Commerce.com Inc (CMRC) 2025 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the Commerce fourth quarter and fiscal year 2025 earnings call. (Operator Instructions) Please be advised that today's conference is being recorded.

I would now like to turn the conference over to your first speaker today, Tyler Duncan, Senior Vice President, Finance, and Investor Relations. You may begin.

Good morning, and welcome to Commerce's fourth quarter and fiscal year 2025 earnings call. We will be discussing the results announced in our press release issued before today's market open. With me are Commerce's Chief Executive Officer, Travis Hess; Chief Financial Officer and Chief Operating Officer, Daniel Lentz.

Today's call will contain certain forward-looking statements, which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning financial and business trends, as well as our expected future business and financial performance, financial condition, and our guidance for both the first quarter of 2026 and the full year 2026. These statements can be identified by words such as expect, anticipate, intend, plan, believe, seek, committed, will, or similar words. These statements reflect our views as of today only and should not be relied upon as representing our views at any subsequent date, and we do not undertake any duty to update these statements.

Forward-looking statements, by their nature, address matters that are subject to risks and uncertainties that could cause actual results to differ materially from expectations. For a discussion of the material risks and other important factors that could affect our actual results, please refer to the risks and other disclosures contained in our filings with the Securities and Exchange Commission.

During the call, we will also discuss certain non-GAAP financial measures, which are not prepared in accordance with generally accepted accounting principles. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures as well as how we define these metrics and other metrics is included in our earnings press release, which has been furnished to the SEC and is also available on our website at investors.commerce.com.

With that, let me turn the call over to Travis.

Thanks, Tyler. 2025 was an important year for Commerce, a year in which we achieved meaningful operational improvements and laid the foundation for sustainable growth. We delivered revenue of $342 million, up approximately 3% year over year, and non-GAAP operating income finished at $28 million with strong improvements to cash generation. We also delivered our highest sequential improvement in subscription ARR in over 1.5 years in Q4.

Over the past 12 months, we have executed on a long-term strategy focused on three priorities: simplifying the business, realigning investment around our highest value initiatives, and building the infrastructure to scale as AI and agentic Commerce reshapes how merchants engage with buyers. We've improved efficiency, reinvested savings in the product innovation, and increased profitability and cash flow, allowing us to operate with greater leverage and speed.

We also reintroduced ourselves to the market under a unified brand, Commerce, which reflects how we now operate, as a connected platform across storefronts, product data, experience, and payments. Importantly, 2025 was not just about internal alignment. It was about accelerating our pace of innovation and driving sustainable growth.

We continue to see strong momentum in B2B, with B2B-oriented customers representing the majority of our new platform, ARR over the past three quarters. Subscription ARR from customers using BigCommerce B2B addition grew nearly 20% in 2025 and delivered the highest retention rates across our product portfolio.

During Q4, we added several new industrial, manufacturing, and distribution customers, including Build It Right, a leading distributor of specialized drilling equipment, premier water tanks, a water truck manufacturer hawk Research Labs, a provider of high-performance refinishing coating systems; and KH Industries, a manufacturer of electrical and AV components. These wins, together with the continued performance of our existing customer base, underscore both the durability of B2B demand and the stickiness of our differentiated B2B capabilities.

We are also seeing continued momentum with leading consumer brands. H&M, The RealReal, and Petco have adopted Feedonomics' data optimization platform to enhance product visibility and performance across digital channels alongside Grainger, one of the largest industrial distributors in North America. On the BigCommerce platform, we added European apparel brand, Lascana, and successfully renewed our long-standing relationship with luxury department store, Harvey Nichols, reinforcing our ability to support complex, global retail use cases across both new and existing customers.

In parallel, we advanced our product innovation and product-led growth agenda with a late Q3 launch of Surface, our self-service version of Feedonomics. Surface enables BigCommerce merchants to enrich and syndicate their product catalog across Google Shopping, Meta, and soon additional agentic advertising and marketplace channels. The early results are compelling. In Q4, merchants using Surface saw an average 24 points higher GMV growth compared to nonusers, a strong early proof point that better data leads to better discovery and conversion. Notably, that material difference in GMV growth was from only the advertising channels built into the initial release.

We plan to quickly roll out additional advertising, marketplace and agenetic channels within surface in the coming months to drive broader adoption and value to our merchants while also driving monetization growth within our customer base.

We also expanded partnerships with OpenAI, Microsoft CoPilot, Google Gemini, and Perplexity to position Commerce is an AI-ready infrastructure layer. These integrations are built to help our merchants bolster visibility and conversion and next-gen shopping and discovery flows with no added integration work or technical lift on their side. Notably, Commerce is one of only two commerce platforms featured in Google's announcements of its new Universal Commerce protocol, further reinforcing our strategic alignment with leading AI and discovery platforms.

