Q1 2022 Bigcommerce Holdings Inc Earnings Call

May 2, 2022

Okay.

Ladies and gentlemen, thank you for standing by and welcome to Big Conference first quarter 2022 earnings call.

At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session. Please be advised that today's conference is being recorded.

I would now like to turn the conference over to your first speaker today, Daniel Harris head of Investor Relations you may begin.

Good afternoon, and welcome to Big Commerce with first quarter 2022 earnings call, we will be discussing the results announced in our press release issued after today.

Market close with me are big Commerce, as President CEO , and Chairman, Brent Berlin, and CFO Robert Alvarez today's call will contain forward looking statements, which are made pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 1095.

Forward looking statements include statements concerning financial and business trends, our expected future business and financial performance and financial condition and our guidance for the second quarter of 2022, and the full year of 2022.

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

Just 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.

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 that big Commerce Dot com with that let me turn the call over to Brent.

Thanks, Danielle and thanks, everyone for joining us on today's call Robert and I will review, our first quarter results.

Excited to share with everyone that commerce reported an excellent first quarter. Our team continues to deliver on our vision to be the leading ecommerce open SaaS provider empowering BTC and <unk> merchants around the globe.

I will share an update on the status of our business.

Recap initiatives, we announced in the quarter and give a brief review of recent product launches and partnership agreements. We will conclude today's call by updating you on our second quarter and 2022 full year guidance, along with our key priorities for 2022.

Let's take a moment to review our Q1 results are.

Our growth in Q1 was strong despite some post pandemic normalization of e-commerce and consumer spending seen across our industry.

Total revenue grew to $66 1 million up 42% year over year, which was our ninth consecutive quarter of posting 30% or higher revenue growth. We're pleased with our progress and we're particularly pleased with the increasing third party validation from customers partners and industry analysts who are rating us the worlds best.

Platform for businesses the value best of breed functionality and the flexibility to address complex business requirements.

We concluded Q1 with IRR or annual revenue run rate at $284 million up 43% from last year.

Enterprise account was $189 million up.

Up 68% year over year.

<unk> from accounts greater than $2000 in annual contract value or.

<unk> totaled $249 5 million up 52% year over year. These.

These results reflect our continued momentum moving upmarket with ever larger and more complex enterprises, choosing bad commerce to modernize their ecommerce offerings and accelerate their online growth initiatives.

Our non-GAAP operating loss was $12 $4 million, which was consistent with the guidance range. We initially provided these operating results benefit from the multiple investment areas that we discussed on our prior earnings call in February including International expansion Commerce as a service.

Harmony channel Headless Commerce and <unk>.

We are excited about this year's shift back to in person marketing and industry events, which we believe is to our advantage as a partner centric open SaaS platform with <unk>.

Participated in or hosted several events with our agency and technology partners during Q1, ranging from shop talk in the USA to one to one Monaco to retail Global conference in Australia, where big Commerce was just named solution provider of the year.

The feedback has been overwhelmingly positive and consistent across the globe.

Merchants crave, a flexible open SaaS platform that they can customize to meet their growing list of technical and operating requirements combining.

Combining our b to C <unk> and omni channel tools merchants are empowered to boost sales across multiple channels and geographies, that's powerful and we're proud to be a part of this evolution and ecommerce.

Positioning, particularly resonates with enterprise merchants, which now make up the majority of our business.

I want to take a minute to review the state of our enterprise footprint in particular.

At the end of 2018 enterprise accounts represented 45% of IRR today, there are 67%.

Our our majority enterprise company that delivers the benefits of best of breed functionality and open SaaS flexibility to companies of all sizes large global apparel brands like Ted Baker, and La Perla demonstrates the unique power of our platform.

Enterprise IRR has grown at a compound annual growth rate of 52% over the last four years, including the 68% year over year growth in our most recent quarter.

Our recent launch of multi storefront functionality firmly positions us at the top end of enterprise SaaS ecommerce platforms.

Storefront enables merchants to use a single big Commerce control panel to manage multiple storefronts that serve different regions brands and or customer segments like b to b.

Although multi storefront is considered enterprise functionality, we plan to bring this to the masses of small businesses as well soon enabling them to add storefronts with a click of a button.

To highlight some of the feedback of our technology and market leadership is receiving I draw your attention to the latest Forrester wave <unk> E. Commerce Solutions report issued last week Forrester rated big Commerce, as a leading e-commerce provider with one of the strongest strategies and most trusted offerings in the market and their wave report up.

To the right indicates success and overall, we outperformed incumbent enterprise leaders like Salesforce Adobe Magenta SAP and Oracle, we also significantly outperformed shopify plus let me share a few quotes.

Big Commerce has a strong partner ecosystem and good performance against this product vision by unifying and simplifying administration of both first party and third party functions.

Map is one of the strongest in this evaluation and includes plans for deeper integration of third party apps and additional native integrations with complementary solutions, such as customer data platforms referenced.

References customers are enthusiastic about the ecommerce as a trusted partner and it garnered the highest marks from references in this evaluation.

Both of the newly published Forrester wave <unk> and <unk> E. Commerce solutions reports are very positive about the commerce switching to the <unk> report, we scored the third highest ranking for current offering among global enterprise <unk> platforms and that was before our acquisition of bundled <unk> announced last week.

A short seven years ago, when I assumed the leadership of Big Commerce from our terrific founders.

We were exclusively a small business platform.

We embarked on a strategy to bring the benefits of SaaS, including scalable performance ease of use value and continuous innovation to the world's complex businesses.

This required opening our platform via Apis and micro services and it required building enterprise functionality on top of those API.

We branded this open SaaS as our alternative to open source at the time Magenta is open source was the undisputed global leader in the mid market and large enterprise segments.

To date in 2020 to SaaS is the present and future of E. Commerce, we're delighted that leading tech analysts like Forrester and IDC advocate for us and Big Commerce ahead of many of our legacy enterprise competitors.

On our last earnings call, we outlined investment across five strategic priorities and one new growth pillar and which we intend to lead the future of E Commerce.

Our decision to invest does consider the uncertainty in our macroeconomic and geopolitical environment, but we are focused on the long term and we are emboldened by the success. We are seeing everyday across these initiatives. We believe we can shape the present and future of global ecommerce and we are investing to do so in.

In Q1, our international expansion efforts made strong progress as we now operate in the sixth largest western European economies.

In the coming quarter, we will increase our European presence by expanding into the Nordic countries building from our recent launch in Mexico. We will also launch our first operations in South America, we're supporting new languages, adding new geographies and integrating new payment methods for local markets. We're in the early innings of global expansion and our growth.

Rates in EMEA, APAC and non U S Americas give us confidence that expansion will pay off in the near and long term.

In Omnichannel, we plan to launch a self service tool that brings premium features embedded in fee dynamics to the mass market.

<unk>, which we acquired last year enables merchants to syndicate and optimize their product offering to the world, leading advertising search engine, social network and marketplace channels.

It powers Omnichannel for many of the world's leading online retailers and in time, we will bring us capabilities to self serve merchants of all sizes. We believe fee dynamics is the world's best feed management tool for expanding reach acquiring new customers optimizing return on AD spend and selling through marketplaces.

Last quarter, we formally introduced a new pillar to our growth strategy Commerce as a service commerce as a service enables partners to create and sell customized commerce solution powered by our platform technology. This announcement has been well received and our partner community in Q1, we enabled five new reseller.

Partnerships, including Clover, a leading north American point of sale and business management solution owned by Pfizer.

Overseas, we launched freedom law.

<unk> dot fr value Com PE and <unk>. These partnerships expand our reach to new merchants through the sales and marketing efforts have established category specific technology solution providers.

This gives the commerce the opportunity to onboard new merchants with marginal cost to us, thereby building additional distribution and a flywheel to scale our revenue model profitably. While we are still in the early phase of commerce as a service is a strategic pillar for our company. We are pleased that it has already generated three of the largest recurring revenue.

