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CI

Commerce.com, Inc. (CMRC)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 revenue was $86.0M (+3% YoY) with GAAP gross margin 78%; Non-GAAP operating income $8.0M and Adjusted EBITDA $8.8M, both improved YoY; free cash flow $7.6M .
  • Against Wall Street, revenue was in line ($86.03M vs $86.03M consensus*) and EPS markedly beat ($0.08 vs $0.02 consensus*); EBITDA missed consensus, reflecting definitional differences vs management's Adjusted EBITDA* .
  • FY25 guidance was narrowed and profitability raised (Non-GAAP operating income to $24.7–$29.7M from $19–$25M), while Q4 revenue guide set at $87.8–$92.8M .
  • Stock reacted positively post-release; one report cited shares up ~16.7% premarket on the EPS beat and AI execution narrative .

What Went Well and What Went Wrong

What Went Well

  • Profitability and cash flow outperformed: Non-GAAP operating income $8.0M (9% margin) and operating cash flow $10.6M; CEO: “another strong step forward… profitability and cash flow exceeding expectations” .
  • AI-led product momentum and partnerships: Launched Feedonomics Surface and agentic checkout via PayPal integration; management leaning into partnerships with Perplexity, Google, and PayPal .
  • Mix shift toward enterprise: Enterprise ARR $269.2M (+5% YoY), now 76% of total ARR (vs 74% LY), with ARPA for enterprise at $46,806 (+7% YoY) .

What Went Wrong

  • Enterprise customer count dipped and ARR growth moderated: enterprise accounts 5,751 (-2% YoY); total ARR up 2% YoY; CFO noted bookings behind plan and flat net revenue retention (~98–99%) on the call .
  • APAC softness: APAC revenue declined 3% YoY in Q3; U.S. +2% and EMEA +9% YoY .
  • Wider Q4 revenue range signals uncertainty: management cited holiday macro/consumer variability and provided a broader revenue range ($87.8–$92.8M) .

Financial Results

Consolidated Results vs Prior Quarters

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$82.4 $84.4 $86.029
GAAP Net Income ($USD Millions)$(0.4) $(8.4) $(2.243)
Diluted EPS - Continuing Ops ($USD)$(0.0045) $(0.1046)*$(0.0278)*
Gross Profit Margin (%)79.38 78.99 78.39
Non-GAAP Operating Income ($USD Millions)$7.6 $4.8 $7.993
Adjusted EBITDA ($USD Millions)n/an/a$8.818
Net Cash from Operations ($USD Millions)$0.4 $13.6 $10.553
Free Cash Flow ($USD Millions)$(2.868) $11.9 $7.586

Note: Cells marked with * are values retrieved from S&P Global.

Segment Revenue (Q3 2025)

SegmentQ3 2025
Subscription Solutions ($USD Millions)$64.703
Partner and Services ($USD Millions)$21.326
Total Revenue ($USD Millions)$86.029

Geographic Revenue (Q3 2025)

GeographyQ3 2025 ($USD Millions)
United States$65.199
EMEA$10.597
APAC$6.220
Rest of World$4.013
Total$86.029

KPIs

KPIQ1 2025Q2 2025Q3 2025
Total ARR ($USD Millions)$350.8 $354.6 $355.7
Enterprise ARR ($USD Millions)$263.8 $269.3 $269.2
Enterprise ARR % of Totaln/an/a76%
Enterprise Accounts (Count)5,825 n/a5,751
ARPA – Enterprise ($USD)~$45,000 n/a$46,806

