Commerce.com, Inc. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. In addition to historical condensed consolidated financial information, the following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Quarterly Report on Form 10-Q, particularly in “Risk Factors.” See “Special Note Regarding Forward-Looking Statements.” Investors and others should note that we announce material financial information to our investors using our investor relations website (investors.bigcommerce.com), SEC filings, press releases, public conference calls and webcasts. We intend to use our investor relations website as a means of disclosing information about our business, our financial condition and results of operations and other matters and for complying with our disclosure obligations under Regulation FD. The information we post on our investor relations website, including information contained in investor presentations, may be deemed material. Accordingly, investors should monitor our investor relations website, in addition to following our press releases, SEC filings and public conference calls and webcasts. Overview BigCommerce is leading a new era of ecommerce. We provide professional-grade commerce solutions that give businesses the power and agility to build for today with an eye toward tomorrow. We offer three core owned products— 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. As of March 31, 2025 we served 5,825 accounts with at least one unique enterprise plan subscription or an enterprise-level feed management subscription (collectively "enterprise accounts"). Enterprise accounts may have more than one enterprise plan or a combination of enterprise plans and non-enterprise plans. We provide our customers with the flexibility to combine the right tools for the right job with a seamless front-and back-end experience. Our industry-leading team of experts partners with our customers to provide the speed and agility needed to grow on their own terms. We provide software-as-a-service (“SaaS”) ecommerce platform for forward-thinking brands and retailers at all stages of ecommerce growth. Our platform serves customers across a wide variety of sizes, industries, and product categories seeking to differentiate themselves in-market with more tailored commerce experiences. We believe our sophisticated functionality and composable SaaS platform make ecommerce success at scale more economically and operationally achievable than the competition. We lower the financial and operating cost of ecommerce by providing technology as a service, including product, hosting, security, bug fixing, and continuous innovation. We believe no other SaaS platform offers comparable enterprise functionality and flexibility at our price point—an advantage increasingly recognized by the world’s most respected technology analysts. Our partner ecosystem is also central to our business strategy. We believe we possess one of the deepest and broadest ecosystems of integrated technology solutions in the ecommerce industry. We strategically partner with, rather than compete against, the leading providers in adjacent categories, including payments, shipping, point of sale, content management systems, customer relationship management, enterprise resource planning, and omnichannel. Our partner-centric strategy stands in contrast to our largest competitors, which operate complex software stacks that compete across categories. We focus our research and development investments in our core product with an emphasis on composability, empowering our customers to grow and scale on their terms. We plan to continue to invest in our strategic offerings of business-to-business ("B2B") business-to-consumer ("B2C") as well as building new partnerships and continuing to develop our portfolio of professional-grade commerce solutions for forward-focused businesses. We will also invest in and grow our business by acquiring additional customers to our platform, growing our revenue with existing customers, and expanding our presence in new markets while maintaining a focus on profitability. Key factors affecting our performance Our operational and financial results have been, and will continue to be, affected by a number of factors that present significant opportunities as well as risks and challenges, including those discussed below and elsewhere in this quarterly report and in our Annual Report . Investment in core offerings We continue to prioritize investment in our core B2B and B2C product offerings to better meet evolving customer needs and strengthen our competitive position. The rapid growth in ecommerce is prompting companies to adopt ecommerce platforms like 28 Table of Contents Table of Content BigCommerce to create branded ecommerce stores and power cross-channel connections to online marketplaces, social networks, and offline POS systems. To meet the evolving needs of enterprise B2B businesses, we released product enhancements, including multi-company hierarchy support and an upgraded configure-price-quote (CPQ) tool. These enhancements are designed to enable large enterprises to more efficiently manage organizational structures and quoting workflow. In B2C, we continued to execute on our strategic customer segmentation strategy, targeting operationally complex and underserved verticals beyond the traditional fashion, beauty, and apparel sectors often prioritized by legacy platforms. We believe that this strategic focus positions us to better address differentiated merchant needs and capture additional market share over time. Expansion of growth initiatives We are advancing initiatives to expand platform capabilities and support revenue growth. We initiated a beta launch of Feedonomics self-serve and plan to broaden its availability with additional paid features. As part of our bundling strategy, we announced our intention to partner with a performance and error monitoring platform to enhance the merchant experience, with additional bundled offerings under development. These product bundles aim to