BigCommerce Q2 2023 Earnings Call Transcript

Quartr
Provided by Quartr
August 3, 2023

There are 14 speakers on the call.

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the BigCommerce Second Quarter 2023 Earnings Call. At this time, all participants are in a listen only mode. After the speakers' 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 Today, Tyler Duncan, Senior Director of Finance.

Operator

Please go ahead.

Speaker 1

Good afternoon, and welcome to BigCommerce's Q2 2023 earnings call. We will be discussing the results announced in our press release issued after today's market close. With me are BigCommerce's CEO and Chairman, Brent Bellum and CFO, Daniel Lentz. Today's call will contain certain forward looking statements, which are made pursuant to the Safe Harbor provisions the Private Securities Litigation Reform Act of 1995. 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 Q3 of 2023 and the full year 2023.

Speaker 1

These statements can be identified by words such as expect, anticipate, intend, plan, believe, Seek, committed, will or similar words. These statements reflect our views as of today only and should not be relied upon as representing our views at any subsequent date and we do not undertake any duty to update these statements. Forward looking statements by their nature 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 Securities and Exchange Commission. During the call, we will also discuss certain non GAAP financial measures, which are not prepared in accordance with generally accepted accounting principles.

Speaker 1

A reconciliation of these non GAAP financial measures to the most directly comparable GAAP financial measure as well as how we define these metrics and other metrics is included in our earnings press release, which has been furnished to the SEC and is also available on our website at investors. Bigcommerce.com. With that, let me turn the call over to Brent.

Speaker 2

Thanks, Tyler, and thanks, everyone, for joining us. I'll start today by discussing our Q2 performance and progress at the halfway point of the year. I'll then share my perspective on our growth strategy and provide additional detail on recent leadership changes. In Q2, Total revenue was just over $75,000,000 up 11% year over year. Our Q2 non GAAP operating loss was just over $3,000,000 Which was ahead of our quarterly guidance and a strong indication of our confidence to reach breakeven on an adjusted EBITDA basis in Q4 of this year.

Speaker 2

Later, Daniel will share greater detail on our financial results and conclude the call with a discussion on updated guidance. I want to highlight 2 milestones that our business achieved in the quarter. First, we reached profitability on an adjusted EBITDA basis in the month of June. And second, we delivered positive free cash flow for the first time, driving just under $14,000,000 of free cash flow for the 2nd quarter ended June 30, 2023. To be clear, these milestones are starting points only.

Speaker 2

We have a long way to go to reach our ambitious goals in terms of revenue growth, profitability and cash flow. But it is worth noting We have delivered nearly 1600 basis points of improvement in non GAAP operating margin compared to Q2 2022 And significant improvement in cash flow generation as well. In response to and against the backdrop of a difficult macroeconomic climate, I would like to thank our entire BigCommerce team for the hard work that was required to deliver that. We concluded Q2 with an annual revenue run rate For ARR of approximately $331,000,000 up 12% year over year. That represents a sequential growth in ARR of just over $14,000,000 Enterprise account ARR was approximately $236,000,000 up 14% year over year.

Speaker 2

As of the end of Q2, Enterprise accounts represent 71% of our total company ARR. Accounts using exclusively our retail plans, which we refer to as non enterprise accounts finished with ARR of approximately $95,000,000 up just under $7,000,000 While total ARR results are close to our midyear target, the mix between enterprise and nonenterprise accounts has differed from our expectations. Going into the year, we expected nonenterprise accounts to contract by mid- to high single digits. Improvements to cohort retention and pricing adjustments Return this portion of the business to growth in Q2, providing encouraging signs of momentum going into the back half of the year. Merchants using our enterprise plans, which we refer to as enterprise accounts, come from 2 parts of the market, mid market merchants and traditional large enterprises.

Speaker 2

We define mid market as merchants doing $1,000,000 to $50,000,000 per year in gross merchandise value or GMV. This part of the market has a large and growing TAM and is underserved by many legacy e commerce providers. Our share momentum in this part of the market is strong And we have seen strong results from the mid market relative to our 2023 plans. Large enterprise merchants, those with GMV of at least $50,000,000 annually, including those up to $1,000,000,000 or more are experiencing significant increases in sales cycle durations compared to 2022. This segment of the industry tends to have lengthier sales cycles and more complicated business requirements.

Speaker 2

Here is where the effects of macroeconomic uncertainty are most noticeable and where a slower than expected increase in enterprise account ARR And where a slower than expected increase in enterprise account ARR can be seen. Although it will take time to scale up our market Penetration in this segment of the industry. We have excellent product market fit for merchants of this size and complexity. In response, We are increasing our investment in mid market sales generation, where we observe fewer macroeconomic challenges and strong performance. Daniel will speak in more detail to these dynamics later in his remarks as well.

Speaker 2

We have 5 primary growth levers in our business today. First, we have a healthy and growing small business at nearly $100,000,000 in ARR. We have taken numerous actions to improve efficiency and scalability in this portion of our business. We eliminated aggressive sales promotions, incentive advanced payment and increased prices with minimal impact thus far to retention. This has led to strong improvements in cohort health.

Speaker 2

Day 120 cohort retention rates on our retail plans are 80% to 85% higher on average than where we were at this time last year. In addition, we shifted sales and marketing resources toward enterprise growth, Improving profitability as we rely more on self serve channels for the SMB portion of the business. We believe our retail plans offer market leading features and And we believe we can grow this business over time profitably as a result of these changes. 2nd, We have a strong and growing presence with mid market merchants, and we have a tremendous runway to grow share in this underserved portion of the market. Our products provide the functionality large enterprise merchants expect without the cost and complexity of legacy e commerce software.

Speaker 2

This allows mid market merchants to enjoy the advantages of enterprise e commerce software at a price point set for the scale of their business. We believe our product is uniquely positioned to win and grow in this part of the market. 3rd, we provide market Leading e commerce and omnichannel solutions for both B2C and B2B merchants. Many B2B merchants are adjusting their buying processes to reflect the consumer shopping experiences Their customers are used to and our award winning platform delivers outstanding value for merchants in both categories. B2B has traditionally been underserved by commerce platforms and we are investing to win in this market.

