Q1 2024 BigCommerce Holdings Inc Earnings Call

Okay.

Speaker Change: Ladies and gentlemen, thank you for standing by and welcome to the Big Commerce first quarter 2024 earnings call.

Operator: Ladies and gentlemen, thank you for standing by. And welcome to the BigCommerce first quarter 2024 earnings call.

Operator: 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, Tyler Duncan, senior director of...

Speaker Change: At this time all participants are in a listen only mode.

After the speaker's presentation, there will be a question and answer session.

Speaker Change: Please be advised that today's conference is being recorded.

Speaker Change: I would now like to turn the conference over to your first speaker today cover Dunkin' Senior director of Finance and Investor Relations.

Tyler Duncan: Good morning, and welcome to BigCommerce's first quarter 2024 earnings call. We will be discussing the results announced in our press release issued today before the market opened. With me are BigCommerce's Chief Executive Officer and Chairman, Brent Bellm, and Chief Financial Officer, Daniel Lentz.

Speaker Change: Good morning, and welcome to the Commerce's first quarter 2024 earnings call, we will be discussing the results announced in our press release issued today before market opened with.

Speaker Change: With me are Big Commerce, as Chief Executive Officer, and Chairman breakdown and Chief Financial Officer. Daniel is today's call will contain certain forward looking statements, which are made pursuant to the safe Harbor provision of the private Securities Litigation Reform Act of 1995.

Tyler Duncan: Today's call will contain certain forward-looking statements, which are made pursuant to the Safe Harbor's provision of the Private Securities Litigation Reform Act of 1995. Such 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 2024 and the full year 2024. These statements can be identified by words such as expect, anticipate, intend, plan, believe, seek, commit, or will or similar words.

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 2024, and the full year 2024.

Speaker Change: These statements can be identified by words, such as expect anticipate intend plan believe seek committed will or similar words.

Tyler Duncan: 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, address 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.

Speaker Change: 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 address matters that are subject to risks and uncertainties that could cause actual results to differ materially from expectations.

Speaker Change: 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.

Tyler Duncan: 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 provided to the SEC, and is also available on our website at investors.bigcommerce.com.

Speaker Change: The call. We will also discuss certain non-GAAP financial measures, which are not prepared in accordance with generally accepted accounting principles.

Speaker Change: 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.

Speaker Change: Which has been furnished to the SEC is also available on our website at investors start Big Commerce Dotcom.

Tyler Duncan: With that, let me turn the call over to Brent.

Speaker Change: That let me turn the call over to Brett.

Brent Bellm: Thanks, Tyler, and thanks, everyone, for joining us. Over the last two years, our business has dramatically improved its ability to deliver profitability and positive operating cash flow. As of 2024, our focus shifts to efficient revenue growth, and that imperative is front and center across every team in the company. We have yet to achieve the full growth potential of this business, but we pursue it with urgency and confidence.

Brett: Thanks, Taylor and thanks, everyone for joining us over the last two years, our business has dramatically improved its ability to deliver profitability and positive operating cash flow.

Brett: The 'twenty 'twenty four our focus shifts to efficient revenue growth and that paradigm is front and center across every team in the company.

Brett: We have yet to achieve the full growth potential of this business.

Brett: But we pursue it with urgency and competence.

Brent Bellm: I will focus my remarks today on improvements underway and how we go to market, key success metrics we're monitoring and improving, and an exciting leadership addition. I will also touch on product innovation that unlocks growth potential. Let me start by briefly summarizing key financial results for the quarter. Q1 results reflected a good start to the year relative to our top and bottom line plans. Revenue finished just above $80 million, up 12% year-over-year. Adjusted EBITDA came in at just over $4 million, or approximately 5% of revenue.

Brett: I will focus my remarks today on improvements underway and how we go to market key success metrics, we're monitoring and improving and an exciting leadership position.

Brett: I'll also touch on product innovation that unlocks growth potential let me start by briefly summarizing key financial results on the quarter.

Brett: Q1 results reflected a good start to the year relative to our top and bottom line plant revenue finished just above $80 million up 12% year over year. Adjusted EBITA came in at just over $4 million or approximately 5% of revenue.

Brent Bellm: We also had a solid start to the year from a cash flow perspective, improving free cash flow by more than 25 points as a percentage of revenue year over year. Turning now to growth, we recognize the importance of re-accelerating our top-line growth profitably, and we are laser-focused on accomplishing that. Let me move into a more detailed discussion of improvements we are making to realize our growth potential. As a reminder, BigCommerce was originally founded to serve the needs of small business customers.

Brett: We also had a solid start to the year from a cash flow perspective, improving free cash flow by more than 25 points as a percentage of revenue year over year.

Brett: Turning now to growth, we recognize the importance of re accelerating our top line growth profitably and we are laser focused on accomplishing now let me move into a more detailed discussion of improvements, we're making to realize our growth potential.

Brett: As a reminder, the commerce was originally founded to serve the needs of small business customers.

Brent Bellm: In my nine years as CEO, we have radically improved our product and service capabilities on behalf of the complex needs of mid-market and enterprise businesses, and we have successfully moved our customer base up market as a result. As part of that progression, certain legacy behaviors, metrics, and systems reflective of our roots must advance to incorporate the best practices of world-class enterprise software companies. I'll now describe three examples of these advances.

Brett: Nine years as CEO, we have radically improved our product and service capabilities on behalf of the complex needs of Midmarket and enterprise businesses and we have successfully moved our customer base up market as a result.

Brett: As part of that progression certain legacy behaviors metrics and systems reflective of our roots must advance to incorporate the best practices of World Class Enterprise software companies I'll now describe three examples of these advancements.

Brett: First we reorganized our business teams and leadership structure to introduce clear and unified end to end ownership of the customer.

Brent Bellm: First, we reorganized our business teams and leadership structure to introduce clear and unified end-to-end ownership of Sales, customer success, marketing, and our business development teams have congruent and clear targets that unify their efforts around customer success and growth. In Q4, we centralized end-to-end customer success ownership under our company president. Our company president now oversees all go-to-market efforts across the business, including the platform product, feedonomics, and PSR.

Brett: <unk> customer success marketing and our business development teams have congruity and clear targets that unify their efforts around customer success and growth in Q4, we centralized end to end customer success ownership under our company President are company President now oversees all go to market efforts across the business, including.

Brett: The platform product feed and Omics N P. S R.

Brett: Second our internal performance metrics in golf have improved that reflect our move upmarket as we discussed in our last earnings call our previous metrics Ingalls prioritize new customer acquisition as the primary means to fuel top line growth new customer acquisition remains our priority of course, but it is now balanced.

Brent Bellm: Second, our internal performance metrics and goals have improved to better reflect our move up market. As we discussed in our last earnings call, our previous metrics and goals prioritized new customer acquisition as the primary means to fuel top-line growth. New customer acquisition remains a priority, of course, but it is now balanced with a strong focus on customer retention, satisfaction, and growth. Target metrics now balance gross retention, net retention, and new customer growth, including a greater focus on portfolio cross-sell of feedonomics and partner solutions. Third, we are optimizing our data and operational systems to improve the management of net retention and sales pipelines.

Brett: A strong focus on customer retention and satisfaction and growth target metrics now balanced gross retention net retention and new customer growth, including a greater focus on portfolio Cross sell a few dynamics in partner solutions.

Brett: Third we are optimizing our data and operational systems to improve the management of net retention and sales pipeline.

Brent Bellm: A new customer master data management system will unify disparate partner and prospect data. We are also re-architecting our CRM and marketing automation system. We put our platform and feedonomics sales and marketing teams under one unified architecture built for account expansion, cross-sell, and multi-product sales growth. We expect these systems investments to be complete by mid-2025, and we are making tactical changes in the meantime to build momentum in our current architecture. We are excited about the growth potential these investments can enable, and we included the associated costs in our financial plans at the outset of the year.

Brett: New customer Master data management system will unify desperate partner and prospect data. We are also re architected, our CRM and marketing automation systems to put our platform and feed anomic sales and marketing teams under one unified architecture built for account expansion cross sell and multi product sales growth we expect these.

Brett: There's investments to be complete by mid 2025, and we are making tactical changes in the meantime to build momentum in our current architecture. We are excited about the growth potential of these investments can enable and we included the associated costs in our financial plans at the outset of the year.

Brent Bellm: These changes are by no means the only enhancements to our go-to-market strategy and operations, but they are illustrative of our transformation in pursuit of becoming a world-class enterprise software company. To help lead this transformation, I'm pleased to welcome Travis Hess as our new company president.

Brett: These changes are by no means the only enhancements to our go to market strategy and operations, but they are illustrative of our transformation in pursuit of becoming a world class Enterprise software company.

Brett: To help lead this transformation I am pleased to welcome Travis half as our New company President Travis brings more than 15 years of exceptional enterprise E. Commerce leadership experience involving many of our top platform competitors and his expertise and service and implementation ecosystem partnerships and competitive selling in <unk>.

Brent Bellm: Travis brings more than 15 years of exceptional enterprise e-commerce leadership experience with many of our top platform competitors, and his expertise in service and implementation, ecosystem partnerships, and competitive selling and positioning will help drive our go-to-market transformation and success. He has served on partner advisory boards for Shopify, Klaviyo, SAP Hybris, and Rackspace, and he most recently worked at Accenture as a managing director leading their direct-to-consumer Travis will target resources and attention on categories in which we are seeing the greatest customer traction and success, including apparel, home and garden, sports and outdoors, and B2B. We have many outstanding customers in these focus categories. Companies such as Coldwater Creek, Francesca's, Harvey Nichols, and White Stuff in Apparel and Accessories; Burrow, OneKingsLane, and Hauser in Home, Garden, and Furniture.

Travis: <unk> will help drive our go to market transformation and success. He has served on partner advisory boards for Shopify Clay D. O S SAP hybris and Rackspace and he most recently worked at Accenture as a managing director, leaving their direct to consumer ecommerce offering and go to market strategy.

Travis: Travels will target resources and attention on categories in which we are seeing the greatest customer traction and success, including apparel home and garden sports and outdoors and B to B.

Travis: We have many outstanding customers and these focused categories.

Travis: Any such as Coldwater Creek, Francesco's, Harvey Nichols, and white stuff in apparel and accessories.

Travis: Boro, one kings Lane, and Hauser and home <unk> Garden and furniture.

Brent Bellm: Marucci, Level Nine Sports, and Tottenham Hotspur, who recently hosted our EMEA Big Summit in Sports and Outdoors; MKM Building Supplies, Imperial Dade, and United Aqua Group in B2B. We also continue to be a great fit for brands in B2B businesses in health and beauty, food and beverage, electronics, and other areas spanning both B2C and B2B. Our R&D investments continue to deliver industry-leading innovation on behalf of our customer promise of Enterprise Ecommerce Simplified.

Travis: Maruti level, nine sports and Tottenham Hotspur, who recently hosted our EMEA Big summit and sports and outdoors.

Travis: MK and building supplies Imperial Dade and United Aqua Group and B to B. We also continued to be a great fit for brands and <unk> businesses, and health and beauty food and beverage electronics and other arena spanning both b to C and b to B.

Travis: Our R&D investments continue to deliver industry, leading innovation on behalf of our customer promise of enterprise ecommerce simplified.

Brent Bellm: A few weeks ago, we unveiled our inaugural Next Big Thing, an extraordinary collection of more than 100 platform enhancements, new features, and partner integration. I won't go through all 100 here, of course, but I do want to call out a few examples of industry-leading innovation on behalf of our customers and ecosystem partners.

Travis: A few weeks ago, we unveiled our inaugural next big thing and extraordinary collection of more than 100 platform enhancements new features and partner integrations.

Travis: Won't go through all 100 here of course, but I do want to call out a few examples of industry, leading innovation on behalf of our customers and ecosystem partners.

Brent Bellm: I'll start with Catalyst, our next-generation storefront technology, which we announced in Q1. Catalyst provides a simplified starting point for customers, agency partners, and e-commerce developers to easily and quickly build beautiful, high-performance stores using a headless, composable architecture. It combines a streamlined GraphQL client optimized for the latest version of Next.js and React Server components with a reference storefront featuring industry-leading Google Lighthouse scores of 100 out of the box.

Travis: I'll start with catalyst our next generation storefront technology, which we announced in Q1 catalyst provides a simplified starting point for customers agency partners and ecommerce developers to easily and quickly build beautiful high performing stores using a headless composed of all architecture.