We partnered with PayPal to introduce BigCommerce payments, which remains on track to launch around the end of Q1 2026. We expect that this new solution will give small and midsized merchants, a fast, integrated way to activate payments, simplify onboarding, and drive higher monetization of GMV.

We've now completed many key elements to our transformation. We've integrated our products and brought them under a unified brand, we have the leadership team in place to drive growth, we have realized material efficiencies in our operations to fuel reinvestment in our products. And in 2026, we are increasing R&D investment by nearly 30%, focusing on four clear priorities that will drive growth.

First, we are delivering AI capabilities directly into our core Commerce platform for both B2B and B2C customers, while extending Feedonomics as the data enrichment and infrastructure layer for agentic commerce. This drives optimized product discovery and shopping experiences across branded storefronts as well as advertising, marketplace, and agentic channels, accelerating time to value and retention across our installed base.

Second, we are expanding Feedonomics surface into more channels for our BigCommerce merchant, which we believe is a powerful driver of both customer outcomes and monetization. Third, we are rolling out BigCommerce payments, starting with the integration of our PayPal powered solution to simplify onboarding for merchants and improved monetization of GMV.

And fourth, we are expanding Makeswift, first as a modern visual editor and page builder for our BigCommerce customers and then launching a stand-alone version that extends our reach to third-party content and Commerce ecosystems. These represent just a sample of what we plan to bring to market this year. These initiatives are designed to increase platform usage, improve attach rates across BigCommerce, Feedonomics, and Makeswift and unlock new monetization via payments, data, and bundling.

And we are doing this in a commerce environment that is rapidly fragmenting across AI services. Buyers are increasingly starting their journey in AI interfaces, not on a brand site. Our role is to make sure our merchants are discoverable, trustworthy, and transactable wherever that journey begins or ends.

To better reflect this evolution, we are introducing two new key metrics. First, gross merchandise volume, otherwise known as GMV, which is a clear measure of the scale of our platform. Our platform delivered GMV of nearly $32 billion in 2025 and with consistent double-digit growth over the last several years.

Second, net revenue retention, otherwise known as NRR, which reflects our ability to grow within our customer base across product lines and services across our entire business, not just a subset of customers or products. Daniel will elaborate on these metrics in more detail shortly, but I would like to offer my perspective on their importance and what they reflect about our business.

Commerce operates one of the largest installed bases in GMV footprints in e-commerce, with GMV growing 12% in 2025 and 11% in 2024. GMV growth and NRR at a total business level, provide a clearer picture of our scale, health, and the growth opportunity ahead, driving improvement in both metrics is a top priority for us in 2026.

The opportunities ahead across AI-driven discovery and checkout first-party payments and product data infrastructure are significant and expanding. While I'm pleased with the strong foundation we have built through improvements to efficiency, profitability and product innovation in 2025, we have not yet delivered on the full growth potential of this business for our shareholders. That changes in 2026 as we shift from foundation building to execution and monetization.

With that, I will turn it over to Daniel.

Thanks, Travis. Commerce serves tens of thousands of merchants globally and facilitates nearly $32 billion in annual GMV across B2C and B2B customers on the BigCommerce platform. Feedonomics remain central to our data strategy, powering discovery, performance and monetization across both traditional and AI-driven channels.

Q4 revenue was $89.5 million, up 3% year over year. We expanded full year non-GAAP operating margin by 230 basis points versus 2024 and 990 basis points versus 2023, underscoring efficiency gains and organizational simplification. We ended the year with $359 million in ARR and continued strengthening our underlying business fundamentals.

Operating cash flow was $3 million and $27 million for Q4 and 2025, respectively, which reflects more disciplined operating controls and improved working capital management. We closed the year with $143 million in cash, cash equivalents and marketable securities with no material debt maturities until 2028, providing flexibility to reinvest in our products to accelerate growth.

We reduced our net debt position from $33 million in 2024 to $11 million in 2025, a decrease of nearly 67% year over year. For this three months ended December 31, 2025, we had approximately 81.4 million common shares outstanding and 82.0 million fully diluted shares outstanding.

As Travis mentioned previously, we are adjusting certain metrics disclosures to better reflect business performance and incorporate investor feedback. Enterprise ARR ended the year at $287 million. Enterprise customer count was 6,648, up 897 accounts sequentially, and Enterprise account ARPA, or average revenue per account, was 43,200, down 8% sequentially. The increase in customer count and decrease in ARPA was partially driven by a Q4 go-to-market program to upgrade select customer accounts from our essentials plans to Enterprise plans.

While we were encouraged by the progress and healthy engagement and retention across our Enterprise accounts last quarter, we believe that driving dollarized expansion across the entire business and customers of all sizes is a better indicator of underlying performance than the growth of a select subset of customers alone. Beginning this quarter, we are retiring Enterprise ARR and related metrics because expansion is increasingly driven by product cross-sell, data services, payments, and bundled capabilities that cut across legacy plan definitions.