Speaker 2

4th, the large enterprise market represents a big opportunity for us and we are expanding upmarket. Key recent product launches, including multi storefront and multi location inventory features reflect the growing capability of BigCommerce's platform. In addition, BigCommerce provides differentiated omni channel capabilities critical to many large enterprise merchants Utilizing Feedonomix market leading AI technology to drive merchant growth and ROI through advertising and marketplace channels. Other competitors offer omni channel connectivity, but connectivity alone is not enough. Connectivity and data quality together drive results for merchants and Feedonomics' Platform agnostic, AI driven data feed optimization capabilities deliver one of the best solutions in the world.

Speaker 2

In fact, in a Q2 2023 Feedonomics customer survey, more than 75% of their customers reported up to 50% or more improvements In their omnichannel conversion, return on ad spend and revenue, we believe our platform can disrupt the large enterprise market and we are committed to growth in this market. Finally, international expansion represents a significant growth opportunity for us as well. We expanded our sales and marketing presence to 12 new countries over the last 2 years. Our expansion has been particularly focused on EMEA, where we see an opportunity to win share from legacy, more expensive e commerce providers. While we have slowed the pace of new country launches recently, We have not significantly changed the amount of sales and marketing investments in existing markets.

Speaker 2

Our near term focus is on building scale and profitability in our recently launched countries, where we are truly just scratching the surface of our growth potential, we expect to continue our international expansion efforts in the coming years in disciplined profitable way. E Commerce is fundamentally an open, flexible, partner first company. Merchants have freedom to choose among the market leading commerce technology partner solutions that suit their businesses, including AI, which we'll discuss further in a moment. It also means merchants can drive improved omnichannel growth and ROI while using our Feedonomics solution on other e commerce platforms as well. Being partner first delivers both better go to market results for BigCommerce and improved performance for merchants.

Speaker 2

Our checkout performance results are an example of the advantages of this open, best of breed, partner first strategy for our merchants. For example, when examining merchant checkout data from May June 2023, We validated that our native one page checkout delivers a 61.9% checkout conversion rate. This exceptional result was the average of all enterprise stores Using a BigCommerce storefront, a flagship payment provider such as Braintree, PayPal Commerce Platform, Stripe or Adyen, PayPal Wallet and Apple Pay and our native one page checkout. We expect to publish a 3rd party independent review and validation of these superior checkout results in the coming weeks. I'd now like to spend some time on 2 recent leadership changes that I believe will help scale our business and execute our strategy.

Speaker 2

Earlier this week, we announced the addition of Technology Industry Veteran and E Commerce Sales Leader, Stephen Chung, as our Company President. Stephen will oversee our sales, marketing and services teams, aligning our go to market teams to fuel our leadership in global enterprise e commerce. Stephen brings relevant experience from his time at Delphix and PagerDuty, and he previously served as global sales leader at Demandware back when they moved up market prior to being acquired. There is no better person to fill this role and lead our mid market and enterprise growth. I'm also excited to highlight Daniel Lentz as our new CFO, replacing Robert Alvarez, We recently retired after holding that position since 2011.

Speaker 2

RA left big shoes to fill, but there is no doubt in my mind or the minds of our Board members that Daniel is absolutely the best person for this job. Few in our company know our business as well as Daniel, And he has extensive experience across a variety of finance roles at Procter and Gamble and enterprise sales experience at Dell that make him a well rounded leader in our business. We have every confidence in his ability to steer the company to long term success. Now I'd like to shift gears To focus on a couple of merchants that are great examples of how our open, partner first strategy resonates with mid market and enterprise customers. The first is Hauser, a U.

Speaker 2

S. Supplier of kitchen sinks and faucets for over 3 decades. Hauser sinks had a solid B2B presence and they wanted a modern tech stacked to support their direct to consumer strategy. They turned to our agency partner Coalition Technologies and launched a new store in BigCommerce in just 60 days. Creating an omnichannel presence was vital for Hauser, and they found that Bit Commerce and Feedonomics was the powerhouse combination they needed.

Speaker 2

With the ability to manage products and orders across over 100 channels, Phenanomics gave Hauser the power to drive omnichannel growth without a high price tag. Coalition and BigCommerce helped Hauser quickly migrate its complex portfolio of products and dramatically increase its site speed, all while maintaining a growing omnichannel presence. Another notable and representative BigCommerce merchant is MKM Building Supplies, the largest independent builders merchant in the UK With over 100 branches across England, Scotland and Wales. With Origins as the neighborhood supply shop in the U. K, MKM realized that it needed to keep up with Digital transformation trends.

Speaker 2

Partnering with big commerce agency Brave Bison, MKM now has a fully composable storefront that delivers online experience to match its offline presence. Bray Bison enlisted global market leading front end solution View Storefront To implement a headless architecture and collaborated with commerce experience provider Bloomreach to drive seamless personalization across the site. Just weeks after going live, MKM saw increased site performance, plus increases in online orders, average order value, New customer accounts and revenue. In June, MKM was honored with a mock B2B Impact Award from the mock alliance, a We are now in a group of independent tech companies dedicated to advocating for open, best of breed technology ecosystems when moving from legacy infrastructure and going compostable. We also remain committed to continuous innovation.

Speaker 2

Last week, we announced a partnership with Google to add new AI powered features to our platform later this year. These features will help merchants improve operational efficiencies, elevate customer experiences, enhance product discovery and drive more sales. Merchants can save time and improve operational efficiency and productivity by using AI algorithms to streamline workflows, Accelerate product development cycles, reduce costs and accelerate time to market. In partnership with Google, we're committed to using AI responsibly and respect our merchants' user data, brand and privacy. We will continue to use AI in a way that is fair and biased and transparent.

Speaker 2

We believe that these principles are essential for enterprise merchants to ensure their brands are protected. Our open And as our partners continue to build new solutions, they will be easily integrated into our scalable platform. Our platform received 2 notable pieces of recognition recently. First, we achieved 24 out of 24 total nettles in the 2023 Paradigm B2B Combine For Digital Commerce Solutions, Enterprise and Mid Market Edition, increasing our rankings in 6 categories. We were also awarded The high placement of major contender in Everest Group's 2023 Digital Commerce Platform Peak Matrix, which assess 21 Digital Commerce providers around the world.