Binds a streamline graph Q all client optimized for the latest version of next J S and react server components with a reference storefront featuring industry, leading Google lighthouse scores of 100 out of the box cat.

Brent Bellm: Catalyst is the culmination of more than 4,000 headless and composable builds on BigCommerce since 2016. It represents the fastest and simplest path to developing extraordinary customer experiences, leveraging the world's highest performing and most popular front-end storefront technology. Catalyst lowers the technical requirements and complexity of a composable implementation, making it far easier for customers and agencies to realize the store design and performance benefits of composable without added implementation, cost, and complexity. Customers using Catalyst will set high standards for shopper UX, site performance, and conversion rates while benefiting from faster, higher quality development. Simply put, with Catalyst, we aim to make Composable as easy to use as our native hosting and themeing framework, StemCenter.

Travis: Catalyst is the culmination of more than 4000, headless and compostable builds on big Commerce. Since 2016 that represents the fastest and simplest path to developing extraordinary customer experiences leveraging the world's highest performing and most popular front end storefront technologies cat.

Travis: Catalyst lowers the technical requirements and complexity of our composed ball implementation, making it far easier for customers and agencies to realize the store design and performance benefits of can postpone without added implementation cost and complexity.

Travis: Using catalysts will set high standards for shopper U S site performance and conversion rates, while benefiting from faster higher quality development simply put with catalyst. We aim to make composed bolt as easy to use as our native hosting and theming framework stencil.

Brent Bellm: Modare, WhiteStuff, ConsHomePlus, Brompton, and Best Way Europe are but a few examples of recent launches leveraging BigCommerce's expertise in composable builds. White Stuff in particular saw an immediate 80% improvement in its website, and 100% on its mobile site after launching its composable store on BigCommerce. Another major area of product innovation featured in Next Big Thing is multi-geography selling, leveraging our multi-storefront product capability. Our multi-geo and multi-language functionality enables multi-storefront localizations such as language, content, pricing, payment methods, and promotion.

Travis: <unk> white stuff cant home, plus Brompton and best way Europe are but a few examples of recent launches leveraging big commerce expertise and compose a ball built.

Travis: <unk> stepped in particular saw an immediate 80% improvement in site speed and 100% on its mobile site. After launching its composed of all store on Big Commerce.

Travis: Another major area of product innovation featured a next big thing is multi geography, selling leveraging our multi storefront product capabilities.

Travis: Our multi G O and multi language functionality enables multi storefront localization such as language content pricing payment methods and promotions.

Brent Bellm: Customers and partners can configure unique checkout experiences for every storefront, all while maintaining one centralized backend for easy and efficient management. We have also announced our new open source B2B buyer portal. Open Sourcing B2B editions buyer portals equip enterprise suppliers, manufacturers, distributors, and wholesalers with the tools to deliver a bespoke buyer experience throughout the entire buyer lifecycle from product discovery to sale, service, and warranty directly from a single portal. By leveraging this customizable starting point, B2B brands can tailor their site experience to the unique needs of their business, their customers, and their operational cost minimization.

Travis: Customers and partners can configure unique checkout experiences for every storefront all while maintaining one centralized backend for easy and efficient management.

Travis: We also announced our new open source be buyer portal.

Travis: Open sourcing <unk> editions buyer portal equates enterprise suppliers manufacturers distributors and wholesalers with the tools to deliver a bespoke buyer experience throughout the entire buyer lifecycle from product discovery to sale service and warranty directly from a single portal by leveraging this customizable starting point.

Travis: BTB brands can tailor their site experience to the unique needs of their business their customers and their operational cost minimization.

Brent Bellm: The open sourcing of our B2B Buyer Portal represents another example of the industry-leading flexibility of BigCommerce's platform. Just as our platform-wide APIs and open checkout brought industry-leading flexibility to B2B e-commerce for a SaaS platform, the open sourcing of our buyer portal has now done the same for B2B e-commerce. For us, OpenSAS is a philosophy.

Travis: The open sourcing of our BTB buyer portal represents another example of the industry, leading flexibility a big commerce platform.

Travis: Just as our platform wide API as an open checkout brought industry, leading flexibility to beat Us E Commerce for a SaaS platform. The open sourcing of our buyer portal has now done the same for beta B E Commerce for us opens SaaS as a philosophy the.

Brent Bellm: The foundation of our product strategy and a major source of competitive advantage. Finally, we announced Instant Commerce from Feedonomics. Instant Commerce represents the enablement by Feedonomics of same-day fulfillment and delivery of orders. Feedonomics provides the catalog, inventory, order, and fulfillment data connectivity between brands and retailers and the third-party marketplaces like Amazon and Walmart, through which they sell and fulfill. It also supports same-day delivery apps and driver services. For same-day delivery and or in-store pickup, inventory must be held in a store warehouse within delivery service proximity of the customer.

Travis: The foundation of our product strategy and a major source of competitive advantage.

Travis: Finally, we announced the instant commerce from feed and Omics instant commerce represents the enablement by feet and Omics, our same day fulfillment and delivery of orders feed and Omics provides the catalog inventory order and fulfillment data connectivity between brands and retailers and third party marketplaces, like Amazon and Walmart for which there.

Travis: Cell and fulfill that also support same day delivery apps and driver services for same day delivery and or in store pickup inventory must be held in a store warehouse within delivery service proximity of the customer.

Daniel Lentz: As the popularity of same-day delivery explodes, instant commerce from feedonomics connects brands, retailers, and businesses to the leading marketplaces and delivery services that enable it. I'll conclude my remarks with a few observations on the macro environment in e-commerce. Consumer spending remains resilient across our major markets, though aggregate e-commerce is growing at lower rates than during and before the pandemic. I'm encouraged overall by the underlying consumption signals that we are seeing in our business.

Travis: As the popularity of same day delivery explodes instant commerce from feed and Omics connects brands retailers and businesses to the leading marketplace and delivery services that enable it.

Speaker Change: I'll conclude my remarks, with a few observations on the macro environment and ecommerce.

Speaker Change: <unk> spending remains resilient across our major markets, though aggregate ecommerce is growing at lower rates than during and before the pandemic I'm encouraged overall by the underlying consumption signals that we're seeing in our business. The consumer health that we observed in the 2023 holiday period held up well in Q1.

Daniel Lentz: The consumer health that we observed in the 2023 holiday period held up well in Q1, which is a good sign both for 2024 and long-term e-commerce growth. We believe platform investment spending will inevitably improve, and we're transforming our go-to-market capabilities to capitalize on it. Overall, I'm encouraged by our start to the year and see a path to growth re-acceleration fueled by our go-to-market transformation and continued industry-leading product innovation. We already see encouraging improvements in gross and net retention since initiating operational changes in Q4.

Speaker Change: Which is a good sign both our 2024 and long term ecommerce growth.

Speaker Change: We believe platform investment spending will inevitably improve and we're transforming our go to market capabilities to capitalize on that.

Speaker Change: Overall I'm encouraged by our start to the year and see a path to growth reacceleration fueled by our go to market transformation and continued industry, leading product innovation, we already see encouraging improvements in gross and net retention since initiating operational changes in Q4, our competitive advantage and total cost of ownership is stronger.

Daniel Lentz: Our competitive advantage and total cost of ownership is stronger than ever thanks to price increases taken by our competitors. Our product continues to receive strong reviews and advocacy by customers and partners. With strong competitive advantages in product and service, combined with significantly improved sales, marketing, and service practices, BigCommerce can achieve its full potential for growth and profitability.

Speaker Change: Than ever thanks to price increases taken by our competitors our product continues to receive strong reviews and advocacy by customers and partners with strong competitive advantages in product and service combined with significantly improved sales marketing and service practices.

Speaker Change: Commerce can achieve its full potential for growth and profitability.

Speaker Change: With that I'll turn it over to Daniel.

Daniel Lentz: Thanks, Brent, and thank you, everyone, for joining us today. During my prepared remarks, I will cover our Q1 results, give additional detail on our key areas of operational focus, and provide updated guidance and our outlook for both the second quarter and for the remainder of the year. As Brent just outlined in his prepared remarks, we are pleased with our execution in the quarter and feel we're off to a good start in 2024.

Daniel: Thanks, Brent and thank you everyone for joining us today during my prepared remarks, I will cover our Q1 results and give additional detail on our key areas of operational focus and provide updated guidance and our outlook for both the second quarter and for the remainder of the year.

Speaker Change: As Brent just outlined in his prepared remarks, we are pleased with our execution in the quarter and feel we're off to a good start in 2024 revenue exceeded the high end of our guidance range and non-GAAP operating income also came in above the top of our expected range. We believe we are well positioned to improve upon these results and advanced our execution in the quarters ahead.

Daniel Lentz: Revenue exceeded the high end of our guidance range, and non-GAAP operating income also came in above the top of our expected range. We believe we are well positioned to improve upon these results and advance our execution in the quarter. In Q1, total revenue was $80 million, up 12% year-over-year. Subscription revenue grew 13% year-over-year to approximately $61 million, while partner and services revenue, or PSR, was up 8% year-over-year to just over $19 million.

Speaker Change: In Q1 total revenue was 80 million up 12% year over year subscription revenue grew 13% year over year to approximately $61 million, while partner in services revenue or <unk> was up 8% year over year to just over $19 million revenue and all of the Americas was up 12%, while EMEA revenue grew <unk>.

Daniel Lentz: Revenue in all of the Americas was up 12%, while EMEA revenue grew 15%, and APAC revenue was up 11% compared to the prior year. We continue to make positive strides on our commitment to running a profitable growth business. For example, our Q1 non-GAAP operating income was just over $3 million versus a loss of $6 million a year ago.

Speaker Change: 15% and APAC revenue was up 11% compared to the prior year.

Speaker Change: We continue to make positive strides on our commitment to running a profitable growth business. Our Q1 non-GAAP operating income was just over 3 million versus a loss of $6 million a year ago. These results represent a nearly 13 point year over year improvements in non-GAAP operating margins increasing from negative 9% in Q1 2023.

Daniel Lentz: These results represent a nearly 13-point year-over-year improvement in non-GAAP operating margins, increasing from negative 9% in Q1 2023 to positive 4% in Q1 2024. As we communicated last quarter, we expected operating margins to finish sequentially lower in the first quarter due to strong Q4 holiday results in partner and services revenue and planned spending in Q4. I want to give you an update on where the three strategic priorities I called out on our last call currently stand.

Speaker Change: A positive 4% in Q1 2024, as we communicated last quarter, we expect operating margins to finish sequentially lower in the first quarter due to strong Q4 holiday results in partner in services revenue and planned spending in Q1.

Speaker Change: I want to give you an update on where the three strategic priorities I called out on our last call. Currently stand first we made a commitment to drive efficient revenue growth Brent spoke in detail the efforts underway with respect to go to market improvements and transformation.

Daniel Lentz: First, we made a commitment to drive efficient revenue growth. Brent spoke in detail about efforts underway with respect to go-to-market improvements and transformation, so I won't restate the details that he outlined previously. What I will add is that we are already beginning to see encouraging progress in only the first quarter since initiating many of those improvements. Q1 gross and net retention rates improved versus the prior quarter, and I see greater focus on customer success and growth than I have at any other time during my nearly six years with BigCom.

Speaker Change: Restate the details that he outlined previously what I will add is that we are already beginning to see encouraging progress in only the first quarter since initiating many of those improvements Q1, gross and net retention rates improved versus the prior quarter and I see greater focus on customer success and growth than I have at any other time during my nearly six years with the cars.

Speaker Change: <unk>.

Daniel Lentz: Second, we committed to improve our operating leverage and grow profitability. More specifically, we aim to expand non-GAAP operating margins in the mid-single digits on a full-year basis in 2024. Q1 Non-GAAP Operating Income and Margin finished roughly double our guidance expectation, reflecting the hard work and continued spending discipline that we will exhibit across the year. This includes discipline on stock-based compensation and equity incentives as well.

Speaker Change: We committed to improve our operating leverage and grow profitability, where specifically we aimed to expand non-GAAP operating margins in the mid single digits on a full year basis in 2020 for Q1, non-GAAP operating income and margin finished roughly double our guidance expectation, reflecting the hard work and continued spending discipline.

Speaker Change: And that we will exit that across the year.

Speaker Change: This includes discipline on stock based compensation and equity incentives as well Q1 stock based compensation expense and this is more than 400 basis points lower as a percentage of revenue compared to Q1 2023.