In place of those disclosures, we will begin sharing quarterly two new metrics that better capture our scale and monetization efficiency. First, starting this quarter, we are now sharing total GMV, which reached nearly $32 billion in 2025 and grew 11% and 12% in 2024 and 2025, respectively. We have a significant opportunity to better scale ARR growth at a similar rate to GMV. The gap between GMV growth and our top-line growth reflects several factors, primarily our strong growth in B2B, where credit card transactions represent a smaller percent of the payments mix and yield lower revenue share than B2C.

To be clear, we do not expect ARR to grow in lockstep with GMV, but we do expect the gap to narrow over time as we drive higher payments monetization mix, product cross-sell, and new product-led monetization models.

Second, we will now share company-wide net revenue retention to provide greater visibility into expansion trends across our entire business. NRR was 95.2% in Q4, up from 95.0% in Q4 2024. Driving improvement in this metric is central to our company's strategy and underpins many of our investment priorities. Specifically, improving time to value for our customers, cross-product adoption, and retention through tighter integration of Feedonomics payments and storefront capabilities, the areas that most directly influence expansion and churn. We believe this shift in reporting aligns more closely with how we are building and operating the business and provides clearer transparency and comparability for our investors.

Now let me walk through guidance. For Q1 2026, we expect revenue between $82.5 million and $83.5 million, and we expect non-GAAP operating income between $9.3 million and $10.3 million. For the full year 2026, we expect revenue between $347.5 million and $369.5 million, and non-GAAP operating income between $34 million and $53 million. This outlook represents 2% to 8% full year growth with non-GAAP operating margins of 10% to 14% at the revenue guidance midpoint. Our guidance exceeds current Street consensus both on revenue and profitability, reflecting the progress we have made in 2025.

Importantly, after giving effect to anticipated operational restructuring payments, we anticipate cash and cash equivalents to exceed total long-term debt by mid-2026, and we expect to deliver GAAP profitability for the full year 2026, the first time in Commerce's history. This milestone is a direct result of disciplined execution and expanding product model and meaningful operational leverage. On a Rule of 40 basis, our non-GAAP guidance implies the combined growth plus margin performance of approximately 11% to 22%, depending on how we execute within our ranges.

Let me close with a few reasons we believe Commerce is positioned to deliver long-term value. We operated nearly $360 million in ARR, with gross margins approaching 80%. We are generating meaningful profit and cash flow and expect to continue to do so this year, with non-GAAP operating income 57% higher year over year at the midpoint. We facilitate nearly $32 billion in annual GMV with consistent double-digit growth.

This business has yet to reach its full potential. We see meaningful opportunities to drive faster growth while maintaining the discipline that has delivered substantial improvements to profitability over the last two to three years. This is a structurally stronger business than it was a year ago. Our focus is squarely on execution, driving stronger growth and sustainable margin expansion.

With that, operator, let's open it up for questions.

(Operator Instructions) Raimo Lenschow, Barclays.

This is Koji on for Raimo. I wanted to talk about where you're seeing the agentic commerce landscape as we've seen the Commerce integrations. And as that sort of evolves, where do you see the biggest opportunity for your platform? And how do you expect that -- how do you expect to capture that over the near and the long term?

Thanks for the question. That's a good one. Listen, we're seeing lots of momentum. I think as others in the market have as well, obviously, aligning with the major players, certainly, Stripe and PayPal are two massive partners and valuable partners to us. We've aligned to their standards and schemas.

We're doing the same across the answer engines, all which have their own intricacies. I think we've been pretty public about where we are with several of them. We are in a position that have mapped to schemas across all the answer engines. Ultimately, a lot of these things are dated, particularly as it relates to checkout. So as an example, Perplexity, we've demoed a genetic checkout and have been live on that surface for some time now.

In the case of OpenAI, we've mapped to their schema, but again, that is gated currently by OpenAI. They are not openly accepting merchants. So we're at the mercy of their thresholds. And they're in to table as far as sequencing. Same for Google.

We are mapped to their schema. We're in testing right now to get BC merchants on there, but UCP only works with data and check out and check out is also gated that's going on a case-by-case basis. We're in a good position to take advantage of that, and we'll be testing with Google over the next quarter.

Ken Wong, Oppenheimer.

Travis, it was good to see that GMV has grown 12%. It does show that you guys are driving some sustainability there. Yet when I do the math, it looks like take rate perhaps kind of inch down a little bit. And as you talk about moving from foundation to monetization, how should we kind of anticipate what happens to take rate? Maybe you can talk about the partnership with PayPal, your own payment product. What's the path going forward there?

Yeah, Ken, great question. I'll take the first part of it and then turn it to Daniel for a minute. Monetization is going to come from a couple of different capacities. One, obviously, we're shipping more product and really focusing on the existing installed base to monetize that as laid out in some of the opening remarks by Daniel. Part of that is BigCommerce payment.

