Sign in

You're signed outSign in or to get full access.

BH

BigCommerce Holdings, Inc. (BIGC)·Q3 2024 Earnings Summary

Executive Summary

  • Q3 delivered modest top-line growth with stronger profitability: revenue $83.71M (+7.3% YoY) and non-GAAP diluted EPS $0.06; revenue slightly beat consensus (~$83.0–$83.1M) and EPS materially beat (consensus $0.02); non-GAAP operating margin improved to 5.2% from (1.5%) a year ago .
  • FY24 outlook maintained at the midpoint and narrowed; Q4 guidance implies low single-digit growth with continued profitability; management flagged 2025 as a transition year with internal plans for mid-single-digit growth and nearly doubling quota-carrying sales capacity to re-accelerate topline .
  • Mix and KPIs: total ARR $347.8M (+5% YoY), enterprise ARR $256.9M (+7% YoY), enterprise share 74%; enterprise ARPA +8% YoY to $43,600, while enterprise account count declined to 5,892 (-1% YoY), a focus area for pipeline and new logos .
  • Restructuring and balance sheet actions: $9.9M Q3 restructuring charge and $12.1M gain on convertible note extinguishment; debt ladder extended via $150M 2028 converts (7.50% coupon) and repurchase of $120.6M of 2026 converts; $169.9M cash & securities; YTD operating cash flow $13.9M, FCF $11.0M .
  • Stock reaction catalyst: beat on EPS and in-line/beat revenue with reaffirmed FY narrative and clearer 2025 framework; shares moved ~+5% premarket post-print .

What Went Well and What Went Wrong

  • What Went Well
    • Profitability inflection sustained: non-GAAP operating income $4.3M (5.2% margin) vs ($1.2M) in Q3’23, driven by operating leverage and cost discipline; adjusted EBITDA $5.4M vs ($0.1M) LY .
    • Cash and guidance quality: nine-month operating cash flow $13.9M and FCF $11.0M; FY24 revenue $331.7–$333.7M and non-GAAP OI $13.8–$15.8M, with FY midpoint consistent and profitability raised vs prior guide .
    • Strategic focus and leadership: new CEO and targeted go-to-market specialization across B2B/B2C/SMB; plan to nearly double quota-carrying capacity in 2025; “mid-single-digit” growth internal plan for 2025 and focus on Rule of 40 longer term .
  • What Went Wrong
    • Enterprise account count fell: 5,892 (-1% YoY), with management citing pipeline build below expectations and attrition among smaller enterprise accounts; targeting turnaround in unit retention and net adds .
    • Restructuring costs: $9.8–$9.9M charges in Q3 tied to workforce reduction, real estate, software impairments, and contract terminations; additional $3–$5M expected across 2025 (non-headcount) .
    • Growth cadence: Q4 revenue guide +2–4% YoY underscores near-term growth headwinds; management’s 2025 growth plan is modest as GTM changes ramp, though profitability expected to improve .

Financial Results

MetricQ1 2024Q2 2024Q3 2024Q3 2024 Consensus
Revenue ($M)$80.36 $81.83 $83.71 ~$83.04–$83.12
Non-GAAP Diluted EPS ($)$0.06 $0.05 $0.06 $0.02
GAAP Gross Margin (%)77% 76% 76% —
Non-GAAP Operating Income ($M)$3.16 $1.89 $4.32 —
Non-GAAP Operating Margin (%)3.9% 2.3% 5.2% —
Revenue Mix ($M)Q1 2024Q2 2024Q3 2024
Subscription Solutions$60.96 $61.80 $62.83
Partner & Services$19.40 $20.03 $20.88
Total Revenue$80.36 $81.83 $83.71
KPIsQ1 2024Q2 2024Q3 2024
Total ARR ($M)$340.1 $345.8 $347.8
Enterprise ARR ($M)$248.2 $253.8 $256.9
Enterprise % of ARR73% 73% 74%
Enterprise Accounts (#)5,970 5,961 5,892
Enterprise ARPA ($)$41,581 $42,576 $43,600
Select GAAP/Non-GAAP ItemsQ3 2024
GAAP Net Loss ($M)($6.99)
Adjusted EBITDA ($M)$5.37
Non-GAAP Gross Margin (%)78%
Cash & Securities ($M)$169.9
9M’24 Operating Cash Flow / FCF ($M)$13.9 / $11.0
Notable Items$9.9M restructuring charge; $12.1M gain on convertible note extinguishment

Notes on beats/misses: Q3 revenue beat modestly and EPS beat significantly vs street; several third-party sources indicate consensus revenue ~$83.0–$83.1M and consensus EPS $0.02, vs actual $83.71M and $0.06 .