Daniel Lentz: Q1 stock-based compensation expense finished more than 400 basis points lower as a percentage of revenue compared to Q1 2020. Additionally, we've moved a significant portion of our 2024 Executive Equity Awards to performance-based stock units to further increase alignment between management incentives and shareholder returns. As our go-to-market efforts drive top-line growth acceleration, the business has the potential to grow margins at an accelerated rate as well. Put simply, we have made material improvements to spending and cash discipline, even as top-line growth rates did not meet our expectations in 2020. That discipline puts the business in a position to see strong gains to profitability as revenue growth rates.

Speaker Change: We've moved a significant portion of our 2024 executive of equity awards to performance based stock units to further increase the alignment between management incentives and shareholder returns as our go to market efforts drive topline growth acceleration. The business has the potential to grow margins at an accelerated rate as well put simply we have made material <unk>.

Speaker Change: Movements to spending and cash discipline, even as topline growth rates did not meet our expectations in 2023 that disciplined puts the business in a position to see strong gains to profitability as revenue growth rates improve.

Daniel Lentz: Third, we are committed to healthy cash flow generation and cash management. I'm very encouraged with our progress in this area, and we continue to evaluate all of our spending to look for opportunities to drive improvements in cash flow. Our investments in internal systems and controls, along with discipline around accounts receivable and collections, are paying off in terms of our working capital and accounts receivable. Deferred revenues increased year-over-year by $12 million, from $23 million to $35 million, while annual plan subscription deferrals increased by $12 million, from $8 million to $20 million.

Speaker Change: Third we committed to a healthy cash flow generation and cash management I'm very encouraged with our progress in this area and we continue to evaluate all of our spending to look for opportunities to drive improvements in cash flow, our investments and internal systems and controls along with disciplined around accounts receivable and collections are paying off in terms of our working capital.

Speaker Change: On accounts receivable and deferred revenues have increased year over year by $12 million from 23 million to $35 million, while annual plan subscription deferrals have increased $12 million from 8 million to $20 million. The current portion of remaining performance obligations or <unk>, so an $18 million year over year increase or up 21.

Daniel Lentz: The current portion of remaining performance obligations, or CRPO, saw an $18 million year-over-year increase, or up 21% from $87 million to $105 million. Operating cash flow was approximately negative $3 million in Q1, while underlying operating cash flow was around positive $3.5 million apart from sizable software prepayments and annual employee payments made in the first quarter. Again, this was a solid start to Q1.

Speaker Change: 1% from $87 million to 105 million operating cash flow was approximately negative $3 million in Q1, while underlying operating cash flow was around positive $3 5 million apart from sizable software prepayments and annual employee payments made in the first quarter again. This was a solid start to the year.

Daniel Lentz: I'll now turn to our non-GAAP KPIs. We concluded Q1 with an annual revenue run rate, or ARR, of approximately $340 million, up 7% year-over-year. That represents a sequential growth in ARR of nearly $4 million. Enterprise account ARR was approximately $248 million, 8%. As of the end of Q1, enterprise accounts represent 73% of our total company ARR. Accounts using exclusively our essentials plans, which we refer to as non-enterprise accounts, finished with ARR slightly over 92 million, or up 5% year-over-year. At the end of Q1, we reported 5,970 enterprise accounts, up 142 accounts, or 2% year-over-year. ARPA, or Average Revenue Per Account for Enterprise Accounts, was $41,581, up 6% year-over-year.

Speaker Change: I'll now turn to our non-GAAP kpis.

Speaker Change: We concluded Q1 with an annual revenue run rate or <unk> of approximately $340 million up 7% year over year.

Speaker Change: That represents a sequential growth in <unk> of nearly 4 million enterprise account <unk> was approximately $248 million up 8% year over year.

Speaker Change: As of the end of Q1 enterprise accounts represented 73% of our total company <unk> accounts using exclusively our essentials plans, which we refer to as non enterprise accounts finished with they are slightly over $92 million were up 5% year over year at the end of Q1, we reported 5970 enterprise accounts of 100.

Speaker Change: 42 accounts or 2% year over year.

Speaker Change: ARPA or average revenue per account for enterprise accounts with $41581 up 6% year over year.

Speaker Change: Before we move onto guidance I'd like to share some high level thoughts on our performance to start the year and how I see 2024 shaping up going forward. Overall I was pleased with results in Q1 relative to our financial plan, we're off to a good start on revenue profit and cash flow and that builds confidence as we approach the mid year line.

Daniel Lentz: Before we move on to guidance, I'd like to share some high-level thoughts on our performance to start the year and how I see 2024 shaping up going forward. Overall, I was pleased with results in Q1 relative to our financial plan. We're off to a good start on revenue, profit, and cash flow, and that builds confidence as we approach the midyear line. ARR results in Q1 reflected both cause for optimism and highlighted the criticality of the go-to-market transformation Brent outlined in detail earlier.

Speaker Change: Our results in Q1 reflected both cause for optimism and highlighted the criticality of the go to market transformation, Brent outlined and detailed earlier gross and net retention results beat our internal plans, which reflected early signs of progress and the changes we are making in our go to market transformation. We also continue to see challenges in sales cycle times and platform invest.

Daniel Lentz: Gross and Net Retention Results beat our internal plans, which reflected early signs of progress in the changes we are making in our go-to-market strategy. We also continue to see challenges in sales cycle times and platform investment, which will require continued focus and effort by our team throughout the year.

Spending, which will require continued focus and effort by our team throughout the year.

Daniel Lentz: I'll now shift to our outlook and guidance for the second quarter and the full year 2024. For the second quarter, we expect revenue in the range of $79.8 million to $81.2 million. Inferring a year-over-year growth rate of 6-8%. For the full year, we expect revenue between $329.7 million and $333.7 million, translating to a year-over-year growth rate of approximately 7-9%. Note that we are increasing our full-year revenue outlook, balancing our overall confidence based on a good start to the year with maintaining prudent conservatism with respect to full-year guidance.

Speaker Change: Now I'll shift to our outlook and guidance for the second quarter and the full year 2024 for the second quarter. We expect revenue in the range of $79 8 million to $81 8 million, implying a year over year growth rate of 6% to 8% for the full year, we expect revenue between $329 7 million to 335.

Speaker Change: $7 million translating to a year over year growth rate of approximately 7% to 9%.

Speaker Change: Note that we are increasing our full year revenue outlook balancing our overall confidence based on a good start to the year with maintaining prudent conservatism with respect to full year guidance for Q2, our non-GAAP operating income is expected to be between $200001 2 million. Note. This is slightly lower than Q1, non-GAAP operating income sequentially due to.

Daniel Lentz: For Q2, our non-GAAP operating income is expected to be between $200,000 and $1.2 million. Note this is slightly lower than Q1 non-GAAP operating income sequentially due to planned salary increases taking effect out of our annual spring merit and promotion cycle. For the full year, we expect non-GAAP operating income between $10.2 million and $14.2 million, which also reflects an improvement to our full-year outlook based on progress. Again, I would like to thank everyone for joining us today.

Speaker Change: Planned salary increases taking effect out of our annual spring Merit and promotion cycle during Q1.

Speaker Change: For the full year, we expect non-GAAP operating income between $10 2 million and $14 2 million, which also reflects an improvement to our full year outlook based on progress through Q1.

Speaker Change: Again, I would like to thank everyone for joining us today as Brent said at the start of the call. Our business has delivered notable improvements to profit and cash flow over the last two years now is the time to do the same in go to market and top line results and our entire team is laser focused on that goal with that Brendan and I are happy to take any of your questions operator.

Daniel Lentz: As Brent said at the start of the call, our business has delivered notable improvements in profit and cash flow over the last two years. Now is the time to do the same and go to market with top line results. And our entire team is laser focused on that goal. With that, Brent and I are happy to take any of your questions. Operator?

Speaker Change: Thank you.

Operator: Thank you. If you would like to ask a question, please press star, then 1. To remove yourself from Q, please press star on them too. Once again, that's Starz101 if you have a question. And today's first question comes from Ken Wong with Oppenheimer & Company. Please go ahead.

Speaker Change: To ask a question. Please press Star then one.

Speaker Change: Move yourself from queue. Please press Star then two.

Speaker Change: Once again that started in the morning, if you have a question.

Speaker Change: And today's first question comes from Ken Wong with Oppenheimer and company. Please go ahead.

Ken Wong: Fantastic. Thanks for taking my question. The first one for you, Brent, you know, when we think about some of the things that might have held back BigCommerce, I think macro is one of them. Second, maybe just the transition in sales leadership here; you guys recently hired Travis. How should we think about that potentially releasing some of the bottleneck? And you mentioned changes going to market in Q4. I mean, should we worry that there's going to be another change in terms of how Travis might want to go to market?

Ken Wong: Fantastic Thanks for taking my question.

The first one for you Brent.

Ken Wong: When we think about some of the things that might have held back the commerce.

Ken Wong: I think macro being one of them.

Ken Wong: Maybe just a transition in sales leadership here you guys recently hired Travis.

Ken Wong: How should we think about that potentially releasing some of the bottleneck.

Ken Wong: You mentioned changes to go to market in Q4, I mean should we worry that there is going to be another change in terms of how travelers might want to go to market.

Speaker Change: Hi, Ken.

Brent Bellm: Hi Ken. We're incredibly excited about the addition of Travis Hess as our Global President, as well as Tom, our new VP of Enterprise Sales in the U.S. They bring decades of experience in e-commerce, serving all of the leading platforms, including our top competitors, and so it really bolsters our team.

Ken Wong: We're incredibly excited about the addition of travelers.

Ken Wong: Our global President as well as.

Ken Wong: Palmer, New VP of enterprise sales in the U S.

Ken Wong: They bring decades of experience in e-commerce, serving all of the leading platforms, including our top competitors.

Brent Bellm: You know, with some of the transitions, including unexpected ones over Q4-Q1, we were down to a single senior sales leader in the Americas who is a VP or higher level. Now we're back to full strength with the addition of those two, but in particular, with more industry experience than we have ever had in our history in the Americas. And so I'm very bullish on the leadership and the experience that they can bring to our customers and to our partners.

Ken Wong: So it really bolsters our team with some of the transitions, including unexpected ones over Q4 Q1, we were down to a single senior sales leader in.

Ken Wong: The Americas, who is our VP or higher level now we're back to full strength with the addition of the two but in particular with more industry experience than we have ever had in our history in the Americas and so I'm very bullish on the leadership and the experience that they can bring to our customers.

Ken Wong: To our partners I think that will help us to reaccelerate new sale in terms of the Ax will go to market changes any president is going to come in and have some level of tweaks and enhancements, but fundamentally.

Brent Bellm: I think that will help us to reaccelerate new sales. In terms of the actual go-to-market changes, any president is going to come in and have some level of tweaks and enhancements. But fundamentally, we committed to a true best-in-breed enterprise go-to-market model. During Stephen's tenure at the end of last year, this is the first year we are implementing that model. And so it's only this year that you will start to see the results of that.

Ken Wong: We committed to a true.

Ken Wong: Best in breed enterprise go to market model.

During Stephens tenure at the end of last year. This is the first year, we are implementing that model and so it's only this year that you will start to see the.

Brent Bellm: And we're already seeing it in things like gross retention and net retention, and we're very excited about the prospects of potentially re-accelerating gross new sales. So all of these trends are putting us in a better place starting this quarter and going forward than we would have been a couple quarters ago. And I think you've absolutely asked the right first question. So thanks for that, Kim.

Ken Wong: The results of that and we're already seeing it in things like gross retention net retention.

Ken Wong: And we're very excited about the prospects of potentially re accelerating gross new sales. So all of these trends are putting us in a better place starting this quarter and going forward than we would've been a couple of quarters ago.

Speaker Change: And I think you've absolutely asked the right first question. So thanks for that Kim.

Daniel Lentz: Thank you, Brent. And then, Daniel, just to follow up, you know, we touched on a lot of improving KPIs. I think maybe the one I wanted to dig into was, you know, CRPO up 21 percent. And this can be a bit of a choppy metric, but, you know, should we view this as a good leading indicator for future AR revenue growth, or would you steer us in another direction? Uh, yes, I would say that...

Kim: Thank you, Brian and then Daniel just a follow up.

Touched on a lot of improving Kpis I think maybe the one I wanted to dig into was CRP, all up 21% and.

Daniel: This can be a bit of a choppy metric, but should we view this as a good leading indicator for future revenue growth or would you steer us another another direction.

Speaker Change: Ah, Yes, I would say that it is I think.

