UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, ~~2023~~2024


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 001-39423

BigCommerce Holdings, Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware	46-2707656
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
11305 Four Points Drive Building II, Suite 100 Austin, Texas	78726
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (512) 865-4500

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Series 1 common stock, $0.0001 par value per share

BIGC

The Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~March 31, 2023,~~May 7, 2024, the registrant had ~~74,549,845~~77,274,527 shares of common stock, $0.0001 par value per share outstanding.

Table of Content

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION
Item 1.	~~Index to~~ Financial Statements	2
	Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023	2
	Condensed Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023	3
	Condensed Consolidated Statements of ~~Operations~~Comprehensive Loss for the three months ended March 31, 2024 and 2023	4
	~~Condensed Consolidated Statements of Comprehensive Loss~~	5
	Condensed Consolidated Statements of Stockholders’ Equity ~~(Deficit)~~for the three months ended March 31, 2024 and 2023	65
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023	76
	Notes to Condensed Consolidated Financial Statements	87
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3435
Item 4.	Controls and Procedures	3435
PART II.	OTHER INFORMATION	3637
Item 1.	Legal Proceedings	3637
Item 1A.	Risk Factors	3637
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3637
Item 3.	Defaults Upon Senior Securities	3637
Item 4.	Mine Safety Disclosures	3637
Item 5.	Other Information	3637
Item 6.	Exhibits	37
	Signatures	38

Table of Content

PART I—FINANCIAL INFORMATION

Item 1. Financial ~~Statements.~~

~~Index to Financial~~ Statements

~~BigCommerce Holdings, Inc.~~


~~Consolidated Financial Statements~~
~~Condensed Consolidated Balance Sheets~~	3
~~Condensed Consolidated Statements of Operations~~	4
~~Condensed Consolidated Statements of Comprehensive Loss~~	5
~~Condensed Consolidated Statements of Stockholders’ Equity~~	6
~~Condensed Consolidated Statements of Cash Flows~~	7
~~Notes to the Condensed Consolidated Financial Statements~~	8

~~Table of Content~~

BigCommerce Holdings, Inc.

Condensed Consolidated Balance Sheets

(in ~~thousands, except per share amounts)~~thousands)


	March 31,			December 31,			March 31,			December 31,
	2023			2022			2024			2023
							(unaudited)
Assets
Current assets
Cash and cash equivalents	$	61,070		$	91,573		$	60,900		$	71,719
Restricted cash		1,117			1,457			1,112			1,126
Marketable securities		221,272			211,941			204,281			198,415
Accounts receivable, net		59,009			51,899			39,302			37,713
Prepaid expenses and other assets		14,048			11,206
Prepaid expenses and other assets, net								29,251			24,733
Deferred commissions		6,431			6,171			8,695			8,280
Total current assets		362,947			374,247			343,541			341,986
Property and equipment, net		10,251			9,083			9,991			10,233
Right-of-use-assets		5,395			5,887
Operating lease, right-of-use-assets								4,024			4,405
Prepaid expenses, net of current portion		886			470			1,817			1,240
Deferred commissions, net of current portion		6,728			7,037			6,430			7,056
Intangible assets, net		25,550			27,583			24,584			27,052
Goodwill		49,749			49,749			52,086			52,086
Total assets	$	461,506		$	474,056		$	442,473		$	444,058
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	7,508		$	7,013		$	7,063		$	7,982
Accrued liabilities		4,239			2,937			3,212			2,652
Deferred revenue		20,786			17,783			34,810			32,242
Current portion of debt								553			547
Current portion of operating lease liabilities		2,509			2,609			2,477			2,542
Other current liabilities		42,316			48,444			19,830			24,785
Total current liabilities		77,358			78,786			67,945			70,750
Deferred revenue, net of current portion		1,879			1,759
Long-term debt		337,989			337,497
Long-term portion of debt								339,970			339,614
Operating lease liabilities, net of current portion		9,362			10,008			7,014			7,610
Other long-term liabilities, net of current portion		478			334			625			551
Total liabilities		427,066			428,384			415,554			418,525
Commitments and contingencies (Note 7)
Stockholders’ equity
Preferred stock, $0.0001 par value; 10,000 shares authorized at March 31, 2023 and December 31, 2022; 0 shares issued and outstanding, at March 31, 2023 and December 31, 2022.		—			—
Common stock, $0.0001 par value; 500,000 shares Series 1 authorized at March 31, 2023 and December 31, 2022; 74,587 and 73,945 shares Series 1 issued and outstanding at March 31, 2023 and December 31, 2022, respectively.		7			7
Common stock								7			7
Additional paid-in capital		587,022			576,851			628,058			620,021
Accumulated other comprehensive loss		(482	)		(1,199	)
Accumulated other comprehensive gain (loss)								(96	)		163
Accumulated deficit		(552,107	)		(529,987	)		(601,050	)		(594,658	)
Total stockholders’ equity		34,440			45,672			26,919			25,533
Total liabilities and stockholders’ equity	$	461,506		$	474,056		$	442,473		$	444,058

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Content

BigCommerce Holdings, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)

Three months ended March 31,

2023

2022

Revenue

$
71,757

$
66,050

Cost of revenue

17,446

17,103

Gross profit

54,311

48,947

Operating expenses:

Sales and marketing

34,052

33,639

Research and development

20,845

20,944

General and administrative

16,494

15,846

Acquisition related expenses

4,125

12,660

Restructuring charges

420

—

Amortization of intangible assets

2,033

2,037

Total operating expenses

77,969

85,126

Loss from operations

(23,658
)

(36,179
)
Interest income

2,426

122

Interest expense

(722
)

(709
)
Other (expense) income

31

(156
)
Loss before provision for income taxes

(21,923
)

(36,922
)
Provision for income taxes

197

115

Net loss

$
(22,120
)

$
(37,037
)
Basic and diluted net loss per share attributable to common
stockholders

$
(0.30
)

$
(0.51
)
Weighted average shares used to compute basic and diluted net
loss per share attributable to common stockholders

74,142

72,476


	For the three months ended March 31,
	2024			2023
Revenue	$	80,360		$	71,757
Cost of revenue (1)		18,439			17,446
Gross profit		61,921			54,311
Operating expenses: (1)
Sales and marketing		32,432			34,052
Research and development		19,988			20,845
General and administrative		14,929			16,494
Acquisition related expenses		333			4,125
Restructuring charges	0				420
Amortization of intangible assets		2,467			2,033
Total operating expenses		70,149			77,969
Loss from operations		(8,228	)		(23,658	)
Interest income		3,178			2,426
Interest expense		(720	)		(722	)
Other income (expense)		(332	)		31
Loss before provision for income taxes		(6,102	)		(21,923	)
Provision for income taxes		(290	)		(197	)
Net loss	$	(6,392	)	$	(22,120	)
Basic net loss per share	$	(0.08	)	$	(0.30	)
Shares used to compute basic net loss per share		76,626			74,142

(1) Amounts include stock-based compensation expense and associated payroll tax costs, as follows:


	For the three months ended March 31,
	2024		2023
Cost of revenue	$	656	$	1,189
Sales and marketing		1,867		2,867
Research and development		3,476		3,503
General and administrative		2,592		3,079

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Content

BigCommerce Holdings, Inc.

Condensed Consolidated Statements of Comprehensive Loss

(in thousands)

(unaudited)

Three months ended March 31,

2023

2022

Net loss

$
(22,120
)

$
(37,037
)
Other comprehensive income (loss):

Net unrealized gain (loss) on marketable debt securities

717

(613
)
Total comprehensive loss

$
(21,403
)

$
(37,650
)


	Three months ended March 31,
	2024			2023
Net loss	$	(6,392	)	$	(22,120	)
Other comprehensive income (loss):
Net unrealized gain (loss) on marketable debt securities		(259	)		717
Total comprehensive loss	$	(6,651	)	$	(21,403	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Content

BigCommerce Holdings, Inc.