Obviously, I think this is a dramatically different approach than where the company was a year ago, where we really didn't talk about this in any capacity. We've taken a more opinionated approach. We'll continue to see that evolve over time as would be expected to monetize. We're also looking at ways to better monetize the B2B installed base. As Daniel also laid out by definition, has a slightly different nuance to it, which is reflective in those numbers.

But I would expect monetization to come really twofold. Growth from existing customers through the shipment of new products whether that's product-led growth or enhancements or new AI SKUs, certainly, as well as obviously monetizing payment.

I'll turn it over to Daniel as it relates to take rate and things like that.

Yeah. Ken, I think it's a great question because I think it gets that why we felt it made a lot of sense to introduce the new metrics that we introduced. I think, by and large, I would say, our platform is larger than probably what it was known to be within the market. I think it's also growing faster as you mentioned on the GMV metric than probably what was broadly known. What I don't think was as well known and what we really wanted to create some transparency around is some of the why behind the things that we are doing here within the company.

Take rate is not where it can be. And part of that is because of the fact that B2B customers just do fewer credit card transactions, so we make less payments rev share. But beyond that, we also have an opportunity to better retain and expand the base. And you see that in the NRR number, which is not where it needs to be, but we wanted to be transparent about where it is. I don't think the metrics should be surprising relative to previous NRR disclosures that we made.

I think it's pretty consistent with that. But what it really shows is an interesting story of opportunity within the business where it's a large, growing and stable platform. We just haven't had enough focus and success in having our growth rates track along with the growth rate of the underlying GMV on the platform. That gets into why we're taking a different point of view on how we're approaching payments. We're starting with kind of a white labeled version with PayPal as our first partner, which we think is great.

But that's not the end of where that's going. And when you look at a lot of the product launches and initiatives that we have coming, they have embedded new monetization models that lead to better NRR and expansion of our existing base, which is also a lower customer acquisition cost, which can allow the business to not only grow faster but grow more profitably in the process.

And so we just thought it was really important to add transparency around that really because we think it reflects the opportunity that has Travis and I so excited. We have a lot of work to do. I think that's evident in the numbers as well. But there's a lot of really good opportunities underneath that that we're excited about.

Understood. Very helpful. And Daniel, second, just on the guidance range for fiscal '26 to $20 million plus revenue range, much larger than the $8 million range you guys started off with in '25. I'd argue there's probably more uncertainty going into '25 versus what the foundation you guys have laid for '26. Can you help me understand what's being considered in the guidance that would create such a large delta?

Yeah. Great question, and I expected this question, actually. So let me kind of go on either end of the range. So if you look at where we are from like a Q1 guide, it looks a little conservative. That's just because we took a little bit of conservatism exiting the holiday GMV that we saw in the period, which was a little bit different -- a little bit lower than where we thought it was going to be what you see in the Q4 results, which wasn't a real big deal. But we kind of carried that into a little bit of conservatism in Q1 and carrying that forward in case we start to see. Just some sort of like macro issues.

There's just been a lot of uncertainty, I'd say, in the labor market in tech, in particular. So the low end of the range kind of reflects that. But the reason we have such a higher dispersion than normal is because we also see a lot more upside this year than where we've been in years past because we have so much innovation that we have on the road map that's coming this year.

Now take payments as an example. We're not going to be having gross accounting, it's going to be net, like it's we are expecting to see strong incremental growth on that over time, but that's one of probably five or six different things that are coming that have us optimistic about where the year can go. We still need to deliver on that, and we think the midpoint fairly reflects where we see the business at this time, but we thought it was important for investors to understand kind of the range of outcomes and what we see in the business.

We have a lot more going on right now at the beginning of the year from an innovation and what we're trying to ship and what we've had at any other time in the seven years that I've been here, but we got to deliver on those things, and we felt that having a broader range than we have in the past accurately reflects that.

DJ Hynes, Canaccord.

Daniel, I'll start with you and then one for Travis after. So starting on the numbers, absent the program to upgrade select customers from Essentials to Enterprise, what was core enterprise ARR growth in the quarter?

It was slightly up apart from that. That was a big driver on why we saw that move that we saw. It was in line to a little better probably than where we were in prior quarters. We didn't make that change because we were trying to kind of be unclear about what's going on in the underlying. We just feel overall, it was better to kind of pivot the focus to where, frankly, Travis and I are running the business, which is looking at how are we monetizing underlying GMV.

And if you look, in particular, DJ, like what we launched on Surface, the self-service version of Feedonomics as an example, that's primarily focused on smaller customers, not our larger customers. And so as we been talking over the last several quarters that our focus is on dollarized expansion, not particular count of a subset of customers while it's important, it's an indicator, but not the most important ones and not how we were running the business anyway. And so we felt it was important to make this pivot.

Yeah. And just a clarification on the metrics going forward. I understand we're not going to talk about enterprise ARR anymore. Are you not talking about ARR at all?

