Good afternoon, everyone. Before we begin the Q&A, please note that legal has made me say this, but please note that our discussion today will include forward-looking statements regarding Commerce's business direction and future plans. These statements are for informational purposes only and are not a commitment to deliver specific materials or functionality. Because these plans involve risks and uncertainties, actual results may differ materially. We encourage you to review our SEC filings, included in our most recent 10-K for a detailed discussion of these risks. We may also reference non-GAAP financial measures today. You can find the relevant reconciliations in our investment materials.
Over the next 90 minutes, you're gonna hear directly from Travis Hess, our CEO, followed by a panel with our Chief Product Officer, Vipul Shah, and three of our product leaders, Sharon Gee on AI, Michaela Weber on payments, and Lance Owide on B2B. We'll close with our CFO, Daniel Lentz. The format is open Q&A for those in the room. We have some questions to get things going, but we wanna make sure we answer any questions that you might have. If you would like to ask a question, please raise your hand. We will run our microphone over to you. With that, let's get started with our CEO, Travis Hess. Travis, for those who are online. Yeah, you can come on up.
Am I going up?
Yeah, you can come up. Maybe tell us a little bit about how the event is going, what the event is for, and what you're most excited about coming out of Commerce Live.
Thank you. Let's start with what the event is for. Generally speaking, this has been an accumulation of partners, both on the tech and the agency side, as well as merchants, both existing merchants and prospective merchants certainly, and then a bunch of folks in between. It's really a product show to me, right? It's demonstrating where we are with the business, where we are with the product, what's coming, right? Validating folks in the building that currently run on one of our products of knowing what it is that we're doing, where it is that we're going, and why it is that we're going there. Also creating a lot of interactive forums and mediums by which to solicit feedback.
It's actually one of the most invaluable mediums for us, particularly around our customer and partner advisory boards, where a lot of the prioritization or the inputs to the prioritization framework for product and roadmap actually come from these conversations. It's really trying to foster. Think of it less of as a captive sales pitch, more of as an input to what we could be doing better, where do we have gaps, where do we have opportunities, and at the same time, articulate where it is that we're going and why. Obviously, taking input both during the sessions and after the sessions and from there, obviously, helping synthesize what it is that we're doing. That's the general gist of it. It's the one time of the year that we bring everybody together.
We just did this in EMEA a couple weeks ago in London at Wembley Stadium. We tend to pick really fancy sporting venues over there, and over here it's a little more subtle, although I think the venue here is fantastic, despite it being April in Chicago. Could have been much colder.
Yeah. You've talked about on stage how in the last year and a half we went through a lot of transformation, but now we're in execution mode. Can you tell us a little bit about what that means for you?
I think I've been pretty open about the amount of change that we needed to metabolize and digest. I think it started with admitting where I felt there were a lot of gaps, mostly around go-to-market, obviously. Coming in, I think it was confusing in many capacities, just given the three products that we owned we had not yet integrated, and the fact that the legacy brand was named after the platform. I think I mentioned in my opening remarks today, just commerce in general is becoming less storefront centric. That doesn't mean the storefront's going away. I think in my speech I talked about commerce moving into more of an environment that is very data centric, very distributed, and very orchestrated.
What I mean by that is, it's never been more important to have enriched, orchestrated data as everyone probably in this room uses LLMs on a daily basis multiple times, at least I do. Where to be surfaced in those interactions, which are very contextual and very conversational, as Sharon Gee does say and put this in my mind, we've taught the robots how to speak human. You've got to be able to have hygiene in your product data and actually have that orchestrated, syndicated out to the proper channels where you want to show up.
One of the big changes we've made in the transformation was to integrate our three products in a way that not only works better with the core base of customers, independent of what product that they're currently consuming, but also sets them up for the future. That is very often showing up across surfaces, regardless of channel and driving value regardless of where someone may buy your good or service and making that as frictionless as possible. A lot of the theme here is how did we transformatively bring these products together? How did we create a foundation where we can evolve those products in a very clean and transparent way? How can we modernize them in a way where we can react quickly to market conditions? How do we just make it easier to do business with?
Meaning, you know, how do we make Feedonomics available, not just way upmarket with the largest brand manufacturers, retailers in the world, but also for the install base of BigCommerce that didn't exist until Q4 of last year when we launched Surface? How do we move Makeswift and BigCommerce upmarket organically in ways that are now mapping quite nicely to what's going on in agentic? Do that in harmony and do it responsibly in a way under one brand, where again, we're making a statement as to where this model is going, and then obviously earning that credibility over time with events like these, soliciting that input and evolving the product accordingly.
This is very much a synthesis of a lot of the changes we made behind the scenes, a lot of the costs that we cut, where we're reinvesting kind of the fruit of that labor, so to speak, and then give that vision about where we're operating going forward. This is very much a product-driven business. Most of this, to me, I think we have an amazing product team here that's all been demonstrated on stage, and the emphasis here is if we were a restaurant, the product is our food. We're here kind of giving everybody a taste of the food, and we hope that it's good, and I think, you know, not to say we need to be imperfect anywhere else, but I think we haven't spent enough time on the food.
We spent a lot of time on the ambiance in the past, and I think it's been a misgiving and it's just in a model now in the market where things are moving so quickly, if you're not foundationally set up for success, the pace by which this model and the market is evolving is such that you can't, you know, a month behind ends up being, you know, six months to 12 months. I think we're in a much better space with the asset right now. I think it's been hard at times, obviously, doing this publicly. I feel really excited and really enthused about where we are, and I think, you know, it's momentum from here on out as we ship more product and we drive more customer outcomes and more value. That's the intent.
All right. We have a lot of partners here. What are you hearing from our partners? What are they most excited about? What are their concerns? What are you kinda hearing out there?
Yeah. I think I've tried to take, having come out of the services side of the business, I know what it's like to live with these products, implement the products, and have merchants of all shapes and sizes digest the products. I think A, accessibility to senior leadership, I think is very well received by partners. I think cluing them more in on the roadmap. I know we haven't always been as public as we'd like to be about what it is that we're doing for obvious reasons, maybe some less obvious reasons. I think the big theme we kinda teed up a year ago was trying to go narrower and deeper with partners of all shapes and sizes. I think that's probably been the best received input I've gotten, is they feel like the partnership.
I know it sounds cosmetic, going deeper with those partners. Obviously, AI has disrupted the services business pretty tremendously, I think anybody investing in our suite of services needs to feel comfortable that they can wrap enriching services around what it is that we're doing. They like to feel like, A, they're part of that input, and B, by proxy, that investment continues to make sense. We oftentimes need to think like a services provider as well, and understand what's enriching for them and what's valuable for them. At the end of the day, it's not just self-service software. You need a lot of these partners, whether they're tech partners or payment partners or service providers. They're ultimately the ones that are helping execute and reinforce the customer outcomes that we're trying to drive.
That's not something we've done particularly well in the past, not for any nefarious reason. It's just the business tended to be very compartmentalized, where we've actually rolled all of our partnerships, both tech and agency, under one leader, under one group. That had never been done before. That allows us to run at a pace that we've not been able to run, obviously. I think that's enthused folks as well, where they feel like both sides of that is now harmonized in one group, which didn't exist till about six months ago.
As a reminder, if you wanna ask a question, please raise your hand. Please introduce yourself and then ask the question.
Sure. Thanks, Tyler. Scott Berg at Needham & Company. Travis, you talked about partners. I know distribution has been a big focus of yours in general, trying to get in more deals over the last 18 months or so. Partners are incredibly important in this space, and they're obviously not going away. You lived it last time I checked. How are you making progress or traction kinda within that to help them either co-sell or lead some of these opportunities with you and just getting you more involved?
I think it's a couple motions there, Scott. Let's just talk cohort. Enterprise side, I try to be pretty clear with this. Most of that distribution's gonna be through GSIs. It's gonna be through the Accentures, the Deloittes, the EPAMs, the PWCs, folks that are embedded globally with the largest merchants in the world, largest retailers primarily, and brand manufacturing as well as manufacturers and distributors. That's been a distribution channel I've been very keen on. I've come out of that model. I know what works, what doesn't work, and how it works. Understanding the mechanics of what motivates those distribution channels is obviously an advantage coming in.
It allows you to spend a lot much, a lot less time, and lose a lot less hair kind of going in trying to figure out the mechanics of how the machine works. Also to the point I just made a few minutes ago, it also has to be enriching for those organizations, right? If Accenture can't sell high-margin, valuable services, by way of leveraging our product suite, they're just not in a position to invest in what it is that we're doing, hence you lose the distribution. For us, we've been very particular about triangulating this in a way that maps not only to, say, their best-in-class capabilities and reach, they all have different nuances and different mechanics in how they operate.