Condensed Consolidated Statements of ~~Preferred Stock and~~ Stockholders’ Equity

(in thousands)

(unaudited)

Preferred
Stock

Common Stock

Additional
Paid-in

Accumulated

Accumulated
Other
Comprehensive

Stockholders’

Shares

Amount

Shares

Amount

Capital

Deficit

Loss

Equity
Balance at December 31, 2022

—

$—

73,945

$7

$576,851

$(529,987)

$(1,199)

$45,672
Exercise of stock options, net of shares withheld for taxes

—

—

246

—

(316)

—

—

(316)
Release of restricted stock units

—

—

396

—

—

—

—

—
Stock-based compensation

—

—

—

—

10,487

—

—

10,487
Total other comprehensive loss

—

—

—

—

—

—

717

717
Net loss

—

—

—

—

—

(22,120)

—

(22,120)
Balance at March 31, 2023

—

$—

74,587

$7

$587,022

$(552,107)

$(482)

$34,440


	Preferred Stock		Common Stock		Additional Paid-in	Accumulated	Accumulated Other Comprehensive	Stockholders’	Three months ended March 31, 2024
	Shares	Amount	Shares	Amount	Capital	Deficit	Loss	Equity	Common Stock				Additional Paid-in			Accumulated			Accumulated Other Comprehensive			Stockholders’
									Shares		Amount		Capital			Deficit			Loss			Equity
Balance at December 31, 2021	—	$—	72,311	$7	$528,540	$(390,068)	$(191)	$138,288
Exercise of stock options	—	—	272	—	277	—	—	277
Balance at December 31, 2023										76,410	$	7	$	620,021		$	(594,658	)	$	163		$	25,533
Proceeds from exercise of stock options										308		0		974			0			0			974
Release of restricted stock units			90		—		—	—		507		0		(1,325	)		0			0			(1,325	)
Stock-based compensation	—	—	—	—	8,962	—	—	8,962		0		0		8,388			0			0			8,388
Total other comprehensive loss							(613)	(613)		0		0		0			0			(259	)		(259	)
Net loss	—	—	—	—	—	(37,037)	—	(37,037)		0		0		0			(6,392	)		0			(6,392	)
Balance at March 31, 2022	—	$—	72,673	$7	$537,779	$(427,105)	$(804)	$109,877
Balance at March 31, 2024										77,225	$	7	$	628,058		$	(601,050	)	$	(96	)	$	26,919


	Three months ended March 31, 2023
	Common Stock				Additional Paid-in			Accumulated			Accumulated Other Comprehensive			Stockholders’
	Shares		Amount		Capital			Deficit			Loss			Equity

Balance at December 31, 2022		73,945	$	7	$	576,851		$	(529,987	)	$	(1,199	)	$	45,672
Proceeds from exercise of stock options		246		0		(316	)		0			0			(316	)
Release of restricted stock units		396		0		0			0			0			0
Stock-based compensation		0		0		10,487			0			0			10,487
Total other comprehensive loss		0		0		0			0			717			717
Net loss		0		0		0			(22,120	)		0			(22,120	)
Balance at March 31, 2023		74,587	$	7	$	587,022		$	(552,107	)	$	(482	)	$	34,440

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Content

BigCommerce Holdings, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

Three months ended March 31,

Three months ended March 31,

2023

2022

Cash flows from operating activities

Net loss

$
(22,120
)

$
(37,037
)
Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

2,904

2,826

Amortization of discount on debt

493

488

Stock-based compensation

10,487

8,962

Allowance for credit losses

1,075

1,313

Changes in operating assets and liabilities:

Accounts receivable

(8,185
)

(2,502
)
Prepaid expenses

(4,235
)

(806
)
Deferred commissions

49

(658
)
Accounts payable

495

(287
)
Accrued and other liabilities

(4,922
)

5,702

Deferred revenue

3,123

14

Net cash used in operating activities

(20,836
)

(21,985
)
Cash flows from investing activities:

Purchase of property and equipment

(1,063
)

(1,340
)
Maturity of marketable securities

39,429

9,000

Purchase of marketable securities

(48,043
)

(32,473
)
Net cash used in investing activities

(9,677
)

(24,813
)
Cash flows from financing activities:

Net payment of settlement of equity-based awards

(330
)

184

Net cash provided by (used in) financing activities

(330
)

184

Net change in cash and cash equivalents and restricted cash

(30,843
)

(46,614
)
Cash and cash equivalents and restricted cash, beginning of period

93,030

298,704

Cash and cash equivalents and restricted cash, end of period

$
62,187

$
252,090

Supplemental cash flow information:

Cash paid for interest

$
431

$
472

Cash paid for taxes

$
152

$
32

Noncash investing and financing activities:

Changes in capital additions, accrued but not paid

$
65

$
96

Reconciliation of cash, cash equivalents and restricted cash within the condensed consolidated balance sheet to the amounts shown in the statements of cash flows above:

Cash and cash equivalents

61,070

250,934

Restricted cash

1,117

1,156

Total cash, cash equivalents and restricted cash

$
62,187

$
252,090

(unaudited)


	Three months ended March 31,
	2024			2023

Cash flows from operating activities
Net loss	$	(6,392	)	$	(22,120	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		3,486			2,904
Amortization of discount on debt		497			493
Stock-based compensation expense		8,388			10,487
Provision for expected credit losses		863			1,075
Changes in operating assets and liabilities:
Accounts receivable		(2,588	)		(8,185	)
Prepaid expenses		(4,960	)		(4,235	)
Deferred commissions		211			49
Accounts payable		(889	)		495
Accrued and other liabilities		(4,601	)		(4,922	)
Deferred revenue		2,568			3,123
Net cash used in operating activities		(3,417	)		(20,836	)
Cash flows from investing activities:
Purchase of property and equipment		(806	)		(1,063	)
Maturity of marketable securities		29,440			39,429
Purchase of marketable securities		(35,565	)		(48,043	)
Net cash used in investing activities		(6,931	)		(9,677	)
Cash flows from financing activities:
Proceeds from exercise of stock options		974		0
Taxes paid related to net share settlement of stock options		(1,325	)		(330	)
Repayment of debt		(134	)		0
Net cash used in financing activities		(485	)		(330	)
Net change in cash and cash equivalents and restricted cash		(10,833	)		(30,843	)
Cash and cash equivalents and restricted cash, beginning of period		72,845			93,030
Cash and cash equivalents and restricted cash, end of period	$	62,012		$	62,187
Supplemental cash flow information:
Cash paid for interest	$	439		$	431
Cash paid for taxes	$	140		$	152

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Content

BigCommerce Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

1. Overview

BigCommerce Holdings, Inc. (the “Company”) is leading a new era of ecommerce. ~~Our~~The Company’s software-as-a-service (“SaaS”) platform simplifies the creation of ~~beautiful,~~ engaging online stores by delivering a unique combination of ease-of-use, enterprise functionality, and flexibility. ~~We power~~The Company empowers both ~~our~~its customers’ branded ecommerce stores and their cross-channel connections to popular online marketplaces, social networks, and offline point-of-sale systems.

~~BigCommerce~~The Company empowers businesses to turn digital transformation into a competitive ~~advantage. We allow~~advantage, and allows merchants to build their ecommerce solution their way with the flexibility to fit their unique business and product offerings. ~~We provide~~The Company provides a comprehensive platform for launching and scaling an ecommerce operation, including store design, catalog management, hosting, checkout, order management, reporting, and pre-integration into third-party services like payments, shipping, and accounting. All ~~our~~of the Company’s stores run on a single code base and share a global, multi-tenant architecture purpose built for security, high performance, and innovation. ~~Our~~The Company’s platform serves stores in a wide variety of sizes, product categories, and purchase types, including business-to-consumer and business-to-business.