Let me clarify this. We are going to continue to disclose ARR every single quarter. There is no change to that. We are also going to continue to talk about subscription ARR, which is simply the difference between total ARR in the last 12 months of partner and services revenue. So no change there.

All we're going to be doing, I would say, is additive, which is we're going to start disclosing GMV on a quarterly basis beginning next quarter. So you'll be able to see the quarter over -- like quarter over quarter versus prior year going forward. We're also going to be sharing total NRR on a total business level every single quarter, which that number kind of definitionally is a rolling prior 12-month metric.

And so it's going to make it very easy for investors to see how are we doing in terms of total platform growth and stability on the GMV side. How are our initiatives making progress or not depending on how results go and driving better monetization and realizing the opportunity to better track overall top line ARR growth underneath it.

The only thing that we're going to be doing is taking away enterprise-specific metrics. But if anything, I actually think this adds better transparency to what's going on into the business to be really clear, that's the intent.

Yeah. Okay, very clear. And then the follow-up for Travis. So it sounds like Shopify's agentic plan, which I talked about yesterday, is directly competitive with Feedonomics, right? I mean, they talked about using that for non-Shopify customers kind of in the same way that you talked about Feedonomics. Is that right? And if so, maybe you can kind of go a little deeper on what positions the Commerce and Feedonomics to win versus what Shopify is doing?

Yeah. There's some overlap there, but I would say, by definition, first of all, it's a completely different cohort of where those products historically serve. I would say with Feedonomics, it served primarily what I would define as enterprise, you're talking about the largest branded manufacturers and retailers in the world. We do have a large subset of those clients that actually run on Shopify for platform but use Feedonomics. That's for a reason, and it's not because it costs less.

It's because they can't get the value out of the data enrichment from what Shopify does or how they do it, that they get from Feedonomics because, again, that product data is enriched bespokely for the surfaces by which they show up on the syndication of which will eventually become commoditized. I mean, all these all these protocols will become open, they'll become standardized so that agents can interact with them. So there's no value proposition in the syndication. The value proposition is in the data enrichment and orchestration. And it's not just orchestration of the data, it's also the orchestration of, say, inventory availability.

So as people get into contextualized conversations, and you're looking for something that you need for next weekend, that contextualized input has to marry against what inventory is available, just like Google ads do today as far as what's available close to you by a particular time frame.

So it's doing a lot of things behind the scenes that by definition is different. It is agnostic to platform. So we accept the fact that there are a lot of merchants that are happy with their current platform, are incapable of moving current platforms, but still have a material need to show up relatively and valuably across services their customers want to meet them. Our responsibility is to enrich and syndicate that agnostically and at scale. That's the biggest difference.

We are not trying to monetize this through a checkout. We are trying to drive merchant value to the extent that also overlaps with BigCommerce. And to Daniel's point earlier, the self-service version of Feedonomics, which has been one of the things we hadn't done yet here having bought Feedonomics is having a self-service version to make it available for smaller merchants. That's what we're most excited about. That will overlap probably the most with what Shopify is doing, and the overlap is really we're offering it for a similar cohort on our platform that they're offering on their platform.

I'm not saying one is better than the other. It's just by definition, native to the platform itself, and we've just begun running -- rolling that out over the last quarter, if that's helpful.

Maddie Schrage, KeyBanc CM.

My first one is just on the payments offering. Could you walk us through the cadence of PSR contributions throughout 2026? And I guess, could you walk us through how that would also touch margins?

Yeah. So we are on track to launch BigCommerce payments roughly around the end of Q1, that's the plan today. We're also going to be making some changes to kind of underlying pricing and packaging on our platform plans around the same time to correspond with the integration of BigCommerce payments into our core offerings. One of the reasons we're excited to partner with PayPal is we have such a huge installed base of existing customers that are already using PayPal, which makes it far easier for us to ship as many existing customers into BigCommerce payments after launch and then start incrementally growing it over time.

We're going to have, I'd say, a two-pronged effort. One is to get as many new merchants that are signing up to go into that solution, which is going to be primarily focused at the outset on small business and mid-market customers, I would say. There will be more features we'll launch more across the back half of the year that I think will make it more relevant for large corporate and enterprise customers.

So we can kind of wave one is we want to get as many new customers into that as possible, but we're also going to have a lot of ways that we are going to look at other customers within our base and see where we can get them to switch into that, where it makes sense, and it doesn't conflict with existing arrangements, obviously, with other partners where we have -- we have wonderful relationships with a number of payment partners, including Stripe and Adyen and others and we're not. We have no intention of disrupting that.

So I think from a margin perspective, we do expect it to be additive across the year. It takes the place of other existing agreements with PayPal. So it's not all 100% greenfield on top of where we already were, which we baked in the guidance and factored that into the range. But we see this really -- Maddie, I think it's important. This is a start of how we're thinking about the strategy here. This is a very demonstrable pivot from how we've thought about this in the past. We think it's very possible and good to be both open and opinionated.