simplify the commercial requirements of customers’ adoption of composable commerce architectures. We believe this will build stronger relationships with our partners and create new revenue opportunities with customers. Our new BigCommerce Payments offering remains on track for a 2026 launch, which will be an optional payments offering for small and medium-sized customers looking for a stream-lined, integrated offering with competitive processing rates. This offering aims to improve our overall monetization and retention rates in the business. Leveraging artificial intelligence to drive value We are integrating artificial intelligence capabilities across our platform and operations to improve personalization, automation, and efficiency. We expanded the application of AI across sales and marketing to identify high-value leads, personalize outreach, and optimize pipeline management. We also deployed AI-driven initiatives across operational functions, including developer documentation automation and outbound call simulations to accelerate onboarding. These initiatives, along with partnerships with OpenAI, Gemini, and Forethought, are supporting greater organizational agility, cost efficiency, and innovation. Macroeconomic environment While we are not directly involved in manufacturing or logistics, many of our customers operate across borders and within affected supply chains. We are closely monitoring how shifting trade policies and increased tariffs may impact international sellers and brands sourcing from affected regions. Although we have not observed a material impact on our performance to date, we remain cautious and continue to partner with our customers to provide flexible solutions that support their agility in a dynamic macroeconomic environment. Business metrics We review the following business metrics to measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions. Increases or decreases in our business metrics may not correspond with increases or decreases in our revenue. As an example, some of our business metrics include annual revenue run-rate ("ARR"), subscription annual revenue run-rate ("Subscription ARR") , average revenue per account ("ARPA"), and others are calculated as of the end of the last month of the reporting period. Annual revenue run-rate We calculate ARR at the end of each month as the sum of: (1) contractual monthly recurring revenue at the end of the period, which includes platform subscription fees, invoiced growth adjustments, feed management subscription fees, recurring professional services revenue, and other recurring revenue, multiplied by twelve to prospectively annualize recurring revenue, and (2) the sum of the trailing twelve-month non-recurring and variable revenue, which includes one-time partner integrations, one-time fees, payments revenue share, and any other revenue that is non-recurring and variable. Subscription annual revenue run-rate We calculate Subscription ARR at the end of each month as the sum of contractual monthly recurring revenue at the end of the period, which includes platform subscription fees, invoiced growth adjustments, product feed management subscription fees, recurring professional services revenue, and other recurring revenue, multiplied by twelve to prospectively annualize recurring revenue. 29 Table of Contents Table of Content Average revenue per account We calculate ARPA at the end of a period by including customer-billed revenue and an allocation of partner and services revenue, where applicable. We bill customers for subscription solutions and professional services, and we include both in ARPA for the reported period. For example, ARPA as of March 31, 2025, includes all subscription solutions and professional services billed between January 1, 2024, and March 31, 2025. We allocate partner revenue, where applicable, primarily based on each customer’s share of GMV processed through that partner’s solution. Partner revenue that is not directly linked to customer usage of a partner’s solution is allocated based on each customer’s share of total platform GMV. Each account’s partner revenue allocation is calculated by taking the account’s trailing twelve-month partner revenue, then dividing by twelve to create a monthly average to apply to the applicable period in order to normalize ARPA for seasonality. Enterprise Account metrics To measure the effectiveness of our ability to execute against our growth strategy, we calculate ARR attributable to Enterprise Accounts. The chart below illustrates certain of our key business metrics as of the periods ended: March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 ARR (in thousands) $ 350,835 $ 349,599 $ 347,787 $ 345,832 $ 340,147 Subscription ARR (in thousands) $ 264,922 $ 264,541 $ 263,933 $ 263,526 $ 258,566 Enterprise Account metrics: Number of Enterprise Accounts 5,825 5,884 5,892 5,961 5,970 ARR attributable to Enterprise Accounts (in thousands) $ 263,815 $ 261,590 $ 256,893 $ 253,798 $ 248,236 ARR attributable to Enterprise Accounts as a percentage of ARR 75% 75% 74% 73% 73% Average Revenue Per Account $ 45,290 $ 44,458 $ 43,600 $ 42,576 $ 41,581 Net revenue retention We use net revenue retention (“NRR”) to evaluate our ability to maintain and expand our revenue with our account base of enterprise customers exceeding the annual contract value ("ACV") threshold over time. The total billings and allocated partner revenue, where applicable, for the measured period are divided by the total billings and allocated partner revenue for such accounts, corresponding to the period one year prior. An NRR greater than 100 percent implies positive net revenue retention. This methodology includes stores added to or subtracted from an account’s subscription during the previous twelve months. It also includes changes to subscription and partner and services revenue billings, and revenue reductions from stores or accounts that leave the platform during the previous one-year period. Net new accounts added after the previous one-year period are