Deals in Big Commerce is history.

In June 2021, we expanded our <unk> functionality with the introduction of <unk> addition.

We recently added our 200, <unk> addition, customer and last week, we announced the acquisition of bundled <unk>. The partner behind that success will be to be addition, offering at.

At a time when <unk> ecommerce continues to boom this acquisition cements, our commitment to being the best and most powerful SaaS ecommerce platform for <unk> merchants.

Near term priorities include embedding bundled <unk> functionality into our native user experience improving its compatibility with our ERP partners and opening its functionality to our agency and technology partners. While the overall deal doesn't have a material impact on our 2022 financials.

Does come with a small amount of incremental investment in <unk>, which Robert will discuss further as we provide our updated full year guidance.

Let's now shift gears to partnerships in Q1, we announced an expanded relationship and merchant of record integration with digital River. This enables big commerce merchants to unlock global sales and sell into international markets seamlessly through their solution for international payments tax shifting in compliance.

In March we announced an expanded strategic partnership with bolt a leading network checkout company, our upgraded integration enables small medium and enterprise merchants to set a bolt one click checkout and our self serve manner within minutes.

It can be prebuilt into merchants big commerce stores, allowing them to deliver secure one click transactions for customers without the need for accounts passwords and logins.

<unk> is taking advantage of our recently launched multi storefront capability to support multiple stores around the world in multiple languages and currencies.

They chose the commerce over other options because of our SaaS approach an ecosystem of integration partners.

Representative enterprise merchants recently launched on our platform include box hub, a U S based merchant that makes it easy to buy sell and trade shipping containers and all the pets, which provides customized meal plans for pets using our headlights functionality.

Dan Cafe launched its new site for Volkswagen Autoparts, leveraging the big Commerce, <unk> ERP connector to the comp.

Denise customer data inventory products and third party apps.

Eurosport tuning a supplier of European auto parts recently launched a new <unk> site on our platform and are taking advantage of multi storefront for their upcoming <unk> site. In addition to those let me name just a few more important brands that launched on big Commerce during the quarter edible blooms pool zoom <unk>.

<unk> the per store group HK living.

International tool supplier at the.

The school of life, and Louisiana Crawfish.

And reflecting on the quarter I'm energized by our results and traction across strategic initiatives, including Enterprise International <unk> Omnichannel Headless Commerce as a service we are investing in global leadership in each of these areas in time. We believe these investments will generate continued above market growth exceptional customer and partner success.

And attractive long term profitability.

For more details on our progress and plans I'm pleased to share that on Wednesday may 25, we will be hosting our first analyst and Investor day as a public company. This event will be held virtually and we will be posting details on how to access that event on our investor Relations site in the coming weeks with that I'll turn it over to Robert.

Thanks, Brad and thank you everyone for joining us today I'll review, our first quarter financial results and provide an update to our second quarter and full year 2022 guidance.

Note that our results on a consolidated basis, which includes activity from <unk>.

Like to start by saying our presence in the enterprise market is stronger today than ever before.

We reported another solid quarter and continued progress moving further up market into the large enterprise segment, which is really best shown there as some of our recent launches.

Ted Baker is a shining example of why we are winning more and more enterprise deals and highlights our enterprise capabilities, including native multi store multi geo multi language multi currency.

All with a customized headless front end user experience <unk>.

Enterprise merchants, they are now making ecommerce platform decisions based on a multiyear horizon.

E Commerce is a platform that can scale as fast as they want to grow.

We're making similar inroads in our international segments. Our results this quarter demonstrate the resilience of our diverse growing and established set of BDC <unk> merchants across a wide range of industries in the U S and the growing list of countries. We can now serves.

In Q1 total revenue was $66 1 million up 42% year over year subscription revenue grew 50% year over year, driven by continued net growth in merchants and our continued mix shift into enterprise plans.

Hardware and services revenue or <unk> was up 23% year over year.

While our PSS growth rate slowed compared to last quarter. This was consistent with the expectation we discussed on our last call relative to overall ecommerce transaction volumes in the base period effect of U S. Federal government stimulus payments in March 2021.

We have now posted nine consecutive quarters of 30% plus total revenue growth and 14 consecutive quarters of 40% plus enterprise AR growth.

We remain focused on delivering our plans for the year, but we are encouraged by the progress reflected in our Q1 results across many fronts.

Revenue in the Americas were up 43% in the quarter.

EMEA revenue grew 43% in Q1, and APAC revenue was up 27% in Q1.

We are making progress across Europe , Asia, and Latin America, but we are still in the early innings in terms of how large our share can be in those markets. Many brands and merchants in these markets produce growth rates ahead of similar companies in North America, and we see the enormous set of opportunities ahead of us and are taking action to <unk>.

Best in these markets.

We believe the opportunity to expand our footprint and share of wallet internationally is tremendous.

I will now review our non-GAAP Kpis overall, we posted results consistent with the trend of the past couple of quarters, our annual revenue run rate or <unk> grew to $280 4 million up 43% year over year, driven by continued strength in our enterprise customer base, we see.

Stronger unit economics, better net revenue retention and higher transaction volumes from enterprise merchants.

Fundamentally Big Commerce is an enterprise E Commerce company.

And our investments aimed to bolster our market position within this attractive customer segment that has been historically served by outdated expensive and very cumbersome legacy systems.

<unk> from accounts with $2000 or more in HCV grew 52% year over year in Q1 to $249 $5 million.

Enterprise accounts posted outstanding growth of 68% year over year to $189 million.

Overall enterprise contribution to our improved growing to 67% of our.

As of March 31.

Compared to 57% in 2021.

Since going public in 2020, we've averaged a growth rate in enterprise or a 55%.

Our focus on expanding our enterprise footprint is gaining traction in North America and across global markets.

Our inroads into new markets are noteworthy, particularly amongst sophisticated merchants our solution allows merchants to utilize the most modern and innovative based solutions, while customizing services for their local market needs, our BDC and <unk> solutions together with our head list and Omnichannel strategy.

It makes our cost effective offering an easy choice for merchants looking to re platform and supercharge their e-commerce capabilities and performance.

In Q1, we posted our highest absolute level of gross new merchant sales in our history.

We're confident our operating results are trending in the right direction and in line with our internal plans.

Although we saw slightly less sequential growth. This quarter. We believe this is largely a cyclical issue.

As we discussed in our last call, we expect slower growth rates.

This year compares to the past couple of years due to some normalization in consumer behavior and the lapping effect of elevated base periods during the pandemic.

This is primarily a result of more moderate GMB growth driving fewer upgrades and plans and hence fewer upgrades and planned pricing.

Revenue guidance ranges incorporate these dynamics and we believe we can sustain strong topline revenue results behind all of the investments we've mentioned.

At the end of Q1, we reported 12972 customers with <unk> greater than $2000 of 2000, and 463 accounts or 23% year over year.

At the end of Q1, 89% of our IRR is now made up of accounts with ACB greater than $2000. That's a 600 basis point increase from the same period in 2021.

ARPA or average revenue per account for accounts with ACB greater than $2000 was 19234 up 23% year over year, driven by a continued mix shift to larger enterprise merchants with strong unit economics.

I'll now shift to the expense portion of the income statement.

As a reminder, unless otherwise stated all references to our expenses.

Operating results in per share amounts are on a non-GAAP basis.

Q1, gross margin was 75% down 25 basis points from the previous quarter.

We reported a gross profit of $49 8 million up 32% over the prior year.

Continued investments in our hosting infrastructure customer support.

International operations are contributing to the reduction in gross margins.

However, our outlook for gross margins remain in line.

We're confident we can maintain rates in the mid to high seventies.

In Q1 sales and marketing expenses totaled $29 5 million up 50.

54% year over year. This accounted for 45% of revenue up 365 basis points compared to last year.

This increase was tied to increasing head count in our sales and marketing teams.

<unk> is tied to client engagement initiatives.

Uptake in travel costs that were marginal during the pandemic.