Speaker 2

In Q2, we continue to grow our roster of leading notable brands and merchants on our platform. Francesca's, a popular women's clothing and accessories brand with more than 4 50 stores, is taking advantage of BigCommerce's page builder tool, Combined with a customized theme and customized checkout in order to deliver unique free spirited fashion and lifestyle products to its customers. Barbeque's Galore, an Australian market leading seller of grills, grilling accessories and outdoor furniture became the 1st merchant transacting with B2B Edition Multi Storefront Going live in just 12 weeks. Square Enix, the company behind some of the world's most popular gaming franchises, including Final Fantasy, Dragon Quest And Tomb Raider launched multiple new stores to power their multi language and multi currency needs in North America, EMEA and APAC, enabling their customers to purchase games across multiple platforms, including digital games redeemed through the Steam marketplace. BMW Group UK, a leading supplier of BMW and MINI original parts, partnered with Autofixis Solutions to launch new stores for both brands, featuring ERP integrations that sync inventory supplies and pricing data directly with the stores.

Speaker 2

I remain incredibly bullish about the long term prospects for profitable growth and market leadership for BigCommerce. 2023 is a challenging year throughout Tepp And I am proud of the progress we have made. We have a long way to go, and our team is committed to the hard work needed to deliver strong growth and returns for our shareholders. Next, I'd like to turn it over to Daniel to discuss our financial results in more detail and conclude with our updated guidance for Q3 and 2023.

Speaker 3

Thanks, Brent, for your kind remarks, and thank you, everyone, for joining us today. During my prepared remarks, I will cover our Q2 results in detail, Provide additional detail on our progress for the year, both where we are showing strengthening trends and where we need to improve, provide updated guidance for the remainder of the year, I'll conclude by speaking to my primary focus areas as CFO. In Q2, total revenue was just over $75,000,000 up 11% year over year. Subscription revenue grew 10% year over year to approximately $56,000,000 while partner and services revenue or PSR Was up 14% year over year to just over $19,000,000 Revenue in all of the Americas was up 9%, while EMEA revenue grew 27% And APAC revenue was up 3% compared to the prior year. As Brent mentioned previously, we hit a couple of important milestones in our business in Q2, Reaching breakeven on an adjusted EBITDA basis for the month of June and delivering positive free cash flow of nearly 14,000,000 Time for the Q2 ended June 30, 2023.

Speaker 3

To be clear, we have a lot of work left to do. These milestones represent encouraging evidence that the operating focus driving our 2023 financial plan is making progress, But we recognize that these results are starting points, not ending points. We are committed to profitable long term growth in this business and the disciplined Use of capital necessary to deliver that. I'll now review our non GAAP KPIs. Our ARR grew to approximately $331,000,000 up 12 percent year over year.

Speaker 3

That represents a sequential growth in total ARR of just over 14,000,000 Enterprise account ARR was approximately $236,000,000 up 14% year over year. Subscription ARR was up $12,000,000 or 5% versus Q1 and up 13% year over year. At the end of Q2, we reported 5,929 enterprise accounts, up 5 11 accounts or 9% year over year. ARPA or average revenue per account for enterprise accounts was $39,870 up 5% year over year. I'll now shift to the expense portion of the statement of operations.

Speaker 3

As a reminder, unless otherwise stated, all references to our expenses, operating results And per share amounts are on a non GAAP basis. Q2 total cost of revenue was $17,500,000 up approximately $1,200,000 sequentially from Q1. Q2 total operating expenses were $61,300,000 down $600,000 sequentially from Q1. Q2 gross margin was 77%, up 12 basis points from the previous year, While gross profit was $58,000,000 up 11% year over year. In Q2, sales and marketing expenses totaled $32,000,000 down 1% year over year.

Speaker 3

This represented 43% of revenue, down 5 15 basis points from a year ago. Research and development expenses were $17,500,000 or 23 percent of revenue, down 5 23 basis points from a year ago and down slightly from Q1. General and administrative expenses were $11,900,000 or 16 percent of revenue, down 50 9 basis points from a year ago. In Q2, we reported an operating loss of $3,400,000 a negative 4.5 percent operating margin. And an operating loss of $6,400,000 or a negative 9 percent operating margin in the prior quarter.

Speaker 3

Adjusted EBITDA was negative 2,500,000 A negative 3.3 percent adjusted EBITDA margin compared to negative $12,900,000 and a negative 18.9 percent adjusted EBITDA margin in the prior year. Non GAAP net loss for Q2 was $1,500,000 or negative $0.02 per share compared to negative $14,100,000 or negative $0.19 per share last year. We ended Q2 with approximately $299,000,000 in cash, Cash equivalents and restricted cash and marketable securities. For the 3 months ended June 30, 2023, operating cash flow was nearly $15,000,000 Compared to negative $13,900,000 a year ago, we reported free cash flow of nearly $14,000,000 which compares to negative $16,000,000 in Q2 2022. I'd now like to share additional color on our 2023 financial plan And my view on our progress thus far in the year.

Speaker 3

We are making the tough decisions necessary to stabilize and improve the underlying economics of our non enterprise business. We are focusing the bulk of our sales and marketing spending towards the superior unit economics of mid market and enterprise merchants, including investments in new channels And upmarket merchant segments. Going into 2023, we knew these decisions would entail a fundamental shift in our weighted average sales cycle time and therefore impact near term bookings results. At the same time, we took decisive action to accelerate our timeline to adjusted EBITDA profitability and improved cash flows. We took these actions despite the resulting challenges to certain areas of near term performance Because it is critical that we invest capital in a focused, disciplined and efficient way against our most profitable market opportunities.

Speaker 3

We are adapting our tactics to a changing operating environment while staying committed to our long term market strategy. Our 2023 plan has 3 primary goals. Let me elaborate on the progress and challenges we have seen thus far on each. First, we are investing to win in the mid market and enterprise markets, while stabilizing the small business portion of our business as well. Revenue and total ARR results are largely in line with where we expected to be at the halfway point of the year.

Speaker 3

We are being more selective in sales promotions and discounts than in prior And we are investing in our quote to cash processes and systems. We see the benefits of these operating changes and investments in our results. Days sales outstanding or DSO improved by 11 days to 63 days from Q1 to Q2. And we saw our largest sequential increase in deferred revenue ever in the quarter. This operating discipline is leading to higher quality revenue and bookings, which is driving our progress towards profitability and strong cash flows.

Speaker 3

While total ARR results Are largely in line with our expectations going into the year, the mix between enterprise and non enterprise ARR has been different. Non enterprise account ARR has exceeded our expectations, growing 6% year over year in Q2. We indicated on our February earnings call that we expected non enterprise ARR to contract in the mid to high single digits. We now expect non enterprise account ARR to grow in the low single digits on a full year basis. This is strong progress.

