Good afternoon, everyone. Ken Wong here, software analyst at Oppenheimer & Company. I'm happy to have with us at the 1:15 time slot, BigCommerce. With BigCommerce, I have Daniel Lentz, CFO. We're gonna go through a fireside chat format for the first, let's say, 20-25 minutes, and then happy to open up the line to audience questions. You can punch those questions into the webcast portal, or if you can't figure that out, send it to me directly, ken.wong@opco.com. And with that, Daniel, welcome. Thank you for joining.
Thanks for having me.
Yeah, really appreciate you participating. Look, I think a lot of people generally know what BigCommerce does, but, you know, for the audience, maybe just a quick refresher, kind of what is BigCommerce, what's the vertical end market, your customer tiers, and, and so forth?
Yeah. So BigCommerce is a e-commerce SaaS company. We have a handful of different products. The main one we're most well known for is obviously our platform product, BigCommerce. We've been in business for, man, at least probably 15 years. Originally started as a small business e-commerce company, founded out of Australia, and then over the course of the last decade or so, we've been kind of steadily investing in the product and moving upmarket, where our, you know, kind of our sweet spot today is mid-market and the lower end of enterprise. We still have a pretty significant small business portion as well.
It's about roughly a fourth of the total company, and, you know, we compete with, on the, the enterprise side, whether it's Demandware through Salesforce or Magento through Adobe, also compete with Shopify and Commercetools, as well in the mid-market and some other areas. We also have, a company called Feedonomics, which is also a part of our portfolio, which is in kind of the Omni-channel feed management space. It's an AI product that companies that are either doing, online advertising, through Google or social channels or selling through third-party marketplaces, basically takes the sending data from the business's site and schema, transforms that using AI and a little bit of human intervention to basically make sure that you get better return on ad spend, better, algorithmic search results when you're on marketplaces.
It's really, if not the best in the world in, in kind of omni-channel feed management, it's certainly up there. We also own a couple of other assets on the B2B side. We have a really substantial and growing B2B business. Bought a small company recently called Makeswift, which is in kind of the page builder space as well, which we can speak to what we're planning to do with that asset as well. So, it's a, you know, exciting company, huge TAM, a lot of things that we're working on and things that we need to, you know, get some improvement in some of our results that we're working diligently on as well, which I'm sure we'll spend some time talking about.
Okay, fantastic. Really appreciate the overview. And maybe just to kind of set things off, since it does feel like it's highly topical right now, it is something asked consistently across these sessions. Maybe start off with just the macro backdrop.
Like, e-com is very consumer sensitive, so how would you characterize the, the spending environment, you know, across merchants? Like, what are you seeing through the first half of the year?
I would say, results have been fairly similar to where we expected going into the year. I've been accused of being a little more optimistic than others have been, but I think it's important just to understand that we were pretty conservative going into the year on where we thought we would be from a macro climate point of view. So maybe the reason I've come across a little bit more optimistic is because from the jump, I was a little bit more pessimistic on where we thought the macro was gonna be. From a signaling basis and what we're seeing in market, there's really two areas that I focus on the most. One is obviously consumer spending, and what we see in our primary markets, which would be primarily North America, Australia, New Zealand, and Western Europe.
And then the second signal that I look for is just where are we kind of in a replatforming investment cycle point of view? I would say from the consumer spend side, we've used the term resilient to describe what we're seeing over the last 2-3 quarters. Overall, I would say that's still true. But again, we were pretty conservative going into the year on where we thought consumer spending trends would be. I see a lot of the same macro signals, whether it's Home Depot's latest results and some of the things they were talking about on, you know, home investments, or UPS's results, McDonald's.
There's been a whole host of things that have obviously come out there that say, you know, consistent with what we're seeing, that the consumer is obviously still struggling, but overall, it's been in line with kind of what we expected. Where we've seen a little bit more challenge, actually, is on the platform investment side of things, and this has been going on for probably, I'd say, the last year to year and a half. Last year, coming out of COVID, when interest rates moved sharply up, into kind of a more, you know, if not rational, long-term interest rate environment, certainly more so than when it was more of a free money environment, a lot of companies, ourselves included, really rapidly switched to cost savings mode, consolidating, spend with either professional services or software and the like.