excluded from our NRR calculations. NRR for enterprise accounts was 99 percent and 100 percent for the years ended December 31, 2024 and 2023, respectively. We update our reported NRR at the end of each fiscal year and do not report quarterly changes in NRR. Components of results of operations Revenue We generate revenue from two sources: (1) subscription solutions revenue and (2) partner and services revenue. Subscription solutions revenue consists primarily of platform subscription fees from plans and recurring professional services. Subscription solutions are typically charged annually for our customers to sell their products and process transactions on our platform. Subscription solutions are generally charged per online store and are based on the store’s subscription plan. Our Enterprise plan contracts are generally for a fixed term of 12 to 36 months and are non-cancelable. Our pricing strategy provides enterprise merchants a discount for a period of time from their contractual obligations. Merchants have full access to the functionality of our platform upon contract execution, and revenue is recognized ratably over the contract life. Our retail plans are generally month-to-month contracts. Monthly subscription fees for Enterprise plans are adjusted if a customer’s GMV or orders processed are outside of specified plan thresholds on a trailing twelve-month basis. Fixed monthly fees and any transaction charges related to subscription solutions are recognized as revenue in the month they are earned. Through Feedonomics, we provide feed management solutions under service contracts which are generally one year or less and, in many cases, month-to-month. These service types may be sold stand-alone or as part of a multi-service bundle (e.g. both marketplaces and advertising) and are billed monthly in arrears. 30 Table of Contents Table of Content We generate partner revenue from our technology application ecosystem. Customers tailor their stores to meet their feature needs by integrating applications developed by our strategic technology partners. We enter into contracts with our strategic technology partners that are generally for one year or longer. We generate revenue from these contracts in three ways: (1) revenue-sharing arrangements, (2) technology integrations, and (3) partner marketing and promotion. We recognize revenue on a net basis from revenue-sharing arrangements when the underlying transaction occurs We also generate revenue from non-recurring professional services that we provide to complement the capabilities of our customers and their agency partners. Our services help improve customers’ time-to-market and the success of their businesses using BigCommerce. Our non-recurring services include education packages, launch services, solutions architecting, implementation consulting, and catalog transfer services Cost of revenue Cost of revenue consists primarily of: (1) personnel-related costs (including stock-based compensation expense and associated payroll costs) for our customer success teams, (2) costs that are directly related to hosting and maintaining our platform, (3) fees for processing customer payments such as credit card processing charges, (4) personnel and other costs related to feed management, and (5) allocated costs, such as, amortization of purchased intangibles, depreciation, technology and facility costs. Sales and marketing Sales and marketing expenses consist primarily of: (1) personnel-related expenses (including stock-based compensation expense and associated payroll costs), (2) sales commissions, (3) marketing programs, (4) travel-related expenses, and (5) allocated overhead sales and support costs such as technology and facility costs. We focus our sales and marketing efforts on creating sales leads and establishing and promoting our brand. Incremental sales commissions for new customer contracts are deferred and amortized ratably over the estimated period of our relationship with such customers. Research and development Research and development expenses consist primarily of personnel-related expenses (including stock-based compensation expense and associated payroll costs) incurred in maintaining and developing enhancements to our ecommerce platform and allocated overhead costs. Software development costs associated with internal use software which are incurred during the application development phase and meet other requirements are capitalized. General and administrative General and administrative expenses consist primarily of: (1) personnel-related expenses (including stock-based compensation expense and associated payroll costs) for finance, legal and compliance, human resources, and certain members of our executive team, (2) external professional services, and (3) allocated overhead costs, such as technology and facility costs. Acquisition related expenses Acquisition related expenses consists of cash payments for third-party acquisition costs and other acquisition related expenses, including contingent compensation arrangements entered into in connection with acquisitions. Restructuring charges Restructuring charges consist primarily of severance benefits, right-of-use asset impairments, lease termination gain, software impairments, accelerated depreciation and amortization, and professional services costs. Amortization of intangible assets Amortization of intangible assets consist of amortization of developed technology and acquired intangible assets which were recognized as a result of business combinations. These assets are being amortized over their expected useful life. Gain on convertible notes extinguishment Gains recorded net of proportionate share of unamortized debt issuance costs and certain third party transaction costs relate to the repurchase transactions of the 2026 Convertible Notes and exchange transaction of the 2026 Convertible Notes for the 2028 Convertible Notes. Interest income Interest income is earned on our cash, cash equivalents and marketable securities. 