Daniel Lentz: Yes, I would say that it is. I think, What I think has been really key in some of the changes that we've been making over the course of the last year to two, not just on the go-to-market side, but also how we're approaching contracts and agreements with our customers. I would say the translation from bookings to revenue, revenue to profit, and profit to cash flow is the strongest we've seen in this business in the six years that I've been here, and that's because we've been prioritizing stronger contracts, longer duration, I'd say stickier terms, and also involving prepayment as a priority, and I think in a lot of ways our contracts are much more looking like best practice from an enterprise software point of view, and that's playing out in what you see in RPO, you see that in deferred revenue, and ultimately it gives us a lot of confidence as we look at the changes that Brent just highlighted on the go-to-market side.

What I think has been really key and some of the changes that we've been making over the course of the last year to two not just on the go to market side, but also how we're approach approaching contracts and agreements with our customers.

I would say the translation from bookings to revenue revenue to profit and profit to cash flow is the strongest we've seen in this business in the six years that I've been here and that's because we've been prioritizing stronger contracts longer duration are I'd say sticky your terms and also involving prepayment as a priority and.

Speaker Change: I think in a lot of ways. Our contracts are much more looking like best practice from an enterprise software point of view and that's playing out and what you see in our P. O you see that in deferred revenue and ultimately it gives us a lot of confidence as we look at the changes that Brent just highlighted on the go to market side. The business is really positioned to capitalize as we start to see better revenue.

Daniel Lentz: The business is really positioned to capitalize as we start to see better revenue growth and acceleration with really strong leverage and cash flow that comes out of that due to the changes that we've been making, and I think CRPO is a useful indicator. It's not perfect for the reasons that you describe. Neither is deferred revenue or other metrics, but now that we're really adopting a lot of these best practices, I think CRPO and deferred revenue are going to become a better leading indicator of where we are from a booking perspective than where we've been in the past.

Speaker Change: Growth in acceleration with really strong leverage and cash flow that comes out of that due to the changes that we've been making.

Speaker Change: <unk> is a useful indicator its not perfect for the reasons that you described neither as deferred revenue are there metrics, but now that we are really adopting a lot of these best practices I think CRP O and deferred revenue, we're going to become a better leading indicator of where we are from a booking itself than where we've been in the past.

Speaker Change: Great. Thank you so much.

Speaker Change: Thank you and our next question comes from Koji Ikeda with Bank of America. Please go ahead.

Koji Ikeda: Thank you. And our next question comes from Koji Akeda with Bank of America. Please go ahead.

Daniel Lentz: Yeah, hey guys, thanks so much for taking the questions. I wanted to maybe follow up on Ken's question here and ask it a different way. You know, you called out changes in the sales organization or some potential changes in the sales organization, definitely some changes to internal systems, but also a commitment to operating leverage, and all that sounds good for efficiency and margins, but it does seem like the business is on an upward trajectory here. And so how are you thinking about balancing profit while making sure you're not leaving money on the table if the demand environment quickly shifts positively in BigCommerce's favor?

Koji Ikeda: Yeah, Hey, guys. Thanks, so much for taking the questions I wanted to maybe follow up on Ken's question here.

Koji Ikeda: In a different way.

Koji Ikeda: You did call out changes in the sales organization or some potential changes in the sales organization.

Koji Ikeda: Definitely some changes to internal systems, but also our commitment to operating leverage and all that sounds good for efficiency and margins, but it does seem like the business is on an upward trajectory here and so how are you thinking about balancing profit, while making sure you're not leaving money on the table at the demand environment quickly shifts positively and big commerce in favor.

Daniel Lentz: Great question! I would say that what we're really focused on right now is how to operate and run in the most efficient manner that we can so that we are growing efficiently and identifying the areas in the business where we're seeing strong ROI and organizing ourselves in a way to capitalize on that ROI where we see it, so that as we start to see improving demand signals, particularly on platform spending, we're in a position to take advantage of that and capitalize on that.

Speaker Change: Great question I would say that what we're really focused on right. Now is how can we operate and run in the most efficient manner that we can so that we are growing efficiently and identifying the areas in the business, where we're seeing strong ROI and organizing ourselves in a way to capitalize on that ROI, where we see it.

Speaker Change: So that as we start to see improving demand signals, particularly on platforms spending we're in a position to take advantage of that and capitalize on that and while I agree with you I do think we're in an upward trajectory. We also are not satisfied with what we're seeing from a growth rate perspective, we think there's a lot of room to improve the efficiency and the returns that we're getting from the dollars that we're putting in.

Daniel Lentz: And while I agree with you, I do think we're on an upward trajectory, we are also not satisfied with what we're seeing from a growth rate perspective. We think there's a lot of room to improve the efficiency and the returns that we're getting from the dollars that we're putting in, and we're really confident that we're going to be able to do that, and we think Travis's leadership is really going to accelerate that as well. But I would just say what we're really looking for is balance.

And we're really confident that we're going to be able to do that and we think Travis is leadership is really going to accelerate that as well, but I would just say we're really looking for is balance theres. A reason why we're talking about efficient revenue growth, we're not going to go back to the times, where it was chasing revenue growth at any cost we are going to run a business that's going to grow profitably.

Daniel Lentz: There's a reason why we're talking about efficient revenue growth. We're not going to go back to the times when it was chasing revenue growth at any cost. We are going to run a business that's going to grow profitably. We're going to expand margins. We're going to focus on cash flow, and we're going to run this in a disciplined, healthy way. That's our commitment, and that's not going to change.

Speaker Change: We're going to expand margins, we're going to focus on cash flow and we're going to run this in a disciplined healthy way, that's our commitment and that's not going to change.

Daniel Lentz: Thank you, Daniel. And just to follow up here on the guidance, when looking at the second quarter guidance and also comparing it to what we've heard from other of the commerce vendors out there, I look at your guidance, and it's calling for sequential growth of about 400,000 at the midpoint, which is a big deceleration from the first quarter. So just trying to understand what's embedded in the guidance from a market dynamic play versus just your typical conservatism. Thank you.

Speaker Change: Got it thank you Daniel and just a follow up here on the guidance.

Speaker Change: When looking at the second quarter guidance and also comparing it to what we've heard from some other of the commerce vendors out there I look at your guidance, calling for sequential growth.

Speaker Change: 400000 at the midpoint.

Speaker Change: Growth is a big deceleration from first quarter. So just trying to understand you know what's embedded in the guidance from a market dynamic play versus just your typical conservatism. Thank you.

Speaker Change: Yeah, Great question, I think part of the the difference on a sequential basis when looking at the year over year is the fact that we actually had pricing actions in the base period. Both in 2023 and 2022, so you get a little bit of noise in the year over years and that plays itself out sequentially and I think that's part of why were there I mean in year's past I think we've gotten a little bit more of a sequential bump in Q2 versus Q.

Daniel Lentz: Yeah, great question. I think part of the difference on a sequential basis when looking at the year-over-years is the fact that we actually had pricing actions in the base period, both in 2023 and in 2022, so you get a little bit of noise in the year-over-years, and that plays itself out sequentially. And I think that's part of why we're there. I mean, in years past, I think we've gotten a little bit more of a sequential bump in Q2 versus Q1 versus what I would probably deem as normal. I'd say for where we are thus far in the year, I'm very encouraged by what we're seeing in terms of consumer volume and spending. There's a reason why we chose to describe it as resilient.

Speaker Change: One versus what I would probably deem as normal I'd say for where we are thus far on the year.

Speaker Change: I'm very encouraged by what we're seeing in terms of consumer volume and spending Theres. A reason why we chose to describe it is resilient, it's not where it was pre pandemic necessarily but we're still seeing a healthy signs there and we're still growing on a same store basis I think at a premium to e-commerce as a whole. So I'd say, that's encouraging that gives me optimism going into the back half of the year. We're also.

Daniel Lentz: It's not where it was pre-pandemic necessarily, but we're still seeing healthy signs there, and we're still growing on a same-store GMB basis, I think at a premium to e-commerce as a whole. So I'd say that's encouraging. That gives me optimism going into the back half of the year. We're also continuing to see some of the same challenges and opportunities on platform investment spending and bookings that are making us really, really focus on the changes that we've been talking about.

Speaker Change: Continuing to see some of the same challenges and opportunities on platform investments spending and bookings that are making us really really be focused on the changes that we've been talking about so that's an area, where we want to see things doing a little better than what we've seen so far we expected that to be a challenge theres. A reason why we're making the changes that we're making.

Daniel Lentz: So that's an area where we want to see things doing a little better than what we've seen so far. We expected that to be a challenge. There's a reason why we're making the changes that we're making. But I just think overall, it's kind of a balanced good start to the year, but we have a long way to go still.

Speaker Change: But I just think overall its kind of a balanced good start to the year, but we have a long way to go sell.

Operator: Thank you. Thank you so much.

Speaker Change: Thank you. Thank you so much.

Speaker Change: Thank you and our next question comes from DJ Hynes with Canaccord. Please go ahead.

David E. Hynes: Thank you. And our next question comes from D. J. Hynes with Kennecord. Please go ahead.

Brent Bellm: Hey, good morning, guys. Thanks for taking the question. Brent, you called out the cross-sell opportunity for feedonomics and some of the changes being made there to better capitalize on the opportunity. When I hear about changes, it makes me think that something isn't going great. I didn't think that was the case with Fedonomics. So I guess the question really is, has that business been performing up to expectations?

David E. Hynes: Hey, good morning, guys. Thanks for taking the question.

David E. Hynes: Brian you called out the cross sell opportunity for feed and Omics and some of the changes being made there to better capitalize on the opportunity.

David E. Hynes: When I hear about changes. It makes me think that something isn't going great. I didn't think that was the case with feed dynamics. So I guess the question really is has that business been performing up to expectations.

Brian: Yes, Amit.

Brent Bellm: Yes, Fedonomics has been performing up to expectations. It hasn't been beating expectations, but it continues to deliver both top-line growth and bottom-line profitability overall, relative to what we would have expected at the time of acquisition. It's absolutely performed above what I would say would have been reasonable expectations. It's the market leader globally in both the enablement of high ROI ad spending as well as marketplace expansion for the biggest brands all around the world.

Brian: <unk> has been performing up to expectations, it hasn't been beating expectations, but.

Brian: It continues to deliver both top line growth and bottom line profitability overall relative to what we would've expected at the time of acquisition it's absolutely.

Brian: Performed above what I would say would have been reasonable expectations since the market leader globally in both the enablement of high R. O Y AD spending as well as marketplace's expansion for the biggest brands all around the world as a true enterprise leader.

Brent Bellm: It's a true enterprise leader, and it gives us what none of our other platform competitors have, which is a compelling argument that we can drive top-line sales growth for our customers both through the world's largest ad channels and the largest marketplace channels.

Brian: It gives us what no none of our other platform competitors have which is a compelling argument that we can drive topline sales growth for our customers both through the world's largest ad channels and largest marketplaces channels.

Speaker Change: Got it. Thank you and then Daniel will follow up for us.

Daniel Lentz: Got it. Thank you. And then Daniel, will follow up for you.

Daniel: The comments on.

Daniel Lentz: So I hear the comments on improving gross retention, improving net retention. But when I look at the enterprise customer count, it declines sequentially, right? It's the first time I've ever seen that in the model. So can you unpack what's going on with the customer count at the enterprise level? Yeah, when we're talking

Daniel: Improving gross retention, improving net retention and I look at the enterprise customer count declined sequentially right. It's the first time I've ever seen that in the model. So just can you unpack, what's going on with customer count at the enterprise level, yes.

Daniel Lentz: Yeah, when we're talking about gross and net retention improvements, I'm looking at it on a dollarized basis, which is the key way that we look at it. I want both to be doing better, and obviously, we were not satisfied with what we saw on an account basis during the quarter. Part of that is a mixing effect, as we're mixing up a little bit, but part of that's just the dynamics that we've been seeing in e-commerce as a whole, where we've had, you know, some downgrades, and we've had some project cancellations.

Daniel: When we're talking about gross and net retention improvements I'm looking at it on a dollar basis, which is the key way that we look at it I want both to be doing better and obviously, we were you know we're not satisfied with what we saw from a count basis on the quarter part of that is a mix effect as we're mixing up a little bit.

Daniel: But part of that is just the dynamics that we've been seeing in e-commerce as a whole where we've had some.

Daniel: Some downgrades we've had some project cancellations were continuing to see good growth in mid market and the lower end of enterprise will keep focusing there and we're confident that the changes and improvements we're making on the go to market side are going to also pull up where we are from a count basis as well, but obviously not satisfied with that and laser focused on making the improvements that will turn that around.