As a part of that, in 2023, we saw a little bit of downgrade headwinds last year, where especially, I'd call it kind of our 2021 or 2022 COVID-vintage groupings, maybe kind of signed up for a little bit more than what they ended up needing, wanted to, you know, downgrade their price a little bit, kind of rightsize that contract. We work with our customers as much as we can when we're in those situations, subject, obviously, to the agreements that we've signed. We've seen a little bit less of an impact from that this year. It's a little bit more back to normal, though certainly a little bit still elevated compared to where it was during the pandemic, but a little bit more normal and in line.
What's still been challenging is just the volume of pipeline of new logos and just customers doing replatforming and migrations. That's certainly been tight and has continued to be across the year.
Okay, perfect. And maybe last question on sort of the macro topic, but you know, kind of beyond some of the right sizing, what are you seeing from a sales cycle perspective? You guys attract, you know, kind of multiple tiers from SMBs, mid-market, and now lower enterprise more aggressively. Like, what are you seeing across those various buckets?
I would say there, there's pros and cons of what we're seeing for the business, right? I'll start with maybe some of the cons, which is just the total deal flow or total deal volume is not as high as where it's been in years past, consistent with what I was saying earlier, just about kind of the platform investment cycle.
Yeah.
You know, all companies, ourselves included, are just being a lot more disciplined about where they're spending money. And obviously, that creates some headwinds, which, I mean, there's been some areas in the business, I'd say over the course of the last couple of years, where we've seen a dramatic improvement in our results. Contract quality, I think, would be one of them. If you look at whether it's where we are on deferred revenue, which was up nearly 50% year-over-year, remaining performance obligations, which is, you know, kind of a good signal for the length and long-term healthy contracts that we're signing, is up nearly 40% year-over-year.
But our ARR was kind of up in the mid-single digits, which shows just the quality of the contracts is up dramatically, but the number of new bookings and pipeline build has still been challenging. That's kind of the downside. On the plus side, it creates a real opportunity, though, for new technology companies with a really strong TCO advantage, and companies even on the Feedonomics side, that are really looking to make absolutely certain that the dollars that they're putting to work in-market, whether it's marketing spend or third-party sales and marketplaces, they want to know and see that that is performing really, really, really well. And Feedonomics really just does an outstanding job at really helping to optimize the dollars that are being spent and really deliver really sizable improvements, you know, as much as 20% improvement in conversion rates when using Feedonomics.
So there's a lot of really good data there. It's while it's a tough environment, it obviously also creates a lot of opportunity, especially for companies like ourselves, that I would argue is really, really a strong product. Kind of less than fair share from a market share point of view, which we're working on, but we think that creates a lot of upside opportunities for where we are and for shareholders.
Okay, fantastic. And you touched on kind of quality bookings. I want to circle back to that, but maybe first, leading into that, you know, you guys pivoted some of your investments away from your SMB base, shifted it more towards your lower enterprise customer base. Now, where are we on that process? How should we think about that pipeline of enterprise going forward? I know we're starting to, you know, perhaps emerge from a trough, but we'd love to get your perspective on what we're seeing there.
Yeah, if I look at where we are overall, I'd say there's almost, over the course of the last few years, almost three transitions that we've been going through. And Ken, you and I talk about this all the time. I try to be as transparent about where we need to get better as the places where I feel like we've done a really exceptional job. I think it's important for investors to really understand and see that, kind of understand what's going on and see that transparency.
Right.
I think there's three transitions we've been going through, and some we still have some challenges on. So the first and most important is the product. So over the course of the last nine years since Brent took over, we've been steadily investing to open up the product, both, you know, through the core commerce product, also Feedonomics, such that it really is a flexible product that you can deploy with speed to really get to the latest, greatest technology. And some of the things we're doing there is really outstanding, such that I could give you numerous examples. One would be on the B2B side, where we, you know, built out the ability to customize the buyer portal for B2B customers, and we've now open-sourced that as well, so customers can completely modify and configure that.