Research and development expenses were $18 4 million or 28% of revenue up 154 basis points from a year ago.

Costs ticked up due to additional headcount added to our product and engineering teams.

Given by the planned investment areas, we have outlined previously.

Finally general and administrative expenses were $14 3 million or 22% of revenue up from 20% of revenue a year ago.

The main drivers of the increase included cost tied to enhanced cyber security investments that fee dynamics and international expansion cost.

In Q1, we reported a non-GAAP operating loss was negative $12 4 million or negative <unk> 18, 7% operating margin. This compares with negative $3 1 million or a negative six 7% operating margin in Q1 2021.

Adjusted EBITDA was negative $11 7 million and negative 17, 8% adjusted EBITDA margin.

Compared to a negative five 2% in Q1 2021.

non-GAAP net loss for Q1 was negative $13 2 million or negative <unk> 18 per share compared to negative $3 1 million or negative <unk> <unk> per share last year.

As we discussed at length on our last earnings call, we are making deliberate investments in our business that we believe will drive durable growth over a multiyear horizon with strong profitability at scale.

We are still in the early innings space and the opportunity we see ahead of us.

We have invested tremendous time and resources over the last few years towards our transformation into a leading enterprise E Commerce company and our results clearly reflect the success of that effort.

With our financial results and the third party accolades that our technology platform is receiving from our agency and Tech partners as well as the leading industry research analysts were big Commerce is now recognized as a true enterprise platform leader across BGC and <unk>.

We are confident this is the right long term decision for our business and our shareholders. We are committed to long term profitable growth, while preserving healthy liquidity on our balance sheet.

We ended Q1 with $377 3 million in cash cash equivalents restricted cash and marketable securities.

At the end of Q1 operating cash flow was negative $22 million declining from negative $12 8 million a year ago.

We reported free cash flow of negative $23 3 million or a negative 35% free cash flow margin. This.

This compares to negative $13 2 million and a negative 28% free cash flow margin in Q1 2021.

In conclusion, let's shift to our guidance and outlook for next quarter and fiscal 2022 for.

For the second quarter, we expect total revenue in the range of $64 6 million to $67 5 million, implying a year over year growth rate of 32% to 38% for.

For Q2, our non-GAAP operating loss is expected to be 16 million to $18 million.

For the full year 2022, we currently expect total revenue between $277 8 million to $286 6 million translating to a year over year growth rate of approximately 26% to 30%.

Our non-GAAP operating loss is expected to be between $47 9 million and $53 9 million our expectations are for margins to gradually improve throughout the year.

We're reiterating our non-GAAP operating loss percentage to be in the high teens at the midpoint.

Please note that these updated guidance numbers also include the inclusion of the acquisition of bundled <unk>, which we expect to add an incremental operating loss of $700000 to $1 $3 million across the balance of the year behind additional <unk> investments embedded in that transaction.

Finally, I would once again like to thank all of our incredible employees merchants and partners.

So proud of our continued progress and excited about the growth opportunity ahead of all of us.

With that Brett and I are happy to take any of your questions operator.

Thank you.

Ladies and gentlemen, as a reminder to ask a question you will need to press Star then one on your telephone.

So withdraw your question press the pound key.

Our next star one to ask the question.

I ask that you limit yourself to one question and one follow up.

Our first question comes from the line of Jefferies with Piper Sandler Your line is open.

Hello, Thank you for taking the question.

Ara you mentioned.

<unk>, an outlook of normalization of consumer behavior of normalization, if GNP growth.

I'd just be curious how much of a change change that <unk> seen in those trends year to date, maybe even thinking about when we last spoke two months ago has there been a change in the trend in the last few months that.

It might be changing outlook here or are they relatively consistent really just as kind of stimulus base periods that you are considering.

Yes, I'd say very consistent really no surprises on that front when we thought about.

Q1, and Q2, the first half of the year, we factored that into our forecast.

And guidance, we were very pleased with the new bookings in terms of.

New gross new bookings for the quarter.

Terms of like upgrades and the pricing impact of upgrades, we factored in kind of <unk> levels that we were expecting as we ended last year. So no surprises on that front.

Alright, and then just to clarify clarification, a slight change the expense guidance here.

Here it looks like Q2 could be the sort of lower point of profitability for the year.

Just really could you breakdown, maybe what are the biggest cost drivers right now should we expect this to be primarily sales and marketing.

Maybe pushing profitability down a little bit lower here in Q2.

And the other line items are pretty consistent in their growth through the year.

This would be consistent with how we kind of viewed Q2 going into the year.

The investments that we were planning to make a lot of it is head count very much tied to sales and marketing across those investment areas. Some of it is product engineering as we invest in building out capabilities around <unk> and omni channel and.

<unk>, but.

As expected Q2 would be kind of the.

Kind of biggest expense period for the year, but we feel confident recommitting and reiterating kind of the full year guide to our operating losses for the year.

Okay. Thank you very much sir.

Thank you.

Our next question comes from the line of Terry Tillman with true Lewis Your line is open.

Yeah, Hey, Brendan.

Good afternoon, I guess first congrats on the enterprise. They are and also I guess congrats on crossing the bridge enterprise capabilities wide wanted to get both of those then.

I appreciate it.

Sure My pleasure first question as Brent for you on the multi store.

I know, it's early days, but that was a lot of heavy lifting in terms of.

<unk> cycle there so you've delivered that now so congrats on that how quickly do you think that could impact enterprise. They are and what are you hearing so far what are the early signals you're seeing from the.

Delivery of multi store into the market and then I had a follow up for Ari.

Well, it's been extremely well received so far in the market Our agency partners.

Really the market that wants enterprise capability from SaaS has been eagerly anticipating that on beta for quite a few months and was already a mature product by the time, we offered it up in general availability near term, we'll see the best impact on new sales.

In particular, new enterprise sale.

Looking for.

And requiring multi storefront functionality.

We still have an additional product release to turn this into a cell therapy product that our F&B plan.

And existing merchants can also just click a button in that store. So that engineering is underway and once we have that will be a compounding effect of existing stores clicking a button upgrade for now existing stores have to be on enterprise and have to call us up and request the contract modification of the tumor.

I'll turn this into a self serve functionality, which will be very very powerful.

Got it got it thank you for that and I guess, just a follow up.

Last quarter, you all talked about commerce as a service the opportunity there.

Kind of the follow up two part follow up I should say is when we released the billings capability and how quickly could the NR benefit from the efforts on the Comverse as a service side. Thank you.

Yes.

Great progress on that front I think that.

The early releases, we'll definitely see kind of in the mid part of this year.

In terms of NR will definitely see the impact next year, we do so we do predict a little bit of a lift based on the timing of when we release that I think the biggest impact is going to be next year, though but.

I think I'll give you an update as that progresses, hopefully I'll have a good update for you by the end of Q2.

Sounds good thank you.

Thanks Terry.

Thank you. Our next question comes from the line of Scott Berg with Needham Your line is open.

Hi, Brian .

For taking my questions today, congrats on the good quarter.

I guess, let's unpack the sales a little bit in the quarter.

I think you both talked about.

Kind of a normalization of the environment out there and I think we certainly don't see that on the <unk> side of the impact of your business there, but how should we think about just general bookings and thinking about that through your lens of AAR and what your definition of that is are you seeing the pace of bookings for these replacement projects to be any different.

And then maybe over the last couple of quarters or should we view the slowing ER growth purely just volume driven versus kind of the infrastructure replacement.

Yes, Scott I mean, like we mentioned in Q1 was our highest gross bookings quarter majority enterprise. So again, we saw.

<unk> performed really well closing large enterprise accounts.

Across both B to C and B to B.

If you look at the components of net new gross new was great in Q1 retention for enterprise and accounts greater than two K remains strong. So we were pleased with that it really comes down to the upgrades and the impact of upgrades that we factored into the forecast into the guide, but in terms of our sales momentum our go to market efforts.