Daniel Lentz: We're continuing to see good growth in mid-market and the lower end of enterprise. We'll keep focusing there. And, you know, we're confident that the changes and improvements we're making on the go-to-market side are going to pull up where we are from an account basis as well. But obviously not satisfied with that, and laser focused on making the improvements that will turn that around.

Speaker Change: Very clear okay. Thank you guys.

Daniel: Yeah.

Raimo Lenschow: Thank you. And our next question comes from Raimo Lenschow with Barclays. Please go ahead.

Daniel: Thank you and our next question comes from Raimo <unk> with Barclays. Please go ahead.

Brent Bellm: Hey, thank you. Can I ask you, if you think about the changes you've made to the business, there's obviously the action, and then there's the result. And, you know, there's usually a time lag in terms of having the whole organization kind of running at the kind of new speed. Like, where are we on that journey in terms of, you know, you've done all the changes. But, you know, in terms of kind of hitting your full potential, where are we on that journey?

Raimo: Thank you.

Raimo: Can I.

Raimo: Do you think about the changes to your tone to the business. There's obviously the action and then there's a result.

Raimo: And if you.

Raimo: Usually a time lag in terms of having the whole organization kind of running out the kind of the new speed like where are we on that journey in terms of like you've done the old changes, but in terms of kind of hitting your full potential where are we on that journey and then I had one follow up.

Speaker Change: Yes, I'd say, we're already seeing positive results in the journey on gross retention, we're saying.

Brent Bellm: Yeah, I'd say we're already seeing positive results on the journey to gross retention. We're seeing, relative to last year, real improvements in year-on-year gross retention in terms of churn and downgrades. We're also seeing early signs of improvement in our ability to cross-sell within our existing merchant base, which improves net revenue retention. That's not something that we historically focused on or really incented sales or customer support fully. Where we have the most to gain is in gross new sales.

Speaker Change: Relative to last year.

Speaker Change: Improvements in year on year.

Speaker Change: Gross retention in terms of churn and downgrades. We're also seeing already early signs of improvement and our ability to cross sell within our existing merchant base, which improves net revenue retention that's.

Speaker Change: That's not something that historically, we focused on for really an extended sales or customer support fully.

Brent Bellm: And as I mentioned in a prior comment, we were really down in terms of sales leadership in the U.S., down to one senior leader. We're now back to full strength with the addition of Tom and Travis. And so that upside is all still to come in terms of how they help us sort of grow both top of pipeline and conversion over the next year. So, you know, if I were to put it on a percentage basis in terms of both how we have instrumented the new go-to-market motions as well as the results, probably no more than a quarter of the results would actually be appearing that we anticipate in our current numbers. We expect to get a lot more out of all these go-to-market changes in the quarters ahead.

Speaker Change: We have the most of gain is in gross new sales and as I mentioned in a prior comment we were really down in terms of sales leadership in the U S down to one senior leader, we're now back to full strength with the addition of palm and with Travis and so that upside is all still to come in terms.

Speaker Change: Of how they helped us sort of grow both top of pipeline and conversion over the next year. So if I were to put it on a percentage basis.

Speaker Change: In terms of both how we have instrumented.

Speaker Change: The new go to market motions as well as a result.

Speaker Change: Probably no more than a quarter.

Speaker Change: The results would actually be appearing in that we anticipate in our current numbers.

Speaker Change: We expect to get a lot more out of all of these go to market changes in the quarters ahead.

Speaker Change: Okay, perfect and then.

Brent Bellm: Okay, perfect. And then that's the follow-up, actually.

Speaker Change: It's a that's the follow up actually if you think about it and you talked a lot about profitable growth.

Speaker Change: Once you up in full swing like I guess the.

Speaker Change: The assumption is that we're growing at the fast I read like how do you think about growth and you know.

Speaker Change: Obviously, you can't give a number because you would guide to it but like how do you think about your growth versus kind of the industry girlfriend, It's all done and dusted. Thank you and congrats from me as well.

Brent Bellm: If you think about it, you talk a lot about profitable growth. Once you're up in full swing, like, I guess the assumption is that we're growing at a faster rate. Like, how do you think about growth, and, you know, obviously, you can't give a number because you'd guide them, but, like, how do you think about your growth versus kind of the industry growth when it's all done and dusted? Thank you, and congratulations for me as well.

Speaker Change: I think based on where we are our expectation that our ambition is to be growing at a premium to the market that represents a healthy growth in market share in the areas, where we are choosing to focus and compete.

Brent Bellm: I think based on where we are, our expectation, and our ambition is to be growing at a premium to the market. That represents healthy growth in market share in the areas where we are choosing to focus, and I think that we can get back to growth rates in the teens and approach 20%. That continues to be our goal and our ambition. We think that that is sustainable, especially at our size; there's a lot of growth runway ahead of us. We're not hitting a scaling issue where you're, you know, trying to run into the law of large numbers.

Speaker Change: I think that that can get back to growth.

Speaker Change: Growth rates in the teens and approached 20% that continues to be our goal and our ambition. We think that that is sustainable, especially at our size. There's a lot of a lot of growth runway ahead of us we're not hitting a scaling issue where you're.

Speaker Change: Trying to run into the law of large numbers, we've got a long way to go and a lot of upside opportunity here that we're excited about and when we look at.

Daniel Lentz: We've got a long way to go and a lot of upside opportunity here that we're excited about. And when we look at where we're investing and where we're spending and we see opportunities all over the business to really, really fully take advantage of the amazing staff that we have here and the leadership that we have here, we think that there's just a lot of growth that we can unlock with the outstanding people that we have by taking better care of our customers and really focusing on their growth and their success and giving them the freedom to choose solutions that work for their business and not try to pigeonhole them into things that they don't need.

Speaker Change: Where we're investing and where we're spending and we see opportunities all over the business to really really fully take advantage of the amazing staff that we have here and the leadership that we have here, we think that Theres just a lot of growth that we can unlock with the outstanding people that we have by taking better care of our customers and really.

Speaker Change: <unk> on their growth and their success and giving them the freedom to choose solutions that work for their business and not try to pigeonholed into the things that they don't need and we think that that can really unlock a lot of growth and with the changes that we've made in the way that we're operating that in turn will turn to profit and cash flow in a way that's very very healthy.

Daniel Lentz: And we think that that can really unlock a lot of growth. And with the changes that we've made in the way that we operate, that, in turn, will lead to profit and cash flow in a way that's very, very healthy for the business and will deliver good returns for our shareholders.

Speaker Change: For the business and will deliver good returns for our shareholders. Okay. Perfect. Thank you good luck.

Operator: Okay, perfect. Thank you. Good luck. Thank you. And our next question comes from Parker Lane at Stiefel. Please go ahead. Yeah, hi guys, thanks for taking the question this morning.

Speaker Change: Thank you and our next question comes from Parker Lane at Stifel. Please go ahead.

Jeffrey Parker Lane: Thank you. And our next question comes from Parker Lane at Stiefel. Please go ahead. Hi guys, thanks for taking the question this morning. Brent, how would you classify the improvements?

Jeffrey Parker Lane: Yeah, Hi, guys. Thanks for taking my question this morning.

Jeffrey Parker Lane: Brent how would you classify the improve.

Jeffrey Parker Lane: Improvements in gross gross and net retention rates over the quarter here.

Jeffrey Parker Lane: Were reflective of the consumer health you guys called out in the prepared remarks, or the internal changes or a combination of both.

Brent: On gross retention I think its a combination both of them.

Brent Bellm: On gross retention, I think it's a combination of both the working through the macro cycle we talked about in a fair number of quarters last year about that were unprofitable for them or sometimes even cancel planned migrations and launches in order to achieve short-term profitability goals. I think we have worked our way through the trough of that post-pandemic drought, and so part of what we're seeing is just a return to normal, but the second thing that we're also observing is a real strong focus and ownership of the customer within BigCommerce.

Brent: Working through the macro cycle, we talked a fair number of quarters last year.

Brent: About the let's call it the post pandemic trough of customers, who had potentially over bought when the economy was locked down during the pandemic and then wanted to rightsize their contracts as the economy reopens and secondarily.

Brent: With high interest rates and a focus on profitability. We saw some subset of customers basically cancel e-commerce stores and projects that were unprofitable for them or sometimes even cancel planned migrations in lawn.

Brent: In order to achieve short term profitability goals I think we have worked our way through.

Brent: The trough of that post pandemic.

Brent: Drought in that.

Brent: So part of what we're seeing is just a return to normal but the second thing that we're also observing is a real strong focus and ownership of the customer within big Commerce, we truly are owning customer success and and that's a shared commitment across sales service and marketing.

Brent Bellm: You know, we truly are owning customer success end-to-end. It's a shared commitment across sales, service, and marketing, and so every time we sign a customer now, our job number one is to help that customer get launched and growing as quickly as possible, so that's the foundation of, you know, their success and our success if we want to earn the right to cross-sell, up-sell, or at least get positive referrals and recommendations from our customers. So it's a combination of those two The first one is somewhat out of our control as the economy returns to normal, but the second one is completely within our control, and we think there's still positive upside to come from that. I got it.

Brent: So every time, we sign a customer now job number one is that helped that customer get launched and growing as quickly as possible.

Brent: So that that's the foundation.

Brent: Their success and our success, if we want to earn the right to cross sell up sell or at least get a.

Brent: Positive referrals and recommendations from our customers. So it's the combination of those two things.

Brent: The first one is somewhat out of our control as the economy returns to normal but the second one is completely within our control and we think theres still positive upside to come from that.

Speaker Change: Got it makes sense and then one for you Daniel just how significant should we think about the investments around the re architected of your CRM and marketing automation systems and is it largely a 'twenty 'twenty four phenomenon or is that extended the 25.

Brent Bellm: It's 2024 and 2025. In the big scheme of things, it's not very material. It won't swing our numbers. We've already got it baked into our guidance. But it's material for us. It matters a lot. There are three big legs to this.

Daniel: It's 2024 and 2025 in the Big scheme of things, it's not very material. It's like it's not going to swing our numbers, we've already got it baked into our guidance it's material for us it matters a lot I mean, it gets there's three big legs to this we're getting into <unk>.

Daniel Lentz: We're getting into a master data management system. We're improving our marketing automation platform. We're getting all of our sales teams into one CRM. I mean, there are a lot of really great unlocks that come out of that, but it's not something that our shareholders need to be worried about from a cash flow or a capital investment point of view. It's big enough that it matters, but it's not so big that it's an outlier that investors really need to worry about.

Daniel: <unk> data management system work.

Daniel: Improving our marketing automation platform, we're getting all of our sales teams into one CRM I mean, theres a lot of really great unlocks that come out of that but it's not something that our shareholders need to be worried about from a cash flow or a capital investment point of view, it's bigger it's big enough that it matters, but it's not so big that it's an outlier that investors really need to worry about.

Speaker Change: Great. Thanks for the feedback.

Operator: Thanks for the feedback. Thank you. And our next question comes from Maddie Schrage with KeyBank. Please go ahead.

Speaker Change: Yeah.

Speaker Change: Thank you and our next question comes from Matthew <unk> with Keybanc. Please go ahead.

Matthew: Hey, guys. Thanks for taking the question I was wondering if you could talk about how you're thinking about ARPA growth this year.

Madison Taylor Schrage: Hey guys, thanks for taking the question. I was wondering if you could talk about how you're thinking about ARPA growth this year.

Matthew: Now, let assume with kind of a new go to market and cross sell opportunities, but this should help ARPA growth, but just wondering if you could size that for us.

Daniel Lentz: Yeah, I think that we've been kind of in the mid single digits from an ARPA growth perspective for the last several quarters, and the way that we're building out our financial plans assumes that stays relatively similar throughout the rest of the year. But I do think that there's upside to that as our systems changes take hold next year. And as we're making a lot of internal changes, in the meantime, obviously, we're really, really architecting ourselves around account success and growth, which will give us better results in cross-sell, which we, you know, added MakeSwift, which gives us the ability to cross sell as a part of the catalyst initiative.

Matthew: Yeah, I think that I mean, we've been kind of in the mid single digits from an ARPA growth perspective for the last several quarters. The way that we're building out our financial plans assumes that stays relatively similar throughout the rest of the year, but I do think that there's upside to that as our system's changes take hold next year and as we're making a lot of internal changes in the meantime.