~~Our headquarters and principal place of business are in Austin, Texas.~~

~~We were formed in Australia in December 2003 under the name Interspire Pty Ltd and reorganized into a corporation in Delaware under the name BigCommerce Holdings, Inc. in~~ ~~February 2013~~.

References in these condensed consolidated financial statements to ~~“we,” “us,” “our,”~~“we”, “us”, “our”, the ~~“Company,”~~“Company”, or “BigCommerce” refer to BigCommerce Holdings, Inc. and its subsidiaries, unless otherwise stated.

2. Summary of significant accounting policies

Basis of presentation

The accompanying condensed unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information. ~~Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.~~

In the opinion of management, the accompanying interim unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments, consisting of normal, recurring adjustments, necessary for a fair presentation. Certain information and disclosures normally included in the notes to the annual consolidated financial statements prepared in accordance with GAAP have been omitted from these interim unaudited condensed consolidated financial statements pursuant to the rules and regulations of the ~~SEC.~~Securities and Exchange Commission (“SEC”). Accordingly, these interim unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the accompanying notes for the fiscal year ended December 31, ~~2022,~~2023, which are included in ~~our~~the Company's Annual Report on Form 10-K, filed with the SEC on ~~March 1, 2023.~~February 29, 2024. The results of operations for the three months ended March 31, ~~2023,~~2024, are not necessarily indicative of the results to be expected for the year ending December 31, ~~2023,~~2024, or for any other period.

In December 2022, we had a reduction in force event that eliminated certain positions and changed the reporting hierarchy and job responsibilities for certain people in our general and administrative function. This resulted in the expense related to these individuals being classified as sales and marketing expenses, when previously, they had been classified as general and administrative expense. Certain prior year amounts have been reclassified for consistency with the current year presentation. For the period ended March 31, 2022 we reclassified $~~1.5~~ ~~million from general and administrative expenses to sales and marketing expenses.~~

Basis of consolidation

The accompanying condensed consolidated financial statements include ~~our~~the Company’s accounts and the accounts of ~~our wholly owned~~the Company’s wholly-owned subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation. ~~Our~~

The Company’s fiscal year ends on December 31. References to "fiscal 2024," for example, refer to the fiscal year ended December 31, 2024.

~~Table of Content~~

~~2. Summary of significant accounting policies (continued)~~

Use of estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires ~~certain financial instruments to be recorded at fair value; requires our~~the Company’s management to make estimates and assumptions ~~that affect~~in the ~~reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the~~Company’s consolidated financial statements and ~~reported amounts of revenue~~notes thereto.

Significant estimates and ~~expenses during the reporting periods. Significant estimates; judgments, and~~ assumptions made by management in these consolidated financial statements include: ~~allocating~~

•

the allowance for credit losses;

•

constrained revenue;

•

variable consideration for revenue recognition;

•

the period of benefit associated with costs capitalized to obtain revenue contracts;

•

the useful lives of intangible assets; and

•

the recognition, ~~constrained revenue; the amortization period for~~measurement and valuation of current and deferred ~~commissions; the allowance for credit losses~~income taxes and ~~a determination~~uncertain tax positions;

Table of ~~the deferred tax asset valuation allowance.~~ Content

Because of the use of estimates inherent in financial reporting process actual results could differ and the differences could be material to ~~our~~the Company’s consolidated financial ~~statements~~statements.

~~Segment and geographic information~~Recent Accounting Pronouncements Not Yet Adopted

~~Our~~ASU 2023-07, Segment Reporting (Topic 280)

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07 requires all public entities, including those public entities that have a single reportable segment to disclose significant segment expenses and other segment items on an annual and interim basis and to provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Additionally, it requires a public entity to disclose the title and position of the individual or the name of the group or committee identified as the chief operating decision maker (“CODM”). ASU 2023-07 is ~~our~~effective for the Company’s fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company is currently assessing the impact this standard will have on the Company’s but does not expect it to have a material impact on the consolidated financial statements.

ASU 2023-09, Income Taxes (Topic 740)

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires all entities to provide more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The amendments in this Update also eliminate requirements such as (1) the disclosure of the nature and estimate of the range of the reasonably possible change in the unrecognized tax benefits balance in the next 12 months, (2) or making a statement that an estimate of the range cannot be made, and (3) the disclosure of the cumulative amount of each type of temporary difference when a deferred tax liability is not recognized because of the exceptions to comprehensive recognition of deferred taxes related to subsidiaries and corporate joint ventures. Lastly, the amendments in this Update replace the term ‘public entity’ as currently used in Topic 740 with the term ‘public business entity’. ASU 2023-09 is effective for the Company’s fiscal years beginning after December 15, 2024. The Company is currently assessing the impact this standard will have on the Company but does not expect it to have a material impact on the consolidated financial statements.

Other accounting standard updates effective for interim and annual periods beginning after December 31, 2023 are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

Segments

The Company’s CODM is the chief executive officer. ~~Our~~The Company’s chief executive officer reviews the financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. Accordingly, ~~we have~~the Company has determined that ~~we operate~~it operates as a single operating and reportable segment.

Revenue ~~by geographic region was as follows:~~

Three months ended March 31,

(in thousands)

2023

2022

Revenue:

Americas – U.S.

$
54,809

$
51,500

Americas – other

3,351

2,684

EMEA

7,983

6,284

APAC

5,614

5,582

Total revenue

$
71,757

$
66,050

~~Long-lived assets by geographic region was as follows:~~

March 31,

December 31,

(in thousands)

2023

2022

Long-lived assets:

Americas – U.S.

$
9,349

$
8,318

EMEA

633

465

APAC

269

300

Total long-lived assets

$
10,251

$
9,083

~~Cash and cash equivalents~~

We consider all highly liquid investments with original maturities of three months or less from the date of purchase to be cash equivalents. Cash equivalents consist of money market funds and investment securities and are stated at fair value.

~~Restricted cash~~

We maintain a portion of amounts collected through our online payment processor with the online payment processor as a security deposit for future chargebacks. Additionally, we have amounts on deposit with certain financial institutions that serve as collateral for letters of credit and lease deposits.

~~Marketable securities~~

All marketable securities have been classified as available-for-sale and are carried at estimated fair value. We determine the appropriate classification of our investments in debt securities at the time of purchase. Securities may have stated maturities greater than one year. All marketable securities are considered available to support current operations and are classified as current assets.Recognition

For available-for-sale debt securities in an unrealized loss position, our management first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value and recognized in other

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~~2. Summary of significant accounting policies (continued)~~

income (expense) in the results of operations. For available-for-sale debt securities that do not meet the aforementioned criteria, our management evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, an allowance is recorded for the difference between the present value of cash flows expected to be collected and the amortized cost basis of the security. Impairment losses attributable to credit loss factors are charged against the allowance when management believes an available-for-sale security is uncollectible or when either of the criteria regarding intent or requirement to sell is met.

Any unrealized losses from declines in fair value below the amortized cost basis as a result of non-credit loss factors is recognized as a component of accumulated other comprehensive (loss) income, along with unrealized gains. Realized gains and losses and declines in fair value, if any, on available-for-sale securities are included in other income (expense) in the results of operations. The cost of securities sold is based on the specific-identification method.

