BigCommerce Q1 2025 Earnings Report

BigCommerce EPS Results

• Actual EPS: $0.07
• Consensus EPS: $0.06
• Beat/Miss: Beat by +$0.01
• One Year Ago EPS: $0.07

BigCommerce Revenue Results

• Actual Revenue: $82.37 million
• Expected Revenue: $82.48 million
• Beat/Miss: Missed by -$112.00 thousand
• YoY Revenue Growth: +2.50%

BigCommerce Announcement Details

• Quarter: Q1 2025
• Date: 5/8/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, May 8, 2025
• Conference Call Time: 8:00AM ET

BigCommerce (NASDAQ:BIGC) operates a software-as-a-service platform for enterprises, small businesses, and mid-markets in the United States, North and South America, Europe, the Middle East, Africa, and the AsiaPacific. The company provides a platform for launching and scaling an ecommerce operation, including store design, catalog management, hosting, checkout, order management, reporting, and pre-integration into third-party services. It serves stores in various sizes, product categories, and purchase types, such as business-to-business and business-to-consumer. The company was founded in 2009 and is headquartered in Austin, Texas.

BigCommerce Q1 2025 Earnings Call Transcript

Key Takeaways

• Solid Q1 financial results: ARR reached $351 M (+3% YoY), revenue hit $82.4 M (+3% YoY) and non-GAAP operating income was $7.6 M, improving margins by 530 basis points.
• Wider full-year guidance: FY 2025 revenue outlook was broadened to $350.1–351.1 M with non-GAAP operating income of $16–28 M, reflecting potential downside from macroeconomic and tariff risks.
• Go-to-market transformation: After a ~10% headcount reduction in Q4, the company has substantially doubled quota-carrying sales capacity, driving a strong uptick in B2B pipeline.
• Product and AI initiatives: Self-serve versions of Feedonomics and MakeSwift are in development, an integrated payments offering is on track for early 2026, and AI tools are enhancing data feed management, sales and support.
• Macroeconomic uncertainty: Management is monitoring global tariffs and supply-chain pressures, which could affect partner and services revenue (25% of total) and new-customer conversion rates.

Presentation

[Operator]

Ladies and gentlemen, thank you for standing by, and welcome to the BigCommerce First Quarter twenty twenty five 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 speaker today, Tyler Duncan, Vice President, Finance and Investor Relations. You may begin.

[Tyler Duncan, VP - Finance & Investor Relations at Bigcommerce]

Good morning, and welcome to BigCommerce's first quarter twenty twenty five earnings call. We will be discussing the results announced in our press release issued before today's market open. With me are BigCommerce's Chief Executive Officer, Travis Hess and Chief Financial Officer, Daniel Lentz. Today's call will contain certain forward looking statements, which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward looking statements include statements concerning financial and business trends, as well as our expected future business and financial performance, financial condition, and our guidance for both the second quarter of twenty twenty five and the full year 2025.

[Tyler Duncan, VP - Finance & Investor Relations at Bigcommerce]

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 with the Securities and Exchange Commission. During the call, we will also discuss certain non GAAP financial measures, which are not prepared in accordance with generally accepted accounting principles.

[Tyler Duncan, VP - Finance & Investor Relations at Bigcommerce]

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

[Travis Hess, CEO at Bigcommerce]

Thanks, Tyler. Good morning, everyone, and thank you for joining us today. I'll open my remarks today by providing an update on our first quarter results, then I'll finish by outlining our progress against the key initiatives driving our operational transformation in 2025. For those of you new to our business, we offer three core owned products in our portfolio today, our flagship commerce platform, BigCommerce our AI based product data feed management platform Feedonomics and our brand and commerce site builder and visual editor MakeSwift. Our 2025 transformation plans touch each of those core products.

[Travis Hess, CEO at Bigcommerce]

As I outlined last quarter, I've set three strategic priorities for the business in 2025. Number one, accelerating revenue growth profitably. Number two, disciplined and focused operational execution. Number three, execution of our go to market transformation plan. I'm pleased to report that Q1 reflects a solid start.

[Travis Hess, CEO at Bigcommerce]

Let's start with the numbers. In Q1, we delivered non GAAP operating income of $7,600,000 a five thirty basis point margin improvement year over year. Annual revenue run rate or ARR reached $351,000,000 a year over year improvement of 3%. Revenue reached $82,400,000 growing 3% year over year and operating cash flow came in at approximately $400,000 an improvement of nearly $4,000,000 year over year. We delivered revenue within our previously reported guidance range and profitability well above the high side of our range.

[Travis Hess, CEO at Bigcommerce]

Even still, these growth rates do not reflect the potential of this business and accelerating growth is our top priority. We see encouraging signs of progress behind our go to market transformation efforts. We reduced headcount by approximately 10% in Q4 and we reinvested savings to roughly double our quota carrying sales capacity, which is now substantially complete. We saw a strong increase in pipeline across Q1 behind this effort, B2B in particular. To be clear, we still expect 2025 to be challenging, but the opportunity that lies ahead of us is tremendous.

[Travis Hess, CEO at Bigcommerce]

We are continuing to act quickly and boldly to transform the company. This type of change is not easy. Current macroeconomic uncertainty adds complexity, which Daniel will discuss in more detail shortly. Regardless, we are focused on what we can control and I see solid leading indicators that the decisive actions we have taken are progressing us as planned. I want to provide an update on four key areas of focus.

[Travis Hess, CEO at Bigcommerce]

One, recruiting top leaders with SaaS and commerce experience. Two, investing in our core offerings in B2C and B2B. Three, creating new revenue growth opportunities through key initiatives we introduced at our recent Investor Day. And lastly four, driving value to our customers and shareholders through AI. I'll start with recent leadership changes that strengthen our focus on product and innovation.

[Travis Hess, CEO at Bigcommerce]

Following the departure of our former CTO, Marcus Groff, our Senior Vice President of Engineering has assumed full leadership of our engineering organization. Marcus joined BigCommerce in January and brings a wealth of experience from Amazon, Salesforce Commerce Cloud and Demandware. In addition, we recently welcomed Dipol Shah as our new Chief Product Officer. Vipol joined us in April and brings an extensive background of driving product strategy and innovation with prior leadership roles at Google, JPMorgan and PayPal among others. We're excited to have both Marcus and Vippel in these critical roles, both of which now report directly to me.