Matthew: Obviously, we're really really architected ourselves around account success and growth, which will give us better results in cross sell which we added make swift, which gives us the ability to cross sell that as a part of it the catalyst initiatives. So there is definitely ways that we can see tailwind to ARPA growth I, just think it's going to take some time for that to really take hold and start to play itself through the numbers.

Daniel Lentz: So there are definitely ways that we can see tailwinds to ARPA growth; I just think it's going to take some time for that to really take hold and start to play itself out in the numbers. But I see that as an upside item for us as we're exiting the year and going into 2025. Great, and just to follow up, I'm wondering if you guys could talk about where you're seeing the most operational leverage, and then from a go-to-market perspective, is there any more senior hiring that you need to do to have a more complete org, or is that it?

Matthew: I see that as an upside item for us as we're exiting the year and going into 2025.

Speaker Change: Great and just a follow up I'm wondering if you guys could talk about where you're seeing the most operational leverage and then from a go to market perspective is there any more senior hiring that you need to do to have some more complete or is everything complete now.

Daniel Lentz: Yeah, I would say on the leverage side, it's pretty broad. When we've gone through restructurings over the course of the last couple years, that was, you know, those were changes felt by all organizations within the company. And where we've seen leverage is not just in headcount changes; it's also in whether we're using, you know, a mixture of high and low cost geographies, a mixture of contractors and, you know, internal employees. We've made a lot of changes and improvements that have reduced bad debt expense, and our collections and DSO have gotten way better.

Speaker Change: Yes, I would say on the leverage side, it's pretty broad based when we've gone through restructurings over the course of the last couple of years and that was those were changes felt by all organizations within the company and where we've seen leverage is not just in head count changes. It's also in whether we're using you know.

Speaker Change: It's a mixture of high and low cost geographies mixture of contractors and internal employees and we've made a lot of changes and improvements that have reduced bad debt expense, our collections and DSO has gotten way better. So we're seeing leverage in a lot of areas. We're also continuing to look at what we can do on the sales and marketing side of things not necessarily because we're aiming to have.

Daniel Lentz: So we're seeing leverage in a lot of areas. We're also continuing to look at what we can do on the sales and marketing side of things, not necessarily because we're aiming to have big decreases in spending; we want to see better growth out of the dollars that we're putting in. And we have really great leadership on that side that's really, really laser focused on that. It's an area where, transparently, I think we can do a lot better. And I think it's something that we recognize is not the best in class.

Speaker Change: Big decreases in spending we want to see better growth out of the dollars that we're putting in and we have really great leadership on that side, that's really really laser focused on that it's an area where transparently I think we can do a lot better and I think it's something that we recognize is not best in class and that's something that we're focused on and we think we can get better topline.

Daniel Lentz: And it's something that we're focused on, and we think we can get better top-line leverage out of what we're putting in on the sales and marketing side. And we're excited about that. From a leadership perspective, there may be a couple of roles here and there. And, you know, Travis will have a lot of say on that when he joins, but we're really happy with the team that we have. And we think we're positioned well for success. Perfect. Thanks, Jamie. Thank you. And our next question today comes from Josh Baer at Morgan Stanley.

Speaker Change: Leverage out of what we're putting in on the sales and marketing side and we're excited about that from a leadership perspective, there may be a couple of rules here and there.

Speaker Change: Travis you'll have a lot a lot to say on that when he joins but we're really happy with the team that we have and we think we're positioned well for success.

Travis: Perfect. Thanks, Daniel.

Joshua Phillip Baer: Thank you. And our next question today comes from Josh Baer at Morgan Stanley. Please go ahead. I wanted to double-click on the enterprise accounts sequentially.

Speaker Change: Thank you and our next question today comes from Josh Baer Morgan Stanley. Please go ahead.

Joshua Phillip Baer: Okay. Thanks for the question I wanted to double click on the account are the <unk>.

Joshua Phillip Baer: Enterprise accounts sequentially.

Joshua Phillip Baer: I'm just wondering if you could talk a little bit about the.

Joshua Phillip Baer: Gross customer adds versus logo churn, yes, there's one.

Joshua Phillip Baer: The two having more of an impact.

Daniel Lentz: In the quarter, it was more about new logo ads than it was about where we were from a gross return perspective, and we saw improvements on dollarized gross retention and net retention, which is good. The amount that we saw in terms of exiting the platform is pretty consistent with where we've seen in the past.

Joshua Phillip Baer: On the quarter. It was more about new logo adds than it was about where we were from a gross churn perspective, we saw improvements on dollarized gross retention and net retention, which is good the amount that we saw in terms of eggs.

Joshua Phillip Baer: Exiting the platform is pretty consistent with where we've seen in the past.

Daniel Lentz: We want to see a little bit better results on where we are from a new customer ad point of view. But in the long run, again, we're really trying to get to a better balance between new customer ads and expansion of existing customers. And so when I think about count, obviously, that's a great healthy leading indicator for the business. But it's also the most expensive way of growing the top line as well.

Joshua Phillip Baer: We just we want to see a little bit better results on where we are from a new customer add point of view, but in the long run again, we're really trying to get to a better balance between new customer adds and expansion of existing customers and so when I think about talent, obviously, that's a great healthy leading indicator for the business, but it's also the most expensive way of growing the top line as well and so.

Daniel Lentz: And so we want to see both doing well. And so we're not going to overreact or anything and have some sort of reflexive correction when we look at the count. We're steady as she goes in what we're doing. We're looking for a good balance between expansion and new customer ads. And as we do that and get better at that, especially with bringing in new leadership, I think it's going to turn around the count as well. Okay, great. That makes

Joshua Phillip Baer: We want to see both doing well and so we're not going to overreact or anything and have some sort of a reflects a correction when we look at the count we're steady as she goes and what we're doing we're looking at a good balance between expansion and new customer adds and as we do that and get better with that especially with bringing in new leadership I think is going to turnaround the count as well.

Speaker Change: Okay, great that makes sense that's helpful.

Speaker Change: And then just wanted to ask about the competitive landscape any any changes that you're seeing out there anything having an impact on the business. Thank you.

Speaker Change: You know I.

Brent Bellm: I think it was quite beneficial to us that our largest competitor raised their plus pricing by as much as 60%. Last quarter, that came as a surprise.

Speaker Change: I think it was quite beneficial to us that our largest competitor raise there Todd there plus pricing by as much as 60%.

Joshua Phillip Baer: Last quarter that came as a surprise.

Brent Bellm: It really improves our already strong total cost of ownership position relative to them. And, you know, really, they're the only competitor that has historically been in our same advantageous TCO position. So we love that they have increased their pricing, and we have not.

Joshua Phillip Baer: Really improves our already strong total cost of ownership position relative to them and really they were the only competitor that had historically been in our same advantageous T O position. So.

Joshua Phillip Baer: So we love that but they increased pricing and we have not.

Brent Bellm: And we think our offerings are super competitive. As a result of that, we're seeing incoming interest both from their customers and from customers considering both of us. That's helped our win rates against them when we're head to head. So that's one of the biggest competitive dynamics. The other thing I would really highlight on our side was our next big announcement from, I guess, about three weeks ago, where it's a semiannual announcement or the first time ever of more than 100 new features that are being released across the platform in the first half of this year.

Joshua Phillip Baer: We think our offering super competitive as a result of that we're seeing incoming interest both from their customers and from customers considering both of us that popped our win rates against them when we're head to head.

Joshua Phillip Baer: So that's one of the biggest.

Joshua Phillip Baer: Competitive dynamics the other thing I would really highlight on our side was our next big thing announcement from I guess about three weeks ago, where its a semiannual announcement, our first time ever of more than 100, New features that were released across the platform or are being released in the first half of this year.

Joshua Phillip Baer: We really think it's industry, leading innovation and B to C and b to B proposal.

Brent Bellm: We really think it's industry-leading innovation in B2C and B2B and composable in those target segments where we want to be the best in the world. We don't see anybody who is introducing as meaningful innovations as we have. And I, you know, leave that to Catalyst and MakeSwift and what we're doing in B2B. So we think that we're enhancing our competitive advantage on the product side of things. We're enhancing our competitive advantage in go-to-market with the experience we're bringing in to the organization. And our competitor, our competitor has gotten more expensive relative to us. So across the board, that bodes well for our ability to compete in the quarters ahead.

Joshua Phillip Baer: In those target segments, where we want to be the best in the world and we don't see anybody who is <unk>.

Brent Bellm: Introducing as meaningful innovations as we have tried to lead that with catalyst and make swift and what we're doing and b to b. So we think that we're enhancing our competitive advantage on the product side of things, we're enhancing our competitive advantage on go to market with the experience, we're bringing in to the organization and our competitor a competitor.

Brent Bellm: It has gotten more expensive relative to us so across the board that bodes well to our ability to compete in the quarters ahead.

Speaker Change: Got it thank you.

Brent Bellm: Thank you and our next question comes from Mark Murphy.

Operator: Thank you. And our next question comes from Mark Murphy at J.P. Morgan. Please go ahead.

Mark Ronald Murphy: Please go ahead.

Operator: Great. Thank you for taking the question. This is some color onto Mark Murphy.

Sona Kolar: Great, thank you for taking the question. This is Sona Kolar on behalf of Mark Murphy.

Daniel Lentz: On the macro environment, you mentioned that consumer spending remains resilient, which is encouraging here I'm curious if you can drill down on the macro backdrop, a little bit more for US were there any particular segments or G is there were pockets of strength or weakness relative to others in Q1.

Brent Bellm: Brent, on the macro environment, you mentioned that consumer spending remains resilient, which is encouraging here. I'm curious if you can drill down on the macro backdrop a little bit more for us. For example, were there any particular segments or geographies that were pockets of strength or weakness relative to others in Q1?

Sona Kolar: Yeah, and when we say resilience again put this in the context of where E. Commerce was pre pandemic. It was growing in the double digits very consistently year after year, 12% to 15%.

Brent Bellm: Yeah, and when we say resilient, again, put this in the context of where e-commerce was pre-pandemic. It was growing double digits very consistently year after year, 12 to 15%. And for the last couple of years, I think we're now in the third straight year where it's been growing in the mid-to-high single digits, which is consistent and solid. It's not where it used to be.

Brent Bellm: So the last couple of years I think we're now in the third straight year, where it's been growing in the mid to high single digits, which is consistent solid it's not where it has it used to be at our own same store sales of our merchants same store sales, meaning ones that had been with us for more than a year and you're comparing where they were a year ago to now.

Brent Bellm: And our own same-store sales of our merchants, same-store sales, meaning ones that have been with us for more than a year, and you're comparing where they were a year ago to now, it's growing, you know, for us slightly ahead of where it is in e-commerce, and as well, it's doing well in the first quarter this year relative to last year and the year before. So that's the resilience that It's not something that would merit an even stronger word than resilient, you know, meaning it's on an upswing, you know, macro or within our business, but it's very consistent, resilient, and slight improvements to where we had then. In terms of geography, America is just an amazing economy, right? It's just that the consumer keeps spending no matter what happens to interest rates and inflation.

Brent Bellm: It's growing.

Brent Bellm: Slightly ahead of where it is in ecommerce, Kansas, well, it's doing well.

Brent Bellm: First quarter this year relative to last year and the year before so that's the resilience that we are seeing it's not.

Brent Bellm: Something that would merit, a stronger word than resilient, meaning it's on an upswing.

Brent Bellm: Macro or within our business, but it's very consistent resilient.

Brent Bellm: Slight improvements to where we had done.

Brent Bellm: In terms of geography.

Brent Bellm:

Brent Bellm: America is just an amazing economy right.

Brent Bellm: The consumer keeps spending no matter what happens to interest rates and inflation consumer always is strong in America and so we continue to see good strength in our American based businesses.

Brent Bellm: Consumer confidence is always strong in America, and so we continue to see good strength in our American-based businesses. Europe, frankly, is a little softer for us on the macro than it has been in the last couple of years, but we think we can explain that. And it's because the strength of Europe relies on our multi-storefront and multi-geography product. That multi-geography product is now being released in its full functionality as of this year, meaning the ability to have different storefronts serving different countries in Europe, each with its own localized content and language, currency, payment methods, and tax calculations.

Brent Bellm: We're frankly.

Brent Bellm: A little softer for us on the macro than where it had been in the last couple of years, but we think we can explain that.

Brent Bellm: It's because the strength of Europe relies on our multi storefront and multi geography product that multi geography product is now being released and its full functionality houses this year, meaning the ability to have different storefronts, serving different countries in Europe, each with their own localized content in language.

Brent Bellm: Currency payment methods tax calculation.