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)Q3 2025$85–$87 Actual: $86.029 In line
Non-GAAP Operating Income ($USD Millions)Q3 2025$2.3–$3.3 Actual: $7.993 Raised vs guide (beat)
Revenue ($USD Millions)Q4 2025n/a$87.8–$92.8 New
Non-GAAP Operating Income ($USD Millions)Q4 2025n/a$4.3–$9.3 New
Revenue ($USD Millions)FY 2025$339.6–$346.6 $340.6–$345.6 Narrowed (midpoint ~flat)
Non-GAAP Operating Income ($USD Millions)FY 2025$19–$25 $24.7–$29.7 Raised (midpoint +$5.2M)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
AI/Agentic CommerceQ1: Partnerships (Klarna, Pipe17); AI data enrichment narrative . Q2: AI “answer engines,” Feedonomics syndication; prepared remarks reinforce AI-led discovery .Q3: Agentic checkout via PayPal; Feedonomics Surface launch; emphasis on AI agents (Perplexity, Gemini, Copilot) reshaping discovery .Strengthening
Product-led growthQ1: Early self-serve motion plans for Feedonomics/Makeswift . Q2: Unifying portfolio under Commerce brand .Q3: Feedonomics Surface adoption; Shopify apps launch; “execution mode” messaging .Strengthening
Enterprise mix/ARRQ1: ARR $351M; ARPA +9% YoY; enterprise accounts 5,825 . Q2: Enterprise ARR $269.3M; +6% YoY .Q3: Enterprise ARR 76% of total; enterprise accounts down 2% YoY; CFO cites bookings behind plan, NRR ~98–99% .Mixed
Regional trendsQ1: EMEA +8%, APAC −5% YoY . Q2: Notable strength highlighted in industry recognitions .Q3: U.S. +2%, EMEA +9%, APAC −3% YoY .EMEA improving; APAC softer
Macro/holiday seasonalityQ2: Q3 outlook set conservatively .Q3: Wider Q4 range reflects holiday demand uncertainty .Elevated uncertainty

Management Commentary

  • CEO: “We are now squarely in execution mode, scaling sustainable growth across core offerings and leaning into strategic partnerships with AI leaders like Perplexity, Google, and PayPal to power agentic commerce” .
  • Product roadmap: “Feedonomics Surface… simplifies and automates connecting product catalogs to advertising channels like Google Shopping and Meta… bringing enterprise-grade capability downmarket” .
  • Portfolio unification and agentic checkout: “New embedded payment processing solution… BigCommerce Payments (powered by PayPal)… and a new agentic commerce feature with seamless agentic checkout” .

Q&A Highlights

  • Enterprise ARR and customer count: CFO acknowledged a sequential ARR moderation and downtick in enterprise customers; attributed to bookings pacing and net revenue retention similar to last year (~98–99%), with focus on expansion into existing customers .
  • 2026 product rollouts: CEO highlighted Feedonomics Surface traction and broader self-serve/product-led growth, including Makeswift expansion; reiterated agnostic support across platforms .
  • Guidance breadth: Management framed the wider Q4 revenue range around holiday/macros, maintaining profitability focus and cash discipline .

Estimates Context

MetricQ3 2025 Consensus*Q3 2025 ActualSurprise
Revenue ($USD Millions)$86.03*$86.03 In line
EPS (Non-GAAP) ($USD)$0.02*$0.08 Bold beat
EBITDA ($USD Millions)$3.90*$2.37*Miss (vs S&P EBITDA); Adjusted EBITDA $8.82
MetricQ4 2025 Consensus*
Revenue ($USD Millions)$90.33*
EPS (Non-GAAP) ($USD)$0.069*
EBITDA ($USD Millions)$8.20*

Note: Asterisks indicate values retrieved from S&P Global.

Implications: Strong EPS beat and in-line revenue suggest improved operating discipline; investors should note Street EBITDA vs company’s Adjusted EBITDA definitions differ, explaining apparent EBITDA “miss” while management’s profitability metrics exceeded guidance .

Key Takeaways for Investors

  • Execution on profitability: Cost discipline and higher gross margin drove a significant EPS beat; watch for continued operating leverage into Q4 and FY25 .
  • AI/product-led catalysts: Feedonomics Surface adoption and agentic checkout via PayPal present near-term monetization levers across SMB and enterprise cohorts .
  • Mix and retention: Enterprise ARR concentration rose to 76%, but enterprise account count dipped; management is prioritizing expansion within the base to stabilize growth .
  • Regional exposure: EMEA strength offset APAC weakness; monitor Q4 holiday sensitivity embedded in a wider revenue guide .
  • Guidance update: FY25 Non-GAAP operating income range raised materially, narrowing revenue band—a signal of confidence in profitability while keeping top-line realistic .
  • Trading setup: Positive EPS surprise and AI narrative were stock catalysts; near-term reaction could hinge on sustained cash generation and Q4 execution vs the broad revenue range .
  • Watch definitions: Street EBITDA differs from management’s Adjusted EBITDA; focus on Non-GAAP operating income and free cash flow to align with company’s performance framing .