Speaker 3

Enterprise ARR growth fell short of our expectations in Q2. Sales pipelines continue to grow at a rate similar to what we discussed in Q1 and win rates remain strong. Non enterprise account ARR is tracking ahead of our And enterprise account ARR is tracking lighter than our expectations. As Brent mentioned, sales cycle times remain considerably elevated compared to prior years with enterprise merchants, while mid market sales cycle times are largely in line with prior years. We also saw an And the number of merchants looking to reduce platform spending where order volumes have been impacted by market conditions and this led to a higher volume of pricing adjustments existing merchants than we expected in Q2.

Speaker 3

We expect these macroeconomic trends to continue in the back half of the year. We now estimate enterprise account ARR growth to finish the year in the low teens year over year. Merchant retention rates remain strong, Our sales pipeline and performance remain healthy and we're encouraged by growing market recognition of the strength of our products. We are confident that these results will improve and we will also provide the accountability necessary to ensure that we see improvements in associated sales and marketing spending efficiency as well. 2nd, we remain confident in our ability to deliver positive adjusted EBITDA for the full quarter and Q4 of this year.

Speaker 3

Q2 sales and marketing, R and D and G and A expenses were over 500 basis points lower than Q2 2022. Operating expenses are down 7% year over year. We delivered the consistent margin improvement we committed to, averaging nearly 400 basis points of operating margin improvement over each of the last four quarters. 3rd, We are taking steps to prioritize cash flow improvements to drive healthy consistent cash flow generation. As we mentioned on the Q1 call, We have focused on driving cash flow improvements through prioritizing advanced billing on new subscriptions, investing in our quote to cash systems and processes and maintaining tight discipline around accounts receivable and collections and largely completing planned retail pricing changes to existing customers in June.

Speaker 3

Our results are beginning to show the effects of these actions, including improving accounts receivable and DSO, healthy growth in deferred revenue and positive free cash flow. Overall, I believe our results at the halfway point reflect cause for optimism in a number of areas. Margin, Cash flow and deferred revenue improvements are notable and encouraging. Non enterprise account performance has exceeded our expectations And revenue and operating loss results have exceeded guidance. Enterprise ARR growth must improve.

Speaker 3

And as Brent said, we are taking actions to deliver better sales and marketing I'll now share an updated view on our outlook and guidance for the Q3 and full year 2023. For the Q3, we expect total revenue in the range of $76,300,000 to $79,300,000 implying a year over year growth rate of 5% to 10%. Note that we expect subscription revenue to grow in the high single to low double digits and for PSR to grow in the low single digits. For the full year 2023, we expect total revenue between $304,000,000 to $310,000,000 translating to a year over year growth rate of approximately 9% to 11%. For Q3, our non GAAP operating loss is expected to be between $1,000,000 $5,000,000 which reflects a slight increase in planned sales and marketing spending in Q3.

Speaker 3

For the full year, we expect a non GAAP operating loss between $10,200,000 $15,200,000 Note that at the midpoint, we are holding our full year revenue outlook in line with prior guidance, while also reflecting our positive momentum and an improved operating loss outlook for the full year. I'd now like to share my focus areas and priorities as CFO. First, we must focus on our core business and manage capital consistent with our core growth levers. Directing capital in a highly disciplined way and in alignment with these core priorities requires difficult trade offs and decisions, and I consider this one of my fundamental responsibilities. 2nd, spending efficiency and operating execution are critical to driving long term profitable growth.

Speaker 3

While we are making great progress, With the long term interest of both our shareholders and debt holders has long been a focus of our leadership team and this practice will continue to be core to what we do and how we operate. This means tightly managing our cash flow, debt, stock based compensation and net dilution. In summary, I'd like to thank BigCommerce's employees and partners for their tireless work to support our merchants and grow this business. This is an incredible company full of dedicated carrying teammates. I'm honored to be a part of this team and serve as the new CFO.

Speaker 3

With that, Brent and I are happy to take any of your questions. Operator?

Operator

We will now begin the question and answer session. The The first question is from Gabriela Borges of Goldman Sachs. Please go ahead. Hi.

Speaker 4

This is Callie Valente on for Gabriela. First question for me is on the international market. You entered a lot of new markets there. Can you talk about what you're where you're seeing the most Traction within EMEA? And then just kind of what you're seeing in terms of overall customer demand in Europe?

Speaker 2

Yes. We're in EMEA, U. K. Remains our powerhouse and original market and It's definitely the engine of growth. On the continent, we continue to see very good traction Really across the board, Italy is a particularly strong market for us.

Speaker 2

Benelux and Nordics have been healthy for us. The Spain Portugal region is really starting to pick up nicely based on investments last year and we continue to put good wins on the board In France, in the German speaking region, the newer countries we expanded into in Eastern Europe and the Middle East reflect Markets where we were already getting strong organic traction even before we had marketing websites and we're delighted to see that continuing.

Speaker 4

Okay. Thank you. And then second one for me is kind of on the back of the pricing increase that went into effect on June 1, How is the initial response then? Are you seeing more customers moving to annual payments? And has there been any impact on churn?

Speaker 3

Yes. I would say thanks for the question. Churn impact has been very negligible thus far, which has been encouraging. We need to see how those results shake out over the next 2 to 3 months, obviously. But I'd say so far, again, it's been very encouraging.

Speaker 3

We haven't seen much of an impact. And yes, we have seen a big impact in the number of merchants that are electing to prepay. We're probably seeing Probably twice as many merchants that are electing to prepay versus where they were before. And to be clear about this, the reason we are approaching this is not from the point of view of factoring Receivables are trying to accelerate that. It's really about cohort health ultimately for us at the end of the day.

Speaker 3

That gets to what Brent had mentioned in his remarks that we've An 80% to 85% uptick in cohort retention versus where we were last year, which has been a really healthy change for us.

Speaker 4

Great. Thank you.

Operator

The next question is from Scott Berg of Needham and Company. Please go ahead.

Speaker 5

Hey, this is Rob Marley on for Scott Berg. Congratulations on the strong quarter. It looks like enterprise AR growth was around 40% for this quarter. You previously discussed anticipating growth of around 20% exiting fiscal year 'twenty three, now How visible is that goal given what you saw in the Q2? Thanks.

