Bigcommerce NASDAQ: BIGC, whose executives spoke on Commerce.com’s third-quarter earnings call, raised its full-year profitability outlook after reporting $84.2 million in revenue and realizing cost savings earlier than expected. The company maintained the midpoint of its revenue forecast.
Chief Executive Officer Travis Hess also announced that Chief Financial Officer and Chief Operating Officer Daniel Lentz will leave on November 13 to become CFO of another publicly traded technology company. Tyler Duncan, senior vice president of finance and investor relations, will become interim CFO, while other executives assume COO responsibilities as the board evaluates permanent candidates.
Profitability outlook rises as savings arrive early
Third-quarter revenue was within the company’s guidance range of $82.5 million to $85.5 million. Subscription solutions contributed $64.7 million, while partner and services revenue totaled $19.5 million.
Non-GAAP operating income was $8 million, above the forecast range of $3.3 million to $5.3 million, for a margin of 9.5%. Lentz said the result was primarily driven by approximately $3 million in savings that had been expected in the fourth quarter but were realized in the third.
The company reported a GAAP net loss of $3.2 million, including $4 million in restructuring charges. Operating cash flow was $9.4 million, and free cash flow was $5.7 million after $3.6 million in capital expenditures.
Non-GAAP gross margin fell approximately 110 basis points sequentially to 74.5%. Lentz attributed the decline to lower partner and services revenue following previously discussed ecosystem changes, as well as continued pressure from AI-related infrastructure costs.
For the full year, the company now expects revenue of $339 million to $342 million and non-GAAP operating income of $35.3 million to $37.3 million. The operating income midpoint is $2.3 million higher than the outlook provided in September.
Fourth-quarter guidance calls for revenue of $83.4 million to $86.4 million and non-GAAP operating income of $6.8 million to $8.8 million.
Cost plan targets higher margins in 2027
Management reiterated its target of $60 million to $80 million in annualized non-GAAP operating cost reductions and a full-year non-GAAP operating margin of at least 20% beginning in 2027. Lentz said the margin goal applies to the full year, rather than only an exit run rate.
The updated outlook includes approximately $5 million in savings during 2026, up from an earlier estimate of approximately $3 million. The company expects the full annualized benefit in 2027 and plans to substantially complete implementation by the second quarter of that year.
The measures address staffing, professional services, facilities, software and infrastructure, while using AI and automation to improve efficiency. Lentz said preliminary planning assumes 2027 revenue will be broadly in line with 2026 levels; formal guidance is expected on the fourth-quarter call.
The company expects additional restructuring charges of $4 million to $8.5 million in the fourth quarter and $2.2 million to $4.2 million in the first half of 2027. Those charges are excluded from non-GAAP operating income, though associated cash payments will affect free cash flow.
Payments and product intelligence drive investment
Gross merchandise value, or GMV, rose 14% year over year to approximately $9 billion. Hess said the gap between GMV growth and revenue performance highlights an opportunity to earn more from transactions already flowing through the platform.
The number of live stores using BigCommerce Payments, which is powered by PayPal, grew approximately 65% sequentially during the quarter. The service also launched in the U.K. in September.
Lentz said the company is evaluating a more integrated, potentially fully white-labeled payments offering. Some new offerings could require gross revenue recognition and associated processing costs instead of the existing net revenue-share model. Plans and accounting treatment have not been finalized, he said, adding that management considered the potential mix effect when setting its 20% margin target.
In product intelligence, Hess said L’Oréal selected Feedonomics as its global product intelligence management partner. He also said hundreds of stores adopted BigCommerce Catalog Enrichment as a paid feature in its first week, while more than 10,000 stores have used BigCommerce Companion since its August launch.
Pipeline improves, but retention metrics weaken
Hess described the third quarter as the company’s strongest so far this year for pipeline generation. Demand was concentrated in areas receiving investment, including B2B manufacturing and distribution and more complex retail categories. Traditional direct-to-consumer business remained soft, he said.
“The focus now is on converting that pipeline into bookings and revenue,” Hess told analysts. He said it was too early to determine whether the payments strategy was contributing to new-customer pipeline growth.
Total annual recurring revenue ended the quarter at $357.6 million, down approximately $2.9 million sequentially. Lentz attributed the decline to the non-renewal of a legacy agreement and a deliberate move away from certain long-tail partner arrangements. Net revenue retention fell to 94.7% from 95.8% in the second quarter.
The board also authorized a $50 million share repurchase program through September 2028. Lentz said the timing and size of any purchases will depend on market conditions, liquidity and other capital priorities.
About Bigcommerce (NASDAQ:BIGC)
BigCommerce Holdings, Inc provides a cloud-based e-commerce platform that enables businesses to create, manage and grow online stores. Its software supports storefront design, product catalog management, shopping carts, checkout, order processing, payments, shipping and customer engagement.
The company serves merchants ranging from small and mid-sized businesses to larger enterprise organizations. Its platform includes tools for business-to-business commerce, omnichannel selling, marketplace and social commerce integrations, headless commerce and application programming interfaces that allow businesses to connect their online operations with other software and services.
BigCommerce markets its platform globally and supports merchants, agencies and technology partners across multiple regions.
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