In the U S. Our sales teams that were.

Building in the countries that we're entering into really couldnt be more pleased with their performance.

Just the interest and awareness that they are building in those markets.

And the new countries that we enter into.

We're going in with an enterprise focus and so we're lining up the best Agency partners in the enterprise, we're building awareness in the enterprise and the folks that we're bringing onto big commerce are really kind of enterprise salespeople that are.

Coming out of the gates really strong so very pleased on that front.

Got it helpful and then from a follow up question.

You all have made two small acquisitions focused on the <unk> side of your business today.

No thats, a small part of the business probably single digits, maybe 10% of revenues plus or minus but how should we think about the growth of that product going forward and your opportunities. There with these capabilities today, knowing that that end market is growing faster than the traditional kind of <unk> environment.

Yes, we'll talk more about this in our analyst day, but the future couldnt be brighter cross as a.

<unk> platform the estimates are that day.

<unk> be generate about a third.

But growing over time to north of 40%.

Total platform spend relative to <unk> and the growth rates are double that of BDC.

We are already positioned as one of the world leaders in B to B, even before these acquisitions for example, the Forrester <unk> report for Enterprise Commerce that also went out last week.

<unk> is a strong performer only three years or so platforms in the world. The day rate is better capabilities and those platforms are far more expensive or more complex and hard to implement.

Whats so powerful now is that.

In essence, when we would compete for <unk> historically.

A portion of the functionality with native Commerce, and then a portion would be gained by clients via App and extensions in the two natively, meaning well built purposefully for the commerce only but commerce that we're the best in our ecosystem <unk> Ninja for quoting and bundled <unk>.

Hosts of other functionality, we now own those and we'll be able to further integrate them into the user experience to take advantage of sort of inside the house functionality rather than external API will improve some of the architect and will also open them up to our agency and tech partner ecosystem just.

The ecommerce has been opened up to all of those.

Some.

Even before these two acquisitions Forrester paradigm and others already right and Thats one of the top three.

Three to five <unk> platforms in the World now with this native functionality I really think we are poised to become the most successful.

Now <unk>.

<unk> platform at scale in the years ahead, we won't necessarily handle the most extreme and complex use cases, there are other platforms for that but as a broad based.

Solution that can serve small medium and the low end of large enterprise b to b.

We are in a fabulous position now that we own both bundled <unk> and <unk>.

Great Thats all I have thanks for taking my questions.

Thanks Scott.

Thank you next.

Next question comes from the line of D. J Hynes with Canaccord. Your line is open.

Hey, guys nice quarter I want to follow up actually on both of those topics that Terry hit on.

We'll start with multi store so I guess based on the.

Conversely issues you are having in the field do you think multi stores is really kind of a breaking of the dam event at the high end or do you get the sense that there may be some hold back still among enterprise buyers until you have.

That multilocation inventory.

<unk> of it as well.

Well the Great News is Multilocation inventory was released in closed beta last week, so that product now.

<unk> and available to a limited subset of.

Customers and.

Yes.

More news to come on that but that's not a limiting factor in certain use cases, and we will on block that soon.

In terms of multi storefront.

We have long known that that of all of the enterprise.

Functionality components.

Was the biggest.

Differentiator between the high end up large enterprise platform and everybody else.

That from the day I came in.

It's so complex to re architect ever.

Everything in a multi tenant SaaS platform with so many customers without disrupting them and not doing what magenta did which has come out with a completely new version of the old customers you've got to migrate a re platform.

We did it while the trains are all moving on the track.

And we're so proud that we pulled that off I think it is the defining.

Breakpoint.

And frankly, it's also what the Genco and Salesforce have been saying against us in recent years, what about multi store front, while we have it now we've got a great version of it.

I think we're extremely well positioned.

All of this within such a great performance and value package.

Frankly, Adobe and Salesforce I don't think can compete with.

Okay, Great that's super helpful color.

And then the follow up maybe more geared towards <unk> is just is there any way to frame kind of how the unit economics compare on revenue that comes through E Commerce as a service versus your direct business right and I get commerce as a services lower taxes those partners kind of do the selling for you, but is there more investment that needs to happen.

Front to get those partners enabled just help me understand kind of how that all works.

Yes, I mean, you nailed it I mean, the cost to acquire is going to be lower there's going to be some upfront costs and those think of those as oftentimes larger deals with kind of a minimum commit that our partners will make with us.

Our multiyear commitment, but yes, the CAC will be lower and we believe that the lifetime value will be longer and bigger across most of those use cases.

Yes, Okay. It was great to hear about the three deals, but I think you called out in the prepared remarks. So good stuff there. Thank you.

Thanks C J.

Thank you.

Next question comes from the line of Josh Beck with Keybanc. Your line is open.

Yeah.

Thanks for taking the question I wanted to go back to I think Clark's question really about the market.

We've heard from.

Some of your Fintech peers, let's say that the e-commerce market.

<unk>, a little bit and they felt like some of the third party forecast, we're a little bit still.

They've called out and these are obviously more same store sales types of growth metrics, but.

Headwinds in the UK and some of the China supply chain.

George is that we are seeing so just to be clear.

Did your market forecast.

Not really changed much or maybe you'd already contemplated some of those you sell a little bit more.

On the market overall, so just curious if there's anything worth wirthlin packaging there.

Hey, Jamie Yes, we contemplated it for Q1.

We're obviously paying close attention attention to it and monitoring it for the rest of the year. So.

In terms of like the back half forecast, we're trying to factor.

That in as well so.

Yes, just pleased that we were pretty much spot on with our assumptions for Q1, and then for the remaining part of the year, especially the back half of the year.

<unk>.

We're using our best guess and kind of.

Discounting it a bit just to make sure. We don't get ahead of our skis on that front, but yes.

Yes, we're definitely seeing some of those trends, but even even with that we're pleased with our <unk> numbers for Q1 and feel pretty confident that we can deliver the rest of the year.

Okay, good to hear and then.

The fee dynamics front obviously.

Been a very successful.

Acquisition and integration.

Is that business continued to outperform your expectations.

While I don't really expect anything quantitative just qualitatively how are you thinking about that business for the balance of the year.

And I'd say, it's outperforming on many fronts not just the product front, but the go to market front the people front the culture front like it is.

We're very very <unk>.

Excited about <unk>.

<unk>.

Super Grateful in terms of how much they've leaned in with US some of the opportunities that we're uncovering now we didn't even know about when we bought them in terms of how to really offer.

It's really robust omnichannel capabilities.

Our partners to the ecosystem.

Yes, so we were blown away by what we can do with feed and Omics.

That's that's an area, where the futures omni channel. So we want to be the very best.

And omni channel selling for our merchants, we believe feed and Omics as the technology and team that will deliver that.

Yes, we're super excited about some of the opportunities that we're working on with them.

Great to hear it thanks, Eric.

Thanks, Jamie.

Thank you next question comes from the line of Koji Ikeda with Bank of America. Your line is open.

Hey, Brian Hey, Alright, thanks for taking my questions.

Maybe first one for <unk> just wanted to.

As they get to the full year guide a little bit so the range.

Previously was about a $12 million spread when you guided first guided in the fourth quarter call now about $9 million spread up a bit from a midpoint perspective versus the prior guide.

I guess, how should we be thinking about that guidance methodology, the narrowing of the range, there and any sort of contributions from economics and bundled <unk>.

Yes.

Obviously, you had a nice beat in Q1.

We did raise a bit the guide for the year.

<unk> is one where we made that acquisition really to really go deep in the product road map and really own it.

<unk> perspective revenue contributions there will I think are reflected in what we would expect to close in gross new bookings for <unk> as we kind of build that into our platform and product and really expand some of our go to market. There is some potential upside for BBB and omnichannel.

We factor that into our forecast so.

Some of the investments that we're making there where we're kind of timing those investments and planned release dates of those investments to where you likely won't see it an uptick in revenue until the back half of the year.

