BigCommerce Holdings, Inc. (NASDAQ:BIGC) is a leading provider of open, composable commerce solutions that empower brands, retailers, and businesses to create exceptional online shopping experiences. With a focus on flexibility, scalability, and cutting-edge technology, BigCommerce has established itself as a driving force in the rapidly evolving ecommerce landscape.

Company History and Growth

Founded in 2009 and headquartered in Austin, Texas, BigCommerce has experienced remarkable growth over the past decade. What started as a small startup has blossomed into a recognized industry leader, catering to the diverse needs of businesses of all sizes, from thriving small enterprises to large, established brands. The company initially launched its software-as-a-service (SaaS) ecommerce platform to provide professional-grade commerce solutions for businesses of all sizes. BigCommerce's platform enables customers to build and manage their online stores, supporting features such as hosting, checkout, order management, and integration with third-party services.

In its early years, BigCommerce focused on expanding its customer base, which included a range of B2C and B2B businesses across various industries. The company's international expansion led to the opening of offices in Australia, the United Kingdom, and Ukraine to better serve its global customers. As BigCommerce's platform capabilities grew, it attracted a mix of small, medium, and enterprise-level customers seeking a robust and flexible ecommerce solution.

During the 2010s, BigCommerce faced challenges in a competitive landscape dominated by larger players like Shopify and Magento. To differentiate its offering and meet evolving customer needs, the company invested heavily in product development and strategic partnerships. This strategy included the acquisitions of Feedonomics, a leading product feed management platform, and Makeswift, a visual editor for ecommerce websites.

A significant milestone in BigCommerce's history came in 2020 when the company went public on the Nasdaq exchange, raising capital to fuel its growth strategy. Despite the challenges posed by the COVID-19 pandemic, BigCommerce was able to maintain strong customer relationships and expand its enterprise customer base during this period.

Product Offerings and Innovation

BigCommerce's flagship platform offers a comprehensive suite of ecommerce tools and functionalities, enabling customers to build, manage, and optimize their online stores with ease. The company's commitment to open architecture and seamless integration with a vast ecosystem of third-party applications has been a key differentiator, allowing businesses to tailor their digital experiences to their specific requirements.

One of the standout features of BigCommerce's platform is its emphasis on composability. By providing a flexible, modular approach, the company empowers its customers to mix and match best-in-class components, from payments and shipping to content management and analytics. This level of customization has been instrumental in helping businesses stay agile and responsive to evolving market demands.

In 2024, BigCommerce took a significant step forward with the launch of its Catalyst offering. Catalyst is an accelerated reference architecture that leverages the power of composability, enabling customers to quickly and cost-effectively build and deploy their online stores. This innovative solution has been widely praised by industry analysts and customers alike, showcasing BigCommerce's dedication to driving ecommerce innovation.

BigCommerce has organized its product and service solutions into three core offerings:

Business-to-Consumer (B2C)

The B2C audience includes branded manufacturers, multi-brand online retailers, and store-based retailers. BigCommerce serves this segment with a platform offering enterprise-grade functionality, openness, and performance capabilities, allowing B2C businesses the flexibility to modernize and customize at a lower total cost of ownership than competitors. The company's powerful storefront speed, open partner ecosystem, multi-brand/international capabilities, and robust security make BigCommerce an ideal fit for B2C businesses.

Business-to-Business (B2B)

BigCommerce caters to a range of B2B businesses, including manufacturers, distributors, wholesalers, professional services, and hybrid B2B-B2C sellers. The company supports this group with a platform offering anchored on improved operational efficiency and customer experience through digital transformation. With its advanced B2B functionality and flexibility, BigCommerce is equipped to serve complex B2B use cases, whether businesses are new to online selling, seeking to scale, or looking to expand into new markets and channels.

Small Businesses (SB)

Small businesses using BigCommerce are growth-oriented B2C and B2B businesses typically ranging from $0.5 million to $5 million in total annual revenue. BigCommerce serves the SB market by providing commerce capabilities that meet their changing needs and increasingly complex use cases as they grow and scale up-market. The company serves these lines of business with professional-grade commerce solutions, high-touch experiences and seamless integration, providing dependable, customizable, and scalable tools that drive growth and enable business agility.

Financials

Financially, BigCommerce has demonstrated impressive resilience and growth. In the fiscal year 2024, the company reported revenue of $332.9 million, an 8% increase compared to the previous year. This top-line growth was accompanied by a significant improvement in profitability, with non-GAAP operating income exceeding $19 million, a $25 million improvement over 2023.