On the enterprise side, for us, we knew we needed to get way more efficient on sales and marketing efficiency. We weren't gonna be able to go do this and go it alone, we needed to do this through GSIs. I think that motion's been very exciting and a lot of momentum there, especially with the cohort of Feedonomics. On the mid-market side, which is where you're gonna see most of the SG&A and the investment for us and where we've lived historically on the platform side, and by proxy Makeswift, that's a bit more of a nuanced, kind of verticalized solution. Think of, with partners, pre-composing and predefining industry and sub-industry, level accelerators, right? Where we are aligning those accelerators by industry and by cohort. You know, we could T-shirt size, like even in regulated industries, right?
They have specific nuances across not only tech partners, but also service providers that have that expertise. How do we go deeper with those folks with less of them, where the product feels very innate to the merchant? We can get them live much faster than we normally would. It mitigates risk, it obviously accelerates revenue recognition, and it actually drives customer outcome and value, and it also allows those service providers to go wrap invaluable services around that that's typically based on business outcome. On the small business side, it's been less obviously service partner oriented. We've tried to move into a motion where it's more product-led growth that we've not really had, and certainly supporting that with prescriptive payment and technical partners. You've seen that. I don't wanna steal Michaela's thunder on BigCommerce Payments.
Certainly the motion there where we feel we can improve our take rate and obviously reduce friction, outside of any sort of service providers. I don't know a lot of service providers who are gonna get rich implementing, small business regardless of platform. That's really been the triangulation. We're in a much better spot to do that. We've got a lot better visibility in how we're doing, and we've got a lot more governance around how well we're actually doing this along the way, which wasn't always the case, one and a half, two years ago when I first got here.
Hi. thanks. John Messina, Raymond James. lots of new product announcements today focused around this, but just curious how you think about the size of agentic commerce for your business over the next few years, where you see your natural advantage, and maybe what signals you're watching for to see if they're materializing in your timeline there.
That's a great question, John. I think there's a lot of enthusiasm, and Sharon will talk to this way more tangibly than I would. She lives it every day. There's a lot of enthusiasm, obviously, up-market. A lot of these LLMs have been gated in nature, so they're not letting everybody in. Google with UCP has been very pragmatic of how they've rolled it out. There's a lot of demand for discoverability right now. Certainly, that's front and center. Arguably, these guys aren't stupid, right? They're not gonna allow people to just syndicate in to be discovered. They want, obviously, them to be transacted. That's the thesis, obviously, going forward.
I think, you know, at first, maybe a little more hesitation by brands, not understanding what that experience is gonna look like, what the governance model is gonna look like. I think it plays well to us, and I'll get to that in a minute. A lot of enthusiasm up-market in that cohort, particularly around retail, larger brand and manufacturers. I'll let Lance opine on the B2B side. I think we see some really tangible use cases there maybe sooner rather than later, but it's less obvious because these are typically behind, you know, paywalls and logins and things like that that aren't necessarily obvious to the general public. Mid-market and down, intrigue less immediacy, right? It's not, Oh my gosh, get me there tomorrow. Some more than others, depending on market, depending on brand.
Certainly, I think we need to display credibility there that we're gonna put them in a really good spot when that makes sense for their business, whatever that maturity level is. I think the big advantage for us, you know, listen, the transformation, the restructuring has allowed us to go back to really being a product-centric company, allowing us to ship really credible, differentiating product very quickly based on a number of different inputs. I think you're seeing that today in a lot of the talk tracks. You're gonna see it in what we've shipped to market and what we'll continue to ship. That's been a big shift from where we've gone before. I think I said in my opening remarks, we're gonna ship more in the next six months than this company has in its entire lifetime.
Which goes to a lot of credit to other folks in this room that are way more important than I am as it relates to designing and building product and shipping it. I would encourage you to ask them about it. I think for us, the biggest differentiation, I think the term gets overused, this open versus closed or, you know, interoperable versus monolithic and things like that. I think people get confused by the vernacular. The reality of it is, robots don't care, honestly. Like, we can give them governance and guidelines and empower merchants to try to guide that as much as they possibly can, but they don't really care who your payment provider is as long as it's mapped to the spec.
I think for us, by definition, I said this in my opening remarks as well, I think the value is accruing in a number of different areas that historically accrued different places. Before it accrued at your storefront, right? How do I get folks to my storefront? How do I create this amazing, frictionless, immersive experience, and how do I get them to check out? That's not going away. There are gonna be a lot of, you know. Everyone looks logically and goes, "Yeah, I'm not gonna have an agent buy a custom couch for me." Right? Right, and arguably, I might not buy a custom couch online either. I may want to go in the furniture store, and I want to touch the fabric and look at the swatches.
By the way, last time I checked, and I've learned this the hard way, generally speaking, when you buy furniture, it's not in stock. Surprise. Yeah, there's gonna be industries and sub-industries that are, that are never gonna leverage this in the way that people would think, like agent to agent per se, but the foundation and the rails need to be such where that could take place, and it's ultimately gonna make that experience more immersive and smarter. I think being agnostic and open, being interoperable, componentizing these three products in the way that we've done, I think is brilliant in differentiating. Again, I don't mean that to sound with bravado or arrogance. I just think it maps way better to where the world is going in this space, 'cause not everyone wants to use all three of our products.
To make that argument, regardless of who you are, I think is a fool's errand. I don't care what platform it is. That might have worked 10 years ago, just like SuperTarget works for a lot of people, but I don't particularly enjoy buying my produce there. I buy it 'cause it's convenient, and that may work for some. Most people want best in class now and in the future, and I think we've been really deliberate about how we've set this up, that we've got a lot of Feedonomics clients that don't use BigCommerce as a platform and never will. That's okay. I still wanna serve that market with best in class Feedonomics. You may make the same argument with Makeswift running on different services or in different ecosystems and make the same argument with, you know, components of our cart, right?
That may sit through agentic services, but a merchant doesn't use anything else but that. Anyway, my point in all of this is we want the optionality. We want the agnosticism to make sure that we're not operating in a weird way and compensating to try to commercialize this in a way that doesn't map back to what's in a merchant's best needs. By definition, open is harder to articulate and explain, which I think frustrates probably folks in this room and frustrates folks in the world. We need to be better about articulating what this all means and why. I think that will beget easier to digest as you have real live use cases in market and you've got real client outcomes that they're testifying against. We're early days. I think it's exciting.
There's obviously a lot of buzz and a lot of noise, and it's very distracting. I think, again, real client outcomes, real client use cases, this becomes a bit more tangible to understand going forward.
Travis, you've mentioned a few times that we're gonna ship more product in the next six months than we have in the last two years. Can you give us a few examples of, or things that you would highlight, that you'd want folks to know about?
Well, I mean, I think the obvious ones, I've not been shy about this. I think, Feedonomics Surface, we shipped that on time, first and foremost back in, I think, late October, early November. I can't remember the exact date. It was in, like, Q3, Q4. Bringing that into the core base of BigCommerce customers, I think is fascinating.
Again, early days. The early results we're seeing from those folks that are using those merchants using Feedonomics is material year-over-year in improvements. Again, never made that available before. You had a product that was very service-oriented, that was niched very upmarket. It just wasn't a digestible, wasn't a digestible offering for the vast majority of our BigCommerce merchants, the tens of thousands of merchants running on the platform. For Surface is one. MakeSwift sitting on Stencil obviously is another. That's an obvious, replacing what I would consider a fairly arguably outdated UI of Page Builder, which was natively running on the platform. I think it received the largest applause last year at this summit when we announced MakeSwift was gonna be on Stencil.
Also another one that we're really excited about, I think BigCommerce Payments, Michaela will talk about here in a minute. Again, a lot of pressure and input outside. How do we improve our take rate? How do we reduce friction for our merchants and things like that? Listen, I think there are a lot of agentic capabilities and a lot of brilliant basic capabilities that don't sound sexy, but the fact that we're able to ship them as quickly as they are. It's like anything else in life, it's a bunch of little things that bother people. It's not big things. I think brilliant basics is a bunch of little things. We're able to kind of close gaps, which again, just reinforces the durability and the stability of the platform. I mean, our moat honestly is our install base.