Brent Bellm: All of that sort of extraordinary functionality is now being released to full availability in Europe, and we think that's going to help us to re-accelerate our growth rates in Europe. So what I would talk about there in terms of the 15% growth rate, that's less to do with macro and more about the upside potential now that our multi-storefront product is reaching completion.

Brent Bellm: All of that sort of extraordinary functionality is now being released and the sort of full availability in Europe, and we think that's going to help us to reaccelerate our growth rates in Europe. So you know what I would talk about there in terms of the 15% growth rate that's left to do with macro.

Brent Bellm: More about the upside potential now that our multi storefront product is reaching completion.

Speaker Change: Understood. That's very helpful. Then as a quick.

Daniel Lentz: Okay. That's very helpful. Then, as a quick follow-up, Daniel, I wanted to ask you how you're thinking about headcount growth for the business. Are there any plans to ramp hiring to meet some of the goals to accelerate top-line revenue growth, or do you kind of feel that these sales and R&D teams are right-sized because of some of the other efficiencies you're generating in the business? Thank you.

Speaker Change: Fall of Daniela I wanted to ask you, how you're thinking about head count growth for the business are there any plans to ramp hiring to meet some of the goals to accelerate topline revenue growth or do you kind of feel that these sales and R&D teams are right sized because there's some other efficiencies youre generating in the business. Thank you at this point at this point I'd describe it as right sized I think if we're going to have.

Daniel Lentz: Thank you. At this point, I'll describe it as right-sized. I think if we're going to have what headcount increases we would have, I think they're modest. I think that we can still make improvements and better top-line growth out of the dollars that we're putting in, and we don't anticipate ramping hiring aggressively in the near future.

Daniel Lentz: What head count increases we would have I think they are modest I think that we can get them still improvements and better topline growth out of the dollars that we're putting in and we don't anticipate ramping hiring aggressively in the near future.

Speaker Change: Terrific. Thank you very much.

Daniel Lentz: Yeah.

Robert Morelli: Thank you. And our next question today comes from Scott Berg at Needleman Company. Please go ahead. Hi, this is Robert Morelli from Scalper. Thanks for taking my question. Congratulations on the quarter. Quick product question to start. How should we think about pricing for the instant commerce feed anonymous?

Operator: Thank you very much. Thank you. And our next question today comes from Scott Berg at Needleman Company. Please go ahead. Hi, this is Robert Morelli.

Speaker Change: Thank you and our next question today comes from Scott Berg Needham <unk> Company. Please go ahead.

Scott Berg: Alright, Thank you Rob earlier on for Scott. Thanks for taking my question. Congrats on the quarter a quick product question to start how should we think about pricing for the instant commerce Putinomics functionality is that a separate SKU and could've brand purchasing without purchasing the core female platform.

Brent Bellm: You would have to purchase the core Fedonomics platform and just remind everybody what instant commerce is and what feedonomics is. So feedonomics enables a business to get their product catalog data from whatever their source of truth is into the primary advertising and marketplace channels that they use. The big difference between a marketplace channel and an ad channel is that a marketplace channel, like Amazon marketplaces, Walmart, Target marketplaces, 200 of them, The marketplace channels have to know inventory counts, and they have to know, have order synchronization as well.

Operator: You.

Robert Morelli: You would have to purchase the core feed anomic platform and just to remind everybody went into commerce.

Brent Bellm: And what's economics, it so Pete and Omics enabled the business to get their product catalog data from whatever their source of truth is into the primary advertising at marketplace channel.

Brent Bellm: They use the big difference between a marketplace channel and then add channel is that a marketplace channel like Amazon marketplace as Walmart target marketplaces 200 of them.

Brent Bellm: The further complication around instant commerce, which is when It's just serving the particular need of when a marketplace or a delivery service like a DoorDash or an Uber or a Deliveroo in Europe is going to pick up the inventory from the warehouse or store of the brand or retailer and be able to deliver it that same day to a local consumer. So, you know, it's a different use case, but you're using the core feedonomics solution to enable it. Got it. It's helpful.

Brent Bellm: The marketplace you now have to no inventory count and they have to know.

Brent Bellm: We have an order synchronization as well the further complication around instant commerce, which is one.

Brent Bellm: Amazon is taking a marketplace order and then actually picking up and fulfilling locally within the same deck or Walmart is doing that they happen to know the location of the inventory relative to the location of the consumer.

Brent Bellm: And so there's this added complexity, but fundamentally this is still.

Brent Bellm: A variant on the core seed and Omics marketplaces solution.

Brent Bellm: Serving the particular need.

Brent Bellm: When a marketplace or a delivery service like a door dash or Uber.

Brent Bellm: Hoover or deliver who in Europe is going to pick up the inventory from the Weyerhaeuser store of the brand or retailer and be able to deliver at that same day to a local consumer.

Brent Bellm: So it's a different use case, but you're using the core feet anomic solution to enable it.

Speaker Change: Got it helpful. And then just quickly on the cross sell efforts.

Daniel Lentz: And then just quickly on the cross-sell efforts, you know, as you say, this is one of the metrics you're measured by. You know, at a high level, where are you today with these efforts to sell within the base? How much more effective do you think the company can be over the next year or two? And you know, what is that ideal balance between cross-sell and new-sell that you're trying to achieve? Well, yeah, so for cross-country, though, go ahead, Daniel. That's insane.

Daniel Lentz: We citizens what metrics you're motion by the high level, where are you today with these efforts to sell within the base how much were expected to be the company can be over the next year or two and what is that ideal balance between cross selling yourself, you're trying to achieve.

Daniel Lentz: Okay.

Daniel Lentz: Well, yes, I have a cross sell.

Daniel Lentz: Sorry about that. I was going to say on the cross-sell side, we're making good progress there. Ideally, I'd like to get to a point where our revenue growth is more like 50-50 between new logos and expansion of existing logos. In the past, it's been disproportionately new logo driven, which I think is a sign of strength in BigCommerce that we're continuing to add logos in a challenging environment. Not every e-commerce platform can say that, certainly.

Daniel Lentz: That's to say Oh, sorry about that I was going to say on the cross sell side, making good progress there ideally I'd like to get to a point, where our revenue growth is more like 50, 50 between new logos and expansion of existing logos in the past it's been disproportionately new logo, driven which I think is a sign of strength in <unk>.

Daniel Lentz: Immerse that we're continuing to add logos.

Daniel Lentz: In a challenging environment not ever ecommerce platform can say that certainly.

Daniel Lentz: It's just an expensive way to be powering your top-line growth. I think that the more we're focused on customer success, ultimately, as our guiding principle, that's going to lead not just to better expansion of existing customers, but it also leads to better referenceability, which will ultimately lead to better new logo acquisition as well. I think that there are ways that we need to train and enable our sales teams in order to think that way, and there are systems investments that we need to make. We're managing this business for long-term growth, and we're really, really focused on making sure that that's a healthy balance. Thank you. And our next question today comes from Terry Tillman at Truist. Please go ahead.

Daniel Lentz: It's an expensive way to be powering your top line growth and I think that the more we're focused on the customer success ultimately as our guiding principle, that's going to lead not just the better expansion of existing customers, but it also leads to better reference ability, which will ultimately lead to better new logo acquisition as well and so I think that there's ways that we need.

Terry Tillman: To train and enable our sales our sales teams in order to think that way systems investments that we need to make we are managing this business for long term growth and we're not we're really really focused on making sure that that's a healthy balance.

Daniel Lentz: Okay.

Terry Tillman: Got it helpful. Thanks Niccolo.

Daniel Lentz: Thank you and our next question today comes from Terry Tillman Truest. Please go ahead.

Terry Tillman: Oh, great. Good morning, guys, Scot or peso on for Terry. Thanks for taking the question just one from me wanted to go back to some of the commentary on <unk> could you maybe just speak to any puts and takes around the demand trends with businesses that want to upgrade their commerce systems and sell that way as it relates to maybe the commentary around broader e-commerce growth and I guess I'm curious on how does <unk> stack up as a priority for <unk>.

Terry Tillman: <unk> that are looking to add additional revenue streams.

Terry Tillman: Yeah, B to B remains a very strong segment for us as we've said in the past at roughly 40% of our gross new sales and that's in line with the aggregates total addressable market, which is for roughly 40% of platform stand for B to B and 60% for BD.

Operator: Yeah, B2B remains a very strong segment for us. As we've said in the past, it's roughly 40% of our gross new sales. And that's in line with the aggregate total addressable market, which is roughly 40% of platform spend for B2B and 60% for B2C. Now, when we calculate that, you know, the note is that any customer that is a hybrid doing both B2C and B2B, then they have to use our B2B product.

Operator: See now when we calculate that the note is that any customer that is a hybrid doing both b to C and b to B were then they have to use our <unk> product and were crediting all of that should it be b to b side of things, we see a lot of good.

Brent Bellm: And we're crediting all of that to the B2B side of things. We see a lot of good upsell and cross-sell from customers who begin with us on B2C and then add the B2B capability. That certainly happens a fair amount.

Brent Bellm: Up sell and cross sell from customers, who begin with us on B to C. And then add the b to B capability that certainly happens a fair amount, but a large portion of our b to b business is coming from true industrial companies distributors.

Brent Bellm: But a large portion of our B2B business is coming from true industrial companies, that is, distributors, manufacturers, wholesalers, you know, companies that, you know, B2C is not even relevant for them because we serve full-spectrum B2B, you know, agricultural companies, industrial manufacturers, transportation companies, right? And so the real opportunity with companies like that is not to add B2C to what we're doing on B2B or It's to expand to multiple brands within their, you know, maybe if they're an industrial conglomerate, it's to add additional geography or additional use cases and customer segments that they want to serve. So there's a lot of expansion opportunity that is not necessarily of the B2B plus B2C variety. One point I would add to that...

Brent Bellm: Distributors manufacturers wholesalers you know companies that are you know bdc's not even relevant for them because we serve full spectrum beta agricultural companies industrial manufacturers, the transportation companies right and.

Daniel Lentz: One point I would add on that too, Connor, as well, is just from the financial point of view: B2B is a very, very healthy segment for us. We have strong win rates.

Daniel Lentz: I mean, GMB that ran through B2B edition grew 50% year-over-year, and it was north of 50% for us last quarter. So this is an area where we see really, really strong competitive advantage, not only from a financial health perspective, but it's an area of product investment, and it's an area that I get really excited about, just from a financial health perspective as well. The more we continue to mix and grow in that direction, it's a good thing for us from a market share and from a financial health point of view.

Daniel Lentz: Okay and for the financial Health point of view.

Speaker Change: Great appreciate it.

Speaker Change: Thank you.

Operator: Thank you. And our next question today comes from Jeremy Sahler with Jeffries. Please go ahead.

Daniel Lentz: Question today comes from Jeremy Solar with Jeffries. Please go ahead.

Jeremy Sahler: Hey guys, I'm on for some Ad Semana. Thanks for taking my questions. Most of my questions have already been answered, but maybe two quick ones.

Jeremy Sahler: Hey, guys I'm on first and lots of mono. Thanks for taking my question. Most of my questions have already been answered, but maybe two quick ones you called out probably about a year ago that your expectations for enterprises accounts should comprise about 80 per cent of the error by 2024 is that still kind of in the card for 2024 to think maybe that'll take a little longer.

Jeremy Sahler: You called out, probably about a year ago, that your expectations for enterprise accounts should comprise about 80% of ARR by 2024. Is that still kind of in the cards for 2024? Do you think maybe that'll take a little longer?

Speaker Change: I'll take that one I think it's gonna take a little bit longer I think that's partially because of the fact that we've just seen a little bit of the macro driven pressure on replatforming spend that we've talked about over the course of the last year to year and a half that's true across all enterprise software as much as it is for US I think that's part part one part two I think they'd go to market changes and improvements that we're making are getting.

Daniel Lentz: I'll take that one. I think it's going to take a little bit longer. I think that's partially because of the fact that we've just seen a little bit of the macro-driven pressure on replatforming spend that we've talked about over the course of the last year to year and a half. That's true across all enterprise software as much as it is for us.

Daniel Lentz: Really help get that back on that track and number three I'd also add our essentials plans have been healthier in some ways than where we thought they would be met maybe a year and a half or so ago. We saw five per cent growth and are are from that portion of the business on the quarter part of that is driven by pricing changes, but a lot of that is also driven by a lot of improvements in fundamental cohort health <unk>.