~~Accounts receivable~~

Accounts receivable are stated at net realizable value and include unbilled receivables. Agreements with enterprise customers can contain promotional billing periods. Since merchants have full access to the functionality of our platform upon contract execution, and we have enforceable rights to receive payments for the promotional period if the contract is early terminated, revenue is recognized ratably over the contract life. When this occurs, we recognize revenue in advance of invoicing creating an unbilled receivable. In addition, some of our partner and services revenue agreements include substantive minimums where the consideration paid varies over the term of the contract and revenue is recognized ratably over the contract term. Accounts receivable are net of an allowance for credit losses, are not collateralized, and do not bear interest. Payment terms range from ~~due immediately~~ to ~~due within 90 days. The accounts receivable balance at March 31, 2023 and December 31, 2022 included unbilled receivables of $20.1~~ ~~million and $19.9~~ ~~million, respectively. Unbilled receivables at March 31, 2023 and December 31, 2022 includes contract assets related to enterprise subscription solutions of $15.2~~ ~~million and $15.7~~ ~~million, and PSR customers of $4.9~~ ~~million and $4.2~~ ~~million, respectively.~~

We assess the collectability of outstanding accounts receivable on an ongoing basis and maintain an allowance for credit losses for accounts receivable deemed uncollectible. The balance of accounts receivable includes accounts that have been invoiced but unpaid, and unbilled amounts, which represents revenues recognized in advance of billing. We analyze both the invoiced accounts receivable portfolio and our unbilled accounts receivable for significant risks, historical collection activity, and an estimate of future collectability to determine the amount that we will ultimately collect. This estimate is analyzed quarterly and adjusted as necessary.

Identified risks pertaining to our invoiced accounts receivable, include the delinquency level, customer type, and current economic environment. The estimate of the amount of accounts receivable that may not be collected is based on aging of the accounts receivable balances and the financial condition of customers, our assessment of the overall portfolio and general economic conditions. Identified risks pertaining to our subscription unbilled accounts receivable include customer type, customer activity on our platform, historical contract termination rates, and customer delinquency. The estimate of the amount of accounts receivable that may not be collected is based primarily on historical contract termination rates, customer delinquency rates and an assessment of the overall portfolio and general economic conditions. The identified risk related to our unbilled accounts related to our PSR business are current partner engagement and activity, the financial wherewithal of the partner, the partner’s future plans and the ability to execute on the plans, and their liquidity and overall financial position. The estimate of the amount of accounts receivable that may not be collected is based primarily on the specific evaluation of the partner based on current level of engagement with BigCommerce, their overall financial position and general economic conditions.

~~The allowance for credit losses consisted of the following:~~

(in thousands)

Balance at December 31, 2022

$
9,995

Provision for expected credit losses

1,075

Accounts written off

(1,476
)
Balance at March 31, 2023

9,594

The quarter over quarter decrease in the provision for credit losses was due to a decrease in our general reserve related to our subscription accounts receivable due to improved collections which was partially offset by an increase in our reserve related to unbilled receivables.

~~Property and equipment~~

Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives or the related lease terms (if shorter).

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~~2. Summary of significant accounting policies (continued)~~

~~The estimated useful lives of property and equipment are as follows:~~


		Estimated Useful Life
~~Computer equipment~~		3 ~~years~~
~~Computer software~~		3 ~~years~~
~~Furniture and fixtures~~		5 ~~years~~
~~Leasehold improvements~~		1-10 ~~years~~

~~Maintenance and repairs that do not enhance or extend the asset’s useful life are charged to operating expenses as incurred.~~

The carrying values of property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. When such factors and circumstances exist, we compare the projected undiscounted future cash flows associated with groups of assets used in combination over their estimated useful lives against their respective carrying amounts. If projected undiscounted future cash flows are less than the carrying value of the asset group, impairment is recorded for any excess of the carrying amount over the fair value of those assets in the period in which the determination is made.

~~Research and development and internal use software~~

Research and development expenses consist primarily of personnel and related expenses for our research and development staff, which include: salaries, benefits, bonuses, and stock-based compensation; the cost of certain third-party contractors; and allocated overhead. Expenditures for research and development, other than internal use software costs, are expensed as incurred.

Software development costs associated with internal use software, which are incurred during the application development phase and meet other requirements under the guidance ASC-350 are capitalized. As of March 31, 2023, we have capitalized $~~4.4~~ ~~million, net of accumulated depreciation of $0.3~~ ~~million. As of December 31, 2022, software costs capitalized were $2.8~~ ~~million, net of accumulated depreciation of $0.0~~ ~~million. Amortization on internally developed software was $0.3~~ ~~million and $0.0~~ ~~million for the three months ended March 31, 2023 and 2022, respectively.~~

~~Leases~~

We determine if an arrangement is a lease or contains a lease at inception. At the commencement date of a lease, we recognize a liability to make lease payments and an asset representing the right to use the underlying asset during the lease term. The lease liability is measured at the present value of lease payments over the lease term. As our leases typically do not provide an implicit rate, we use our incremental borrowing rate for most leases. The right-of-use (“ROU”) asset is measured at cost, which includes the initial measurement of the lease liability and initial direct costs incurred and excludes lease incentives.

Lease terms may include options to extend or terminate the lease. We record a ROU asset and a lease liability when it is reasonably certain that we will exercise that option. Operating lease costs are recognized on a straight-line basis over the lease term.

~~We also lease office space under short-term arrangements and have elected not to include these arrangements in the ROU asset or lease liabilities.~~

~~Business combinations~~

We record tangible and intangible assets acquired and liabilities assumed in business combinations under the acquisition method of accounting. We use best estimates and assumptions, including but not limited to, future expected cash flows, expected asset lives, and discount rates, to assign a fair value to the tangible and intangible assets acquired and liabilities assumed in business combinations as of the acquisition date. These estimates are inherently uncertain and subject to refinement. We allocate any excess purchase price over the fair value of the tangible and identifiable intangible assets acquired and liabilities assumed to goodwill. During the measurement period, which may be up to ~~one year~~ ~~from the acquisition date, adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed may be recorded, with the corresponding offset to goodwill.~~

Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our condensed consolidated statements of operations.

~~Acquisition related expenses~~

~~Acquisition related expenses consist primarily of cash payments for third-party acquisition costs and other acquisition related expenses. We recognized $4.1~~ ~~million and $12.7~~ ~~million in acquisition related expenses during the three months ended March 31, 2023 and 2022, respectively. For the three months ended March 31, 2023, $4.1~~ ~~million was recognized in connection with contingent compensation arrangements entered with our fiscal 2021 acquisitions. We entered into contingent compensation arrangements, in~~

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~~2. Summary of significant accounting policies (continued)~~

which payments will be made or have been made, as applicable, after the first and second anniversaries of the closing or upon the earlier achievement of certain product and financial milestones. The compensation arrangements are contingent upon continued post-acquisition employment with us. During the first period, earlier achievement of product and financial milestones were not met. We account for the cost related to the first and second contingent compensation arrangement payments over the service periods of 12 ~~and~~ 24 ~~months, respectively, beginning on the acquisition date, assuming earlier achievement of product and financial milestones is unlikely to be met.~~

~~Goodwill and other acquired intangibles, net~~

We assess goodwill and indefinite-lived intangible assets for impairment annually during the fourth quarter, or more frequently if events or changes in circumstances would more likely than not reduce the fair value of a reporting unit below its carrying value. When we elect to perform a qualitative assessment and conclude it is not more likely than not the fair value of the reporting unit is less

than its carrying value, no further assessment of that reporting unit is necessary; otherwise, a quantitative assessment is performed and the fair value of the reporting unit is determined. If the carrying value of the reporting unit exceeds the estimated fair value, impairment is recorded.

We evaluate the recoverability of finite-lived intangible assets for impairment whenever events or changes in circumstances indicate the carrying amount of such asset may not be recoverable. If such review determines the carrying amount of the indefinite-lived asset is not recoverable, the carrying amount of such asset is reduced to its fair value.

Acquired finite-lived intangible assets are amortized over their estimated useful lives. We evaluate the estimated remaining useful life of these assets when events or changes in circumstances indicate a revision to the remaining period of amortization. If we revise the estimated useful life assumption for any assets, the remaining unamortized balance is amortized over the revised estimated useful life on a prospective basis.