We're never set up to ship or sell product to that install base regardless of product. That's one of the big foundational changes we've made. Just that motion, that infrastructure in and of itself, human capital-wise, systems-wise, product-wise, commercial-wise. We're launching new packaging and pricing coming up here shortly. Like, just things that we probably should have done a while ago, again, it's chicken and egg. We didn't have these things integrated, and that in and of itself will also reduce a lot of friction. It will reduce downgrades and things like that. That's the spirit behind it, like being better at feature gating our products. Right. These things were just stuff that were in our way, it's hard to triangulate all at once. A lot of enthusiasm there, and I can see Lance's eyes on me.
On the B2B side, which gets not as much press, I think our dominance there, particularly in mid-market B2B, has been fascinating. Those folks have been very laggardy in general, so a lot of momentum there and really excited about taking that, continuing to take that product upmarket on the platform side as folks like SAP are forcing upgrades and things like that. We're seeing a fascinating moment in time where there's more ERP replatforms in market right now than I've ever seen, and it's a fascinating opportunity to marry front office with back office, which was never part of the consideration set 10, 15 years ago when this happened the first time. That's another opportunity we can take advantage of that we're excited about.
Hey, Travis. Scott from Needham again. I wanted to just follow- up on your pricing and packaging comment in particular. There's a lot of focus amongst software investors for the platforms that are rolling out some of these agentic functionality really around concern being around gross margins in particular trying to understand how you price and monetize that effectively. How do you think about monetizing some of these AI products? Are you gonna get to a more modular type of pricing opportunity, or does it get built in the core product? Platform pricing just gets raised just try to help us think how you think about that.
Yeah, I mean, Listen, I think that's where it's gonna go in a lot of use. I mean, people are already talking about it now around tokens and usage and things like that. I'll let Sharon and Daniel weigh in upon more than I will there. I think historically, you know, an order-based pricing model I think favors you in certain use cases and industries. Certainly B2B, when conversion's 100%, to try to charge that based on GMV is a fool's errand. I think that's an advantage. I think you see it in other subverticals like luxury, as an example. If I'm Diane von Furstenberg and I'm selling a $3,000 dress, do I really wanna pay a percentage of revenue to sell an AOV that high, as an example? Not to pick on Diane, who's lovely.
I've met her once. You know what I'm saying? I think there's industries where we've got flexibility around the commercial model and pricing. I think this will organically evolve, and it's part of kind of the plumbing and the wiring that we put in here and kind of tried to signal to the market that we know this is evolving very quickly. We're very open to adapting to where this is going to go. We're not kind of backed into a corner in any capacity. I think just natively, we've got some advantages there. I think I had a line in my talk track this morning is, we're trying to work with your architecture.
like to think, having come from services, to think that people are gonna blow up their architecture and what they've invested in, again, is foolish to think that that's gonna happen. We've got to figure out how to work alongside of it and optimize and map what it is that we're doing, how it is that we're doing, and how it is that we're charging for it. I think, Scott, yeah, we talk about this a year from now. It's a fascinating question because I wanna see. You know, everyone else is considering the same things. I think it will evolve. I think it has to evolve. Daniel, do you wanna comment on that?
Yeah. Sorry, it's Daniel. I'll jump in, Daniel Lentz as well. A couple points I would just kind of reinforce on this is that, fundamentally, we consider it part of the infrastructure layer within commerce, and the trends that are happening in agentic I think actually reinforce the monetization model. Meaning we're not on a seat license-based model. We don't have to make a big change as a result of this. What we have fundamentally is a consumption-based pricing model. As we end up with more and more surfaces that are.
Either from a discovery or transactions flowing through, it just reinforces the importance of the pipes that are actually processing the orders on the checkout side. We would monetize that through orders on our rails the same way we would and have in the past. Agentic just makes kind of a more diversified inbound on where those orders come from, which actually just reinforces the importance of the pipe. We still monetize on orders, we still monetize on a rev share basis payments, and a whole host of other things on the platform. That doesn't change necessarily when things go through Agentic. On the Feedonomics side of the business, that's based on SKUs that are going out to these surfaces.
As you see more disparate sourcing of volume, Feedonomics becomes a more core part of the infrastructure with a consumption-based model in a lot of ways based on SKUs. I'm oversimplifying a little bit, but I think in general, the pricing model doesn't need to shift. I think there's some improvements and changes that we can make to it to kinda make sure we're capturing a better take rate for the strong GMV growth that we're seeing on the platform. By and large, we actually are encouraged by where this is going. I don't think we necessarily move into kind of a token-based, not necessarily. I don't think we need to do that, at least not in the short- term.
All right, Travis, before we open it up to the product team, last question. If you had to leave our investors with one thing about Commerce that they may or may not understand, what message would you leave with them?
Well, hopefully the theme of today is that we've actually built the foundation and integrated the assets to where this has been harmonized, right, under that brand. I think Commerce by definition, you know, the rebranding process is challenging just based on availability and domains and how do you name yourself something that doesn't back you into a corner. I think the most encouraging thing is you've got an integrated foundation that is back to being product-centric that's going to ship at speed and map to where the model is ultimately headed. Again, depending on cohort, we're going to see that happen at faster paces than others. I think ultimately, at the end of the day, I meant what I said in my speech. This is becoming less storefront-centric long- term. Doesn't mean it goes away. It's expanded.
It's really again, it's data-centric, it's distributed, and it's orchestrated. I think I explained that in my speech this morning. It happens everywhere. Merchants, regardless of size, need to show up where their customers want to engage them with value, regardless of where they buy their good or product. We feel like we've got the best infrastructure and market to enable that to happen at scale, and we need to go execute on that market. That's ultimately where we are at this point, but we're finally at a point where we can go run that offense. In market, a lot of the last 18 months has been kind of putting the pieces in place to get there.
I'm relieved to be through a lot of the reno, and I feel like Daniel and I and everyone else has been living in it with the dust and everything else, which isn't always convenient, but we've got to go out and execute on what it is we've put in place from a strategy standpoint, so that's exciting.
Great. Thank you very much, Travis.
You bet.
Invite the product team to come on up. All right, as we get started with the product team, I'm actually gonna ask if you guys wouldn't mind introducing yourselves and maybe giving a little bit about your background before we get started.
Hi, everybody. My name is Vipul Shah. I'm the chief product officer here at Commerce. I've been with the company for exactly one- year. Today is my one- year anniversary. I'm thrilled to be here with you all, and very excited about, you know, the momentum that we're building here. Prior to this, two decades in banking and payments, on the banking side with the likes of JP Morgan and Wells Fargo, on the technology side with Google and PayPal. Spent a good chunk of my life enabling merchants, connecting consumers, and bringing technology to bear to help consumers and merchants. Thank you.
Hi, everyone. I'm Michaela Weber. I run the payment product and financial services business, working for Vipul. My background is in payments and financial services. I was at Goldman Sachs and JP Morgan, and then moved over to payments working at Worldpay and Mollie, the Blackstone-backed European payments scale-up.
Hi, my name is Sharon Gee. I'm the senior vice president of product for our Feedonomics product vertical, and then our horizontal AI portfolio offerings across BigCommerce, Feedonomics, and Makeswift, reporting to Vipul.
Lance Owide. I run our B2B product, which is B2B Edition, then working cross-functionally with every product team to make sure that we're building for manufacturer and distributor use cases. My background, kind of a little bit different, similar to kind of Michaela. I was on kind of your side of the fence at UBS, and then at Apollo Global Management. Great to be speaking with you guys today.
Yeah. Thanks, everybody. It's kind of a loaded question 'cause there's a lot going on in each one of your areas, what are you most excited about in your product area?
Seeing as I have the mic, I guess I'll go first. It kind of harkens back actually to a question that was asked earlier. You're kind of asking, you know, what's the size of the potential with AI? I think at B2C, that's harder to answer, and I'll leave that to Sharon. In B2B, if you think about transactions, it's all about efficiency. I don't need an experience where I can see the shoe I'm buying or I, you know, or I can feel like I understand the brand and the texture. That's not what it's about. It's about buying widgets and getting that done really efficiently. You saw on stage, we announced our purchase order agent. That's what that's about.
It's about driving real efficiency through the transactions that are occurring and bringing more of them online. I think as we start to see AI penetrate into the B2B space, the number of transactions that can be touched by AI and improved by AI is gonna be dramatic. That's what's really exciting me. You know, things like that purchase order agent and what we build on top of that with agents to automate workflows and reduce friction are gonna be great drivers of efficiency for B2B businesses in the back office and for their buyers as well. That's what's exciting me.