[Travis Hess, CEO at Bigcommerce]

I'm confident they will further elevate our product and engineering capabilities. Our senior leadership team is now in place and I believe we have the exact right team of experienced commerce and SaaS professionals to lead our organization forward. Second, we are continuing to invest in both B2B and B2C. B2B continues to grow as a percentage of our overall business underscoring our leadership in digital commerce for manufacturers, distributors and wholesalers. We welcomed onto our platform industry leaders such as Super Feet and Van de Velde packaging while also celebrating standout launches from Sealy Tools and ISG Enterprises.

[Travis Hess, CEO at Bigcommerce]

We also delivered new capabilities tailored to complex B2B needs. In Q1, we released two major enhancements, multi company hierarchy support and an upgraded configured price quote tool. These features help large enterprises manage complex organizational structures and quoting workflows more efficiently. For example, our new configure price quote system reduces the steps required to respond to a quote request by up to 75%. This is creating efficiencies by freeing up time for teams to focus on driving revenue.

[Travis Hess, CEO at Bigcommerce]

In B2C we're driving focus and discipline on our core target customers including our strategic focus on businesses outside the traditional fashion, beauty and apparel verticals traditionally prioritized by legacy platforms. Our momentum is particularly strong with brands and underserved operationally complex categories such as direct selling, regulated industries, home decor and others. These complex use cases will remain a strategic priority for our business. We proudly celebrated the successful launch of Euro Optic, a leading online retailer specializing in high quality sporting optics, ensuring compliance with strict regulatory requirements. We also launched Kittery Trading Post, a prominent retailer dedicated to outdoor activities, hunting and adventure gear.

[Travis Hess, CEO at Bigcommerce]

UK based fashion brand ECO, known for its trendy women's footwear, clothing and accessories also faced unique challenges with its legacy platform. They have now successfully launched several international storefronts on a composable architecture with BigCommerce. Additionally, we welcome exciting new brands such as Kong, a trusted pet brand known for its durable toys and treats. Third, we are on track to deliver the initiatives we announced at our recent Investor Day. We have a big opportunity to drive growth by more cost effectively cross selling Feedonomics to the tens of thousands of customers on the BigCommerce platform.

[Travis Hess, CEO at Bigcommerce]

This initiative is in beta stage with select customers now and a broader rollout with new paid features will be available to existing customers ahead of the holiday season. We are building a self serve version of MakeSwift into the BigCommerce platform with key product milestones and paid features expected late this year or early next This will deliver a step change improvement in storefront design capabilities to our customer base and create new upsell opportunities behind paid features as well. As part of our bundling strategy, we announced our intention to partner with one of the leading providers of platform performance and error monitoring, Nobu, to help customers maximize conversion and revenue with availability in the second half of this year. Several additional bundle offerings are currently in development. These product bundles aim to simplify the commercial requirements of customers adoption of best in breed commerce architectures.

[Travis Hess, CEO at Bigcommerce]

This will build stronger relationships with our partners while creating new revenue opportunities with our customers. Our new BigCommerce payments offering remains on track for an early twenty twenty six launch, which will be an optional payments offering for small and medium sized customers looking for a streamlined, integrated offering with strong payments processing rates. This offering aims to improve our overall monetization and retention rates in the business. Finally, AI remains a key area of focus. We are leveraging AI to deliver major improvements to sales and support efficiency.

[Travis Hess, CEO at Bigcommerce]

We have also built internal tools to design tailored architectural recommendations to customers. We've also automated developer docs and onboarding operational tasks while partnerships with OpenAI, Gemini and Forethought drive agility and innovation. Feedonomics continues to lead embedding AI into workflows to improve data matching and channel performance. More AI driven enhancements are coming across CX, partner integrations and merchant enablement. For our customers leveraging AI advancements in commerce isn't just about having product and inventory data, it's about having that data optimized for the right medium and use cases.

[Travis Hess, CEO at Bigcommerce]

This is Feedonomics' sweet spot powering product data syndication for over 30% of the Internet Retailer 1,000. As tools like OpenAI and Perplexity drive the next wave of agentic shopping, we're making sure our customers are in a position to lead while driving frictionless customer experiences. We're actively partnering with the platform shaping this space, so our customers' products are not only easy to find, but easy to buy. Looking ahead, we remain focused on creating measurable value for our customers and our shareholders. The changes we've made are working and we believe they set the foundation for renewed growth in the quarters to come.

[Travis Hess, CEO at Bigcommerce]

We're encouraged by our progress, but we know we still have work to do. As we said at our Investor Day, this is a crucial transformation year for the business. We have the leadership team in place to execute our plans. We're focused on customer outcomes, not just features. We're aligning everything we do to efficient revenue growth and we remain confident in our ability to accelerate performance as the year progresses.

[Travis Hess, CEO at Bigcommerce]

With that, I'll hand it over to Daniel to walk through the financials.

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

Thanks, Travis. Before we dive into my commentary on the quarter, I want to highlight a few areas that demonstrate our market position and improving financial profile. BigCommerce serves 5,825 enterprise accounts alongside tens of thousands of small business accounts. ARR is $351,000,000 as of the end of Q1 twenty twenty five, a 3% increase year over year while average revenue per enterprise account finished just over $45,000 a 9% increase year over year. Our non GAAP gross margin strengthened to 80.3%, up two forty basis points year over year and non GAAP operating income margin finished Q1 at 9.2%, up five thirty basis points from Q1 twenty twenty four and eighteen twenty basis points from Q1 twenty twenty three.

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

We closed Q1 twenty twenty five with a solid balance sheet including $121,900,000 in cash, cash equivalents and marketable securities. Our operating efficiency continues to improve with quarterly operating cash flow of approximately 400,000 up $3,800,000 from Q1 twenty twenty four and up $21,200,000 from Q1 twenty twenty three. We have reduced our net debt position to $32,200,000 a 59% decrease year over year with maturities of approximately $4,000,000 due in 2026 and $150,000,000 due in 2028. As of the end of Q1, we had approximately 78,800,000.0 common shares outstanding and 80,500,000.0 shares of fully diluted outstanding, including unvested shares of restricted stock units, options and our convertible notes as outlined in our latest Form 10 Q. We are making measurable progress on our go to market transformation.