Daniel Lentz: I think that's part one. Part two, I think the go-to-market changes and improvements that we're making are going to really help get it back on that track. And number three, I'd also add our essentials plans have been healthier in some ways than where we thought they would be maybe a year and a half or so, a good six months ago. We saw 5% growth in ARR from that portion of the business in the quarter.

Daniel Lentz: Part of that's driven by pricing changes, but a lot of that's also driven by a lot of improvements in fundamental cohort health and just the gross and net retention that we're seeing from that part of the business as well. I think that's a good outcome because while I still think that the business is going to shift to 80 and potentially beyond that on enterprise accounts, that will be, I think, alongside a healthy essentials plan portion of the business as well, which we feel is stabilizing and we can start to get healthy growth out of in the future as well.

Daniel Lentz: And just the the gross and net retention that we're seeing from that part of the business as well I think that's a good outcome because while I still think that the business is going to shift to 80 and potentially beyond that on enterprise accounts that will be I think along alongside a healthy essentials plan portion of the business as well that we feel is stabilizing and we can <unk>.

Daniel Lentz: To get a.

Daniel Lentz: Healthy growth out of out of in the future as well.

Jeremy Sahler: All right, that's a peaceful color. And then, you know, here you are on competitive pricing. And I know someone asked about feed anonymous specifically, but can you maybe remind us how you're thinking about pricing as a growth lever, whether that's in the shorter term or as part of the broader strategy?

Speaker Change: That's that's useful color and then you know here you uncompetitive pricing and I didn't know someone asked about being honest specifically, but can you maybe remind us how you were thinking about pricing of the growth liver, whether that's in the shorter term or if it is part of the broader strategy.

Jeremy Sahler: We're going to continue to look for opportunities to take pricing, where we think that makes sense. We've taken pricing you have two or three times probably over the course of the last several years when we do that it's going to be in pockets, it's going to be how we think about discounting levels with new customers. What we are going to continue to do because this is just the way we operate as a company we are gonna <unk>.

Daniel Lentz: We're going to continue to look for opportunities to take pricing where we think that makes sense. We've taken pricing two or three times probably over the course of the last several years. But when we do that, it's going to be in pockets.

Daniel Lentz: It's going to be how we think about discounting levels with new customers. And what we are going to continue to do, because this is just the way we operate as a company, we are going to continue to operate the company in a way that gives customers the freedom to choose the solutions that are best for their business. We are going to be opinionated and offer them good counsel on how we think they can best optimize their stack to help their customers be successful, and we offer commerce solutions that can do that.

Daniel Lentz: Continue to operate at the company in a way that gives customers the freedom to choose the solutions that are best for their business, we're going to be opinionated and offer them. Good counsel on how we think they can best optimize their stack to help their customer be successful and we offer commerce solutions that can do that what we're not going to do is put a pricing structure in place that penalizes them or pressures them in.

Daniel Lentz: What we're not going to do is put a pricing structure in place that penalizes them or pressures them into using solutions that may be good for our P&L but not good for theirs. We're going to focus our pricing efforts in that way, and we're going to make sure that our pricing scales with their growth. We're going to offer them the ability to negotiate a lot of those discounts in advance with volume changes that grow alongside their business while giving them the freedom to pick the solutions that make the best sense for them, whether that's on the payment side, whether that's on the tax side, or any other solution as well.

Daniel Lentz: Using solutions that may be good for our P&L, but not good for theirs and we're going to focus our pricing efforts in that way, where we're gonna make sure that our pricing ramps with their growth. We're gonna offer them the ability to negotiate a lotta those discounts in advance with volume changes that grow alongside their business, while giving them the freedom to pick the solutions that makes the best sense.

Daniel Lentz: For them, whether that's on the payment side, whether that's on tax or any other solution as well so for as a gross lever I do think that's an area, where we can continue to see growth in the business, but we're going to do so in an opportunistic way in a way that we think is can grew it not only with our success, but also for the success of our customers rather than it being at their expense.

Daniel Lentz: As a growth lever, I do think that's an area where we can continue to see growth in the business, but we're going to do so in an opportunistic way, in a way that we think is congruent not only with our success but also with the success of our customers, rather than it being at their expense.

Speaker Change: It makes sense. Thanks for taking my question.

Jeremy Sahler: That makes sense, and thanks for taking my questions.

Jeremy Sahler: Thank you and our next question comes from Brian Peterson with Raymond James. Please go ahead.

Operator: Thank you, and our next question comes from Brian Peterson with Raymond James. Please go ahead.

John Massinon: Hi, thanks for taking the question. This is John Massinon on behalf of Brian.

John Massinon: Hi, Thanks for taking the question. This is Jonathan can on for Brian on.

John Massinon: <unk> sales cycles. So just a quick one there uhm if you have a bunch of new longer it feels cycled past few quarters, but I'm curious what the second derivative. There is improving have you seen any stabilization or improvement in the cycles or they won't get it further and then I have a quick follow up.

Daniel Lentz: On sales cycles, so just a quick one there, you've mentioned the elongated sales cycles past two quarters, but I'm curious if the second derivative there is improving. Have you seen any stabilization or improvement in the cycles, or are they elongated further? And then I have a quick follow-up.

Daniel Lentz: A quick answer: they've been essentially the same. Some months are a little bit higher, some months are a little bit lower, but if you draw a trend line across it, it's been largely the same for several quarters in a row going back into 2023.

Daniel Lentz: Quick answer they they've been essentially the same some months or a little bit higher some months or a little bit low, but if you draw a trend line across it it's been largely the same for several quarters <unk> going back into 2023.

Speaker Change: Okay Perfect I was helpful. And then they'll put you on the macro commentary embedded in guidance. So during the prepared remarks should reference consumer health holding up in Q1, but I'm curious what degree that stances reflected in the current guidance outlook basically trying to get at you.

Daniel Lentz: Okay, perfect, that was helpful. And then double-click you on the macro commentary embedded in guidance. So during the prepared remarks, you referenced consumer health holding up in Q1. But I'm curious to what degree that stance is reflected in the current guidance outlook, basically trying to get at, you know, if consumer trends do weaken, how much conservatism have you baked in to the forecast. Good question. I think we've baked in a lot

Daniel Lentz: You know if consumer trying to weaken how much conservatism that'd be baked in to the forecasts Sir.

Daniel Lentz: Good question. I think we've baked in enough appropriate conservatism. What we haven't baked in is the assumption that we're going to see a holiday period in Q4 of this year necessarily the way that we saw last year. We had a really, really good holiday period in Q4. We also hit a performance bonus with one of our technology partners that was big enough to matter but not necessarily the reason why the quarter was outstanding.

Speaker Change: Good question I think we baked in appropriate conservatism, what we haven't baked in is the assumption that we're going to see a holiday period in Q4 of this year necessarily the way that we saw last year, we had a really really good period holiday period in queue for we also we hit a performance bonus with one of our technology partners that was big enough to <unk>.

Daniel Lentz: But not you know, but not necessarily the reason why the quarter was outstanding but if you just look at the front half to back have a mix of revenue baked into the guide compared to where we've been in years past, you'll see that are back have guidance looks a little bit conservative relative to the front half back have nixed that we've seen in the past that's reflective of our conservatism and the fact that frankly I don't want to get over.

Daniel Lentz: But if you just look at the front half to back half mix of revenue baked into the guide compared to where we've been in years past, you'll see that our back half guidance looks a little bit conservative relative to the front half to back half mix that we've seen in the past. That's reflective of our conservatism and the fact that, frankly, I don't want to get over our skis from a guidance perspective on the consumer spending side of things before we start to see some signals from the holiday period.

Daniel Lentz: Skis from a guidance perspective on the consumer spending side of things before we start to see some signals from the holiday period. So again, it's Brent said, there's a reason why we're choosing the word resilient, it's not perfect, but it's certainly been encouraging gives us reason for optimism, but we're going to continue to manage guidance conservatively, especially as we want to see continued improvements.

Daniel Lentz: So again, as Brent said, there's a reason why we're choosing the word resilient. It's not perfect, but it's certainly been encouraging and given us reason for optimism, but we're going to continue to manage guidance conservatively, especially as we want to see continued improvements in new bookings growth, which I really think is a key signal for us as we think about the rest of the year. Thank you very much. Thank you. And our next question today comes from...

Daniel Lentz: In new bookings growth, which I really think is the key signal for us as we think about the rest of the year.

Speaker Change: Thank you very much.

Daniel Lentz: Thank you and our next question comes from Gabriella borders with Goldman Sachs. Please go ahead.

Operator: Thank you. And our next question today comes from Gabriela Borges with Goldman Sachs. Please go ahead. Hi, this is Kevin Kuhn.

Operator: Hi, This is Kevin Kumar on for Gabrielle and thanks for taking my question.

Gabriela Borges: <unk> can you talk a bit about your partner channel and how they're performing in terms of driving your business or in bringing in talk with one of <unk>. Thank you.

Kevin Kuhn: Yeah, the partner channel for enterprise.

Brent Bellm: Yeah, the partner channel for enterprise has consistently over time delivered about 35 to 40% of our sales volume, meaning they source that. And on an equivalent basis, we source enterprise deals, and they feed them back into the partner channel. So, you know, collectively, it's in the 70 to 80% range of our enterprise customers who are using an agency partner. So overall, agency partners are absolutely essential to the success of enterprise e-commerce. We also see that our customers who use an agency partner have faster implementations and more success.

Brent Bellm: Because consistently over time delivered about 35% to 40%.

Brent Bellm: Our sales volume meeting face source that.

Brent Bellm: On an equivalent basis resource center price deals and they feed them back into the partner channels. So collectively gets in the 70 to 80 per cent range of our enterprise customers, who are using an agency partner. So overall agency partners are absolutely essential to the success of.

Brent Bellm: Enterprise E. Commerce, we also see that our customers who use an agency partner have faster implementations and more successful implementation.

Brent Bellm: So we want to be the best partner in the industry, working with the best agencies on both sides. The agencies themselves have been reporting to us, whether they're our partners or serving competitive platforms, that they've seen a slowdown in aggregate-level migrations and new e-commerce launches since the end of the pandemic. And so aggregate sort of new demand in the industry overall is down to where it has been historically.

Brent Bellm: So we want to be the best partner in the industry. He hadn't working with the best agencies in the industry of all sides. The.

Brent Bellm: The agencies themselves have been reporting to us whether there are partners or serving competitive platforms that they've seen a slow down in aggregate level migrations can do ecommerce lunches.

Brent Bellm: Since the end of the pandemic and so aggregates sort of new demand.

Brent Bellm: The industry overall is down to where it has been historically and that's a little bit tough on agency, but we're hoping the big commerce can keep growing both aggregate share and competitiveness lived at our agency partners are the most successful can the industry. That's our shared goal with them.

Brent Bellm: And that's a little bit tough on agencies, but we're hoping that BigCommerce can keep growing both its aggregate share and competitiveness so that our agency partners are the most successful in the industry. That's our shared goal with.

Speaker Change: That's helpful. Thank you.

Speaker Change: Thank you and this includes a question and answer session. How 'bout, a determined conference pack over in front bowling for closing remarks.

Brent Bellm: Thank you. And this concludes our question and answer session. I'd like to turn the conference back over to Brent Bellm for closing remarks.

Brent Bellm: Yeah, just say as we look to the back half of the year. We're excited about the competitiveness of our product Midmarket and enterprise B C N b.

Brent Bellm: Yeah, I'd just say as we look to the back half of the year, we're excited about the competitiveness of our product in mid-market and enterprise B2C and B2B and in composable. We also believe that now, with Travis's incoming leadership, we have the right and are implementing the right enterprise-level go-to-market strategies from sales, marketing, and service as befits the product. And so those two, in combination, give us optimism that we can achieve our goal of reaccelerating top-line growth now on a foundation of very solid profitability. That's what we're looking forward to in the back half of the year. And we're grateful to all of our customers, partners, and shareholders who have tuned into this call and have supported the company. Thanks.

Brent Bellm: <unk> and and Composable. We also believe that now with Travis as incoming leadership, we have the right and are implementing the right enterprise level go to market motions from sales marketing and service.

Brent Bellm: Fits the product and so those two in combination give us optimism that we can achieve our goal Reaccelerating top line growth now on a foundation of very solid profitability. That's what we're looking forward to in the back half of the year and we're grateful to all of our customers partners and.

Brent Bellm: Shareholders, who have tuned into this call centre followed the company. Thanks.

Speaker Change: Thank you. This concludes today's conference call. We thank you all for time in today's presentation, you may not a scratch your line so have a wonderful day.

Operator: Thank you. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.

Operator: [music].