In the past, from a fintech point of view or a payments point of view, it's been very much saying, look, use whoever you want, we will continue to allow customers to have huge wide choice in who they want to use on the payment side. But we'd like to be able to bring more focus to a smaller number of partners and included the branded solution so that we can have better technical integrations and better results for customers by focusing on perhaps a smaller number of partners going forward. And then over time, might we expand this further and start investigating whether we want to take further steps towards the PSP or things like that.

Those are certainly things we're still evaluating. We just felt it was prudent as a first step. Let's start with this. see how we can drive adoption on this, get margin improvement over time and then expand this further as we go to better link up our overall growth rate to GMV growth rate on the platform, which as we said, has been really strong and stable for several years.

Understood. And then I guess my second question kind of piggybacks off of that. But as you guys become more penetrated on the B2B side of things, and that's lower credit card penetration, how does that kind of offset what the take rates would be going forward?

I think you see that and why our take rates -- to the question we got earlier, like take rates, if you just derive total ARR into GMV. So it went down slightly over the course of the last quarter. A lot of that's B2B mix and that's the issue that you described. Some of that's somewhat inevitable. I mean, like I think what we're really looking at is to say, okay, we have a lot of really unique competitive differentiation in B2B, and we want to encourage merchants to have all great services in all of the different ways that they need their customers to be paying us, whether that's ACH or going through POs and invoicing or credit card transactions.

What we're going to do is narrow the aperture of the number of partners that we're really focusing on within B2B so that we can have better solutions offerings for customers that have expanded payments opportunities and monetization opportunities for us over time as well. It's always going to look a little different than the B2C side of things because of the credit card mix, but we still think there is a lot of opportunity to incrementally improve monetization of B2B.

Even if on an apples-to-apples basis, it's intrinsically always going to be a little different than B2C. There's a lot of ways that we still see that we can improve that and make -- and create upside there even within the B2B cohort.

(Operator Instructions) Koji Ikeda, Bank of America.

I wanted to ask about the NRR metric being 95. Being sub-100 raises a lot of questions on growth durability. And so how should we be thinking about the core drivers to expand this metric in the near term? And what sort of NRR assumptions are baked into the 2026 guide?

This is Daniel. I'll take that one. So that the number for the total business is 95. I don't believe should be surprising when the metric for Enterprise accounts and that prior disclosure was around 100. And I had said it was kind of in the 99 to 100 range.

I think we finished last year, I think at 98. So the fact that at a total business level, we're 300 basis points lower than that, I don't think really should be surprising. The core to the question is, obviously, we do not consider that number acceptable, and it's nowhere near best-in-class in where it needs to be. I think it reflects the fact that we have not add the focus that we need on delighting and expanding our existing customers.

And if you look at why -- why did we make the changes that we made from a restructuring basis in the announcement that we made last quarter, is because, one, we can run the business a lot more efficiently than where we had before. Like this is not a pivot or a change. We're running the same plan that we've been talking about for the last year. We can just do it with less capital in the go-to-market side in particular, which is what's enabling us to redeploy dollars into R&D and investments that are directly focused on what we're doing on the NRR side of things.

And I think the fact that we're able to increase our capital investment in R&D in 2026, nearly 30%, while having a midpoint guide that's nearly 60% higher profit growth year over year, I think shows how much wins we've seen within the business and how we're operating that creates efficiency to free up capital to reinvest.

If you look at just the initiatives that Travis mentioned in his prepared remarks, in particular, I would argue almost every single one of them is focused on getting NRR to the number where it should be. Launching Surface, great. We had 24 points higher GMV growth for customers that are using it that weren't. And that was only with two advertising channels built into the initial release, that drives better retention and it's a new monetization path that didn't exist before. Launching Makeswift as our new page builder, which is going to happen roughly in the next quarter or so.

Same thing that has new monetization models built in. And a lot of the places where we're directing dollars is on core product performance to delight our customers to help improve retention and expansion.

Yeah. And I think foundationally, Koji, over the last year, 1.5 years, we've laid the foundation to be able to actually execute on this. I know it hasn't been sexy or super exciting and a lot of the changes that we've made, certainly, but they were intentional. And intentional to get to this point, it's still to Daniel's point, we've got a lot of work to do, like it's certainly not mission accomplished by any stretch, but we actually have the foundation in place to take advantage of this. I think that's reflected in the guide and certainly will be measured in ongoing capacity on efficacy against this, but we think net revenue retention is the ultimate metric of the business and where we are.

And given that transparency to The Street, we think is helpful and less confusing than guiding on a particular type of plan that might be misconstrued, which is where we were in the past around Enterprise.

And one last point, Koji, I would make. Just to your specific question at the end, essentially what's baked into the guide. What's baked into the guide is incremental improvements across the year, but not so dramatic in improvement that it's something that's unrealistic, and we feel like we can achieve within the 12-month period. I think if you just look at the pace of new account additions and growth over the course of the last two years or so, it's been pretty stable. We want to see that inch up incrementally.