So I would look at our kind of revenue guide is kind of nice beat for Q1 took it up a bit.

Holding kind of our op loss consistent.

But also adding about.

Roughly $1 million and the midpoint to invest in bundle b to b, because we feel like once we kind of make those investments, we're going to be able to to really.

Go to market the way we want.

With our <unk> offering.

Got it. Thank you and then just one follow up for me.

Still I am pretty new to this name so when I was ramping up I understood. There was some.

Maybe some pricing benefits through the model during the pandemic, but just kind of thinking about moderating G&P volumes post pandemic.

Are there any sort of pricing tier downgrades that could happen or maybe walk us through does that happen how does that work or is there anything to call out there.

Yeah on the enterprise plans. It is on a trailing 12 months view, so you could get potentially.

Potentially.

A lower amount, but in terms of we don't see that very often it's just the amount of upgrades that we were seeing during the pandemic.

It's a bit more normalized now versus the last couple of years. So.

And retail plans, it's all <unk> based.

But enterprise plans are really order based on a trailing 12 month basis, so not too much on the downgrade side, but definitely less up less order based upgrades than we saw in the height of the pandemic.

Got it got it thanks, guys. Thanks for taking my questions sure Koji.

Thanks.

Our next question comes from the line of blackmail Iranian with Wedbush. Your line is open.

Hey, guys. Good afternoon, I was just first follow up on the last comment.

So less order based upgrades just based on <unk> and normalization can you talk a little bit more about.

What youre seeing from.

From your customers in terms of how they view investments in.

Building their e-commerce platforms.

E Commerce ecosystem.

Slowdown or normalize to certain extent and maybe talk a little bit about about the pipeline so outside of the Cherokee swings.

Yes, I mean keep in mind, who we compete with and who we see in Rfps.

<unk>.

There's a lot of value with big Commerce <unk> is lower we're more flexible they can launch with us faster.

But so.

Situation that a lot of merchants are now when theyre thinking about a multiyear bet around E. Commerce a lot of these enterprise merchants have seen their ecommerce business really grow really nicely over the last two to three years, they want to move faster they want to grow.

Exponentially further in across a lot of different geographies and so when they look at big Commerce, They really see a much more cost effective solution than some of those legacy systems that they're on or some of the big enterprise companies that.

Maybe we're competing against so I think our pricing is very competitive we offer really really strong kind of TCR.

Offer for merchants, but again I think the reason why merchants are now choosing big commerce.

Not just because we're cheaper.

But its because they can move a lot faster they can launch a lot faster they really love the flexibility of the platform being able to customize it so our value prop today, especially with native multi store being rolled out.

I think is stronger than ever.

And I think our pricing is very competitive in the segment of the market that we're competing in and focused on.

Okay great.

Also a follow up on commerce as a service Brent mentioned.

I forget the exact comment but it was the three of the largest recurring revenue deals from that.

Can you talk about why that is.

And if that's something we should be expecting in general that it's going to drive.

Higher recurring revenue deals are bigger deals in general just to understand some of the components of that.

Yeah.

Yes, I'll take that.

It's really going to be the full range of deal types as an example.

Congress is a service major announcements that we've had to date, including wind direct.

Newark status and Clover, all come with pretty significant.

Initial minimums that immediately start contributing to.

Revenue.

<unk>.

Some of the other ones that we just announced are very much.

Deals, where we only get revenue as new merchants are added.

And so they'll start from a base of zero and hopefully grow.

Strong levels every time those partnerships are successful so it'll be a whole range and really each particular.

Deal in relationship with tailored to the specific needs of the partner.

More often than not.

As a partner with a large established.

The base of business that Theyre trying to migrate over you would expect a significant deal with an upfront commitment.

With a smaller partner and trying to build a new program from the bottom up there there may be very little or no initial commitment and everything goes up one year early with merchants that are added.

Great. Thank you so much guys.

Thanks.

Thank you.

Our next question comes from Parker Lane with Stifel. Your line is open.

Hey, guys.

Parker Lane.

I know, we've talked to last quarter about the international opportunity and kind of the long term target being 50 50, He has announced a few exciting expansions.

Going forward. This year I was just wondering what kind of environment youre seeing over there with everything going on and if it's changed your plans at all or if Youre just moving forward for the long term opportunity rather than whats happening potentially in the short term.

Yes, the pipeline that we're seeing remains strong across those markets I think the feedback that we're getting from our sales teams as well as our partners in the markets that we're in.

I would say the enterprise.

Demand for ecommerce is is fairly robust.

Long term debt 50, 50 is kind of where we would expect our gross new bookings split to be.

In terms of revenue, we're still 80, 182%.

Revenue in America has been in terms of that $50 50 gross new.

Still something that we see kind of in our sites and so as we.

Expand our go to market teams in Latin America.

Our European teams continue to do extremely well in terms of their ability to close.

Quota attainment remains strong and so we're as confident as ever.

We can continue to drive really great enterprise growth.

In Latam and then ultimately in APAC down the road.

Got it and then switching gears thinking about.

Social Commerce is still kind of an emerging category for a lot of businesses and I know you guys announced a plan for talked advertising.

A little while ago is there anything else going on with big Commerce and their role in social Commerce trading hours more focus is put on commerce as a service.

Sure couple social Commerce is super important to us and was one of the contributing factors to our acquisition of economics.

Last year.

I would say the comment about <unk>.

Growing importance of social is indeed true of the United States, but if you looked at Asia.

Enormously big in certain countries already and has always been a giant component of advertising so.

<unk> on Facebook, and Instagram and tick tock.

Really highly valued right now with some of the other networks.

Point about <unk> is that it's the leading feed management tool used by the largest retailers online in the United States.

For social Commerce, specifically that enables the business to get their product catalog from out of their source of truth that E com platform ERP or Tim.

Not just syndicated into <unk>.

Efficiently the various social networks, they want to use but optimized for each one with exactly the right format.

Character count pixel dimensions for images.

Category.

Schemas that each one likes to you and Thats just as relevant for advertising on the social networks as it is for.

Actual selling so whether its snap or whether it's kickoff core Facebook and Instagram or any other major social networks around the world.

What's the denominator, we've got feedback.

Seat management capabilities available and we're also very actively across both ecommerce and economics enhancing the partnerships some of which we've announced in the past with those organizations to help them both get ever better inventory out there.

With E Commerce merchant base merchant base, but as well merchants, who are using other platforms, but taking advantage of feet in opex. So work.

We're extremely bullish about the potential.

Social networks for e-commerce, and whether that's selling directly on those platforms are simply advertising effectively.

That will all sort of evolve over time, but advertising at a minimum should be an anchor for so many.

The online.

Business to consumer brands and retailers.

Yes.

Thanks, Congrats on the quarter and thanks for taking my questions.

Thanks.

Thank you.

Our next question comes from the line of Matt Samana with Jefferies. Your line is open.

Hey, Good evening, guys hope all is well down in Austin.

And maybe just.

Our first question on the Commerce of the service side I just wanted to make sure I understand so when when someone's using big Commerce and that situation is at the end merchant. That's that's making the platform selection or is it a partner that's going to be making the slashing I guess does it change.

How the actual customer acquisition motion goes beyond that they're actually acquiring them, but does it change whose could the decision maker for what E. Com platform is being used is.

It always starts with the partner so the partner is contracting with that Commerce E Commerce as a service and in essence.

Market and sell a bundled offering between whatever is their core solution.

Our commerce platform.

Power the commerce platform.

Great. That's very helpful sorry, but let me just complete that in some cases.

The partner.

Just saying I only work with the Commerce, you have no choice and if they're migrating.

<unk> over to big commerce than they might do a big upfront arrangement with us in other cases, they are launching a new program and it's really up to each individual merchant to decide whether they're going to use it or not.

But typically the partner will only have one such <unk>.

Commerce is a service relationship like this with our competitors for the most part don't do that.