~~Income taxes~~

We account for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax balances are adjusted to reflect tax rates based on currently enacted tax laws, which will be in effect in the years in which the temporary differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period of the enactment date. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets unless it is more likely than not that those assets will be realized. To date, we have provided a valuation allowance against all of our deferred tax assets as we believe the objective and verifiable evidence of our historical pretax net losses outweighs any positive evidence of its forecasted future results. We will continue to monitor the positive and negative evidence, and we will adjust the valuation allowance as sufficient objective positive evidence becomes available.

We recognize the tax effects of an uncertain tax position only if it is more likely than not to be sustained based solely upon its technical merits at the reporting date. The unrecognized tax benefit is the difference between the tax benefit recognized and the tax benefit claimed on our income tax return. All of our gross unrecognized tax benefits, if recognized, would not affect its effective tax rate, but would be recorded as an adjustment to equity before consideration of valuation allowances. We do not expect unrecognized tax benefits to decrease within the next twelve months. We recognize accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. As of March 31, 2023, we have not accrued any interest or penalties related to unrecognized tax benefits. We believe that all material tax positions in the current and prior years have been analyzed and properly accounted for and that the risk of additional material uncertain tax positions that have not been identified is remote.

~~Stock-based compensation~~

We issue stock options, restricted stock units (“RSUs”) and performance based restricted stock units (“PSUs”). Stock-based compensation related to stock options is measured at the date of grant and is recognized on a straight-line basis over the service period, net of estimated forfeitures. We use the Black-Scholes option-pricing model to estimate the fair value of stock options awarded at the date of grant. Stock-based compensation related to restricted stock units is measured at the date of grant, net of estimated forfeitures, and recognized ratably over the service period. Stock-~~basedcompensation~~ ~~related to performance based restricted stock units is measured at~~ ~~the~~ ~~date of grant and recognized using the accelerated attribution method, net of estimated forfeitures, over the remaining service period, when deemed probable.~~

~~Net payments on the settlement of equity-based awards were $0.3~~ ~~million for the three months ended March 31, 2023, which consisted of $1.4~~ ~~million for tax payments related to the net settlement of equity awards and $1.1~~ ~~million for proceeds from stock option exercises.~~

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~~2. Summary of significant accounting policies (continued)~~

~~Foreign currency~~

Our functional and reporting currency and the functional and reporting currency of our subsidiaries is the U.S. dollar. Monetary assets and liabilities denominated in foreign currencies are re-measured to U.S. dollars using the exchange rates at the balance sheet dates. Non-monetary assets and liabilities denominated in foreign currencies are measured in U.S. dollars using historical exchange rates. Revenue and expenses are measured using the actual exchange rates prevailing on the dates of the transactions. Gains and losses

~~resulting from re-measurement are recorded within Other expense in our consolidated statements of operations and were not material for all periods presented.~~

~~Restructuring charges~~

Restructuring charges are comprised of costs incurred as a result of our December 15, 2022 reduction in force as well as an impairment of the right of use asset triggered by our decision to cease using a significant portion of certain leased facilities.

~~3. Revenue recognition and deferred costs~~

~~Revenue recognition~~

Our sources of revenue consist of subscription solutions fees and partner and services fees. These services allow customers to access our hosted software over the contract period. The customer is not allowed to take possession of the software or transfer the software. Our revenue arrangements do not contain general rights of refund in the event of cancellations.

~~The following table disaggregates our revenue by major source:~~

Three months ended March 31,

(in thousands)

2023

2022

Subscription solutions

$
53,808

$
47,987

Partner and services

17,949

18,063

Total revenue

$
71,757

$
66,050

Subscription solutions

Subscription solutions revenue consists primarily of platform subscription fees from all ~~plans. It also includes~~plans and recurring professional ~~services and sales of SSL certificates.~~services. Subscription solutions are charged monthly, quarterly, or annually for ~~our~~the Company’s customers to sell their products and process transactions on ~~our~~the Company’s platform. Subscription solutions are generally charged per online store and are based on the store’s subscription plan. Monthly subscription fees for ~~Pro and Enterprise~~enterprise plans are adjusted if a customer’s gross merchandise volume ("GMV") or orders processed are above specified plan thresholds on a trailing twelve-month basis. For most subscription solutions arrangements, excluding enterprise subscription plans, ~~we have~~the Company has determined ~~we meet~~the Company meets the variable consideration allocation exception and, therefore, ~~recognize~~recognizes fixed monthly fees or a pro-rata portion of quarterly or annual fees and any transaction fees as revenue in the month they are earned. ~~Enterprise~~During the second quarter of fiscal 2023, the Company adopted a new pricing structure that provided a discount to the contractual price for customers who pay quarterly or annually. Prior to this date, enterprise subscription plans ~~include~~included an upfront promotional period in order to incentivize the customer to enter into a subscription arrangement. ~~For~~In both of these ~~Enterprise arrangements,~~scenarios, the total subscription fee is recognized on a straight-line basis over the term of the contract. ~~Revenue recognized in advance of billing is recorded as unbilled accounts receivable.~~ In determining the amount of revenue to be recognized, ~~we determine~~the Company determines whether collection of the entire transaction price is probable. Only amounts deemed probable are recognized as revenue. Key factors in this determination are historical contract termination rates and general economic factors.

Professional services, which primarily consist of education packages, launch services, solutions architecting, implementation consulting, and catalog transfer services, are generally billed and recognized as revenue when delivered.

~~Contracts with our retail customers are generally month-to-month, while contracts with our enterprise customers generally range from~~ ~~one~~ to ~~three years. Contracts are typically non-cancellable and do not contain refund-type provisions. Revenue is presented net of sales tax and other taxes we collect on behalf of governmental authorities.~~

~~Subsequent to our acquisition of Feedonomics on July 23, 2021, subscription~~Subscription revenue includes revenue from Feedonomics. Feedonomics provides a technology platform and related services that enables online retailers and other sellers to automate online listings of the sellers’ information across multiple third-party marketplaces and advertisers (such as Amazon, Google, Facebook, etc.). ~~We provide~~The Company provides these services under service contracts which are generally one year or less, and in many cases month-to-month. These service types may be sold stand-alone or as part of a

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multi-service bundle (e.g. both marketplaces and advertising). ~~The service~~

~~Table of Content~~

~~3. Revenue recognition and deferred costs (continued)~~

~~offerings constitute a single combined performance obligation.~~ Services are performed and fees are determined based on monthly usage and are billed in arrears.

Contracts with the Company’s retail customers are generally month-to-month, while contracts with the Company’s enterprise customers generally range from one to three years. Contracts are typically non-cancelable and do not contain refund-type provisions. Revenue is presented net of sales tax and other taxes the Company collects on behalf of governmental authorities.

Partner and services

~~Our~~The Company’s partner and services revenue ~~consists of~~includes revenue share, partner technology integrations, and marketing services provided to partners. Revenue share relates to fees earned by ~~our~~the Company’s partners from customers using ~~our~~the Company’s platform, where ~~we have~~the Company has an arrangement with such partners to share such fees as they occur. Revenue share is recognized at the time the earning activity is complete, which is generally ~~monthly.~~monthly and variable based on customer usage on the platform. Revenue for partner technology integrations is recorded on a straight-line basis over the life of the contract commencing when the integration has been completed. Revenue for marketing services are recognized either at the time the earning activity is complete, or ratably over the length of the contract, depending on the nature of the obligations in the contract. Payments received in advance of services being rendered are recorded as deferred revenue and recognized when the obligation is completed.

WeThe Company also ~~derive~~derives revenue from the sales of website themes and applications upon delivery.

~~We recognize~~The Company recognizes partner revenue share ~~from the sales of third-party applications,~~ on a net basis as ~~we have~~the Company has determined that ~~we are~~the Company is the agent in ~~our~~the Company’s arrangements with third-party application providers. All other revenue is recognized on a gross basis, as ~~we have~~the Company has determined ~~we are~~the Company is the principal in these arrangements.