Like, we really believe that the product needs to be designed to what the customers need it to do. In the course of opening up that product and introducing all those upmarket features and functions, has gradually opened up the TAM for where we can play beyond where we started in small business, now up into mid-market and the lower end of enterprise, and we're confident over time we can get into more and more use cases moving upmarket into enterprise as well. So kind of transition one, which I feel like so far we've executed pretty well, is moving the product upmarket. The second transition that I would speak to is kind of where we've been putting dollars on the go-to-market side. Like, we started shifting where we've been putting demand gen resources more upmarket into mid-market and enterprise.
We really started that in earnest over the last, call it, year or two. It's kind of shift of dollars. And then the third is kind of the change in the go-to-market motions, like how we approach metrics, goaling, organizational structure, and I think that we are really in the midst of making a lot of those changes, kind of in that third transition. You know, if I could go back, I think I probably would have started that even a little bit earlier.
Bringing in the president, Travis Hess, as an example, I think doing that a little bit earlier as we were making the shift in some of the dollars, I think would have led to better results from a sales and marketing expense efficiency point of view than where we've been over the course of the last few quarters, which, you know, it's been getting better, but it's still not best in class and not nearly where we know that it needs to be and where we're confident we can get the business.
Okay, fantastic. On that third point, you know, you mentioned bringing in Travis. You know, it seems like you guys are kind of cleaning up sales org. You guys have the right people in place now. Like, what else needs to change or is changing? What's the right timeline in terms of potentially seeing, you know, some progress on that front to get comfortable that you guys are on the right path?
Yeah, I mean, I would describe it slightly different. I wouldn't describe it as cleaning up any one org or another. Like, the teams we have are outstanding.
Okay.
I don't think this is about the people. I think this is really about structure and approach, and focusing on efficacy and efficiency of the dollars that we're putting in place. So I don't, by saying that we need to continue to execute better, I don't want that to be taken as some sort of reflection on the people, because that's not, not how we see it. Now, what we do wanna make sure that we focus on is making sure that we have the leadership team in place and the structure underneath them that can make those dollars perform better than where they have in the past.
And so when we look at where we are from a growth rate perspective, we know that we need to re-accelerate revenue growth, and we're confident that we can do so while being more efficient than we have been in the dollars that we have in place. So how do we do that, and what have we been doing over the course of the last several months? Like I mentioned on our last earnings call, you know, we have, we made a lot of improvements and changes. We have more to come. It's not net new things that hadn't really been considered before. It's kind of a continuation of what we've been working on over the course of the last several quarters. There's a couple of things that I would bucketize it into. Number one is kind of end-to-end ownership of the customer.
In Q4, we kind of changed the way we were scoping some of our leadership roles so that we didn't have, you know, such rigid handoffs between the sales organization and the services organization, which leads to a lot better kind of holistic account coverage by our sales team. And the fact that we needed to make that change is kind of reflective in where we've been kind of seeing a lot of our revenue growth come from. We've been, in the past, somewhat disproportionately weighted towards new logo acquisition as a means of driving revenue growth. That's not a bad strategy when the cost of acquiring a new logo is substantially lower than where it is today in this macro climate, obviously.
And so what we've really been working on over the course of the last probably 2 to 3 quarters, and this is gonna continue, is really just getting to a better balance in source of growth between existing accounts and cross-sell to existing accounts and the acquisition of new logos. And we've had a lot of success and improvements that we've seen so far this year. As we mentioned on our call, you know, on a dollarized basis, our gross and net retention rates are improving, kind of in line with where our internal plans are. Still not where they were a couple of years ago, but they're heading in the right direction of where we wanted them to be.
More of the challenges we've seen this year is more macro-driven in what we're seeing in terms of new logo builds, but we've been focused on dollars first, count of customers second, I would say, because we're really focused on P&L health and kind of improving that efficiency.
Okay, and another thing you touched on earlier, the quality of your bookings, the quality of your revenue is definitely higher. You guys, you know, made a push to get more upfront billing from customers.