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

Our realigned sales organization is now fully structured around our B2B, B2C and small business offerings. Hiring to double our quota carrying sales capacity is substantially complete and early signs from pipeline conversion rates are encouraging. As Travis outlined previously, we're on track for the key initiatives we discussed in our recent Investor Day, including the launch of a big commerce payment solution, launching self serve versions of Feedonomics and MakeSwift to our existing platform customers and building bundled solutions with key partners to make it easy for customers to design and deploy solutions with leading technology partners in our industry. These initiatives are key to our wallet share expansion goals and a focus area for Q2 and beyond. Before turning to guidance, I want to briefly address recent developments related to global trade and tariffs.

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

While BigCommerce is not directly involved in the manufacturing or physical movement of goods, many of our customers operate across borders and within effect supply chains. We're closely monitoring how shifting trade policies and increased tariffs may influence our customers operating environments, particularly for international sellers and brands sourcing from impacted regions. Our most direct exposure to the potential impacts of macroeconomic uncertainty and change in this area would be in partner and services revenue or PSR, which constitutes approximately 25% of our total revenues and is driven by revenue share on transaction volumes from various technology partners. Potential effects on business sentiment may affect pipeline generation and conversion rates over time as well. While we have not yet seen a material impact from increasing macroeconomic uncertainty on our performance or pipeline, we are maintaining a cautious view and partnering with our customers to provide thoughtful support and flexible solutions in this environment.

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

Let me transition to related impact on guidance. Broadly speaking, we believe the current environment increases the potential range of revenue growth results we may see in 2025. To be clear, we built plans expecting 2025 to be a challenging year as we execute transformational change. We are encouraged by results so far and we see potential upside to our previous revenue growth guidance. That said, we also believe increased macroeconomic uncertainty could have a downside impact on growth expectations as well.

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

For Q2, we expect revenue between $82,500,000 and $83,500,000 and non GAAP operating income between $2,700,000 and $3,700,000 For the full year 2025, we are widening the revenue guidance range to 3 and $35,100,000 to $351,100,000 to reflect both the underlying strength we continue to see in the business on the high end and macroeconomic uncertainties potential downside on the low end. We expect non GAAP operating income between $16,000,000 and $28,000,000 for the full year. From a profit perspective, we are managing spending carefully to account for macroeconomic risk and also to maintain optionality to reinvest in the business throughout the year to drive growth. We believe this balanced guidance adjustment reasonably represents the range of possible outcomes at this time given the dynamic economic environment. Our commitment to operational discipline remains unchanged.

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

We will continue to invest in high ROI areas that deliver durable value, specifically our sales capacity expansion, AI innovation initiatives and core product initiatives to fuel growth in the business. We have an experienced leadership team that's excited to drive growth and carefully manage our transformation amidst an uncertain environment. We will continue to provide transparent updates throughout the year as conditions change as well. In closing, we're pleased with our Q1 performance and encouraged by the early momentum in our business transformation efforts. We remain committed to delivering profitable, sustainable growth that creates lasting value for our shareholders.

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

We look forward to sharing further progress with you in the quarters ahead. With that, Travis and I are happy to take your questions. Operator?

[Operator]

We will now begin the question and answer session. To ask a question, you may press star then one on your touch tone phone. If you are using a speakerphone, please pick up your handset before pressing the key. If at any time your question has been addressed and you would like to withdraw your question, The first question today comes from Raimo Lenschow with Barclays. Please go ahead.

[Raimo Lenschow, Managing Director at Barclays]

Perfect. Thank you. Congrats from a good solid quarter here. I was really encouraged on the signs that you kind of mentioned in terms of early progress. Can you kind of discuss that a little bit more in detail in terms of what you mentioned here on the pipeline side, etcetera?

[Raimo Lenschow, Managing Director at Barclays]

And then also maybe as part of that, put it into context in terms of, obviously, you're trying to control the controllable, there's tariffs coming in there, like how do you kind of get visibility on either end then? Thank you.

[Travis Hess, CEO at Bigcommerce]

Great question. Yes, as far as encouraging signs, I mean, the most notable is obviously size of pipeline sequentially quarter over quarter and year over year. And as I highlighted in the opening remarks, we've seen that particularly within B2B, which has been consistent momentum wise and what we've seen in net new bookings over the last twelve months. So that's probably the largest indicator. Certainly, seeding of the larger leadership team, which just concluded over the last couple of weeks is also obviously an internal sign for us.

[Travis Hess, CEO at Bigcommerce]

But from a productivity perspective having folks in place and aligned and operating in seat obviously is something internally that you feel day in and day out. And then on the tariff side, I'll let Daniel add color. Certainly, it's hard. We're keeping a close eye on the macro certainly and it's hard to understand the supply chains of many of our customers. Some may presume to be more obvious than others.

[Travis Hess, CEO at Bigcommerce]

We've not seen obvious tangible signs yet where we feel comfortable pining on it, but certainly are very consciously aware that there's some exposure there given some of the macro trends.

[Raimo Lenschow, Managing Director at Barclays]

And Daniel, you think about it like how do you think about your investment levels in terms of cost etcetera as macro changes one way or the other? How flexible are you there? Thank you.

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

I would say when you look at where we are on the guidance range on non GAAP operating income for the year, we widened that a little bit compared to where we were before. I'd say there's specific reasons for that. It's because there's really opportunity that we see in the business to invest in the areas we see specifically related to AI, what that can mean for commerce in particular. We want to have dry powder available in order to capitalize on those opportunities throughout the year. And it's moving and changing really quickly in exciting ways, which I'm sure we'll get to later on in Q and A.

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

So part one is we want to make sure that we have spending available to make bets that can pay off, we think, in a big way in accelerating growth in the medium term. But on the flip side, we're also going to be very cautious about how we're spending money so that we protect margins in a reasonable way with the amount of uncertainty that we have right now in the market. And as we said in the prepared remarks, we haven't seen a lot of signs of this yet in the numbers, so to speak, in terms of what we saw up until now and either GMV or what we're seeing in terms of pipeline build, we've seen good signs there actually. But I think we'd be relatively foolish if we didn't consider that to be a downside risk at this point. So we felt it was prudent to widen our range to account for that and just on the side of transparency and authenticity with our investors throughout the year, what we see.

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

There's a lot still up in the air and we'll just have to see where it goes.

[Raimo Lenschow, Managing Director at Barclays]

Perfect. Thank you.