Contracts with multiple performance obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment.

~~Our~~The Company’s subscription contracts are generally comprised of a single performance obligation to provide access to ~~our~~the Company’s platform, but can include additional performance obligations. For contracts with multiple performance obligations where the contracted price differs from the standalone selling price (“SSP”) for any distinct good or service, wethe Company may be required to allocate the contract’s transaction price to each performance obligation using ~~our~~the Company’s best estimate of SSP. Judgment is required to determine the SSP for each distinct performance obligation. A ~~contract's~~contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. ~~We have determined that our standard list price~~The primary method used to estimate SSP is ~~our best approximation~~the observable prices of ~~SSP.~~products or services sold or priced separately in comparable circumstances to similar customers.

Contracts with ~~our~~the Company’s technology solution partners may include multiple performance obligations, which can include integrations and marketing activities. In determining whether integration services are distinct from hosting services ~~we consider~~the Company considers various factors. These considerations ~~included~~include the level of integration, interdependency, and interrelation between the implementation and hosting ~~service. We have~~services. The Company has concluded that the integration services included in contracts with hosting obligations are not distinct. As a result, ~~we defer~~the Company defers any arrangement fees for integration services and recognize such amounts over the life of the hosting obligation commencing when the integration has been completed. To determine if marketing activities are distinct, ~~we consider~~the Company considers the nature of the promise in the contract, the timing of payment, and the partner expectations. Additional consideration for some partner contracts varies based on the level of customer activity on the platform. Certain agreements contain minimum guarantees of revenue share. These contracts are evaluated to determine if the guaranteed minimum is substantive. If the minimum is deemed substantive, revenue is recognized ratably over the life of the ~~agreement, which results in a contract asset that is included in unbilled receivables.~~agreement. For most of ~~our~~the Company’s contracts, ~~we have~~the Company has determined ~~that we meet~~ the variable consideration allocation exception has been met and therefore ~~recognize these~~ variable fees are recognized in the period they are earned.

The timing of revenue recognition, billings and cash collections can result in billed accounts receivable, unbilled receivables, contract assets, and deferred revenue.

Contract Assets

Billings scheduled to occur after the performance obligation has been satisfied and revenue recognition has occurred result in contract assets. Contract assets are recorded on the condensed consolidated balance sheets at the end of each reporting period in Prepaid expenses and other assets, net. Typically, contract assets arise from agreements that have tiered billings over the contract life,

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promotional billing periods, and partner and services revenue agreements that include substantive minimums. Net contract assets were $12.7 million as of March 31, 2024 as compared to $11.9 million as of December 31, 2023.

The Company is exposed to credit losses primarily through sales of products and services to customers and partners. The Company assesses the collectability of outstanding contract assets on an ongoing basis and maintain a reserve which is included in the allowance for credit losses for contract assets deemed uncollectible. The Company analyzes the contract asset portfolio for significant risks by considering historical collection experience and forecasting future collectability to determine what will ultimately be collected from its customers and partners, delinquency level and customer type have been identified as the primary specific risk affecting the Company’s contract assets, and the estimate for losses is analyzed annually and adjusted as necessary.The Company has provisioned $1.3 million and $1.5 million for credit losses related to contract assets as of March 31, 2024 and December 31, 2023, respectively.

Deferred revenue

Deferred revenue primarily consists of amounts that have been received from customers in advance of the performance obligation being satisfied. The Company recognizes revenue from deferred revenue when the services are performed and the corresponding revenue recognition criteria are met. Amounts recognized from deferred revenue represent primarily revenue from the sale of subscription solutions, integration, and marketing services. The Company recognized $15.9 million of previously deferred revenue during the three months ended March 31, 2024.

The Company experienced an increase in the deferred revenue balance as of March 31, 2024, compared to December 31, 2023, which was primarily driven by the Company's continued shift to annual billing cycles.

Remaining performance obligation

As of March 31, 2024, the Company had $171.8 million of remaining performance obligations, which represents contracted revenue minimums that have not yet been recognized, including amounts that will be invoiced and recognized as revenue in future periods. Remaining performance obligation is subject to future economic risks, including bankruptcies, regulatory changes and other market factors. The Company expects to recognize approximately 60 percent of the remaining performance obligations as revenue in the following 12 month period, and the remaining balance in the periods thereafter.

Remaining performance obligation consisted of the following:


(in thousands)	Current		Noncurrent		Total
As of March 31, 2024	$	105,486	$	66,350	$	171,836
As of March 31, 2023		87,172		67,872		155,044

Cost of revenue

Cost of revenue consists primarily of personnel-related costs, including: stock-based compensation expenses for customer support and professional services personnel; costs of maintaining and securing ~~our~~ infrastructure and platform; allocation of overhead costs and credit card processing; and amortization expense associated with capitalized internal-use ~~software;~~software.

Accounts receivable

Accounts receivable are stated at net realizable value and ~~allocation~~include both billed and unbilled receivables. Accounts receivable are net of ~~overhead costs.~~an allowance for credit losses, are not collateralized, and do not bear interest. Payment terms range from due immediately to due within 90 days. The accounts receivable balance at March 31, 2024 and December 31, 2023 included unbilled receivables of $10.7 million, and $11.0 million, respectively.

The Company assesses the collectability of outstanding accounts receivable on an ongoing basis and maintains an allowance for credit losses for accounts receivable deemed uncollectible. The Company analyzes grouped customers by similar risk profiles, along with the invoiced accounts receivable portfolio and unbilled accounts receivable for significant risks, historical collection activity, and an estimate of future collectability to determine the amount that the Company will ultimately collect. This estimate is analyzed annually and adjusted as necessary.

Identified risks pertaining to the Company’s invoiced accounts receivable include the delinquency level and customer type. The estimate of the amount of accounts receivable that may not be collected is based on aging of the accounts receivable balances, historical customer delinquency, and assessment of the overall portfolio and general economic conditions.

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The allowance for credit losses consisted of the following:


(in thousands)
Balance at December 31, 2023	$	5,997
Provision for expected credit losses		863
Write-offs charged against the allowance		(821	)
Balance at March 31, 2024	$	6,039

Stock-based compensation

The Company issues stock options, restricted stock units (“RSUs”) and performance based restricted stock units (“PSUs”) to employees.

~~Deferred~~The Company values stock options using the Black-Scholes option-pricing model at the date of grant and recognizes the relates stock-based compensation expense on a straight-line basis over the service period, net of estimated forfeitures, which is typically four years.

The Company values RSUs at the closing market price on the date of grate. RSUs typically vest in equal installments over a four-year period, subject to continued service, and compensation expense is recognized straight-line over the requisite service period.

The Company grants PSUs which provide for shares of common stock to be earned based on the Company's total stockholder return compared to the Russell 2000 index, and referred to as market-based awards. The Company values these market-based awards on the grant date using the Monte Carlo simulation model. The determination of fair value is affected by the Company's stock price and a number of assumptions including the expected volatility and the risk-free interest rate. The Company assumes no dividend yield and recognizes stock-based compensation expense ratably from grant date over the performance period of the award. The market-based awards will cliff-vest at the end of the three-year period ranging from 0 percent to 200 percent of the target number of PSUs granted.

The Company also grants PSUs which provide for shares of common stock to be earned based on its attainment of the Company's adjusted earnings before interest, taxes, depreciation and amortization ("adjusted EBITDA") and revenue relative to a target specified in the applicable agreement, and are referred to as Company performance-based awards. The Company values these awards at the closing market price on the date of grant. The vesting of Company performance-based awards is conditioned upon the achievement of certain targets and will vest in three annual tranches in a percentage of the target number of shares between 0% to 200%. The Company recognizes stock based compensation expense over the performance period, if it is probable that the performance condition will be achieved. Adjustments to stock based compensation expense are made, as needed, each reporting period based on changes in our estimate of the number of units that are probable of vesting.