Guidance Changes

MetricPeriodPrevious Guidance (Aug 1)Current Guidance (Nov 7)Change
Revenue ($M)Q4 2024—$85.8–$87.8 New
Non-GAAP Operating Income ($M)Q4 2024—$4.4–$6.4 New
Revenue ($M)FY 2024$330.2–$335.2 $331.7–$333.7 Maintained/Narrowed (midpoint steady)
Non-GAAP Operating Income ($M)FY 2024$10.7–$13.7 $13.8–$15.8 Raised

Additional planning commentary (not formal guidance): 2025 internal plan for mid-single-digit growth with growth ramping through the year; aiming to nearly double quota-carrying sales capacity; targeting balanced Rule of 40 over time .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2024)Current Period (Q3 2024)Trend
Go-to-market overhaul & specializationReorganized GTM under new President; focus on retention, cross-sell, unified CRM/MDM; improving gross/net retention; pipeline still challenged New CEO; dedicated B2B/B2C/SMB teams; nearly doubling sales capacity in 2025; leadership layer streamlining Intensifying execution focus
B2B momentumB2B ARR +35% YoY; B2B GMV >+50% YoY; strong win rates; broad use cases B2B pipeline “building nicely”; AI plans around CPQ for complex B2B Sustained priority
AI/product innovationBigAI Copywriter, Recommendations (Google AI); Catalyst; Open Source B2B Buyer Portal; Instant Commerce (Feedonomics) Continued AI roadmap incl. migration accelerators and B2B CPQ; Makeswift integrated into Catalyst Broadening applications
Macro/consumer & tariffsConsumer “resilient”; elongated cycles; cautious guide Demand “okay” for platforms; too early on potential tariff changes; not altering plans Stable/cautious
Europe/EMEA & multi-geoMulti-geo completion expected to re-accelerate EMEA EMEA best-performing region in Q3; strength in UK and Southern Europe Improving
Capital structurePlan to restructure converts to extend duration Executed exchanges/repurchase; $150M 2028 converts (7.50%); gain on extinguishment De-risked maturities

Management Commentary

  • “We will nearly double our quota-carrying sales capacity in 2025.” — CFO Daniel Lentz .
  • “For Q4 2024, we expect revenue $85.8–$87.8M and non-GAAP operating income $4.4–$6.4M... From an early read... building internal plans around mid-single-digit growth rates for the full year 2025.” — CFO Daniel Lentz .
  • “Average revenue per account for enterprise accounts was $43,600, up 8% year-over-year.” — CFO Daniel Lentz .
  • “EMEA was our best performing market in the quarter... we remain committed to expansion already done within EMEA.” — Management .
  • “There are so many opportunities to... rethink choices... broaden and deepen our relationship with customers... self-serve Feedonomics, Makeswift as an independent product, payments offerings.” — CFO Daniel Lentz .

Q&A Highlights

  • Enterprise accounts: third consecutive quarter of declines in count; management prioritizing dollarized retention but acknowledged pipeline hasn’t fully offset attrition in smaller enterprise cohort; targeted turnaround .
  • Sales capacity and hiring: plan to nearly double quota-carrying capacity in 2025; majority via external hires; ramp to full productivity typically 2–3 quarters; bulk of hires in 1H25 to drive 2H25 momentum .
  • B2B emphasis: strongest bookings mix; pipeline building; expect cross-sell/upsell momentum and higher attach rates across product portfolio .
  • International: EMEA momentum (Italy, Southern Europe, UK) with multi-geo strengths; focus on efficiency within existing markets vs opening many new ones .
  • Tariffs/macro: too early to assess tariff changes under new administration; no plan changes embedded; consumer/platform spend “resilient/okay” .

Estimates Context

  • Q3 results vs consensus: revenue $83.71M vs ~$83.04–$83.12M; non-GAAP EPS $0.06 vs $0.02 — both beats; revenue beat modest, EPS beat significant .
  • Guidance vs street (directional): Q4 revenue guide $85.8–$87.8M and FY24 $331.7–$333.7M broadly consistent with prior midpoint; profitability raised. Expect estimate revisions to lift FY24 non-GAAP OI and Q4 EPS; revenue tweaks likely minor given narrow ranges .
  • S&P Global consensus was unavailable via tool at time of analysis; third-party consensus figures cited above.

Key Takeaways for Investors

  • Execution improving on profitability and cash flow: non-GAAP OI margin expanded to 5.2%, adjusted EBITDA positive, and YTD FCF positive; FY24 profitability guidance raised — underpinning a more durable financial profile into 2025 .
  • Growth trajectory near term remains muted (Q4 +2–4%), but 2025 sets up as a transition with heavier sales capacity and specialized GTM intended to re-accelerate topline; monitor ARR growth inflecting ahead of revenue as an early indicator .
  • Mix quality improving: enterprise share of ARR rose to 74% and ARPA +8% YoY, but enterprise account count contraction is the key risk to watch; pipeline build and new logo adds are the main swing factors .
  • B2B remains the core wedge: stronger retention and pipeline, with AI-enabled CPQ and composable/catalyst stack as differentiators; EMEA momentum may add incremental tailwind .
  • Balance sheet strengthened: note exchanges/repurchases extend maturities and reduce leverage sensitivity; GAAP results benefited from $12.1M extinguishment gain in Q3; expect additional non-headcount restructuring costs ($3–$5M) in 2025 .
  • Stock setup: after an EPS beat and maintained FY revenue outlook with higher profitability, sentiment hinges on evidence of pipeline conversion, enterprise logo growth, and visible ARR acceleration into 2025; near-term catalysts include January NRF product showcases and March 11 Investor Day .

Appendix: Regional and Additional Metrics (Q3)

  • Regional revenue YoY: Americas +6%, EMEA +12%, APAC +9% .
  • GAAP/non-GAAP reconciliations: Q3 included $9.9M restructuring charge and $12.1M gain on convertible note extinguishment; non-GAAP removes stock comp, amortization, acquisition costs, restructuring, and extinguishment gain -.