I think in the agentic space, merchants have two problems. They are no longer as discoverable as they once were on the channels that they were used to acquiring customers on. Then they need to run efficiently, like you've said. There's a good question that said, "What is the opportunity in agentic? How big is it going to be?" It depends on the category, and it depends on how you define agentic. Agentic experiences live across both third-party surfaces like ChatGPT and Gemini, but also one of the biggest opportunities is for merchants to launch their own agentic experiences within their own properties, right? A shopping assistant that can help you buy a gift for, you know, based on everything it knows about you.
Our merchants understand all of this, when I think about what I'm the most excited about, it's the agentic foundation that in this new world, commerce is an infrastructure layer. It's no longer just a destination of a storefront on a dot com. The dot com's just another channel. It's another front end. In agentic, it becomes the brain. It becomes the foundation that knows everything about your customers, what they've ordered, what their pricing, their unique pricing is, what their loyalty is. That beating heart, that foundation, externalizes to all the channels, right? That data that you're improving, the catalog, the inventory, the shipping and rules, that becomes the foundation that powers experiences on Gemini, ChatGPT, an agentic experience on Slack or WhatsApp, and it's all underpinned by this brain.
I'm the most excited about building that foundation because it becomes critical infrastructure because in agentic, merchants are still merchant of record. They need this in order to be able to participate at scale.
On the payment side, we're making a lot of really positive changes to reduce the number of partners that we work with and invest more heavily in a select group of integrations. I think one of the unexpected negative outcomes from Commerce.com being so open to partners for so long was that we had literally over 70 payment partner integrations, and especially for our self-serve merchants, so retail plan merchants, they want help. They're not payments experts. They're running their business on a day-to-day. While we thought we were doing the right thing by showing them, you know, in Travis's words, The Cheesecake Factory menu, actually, you know, an enterprise merchant that has a really specific set of needs, they may bring their own payment provider.
With the launch of BigCommerce Payments, give the option to a merchant to select a bundle that is going to work really well with their storefront plan, that's something we've had, you know, really positive initial feedback. We're actively working on taking partners off the platform who haven't updated their integrations, who are not having good acceptance rates, who are harming our customers' conversion. You've seen that with some of the pricing and packaging changes we've announced to really move towards, you know, still a very generous list of payment providers that our self-serve merchants can choose from, but helping them choose providers that we have a strong relationship with, who are invested in their integration, who are going to offer Apple Pay, who are going to work well with our standard one-page checkout.
These are really important changes for our merchants to help them run their business better and for us to support their growth. We know that the net revenue retention is higher for merchants who use one of our core, payments partners. That's what I'm super excited about.
Yeah, I'm excited about all those things, the benefit of going last here. Probably most importantly about bringing these assets together and the people assets as well, not just the software assets into cohesion, right? I think Travis set a goal to really bring Makeswift and BigCommerce and Feedonomics together. There's a real synergy there. We think we're starting to see the benefits of that with our customers, whether it be Makeswift on Stencil, whether it be agentic checkout, which allows us to bring agentic commerce to customers that aren't even on our platform right now, as Sharon has discussed on stage, or whether it's Stencil, right? Bringing multi-channel capabilities to the tens of thousands of customers on our platform.
I'm excited about the connective tissue that we're building from a product perspective between the assets that we have, and then from a people perspective, having been with some of the best companies in the world and the best talent, I'd say this team is right up there with them and really pleased about the team coming together as well.
Vipul, I have one for you now.
Yeah.
How do you think about prioritizing? There's a lot of good things going on at Commerce. Travis talked about how we're gonna ship more product in the next six months than we have in the last two years. As a product leader, how do you think about prioritizing the launch of those new products?
It's a great question. All of us product leaders kind of grapple with that. There's always more to do than we have the resources to do. I think fundamentally it's about anchoring in our merchants' needs. We're here in events like this, but even outside of this, the real conversations are happening one-on-one with various customers across the spectrum, right? Small, middle, large, to understand what the needs are. And to understand where we get the maximum leverage in our investments, right? To benefit the larger set of customers. A lot of our work is around understanding sort of the common denominator across diverse customer sets that we serve, and deploying capital in a way that allows us to get the maximum lift in that, right?
These conversations here today, and many happening outside of this room, are essential to that prioritization. Working obviously with our finance teams, making sure that, you know, we get the return on that investment that is absolutely necessary, right? My background is banking. I come from the finance function as well, prior to going over the product side of things. I understand the need to serve customers, but also to make sure that we're driving value for our shareholders. There's a disciplined effort, as you know, Tyler, around how we think about value at a project level, how we crystallize that value, and that discipline, I think, is an important part of the prioritization as well.
Big one for you, Sharon. Agentic commerce has meant a lot of things, and it seems to get thrown into a very broad category. Can you maybe dive down and get specific about what agentic commerce means for commerce and how we compete?
Yeah. It's helping our merchants be discoverable on agentic third-party surfaces like, you've seen the announcements with our partnership with Google around Universal Commerce Protocol to be able to make commerce catalogs shoppable, discoverable and shoppable on AI surfaces within Google. Our announcements with Copilot and Perplexity and PayPal and Amazon Shop Direct. It's about discoverability. That's one category of agentic. The other is, it's really about being able to run with agents. How can you make your merchants more efficient with the launch of BigCommerce companion directly within the control panel?
The ability to have a companion that knows everything about how to run a BigCommerce store, how to, you know, it knows everything about your data and any of the orders that you've had, and can be a companion to you in helping run a store more efficiently to save your team's time. Lastly, I would say merchants who are launching agentic experiences that interface with their customers. When we think about a storefront agent, these are the areas that we're investing in because merchants know so much about their customers. They know what they've ordered and everything. When we look at the, like the purchase order agent for B2B merchants or a shopping assistant that lives on the front end of a merchant's site that can answer, "Where's my order?
Tell me about these products. What should I buy my wife for her birthday?" These are the kinds of interactions that our merchants are going to be able to turn on very seamlessly with the launch of BigCommerce MCP as of yesterday, that's available to all BigCommerce stores. When we break it down, there's kind of three different areas. Then the fourth, I would say, is being able to build BigCommerce experiences and commerce experiences more effectively with agents. When we think about launching BigCommerce MCP and CLI soon, all of these things are making it possible for Claude to be able to help you know, build these experiences even more effectively.
Very cool. Sharon, one more for you, actually. These products, they sound really good. Do we have them in the hands of merchants right now? Who's using them, and what's their reaction to these products that we're rolling out?
Yeah, we do. You may have seen the public announcement with Dell yesterday about us supporting Dell's agentic catalog exports to OpenAI, to Google. We've been working with Dell for years. They've been working with Feedonomics to send global catalog in many multiple languages to Google, Meta, Amazon, various different channels, from ads, social, and sometimes marketplaces perspective, depending on the customer. Now increasingly, the agentic channels, because it's additional data fields that need to go to channels like Google to support Universal Commerce Protocol, or it's new data completely that's being sent to someone like OpenAI or Perplexity. When we look at that capability, Dell Live. We're live with Agentic Checkout Kit with PacSun.
They run on Salesforce Commerce Cloud, but they're using our infrastructure for the catalog from Feedonomics, the back-end headless checkout capability that's integrated with PayPal Store Sync that just launched, makes PacSun's catalog shoppable on Perplexity, Copilot, and soon Google as well.
Stripe getting along.
Stripe, yeah. We're working with all of the partners who have, you know, major inroads in the agentic space. PayPal, Stripe, Amazon, you know, all the major players, and Meta, all of those folks.
one for Michaela. Michaela, for those new to our payment story.
Mm-hmm
can you talk a little bit about what our journey was to get to BCP, why it's important, and how it helps merchants?
Sure. I mentioned earlier that there was an open SaaS principles for a long time, which involved really allowing partnering with everyone. You know, taking a very democratic partner approach to allowing merchants to bring their own provider, and then really offering a huge range of payments, providers, and wallets and some local payment methods for our merchants. That has resulted in, I think I mentioned earlier, a bit of a mixed experience, especially for some of the smaller merchants who really are looking to their platform for guidance on what the best payment provider for them will be. For enterprise merchants, it also has resulted in them sometimes not being able to get on an optimal integration because they're, again, choosing from a list. Also, to be totally direct financially, there wasn't an optimized take rate set up.
Some of the payment partners that we work with that have volume with our merchants, we don't have attractive rev share economics with. Some we do. To number one, be very focused on improving the overall merchant experience and store performance. We took steps to reduce the number of payment providers we're working with to kind of form this more cohesive embedded list, but then also to take the step to launch our own embedded payment solution, BigCommerce Payments. We did select PayPal as the provider behind that. We're really proud to have announced on March 30th that that solution is GA. Do have merchants live on the solution today, both self-serve merchants and enterprise merchants. Primarily, we're offering this solution in a product-led growth motion through the BigCommerce control panel.