Like, how far along are we in that process? And then from an outsider's perspective, you know, should we start to look at billings and RPO as a potential leading indicator of your revenue going forward? That wasn't how you guys used to frame those KPIs.
Yeah. Yeah, so the way we used to frame was that we, you know, used to say that deferred revenue and RPO was not a great leading indicator for where we were on a bookings basis. That was because so many of our customers were paying us on a monthly basis, very much in line with kind of the small business roots of the company. We've made significant changes to that over the course of the last two years. We've had a major improvement in the amount of advanced billing that we see from customers, both new customers as we're signing them, then also existing customers as they are rolling and renewing, and those may not be going from monthly to annual all at once.
They may be going from monthly to quarterly, and then next year, you kind of, you know, move it along one step at a time. I would say, at this point, it is still not a perfect indicator of where we expect ARR growth to be in the short run, because we still need to see, I would argue, a bigger percentage of our base on annual billings before that really becomes a perfect leading indicator of absolute ARR growth. It's getting there, but I still think it's gonna take a couple years for that to be a perfect metric. But what it absolutely is a leading indicator of now, and I wouldn't have said this a couple of years ago, is the earnings and revenue quality that's coming in the door.
I mean, it is substantially different, and you see this all the way down in the flow through to cash flow. I mean, obviously, when we look at our profitability and the total cash flow of the business, we're scratching the surface of our potential and where we know we need to be. But, you know, I've been here about 6, 6.5 years at this point, and the flow through from bookings to revenue, revenue to profit, profit to cash flow is by far the strongest I've ever seen at any time that I've been here, and that's with there still being quite a substantial amount of runway for us to continue to get our base into advanced billing in a way that's much more typical for a mid-market or enterprise SaaS company.
Got it. You talk about a big TAM here. Like, I think we all recognize that commerce is a massive opportunity, and historically, sort of everything came with a platform. Kind of with economics, you guys branched out to selling adjacent capabilities on top of the core platform. I think you did that with B2B Ninja as well. How should we think about BigCommerce's approach going forward? Is that something you guys will lean into more? How does that play off of your kind of more open, you know, partner ecosystem approach?
Great question. So this gets to a bit of a philosophical question about how we think about total monetization opportunities with customers. Some of our competitors pursue kind of a vertical integration strategy, where they say, "Listen, the way that you're gonna do a numbers game, if you're gonna acquire 100 customers," say it's a small business type of competitor, maybe they churn out 50, but the 50 that they keep have so many white label, vertical integrated ways to make money after the fact. You can kind of make the math work in that model. It's a high velocity, high turnover model, but you make enough money on the back end that it's there.
I've gotten a lot of questions about how we approach this from a strategy point of view, and to understand this, you really have to understand our partner and services revenue line item, which is really substantial, and it's basically pure net revenue bookings. Like, it's not... We don't take on credit risk. We don't take on any of those types of things. Like, it is a pure rev share, and it's one of the ways that we increase total net revenue retention of customers when they come on the platform. So we would look at it and say, "Listen, as you are going upmarket," take payments as an example, which is one that's kind of the classic question that we get. We're one of the few in the market that don't have kind of a white labeled or branded payment solution.
I get asked questions pretty frequently why. The answer I would give to that is, I think as you move further and further upmarket, the more flexibility large multinationals need to have, either based on geography or use case, the right payments partner in the United States is gonna look very different potentially from who you may want to use in Germany. And we would look and say, "Well, we're gonna partner with the best in Germany and the best in the United States," get a very healthy rev share that we believe we capture the substantial majority of the profit margin that we would get, even if we took that on as kind of a vertical integrated expansion strategy, and monetize it through the partner and services revenue line item.
But it's different 'cause it's not gross bookings, so it's not as big of a percent of our revenue, but it's obviously a really nice profit center for us. The broader question then is: how do we think about portfolio expansion as a means of cross-sell and expansion overall with our customers over time? And I'd say today we have probably three primary products in how we approach the market, maybe four, and we're working on continuing to build this out in a responsible way. Obviously, the core one is the commerce product. Number 2 is Feedonomics.