It will grow over time with the merchant doesn't have a pre installed base based on individual businesses, deciding hey, I like that combined offering I want to adopt it.

Thank you.

Ladies and gentlemen, due to the interest of time, we ask that you limit yourself to one question.

Our next question comes from the line of Rhino.

<unk> with Barclays. Your line is open.

Hey, Thanks for squeezing me in again.

Just.

The one question for me would be like can you talk a little bit about what you're seeing.

On the international side, you, obviously have a decent R&D exposure.

In Ukraine, and obviously with the deal.

The amount of European revenue. So what are you seeing there from a macro perspective, thank you and congrats from me as well.

Brian I'm going to start on the Ukraine part of that so I'm after commenting last quarter I'm delighted to share that.

107 of our employees and Ukraine are accounted for.

Including the subset serving in the military.

They are all safe.

Our estimate on blended productivity.

Relative to what it would be across the entire employee base absent. The war is about 85% so for the most part.

Folks are working.

And many of them at 100% from wherever their locations are Ukraine has fortunately.

Retained key then and some of them are returning to Keith from other parts of the country, where they had relocated so things are really good there and the rest of continental Europe and in the UK. It's full steam ahead.

Business as usual.

We are finding interest in us really great one of the coolest things that happened last week is on the same day that Forrester came out with their new wave reports for <unk> and B to C.

Enterprise ecommerce and rated us so well.

Another tactic rating agency in Europe immerse out of another one also rated us the best enterprise platform.

Same day two continents.

First enterprise ecommerce platform.

Reviews, and so we think we're positioned not just better than ever but also getting that recognition and that should help propel us I hopped on a plane tomorrow for the Berlin E Commerce conference and can't wait.

Tried to build the same kind of enthusiasm and morale in Germany that we're already seeing in Italy, France, U K, Spain and Netherlands.

That's great to hear thank you.

Thanks.

Thank you last question comes from the line of Matt Pfau with William Blair. Your line is open.

Hey, guys. Thanks for taking my question I wanted to just follow up on your <unk> efforts. So clearly you've made a lot of investments there from a product perspective, maybe just give us an update on what you need to do on a.

Go to market front, there what investments are you, making and is this an area where the commerce as a service strategy can help out.

Yes.

Yeah.

Commerce as a service.

Yeah.

Can help out.

Imagine.

As an example.

Trade associations industry associations.

Applications purpose built for specific industries, like automotive or a certain manufacturing vertical and ERP serving.

Specific.

Industrial vertical those are all.

Potential areas where either.

Trade class marketing partner or a technology partner could do commerce as a service.

So far for the most part our ecommerce as a service sales have gone to companies that serve <unk> sellers.

So there is potential there.

I'm excited to begin exploring that.

In addition on the go to market for.

<unk>.

The most important thing is simply starting with the recognition.

The various.

Tech analysts, who evaluate <unk> platforms.

There is no more scaled way than when experts and authorities evaluate under the hood the various platforms and we get great ratings. So we have great ratings from obviously know Forrester in last week's report, we had great ratings from paradigm last year, they're updating their report.

Right now.

And we've had several others that do that it is also interesting if you go into trust.

Radius or <unk> I think it's G to crowd.

If you were to do.

Click there little boxes and get their grid report on the combination of most popular and highest reviewed <unk> platform.

<unk> way up into the right and nobody has any anywhere close to us, it's mostly <unk> and sort of mid market small business and mid market lower end merchants, who are filling out those details.

Ports, but that's the wisdom of the crowds, saying that we're the best in that application to so whether it's enterprise or small business.

That speaks volumes in a much more scaled way to get the great word out about our capability then are trying to market and reach every perspective buyer agencies also a lot of the <unk>.

<unk> sellers will rely on an agency to help them get started or to re platform. Their e-commerce and the agencies really look to these reports to figure out where to.

But their money.

We have great value out of the box and I think thats going to help us grow share significantly overtime. Thanks for the question.

Thank you.

Our next question comes from the line of Keith Weiss with Morgan Stanley . Your line is open.

Excellent. Thank you guys for sneaking me in even after you snuck in there.

Yes.

Very nice quarter.

Hey.

Beat a dead horse.

On the macro side of the equation, but it is kind of what we've been getting beaten with led by investors.

Over the past couple of months in terms of understanding that macro side of the equation. It looks like the enterprise business is holding in really well if I look at sort of the inverse of that 89% of <unk>.

This enterprise.

Retail side of the equation and correct me if my math is wrong and it looks like that.

What was down a little bit sequentially in the quarter.

Is that the kind of the macro impacts that you guys are talking about and would we see more of that on a go forward basis or do you think that stabilize how should we think about that side of the equation.

Yes, so on the enterprise.

Our front I mean, we had a great quarter in terms of the sequential increase.

Had some higher end retail plans that actually upgraded to enterprise plans in the quarter in Q1, where we see some of the.

Kind of macro factors affecting smbs, especially would be on the standard plus plan. So those are the accounts less than two K, but remember I mean, our enterprise business I mean, 80% plus of our GMB is coming from our enterprise accounts. When we look at our net new bookings all of last year 80.

<unk> of our net new bookings came from enterprise for 2021, and the way we recognize revenue too I mean, we're majority subscription right, so where we get impacted by kind of order based or <unk>.

<unk> based impacts is really kind of on the upgrade side or pricing side and so were we.

Our focus on enterprise for their focus on gross new subscriptions.

We don't see the impact of that as much we do see it and upgrades that we talked about but definitely in our standard and post plans youll see some of that in.

Some of those retention dynamics are quite different on those plans versus the really really strong retention profiles that we see in our in our enterprise merchants.

Thank you. Our next question comes from the line of Brian Peterson with Raymond James Your line is open.

Good evening gentlemen, thanks for fitting me in so I just wanted to follow on that question on <unk> I'm curious what do you view as the gating factor on growth for <unk>. There's a lot of functionality that you've added. So I'm curious is there a market awareness component work.

Some of these businesses may not know what they can get from a <unk> perspective, and as we kind of put a longer term lens on is there a period or is there a functionality where that really starts to inflect im curious to get your thoughts there.

Well I think one there are some limiting factors.

One is that.

B to be sellers are less homogeneous than be to see sellers.

It's very different things you are talking to.

Our supplier of.

Raw material.

Cereal or intermediate goods versus the final produce are you selling to wholesale are you selling to industrial.

Industrial accounts.

These are very different use cases and no. One platform is going to serve every single use case, what we do is we bring all of the great user experiences.

Functionality originally built for beta fee plus the most common functionality for <unk> Lite account hierarchy.

Approval processes, invoicing et cetera quoting.

That gets added into our <unk>.

Our functionality and so it's a subset of the <unk> market, where that will be most.

Appealing, but I would say if you will.

Look at history from Magenta shows.

Evolution magenta like US also started as a BDC platform and it was around about 2013 2014, when they saw increasing numbers of <unk> sellers using them in conjunction with apps and their app marketplace in the very short periods of time, where they went from.

Not even focus on <unk> to be the number one <unk> in the world because they were solving that generalized use case.

Of course, the floor for a lot of businesses with mid jumped out with owned licensed software that you have to manage and secure yourself and with that commerce now. We're following that same path, but in a SaaS model and we really do hope that given the appeal of fast, especially.

<unk> business is that that same part of the market that magenta did so well in <unk>.

Going forward, the commerce can't to Genco didn't market their way to number one share it's not like they were spending fortunes on marketing or had some gargantuan sales staff all around the world there were relying on the <unk>.

Proposition and capabilities of their software combined with their apps and extension.

Market place, just like we are and especially agencies, who assist these companies and making their choices and we will also rely on agencies and developers around the world to help us get the word out scalable.

Thank you.

Our next question comes from the line of somehow magical power with bearing Barrett capital. Your line is open.

Thank you very much for taking the question.

Maybe one question on the partner and services revenue it looks like it is pretty much flat.

Last quarter can you just talk with us.

The mix what is going on there and how should we be thinking about that line going forward.