If you saw the product session, there is within the BigCommerce control panel, a tab where merchants can see BigCommerce Payments. We also are rolling out a comprehensive marketing campaign to eligible merchants for whom we think this would be a great fit. The best thing about BigCommerce Payments is not only is it an embedded payment experience within your control panel, which for a merchant saves you from having to log in to two different places to see the same thing, but we're also coming to them with a bundle of the payment methods that we know are gonna help you run your business. Venmo, PayPal Wallets, Google Pay, Apple Pay, basic wallets. You'd be shocked by the number of payment providers that we have on our platform who don't offer Apple Pay. If you're a B2C merchant today, Apple Pay is a no-brainer, right?
Some of our regulated merchants aren't able to offer Apple Pay, let's set that to the side. Really ensuring that merchants can have this embedded experience, and the initial feedback's been great. We're really pleased to have launched this journey. I think very importantly, enterprise merchants still have a range of solutions they can choose from. Enterprise merchants can bring their own payment provider. On the self-serve side, so our historically retail plan merchants, we have launched an embedded list. BigCommerce Payments is one of the embedded payment providers they can choose from, and it is the only payment provider that has a within the control panel experience for customers to manage their payouts and view their balance.
All right. Got a couple questions.
Thanks, guys. It seems like you've done a really good job on moving the product to the next level. I'd be curious from your perspective, what you have that you think is truly differentiated from the competition as opposed to where you've just caught up. how do you get that differentiation out there from a sales and marketing perspective to your point, to turn the products into actually growth, right? I mean, the business needs to start growing again. like, how are you wrapping sales and marketing and go to market and that messaging to make it very clear and easy to see why you guys and not Shopify or somebody else?
Yeah. I'll start with one. One of the biggest differentiators is in this new era, you need control of the data. You need data governance. You need the ability to understand what data you have and then know what you're missing in order to be able to send it to all the channels 'cause they all require different data. You need to be able to tune that generated data with a brand tone, right? Yes, you can go tell Claude to rewrite your product descriptions, but how do you know it's gonna sound like the brand tone that you need? How do you know it's gonna include the right content and that it's not gonna experience drift when you're doing more than 100 SKUs?
You need control and data governance layers and observability. We were meeting with one of our customers, we are uniquely positioned to do that because Feedonomics has done it with the biggest platforms in the world for over 10 years. We have customers on those other platforms who use Feedonomics for that specific reason. We have merchants on other e-commerce platforms who know that they need that capability for data governance. When you think about bringing those three things together in terms of differentiation by nature, our ability to understand what data destination schemas require and then auto-generate the best version of that to deliver you the best outcome, is a unique differentiator.
It's about bringing all three of the powers together because in this new era, you need not only the flexibility to be able to make sure that it works with the tech stack that you have, else, you know, be forced into a different model that doesn't meet your business requirements, particularly if you're B2B or otherwise. The differentiators are both that we give you data control and governance and freedom of choice to be able to make that work with your stack. That's the one of the biggest differentiators that exists and why merchants on other platforms use some of our components, whether it's front ends like Makeswift or data control orchestration capabilities of Feedonomics.
I feel quite proud to be able to sit up here and say our B2B product is pretty differentiated and pretty market leading, especially in the mid-market. Andy Hoar, who is an analyst that just focuses on B2B, last year he ranked us the number 1 B2B mid-market e-commerce platform, which is awesome. He did that because we've built an incredible set of features that meet the needs and use cases of those businesses. Quoting, invoicing, approval workflows. It's built in, it's out of the box, it's ready to go. If you need to customize it, you can. That's how we support businesses that are doing some $30 billion down to those doing $10 million. The problem is distribution, right? That was your question. How do we get that out more? That's what Travis spoke about.
It's about getting that story out there with the GSIs for the large enterprise, right? You'll see Accenture were here, Deloitte were here. I was meeting with them an hour and a half ago talking about exactly that. How do we get our story out? In fact, in a couple of weeks, I'll be presenting to the Deloitte sales team about BigCommerce B2B. We need to do a better job there. It's about technology partners as well. Folks like Acumatica, you'll see them. They have a booth out there. That's an ERP platform that's growing. I'd misquote it. It's growing incredibly fast, and we have a huge joint customer base, over 300 customers. We can keep growing that.
We're working with their product team to build better and stronger integrations, that's a pipeline I'm really excited about. It's about, obviously, we just brought JD on board as our new SVP of partnerships. Working with him both on the agency side to bring in more of those leads, but also with the technology partners that sit downstream of us, mostly those ERPs in NetSuite, Acumatica, Dynamics, et cetera, to build those relationships and drive more leads over. A lot of it's an education and positioning problem, but we're working on that and solving that with the vision that Travis set out.
I would echo that on the channel partners, right? You may have seen an announcement with PayPal today, as well as many, many others in the past few months. We go to market with folks like Google and Perplexity and Microsoft because, you know, if they're advocating, "Hey, you get really good data from this partner who can support these experiences that we're launching," certainly that's distribution that we need.
I think on the differentiation on the payment side, you know, with some of our really standout opportunities with B2B, one of the things that I've been working very closely with Lance on how we continue to innovate on the B2B payment side to ensure that that is something else that we can take as an asset when we go to market to win those deals.
Yeah. Let me just add one more thing. Back to the unity, right? I think you guys might have been expecting for some time now that MakeSwift, platform, Feedonomics come together, you start to see the fruit of that. I think to me, that's probably the biggest competitive advantage we have, which is these amazing assets. Business isn't happening in compartments. Customers benefit when we can bring these things together for them in harmony. I think with this team and with the connections we're building between the products, it's just a much more seamless experience for merchants that I think is unparalleled in the industry.
Hi, Scott from Needham. Kind of a two-part question, one for Michaela and one for Sharon. Both of them surround how you think about the future opportunity in your respective areas. I guess on the payment side, Michaela, is, you know, you have one particular competitor out there that forces all their customers to use their payments, obviously on their platform, otherwise they charge a high fee. How do you think about adoption amongst your customer base if we're looking out four or five years, you know, from now of BigCommerce Payments in particular? Just trying to understand the impact there, both on the existing customer side and maybe what it does for, you know, attracting new customers there, helping try to take that friction out.
Sharon, on the agentic side, you and I have had a couple conversations on UCP and what that can do in the environment. What are you starting to hear from some other merchants out there? you know, there's not a lot of volumes out there. I know merchants are kind of slow, but at the same point they wanna run fast there. As you think about the impact of the business a couple years out, is this opportunity small, large, too early to define? You know, love to hear how you think about your areas over the next couple years.
Sure. For the payments adoption question, we have a benchmark for what we think a best-in-class payments adoption is for merchants using a embedded solution. We kind of understand what we're working towards. One change that you would see if you signed up for a BigCommerce storefront today is in the self-serve boarding flow, BigCommerce Payments is the only prominent tile. We have worked very closely with our product and design team to not force merchants to take it, but to make that an attractive option with a very clear call to action and product differentiators. We've been very pleased with the results since we've been live on the new flow of the percentage of new self-serve merchants that have adopted the solution.
Our focus right now has been especially lifting and shifting, with the support of PayPal, some of our existing PayPal customers onto the new experience. As we move into more of an enterprise motion, obviously that's something where currently merchants can choose their own solution. We would need to ensure that the solution is competitive in terms of features and payment methods with some of the larger solutions that we have on the platform. We have a clear marker internally of what we think good looks like in terms of %. Certainly for our B2C merchants and with some of the developments we have on B2B in terms of adding ACH, for example, and B2B payment methods, we feel really good about the applicability of this solution to a broad set of our customer base.
My response, I'm going to give you a agentic. Once again, I don't think about it as only third-party channels like Gemini and otherwise, right? The answer is it depends on adoption. Certainly discovery is critical on these channels right now, right? I wanna be discovered on. People are asking questions to ChatGPT and Gemini every day. I want my products to be discoverable there. It's early days in terms of GMV flowing through those channels. I think too early to tell on that, but certainly it will be different by category. Imagine the mascara that I know that I like to buy. It's very easy for me to think I will use a thumbprint to buy that.
What about a custom couch that I need to, you know, schedule white glove delivery for? It will be different by category depending on what merchants sell. The other thing I would say is it depends on whether you're on owned agentic. I think B2B owned agentic, where you can, using an agent to automatically build a purchase order to make it easier than ever for a sales team to sell, agentic informed B2B purchasing, I think is a really huge opportunity. I think about it maybe a little bit differently than just third-party agentic channels for discovery.