31 Table of Contents Table of Content Interest expense Interest expense consists primarily of the interest expense from the amortization of the debt issuance costs and coupon interest attributable to our 2028 and 2026 Convertible Notes with offsetting amortization of the debt premium related to the 2028 Convertible Notes. Other income (expense) Other expense primarily consists of foreign currency translation adjustments. Provision for income taxes Our provision for income taxes consists primarily of current state and foreign jurisdictions in which we conduct business, deferred income taxes associated with amortization of tax deductible goodwill. For U.S. federal income tax purposes and in certain foreign and state jurisdictions, we have NOL carryforwards. The foreign jurisdictions in which we operate have different statutory tax rates than those of the United States. Additionally, certain of our foreign earnings may also be currently taxable in the United States. Accordingly, our effective tax rate will vary depending on the relative proportion of foreign to domestic income, use of foreign tax credits, changes in the valuation of our deferred tax assets and liabilities, applicability of any valuation allowances, and changes in tax laws in jurisdictions in which we operate. Results of operations The following table summarizes our historical consolidated statement of operations data. The period-to-period comparison of operating results is not necessarily indicative of results for future periods. For the three months ended March 31, 2025 2024 Revenue $ 82,370 $ 80,360 Cost of revenue (1) 16,984 18,439 Gross profit 65,386 61,921 Operating expenses: Sales and marketing (1) 30,366 32,432 Research and development (1) 19,206 19,988 General and administrative (1) 13,644 14,929 Amortization of intangible assets 2,335 2,467 Acquisition related costs 333 333 Restructuring charges 1,912 0 Total operating expenses 67,796 70,149 Loss from operations (2,410 ) (8,228 ) Gain on convertible note extinguishment 3,931 0 Interest income 1,300 3,178 Interest expense (2,543 ) (720 ) Other expense (107 ) (332 ) Income (loss) before provision for income taxes 171 (6,102 ) Provision for income taxes (524 ) (290 ) Net loss $ (353 ) $ (6,392 ) (1) Amounts include stock-based compensation expense and associated payroll tax costs, as follows: Three months ended March 31, 2025 2024 (in thousands) Cost of revenue $ 746 $ 656 Sales and marketing 1,775 1,867 Research and development 3,042 3,476 General and administrative (144 ) 2,592 32 Table of Contents Table of Content Revenue by geographic region The composition of our revenue by geographic region during the three months ended March 31, 2025 and March 31, 2024 were as follows: Three months ended March 31, Change 2025 2024 Amount Percent (dollars in thousands) Revenue United States $ 62,621 $ 61,138 $ 1,483 2.4 % EMEA 9,965 9,192 773 8.4 APAC 5,925 6,254 (329 ) (5.3 ) Other 3,859 3,776 83 2.2 Total Revenue $ 82,370 $ 80,360 $ 2,010 2.5 % Comparison of the three months ended March 31, 2025 and March 31, 2024 Revenue The following table presents the components of our revenue for each of the periods indicated: Three months ended March 31, Change 2025 2024 Amount Percent (dollars in thousands) Revenue Subscription solutions $ 62,114 $ 60,959 $ 1,155 1.9 % Partner and services 20,256 19,401 855 4.4 Total revenue $ 82,370 $ 80,360 $ 2,010 2.5 % Total revenue increased $2.0 million, or 2.5 percent, to $82.4 million for the three months ended March 31, 2025, from $80.4 million for the three months ended March 31, 2024, as a result of increases in both subscription solutions and partner and services revenue. Subscription solutions revenue increased $1.2 million, or 1.9 percent, to $62.1 million for the three months ended March 31, 2025, from $61.0 million for the three months ended March 31, 2024, primarily due to increases in Feedonomics activity. Partner and services revenue increased $0.9 million, or 4.4 percent, to $20.3 million for the three months ended March 31, 2025, from $19.4 million for the three months ended March 31, 2024, primarily as a result of increases in revenue share activity offset by decreases in stand ready and integration activity. Cost of revenue, gross profit, and gross margin Three months ended March 31, Change 2025 2024 Amount Percent (dollars in thousands) Cost of revenue $ 16,984 $ 18,439 $ (1,455 ) (7.9 ) % Gross profit 65,386 61,921 3,465 5.6 Gross margin percentage 79.4 % 77.1 % Cost of revenue decreased $1.5 million, or (7.9) percent, to $17.0 million for the three months ended March 31, 2025, from $18.4 million for the three months ended March 31, 2024, and gross margin increased to 79.4 percent from 77.1 percent. The decrease in expense is primarily attributable to the Company recording certain expenses in sales and marketing in the first quarter of 2025 while prior years expenses of $1.4 million were recorded in cost of revenue as certain employees were moved from customer support roles to sales and marketing roles in connection with our restructuring initiatives. The remaining change related to decreases in payroll costs and share-based compensation expense of $0.7 million partially offset by increased software and web hosting costs of $0.6 million, primarily as a result of increased efficiency in customer service staffing and spending and the 2024 Restructure. We expect cost of revenue to increase in absolute dollars primarily driven by additional hosting costs, but anticipate that cost of revenue as a percentage of revenue will remain consistent for the remaining fiscal year 2025. 