Speaker 2

This is Brent and I'll Start us off. We continue to believe that in a challenging global economy like the current one, 20% is in the long run an achievable growth target for us and in a healthy economy, Potentially higher. We were we saw a couple of dynamics in the second quarter That impacted our ability to achieve it. One was some major deals, especially at the enterprise side where the Sales cycles have elongated and they didn't close in quarter. A second dynamic, which I think it's probably happening across all of software.

Speaker 2

Companies are in this economy prioritizing profitability and they're looking for Ways in which to reduce their software spend. And the particular dynamic in e commerce, we had merchants who We're signing up in the go go days of 2020, 2021 and potentially anticipated higher Sales volumes and they have achieved and signed up for larger limits with us than they have Realized since then. And so some of them have come back and said, I want to restructure my contract with BigCommerce. It's not a shocker to us and that we've gone back And looked at all of our software contracts that we spend money on, reduce licenses, reduce unnecessary expenditures ourselves, that's one of the reasons why We're getting such great P and L leverage right now is eliminating unnecessary expenditures. And so both of those dynamics impact I think going forward, we're wise not to fixate on the quarterly achievement of A particular target like that, in particular because we have a dynamic and multi segment business and as Daniel discussed, We're seeing healthy over performance in the SMB side, which in some quarters can make up for something else.

Speaker 2

Anything you'd add, Daniel? No.

Speaker 3

I mean, I think all I would add to that is, just I think going into the year, we knew as we started to shift dollars more upmarket, it was Like I said in my remarks, we're going to be shifting kind of our weighted average sales cycle time. The increase in sales cycle time on larger opportunities has been kind of stubbornly longer Then where we would have liked it to be at this time of the year. But overall, I mean, we're really encouraged by the underlying trends that we see. We're very excited about Stephen starting in Particular as President, we think he's really going to be able to help accelerate our move up market into this area. We just think it's prudent based on what we're seeing in a macro climate to just be kind of in line with the trend that we're seeing there and focus What we're doing in the overall business.

Speaker 3

And again, I'd just reiterate, there's a lot of changes we've made in the practice and the way we're going about things in our business this year from Getting less aggressive on promotions, prioritizing pre billing and that's playing it out in earnings quality, revenue quality, bookings quality, That is really starting to pick up and show momentum in Q2 results. And we had said going into the year, if we had to make some trade offs here and there, Maybe marginally less growth in exchange for an outsized improvement in quality that would show up in margins and cash flow, we would do that. And I think we're seeing that in the results. But our long term view about where we think we can be from a growth basis has not changed. We think that that is going to be largely driven by growth in mid market and We've not walked away from our small business.

Speaker 3

It's a large business. It has due to the actions we've taken, it has healthy and stable economics. So there's a lot of growth vectors for us that we're quite excited about.

Speaker 5

Got it. Thanks for the response. That's very helpful. That's all for me.

Operator

The next question is from Daniel Regan of Canaccord Genuity. Please go ahead.

Speaker 6

Hey, guys. This is Dan Regan on for D. J. Hynes. Thanks for taking my question.

Speaker 6

So maybe just starting with Brent. So you guys Just hired Steve Cheung. He appears to have a really solid background to be coming To BigCommerce, drawing on his experiences from Demandware and PagerDuty, I'm wondering if you could just discuss the key initiatives Or changes you expect them to drive in the sales org? And then, how does that translate to a potential acceleration In the mid market and enterprise with your ambitions there?

Speaker 2

Yes. I'm giddy with excitement about The playbook and experience, Stephen, is uniquely able to bring into BigCommerce. The common DNA we have with Demandware is that Larry Bohn still on our Board was our Series A backer and their Series A backer Way back in the day. And Larry really points to Stephen as being instrumental As the sales leader and catalyst for Demandware right after they IPO ed in 2013 successfully Moving up market, creating real buzz interest and credibility with the world's top brands And largest enterprises and to take on and really win business against the legacy software Giants of the time. It's that playbook for building excitement in market, credibility, leveraging existing customers who Others look up to who are highly referenceable is going to be a unique addition to The depth and strength we already have in sales, marketing and customer support.

Speaker 2

So I'm anticipating Growing excitement, growing activation within our partner ecosystem and a lot Businesses who might not previously have been drawn to consider us relative to what they're using today to come take a look. And we've always had high win rates. Once we get an opportunity to compete for an opportunity, Hopefully, he'll bring in many more opportunities. And he's got a lot of experience and a lot of individual techniques that we've talked about in the sales sorry, in the I think a quarter from now after he started and has started to implement certain ones, we'll be able to say more about what specifically is changing.

Speaker 6

Excellent. Thanks for that color. And then I just have one for Daniel. First, I wanted to say congrats. Our team has always been impressed by your work.

Speaker 6

It's great to see you in the seat. I was just wondering if you could help us quantify the full effect of pricing changes Across ARR metrics in Q2? And then also, what's the right way to think about growth in a few in several quarters when we eventually lap Those pricing changes? Thanks, guys.

Speaker 3

That's a great question. Thanks for the compliment, by the way, too. In terms of the total impact, if you look at the Non enterprise ARR growth rate sequentially was around $7,000,000 I believe, and quite a bit of that was driven from the pricing action. And roughly maybe $3,000,000 to $4,000,000 of cash incremental cash flow as well due to merchants within our base that chose to prepay. I think what's interesting about the way we approach that portion of our business going forward is that part of what Made it maybe slightly more difficult for us to put incremental investment into that business was just making sure that we had the cohort health and the underlying economics In a place where it made sense from kind of a highest and best use of the next investable dollar to put into that business.

Speaker 3

And I think over time, we will be able to start putting more investment in that area. I think the priority for us in differentiation is still going to be Mid market and enterprise, but we are really confident in the quality of the product that we have in small business. It's not geared to go for every single proportion of the small business I mean, we're an open platform. We're focused on merchants that are looking for that kind of best of breed functionality with Ease of expansion, omnichannel interest and things like that. So I think over time, it gives us some opportunities to do so.

Speaker 3

I think over the course of the next couple of quarters, I don't anticipate us adding sequentially a lot of ARR in that portion of the business, I think, just based on our spending plans for this year. We think we can stabilize that more going into planning for next year and then we think we can start to organically grow that in more of a self serve go to market way that's much more cost efficient for us. We can continue to focus our sales and marketing resources upmarket, while still having healthy and stable growth in that portion of the business well over time.