That can be cross-sell either direction, either a BigCommerce customer using Feedonomics or a Feedonomics customer using BigCommerce, though the substantial majority of Feedonomics revenue is actually not using BigCommerce as an e-commerce product, and part of our open ethos is that we're not gonna be forcing Feedonomics customers to try to use BigCommerce. We invest in Feedonomics to make it the best platform for omni-channel feed management on Shopify or on Magento or Demandware, or many, many others, and that will remain the case. But we obviously have that cross-sell. Once you land a platform account, you have substantial opportunities to also pick up partner and services revenue at a very, very high margin.
We also think over time we have opportunities through the acquisition of Makeswift, which kind of gets us into not just kind of the amplification of what it can do for the core commerce product, when paired with what we're doing in our Catalyst initiative, which we can speak to if you like, but it also opens up TAM for us within content-only websites that maybe aren't starting in commerce. It's a great tool that can be used for visual editing and site construction there, and that's on top of upsells and that we do with, you know, getting customers using our B2B suite as well. So when I look at what that means for us from an expansion point of view, potential M&A point of view, our aperture is pretty narrow in terms of the types of things that we would do.
It's your classic build versus buy discussions, but we definitely see ways that we can broaden the portfolio of what we're selling and what we can cross-sell, such that as we are looking, again, as I said, for that better balance between growth from new logos and expansion of existing, we want to increase the bag of what's available to our account teams in order to cross-sell into those accounts and build out the messaging and the branding behind that, that does a more effective job in kind of bringing those all under one portfolio.
All right. You know, I probably wasn't gonna dive into kind of Catalyst and Makeswift-
That's okay.
Right off the bat, but, you know, it does... You do bring up an interesting point. I think there's-- I think from the outside looking in, you guys have been talking about moving upmarket. One, one might look at kind of a prepackaged kind of Catalyst offering, Makeswift being more of a content type of a product, being a return back downmarket. I, I guess maybe help me-
Exactly.
Where I'm wrong there.
Yeah, so if you think about it from a direct sales point of view, Makeswift is a great tool for content sites, which you could argue is maybe more downmarket than the commerce product, but that's not the driving thesis behind why we did the acquisition. So our Catalyst initiative, in very simple terms, basically lowers the barrier to entry and speeds up the time to implementation for composable architecture.
So if you look at, like, soundbites like the MACH Alliance or headless, all these different things, headless is just a use case of a composable build. Now, we offer either a full out-of-the-box deployment on the commerce side, where we are opinionated, so to speak. Well, we'll say: Listen, if you're in this vertical, this is the right combination of technical solutions that we think is gonna be the highest performing. But the product, again, as I said, we've spent years opening up the product. You can then deploy it modularly. You can say, "I just want to use BigCommerce for checkout," which is, you know, we have certain examples there, or you can use it for the whole suite.
If you want to do it composable, it creates a lot of really interesting opportunities for how to customize the deployment for the business, but that traditionally has been a little more costly as an implementation strategy. It takes a little more time, either in pro services costs or the like, but by using Catalyst, it kind of uses this technology such that you can do a lot of those benefits, but you can do it less expensively and faster.
I would look at that and say, it's not that it's a downmarket move, it's a way of really democratizing the way to do that type of composable build and bring that product advantage to a bigger part of the TAM, which we think gives us a lot of upside in where we can be from a market share perspective over the next several years.
Okay, perfect. Thanks for the clarification. I'm gonna pause for a second, see if there's any questions from the audience. Again, if there are any questions, feel free to submit them. Oh, here we go with one. What specific things are you doing to enhance shareholder value? As a small tech company, growth would be a catalyst for shareholder value. Growth has been anemic at best. What are you doing to spark significant growth?
That's a great question. So what Brent and I have been talking about all year is that the number one driver for the year is efficient revenue growth. Not trying to come up with an investor relations soundbite. There's actually meaning behind why we choose the words that we do in particular. It's because there are two hard requirements that we must execute upon in order to increase shareholder value. One, to the question's point, is growth rate. We know we need to accelerate growth rate, and we're confident that we can. The TAM is there, the product is there. Yes, it is a difficult macro climate, but I stopped, you know, making excuses based on outside forces back when I was in high school, at least I hope so, and shareholders require us to execute in all markets, even tough ones.