33 Table of Contents Table of Content Operating expenses The following tables present our operating expenses for each of the periods indicated: Three months ended March 31, Change 2025 As a % of Total Revenue 2024 As a % of Total Revenue Amount Percent (dollars in thousands) Sales and marketing $ 30,366 36.9 % $ 32,432 40.4 % $ (2,066 ) (6.4 ) % Research and development 19,206 23.3 19,988 24.9 (782 ) (3.9 ) General and administrative 13,644 16.6 14,929 18.6 (1,285 ) (8.6 ) Amortization of intangible assets 2,335 2.8 2,467 3.1 (132 ) (5.4 ) Acquisition related expenses 333 0.4 333 0.4 0 0 Restructuring charges 1,912 2.3 0 0.0 1,912 100.0 Total operating expenses $ 67,796 82.3 % $ 70,149 87.3 % $ (2,353 ) (3.4 ) % Sales and marketing Sales and marketing expenses decreased for the three months ended March 31, 2025 from March 31, 2024. The period over period decrease was reduced due to the Company recording certain expenses in sales and marketing in the first quarter of 2025 while in the prior year these expenses of $1.9 million were recorded in cost of revenue and general and administrative as certain employees were moved from customer support and general and administrative roles to sales and marketing roles in connection with our restructuring initiatives. Excluding the impact of these expenses, the period over period change of $4.0 million was primarily driven by reductions in variable marketing spend and professional services of $3.5 million, and $0.3 million decrease in stock-based compensation and associated payroll costs. We expect that sales and marketing expenses will increase in absolute dollars and may slightly increase as a percentage of revenue near term as we reinvest in our go-to-market organization as part of the 2024 Restructure. We do not expect sales and marketing in absolute dollars to increase as much as our revenue growth in future periods. Research and development Research and development expenses decreased for the three months ended March 31, 2025 from March 31, 2024, primarily due to a decrease in staffing costs of $0.6 million, including stock-based compensation and associated payroll costs. We expect that research and development expenses as a percentage of revenue to remain consistent throughout the fiscal year 2025. General and administrative General and administrative expenses decreased for the three months ended March 31, 2025 from March 31, 2024. A portion of the decrease is attributable to the Company recording certain expenses in sales and marketing in the first quarter of 2025 while in prior years expenses of $0.3 million were recorded in general and administrative due to changes in employee roles. The remaining change was primarily due to a $2.7 million decrease in stock-based compensation associated with executives departure, offset by a $1.8 million increase in professional services. We expect that general and administrative expenses as a percentage of revenue to remain consistent throughout the remaining fiscal year 2025. Amortization of intangible assets Amortization of intangible assets decreased for the three months ended March 31, 2025 from March 31, 2024. The decrease was due to amortization of Makeswift intangible assets. Acquisition related expenses Acquisition related expense remained consistent for the three months ended March 31, 2025 from March 31, 2024. 34 Table of Contents Table of Content Restructuring charges Restructuring charges increased for the three months ended March 31, 2025 from the three months ended March 31, 2024. For the three months ended March 31, 2025, restructuring charges included severance and related charges for a reduction in workforce, consulting costs associated with changes in go-to-market approach, and accelerated depreciation of leasehold improvements associated with relocation of the Austin headquarters. Other income The following tables present our other income/(expenses) for each of the periods indicated: Three months ended March 31, Change 2025 2024 Amount Percent (dollars in thousands) Gain on convertible note extinguishment $ 3,931 $ 0 $ 3,931 100.0 % Interest income 1,300 3,178 (1,878 ) (59.1 ) Interest expense (2,543 ) (720 ) (1,823 ) 253.2 Other expenses (107 ) (332 ) 225 (67.8 ) Total Other income $ 2,581 $ 2,126 $ 455 21.4 % Gain on convertible note extinguishment increased for the three months ended March 31, 2025 from March 31, 2024. The increase consisted of a $3.9 million gain on the repurchase of 2026 Convertible Notes. Interest income decreased for the three months ended March 31, 2025 from March 31, 2024. This decrease was due to lower yields on our cash equivalents and marketable securities in 2024 primarily as a result of less cash, cash equivalents, and marketable securities during the period. Interest expense increased for the three months ended March 31, 2025 from March 31, 2024. This increase was the due to the exchange of 2026 Convertible Notes for 2028 Convertible Notes in the third quarter of 2024 at a higher effective interest rate. Other expenses decreased for the three months ended March 31, 2025 from March 31, 2024. This decrease was due to the impact of foreign currency exchange rates. Provision for income taxes Our provision for income taxes increased approximately $0.2 million for the three months ended March 31, 2025 from March 31, 2024. This increase was primarily due to changes in the Company's tax reserves. Cash flows The following table sets forth a summary of our cash flows for the periods indicated. Three months ended March 31, 2025 2024 (in thousands) Net cash provided by (used in) operating activities $ 401 $ (3,417 ) Net cash provided by (used in) investing activities 17,365 (6,931 ) Net cash used in financing activities (54,874 ) (485 ) Net decrease in cash, cash equivalents and restricted cash $ (37,108 ) $ (10,833 ) As of March 31, 2025, we had $53.2 million in cash, cash equivalents, and restricted cash, a decrease of $8.8 million compared to $62.0 million as of March 31, 2024. Cash and cash equivalents consist of highly-liquid investments with original maturities of less than three months. Our restricted cash balance of $1.2 million and $1.1 million at March 31, 2025 and 2024 respectively, consists of security deposits for future chargebacks and amounts on deposit with certain financial institutions. Our marketable securities balance of $68.6 million and $204.3 million at March 31, 2025 and 2024 respectively, consists of investments in corporate and US treasury securities . We maintain