Operator

The next question is from Koji Ikeda Bank of America, please go ahead.

Speaker 7

Hi. This is George McGreehan on for Koji. Apologies if

Speaker 6

I missed this,

Speaker 7

but in regards to the reaching EBITDA profitability In June, is that is the kind of the expectation for the business to kind of remain EBITDA positive going forward?

Speaker 3

That's a great question, George. This is Daniel. I'll take that one. What we were calling out is that for the full month of June, we got above Breakeven on adjusted EBITDA, but that's not for the full quarter. We anticipate being still below 0 for Q3.

Speaker 3

Part of the reason for that is just planned hiring. We have a little bit of an increase in sales and marketing expenditures, particularly in the mid market that we've had that we Had planned and also wanted to take advantage of some opportunities. So we expect to be sequentially better in terms of EBITDA and operating loss than where we were in Q2, But not necessarily above breakeven for the full quarter. We are reiterating our commitment and confidence to get above the breakeven point for Q4. And again, I want to reiterate, Adjusted EBITDA breakeven is a starting point.

Speaker 3

When Brent and I think about how we're running this business, we're thinking about long term healthy margins with Very, very healthy free cash flow generation. Just to be very unambiguous about that, when we think about planning for this business, it's a milestone, but it is a milestone on a path to where we think this business can be from a cash flow generation basis. Important, I think, is a milestone for where we track progress this year. And I'm particularly proud of the just very consistent improvements in operating leverage that we've shown for 4 quarters in a row. I mean, we've had over 400 basis on average of operating leverage, just as we said we would in a very consistent way as we're approaching that goal in Q4.

Speaker 3

And I'm confident we can continue to do so. It's not easy. We've got to execute, but we're excited to get to that kind of starting point in Q4 and then have A healthy balanced growth profile profitably going into next year.

Speaker 7

Awesome. And if I could follow-up With another question, there's a sizable sequential step up in partners and service revenue. I guess, how should we think about drivers of this revenue going forward and maybe things to keep in mind Yes,

Speaker 3

that's a great question. The improvements in PSR were largely just due to underlying improvements in consumption. I think what we're seeing is very much in line with probably broader macro trends in terms of the volumes. But it's important to understand, as we've said before, PSR does not track perfectly with GMV growth for us. It's one factor of many.

Speaker 3

We have a lot of different economic arrangements underlying PSR, Which makes things a little difficult sometimes to project out from a year over year growth rate from 1 quarter to the next because we have slotting fee arrangements that may hit on a rev rec basis more in one quarter than another. That's true as well in Q3, for example, where we anticipate having growth rates in the low single digits, Largely for that reason, it's kind of a base period effect and more of a mix difference between some of those kind of large one time arrangements versus kind of more consumption driven stuff. But We're encouraged by what we can see. We think we can do a lot better. We're by no means where we think we can get to in terms of Overall attach rates, growth in terms of PSR, we have a number of really fantastic merchants that we signed recently, many of which we've talked about That we have not fully ramped.

Speaker 3

We're working on getting those up and running by holiday, where we think we can see a pickup in Q4 as well, which you can see is kind of implied in the guidance as well. So Not where we think we can be, but we are certainly encouraged by

Speaker 7

the progress. Awesome. Thank you. You're welcome.

Operator

The next question is from Parker Lane of Stifel. Please go ahead.

Speaker 8

Hi, this is Matthew Kickert on for Parker. Thanks for taking my questions. To start, when you look at the nonenterprises cohort, would you say logo retention or pricing adjustments are having the most pronounced impact on the momentum you're seeing there?

Speaker 3

I'd say it's a combination of the 2. So if you look at the pace of contraction that we've seen over the Quarters prior to Q2, it was slowing even as we approached Q2. You saw like in kind of the forward outlook we were giving on that. We We ended the year thinking it would contract in the mid to high single digits. Into Q1, we kind of moderated that a bit.

Speaker 3

We thought it would contract maybe in the single digits. Now we think it can be positive. And the reason for that is it's not just pricing that's driving the improvements in health that we're seeing. Even apart from pricing, we're seeing really, really healthy improvements And retention. And part of that is because we're being very disciplined about who we are really marketing I mean, we're directing our dollars in sales and marketing spend towards mid market, which has a spillover effect kind of into the upper end of small business, Maybe a little bit less in the entrepreneurial set, but established small businesses that really get a lot of value out of the product.

Speaker 3

These are stable, sticky small business merchants. And we're just we're being a lot more careful about the types of promotions that we're offering in order to bring them in. So it's a little bit of both. I mean, obviously pricing is a big impact But the underlying improvements we're seeing are baseline health, it's not just pricing.

Speaker 8

Okay. That's good to hear. And then moving back over to the enterprise category, what have been the primary contributing factors to the Longation of sales cycles there, is it kind of like a budget issue or a lack of interest in replatforming? And do you have any expectations on when that could turn back around?

Speaker 2

Well, by definition, an elongated sales cycle begins when somebody expresses interest in migrating. So the interest we believe is out there in the market. Companies are just taking longer to negotiate and commit on Large projects that are quite expensive for them. I imagine you're seeing that across many enterprise software companies in various categories.

Speaker 8

Okay. Thank you.

Operator

The next question is from Maggie Schrage of KeyBanc. Please go ahead.

Speaker 9

Hey, guys. Thanks for taking my question and congrats Daniel on the new role. I was just wondering if you guys could talk about The investments that you're making in B2B, would you say that this is primarily on like the sales team side, if there's more R and D features you guys need to build out or if that's really a marketing push? And do you see any differences in terms of LTV to CAC with any of those customers. Thanks.

Speaker 2

Yes. B2B It's growing as a driver of our overall sales, but our sales teams are Capable of serving any merchant on B2B or B2C in a sales context and indeed quite a few of our Customers are using us for both of those. And so there's not really a distinction in sales in growing B2B. The product is advancing very quickly under an incredibly talented product and engineering team that frankly isn't All that big. It's incredible just how efficient they are.

Speaker 2

I mean, if you see that buyer portal that we released at the beginning of Q2, It's really industry leading. It's one of the reasons why on G2, the world's businesses rate us by far their favorite B2B platform. They love the product. And as soon as that's out, they go to multi storefront compatibility. They go on to invoice incorporation into it.