[Operator]

The next question comes from Ken Wong with Oppenheimer. Please go ahead.

[Ken Wong, Managing Director at Oppenheimer & Co. Inc.]

Great. Thanks for taking my question. Travis, it sounds like pipelines are holding in fine. As you engage customers this quarter, April, May, any color in terms of how those conversations, how close rates trended from kind of January through May to help us get a sense for how the exit was starting to look?

[Travis Hess, CEO at Bigcommerce]

Yes. Thanks for the question, Ken. Good one. Nothing worth calling out. One of the big trends that we've seen obviously, particularly in the B2C side, we're in much larger deals.

[Travis Hess, CEO at Bigcommerce]

So we've seen probably a half dozen or so big global deals in the mix over the last couple of months. Obviously, deals have different dynamics to them. They're typically contractually obligated to legacy partners with timeframes and things like that. So we would expect a slower sort of conversion timeframe on those larger ones. So we're seeing that in a subset of the pipeline.

[Travis Hess, CEO at Bigcommerce]

That's probably been the most notable change we've seen. But what Daniel kind of alluded to earlier, if you didn't read the press and pay attention to what was going on in the macro, there's nothing obvious in the business that jumps out where you're like, wow, there is uncertainty or any sort of perceived volatility here. Pipeline is probably better than expected, but given the investments we've made there and the strategy this year, wouldn't say that we're surprised by that. It was an expected outcome. We're pleased to see it.

[Travis Hess, CEO at Bigcommerce]

Everything else is sort of as normal, but hard to ignore some of the volatility and some of the presumed headwinds folks might have with supply chains within tariff impacted territories.

[Ken Wong, Managing Director at Oppenheimer & Co. Inc.]

Got it. Perfect. Thanks for the color. And Daniel, definitely understandable on the widening of the range, positively surprised that you guys actually raised the upper end. As we think about how to get there, is it simply a matter of status quo and you would see the upper end?

[Ken Wong, Managing Director at Oppenheimer & Co. Inc.]

Or does something need to happen to get to that upper end?

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

I would say there's some things that need to not happen and there's some things that need to happen. The things that need to not happen is a recessionary shift or inflationary pressures as a result of change in tariff policy. If that really starts to manifest itself, then I think it would be challenging for anybody that's moving goods, particularly with concentrated supply chains, particularly from China. And so, I think if that really plays itself out, that creates a headwind, that would be difficult. And we talked about this at our Investor Day, we expected the year to be challenging.

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

We did not bake in some sort of macroeconomic tailwind into our assumptions when we built our financial plans for the year. So we just needed to not become a headwind. To get to the high end of the range, I'd say it's two things. One, we need to continue to see building pipeline behind the investments that we've made in sales and marketing. Number two, we want to see some really good returns on some step ups that we plan on increasing on marketing spend, particularly in Q2 and Q3 behind some of the branding work that we're doing.

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

And number three, we need to see those play out in good conversion rates and what we're doing particularly in the area of B2B. So, look, as we thought about the guidance and the range, it's not all downside. I mean, I think it's wise and prudent to account for that because that's frankly out of our control. But largely speaking, when we look at where we are versus our internal plans, it's we're kind of where we expected to be at this point. We thought this was going to be a challenging year.

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

We have a lot of change that we're metabolizing that we're excited about. But so far so good, but there's just a lot of uncertainty that I would say has even escalated since the Investor Day due to factors outside of our control. We want to be transparent and prudent and account for that in our guidance range.

[Ken Wong, Managing Director at Oppenheimer & Co. Inc.]

Great. Thank you, Dan.

[Operator]

Next question comes from Koji Ikeda with Bank of America. Please go ahead.

[Koji Ikeda, Director - Enterprise Software Equity Research at Bank of America]

Yeah. Hey, good morning. Thanks so much for taking the questions. I wanted to ask a question on payments. And so really great to hear the payments the payment strategy is on track here for a 2026 launch.

[Koji Ikeda, Director - Enterprise Software Equity Research at Bank of America]

But I also saw, you know, a press release earlier from you guys about Klarna being becoming a a global preferred payments partner. And so the question here is, how do you think about your guys' plan for pushing payment options in 2025 to your customers and partners knowing that a new payment offering is coming next year?

[Travis Hess, CEO at Bigcommerce]

Yes. No, great question. Listen, I think directionally we want to provide optionality to customers. We've been pretty open about this in the technical approach and strategic approach. We want to be able to bring best in class capabilities to customers across all three of our core offerings.

[Travis Hess, CEO at Bigcommerce]

That being said, Klarna, obviously a long standing buy now pay later partner with us. They've moved to a preferred partner status. And we know statistically, big commerce customers that use buy now pay later have higher conversion rates. That's certainly goodness that we're going to evangelize out to our customer base where that makes sense. On the BC payment side, the thesis there is we believe that there is a large subset of customers that would benefit from an APC payment option.

[Travis Hess, CEO at Bigcommerce]

We've talked timeframe on that. Really now it's targeted really early next year for optimized customer experience, something that's easy and also lucrative for our customers that will be optional. Certainly, won't force them into that. That could garner them a better experience and better rates. So I view them to be complementary to one another, not competitive in nature.

[Travis Hess, CEO at Bigcommerce]

And as we see other financial vehicles that would benefit our installed base, certainly we will continue to roll that out in short order as well.

[Koji Ikeda, Director - Enterprise Software Equity Research at Bank of America]

Got it. Thank you, Travis. And maybe a follow-up here for you or Daniel. I appreciate all the color in the prepared remarks about guidance and PSR in the current macro. I was also wondering on how you guys are planning to treat potential SPEAR downgrades this year, just knowing that GMV is a component of subscription tiers.

[Koji Ikeda, Director - Enterprise Software Equity Research at Bank of America]

And so how do you think about it if GMV is not, you know, reaching those certain threshold thresholds and downgrades could potentially happen with your clients?

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

I think we need to see again how it plays out in the macro. For folks on the call that may be new to us or unfamiliar with how we handle pricing, a little bit of background may be helpful here because it's different than how other folks in our space do this. What's sometimes common among some of our larger competitors is their pricing is basis points on GMV. And there's advantages to that model, there's downsides to that model. It tends to make pricing more elastic to short term sudden changes in volumes, consumer volumes in particular.