cash account balances in excess of Federal Deposit Insurance Corporation (FDIC) insured limits. Operating activities 35 Table of Contents Table of Content Net cash provided by (used in) operating activities for the three months ended March 31, 2025 and 2024 was $0.4 million and $(3.4) million, respectively. This consisted primarily of our net losses adjusted for certain non-cash items including depreciation, stock-based compensation, debt discount amortization, amortization of intangible assets, bad debt expense, gain on convertible note extinguishment, and the effect of changes in working capital. Investing activities Net cash provided by (used in) investing activities during the three months ended March 31, 2025 and 2024 was $17.4 million and $(6.9) million, respectively. In the three months ended March 31, 2025, this consists primarily of the sale and maturity of marketable securities of $28.6 million offset by the purchase of marketable securities of $7.9 million and the cash paid for the website domain name of $2.4 million. In the three months ended March 31, 2024, this consists primarily of the sale and maturity of marketable securities of $29.4 million offset by the purchase of property and equipment of $0.8 million and the purchase of marketable securities of $35.5 million. Financing activities Net cash used in financing activities during the three months ended March 31, 2025 and 2024 was $54.9 million and $0.5 million, respectively. In the three months ended March 31, 2025, this was attributable to the repayment of convertible notes of $54.5 million and taxes paid related to net share settlement of stock options of $1.2 million offset by the proceeds from exercise of stock options of $1.1 million. In the three months ended March 31, 2024, this was attributable to proceeds from exercise of stock options of $1.0 million offset by withholdings from the issuance of shares of common stock pursuant to the exercise of stock options and vesting of restricted stock units of $1.3 million and repayments of debt of $0.1 million. Liquidity and capital resources We are committed to cash flow generation and cash management by focusing on operational discipline, and we continue to evaluate all of our spending to look for opportunities to drive improvements in cash flow. Our success in transitioning our customer base from legacy month-to-month contracts to annual contracts has continued to result in improved cash flow as these efforts have increased the timing of our cash receipts and reduced our overall subscription churn rate. Our operational short-term liquidity needs are primarily driven by working capital requirements to support sales and marketing, research and development, and on-going innovation. In particular, we are focused on the continued improvement of our platform architecture, transformation initiatives, and the launch of new products, such as BigCommerce Payments. Our future capital requirements will depend on many factors, including our growth rate, levels of revenue, the expansion of sales and marketing activities, market acceptance of our platform, the results of business initiatives including our efforts in transitioning our customers to annual billings, continued reduction in churn, the timing of new product introductions, the continued impact of shifting trade policies and increased tariffs as well as inflation on the global economy, market risk due to elevated interest rates, our business, financial condition, and results of operations. We believe that our existing cash and cash equivalents and our cash flows from operating activities will be sufficient to meet our working capital and capital expenditure needs for at least the next twelve months. With our repurchases of the 2026 Convertible Notes, there was a reduction in our cash and cash equivalents and marketable securities. However, we believe as a result of the repurchases and extension of the remaining obligation, we have decreased our overall debt leverage and better optimized our maturities. The restructuring of the convertible notes requires semi-annual interest payments and increases our contractual interest rate to 7.50 percent. From time to time, we may seek to repurchase, redeem or otherwise retire our Convertible Notes through cash repurchases and/or exchanges for equity securities, in open market repurchases, privately negotiated transactions, tender offers or otherwise. Such repurchases, redemptions or other transactions, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors. The amounts involved may be material. We do not have any material off-balance sheet arrangements that we expect would materially affect our liquidity and capital resources. Indebtedness 2028 Convertible Notes In August 2024, we issued $150.0 million in aggregate principal amount of the Company’s new 7.50 percent convertible senior notes due 2028 (the “2028 Convertible Notes”). The 2028 Convertible Notes were issued pursuant to, and are governed by, an indenture (the “2028 Convertible Notes Indenture”), dated as of August 7, 2024, between the Company and U.S. Bank Trust Company, National Association, as trustee. 