Speaker 2

It's It's a very rapid expansion of what are already market leading capabilities. The other nice thing about the B2B industry is so much of our competition is Very much legacy software, oftentimes B2B only platforms that don't have all the incredible flexibility, functionality, user experience that we have from our B2C origins and the combo of the 2, B2B specific functionality, but all the flexibility and usability From B2C is a winner in the market.

Speaker 3

And then I'll address the question on LTV to CAC as well. We don't really see a very big difference between the LTVCAC on a traditional B2C versus B2B opportunity. B2B Volumes, they tend to have maybe a little bit fewer credit card transactions than you might see on a B2C site, which has a little bit of a flow through effect into PSR. Nothing material. I mean, we pay attention to it, but it doesn't necessarily adjust our planning.

Speaker 3

And then the acquisition costs actually are quite good in So I mean from my perspective as we think about building out plans for the future, I get equally excited about opportunities whether they're B2C, B2B or even or hybrid where honest I think we're very uniquely positioned as well.

Speaker 9

Got it. And that's super helpful. And I just wanted to touch a little bit about the investments that you're making On the enterprise side, obviously, you've called out some weakness that we're seeing kind of in those top very super large Merchants, just wondering why now? I guess, how long you're expecting the ramp with Steven now in his seat to take to kind of fuel this new engine that you guys have.

Speaker 3

Yes. This is Daniel. I'll address that one. I would say we are making significant progress compared to where we were a year ago in that upper end of the market for us. And again, Large enterprise opportunities for us today are smaller than where they will look 5 years from now, as an example, right?

Speaker 3

And it's taking a little bit longer to ramp, Still materially improved versus where we've been in past years. We knew going into the year, we would be shifting dollars from Very short sales cycle times, small business leads and pivoting them into things that can take multiple months. It's just a very different sales and marketing motion Then small business and it's different teams. They're having to ramp up spending in new channels. So I think we're very proud of the work that, that team Doing, we think Stephen's leadership is really going to be able to help pull together what we're doing across sales and marketing and customer support.

Speaker 3

And we think it's going to improve over the course of the next several quarters. But just to be clear, this is something that we're committed to long term. This isn't something where if it's a little more difficult in the back half of the year than we had Going into the year, it doesn't impact or change our strategy of moving upmarket. We think the upper end of enterprise Commerce is right for disruption and we think that our platform is the platform to do it. And it may take time to build share in that area, but this is something that we are convinced we can win what we're going to do is be very measured and we're going to be very disciplined in how we're applying capital against that because we're going to be very much operate wisely with how we're thinking about profit Cash flow.

Speaker 3

But this is an area, again, we're convinced we can win, and we're committed to do so.

Speaker 9

Appreciate the time, guys. Thanks.

Speaker 10

Welcome.

Operator

The next question is from Keith Weiss of Morgan Stanley. Please go ahead.

Speaker 11

Thanks for taking the question. This is Ryan on for Keith. I was just kind of curious in the broader scheme of things now that you've had a few quarters into your Price sales realignment, how do you feel about sales efficiency relative to expectations and kind of what incremental benefit that could provide gone from here?

Speaker 3

Yes. I would say, we as I said, going into the year, we knew that fundamentally we would see less Strong sales and marketing efficiency results than where we were last year, purely because of the change in pipeline duration, right? I mean, The amount of you're going to be spending money for multiple quarters as you're building pipeline in the upper end of enterprise. And so we knew it was going to be a difficult decision Going into the year, but we made it anyway because we're convinced it's the best long term decision for our shareholders. I mean, I would say, as I said in my remarks, we have Definite room to improve in what we're seeing in that area, but it's not specific it's not just related to rate of acquisition.

Speaker 3

I mean, I still think there's room for us To continue to improve in what we're doing in terms of expansion of existing customers, the renegotiation of contracts that Brent spoke to and from a Downgrade perspective also impacts how that metric is performing as well. So there's a number of things where we know that, that can get better over time, and something that our leaders within sales and marketing and support are also very, very focused on as well.

Speaker 11

Helpful. Thanks.

Speaker 6

And then

Speaker 11

one quick follow-up to clarify a point. When you say enterprise ARR Back to the finish the year in the low teens, is that an exit rate or

Speaker 3

just the overall year growth? The way we calculate the metric, it's essentially a spot metric As of the end of the year, so the exit and the full year number are actually the same.

Speaker 1

Helpful. Thank you.

Speaker 6

Welcome.

Operator

The next question is from Brian Peterson of Raymond James. Please go ahead.

Speaker 11

Hi, thanks for taking

Speaker 12

our question. This John on for Brian. On the mid market strength, I'm just curious if you could speak to maybe any areas that you noticed outside strength there? And also on the planned investments in that area, Can you speak to geographically where those investments will be made? And then I have a quick follow-up.

Speaker 2

In mid market, it's really across the board And volume coming in, we're seeing it in every category from B2B, which is very healthy and industrial, Apparel, consumer electronics, home and beauty, sorry, food and beverage, Health and beauty, it's really across the board in mid market. And then it's lumpier with large enterprise. But I think 2 great examples in large enterprise highlighting just what we can do there were the announced go lives for Francesca's. Francesca's, I think many people know is in most of the malls of the United States, 4.50 plus stores, And it shows just how well we can serve a very large, very complex apparel retailer with a large store footprint. And then on the industrial side, MCAN Building Supplies demonstrates on the B2B, just what a great job we can do for A leader in the UK with more than 100 locations there.

Speaker 12

Okay. Thanks. That's really helpful. And then as a quick follow-up, Daniel, I'd echo my congratulations as well. But I have a question on pricing at the lever moving forward.

Speaker 12

Given the retention dynamics you referenced, while I realize you just did a price increase, I'm curious as we move forward how we should think about pricing as a gross lever? Thank you.

Speaker 3

What I would I think about it differently, whether we're talking about our retail plans or our enterprise plans. For our retail plans, we think where their price right now from a value Perspective is very strong. Up until this pricing action, we had very minimal pricing changes for several years. And we don't take pricing changes lightly because we know they're impactful for our merchants, but we felt it was definitely warranted based on just the changes in the product and the launch everything that we've had. On the enterprise side, obviously, those prices are far more opaque because they operate off a list price.