Thank you, yes. Thanks for the question yet usually what we see with <unk> is Q1 would be sequentially down from Q4 normalized.

Q4 is our holiday season. The last couple of years have been quite different. So Q1 of 2020, we had the impact of.

Increased volumes with Covid.

Q1 of 2021, we had the impact of the U S stimulus checks going out, which elevated PSA levels in that quarter and so I think what we're seeing is just kind of a more normalized view of <unk> post pandemic and without the impact of the stimulus check. So I think this is kind of what you were.

Would expect and what we saw kind of pre IPO and pre pandemic.

Thank you.

Our next question comes from the line of Mark Murphy with Jpmorgan. Your line is open.

Oh, great. Thanks for squeezing us in this thing just I'm sitting in for Mark.

Just one quick question on feed on a mix, obviously, it seems like youre not giving us.

The contribution but there is no reason to think that the IRR for feet on our mix should be down sequentially right. It sounds like it's doing really good so it should be up sequentially I think that correctly.

Yes, I would think about it up slightly I think fee dynamics for Q1.

<unk> grew nicely up slightly.

So yes, nothing nothing unusual to report there.

Got it thank you.

Sure.

Operator.

I'm now showing no further questions in the queue I would like to turn the call back over to Mr. Brent Berlin, President CEO and chairman for closing remarks.

Just want to thank everybody for dialing in and the questions and we look forward very much to seeing as many of you as possible. When we have our first ever analyst day, which I believe is scheduled for may 25th.

With the possibility of in person attendance here in Austin So.

It will be a great chance for us to talk more about all the major things that we're doing and.

And get your questions and feedback at that time until then we wish you the very best.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may disconnect.

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Sure.

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Okay.

Yeah.

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Sure.

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Ladies and gentlemen, thank you for standing by and welcome to Big Commerce first quarter 2022 earnings call.

At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session. Please be advised that today's conference is being recorded.

I'd now like to turn the conference over to your first speaker today, Daniel Let's hit a head of Investor Relations you may begin.

Yes.

Good afternoon, and welcome to Big Commerce was first quarter of 2022 earnings call.

We will be discussing the results announced in our press release issued after today's market close with me are big Commerce, as President CEO , and Chairman, Brent Berlin, and CFO Robert Alvarez today's call will contain forward looking statements, which are made pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 1995.

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 that big Commerce Dot com with that let me turn the call over to Brent.

Thanks, Danielle and thanks, everyone for joining us on today's call Robert and I will review, our first quarter results and I'm excited to share with everyone. The Big Commerce reported an excellent first quarter. Our team continues to deliver on our vision to be the leading ecommerce open SaaS provider empowering BTC and VW merchants around the globe.

Today, I will share an update on the status of our business recap initiatives, we announced in the quarter and give a brief review of recent product launches and partnership agreements. We will conclude today's call by updating you on our second quarter and 2022 full year guidance, along with our key priorities for 2022 first let's take a moment to review.

Our Q1 results are.

Our growth in Q1 was strong despite some post pandemic normalization of ecommerce and consumer spending is seen across our industry.

Platform for businesses the value best of breed functionality and the flexibility to address complex business requirement.

We concluded Q1 with IRR or annual revenue run rate at $284 million up 43% from last year.

Surprise account was $189 million up.

Up 68% year over year.

<unk> from accounts greater than $2000 in annual contract value or ACD totaled $249 $5 million up 52% year over year.

Omnichannel headless commerce and BBB.

We are excited about this year's shift back to in person marketing and industry of that which we believe is to our advantage as a partner centric open SaaS platform we participated.

Our hosted several events with our agency and technology partners during Q1, ranging from shop talk in the USA to one to one Monaco to retail Global conference in Australia, where big Commerce was just named solution provider of the year. The feedback has been overwhelmingly positive and consistent across the globe.

Merchants crave, a flexible open source platform that they can customize to meet their growing list of technical and operating requirements, combining our b to C. <unk> and omni channel tools merchants are empowered to boost sales across multiple channels and geographies, that's powerful and we're proud to be a part of this evolution and ecommerce.

This positioning, particularly resonates with enterprise merchants, which now make up the majority of our business.

To take a minute to review the state of our enterprise footprint in particular.

At the end of 2018 enterprise accounts represented 45% of IRR.

Today, there are 67%.

We are a majority enterprise company that delivers the benefits of best of breed functionality and open SaaS flexibility to companies of all sizes large global apparel brands like Ted Baker, and La Perla demonstrates the unique power of our platform.

Enterprise IRR has grown at a compound annual growth rate of 52% over the last four years, including the 68% year over year growth in our most recent quarter.

Our recent launch of multi storefront functionality firmly positions us at the top end of enterprise SaaS ecommerce platforms.

Multi storefront enables merchants teams a single big Commerce control panel to manage multiple storefronts that serve different regions brands and or customer segments like need to be.

Although multi storefront is considered enterprise functionality, we plan to bring this to the masses of small businesses as well soon enabling them to add store fronts with a click of a button.

<unk> Commerce has a strong partner ecosystem and good performance against that product vision by unifying and simplifying administration of both first party and third party functions. This roadmap is one of the strongest in this evaluation and includes plans for deeper integration of third party apps and additional native integrations with complementary solutions such as customer data.

<unk>.

Reference customers are enthusiastic about the ecommerce as a trusted partner and it garnered the highest marks from references in this evaluation.

Both of the newly published Forrester wave <unk> and <unk> E. Commerce solutions reports are very positive about the commerce switching to the <unk> report, we scored the third highest ranking for current offering among global enterprise VW platforms and that was before our acquisition of bundled <unk> announced last week.

A short seven years ago, when I assumed the leadership of the commerce from our terrific founders.

We were exclusively a small business platform.

We embarked on a strategy to bring the benefits of SaaS, including scalable performance ease of use value and continuous innovation to the world's complex businesses.

This required opening our platform via Apis and micro services and it required building enterprise functionality on top of those API.

We branded this open SaaS as our alternative to open source at the time Magenta is open source was the undisputed global leader in the mid market and large enterprise segments.

Today in 2020 to SaaS is the present and future of E. Commerce, we're delighted that leading tech analysts like Forrester and IDC advocate for us and right Big Commerce ahead of many of our legacy enterprise competitors.

On our last earnings call, we outlined investment across five strategic priorities and one new growth pillar and which we intend to lead the future of E Commerce.

In Q1, our international expansion efforts made strong progress as we now operate and the sixth largest western European economies.

Rates in EMEA, APAC and non U S Americas give us confidence that expansion will pay off in the near and long term.

In Omnichannel, we plan to launch a self service tool that brings premium features embedded in fee dynamics to the mass market.

<unk>, which we acquired last year enables merchants to syndicate and optimize their product offering to the world, leading advertising search engine, social network and marketplace channels.

Power's omnichannel for many of the world's leading online retailers and in time, we will bring us capabilities to self serve merchants of all sizes. We believe fee dynamics is the world's best feed management tool for expanding reach acquiring new customers optimizing return on AD spend and selling through marketplaces.

Last quarter, we formally introduced a new pillar to our growth strategy Commerce as a service commerce as a service enables partners to create and sell customized commerce solutions powered by our platform technology. This announcement has been well received and our partner community in Q1, we enabled five new reseller.

Partnerships, including Clover, a leading north American point of sale and business management solution owned by Pfizer overs.

Overseas, we launched freedom local dot Fr Valley.

Value Com PE and Abbott Sam.

These partnerships expand our reach to new merchants through the sales and marketing efforts have established category specific technology solution providers.

This gives the commerce the opportunity to onboard new merchants with marginal cost to us, thereby building additional distribution and a flywheel to scale our revenue model profitably.

We are still in the early phase of Commerce as a service is a strategic pillar for our company. We are pleased that it has already generated three of the largest recurring revenue deals and big Commerce is history.

In June 2021, we expanded our <unk> functionality with the introduction of <unk> addition, we.