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

We saw this in the pandemic. Hope it does not happen to the economy now, but that is not how we do pricing. The way that we do pricing is based on order volume and it's sold in blocks and calculated on a trailing twelve month basis. So when there are sudden changes in order volumes, to your point, we could see downgrade pressure on pricing, but it's more moderated in how it hits us and how fast it hits us. Now that's good for us as a company because it makes our revenue line item, I would argue, perhaps a little bit more durable and less prone to sudden shocks and swings, but also makes pricing more predictable for our customers because they don't see month to month changes in their pricing.

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

If we do see recessionary pressures that are sustained, then over time that could definitely contribute to downgrade pressure. We have factored that into our guidance and how we thought about the range. At this point, I think we're in a wait and see mode. We said very deliberately in the prepared we think that range reflects what we see right now. But we need to see how this plays out.

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

I knew how to predict what was going to happen in this area of the macro economy, there's a lot of other ways that I could be trading options and make money different from what I do today.

[Koji Ikeda, Director - Enterprise Software Equity Research at Bank of America]

Got it. Thank you.

[Operator]

The next question comes from David Hynes with Canaccord. Please go ahead.

[David Hynes Jr., Managing Director, Software Lead Analyst at Canaccord Genuity - Global Capital Markets]

Hey, guys. Travis, congrats on making quite a bit of headway on the Salesforce growth. Nice to see the investments largely complete there. I'd be curious to get some commentary on kind of the profile and experience of the reps that you've added. And how long do you think it will take to tell if the new reps you've onboarded are a good fit for BigCommerce?

[Travis Hess, CEO at Bigcommerce]

Yes. We've got that's a great question, David. Listen, the profile of reps obviously varies based on the line of business and the market. Clearly, I've been pretty public in hedging towards more experienced folks. Having come out of commerce myself in twenty years. I think the market is such that, yes, there are aspects of it that are commoditized around features and functions. It's now very business outcome oriented. And I think experience is an added advantage as we kind of navigate the proliferation of channels and the inventory orchestration and distribution in the back office and lots of really interesting things that are happening with AI in particular. So that's been on the enterprise side.

[Travis Hess, CEO at Bigcommerce]

There's a lot of the good news is there's lot of talent on the street. So a lot of experienced folks been in space for a long time. There's been a couple of trip ups with some of our competitors. So that's fortuitously made some other folks available that aligned to our value proposition. That's been the model there.

[Travis Hess, CEO at Bigcommerce]

We've also been intentional about bringing on younger talent too, particularly in our mid market ranks as well. We feel like there's a really interesting opportunity to incubate younger talent and scale in more efficient ways combined with a lot of stuff we've been doing with AI around enablement and training. It's enabled us to onboard folks faster and more effectively than we probably would have had in the past. As far as the onboarding, again, would expect an experienced rep to onboard and hit Stride faster than maybe a less experienced rep. Daniel has quite credibly built all of this into kind of the model as we've staggered folks.

[Travis Hess, CEO at Bigcommerce]

But generally speaking, we look at roughly a six month tops onboarding for folks to be kind of in market in their accounts. Spends on the role certainly in the market. But I think generally speaking that's been the approach on the new business front, if that's helpful.

[David Hynes Jr., Managing Director, Software Lead Analyst at Canaccord Genuity - Global Capital Markets]

Yes, no it is. Thank you. And then Daniel, maybe one for you. Look, I understand kind of the optimism, the progress with some of changes that you guys have implemented. But I look at the number of enterprise accounts and it's declined again more significantly in Q1.

[David Hynes Jr., Managing Director, Software Lead Analyst at Canaccord Genuity - Global Capital Markets]

It's five straight quarters of kind of sequential declines. For us to see a reacceleration revenue growth, do we need to see the number of enterprise accounts growing on a sequential basis before that happens?

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

I would say it's mixed story on that. Let me describe what I mean by that. We have had five quarters of very slight but sequential decline in the number of enterprise accounts. You will never hear Travis or I say we are okay with that. So let's just start with that.

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

We're not okay with that. On the flip side, we've also had six consecutive quarters of accelerating growth in average revenue per account. And our focus is very much on the dollarized aspect of growth more so than the unit count. As we said before, we want to see both. We expected the front half of the year in particular to be challenging.

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

You're bringing on a bunch of new reps. You're asking them to work territories differently than we have in the past. We've got a significantly different marketing team in terms of size, remit, leadership group. We expected the front half to be challenging. So, I'm not surprised at all on where that landed.

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

And certainly, the economic noise doesn't help. It doesn't make it any easier. But in order to accelerate growth the way that we want, yes, that number needs to increase. We need to see unit numbers increasing. But I don't think it needs to increase quite as much as you may think.

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

Again, if you get back to the fact we've got six consecutive quarters of accelerating average revenue per account and we don't even have in market yet all the initiatives that we are working on intended to grow wallet share and net revenue retention with our existing accounts. We are working on a self serve version of Feedonomics that can go to our base where they get some of the benefits of Feedonomics on a free version with the paywall features behind it. Same thing for MakeSwift, a big commerce payment solution, working on bundles. Mean, there are so many things that we are looking at that I think can provide a tailwind to the dollarized number that I don't think unit count has to increase as much as people think, but I will never be satisfied until both are growing.

[David Hynes Jr., Managing Director, Software Lead Analyst at Canaccord Genuity - Global Capital Markets]

Yeah. Perfect. Thank you guys.

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

You bet.

[Operator]

The next question comes from Parker Lane with Stifel. Please go ahead.

[Parker Lane, Director at Stifel Financial Corp]

Yes. Hi, guys. Good morning and thanks for taking the question. Daniel, looking at quarter over quarter year over year gross margins, pretty solid improvement there. I know you've been making a lot of changes in the types of customers you're targeting, the different solutions you're selling and internal structure of this business.

[Parker Lane, Director at Stifel Financial Corp]

Just wondering if this is kind of a new low watermark, how we should think about the rest of the year from a gross margin standpoint? Because looking at 2Q operating income guidance, just trying to understand how much of the improvement year over year is going to come from gross margin gains versus some OpEx leverage.

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

Gross margins are definitely healthy. I'm pleased with where they are. It's important to call out. We also have some expenses that we used to classify in cost of revenue that we needed to move into sales and marketing starting this quarter. That's not why margins by themselves are improving, but we called that out in our queue.