But we have a lot of levers to pull to improve this, and we don't need to see some dramatic improvement that's unrealistic in order to get to the numbers that we've included in our guidance. We need to get better, but we think that it's certainly achievable.

Got it. Thank you. Maybe a question for either of you. Travis, in your prepared remarks, you talked about Commerce.com becoming successful in the AI-ready infrastructure layer for B2B and B2B Commerce -- B2B and B2C Commerce strategies. Like if you guys are successful with that, what would it mean for customer buying patterns of the three big products, BigCommerce, Feedonomics, and Makeswift? Does that change the algorithm at all?

I think it -- well, it's going to organically change just because those three products would be more easily available certainly to the installed base, which was the intention, I think, I've said this publicly a couple of times now. We have not focused enough on the existing customer installed base, quite frankly. We weren't in a situation to be able to do it because these other products weren't installed. And there was a lot of duplicity in both cost and just distraction and overall road map unintended duplicative -- duplicative, sorry. Duplicative, it's early in the morning. Anyway, we weren't in a position to take advantage of that. So that's part of the thesis here was integrating those products and making it available.

To your point, there's also a slightly different wedge strategy as well now as well. Feedonomics being agnostic. We've talked about Makeswift going on from a distribution perspective into other ecosystems. We now have creative new ways to access business outside our own four walls at the same time and a land and expand motion, which is also something we didn't have the systems, we didn't have the infrastructure didn't have the motion to be able to do that.

So I think that will impact AI is obviously accelerating all of those things. So it's allowing us to go at a much faster, more efficient pace which is allowing us to do more with less. That's probably the biggest impact as far as cadence and things are concerned. So if you'd asked this two years ago, if we thought we had accomplished this in the time frame. Without AI, I don't think that would be possible.

So I think the speed by which we will deliver product and are delivering product, the speed by which we're enabling our sales folks and go-to-market teams and the speed by which we're actually able to take things to market and drive efficacy is obviously radically improved.

Josh Baer, Morgan Stanley.

Wanted to follow up on the '26 guidance range question, which you answered from a growth perspective. On the margin side, the range for operating income also wide. I guess the question is really like is there -- how should growth and revenue coincide with margins? Is there a framework? Is it a scenario where the upside on revenue is payments, net recognition that drops to the bottom line and drives the higher margins? Or is it a scenario where the slower growth you lean into profitability?

That's a great question, Josh. It's Daniel, I'll take that one. I would say just the way that Travis and I are operating this approach in the year, growth is paramount. That is the focus. We are confident. I think we've demonstrated this over the course of the last several years.

We run a disciplined business. We run a disciplined P&L. We need to be growing faster. I'm very confident as we grow, we are going to deliver strong margins as we go through.

And I think the fact that we delivered such a materially higher guidance and profit that I think probably where the Street expected us to be for 2026, while reinvesting in growth shows that priority. If we end up on the high side of the range, obviously, that's going to throw off extra profit that would take us to the higher part of the range. But if we're landing on the high side of where we talked about on the revenue guide,

Travis and I are going to look for opportunities to reinvest that further into growth. We're going to do it in ways that we think are prudent. We're not going to throw money after high cost of acquisition, low ROI things like we need to get materially better in sales and marketing efficiency. And that's one of the reasons we made some of the redeployments and changes that we made because we see that in the numbers the same way that our investors have over the course of the last year or two.

But where we have opportunities to reinvest, if we're coming in on the high side of the revenue range, we're going to do that because we want to plow more back into growth as we get momentum going further.

Okay. That makes sense. So if we come in at the high end on revenue, we will see more investment because the return is there. And if we're at the low end on revenue, like that's going to be a negative for the margins coming at the --

Let me just clarify. If we come in on the lower side of the revenue guidance range, we're going to tighten the belt where we can to make sure that we deliver within the range that we provided on profit, right? If we end up on the high side of the revenue range, we run an 80% gross margin business. A lot of that is going to flow to the bottom line, and we're not going to reinvest every single dollar. A lot of what we would put in, we'd probably put into additional capital in R&D, and you've got normal capitalized software rules and things like that that we would need to go through.

So it would end up generating additional profit. So we probably -- high side of revenue range is high side of profit range even with reinvestment, but we're going to do it in a way that we think is really, really prudent. We're not just going to go throwing money around everywhere. I think we've shown really clearly that's not how we run the business.

Exactly. Okay. That's super helpful. And then on the disclosures, one follow-up. With the removal of the Enterprise related metrics, like is there a customer count disclosure now going forward? And just really wondering how you think it's best that we track an important element of the business around net new customers, market share and go-to-market initiatives and progress.

Yeah. We're not going to have a specific customer count metric going forward. It's something that we will speak to. So investors kind of understand where it is. We think one of the best ways to understand how we're doing on a market share basis is how are we doing on GMV growth?