Speaker 3

We've actually taken Pricing in different ways and pockets multiple times over the last several years within enterprise. We'll continue to do so as we move up market and also have different features Launches, so I view pricing obviously it's something that we look at closely. It is a growth lever for us, but it's probably not going to be something that we're going to Site is a separable number and how much we're expecting to get from it. It's just something we're going to manage well and carefully as we're moving up market, where we have a really strong TCO advantage. And frankly, we don't have to price super aggressively in order to have a very compelling TCO advantage as we're moving further and further at market and enterprise.

Speaker 3

We're going to strike a good balance on that. We want to obviously maximize the value of the opportunities that we get while still maintaining that advantage.

Speaker 12

Thank you very much.

Operator

The next question is from Mark Murphy of JPMorgan. Please go ahead.

Speaker 10

Hey, this is Arty on for Mark. Thanks for taking the question. Congrats on the quarter and congrats Daniel on the new role. My first question is, and I think you guys kind of answered this, but just to ask it directly. This upside you're showing with the non enterprise side, That seems to be mostly driven by actions you guys have taken in terms of pricing, go to market, etcetera.

Speaker 10

Not really kind of indicating that, that Segment is doing better in terms of demand or overall, right?

Speaker 3

I mean, what I would say is, We very deliberately shifted our sales and marketing dollars into Mid market and enterprise. And the growth that we're seeing there is due to improvements in cohort retention, because we're still continuing to get volume there, which We're excited about and pricing. I would say I do think it's encouraging. I think it's a good indication of health. But just to be clear, like we're not spending a lot of our sales and marketing resources out of pocket to drive demand there today.

Speaker 3

We're focusing those resources in mid market and enterprise.

Speaker 10

Got it. So maybe a little bit of improvement in how they're just performing on their own. And then second question, when you guys talked about these customers who are in the enterprise segment who are Kind of reforecasting their sales and having to adjust some of their spending, is this also a dynamic where it's split more toward the larger end of the enterprise versus mid market or is it spread evenly there? I know the sales cycle is a little bit different, but just specifically on the spending adjustments?

Speaker 3

I think it's spread pretty evenly. And I mean, I think, lots of companies like us in tech have talked about the way this is playing out, whether it's Businesses that operate on seat licenses where they're seeing changes to the number of contracted seat licenses, orders in our case, and to be frank, I mean, we've pulled 1,000,000 out of our own spend this year from Brent and I doing exactly the same thing with our own vendors. So I think this is something that, I think it's something that It's pretty widely spread within our base. Not unexpected. I think the part that was a little bit just different was the degree of it that we saw in Q2.

Speaker 3

And we're reflecting that To be more conservative as we think about the back half outlook as well.

Speaker 10

Perfect. Thanks for the insight.

Speaker 3

You're welcome.

Operator

The next question is from Ken Wong of Oppenheimer. Please go ahead.

Speaker 13

Great, fantastic. I wanted to maybe dig in on the exit run rate. So at low teens, I guess, it's arguably flat To a downward trajectory? I guess I just wanted to kind of check-in with you guys. Should we think of that as a floor or Is there more downward to go?

Speaker 3

I can take that one, Ken. I think it's a reasonable expectation. I think of it more of as a There's always macro conditions or things that can change that could have it turn out differently. But based on what we see right now, We feel good about that number and we think there's a lot of opportunity for us to do better than that and also really kind of accelerate out of that going into next year as well. We just think it's important to reflect that conservatively and how we're thinking about the back half of the year.

Speaker 3

And again, going into the year, we had some pretty significant changes. We're pleased with what we're seeing in the non enterprise part of the business. We think this other portion obviously can and will do better. But I think from our perspective, Going into the year, we really had 3 things we are focused on here. We wanted to maintain growth momentum as we're going up market, and we wanted to See really big improvements in profitability and cash flow.

Speaker 3

I think we've done that. I think that's definitely on track. But to be clear, as Brent and I are thinking about this, This is about profitable growth and I want to make sure to articulate that. We're very much thinking about where we can make concentrated investments To really power the growth rates and trajectory of the business, but we're going to do it in a way that's very disciplined and focused on maintaining a balance between growth and But I don't want to give the impression that we're kind of over correcting one way or the other. We knew going into the year striking a balance was going to be important.

Speaker 3

We think so far we've done a pretty good job of that, but we're not satisfied. We know there's a lot of areas where we think we can improve.

Speaker 13

Got it. And then Maybe a second, just in terms of the reduction in platform spend, I mean, should we view that as largely mechanical? So Obviously, as volumes come down, sales transactions come down, they'll probably reach out to price down? Or are there any deliberate Actions like you hear a lot in with the cloud vendors, customers optimizing their workloads and whatnot. Are there any Deliberate things that a customer might be doing to try to drive down that spend that we should be thinking about?

Speaker 3

It's both, but it's very similar dynamics for us way you described, you're hearing from other places, Ken. I mean, we're seeing obviously just kind of the organic changes as volumes change on a trailing 12 month basis, Up or down for us, and we're also seeing more of where folks are making some deliberate cost saving actions and calling in to talk through those things with us. Again, very similar to what we're doing ourselves.

Speaker 13

Got it. And then maybe last, just kind of just more of a detail on that kind of trailing volumes. Would you say we're on the front end of that or kind of emerging? Because obviously last year was just a bad year for everyone. So Are we just kind of now seeing the catch up or we're in the front end of it?

Speaker 3

No, that's a great question, Ken. I think the Change that we observed in Q2 was more related to the deliberate actions from merchants reaching out to renegotiate. It was not an acceleration of some sort of Downward macro related order volume trend. I think what's gone on there has been very much in line with what we expected going into the year and is not Some sort of underlying erosion. It's really more of kind of deliberate renegotiations on behalf of our merchants.

Speaker 13

Got it. Okay, fantastic. Thanks for the color, guys.

Speaker 3

Welcome.

Operator

This concludes our question and answer session. I would like to turn the conference over to Brent Bohn for closing remarks.

Speaker 2

Yes. I just want to sort of finish by saying, thanks to everybody who has joined us on this Transformation of the company from a growth centric one to now one that is balancing Growth and strong move towards profitability. Q2 was a very significant step forward for us with our first Full quarter of extremely high free cash flow. We're reiterating our confidence in achieving our 1st full quarter in Q4 of adjusted EBITDA profitability and we very much look forward to the years ahead where you'll see ever expanding profitability And solid growth from us. So thanks again and look forward to talking again a quarter from now.

Operator

The conference has now concluded. Thank you for attending today's presentation. You may now

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Earnings Conference Call
BigCommerce Q2 2023
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