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

That just has to do with some sales enablement stuff and some stuff that we felt we needed to move around. But overall, like we're seeing good results in what we're spending in hosting. We're seeing strong results in what we're spending in support. I think that the improvements in gross margin are sustainable throughout the year. If I look at where we would see growth in operating margins overall, I think more so that will be driven by revenue growth acceleration and continued discipline on what we're doing in operating expenses.

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

We are expecting and the guidance reflects that we're going to see a step up in OpEx in Q2. We do our annual merit like salary and merit increase in Q1. So you see the effect of that in Q2, which is why there's a sequential step up in OpEx for us in Q2 every year. But we also have planned investments in go to market, particularly in marketing that are stepping up in Q2 and Q3 as well. So I'm really encouraged by what we're doing.

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

I think structurally we're in a good place. We we need to get to the revenue targets and manage through an uncertain macro, but I feel good about where we are overall.

[Parker Lane, Director at Stifel Financial Corp]

Understood. Appreciate that feedback. And then on on partner and services, you know, you mentioned that would be an area that you see any potential cracks in the macro more quickly than in subscription. Just looking at this particular quarter Q1, was that just normal seasonality in line with your expectations? Or was there anything that was influencing that number quarter over quarter, whether it be partner specific partner agreements, etcetera, that would drive that performance?

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

I would say what we saw in Q1 was pretty normal. I think where the noise started kicking in more was after the announcements on all of the different specific changes in tariff rates. We saw it kind of little noisy during that week on a day to day basis. Some days were up quite a bit compared to year over year. There are other days that were down.

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

It kind of settled back into what I would consider normal after the noise of that first week, but it's only been a few weeks and that's a lot of choppiness to manage, which is why I think we're just being cautious about how we're thinking about this for the rest of the year. So far so good, but we need to see how people adjust supply chains, does this end up inflationary, you know, we'll see.

[Parker Lane, Director at Stifel Financial Corp]

Alrighty. Appreciate it. Thanks, guys.

[Operator]

The next question comes from Maddie Scratch with KeyBanc Capital Markets. Please go ahead.

[Maddie Schrage, Vice President at KeyBanc Capital Markets]

Hey, guys. Thank you for taking my question. Daniel, you kind of touched on this a little bit earlier, but I'm wondering if you guys could talk about the progress that you've made on your freemium offerings with MakeSwitch and Feedonomics and maybe how far away you are from launching those? And then my second question is about gross margin upside. Obviously, you'd kind of just touched on moving some of those expenses into sales and marketing, and I'm wondering if that changes kind of your 80% target that you guys have previously set for where you think gross margin should shake out? Thanks.

[Travis Hess, CEO at Bigcommerce]

Thanks for the question, Maddie. I'll handle the first one and turn it over to Daniel. On the Fido Feedonomics and MakeSwift front, progress has been great. We're in beta right now with self serve Feedonomics with a small subset of customers. I would expect to see that out in the wild here sooner rather than later.

[Travis Hess, CEO at Bigcommerce]

And lots of other AI enhancements coming there as well across that broader product suite and partnerships. We've been actively engaged with around OpenAI and Perplexity, Microsoft, Google and others as we continue to enhance and surface both catalog data and inventory data for clients. The MakeSwift MakeSwift self-service is a bit farther down the road. We've, I think, announced late this year, early next year, which we feel really good about. That's progressing as intended and we'll continue to keep obviously everybody updated as we progress quarter over quarter.

[Travis Hess, CEO at Bigcommerce]

But both those are on track as expected, since the beginning of the year. And Daniel, I'll turn it to you for the other.

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

Yes. From a margin basis, Matti, we factored this into our discussions on margins when we were at our Investor Day. I think that we can sustain high 70s, low 80s. I think 80 is a good kind of long term point. We've got some efficiencies that we still think we can get in cost of revenue.

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

As we introduce payments, depending on the attach rate of that, that would be slightly dilutive to gross margins depending on the mix. But still obviously a really good result from an earnings per share basis and overall profitability. So, you've just got some different things moving in a couple of different directions, but I do think that that is still very much consistent with what we said at our Investor Day and what we think we can sustain. We'll just again, the only thing is we'll just see how if payments is as successful as we think it can be. There may be a little bit of dilution that comes on the gross margin side, but we are not going to end up with a P and L that looks like FinTech or some of our competitors that have a lot more revenue from that type of area.

[Maddie Schrage, Vice President at KeyBanc Capital Markets]

Great. And then just one quick follow-up. You guys kind of touched on what it would take to get to the high end of guidance. And I'm just curious what you've baked into the low end. I'm guessing from a macro perspective, how bad do things have to get to get to the low end?

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

We would need to see increases in churn rates in particular beyond what we are seeing right now in order to get there. Our plans bake in assumptions that we are going to make improvements in gross retention even as we are making efforts to expand wallet share. Again, if you go back to what I said about our pricing model, you'd have to see not just a downturn, but a fairly sustained one in order for that to really play itself out in downgrades and what we see in subscription revenue. If we see a sharp macroeconomic downturn, I think there's two areas that we would see it, obviously PSR being the first. The second would actually be in conversion rates on new deals and new opportunity.

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

If that bleeds over into business sentiment and their willingness to pursue either business with feed enomics or the BigCommerce platform product, then it would affect more of the growth side with new customers. And again, we haven't seen that to this point. So I don't want to overemphasize the downside because again, we haven't seen it at this point. But I just think it's wise to call that out given the climate.

[Maddie Schrage, Vice President at KeyBanc Capital Markets]

Totally understand. Thank you, guys.

[Operator]

The next question comes from Josh Baer with Morgan Stanley. Please go ahead.

[Joshua Baer, Executive Director - Software Equity Research Analyst at Morgan Stanley]

Thanks for the question. Daniel, you were alluding to some areas of potential investment for which you wanted to keep some dry powder. Just hoping you could review some of those. What's most exciting as far as opportunities? And then the follow-up, like what would it take for you to go forward with those investments, something you'd be looking for from a demand perspective or a growth perspective before ramping those investments? Thanks.