Yeah. I know you didn't ask me, Scott.
That was my next question.
Oh, no. I think the thing that people often miss in UCP is that it has a logged in state.
Mm-hmm.
You know, if you go to Gemini knows who you are, but when you're searching for a product, you're not looking at your orders and your history for that particular store. For B2B, where it's an owned agent, and here I mean, you know, we all, you know, a lot of you work at large companies. You're not allowed to go on Gemini and just give it all your data. You're in your own workspace. That's a lot of enterprise B2Bs. That's what they look like. They'll be building their own agents internally, and they can use UCP to log into their supplier's agent and get their bespoke catalog, their bespoke pricing, and up-to-date inventory. A lot of B2B today is just data files going back and forth, and now they're dumb pipes, really dumb. Now it's going to be smart.
I actually think while, yes, in B2C, there's a big opportunity, especially around discovery. In B2B, the opportunity is bigger because we can replace a lot more of the tech stack today that is dumb pipes of files, XML files going back and forth with this new logged in agent state. That means if I'm a buyer and I'm looking. You know, I have 10 suppliers I can purchase from. That's the only ones I can purchase from. That's a lot of big B2B businesses out there. They're not allowed to just go and type in Gemini, "Find me this product." That's not how it works, right? I can't go and purchase products for BigCommerce. No, I cannot. Exactly. I have a list.
I can just go into that agent and say, "Hey, I need this product. Go and find the suppliers that have inventory, tell me the price, tell me where it's available, and get it for me." UCP enables that. I actually think the opportunity in B2B is bigger than in B2C. It's a really big opportunity because you could see a huge transformation in the way that transactions occur.
I realize. Sorry. John Messina, Raymond James. I realize a major focus here has been unifying BigCommerce, Feedonomics, and Makeswift into a more integrated experience. I think you're also kind of focusing on maintaining that standalone value. How do you think about the right balance between deeper integrations while also enhancing the solution so it continue to stand standalone?
That's a great question. I think, you know, right now the standalone offerings are reasonably well understood. So Feedonomics, for example, right? I think as a category leader, I think merchants really understand it for the value that it can generate independent of the platform, independent of Makeswift. Platform itself, you know, been around for 15 years, and I think people understand that independent of Feedonomics. I think, for customers that want to purchase a la carte, they'll continue to have the ability to do that. Composability, the componentization of our infrastructure, overall commerce infrastructure is gonna be a fundamental principle we'll continue to abide by, right? That openness will not go away.
I think where we can make big strides and are in some of the examples I cited, whether it be Makeswift on Stencil or Feedonomics Surface or agentic checkout, is just bringing those together in more seamless ways, right? For customers that are looking for the package, and we know that many of them are, as they navigate this complex world of solutions, and particularly in the world of agentic, I think they're looking for more connected solutions, and that's where I think we have a big opportunity to do so, right? I think we'll be looking at a number of different opportunities to componentize our technology stack to the extent that customers can avail of a capability a la carte. We'd like to provide that capability and functionality.
For many others, we're finding that that unification is quite beneficial, we wanna pave the way for that as well. Anybody wanna add anything to that? Good. John, go ahead.
Maybe just to follow- up on the payment side. I realize that we GA a month ago, but just curious if you could talk about how you're thinking about the international rollout there.
Yep.
The opportunity internationally, and then it's been referenced quite a few times on the B2B side. As we think about B2B payments as a category here, maybe can you talk more about where that investment needs to go so you can continue to serve those merchants well or expand into the B2B payment side?
Sure. Let's talk about the international rollout, and I would say, you know, this is all subject to, obviously, this is in our plans. The next market we're launching in is the U.K., and we're planning to launch in some select European markets. The U.K. and some of Europe is Q3. Some of this is dependent on PayPal. We are distributing in the view of some regulators, a PayPal solution. Obviously by market, there's some nuances there. We're excited about getting to market in those countries where we think this is a really competitive solution. I think in terms of rest of world being available in 160 countries, I don't think that that's something that we view as a differentiator.
We want to focus on the core markets where we have both installed customer base and where we know that this is gonna be a competitive solution with good adoption. In terms of B2B payments, you know, obviously B2B payments get a lot of focus because B2B TAM is enormous, and so there's tons of companies focused on how to crack B2B payments. You know, you've heard from Lance, there's so many companies that we work with and in the, in the world from B2B that are using quite manual processes. Our focus is really coordinated with some of the agentic solutions, some of the B2B developments we have. How can we make it easier for merchants to use some of those features and also loop in payments?
Invoicing is a great example, where there are opportunities to incorporate an easy payments flow where we know end B2B customers would benefit. They are, you know, using card payments in some cases, and then also to have that opportunity. Invoicing is a great example, just really working through our B2B purchase order flow. We have the new purchase order agent, which is so exciting. Really keeping payments in concert with that, because if you have a great purchase order agent, that's awesome, but if you're still getting a check payment or COD, which is actually a payment method that we see today from some of our customers, that's slowing down your business process. That's an education also for us with some of our merchants who are heavily allergic to a card payment or anything beyond, you know, a manual PO.
One of the journeys that we've been on is trying to help them understand that. Also for some of the card volumes, there are regionally compliant surcharging programs that some of our payment provider partners offer. It's something that we've been discussing is that something that could be attractive to our B2B customers? They'd be able to offer a card payment, but could pass on in a compliant way the payment processing fee. Would that encourage them to accept card payments? Really focus on B2B payments. It's great if you've got the Ferrari, but if you've got the golf cart engine because you're still accepting very manual payments, like you're not gonna be fully optimized. How can we build that in concert with, you know, Sharon and Lance and the things they're working on?
Bring it back to Commerce Live. You're talking to a lot of partners. I asked this of Travis, but curious to get your opinion. What are partners talking to you about? What are their concerns? What are they excited about? What's it like out there?
Yeah. Well, I think a lot of merchants, their data's not ready. With the data enrichment capability of Feedonomics, there's a lot of excitement around that because a lot of merchants know, my data's in disarray. In order to be able to participate at speed and with relevance in this agentic era, they have to get attributed data ready together. A lot of excitement around that product release, which is the ability for us to use GenAI to understand what data you have, auto-generate up to 40 additional attributes that can be leveraged to better answer the queries of answer engines to make you more discoverable. Lots of excitement around that product.
Yeah. I think from a partner perspective, it's, let's get out there and tell the story. You know, I mentioned that with Deloitte, that's what I'm hearing across the board. From a B2B merchant perspective, they're all getting pressure from their boards. What's your AI strategy? They're looking to us to give them the deck that says, "Here's. Take this." I think the purchase order agent, that's why it gets so many of them excited, because they can take that to the board and they can say, "Look, here's something we can deliver." It's live on customer sites today. You can go on the AS Colour as I showed, go on ascolour.com, actually you'd need to log in. It's logged in only right now for their customers.
You'd be able to do it if you could log in and you'd put a PO in. That's because they have customer specific pricing, so you can't go and do it. That we can roll that out onto customer stores. The way you should think about that is, you know, how do we think about that as, you know, grabbing operational efficiency? You know, Wolf Automation, they're a $5 million-10 million business. They're here in the audience today. They have a single individual, they pay $80,000 a year. All they do is process POs. That's it. They're in the alpha. They're going to be using this tool instead.
We get to extract that value, and not only are we providing those merchants with an answer to what's my strategy, I'm doing something and I'm driving operational efficiency, we're gonna save money as we do it.
I would say from the payments and financial services side, we're getting a lot of questions about roadmap planning together. You saw we launched Stripe, our Stripe OCS integration, updated link integration. We've shipped over 30 new local payment methods on native integrations in the past 12 months. We're working with some of our partners on a forward-looking basis. What features do you have coming out? What do we need to make roadmap capacity for? We've got a couple exciting merchant implementations with large partners where they have specific local payment method needs, making sure that those get in the roadmap, that we're working closely with those teams. Really forward-looking, I would say all the partners want to co-market with us, co-sell.
It's big themes of, you know, how can we do more together, show up together, especially with some of the accelerators and verticalized industry go-to-marketplace we've been talking about.
All good.
All right. Last question before we bring on Daniel. If you had one thing to say to our investors, what would you leave them with? How would you describe Commerce and our product team?
I'll go first 'cause I'm holding the mic. I think the product team has been, is a great source of energy for the organization. I'm so proud of being part of the team and all the new features and developments that we've shipped and what's coming on the roadmap. The thing I would leave you with is we are making step changes in the payments business that are really exciting and going to make a big difference long- term. I'm really excited about the time and effort the teams have put into shaping that and the ongoing work ahead of us to continue to improve payments and financial services.