3. Revenue recognition and deferred costs

Revenue recognition

The Company’s source of revenue consists of subscription solutions fees and partner and services fees. These services allow customers to access the Company’s hosted software over the contract period. The customer is not allowed to take possession of the software or transfer the software. The Company’s revenue arrangements do not contain general rights of refund in the event of cancellations.

Disaggregation of revenue

~~Deferred~~The following table disaggregates revenue ~~primarily consists~~by major source:


	Three months ended March 31,
(in thousands)	2024		2023
Subscription solutions	$	60,959	$	53,808
Partner and services		19,401		17,949
Revenue	$	80,360	$	71,757

Revenue by geographic region was as follows:

Table of ~~amounts that have been billed to or received from customers in advance of performing the associated services. We recognize~~Content


	Three months ended March 31,
(in thousands)	2024		2023
Revenue:
Americas – U.S.	$	61,138	$	54,809
Americas – other (1)		3,776		3,351
EMEA		9,192		7,983
APAC		6,254		5,614
Revenue	$	80,360	$	71,757

(1)Americas-other revenue includes revenue from ~~deferred revenue when~~North and South America, other than the ~~services are performed,~~U.S.

Revenue by geographical region is determined based on the region of the Company’s contracting entity, which may be different than the region of the customer. Revenue attributed to the United States was 76 percent and ~~the corresponding revenue recognition criteria are met. We recognized $~~EMEA was ~~9.3~~11 ~~million~~percent during the three months ended March 31, 2024 and 2023. No single country, other than the United States, represented more than ten percent of ~~previously deferred~~total revenue during the three months ended March 31, ~~2023.~~

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~~3. Revenue recognition~~2024 and ~~deferred costs (continued)~~

The net increase in the deferred revenue balance for the three months ended March 31, 2023 is primarily due to increases in SaaS related subscriptions. Amounts recognized from deferred revenue represent primarily revenue from the sale of subscription solutions, integration, and marketing services.

~~As of March 31, 2023, we had $155.0~~ million of remaining performance obligations, which represents contracted revenue minimums that have not yet been recognized, including amounts that will be invoiced and recognized as revenue in future periods. ~~We expect to recognize approximately~~ 56~~% of the remaining performance obligations as revenue in the following~~ 12~~-month period, and the remaining balance in the periods thereafter.~~ 2023.

Deferred commissions

Certain sales commissions earned by ~~our sales force~~the Company’s go-to-market teams are considered incremental and recoverable costs of obtaining a contract with a customer. ~~Sales commissions are not paid on subscription renewals. We amortize~~The Company amortizes deferred sales commissions ratably over the ~~estimated period of our relationship with customers of approximately~~average customer life which is three years. Based on historical experience, we determine the average life of our customer relationship by taking into consideration our customer contracts and the estimated technological life of our platform and related significant features. We includeThe Company includes amortization of deferred commissions in ~~Sales~~sales and marketing expense in the condensed consolidated statements of operations. WeThe Company periodically ~~review~~reviews the carrying amount of deferred commissions to determine whether events or changes in circumstances have occurred that could impact the period of benefit of these deferred costs. WeThe Company did not recognize an impairment of deferred commissions during the three months ended March 31, ~~2023~~2024 and the year ended December 31, ~~2022.~~2023.

Sales commissions of $~~1.7~~2.1 million and $~~1.6~~1.7 million were deferred for the three months ended March 31, 2024 and 2023, ~~and 2022,~~ respectively; ~~and~~ deferred commission amortization expense was $~~1.6~~2.3 million and $~~1.1~~1.6 million for the three months ended March 31, ~~2023~~2024 and ~~2022,~~2023, respectively.

~~Table of Content~~

4. Fair value measurements ~~cash equivalents and marketable securities~~

Financial instruments carried at fair value include cash and cash equivalents, restricted cash and marketable securities. ~~The carrying amount of accounts receivable approximates fair value due to their relatively short maturities.~~

For assets and liabilities measured at fair value, fair value is the price to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. When determining fair value, ~~we consider~~the Company considers the principal or most advantageous market in which it would transact, and assumptions that market participants would use when pricing asset or liabilities.

The accounting standard for fair value establishes a fair value hierarchy based on three levels of inputs, the first two of which are considered observable and the last unobservable. The standard requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The three levels of inputs that may be used to measure fair value are as follows:

•

Level 1 – Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

•

Level 2 – Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

•

Level 3 – Inputs are unobservable that are significant to the fair value of the asset or liability and are developed based on the best information available in the circumstances, which might include ~~our~~the Company’s data.

The following table presents information about the Company’s cash equivalents, marketable securities and liabilities that were measured at fair value as of March 31, 2024 and December 31, 2023:

Table of Content


	As of March 31, 2024
(in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
Cash equivalents (1):
Money market mutual funds & cash equivalents	$	33,727	$	0	$	0	$	33,727
Marketable securities:
Corporate bonds	0			75,318	0			75,318
U.S. treasury securities		56,251	0		0			56,251
Commercial paper	0			28,004	0			28,004
Agency bonds	0			44,708	0			44,708
Total marketable securities	$	56,251	$	148,030	$	0	$	204,281
Liabilities:
Convertible senior notes due 2026	$	0	$	288,938	$	0	$	288,938


	As of December 31, 2023
(in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
Cash equivalents (1):
Money market mutual funds & cash equivalents	$	39,754	$	0	$	0	$	39,754
Marketable securities:
Corporate bonds		0		64,545		0		64,545
U.S. treasury securities		48,138		0		0		48,138
Commercial paper		0		30,596		0		30,596
Agency bonds		0		55,136		0		55,136
Total marketable securities	$	48,138	$	150,277	$	0	$	198,415
Liabilities:
Convertible senior notes due 2026	$	0	$	280,658	$	0	$	280,658

(1) Included in “Cash and cash equivalents” in the accompanying Condensed Consolidated Balance Sheets, in addition to $28.3 million, and $33.1 million of cash, as of March 31, 2024 and December 31, 2023, respectively.

The contractual maturities of the investments classified as marketable securities were as follows:


(in thousands)	As of March 31, 2024		As of December 31, 2023
Due within 1 year	$	165,733	$	183,132
Due in 1 year through 2 years		38,548		15,283
Total marketable securities	$	204,281	$	198,415

Table of Content

The following tables summarize the gains, losses, and estimated fair value of ~~our~~ cash equivalents, marketable securities and ~~debt.~~liabilities as of March 31, 2024 and December 31, 2023:

As of March 31, 2023

(in thousands)

(Level 1)

(Level 2)

(Level 3)

Total

Financial assets:

Money market funds

$
40,337

$
—

$
—

$
40,337

U.S. treasury securities

$
64,272

$
—

$
—

$
64,272

Corporate securities

$
—

$
157,000

$
—

$
157,000

Total financial assets

$
104,609

$
157,000

$
—

$
261,609

As of December 31, 2022

(in thousands)

(Level 1)

(Level 2)

(Level 3)

Total

Financial assets:

Money market funds

$
68,129

$
—

$
—

$
68,129

U.S. treasury securities

$
72,577

$
—

$
—

$
72,577

Corporate securities

$
—

$
139,364

$
—

$
139,364

Total financial assets

$
140,706

$
139,364

$
—

$
280,070

~~Table of Content~~

~~4. Fair value measurements, cash equivalents and marketable securities(continued)~~

~~The following tables summarize the estimated fair value of our cash equivalents and marketable securities.~~