And so when we look at where we are on a go-to-market execution side of things, among other areas within the business, we're really confident that we can improve the share, the pipeline build such that we can reaccelerate revenue growth, even if the macro remains challenging, which I expect it will continue to be so for a while. I'm looking at the same signals as everybody else. Ken, just like the first question that you asked at the beginning of this. The second part of that is the efficient part.
When we look at our sales and marketing efficiency, and this is not just a departmental comment, this is where we're spending money and how that plays its way through towards net retention with our customers, we are not best-in-class in that area, and we know that we need to get substantially better. And that speaks to what we were talking earlier about bringing on Travis Hess as our new president, who is really outstanding. The more time I get to spend with him, the more excited and bullish I get about where this business can go. His background is, I think, uniquely suited well for where we are. I mean, he was on Shopify's Product Council. He's been in e-commerce for 25 years in a number of different places.
I mean, even when I was interviewing him originally, we had really great, blunt conversations about where we were doing well and where we could be resonating better in market, 'cause he's been competing with us for years. And so it's been really great to have him here because it really kind of helps us set a vision for where we need to take the business externally to resonate better in market, such that it can get back to acceleration and revenue. 'Cause I think from a shareholder value perspective, we know we need to get better efficiency, better efficacy, and again, go back to what I said about bookings to revenue, revenue to profit, profit to cash, the best it's been since I've been here.
If we can start making more progress on top line growth, even in a tough climate, the flow-through from that down to profit improvements and cash flow, I believe, is going to be very substantial. Given where we're trading, I think that creates a ton of upside for shareholders. We are not okay with the results that we've been posting in that area in terms of overall top line growth, and we are absolutely focused and determined on getting that where it needs to be. We expect it to be challenging. It's not gonna be easy. I don't expect it to immediately turn overnight, but we are acting with urgency on the changes that we need to make in order to get it where it needs to be.
All right, perfect. And again, if there's any questions, please submit them to the webcast portal, or send them to my inbox, ken.wong@opco.com. You know, maybe shifting over to areas that you guys are doing particularly well across kind of industry conversations, and I feel like even in your own talking points, B2B has been one area where perhaps you guys have-
Really outstanding.
Tougher climate.
Yeah.
Can you talk about kind of where you are from a market position there? Is that an area we should expect management to lean into?
Absolutely. I expect B2B to be a disproportionate grower for us over the course of the next two or three years, and also get kind of disproportionate investment. Not to lean in too much on analyst ratings, it's customer ratings that I'm most concerned about, not necessarily analyst ratings, but they're a good leading indicator of where the product is. And if you look at just whether it's, you know, Paradigm B2B or the B2B Combine, like, we're cleaning up on recognition for where the product is on the B2B side. So when we look at where we think we can be from a share perspective in B2B, it's really, really strong, and the product is performing really, really well for multiple use cases.
I think if you get back again to our open ethos here, like, we have a highly customizable performant product that's very, very well suited to B2B, and we're gonna continue to kind of disproportionately invest and grow there, I believe, over the next couple of years.
Got it. And when we think about B2B, it's not your typical, you know, consumer retail.
Right.
I guess, help us understand kind of why is it that you guys win? Is it certain verticals? It's a certain end markets within that B2B landscape where BigCommerce excels?
Yeah, so if you think about from the B2B use case point of view, it's a very different. The decision to re-platform in B2B looks different and has different catalysts than B2C. B2C may be more about revenue funnel optimization, what's going on with conversion rates, abandoned carts, what are you paying in terms of credit card fees, that kind of thing. B2B is different. The conversion rates in B2B are quite high. It's a totally different transaction. It's a lot more about tech flexibility, tech functionality, and TCO, and total cost of ownership, and we have huge advantages in those areas. Again, if you go back to the B2B portal, buyer portal that I described, like, there's a lot of configuration and build-out that we've done specifically within B2B that's getting that type of recognition.