We recently added our 200, <unk> addition, customer and last week, we announced the acquisition of bundled <unk> to be the partner behind that success will be to be addition, offering at.

At a time when <unk> ecommerce continues to boom this acquisition cements, our commitment to being the best and most powerful SaaS ecommerce platform for <unk> merchants.

Does come with a small amount of incremental investment in BBB, which Robert will discuss further as we provide our updated full year guidance.

In March we announced an expanded strategic partnership with bolt a leading network checkout company, our upgraded integration enables small medium and enterprise merchants. The set of both one click checkout and our self serve manner within minutes, both can be prebuilt into merchants big commerce stores, allowing them to deliver secure <unk> transactions.

For customers without the need for accounts passwords and logins.

This month, we will launch a new store for Tottenham Hotspur one of the world's Premier football brands disperse are leveraging the <unk> commerce platform to improve fan experience not only in the U K, but also North America and Asia. Tottenham is taking advantage of our recently launched multi storefront capability to support multiple stores around the world in multiple languages.

<unk> and currencies.

It shows the commerce over other options because of our SaaS approach an ecosystem of integration partners.

Van Cafe launched its new site for Volkswagen Autoparts, leveraging the big Commerce Axiomatic ERP connector to the Denny's customer data inventory products and third party apps.

<unk> tuning our supplier of European Auto parts recently launched a new <unk> site on our platform and are taking advantage of multi storefront for their upcoming <unk> site. In addition to those let me name just a few more important brands that launched on big Commerce during the quarter edible balloons pool zone illegal product.

The per store group HK living <unk>.

International tool supplier at the.

The school of wide and Louisiana Crawfish.

And attractive long term profitability.

For more details on our progress and plan I am pleased to share that on Wednesday may 25, we will be hosting our first analyst and Investor day as a public company. This event will be held virtually and we will be posting details on how to access that event on our investor Relations site in the coming weeks with that I'll turn it over to Robert.

Thanks, Brent and thank you everyone for joining us today I'll review, our first quarter financial results and provide an update to our second quarter and full year 2022 guidance.

Note that our results on a consolidated basis, which includes activity be dynamics.

Like to start by saying our presence in the enterprise market is stronger today than ever before.

We reported another solid quarter and continued progress moving further up market into the large enterprise segment, which is really best shown there as some of our recent launches.

Ted Baker is a shining example of why we are winning more and more enterprise deals and highlights our enterprise capabilities, including native multi store multi geo multi language multi currency.

All with a customized headless front end user experience <unk>.

Enterprise merchants, they are now making ecommerce platform decisions based on a multiyear horizon.

E Commerce is a platform that can scale as fast as they want to grow.

Services revenue or <unk> was up 23% year over year.

Our PSS growth rate slowed compared to last quarter. This was consistent with the expectations. We discussed on our last call relative to overall ecommerce transaction volumes in the base period effect of U S. Federal government stimulus payments in March 2021.

We have now posted nine consecutive quarters of 30% plus total revenue growth and 14 consecutive quarters of 40% plus enterprise AR growth.

We remain focused on delivering our plans for the year, but we are encouraged by the progress reflected in our Q1 results across many fronts.

Revenue in the Americas were up 43% in the quarter.

EMEA revenue grew 43% in Q1, and APAC revenue was up 27% in Q1.

We are making progress across Europe , Asia, and Latin America.

We are still in the early innings in terms of how large our share can be in those markets. Many brands and merchants in these markets produce growth rates ahead of similar companies in North America, and we see the enormous set of opportunities ahead of us and are taking action to invest in these markets.

We believe the opportunity to expand our footprint and share of wallet internationally is tremendous.

Stronger unit economics, better net revenue retention and higher transaction volumes from enterprise merchants.

Fundamentally they commerce is an enterprise E Commerce company and.

And our investments aimed to bolster our market position within this attractive customer segment that has been historically served by outdated expensive and very cumbersome legacy systems.

<unk> from accounts with $2000 or more in HCV grew 52% year over year in Q1 to $249 $5 million.

Enterprise accounts posted outstanding growth of 68% year over year to $189 million.

Overall enterprise contribution to our improved growing to 67% of our <unk>.

As of March 31.

<unk> to 57% in 2021.

Since going public in 2020, we've averaged a growth rate in enterprise or a 55% are focused on expanding our enterprise footprint is gaining traction in north America and across global markets, our inroads into new markets are noteworthy, particularly amongst sophisticated merchants our solution.

How's merchants to utilize the most modern and innovative based solutions work.

Customizing services for their local market needs, our BDC and <unk> solutions together with our head list and Omnichannel strategy makes our cost effective offering an easy choice for merchants looking to re platform and supercharge their e-commerce capabilities and performance.

In Q1, we posted our highest absolute level of gross new merchant sales in our history.

We're confident our operating results are trending in the right direction and in line with our internal plans.

Although we saw slightly less sequential growth. This quarter. We believe this is largely a cyclical issue.

As we discussed on our last call, we expect slower growth rates.

This year compares to the past couple of years due to some normalization in consumer behavior and the lapping effect of elevated base periods during the pandemic. This.

This is primarily a result of more moderate GMB growth driving fewer upgrades and plans and hence fewer upgrades and planned pricing.

Revenue guidance ranges incorporate these dynamics and we believe we can sustain strong topline revenue results behind all of the investments we've mentioned.

At the end of Q1, we reported 12972 customers with HCV greater than $2000.

<unk> 2463 accounts or 23% year over year.

At the end of Q1, 89% of our IRR is now made up of accounts with ACB greater than $2000. That's a 600 basis point increase from the same period in 2021.

I'll now shift to the expense portion of the income statement.

As a reminder, unless otherwise stated all references to our expenses.

Operating results in per share amounts are on a non-GAAP basis.

Q1, gross margin was 75% down 25 basis points from the previous quarter. Meanwhile, we reported a gross profit of $49 8 million up 32% over the prior year.

Continued investments in our hosting infrastructure customer support.

International operations are contributing to the reduction in gross margins. However, our outlook for gross margins remain in line with.

We're confident we can maintain rates in the mid to high seventies.

In Q1 sales and marketing expenses totaled $29 5 million up 50.

<unk>, 54% year over year. This accounted for 45% of revenue up 365 basis points compared to last year.

This increase was tied to increasing head count in our sales and marketing teams.

<unk> is tied to client engagement initiatives.

Uptake in travel costs that were marginal during the pandemic.

Research and development expenses were $18 4 million or 28% of revenue up 154 basis points from a year ago.

Costs ticked up due to additional head count added to our product and engineering teams.

Given by the planned investment areas, we have outlined previously.

Finally general and administrative expenses were $14 3 million or 22% of revenue up from 20% of revenue a year ago.

The main drivers of the increase included cost tied to enhance cyber security investments that fee dynamics and international expansion cost.

Adjusted EBITDA was negative $11 7 million and negative 17, 8% adjusted EBITDA margin.

Compared to a negative five 2% in Q1 2021.

non-GAAP net loss for Q1 was negative $13 2 million or negative <unk> 18 per share compared to a negative $3 1 million or negative <unk> <unk> per share last year.

We are still in the early innings space and the opportunity we see ahead of us.

We have invested.

And as time and resources over the last few years towards our transformation into a leading enterprise E Commerce company and our results clearly reflect the success of that effort.

Our financial results and the third party accolades that our technology platform is receiving from our agency and Tech partners as well as the leading industry research analysts were big Commerce is now recognized as a true enterprise platform leader across BTC and <unk>.

We are confident this is the right long term decision for our business and our shareholders. We are committed to long term profitable growth, while preserving healthy liquidity on our balance sheet.

We ended Q1 with $377 3 million in cash cash equivalents restricted cash and marketable securities.

At the end of Q1 operating cash flow was negative $22 million declining from negative $12 8 million a year ago.

We reported free cash flow of negative $23 3 million or a negative 35% free cash flow margin.