[Travis Hess, CEO at Bigcommerce]

Yes, I would say the largest area opportunity right now we feel really bullish about is AI. I just alluded to it a few minutes ago in Matti's question around feedonomics. I think in the new world order, obviously a lot of buzz around AI and what the industry refers to as agentic commerce with this agent driven. There's two big components of that that feeds almost everything and it's really catalog data and inventory data being surfaced. So optimizing product and catalog data for ingestion into AI and LLMs and then obviously being able to surface real time inventory availability across markets, across different channels by which customers expect and want to receive things.

[Travis Hess, CEO at Bigcommerce]

And we are already doing that today with Feedonomics across 30% of the Internet Retailer 1,000. So there's a lot of, obviously, through the top partners in the space. I mentioned OpenAI. Obviously, we're already feeding Perplexity today, active partnerships with Microsoft and Google and many of our premier payment partners, that is by and large the largest area of potential increased investment as quickly as all of that is progressing. So excited to share more about that as it progresses.

[Travis Hess, CEO at Bigcommerce]

Certainly wanted to at least touch on it in this call. Dino, I don't if you want to add any color to that.

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

Yes. All I would just elaborate on a little bit is just to Travis' point, this isn't just about go to market investment. This is about product investment. And if we where we do this it will be moderated and wise. We're not going to have huge swings of what we're talking about in profitability.

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

There's a reason why we set guidance the way that we do. But I'm really excited about the possibilities in this business and how we can power AI as it takes on comp. I think there's a huge opportunity in this area and we're already in active conversations with all the leading players in this area, as Travis talked about. So I think that's part of it. Part of it also is we've got a lot of good exciting things coming with respect to branding, what we are doing in go to market.

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

In a lot of ways, as we kind of contemplated the front half of the year, we knew going into the front half of the year that it was going to be challenging in many ways, and we haven't been able to bring to market yet a lot of the things that we are so excited about that folks haven't seen. And so, I think there is a lot of investments that we have planned, we are excited about with our team and marketing, what we can do in product. We just need to be disciplined and choiceful about how we do that, what do we choose to build, what we choose to partner. I think that's good for our customers because we are trying to make it commercially easier for customers to have best of breed architectures. And I think our business model is uniquely positioned to power what's happening in AI because we also don't have some of the financial incentives to force people on to certain payments rails or other things that we're really excited about and we want to keep our options open in that, but continue to be obviously wise and disciplined as we've shown in the last quarter about where we're to spend our money.

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

And I think we can do both. I think we've demonstrated that type of discipline around profitability over the course of the last two to three years in a good way.

[Joshua Baer, Executive Director - Software Equity Research Analyst at Morgan Stanley]

Great. Thank you.

[Operator]

The next question comes from Mark Murphy with JPMorgan. Please go ahead.

[Analyst]

Hey, Travis and Daniel. This is Arti on for Mark Murphy. Thanks for taking the question. Travis, to start off, you kind of mentioned the complex category of companies that include direct selling regulated industry and home decor. Can you describe a little bit about what's giving you guys the success in that space?

[Analyst]

And when you talk about the strong momentum there, is that kind of a continuation of a trend or are you seeing kind of a picked up traction? Thanks.

[Travis Hess, CEO at Bigcommerce]

It's a great question. I would say we've it's a continuation. I think we've historically had success in some of these niches for a myriad of reasons. The most notable of which is they oftentimes require some semblance of customization and openness flexibility to appease reasonably complex use cases. The thing we're focused on is making those use case easier to deal with, more efficient to deal with over time.

[Travis Hess, CEO at Bigcommerce]

And we think just the nature and architecture of the platform and the product suite maps quite nicely to those types of industries. So we've been there before. We haven't talked about it at the level that we're talking about and now we're being much more deliberately focused in going deeper within those respective areas and trying to create more tangible examples and use cases. So it's a bit more obvious to folks on the call and investors out there as to why it's a great fit, because there is a massive market there. It also lends itself into the B2B side of the business as well, which is also by definition a very complicated sort of use case as far as what people need relative to the platform.

[Travis Hess, CEO at Bigcommerce]

So I would expect us to do more there, more around pre composed accelerators and industry specific solutions that will come with bundles of other technology partners pre bundled commercially, operationally and technologically. So as we go in deeper into these markets, we're able to deliver more value less expensively and faster, which we feel is a massive differentiator. And there's a subset of those industries too that are having to digitize and digitally transform now just given more macro environments where that becomes just an essential barrier of entry that obviously will widen our TAM as we continue to progress down that road.

[Analyst]

Very helpful. Thank you. And then Daniel, I know you talked about not seeing any material impact to your business right now from tariffs or the macro in general. But curious, are you seeing customers talk about it more? Or do they kind of seem more and more resilient?

[Analyst]

And from your perspective, are you surprised that there's kind of been no impact from what I'd characterize as pretty volatile macro and tariffs? Thanks.

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

Where we hear about it, it's from customers that have supply chain challenges based on how diverse their sourcing is. So, I'm very optimistic about where the business is, but I'm also very cautious about a wait and see on how this can play out. Until folks get through their inventories and figure out how they're going to replenish those inventories in a high tariff environment, we are not out of the woods. And I think anybody who would say different is being a little bit maybe not as cautious as maybe they should be. So, I think that's kind of the wait and see aspect of this.

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

I don't know that we have really seen the full effect of how that can affect inventories. And that's not something we see very clearly on our side. We see finished goods transactions to consumers. We don't have great visibility into where people are sourcing that inventory from. And I just think it's going to take still a few weeks to see how that plays out.

[Analyst]

That's super helpful. And just one very quick follow-up there. Are you saying that perhaps some of the inventory levels that customers have is what's given them some resiliency, like at least in the short term?

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

I mean, I'm not an economist. I don't I only want to go so far out on a limb on this. I just think I mean, I've worked in CPG, I've worked in other industries, I've looked at how you have to move inventories around. You can't move supply chains on a dime. And so, I think, you know, that's really the question for me is how much stock did folks have, how successful are they in moving inventory around, and, you know, can we get some resolution on some of these outstanding questions before we start to see that in the numbers. I don't think we're there yet, we'll see.

[Analyst]

Appreciate it. Thank you.

[Operator]

The next question comes from Scott Berg with Needham. Please go ahead.

[Scott Berg, Senior Analyst at Needham & Company]

Hi, everyone. Thanks for taking my question. I didn't really hear anyone ask this, in particular, Travis. But as you look at your kind of new sales pipelines here in April after all the tariff promotion started to fire up, are you seeing a change in behavior specifically on your net new customers in the last thirty days? Is that still maybe yet to play out in this quarter?