Well, why don't I go last?
I think the thing I would leave you with is in an era where you need to get your data together, owning the market leader for data capabilities across channels that has been a market leader for 30% of the Internet Retailer 1000 is a really good position to be in. The market needs a thing we have right now, we are working to make sure that all parts of our customer base across BigCommerce, Feedonomics, and Makeswift can access that at speed, that it's empowered with agentic capabilities. I think that's what I would leave you with, is it's a good moment to need to be a data vendor when everybody needs good data.
We have a market-leading B2B product. We are building on top of that and innovating to deliver more solutions that give us greater attach and that we can charge for. That's, I think, really what I would leave you guys with. As we think about how do we distribute more, you heard Travis talk about it, and we're working on it. We have the product, we continue to innovate, greater attach in our customer base, and now we're working on that distribution piece.
Yeah. I would just leave you with we've got a bunch of product people and engineers as well, focused on building great things. That's product people and engineers by, just by spirit. You know, that's what they do. I think the one big step change in the last year or so has been the focus on value. Not that each engineer is going to be reciting weighted average cost of capital or doing dissertations on CAPM and stuff like that, but every single person in our product and engineering team now knows that what we build needs to make a big difference for our customers and for our shareholders. There's a level of scrutiny there that hasn't existed in a long, long time.
I just wanna leave you with, you know, we're not here to just build widgets for widgets' sake, and get enamored by, you know, this is an agentic thing we built, or this is some fancy widget. This is stuff very deeply rooted in customer value and in shareholder value. Okay. That's all.
Thank you guys very much. Appreciate it. We'll bring up Daniel Lentz, CFO and COO. All right. Daniel, first question for you. For those who are not familiar with the story, maybe just give a little background and give the financial profile of the business just to kick us off.
We do about $32 billion a year in GMV. It's grown 11% and 12% over the last couple of years. We do roughly $350 million a year in ARR, give or take maybe a little more than that. I think we finished last year maybe $355, something like that. It's a profitable business. Last year we did about nearly $30 million in non-GAAP operating income, almost as much in operating cash flow as well. Historically, the business, I'd say for several years, like a lot of companies within SaaS, it was growing really fast, was burning a lot of cash. That changed a lot over the course of the last three years.
We've really made a ton of progress in terms of balance sheet health, profitability, cash generation. Where we are as a business is we're not monetizing that GMV growth as well as we need to be. That's fundamentally where we're at. When I get questions about kind of where we're at as a business, it's kind of a tale of two things. If you look at the fundamental core health of the business, it's a very large-scale business. $32 billion in GMV within the commerce space is very large. It's probably the number two or number three largest platform on an independent basis, I would say. Where we've had struggles is just the take rate on that GMV, and there's several reasons for that. Michaela mentioned several of those.
We just, you know, we get a lot of revenue share from payments. B2B customers don't do as much credit card transactions. We don't see quite as much revenue share there. There's other parts of the business where it wasn't really configured to focus on kind of having a really good congruency between customer GMV growth and then revenue growth to the business.
We try to be very transparent about that with our shareholders because a lot of the decisions that we've been making over the course of the last couple years are really, really laser focused on improving that monetization gap to really show the growth that's proportionate to the scale of the business, and also do it in a way that's got really healthy underlying net revenue retention dynamics, which I would say are not nearly where they need to be as a business, which we started disclosing that metric last quarter as well. Just, you step back and look at the business, it's a healthy, profitable, cash flowing business. We're trading where we're trading because we're not growing fast enough.
We're not monetizing the growth in the GMV scale that we have the way that we need to. That's really, really where the business has been focused.
We recently announced some pricing changes that are gonna go into effect on June first. Would you mind walking through those, what it is, what it isn't, and why we went about making this pricing change?
Yeah. really glad you asked this question, actually. first off, we have traditionally, we've had four plans that we sell on the platform side, and what we announced is a pricing change on the BigCommerce product. We have other changes we're gonna be contemplating in the future on other products, but for now, all we've talked about is BigCommerce. We had four plans, which were called Standard, Plus, Pro, and then Enterprise accounts. really the differentiation between them is the first three were bought just in a self-serve fashion. We've called them retail, we've called them small business. In a lot of different ways, they're misnomers because you may have really large customers that are building test sites on a Pro plan, but we're calling it a retail business, but they're actually B2B.
It's really confusing in the way that we name them. Enterprise plans were exclusively sold through a sales assist motion, but we have small businesses that are in term agreements that are buying Enterprise plans, and it leads to just a lot of confusion in market. Sometimes we'd get this question, "Well, you have a customer that's doing $1 million a year in GMV. You know that's not an enterprise merchant, right?
Like, that's a small business." Yes, we know there's a lot of, you know, things that were kind of confusing in that, and we said, "Okay, well, let's do two different things here." Fundamentally, we needed to rethink how we were going about packaging the core platform product. First we said, "Look, let's wipe the slate clean in terms of the naming," because the naming is a little bit strange in some ways, and has been for quite some time. We switched the four platform products into core, growth, scale, and performance. Performance plans, it's really the same exact thing as what we had before with enterprise plans. It's literally just a name change.
There's no effect on any customer that is in a negotiated term plan from anything that we have done on the pricing side at all, which is the vast majority of the ARR and GMV that's on the platform. For the other three plans that are primarily sold through a self-service motion, we made a couple of different changes. Number one, the entry level plan, we made a change to the service that goes as a part of that. We used to offer unlimited free phone technical support if you're buying a $30 a month plan. That's very generous. I don't know of any other competitor that offers that, because from a cost to serve basis, it's really difficult to make that work.
You get one or two technical support calls that are challenging, and you may end up paying more than that on the cost side versus what you're getting on the revenue. We needed to kind of get, I'd say, more in line with best practice and in line with everybody else in the space. It's unlimited chat. You can a la carte buy to be able to get, you know, an upgrade with that plan type in order to get phone technical support. You have unlimited phone support starting on our growth plans and on up. No change for those at all. Okay. Two other changes that we made as a part of this.
We also wanted to make sure that all of our customers, as they grew in GMV on the platform product, were getting a progressively lower take rate the more that they grew and scaled on the platform. This is not rocket science. This is how pricing works. We had some strangeness though with our two lowest level plans, where actually as they would upgrade, their take rate would sometimes go up and down as they upgraded, and it just led to some real confusion for customers. It almost felt like they were being penalized for growth as they were going up some of these self-serve plans. We needed to change the way the discount slopes worked so that customers had a much more linear improving, kind of declining marginal cost as they went up the curve.
I sound like such a nerd here as I'm talking about this, but this is the thinking behind it. It was important. The last piece is we introduced an open payments provider fee. Let me just explain kind of what this is. It only applies to the three plans that are available through self-serve, which is a very much a minority of the ARR on the platform, but it is a large number of customers that is on the platform. It's almost identical to how our largest competitor does this with one very notable exception. We are not trying to force customers to use BigCommerce Payments. I wanna be really clear about this. We are an open platform.
As Michaela was talking about earlier, we have over 100 probably different payments providers that we have built connections into. That's very, very good when customers need that, but it also comes with a lot of overhead cost and complexity for us, where we're carrying a lot of cost to maintain all of those different integrations. When customers are using our kind of top flight payments providers, we see a demonstrable difference in their GMV growth rates, the net revenue retention that we see on the business. We wanna remain open, but we're going to be a little bit more opinionated when we think it gives benefit to the merchants.
What we've done, what's very different from Shopify as an example, is I think we have 15 or 20 different providers that merchants can choose from and not be subject to any of those open payment provider fees. If you're going outside of that kind of 20 list that is the best, have the best integrations, has the highest quality product experience, the best growth, then it carries extra cost for us that can be fairly significant. We've introduced a fee when you go outside of those top 20. To be very frank, I wanna be clear about this from the CFO point of view, we're not trying to make any money off of that. The goal is not to make money off of that fee.
It's to really help get merchants onto the payment providers that have Apple Pay and have all of these things that are gonna make them more successful, but ultimately allow us to have a lot better concentration of resources within R&D to focus on a smaller number of partners where we can have the best integrations possible. It's really expensive to say, "Choose your own adventure. You can use any one of 200 different payment providers." I wanna be clear, if you're on one of our negotiated agreements, one of our performance plans, there is no open provider fee whatsoever. You still have complete choice and freedom to use whoever you want. That's very core to our ethos as a company.