And I think for a long time, we got questions from a lot of investors specifically about that because that's also how they were trying to understand overall market share growth because our customer count metric that we were disclosing was a subset metric anyway, it didn't represent the breadth of the count of customers on the platform to begin with.

I mean, okay, we're talking we have 6,000 accounts that happen to buy our enterprise plans, tens of thousands of customers that are running on the platform. If you look at B2B by count, we think we're probably one of the biggest B2B platforms in the world and that's at a subset. But I think the most important thing is, are those customers being retained and expanding.

That's reflected in NRR. There's some goodness there in some of the underlying parts, but we need to get a lot better. But if you look, importantly, if the overall GMV metric, the scale of this business and the health of the growth and what we see in the underlying platform, is good. We need to do a better job orienting the business to drive monetization of that growth down to our shareholders, and that's where we are focused and where we've been focused for the last year, we just didn't think that the metrics that we have are really providing a good enough why to connect the dots between where we were applying capital and where we see opportunity to drive monetization of the business.

Brian Peterson, Raymond James.

Travis, maybe to start, I wanted to get your perspective on how agentic commerce may be impacting replatforming opportunities? On one hand, I could see it driving a lot of innovation and people looking at new purchases. And I also could see it maybe slowing purchasing decisions. Any perspective on what you're seeing from the impact of agentic, if at all?

Yeah, Brian, great question. Certainly, in 2025, it impacted it on the B2C side, most notably, I would say the back half of the year. Obviously, we were disappointed in what we delivered in the back half of the year, I think we expected more there. I think the good news is we've got great product market fit for agentic. We're obviously in the midst of a lot of positive things there, but the downside is the collateral damages you've got brands and retailers where traffic has dropped off, obviously, and that's become the importance as opposed to replatforming.

It's not killed it. We certainly have a healthy pipeline. But yeah, I don't think it's been helpful in speeding up platforms, particularly upmarket on B2C. I would expect it to change a little bit, but I think what's also happening through agentic is it's spawning new commercial models, right, where you're seeing components of different aspects like our agentic checkout product, as an example, is an easy use case of an existing Feedonomics client where we're enriching and syndicating that catalog either directly or through financial partners like PayPal, where again, that checkout may happen on our rails with our cart and our order orchestration capabilities within Feedo into somebody else's order management system.

Are you going to see more and more of those sorts of things? So different commercial models, different components and things and mixing coming together. I think our North Star and all of this is to remain agnostic to what's best for our merchants. So if we're providing all of that infrastructure, fantastic. That makes the most sense. We're providing a portion of it, and that makes the most sense.

I think in the example earlier, I think Ken made ask the question around to Feedo. One of the biggest differentiators for us on the Feedonomics side and how it differentiates in market are the control mechanisms within that product. Larger brands, enterprise, branded manufacturers, and retailers need those controls.

And they also need the agnosticism because if they're going through agentic checkout regardless of infrastructure, they want to make sure that that aligns with their back-office systems, meaning their point of sale and other channels by which people may transact. So if I buy something agentically, through say ChatGPT, and I want to return that product in store that needs to have interconnectivity there. And that technology isn't agnostic and they're forced to use different rails, that sink is off and it creates a bad customer experience and increased cost for the merchant.

So I know these are weird use cases that nobody thinks about because shopping just happens to the customer, but these are very complicated, nuanced, expensive mistakes in the back end, and that's where you're seeing a lot of hesitation from the more enterprise-oriented branded manufacturers and retailers. They know how complicated this is. They know how hard it is, and they know how expensive it is to go create friction in those buying experiences. So when they do this, they want to make sure they do it right and they adjust accordingly, and we're allowing them to do that through some of our components and some of our capabilities. And that's what's probably slowing up more of the replatforming than anything else certainly upmarket, if that's helpful.

No, that's great color. And Daniel, maybe one for you. I appreciate all the new disclosures. But any perspective that you can give us on how the split of GMV growth in 2025 looked of B2B versus B2C?

Yeah. I would say -- I mean, we called out last year, customers using B2B addition, ARR from those customers grew almost 20%. GMV was similar. B2B is a disproportionate grower as a share of GMV, which is why you see some of the kind of derived slight decline in net take rates when you look at ARR as a percentage of total GMV again, it's a high-class problem. It's growing really, really well. It's differentiated. It's doing great in market. It's kind of fun to be able to look to our product leaders and say, look, we got to get monetization up.

You're doing a great job driving growth in the platform. We need to close the gap between monetization between B2B and B2C. Some of that spread is inevitable. It just is, but there's a lot of opportunities for us to improve that.

This concludes our question-and-answer session. I would like to turn the conference back over to Travis Hess, CEO, for any closing remarks.

Thank you. I want to thank everyone, obviously, for attending. We're excited to execute against our strategy laid out and look forward to discussing further with you all next quarter. Thanks very much.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.