36 Table of Contents Table of Content The 2028 Convertible Notes are our senior, initially unsecured obligations and will accrue interest at a rate of 7.50 percent per annum, payable semi-annually in arrears on April 1 and October 1 of each year. The 2028 Convertible Notes will mature on October 1, 2028, unless earlier converted, redeemed or repurchased. Before July 3, 2028, noteholders will have the right to convert their 2028 Convertible Notes only upon the occurrence of certain events. From and after July 3, 2028, noteholders may convert their 2028 Convertible Notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. We will settle conversions by paying or delivering, as applicable, cash, shares of its common stock or a combination of cash and shares of its common stock, at the Company’s election. The initial conversion rate is 62.5000 shares of common stock per $1,000 principal amount of 2028 Convertible Notes, which represents an initial conversion price of $16.00 per share of common stock. The conversion rate and conversion price will be subject to customary adjustments upon the occurrence of certain events. In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” (as defined in the 2028 Convertible Notes Indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time. We may not redeem the 2028 Convertible Notes at its option at any time before October 7, 2026. The 2028 Convertible Notes will be redeemable, in whole or in part (subject to the “Partial Redemption Limitation” (as defined in the 2028 Convertible Notes Indenture)), at the Company’s option at any time, and from time to time, on or after October 7, 2026 and on or before the 25th scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of the Company’s common stock exceeds 130 percent of the conversion price for a specified period of time and certain other conditions are satisfied. The redemption price will be equal to the principal amount of the 2028 Convertible Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. In addition, calling any 2028 Convertible Note for redemption will constitute a Make-Whole Fundamental Change with respect to that 2028 Convertible Note, in which case the conversion rate applicable to the conversion of that 2028 Convertible Note will be increased in certain circumstances if it is converted after it is called for redemption. Pursuant to the Partial Redemption Limitation, we may not elect to redeem less than all of the outstanding 2028 Convertible Notes unless at least $100.0 million aggregate principal amount of 2028 Convertible Notes are outstanding and not subject to redemption as of the time the Company sends the related redemption notice. If certain corporate events that constitute a “Fundamental Change” (as defined in the 2028 Convertible Notes Indenture) occur, then, subject to a limited exception for certain cash mergers, noteholders may require the Company to repurchase their 2028 Convertible Notes at a cash repurchase price equal to the principal amount of the 2028 Convertible Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. The definition of Fundamental Change includes certain business combination transactions involving the Company and certain de-listing events with respect to the Company’s common stock. The 2028 Convertible Notes have customary provisions relating to the occurrence of “Events of Default” (as defined in the 2028 Convertible Notes Indenture), which include the following: (i) certain payment defaults on the 2028 Convertible Notes (which, in the case of a default in the payment of interest on the 2028 Convertible Notes, will be subject to a 30-day cure period); (ii) the Company’s failure to send certain notices under the 2028 Convertible Notes Indenture within specified periods of time; (iii) the Company’s failure to comply with certain covenants in the 2028 Convertible Notes Indenture relating to the Company’s ability to consolidate with or merge with or into, or sell, lease or otherwise transfer, in one transaction or a series of transactions, all or substantially all of the assets of the Company and its subsidiaries, taken as a whole, to another person; (iv) a default by the Company in its other obligations or agreements under the 2028 Convertible Notes Indenture or the 2028 Convertible Notes if such default is not cured or waived within 60 days after notice is given in accordance with the 2028 Convertible Notes Indenture; (v) certain payment defaults on the Company’s credit facility if the Company has entered into the Security Documents (as defined in the 2028 Convertible Notes Indenture), (vi) certain defaults by the Company or any of its significant subsidiaries with respect to indebtedness for borrowed money of at least $20,000,000; and (vii) certain events of bankruptcy, insolvency and reorganization involving the Company or any of its significant subsidiaries. If an Event of Default involving bankruptcy, insolvency or reorganization events with respect to the Company (and not solely with respect to a significant subsidiary of the Company) occurs, then the principal amount of, and all accrued and unpaid interest on, all of the 2028 Convertible Notes then outstanding will immediately become due and payable without any further action or notice by any person. If any other Event of Default occurs and is continuing, then, the Trustee, by notice to the Company, or noteholders of at least 25 percent of the aggregate principal amount of 2028 Convertible Notes then outstanding, by notice to the Company and the trustee, may declare the principal amount of, and all accrued and unpaid interest on, all of the 2028 Convertible Notes then outstanding to become due and payable immediately. However, notwithstanding the foregoing, the Company may elect, at its option, that the sole remedy for an Event of Default relating to certain failures by the Company to comply with certain reporting covenants in the Indenture consists exclusively of the right of the noteholders to receive special interest on the 2028 Convertible Notes for up to 180 days at a specified rate per annum not exceeding 0.50 percent on the principal amount of the 2028 Convertible Notes. The 2028 Convertible Notes Indenture contains a number of restrictive covenants and limitations, including restrictions on the Company’s ability to incur certain indebtedness, as further described in the Indenture. In addition, to the extent the Company incurs subordinated indebtedness pursuant to the terms of the Indenture, it will be required to secure the 2028 Convertible Notes, subject only to prior security interests in favor of lenders under any senior secured revolving credit facility, if then outstanding. 