I would say in some ways, it's a less crowded space from a competitive point of view as well. I mean, it's it gets pretty good efficiency from the go-to-market side. I mean, I actually saw a travel and expense report one time for sales reps that were going to, like, the Southeast Automotive Wholesalers Convention in Florida. That's a thing, and we were there. There are not a lot of e-commerce companies there, but there's great prospects at things like that because they do great on the platform, and sometimes brands and businesses that a lot of folks may not have heard of, but they're really, really solid economics in those deals. And the investment cycle in B2B is probably a couple of years behind where it is on the B2C side.
I would also add, just from a product perspective, you know, the fact that we have multi-storefront functionality enables customers that maybe are B2B today to add another storefront that's a direct-to-consumer storefront using all of the same back end, and not having to duplicate any of the back-end management of the site. And now all of a sudden, they're a hybrid in both markets. And so there's a lot of ways that we add functionality and flexibility for our customers, either B2C to start selling B2B or vice versa, that's unique to the platform and the capability of the product, that I think has really resonated and given us a leg up in B2B.
Got it. You know, you touched on efficient growth earlier. You also mentioned you guys, you know, recognized perhaps not quite best-in-class from an operating model perspective. Like, are there any additional things you guys can do to drive leverage? How much of the margin expansion going forward will depend on, you know, revenue rebounding, getting scale, or can you guys continue to manage that spend line in a more efficient manner to kind of keep margins expanding?
Both. I think we can continue to expand margins, even if revenue growth does not get where it needs to be in the short run. It's challenging. It's not easy to do. If it were easy, more companies would do it more quickly. But when we look at, we said going into the year that we wanted to get to margin expansion in the mid-single digits. Midpoint of our updated guidance, I think we're close to 500 basis points on a full-year basis, which is in the range we were talking about. We'd like to do a little better than that. I think we can do that even if the macro climate and top line remains challenging, but obviously, I'd love to see both. The fastest way to get to a better bottom line is better top line.
I think also long-term shareholder value creation is served through expansion overall on the top line, but doing so, it's got to be in a way that's done efficiently. We're way out of the years of operating at a loss, and you can always find funds, and don't worry, as long as you got a, you know, X growth rate, even if you're not running efficiently, that's not gonna be a problem. That's not a rational environment. I think we're through that for sure.
Got it. And let's see. I got a question that popped up in my inbox. This one's probably a little trickier. There's probably only so much you can disclose.
Right.
The question being, you know, there's obviously been, there was headlines that you guys were exploring a sale. You guys somewhat addressed it on the last earnings call. Seems like, you know, those discussions have passed. You guys redid your debt. Like, what's management's philosophy in terms of, you know, potentially being acquired? How do you approach that? You know, any color you can give in terms of what happened in the last couple months?
Yeah, very little, as you can imagine, very little color that I can add beyond what we already said in our earnings call. You know, as we said, you know, periodically from time to time, we get inbound interest when that is serious, we take it seriously, as you would imagine. Board ultimately is gonna make a decision based on what they think is best from a shareholder value point of view. This case was no different. Could that change in the future? Certainly. I mean, every public company ultimately is for sale, as are many, many private companies. I would say that for where we are, we are really, really focused on execution of our operating plan. We think there's huge upside to shareholders based on getting that turned around.
It's a lot easier to turn around, go to market, than it is to turn around the product, and the product is there. And so we're really confident in the operating plans. The board is as well. But ultimately, we know we're accountable to the results. But we wanted to be as transparent as we could about that. Some companies don't acknowledge or don't talk about it when you know, there's been that type of interest. We wanted to acknowledge that, and try to be as transparent about it as we could. I'd always rather err on the side of being direct about what's you know, going great than direct about where there are challenges. I think that's just really important to us, that we're being really, really transparent with our shareholders.
Got it. Got it, perfect. Let's see, another question here. You know, when talking about the, the softness you've seen in your results, what gives you confidence that this is driven by just the cyclical macro headwinds that you're seeing versus something more competitive? Yeah.