[Travis Hess, CEO at Bigcommerce]

That's too early to play out. No, we haven't seen I mean, I think, again, this is somewhat conjecture. Obviously, I alluded to earlier, we've seen obviously B2B notably increase. We've seen that trend for a while. Someone asked me why I thought that was, I would argue oftentimes in the B2B focused areas that tends to be a cost savings thesis.

[Travis Hess, CEO at Bigcommerce]

So there I would assume there'd be a sense of urgency there as smaller folks looking to digitize those capabilities to drive costs out, particularly around FTE type labor and moving that into more of a digitized solution or consolidating oftentimes complex back ends and back offices. So I suspect just with the macro environment when there is a cost savings thesis and a need to transform, the presumption would be there would be a sense of urgency there to increase pipeline. Too early to tell to see if that's a real trend. But we're also starting to see some of these larger deals that I alluded to earlier. Many of those are also looking to create some semblance of cost savings.

[Travis Hess, CEO at Bigcommerce]

To Daniel's point earlier, they really like our commercial model. It tends to be more capable and more flexible, more durable and creative in ways, particularly across larger clients and industries. And so the downside to those larger clients is they just take a little bit more time to materialize across pipeline. So we'll keep obviously folks updated across earnings next quarter and what trends that we're seeing. But we are operating as expected as we've alluded to.

[Travis Hess, CEO at Bigcommerce]

We're seeing nice trends in the business, but too soon to really tell on any sort of granular trends that we could share more.

[Scott Berg, Senior Analyst at Needham & Company]

Great, helpful. And then Daniel, as you think of your guidance for the year, I know you talked about impact number one would be PSR and two on net new business. Just wanted to clarify on the guidance, the increased range, is that all unexpected variances or potential variances around PSR? Within that, was there contemplated anything on the net new side?

[Daniel Lentz, Chief Financial Officer at Bigcommerce]

I'd say it's in both, Scott. Think that, like I said, the two areas we'd see it is consumer spending, how it plays through in PSR in the short term. But second would be, if we start to see big changes in consumer spending, I would expect it to affect sales cycle times and conversions on new business as well. So when I think about the range, if we were to end up on the downside of the range, would expect to see the effect in both subscription and PSR over time.

[Scott Berg, Senior Analyst at Needham & Company]

Excellent. Thank you.

[Operator]

The next question comes from Brian Peterson with Raymond James. Please go ahead.

[Brian Peterson, Managing Director at Raymond James Financial]

Hi, gentlemen. Thanks for taking the question. So one theme that's come out of earnings so far over the last couple of weeks has been the idea of search traffic and how that's changed. As you've talked to your customer base, have they talked about any changes in traffic coming to their websites? And as you think about how you can add value to these customers, is there anything that you're doing in the product portfolio to really help address that?

[Travis Hess, CEO at Bigcommerce]

Yes. I can't speak tangibly to specific clients coming to us on those specific challenges. But I can tell you, yes, proactively, I kind of alluded to it a couple of times around obviously more search traffic going through AI chatbots and things like that. Obviously, we are very actively involved in optimizing those capabilities for discoverability for our merchants across those mechanisms by which people are searching against versus the traditional mechanisms. We're also, as I've alluded to before, seeing this giant proliferation of channels and where customers want to discover product independent of industry or market.

[Travis Hess, CEO at Bigcommerce]

And so this is a fundamental element of our product strategy and product suite strategy of allowing organizations or merchants basically to go to customers independent of channel with immersion and value and allowing them to experience the brand, the product, the service across which channels they want regardless of how they order it or buy it. And so yes, there are nuances to that. It oftentimes does come down to the optimization of product and catalog data and having that optimized across those particular mediums and channels which we do day in and day out through Feedonomics. And then also looking at servicing obviously inventory availability where we ultimately want to service the most profitable available inventory based on where a customer wants to or expects to receive a certain product service or good, and then orchestrate that on the back end. So you're going to see more and more of that come up as folks start optimizing for these AI LLMs.

[Travis Hess, CEO at Bigcommerce]

It's going to be a different motion and a lot of it is going to come down to the cleanliness and optimization around the product and feed data. So we'll continue to share more about that as it evolves. But yes, that is a heavy investment area, heavy trend and heavy efforts. I just don't have any tangible information on specific use cases and clients coming to us asking for things.

[Brian Peterson, Managing Director at Raymond James Financial]

Appreciate the color. Thanks guys.

[Travis Hess, CEO at Bigcommerce]

Yes, of course.

[Operator]

This concludes our question and answer session. I would like to turn the conference back over to Travis Hess, CEO, for any closing remarks.

[Travis Hess, CEO at Bigcommerce]

Thanks so much. I want to thank everyone for joining today. Appreciate the involvement and the questions. We feel really good about where we are. We are on track against our broader plan that we've outlined over the last couple of quarters, including our investment day.

[Travis Hess, CEO at Bigcommerce]

We are starting to see really encouraging signs and shoots within pipeline and access to business that we've not yet seen previously at rates. We're really pleased about seeding the entire senior leadership team most recently over the last couple of weeks. So the team is in place, the plan is in place, we're executing against our strategy again as Daniel and I both alluded to. We expected this to be a challenging year particularly the first half and we're excited to continue to see encouraging signs and efforts to accelerate growth across the business going forward. So look forward to chatting with you all, certainly next quarter and keeping everybody posted on our progress.

[Operator]

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

Participants

Analysts

• Tyler Duncan, VP - Finance & Investor Relations at Bigcommerce
• Travis Hess, CEO at Bigcommerce
• Daniel Lentz, Chief Financial Officer at Bigcommerce
• Raimo Lenschow, Managing Director at Barclays
• Ken Wong, Managing Director at Oppenheimer & Co. Inc.
• Koji Ikeda, Director - Enterprise Software Equity Research at Bank of America
• David Hynes Jr., Managing Director, Software Lead Analyst at Canaccord Genuity - Global Capital Markets
• Parker Lane, Director at Stifel Financial Corp
• Maddie Schrage, Vice President at KeyBanc Capital Markets
• Joshua Baer, Executive Director - Software Equity Research Analyst at Morgan Stanley
• Analyst
• Scott Berg, Senior Analyst at Needham & Company
• Brian Peterson, Managing Director at Raymond James Financial