BigCommerce Holdings, Inc. (BIGC) Q2 2021 Earnings Call Transcript | The Motley Fool

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BigCommerce Holdings, Inc. (NASDAQ:BIGC)
Q2 2021 Earnings Call
Aug 05, 2021, 5:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by, and welcome to BigCommerce’s second-quarter 2021 earnings call. [Operator instructions] Please be advised that today’s conference is being recorded. I would now like to turn the conference over to your first speaker today, Daniel Lentz, head of investor relations. Thank you.

Please go ahead.

Daniel LentzHead of Investor Relations

Good afternoon, and welcome to BigCommerce’s second-quarter 2021 earnings call. We will be discussing the results announced in our press release issued after today’s market close. With me are BigCommerce’s president, CEO and chairman, Brent Bellm; and CFO,  Robert Alvarez. Today’s call will contain forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

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 third quarter of 2021 and the full-year 2021. These statements can be identified by words such as expect, anticipate, intend, plan, believe, seek, will or similar words. These statements reflect our views as of today only and should not be relied upon as representing our views at any subsequent date, and we do not undertake any duty to update these statements. Forward-looking statements, by their nature, 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. 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 Brent.

Brent BellmPresident, Chief Executive Officer, and Chairman

Thank you, Daniel, and thanks to everyone for joining us on our second-quarter earnings call. On today’s call, Robert and I will review our second-quarter results, provide you with updates on our strategy, highlight some of our recent product launches and partnership announcements and also provide additional disclosures on our recent acquisition of Feedonomics. Finally, we will conclude today’s call by updating you on our third-quarter and 2021 full-year guidance. Let’s begin with a brief recap of our Q2 financial results.

Momentum across our business segments continues to gain speed. We saw strong revenue growth in the second quarter, increasing to $49 million, up 35% year over year, and it represents the sixth consecutive quarter of 30% or higher revenue growth. Our partners and teams across all geographies are doing a tremendous job executing on our strategy, so I want to start by thanking them for their continued commitment and all their efforts. The underlying trends in our key metrics also continue to strengthen.

Starting with ARR, or annual revenue run rate, which grew to $209.3 million, up 38% from a year ago. We continue to see strong momentum in our target market of established and growing businesses. Our enterprise account ARR was $122.7 million, which was up 54% year over year. ARR for accounts greater than $2,000 in annual contract value, or ACV, finished at $177.2 million, up 46% year over year.

Last week, we announced the acquisition of Feedonomics, a leading data feed optimization platform that is being used by nearly 30% of the top 1,000 Internet retailers. Their technology helps merchants get discovered across leading advertising channels and facilitate sales across both social and marketplace platforms. With U.S. e-commerce ad channel spending expected to more than double to over $40 billion by 2024, the effectiveness of merchant spend on these areas will become increasingly critical.

We’re seeing the importance of structured data gaining traction among our channel partners, merchants and agencies. Maximizing omnichannel demand generation and sales requires a feed management solution that can ingest, enhance and syndicate product data across multiple channels. Feedonomics builds on many of those major omni partnerships we have announced recently, becoming the connective tissue that can make BigCommerce the world’s most powerful e-commerce platform for omnichannel selling. We believe that merchants will need to meet consumers where they are, whether it’s on social channels, ad channels or marketplaces.

And together with Feedonomics, we will be the best way for merchants of all sizes to reach and acquire new customers wherever they shop and browse online. The migration away from on-premise software and outdated legacy systems toward our best-of-breed open SaaS platform is steady, and we believe this trend will pick up speed in the coming years. Additionally, our merchants are looking for ways to streamline their omnichannel operations, juggling complex logistics and marketing efforts to grow their businesses. We aim to be a critical partner to our merchants by serving as the nucleus of their omnichannel growth efforts.

We remain steadfast in our commitment to invest in our core platform and be the leading open SaaS platform in the world for merchants of all sizes. Our core strategic areas of focus remain our core open SaaS platform, omnichannel, international expansion, B2B, headless and expanding our partner and services revenue opportunities. It’s clear this acquisition fits well within our core strategic pillars. BigCommerce has demonstrated its ability to drive strong and durable revenue growth rates while generating leverage with a disciplined approach to capital allocations.

As I mentioned on our IR call last week, our market continues to get bigger, and there are many opportunities for us to invest in our business, both organically or inorganically through targeted M&A. We will continue to make smart investments that accelerate our strategic initiatives and deliver outsized value to our merchants and partners over the long term. Now I’ll move on to discussing new customers that launched exciting sites on our platform. In Q2, we had several premier brands joining BigCommerce.

Well-known fashion brand, Peter Christian, recently moved from a legacy platform to BigCommerce to launch two international storefronts that leverage a react custom product bundle. With this, the merchant can combine many products into a single product detail page, creating a better customer experience. Quality Marine, which offers one of the widest and highest-quality selections of aquaculture and sustainably caught marine fish and invertebrates, upgraded from a custom-built solution to launch a website on BigCommerce that enables both B2B and B2C functionality. Through its work with BigCommerce and an agency partner, Quality Marine is able to showcase multiple brand sites through a single BigCommerce instance.

Industry-leading manufacturer and distributor, Maintex, migrated to BigCommerce in order to take advantage of bundled B2B functionality, which is available exclusively on our platform. AM Touch Dental Supply also chose BigCommerce for our B2B capabilities and leveraged the recently launched B2B Edition to support its complexities around cost tracking, customer groups and pricing on products. Additionally, the brand needed a platform that could support mobile responsiveness and offered a tight integration with its ERP. RDO equipment production, a manufacturing brand with more than 75 stores nationwide, launched the first headless storefront on BigCommerce using Sitefinity as a CMS.

The company was drawn to BigCommerce’s open-source mentality and flexibility and felt that its open APIs allowed them to connect all the pieces of their overall solution together. Parent…

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