I mean, I would say it's both. I mean, there's certainly some competitors in the e-com space that are doing a little better than others. I think, from what we see in market, and when, you know, we have many folks here in staff that have been veterans in e-commerce for many, many years, and when we talk to GSIs, I think in general, they would say the market is pretty tight right now in software in general. Not just in e-commerce, but software in general. There are some competitors, I think, that are doing better than others, and there's different ways that they're getting to that. Certain areas we can learn from and do a better job in, to be quite frank. I think my focus is: where are we on an operating execution point of view?
And from our point of view, from an accountability side, our job is to execute in all climates, whether it's a good macro or a bad macro. And there's not one thing that I believe we can do this one little thing better, and then it's gonna be a dramatic different result. I think there's 50 different things that we could do better that can add up to a dramatically different result, and I actually find that very encouraging. I am personally even in, even while being sober-minded about the climate that we're in from the macro side of things and the fact that I know we have so much that we need to and can improve in the way that we're executing, I'm really, really bullish about where we are overall with, with our results, the upside that's there.
I think that the intrinsic value of this company is really high. It's a very valuable asset, and it's... I get excited every day in kind of making sure that we're taking care of our customers. Our board is as well. And there's lots of things, yes, that we can and need to improve, and we're going to, but I think the upside here is just tremendous.
Got it. Okay, perfect. And then maybe shifting gears a little bit, you know, would like to touch on the kind of, the company's view on, on pricing. You guys recently raised pricing about, you know, just about two years ago. Competitor did as well. Competitors continue to raise price. Like, how do you think about, you know, pricing as a growth lever, and relative to, you know, your peers out there right now, how is that maybe an advantage for you guys in the, in the near medium term?
What I would say, let me speak to it from the customer point of view first, and then the investor point of view second. From the customer point of view, my main concern is transparency and predictability for our customers and their price. We're not trying to have a complex 2, 3, 4-part pricing scheme, where we've got a fixed minimum and really high variable. Our pricing model looks a little different. I mean, if we have customers that are wanting to price as basis points on GMV, we can accommodate that model, though it's not our primary. Traditionally, the way that we operate is you pay, you know, a certain amount per year to process a certain number of orders or SKUs on the Feedonomics side, but it's fundamentally the same structure.
When you go above that allotment, your price would go up, but it provides really good consistency and predictability for our customers, and they know what they're going to pay on a month-to-month and quarter-to-quarter basis. We want, obviously, to capture value that we think is proportionate to what we're driving for our customers. But from a model perspective, I think we can do that in a way that's very customer-friendly and continues to give them that type of predictability and fairness based upon what they're getting from the platform. From the investor point of view, we have and will continue to look at opportunities where we think it makes sense to take pricing action. Now, we don't. We have more opacity in our pricing, obviously, because outside of our small business product, we don't have pricing rate cards posted up on our website.
They're negotiated individually by individual account in our enterprise plans. But, you know, I would argue, you know, pushing more for advanced payment is a different form of pricing. Even if it's not an increase to the sticker price, it's a quality difference, but it also has benefits, I would argue, for the customer because they're not getting nearly as many invoices. They save money on the back and forth there. So there's some offsets that go along with that. Where we see pockets where we think it would make sense to take pricing, whether it's with new customers or as customers roll on their existing agreements, obviously, we do that, and we'll continue to do that. What we don't plan to do is some mid-contract price increase and opening up an agreement and a commitment that we already made to customers.
Or, you know, if we do that, there has to be pretty extreme circumstances why we would do that with an agreement that's already in place.
All right, perfect. We are running right up on time. Last opportunity for anyone in the audience. Any questions, please submit to the queue, or again, email kenwong@opco.com. Let's see. Going once, going twice, and sold.
All right.
Daniel, I think we're at the end of my list of questions, and we are right at the end of time, so I'll give you back your last 30 seconds. Really appreciate the time and the participation. Thank you to the audience. Daniel, I'll see you in a couple of weeks.
Awesome. See you in a couple weeks, Ken. Thanks for the thoughtful questions.