If you're a multinational company operating in five different markets, it's very unlikely that you're gonna wanna use the exact same credit card provider in Germany that you wanna use in Brazil and that you wanna use in the United States. We're not going to put some sort of a financial disincentive in place on really large customers that have that type of complexity to try to get them to go down that path. For smaller customers, they're gonna benefit from having an integrated experience in the control panel anyway. We wanted to make sure that we incorporated that as well. The pricing change is really more about packaging and right-sizing the way that we do discounting. We have kinda some cost-to-serve things in mind.
It actually impacts a fairly small amount of the actual ARR in the business.
We've talked a lot about product. Travis again has said we're gonna launch more products in the next six months than we have in the last two years. With your CFO hat on, how do you think about that? What are you most excited about with launching all these new products?
The monetization models that come with them actually. Now that's a complete CFO question or answer, and I recognize that. I've talked about this a lot over the years. In a lot of ways, our business was overly reliant on a sales assist motion to drive growth. We had, you know, a self-serve way for small businesses to buy the platform product directly. Once they were on the platform, there were not a lot of additional monetization paths that were available in order to grow the business.
I think if you look at some of our competitors, whether it's Wix, who I think does a really nice job in this area, and several others, they have really good net revenue retention even among small customers, because I think they've done a nice job in thinking about what is that customer experience? How do they need to grow with the business? How do you develop product that has congruency between their growth and the monetization? With a lot of the things that we're launching, we're introducing new monetization models that can drive long-term growth and net revenue retention. That pulls us away from having such a disproportionate weightedness towards a sales assist motion. The Feedonomics Surface product is an example which we've launched.
That's actually our first freemium pricing model that I can think of that we've launched in the time that I've been here, and I've been here almost eight years, where you use the product, it's free up to a certain amount of usage or a certain number of channels. If for a lot of our customers, that's all they may need, they may never need to pay anything extra for Surface, and that's okay. We will make our money with higher retention of the core platform product, that I'm totally fine with that. For the customers that are really more sophisticated and are growing faster because their product is discoverable on more surfaces, as they use that product, they will get more and more benefit, we have monetization models that kick in behind that.
Whether you look at features and how we're setting up Makeswift on Stencil, it will have a freemium pricing model baked in behind that. You may have noticed when we were going through the background of the product leaders that are up here, there's a consistency across all of them that they all come from a commercial background. That was a very deliberate choice that we had as we were staffing out our leadership team, as we wanted folks that were on the product leadership team, from my perspective, that were customer-centric, that really were strong in product and were also very good commercially. So that we could have a, as Vipul said, a really good congruency between what's right for the customer, but also what's right for the shareholder. That's different.
I think that's a marked difference in what I see and what we're launching, is now it's much easier for me to see the relationship between the shareholder outcome and what we're launching on product, whereas before, over the last few years, sometimes it felt like we were launching features, but it didn't have as much focus on what that was gonna do for the P&L and what was it gonna do for our monetization rates. I get really excited about that.
A question in the back of the room.
Hey, thanks. Thanks for taking the question. John Messina, Raymond James. Maybe following up on that, so you've obviously emphasized investments in a number of different categories, so, just kinda wanna double-click on how you think about those as growth levers over time, which one you expect to see ramp the fastest, and then any impact that could have on sort of the model, right? Just from AI, higher compute costs, things like that, just how it can flow through.
I think the disproportionate grower that I would expect is B2B. This has been true. I think it will continue to be true. We are growing disproportionately. I think B2B has probably been the majority of new customer acquisitions for maybe the last two years. I'm looking at you, Tyler. It sounds about right. I think that's going to continue. What it means from a business model point of view is it puts a lot of focus on the work that Michaela and others are doing in finding ways to get better breadth of monetization options to the business for B2B payment methods, because it's different. If you look at some of our competitors as they grow in B2B, they've struggled if especially they're really focused on credit card monetization as a primary means of driving revenue growth.
That's not really the core in B2B, and we're not trying to force B2B customers into things that are not good for them, but the payment methods are really quite different. It has a little bit of a different effect on what it does from a take rate basis. I talked about on our last earnings call as an example, like part of the reason that we have had take rates, the GMV growth has exceeded where we've been on a revenue growth side, that's the disproportionate growth of B2B is one of the reasons behind that.
As we thought about the disclosures we wanted to make and what metrics we were wanting to share, we wanted to be very deliberately transparent with investors to show what exactly is the underlying health of the platform and what are some of these issues that we're having to tackle so that we could provide some context behind the product development decisions that we're making because they're very much acutely focused on issues like that. I think we're gonna continue to see a lot of growth in a lot of areas in the business. There's a lot of areas in B2C where I think we're still doing a very good job. We're not gonna go after digitally native startups in B2C, as an example. That's not really an area where we tend to focus.
For complex businesses in B2C, especially whether it's multi-level marketing or just different use cases and stuff in the B2C space, whether it's regulated industries and things like that, we do very, very well there. Everything that we're doing, that Sharon was describing on the AI front, I think is a good thing for us. I don't think of that necessarily as its own separate business necessarily because we're working so hard to integrate the functionality of those things into all of the core products. Like, there's a lot of great things that we're doing to try to help drive agentic shopping. We're seeing a lot more traction, I would say, on agentic discovery than agentic checkout today, as an example.
The tooling benefits that are good for our customers, whether it's the PO example that Lance talked about, you could get that excited about drag and dropping a PDF into a file, you know, into the control panel, be amazed that that's so revolutionary, but it actually is. That's an agentic function that's actually an operational improvement, even though it's not directly affecting shopping. I think that when I think about what's going on in the AI world, it's just as much about usability for the customer as it is whether or not it's gonna be affecting a direct checkout transaction. If you look at what we're doing in the product roadmap, we're not being myopic, in my opinion. I think we're doing it right.
We're not just trying to play soundbite bingo about AI and how every transaction that's gonna come online is gonna come through an agent. It's going to increase in share, but that's not gonna be the dominant thing. I also care a whole lot about things that may not be as appealing but are directly applicable to our B2B customers or B2C customers, like can you automate the way that I can get PO data input without having to pay somebody to literally do data entry like it's 1992, right? Like, those are important things, and I think we're gonna keep focusing on that.
Last question, Daniel. For those investors who might be on the fence or those investors who are here, what would you leave them with? What would your pitch be for Commerce?
Yeah. I think that we are trading where we are trading because we're not growing fast enough. That's, I think, the fundamental issue. I think it's really important to separate where are we with the fundamentals of the scale, the profitability, and the cash flow of the business, while also being transparent and acknowledging the issues that we need to work with. If you look at where we are as a business, we're a $350+ million ARR business, we're, you know, we guided on our last call, profit's gonna be up almost 60% year-over-year. Profit margin's in the, you know, kinda mid-teens. You've got 80 million shares outstanding, it's just, it's a very, very healthy cash flowing business. We have almost no net debt left, really strong cash generation.
We're not growing fast enough. Why is that the case? It's because our net revenue retention hasn't been as strong as it needs to be. A lot of that is in product decisions that we are actively investing to correct. I mentioned on the last call, you know, we took a lot of painful, but I think good actions over the course of the last year to actually get smaller in certain departments, many of whom report to me, so that we could invest more capital back into what we're doing on product and engineering. I'm really encouraged by what I'm seeing in not only the velocity, but the quality of what we are shipping and what we're putting out in market.
I'm more encouraged about that than I have been about anything we've been putting out on the R&D side in the last eight years that I've been here. I'm sincere about that. I feel really good about what we're seeing in that area, and I think over time, we have the right people in place to also improve what we're doing from a monetization rate basis. This is a $32 billion GMV business that's trading at less than 1x revenue, while it's cash flowing, has almost no net debt. It's a very, very healthy business. We need to grow faster. I think we're trying to be very transparent about what are the issues that are behind that that we're trying to tackle. I think it's a fundamentally very sticky business.
It's an infrastructure business that as AI is starting to really cause a more of a disparate inbound channels of where order volume is coming from, what we have effectively is commerce pipes, right? That makes it more important that you have very reliable pipes to actually transact from all those disparate surfaces, we have a product like Feedonomics that's been number one in this area for over a decade, with huge brands running on it. I think we haven't done a great job in articulating how those 3 assets come together. We've been working on it. I'd say we've done just okay. We still need to do a lot better at that, there's a lot of things here that I'm really encouraged by that I think I'm not gonna speculate on share price.
The markets are where they are, but I think fundamentally the business is a very, very healthy business. We need to be growing faster.
All right. That concludes today's event. I wanna thank all the speakers, those in the room and those who listened online. Thank you.