BigCommerce's focus on enterprise-level customers has also borne fruit, with the company's enterprise annual recurring revenue (ARR) growing 7% to $262 million in 2024, representing 75% of the company's total ARR. This emphasis on the high-end market has been a strategic priority, as BigCommerce aims to capitalize on the increasing demand for sophisticated, scalable ecommerce solutions among large, complex organizations.

The company's financial performance has been further bolstered by a disciplined approach to cost management and operational efficiency. In 2024, BigCommerce reduced its non-GAAP sales and marketing expenses to 36% of revenue, down from 41% in the previous year. This optimization has enabled the company to invest in key growth initiatives while maintaining a strong focus on profitability.

Subscription solutions revenue, which makes up the majority of total revenue, grew 8.1% to $247.9 million in 2024. Partner and services revenue also increased 6.2% to $85.1 million. Gross margin remained relatively stable at 76.7% in 2024, compared to 76.0% in 2023.

The company continues to invest in its platform and technology, with research and development expenses of $80.9 million in 2024. Sales and marketing expenses decreased 7.6% year-over-year to $129.6 million, as the company focused on more efficient go-to-market strategies.

Despite these investments, BigCommerce reported a net loss of $27 million in 2024, an improvement from the $64.7 million net loss in 2023, as the company works towards profitability. Operating cash flow for 2024 was $26.3 million, a $50 million improvement from 2023. Free cash flow for the year reached $22.5 million.

In the most recent quarter (Q4 2024), BigCommerce reported revenue of $87 million, representing a 3.4% year-over-year growth. The net loss for the quarter was $2.4 million, with operating cash flow of $12 million.

Liquidity and Future Outlook

Looking ahead, BigCommerce has provided guidance for fiscal year 2025, projecting revenue in the range of $342.1 million to $350.1 million and non-GAAP operating income between $20 million and $24 million. This outlook reflects the company's confidence in its ability to reaccelerate revenue growth while continuing to drive margin expansion.

For Q1 2025, BigCommerce expects revenue of $81.2 million to $83.2 million and non-GAAP operating income of $4 million to $5 million. The company is targeting mid-single-digit growth rates for the full year 2025, with ARR growth gradually accelerating. BigCommerce is also aiming for additional low-to-mid single-digit operating margin expansion in 2025.

The company's liquidity position remains strong, with a debt-to-equity ratio of 6.61 and cash and cash equivalents of $88.9 million as of December 31, 2024. BigCommerce's current ratio and quick ratio both stand at 2.85, indicating a healthy short-term financial position.

Industry Trends and Market Position

The ecommerce industry has experienced significant disruption in recent years, with the COVID-19 pandemic serving as a catalyst for increased online shopping and the rapid adoption of digital sales channels. As businesses of all sizes seek to capitalize on this shifting landscape, the demand for flexible, scalable, and innovative ecommerce solutions has never been greater.

BigCommerce's positioning at the forefront of this transformation positions the company for continued success. With its robust product offerings, strategic partnerships, and a seasoned leadership team, BigCommerce is poised to play a pivotal role in shaping the future of the ecommerce industry.

The ecommerce market continues to show strong growth potential, with ecommerce now accounting for around $1 out of every $5 spent on retail purchases. However, over 80% of the retail market remains relatively untapped by ecommerce, leaving significant room for further industry growth.

Geographic Performance

BigCommerce has demonstrated a strong presence in key markets worldwide. In 2024, approximately 76% of the company's revenue was attributed to the United States. The Europe, Middle East, and Africa (EMEA) region accounted for 11% of revenue, while the Asia-Pacific (APAC) region contributed 8% of revenue. This geographic diversification highlights BigCommerce's global reach and its ability to serve customers across various markets.

Customer Base and Enterprise Focus

As of December 31, 2024, BigCommerce served 5,880 enterprise accounts, which may have more than one Enterprise plan or a combination of Enterprise plans and Non-Enterprise plans. The company continues to focus on growing its enterprise customer base, recognizing the potential for higher revenue and long-term relationships with larger clients.

Conclusion

BigCommerce's compelling value proposition, strong financial performance, and unwavering commitment to innovation make it a compelling investment opportunity in the dynamic ecommerce software market. As businesses of all sizes navigate the rapidly evolving digital landscape, BigCommerce's flexible, composable solutions are well-positioned to meet their evolving needs and drive growth. With a clear strategic vision, a robust product pipeline, and a seasoned leadership team, BigCommerce is poised to cement its position as a leading provider of ecommerce technology solutions.