37 Table of Contents Table of Content 2026 Convertible Notes In September 2021, the Company issued $345.0 million aggregate principal amount of its 2026 Convertible Notes. The 2026 Convertible Notes were issued in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). The net proceeds from the sales of the 2026 Convertible Notes was approximately $335.0 million after deducting offering and issuance costs related to the 2026 Convertible Notes and before the 2021 Capped Call transactions. Interest on the 2026 Convertible Notes accrues at a rate of 0.25 percent per annum, payable semi-annually in arrerars on April 1 and October 1 of each year, beginning on April 1, 2022. In February 2025, the Company entered into separate, privately negotiated repurchase agreements with a limited number of holders of its outstanding 2026 Convertible Notes to repurchase approximately $59.1 million aggregate principal amount of its 2026 Convertible Notes for aggregate cash consideration of approximately $54.4 million, including accrued but unpaid interest. This transaction resulted in a net gain on repurchases of debt of approximately $3.9 million, net $0.6 million write-off of unamortized debt issuance costs. As of March 31, 2025, approximately $4.0 million principal amount of 2026 Convertible Notes remain outstanding. Off-balance sheet arrangements We did not have any off-balance sheet arrangements as of March 31, 2025 or as of December 31, 2024. Critical accounting policies and estimates Our condensed consolidated financial statements have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. We also make estimates and assumptions on the reported revenue generated and reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. There have been no material changes to our critical accounting policies and estimates as compared to the critical accounting policies and estimates described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” set forth in our Annual Report. Recent accounting pronouncements A discussion of recent accounting pronouncements is included in Note 2 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. 38 Table of Contents Item 3. Quantitative and Qualitati ve Disclosures About Market Risk. Interest rate risk Our cash, cash equivalents and restricted cash, consist primarily of interest-bearing accounts. Such interest-earning instruments carry a degree of interest rate risk. To minimize interest rate risk in the future, we intend to maintain our portfolio of cash equivalents in a variety of investment-grade securities, which may include commercial paper, money market funds, and government and non-government debt securities. Because of the short-term maturities of our cash, cash equivalents, restricted cash, and marketable securities, we do not believe that an increase in market rates would have any significant negative impact on the realized value of our investments. An immediate increase or decrease in interest rates of 100 basis points at March 31, 2025 could result in a $0.8 million market value reduction or increase of the same amount. In August 2024, we issued the 2028 Convertible Notes with an aggregate principal amount of $150.0 million, the full amount of which is outstanding as of March 31, 2025. The 2028 Convertible Notes have a fixed interest rate of 7.50 percent; we do not face variable interest rate risk with respect to the 2028 Convertible Notes. The fair value of the 2028 Convertible Notes changes when the market price of our stock fluctuates or market interest rates change. Foreign currency exchange risk All of our revenue and a majority of our expense and capital purchasing activities for the three months ended March 31, 2025 were transacted in U.S. dollars. As we continue our sales and operations internationally, we will be more exposed to changes in foreign exchange rates. Our international revenue is currently collected in U.S. dollars. In the future, we expect that our international sales will be primarily denominated in U.S. dollars. If we decide in the future to denominate international sales in currencies other than the U.S. dollar, unfavorable movement in the exchange rates between the U.S. dollar and the currencies in which we conduct foreign sales could have an adverse impact on our revenue. A portion of our operating expenses are incurred outside the United States and are denominated in foreign currencies, which are subject to fluctuations due to changes in foreign currency exchange rates. In particular, in our Mexico, Australia and UK-based operations, we pay payroll and other expenses in Mexican pesos, Australian dollars and British pounds sterling, respectively. Our operating results and cash flows are, therefore, subject to fluctuations due to changes in foreign currency exchange rates. However, we believe that the exposure to foreign currency fluctuation from operating expenses is relatively small at this time as the related costs do not constitute a significant portion of our total expenses. We currently do not hedge foreign currency exposure. We may in the future hedge our foreign currency exposure and may use currency forward contracts, currency options, and/or other common derivative financial instruments to reduce foreign currency risk. It is difficult to predict the effect future hedging activities would have on our operating results. Credit risk Financial instruments that potentially subject us to concentrations of credit risk consist of cash and cash equivalents, restricted cash, and accounts receivable. Our investment policy limits investments to high credit quality securities issued by the U.S. government, U.S. government-sponsored agencies, and highly rated corporate securities, subject to certain concentration limits and restrictions on maturities. Our cash and cash equivalents and restricted cash are held by financial institutions that management believes are of high credit quality. Amounts on deposit may at times exceed FDIC insured limits. We have not experienced any losses on our deposits of cash and cash equivalents, and accounts are monitored by management to mitigate risk. We are exposed to credit risk in the event of default by the financial institutions holding our cash and cash equivalents or an event of default by the issuers of the corporate debt securities we hold.