprise accounts finished at 99%, which is below past performance and the company's expectations.
• Non-Enterprise ARR declined by 4% to $88 million, indicating challenges in the small business segment.
• The company is taking a conservative stance on growth projections for 2025, expecting mid-single-digit growth rates, reflecting macroeconomic uncertainties.
• Despite improvements, the company acknowledges that transformations take time, and early 2025 growth is expected to mirror Q4 2024 as transformation actions take root.

Q & A Highlights

Q: What are the key performance indicators (KPIs) to gauge the success of BigCommerce's new leadership and strategy? A: Travis Hess, CEO, mentioned that the leading indicator will be the pipeline and its quality year-over-year and quarter-over-quarter. They expect improved bookings by mid-year, with external messaging changes starting in mid-March to accelerate pipeline growth.

Q: How does BigCommerce plan to achieve further operating margin expansion in 2025? A: Daniel Lentz, CFO, stated that the company does not need material revenue growth beyond current guidance to achieve margin expansion. They plan to reinvest in growth areas with strong ROI while maintaining a balance between margin expansion and revenue growth acceleration.

Q: What is the strategy behind doubling the sales team by mid-2025, and how does it impact pipeline creation and conversion? A: Travis Hess, CEO, explained that the sales team expansion is fully loaded to drive efficacy in the second half of the year. The majority of resources were added by the end of Q4, with some specific roles still being recruited. The aim is to build momentum and achieve a strong rule of 40 profile by year-end.

Q: How is BigCommerce engaging with partners following leadership changes, and what are partners asking for? A: Travis Hess, CEO, noted that partner engagement has been positive, with a focus on composability and making third-party capabilities more consumable. The company is concentrating on deepening relationships with select partners to enhance strategic partnerships and drive growth.

Q: What are the expectations for non-enterprise ARR, and how does it fit into the overall growth strategy? A: Daniel Lentz, CFO, expects the non-enterprise segment to be relatively flat for the year. The focus remains on moving upmarket with enterprise accounts, but there is room to stabilize and grow the small business segment over time, leveraging products like self-serve Feedonomics and Makeswift.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.