	As of March 31, 2023									As of March 31, 2024
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value		Amortized Cost/ Principal amount		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Cash equivalents:
Money market funds	$	40,337	$	—	$	—		$	40,337
Money market mutual funds & cash equivalents										$	33,727	$	0	$	0		$	33,727
Marketable securities:
Corporate bonds											75,294		50		(26	)		75,318
U.S. treasury securities	$	64,545	$	—	$	(274	)	$	64,271		56,312		9		(70	)		56,251
Corporate securities	$	157,209	$	—	$	(209	)	$	157,000
Commercial paper											28,005		5		(6	)		28,004
Agency bonds											44,767		3		(62	)		44,708
Total marketable securities										$	204,378	$	67	$	(164	)	$	204,281
Liabilities:
Convertible senior notes due 2026										$	345,000	$	0	$	0		$	288,938


	As of December 31, 2022									As of December 31, 2023
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value		Amortized Cost/ Principal amount		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Cash equivalents:
Money market funds	$	68,194	$	—	$	(65	)	$	68,129
Money market mutual funds & cash equivalents										$	39,754	$	0	$	0		$	39,754
Marketable securities:
Corporate bonds											64,421		157		(33	)		64,545
U.S. treasury securities	$	73,208	$	—	$	(631	)	$	72,577		48,061		86		(9	)		48,138
Corporate securities	$	139,932	$	—	$	(568	)	$	139,364
Commercial paper											30,588		16		(8	)		30,596
Agency bonds											55,182		24		(70	)		55,136
Total marketable securities										$	198,252	$	283	$	(120	)	$	198,415
Liabilities:
Convertible senior notes due 2026										$	345,000	$	0	$	0		$	280,658

~~In September 2021, we issued $345.0~~ ~~million aggregate principal amount of~~ ~~0.25% convertible senior notes due 2026 (the “Notes”). The estimated fair value of the notes was approximately $263.1~~ million as of March 31, 2023. The Notes were categorized as Level 2 instruments as the estimated fair value was determined based on estimated or actual bids and offers of the Notes in an inactive market on the last business day of the period.

5. Business combinations

Acquisition of Makeswift

~~Fiscal 2022~~In October 2023, the Company acquired all issued and outstanding stock of Makeswift, Inc. (“Makeswift”) pursuant to a merger agreement. Makeswift is a leading visual editor for Next.js websites. The total purchase consideration for Makeswift was approximately $9.2 million which consisted of the following:


(in thousands)	Amount
Base purchase price	$	11,000
plus: Closing cash		238
minus: Deferred compensation		(2,000	)
Total purchase consideration(1)	$	9,238

(1) Of the total purchase consideration, $1.1 million of cash was held back by the Company for potential breaches of representation and warranties, as well as adjustments to working capital. Subsequent to March 31, 2024, the Company dispersed working capital hold back of $0.1 million.

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The table below summarizes the estimated fair value of the assets acquired and liabilities assumed in the Makeswift acquisition, at acquisition date:


(in thousands)	October 31, 2023
Tangible assets acquired	$	1,370
Right-of-use asset		147
Intangible assets acquired		7,890
Liabilities assumed		(1,311	)
Deferred tax liability		(1,045	)
Lease liability		(150	)
Net assets acquired, excluding goodwill	$	6,901
Total purchase consideration	$	9,238
Goodwill	$	2,337

As of March 31, 2024, the purchase price allocation is not finalized as the Company has not yet filed the Makeswift tax return for the period ended October 31, 2023. Once this return is filed in fiscal 2024, the Company will update the estimated fair value liabilities assumed in the acquisition.

~~April 2022 Acquisition~~The fair value of ~~Bundle B2B Inc.~~identifiable intangible assets acquired at the date of the acquisitions is as follows:


(in thousands)	Fair value		Useful life (in years)
Developed technology	$	6,600		5.0
Customer relationships		1,200		3.0
Tradename		90		5.0
Total acquisition-related intangible assets	$	7,890

On ~~April 25, 2022, BigCommerce completed its acquisition of Bundle B2B Inc. (“Bundle”), a B2B eCommerce solution that provides advanced B2B functionality seamlessly with BigCommerce’s platform.~~ The ~~total purchase price was~~ $~~7.7~~2.3 ~~million. We acquired Bundle because it~~million goodwill balance is ~~complementary~~primarily attributable to ~~our core business~~synergies and ~~will allow us~~expanded market opportunities that are expected to ~~expand our product~~be achieved from the integration of Makeswift with the Company’s offerings ~~to our merchant base.~~and assembled workforce. The ~~purchase price was based on the expected financial performance of Bundle,~~goodwill balance is not ~~on the value~~deductible for income taxes purposes.

As part of the ~~net identifiable assets at the time of the acquisition. This resulted in a significant portion~~Makeswift merger agreement, $2.0 million of the purchase ~~price being attributed~~consideration is subject to ~~goodwill.~~clawback if any of the key Makeswift employees voluntarily terminate their employment within 18 months after the closing date of the transaction. The ~~purchase price~~$2.0 million is accounted for as compensation expense and therefore not included ~~the issuance of common stock~~ in the ~~amount of~~purchase consideration. The related compensation is recognized as post-combination expense over the 18 month service period on a straight-line basis. The Company incurred $~~4.6~~ ~~million, cash of $0.8~~ ~~million, an escrow withheld in the amount of $0.9~~ ~~million and $1.4~~0.3 million of ~~contingent consideration.~~compensation costs during the three months ended March 31, 2024. The ~~amount held in escrow will be paid out on the first anniversary date with the issuance of the stock based on the fair value of our common stock on the date of payment. Of the~~Company has $~~1.4~~ ~~million contingent consideration, $0.7~~ ~~million is tied to the migration of old merchants to updated plans over a~~ 6~~-months period from acquisition date and the remaining $0.7~~ ~~million is tied to ongoing performance measures over a~~ 12~~-months period from the acquisition date. The purchase price primarily included $0.4~~1.3 million of ~~developed technology~~unvested amounts of cash retention payments recorded in prepaid expenses and $~~7.3~~ ~~million of goodwill that is not expected to be deductible for tax purposes. The identifiable intangible~~other current assets ~~which consisted of developed technology, have estimated useful lives of~~ ~~four years. The pro forma financial information assuming fiscal 2022 acquisition had occurred~~and other assets on the condensed consolidated balance sheet as of ~~the beginning of the fiscal year prior to the fiscal year of the acquisition, as well as the revenue and earnings generated during the current fiscal year, were not material for disclosure purposes.~~March 31, 2024.

6. Goodwill and intangible assets

Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and intangible assets acquired.

Goodwill amounts are not amortized but tested for impairment on an annual basis. There was no impairment of goodwill as of March 31, ~~2023.~~2024.

~~Definite-lived intangible~~Intangible assets are amortized on a straight-line basis over the useful life. ~~Definite-lived intangible~~Intangible assets amortization was $2.5 million and $2.0 million for the three months ended March 31, 2024 and 2023, ~~and 2022,~~ respectively.

~~Table of Content~~

~~6. Goodwill and intangible assets (continued)~~

~~Definite-lived intangible~~Intangible assets consists of the following:

(in thousands)

March 31, 2023

December 31, 2022

Weighted average remaining useful life as of March 31, 2023 (in years)

Gross amount

Accumulated amortization

Net carrying amount

Gross amount

Accumulated amortization

Net carrying amount

Developed technology

$
13,367

$
(5,604
)

$
7,763

$
13,367

$
(4,745
)

$
8,622

2.3

Customer relationship

$
22,525

$
(6,731
)

$
15,794

$
22,525

$
(5,734
)

$
16,791

4.1

Tradename

$
2,470

$
(834
)

$
1,636

$
2,470

$
(711
)

$
1,759

3.3

Non-compete agreement

$
162

$
(91
)

$
71

$
162

$
(78
)

$
84

1.3

Other intangibles

$
485

$
(199
)

$
286

$
485

$
(158
)

$
327

1.8

Total definite-lived intangible

$
39,009

$
(13,459
)

$
25,550

$
39,009

$
(11,426
)

$
27,583

Table of Content


	March 31, 2024							December 31, 2023
(in thousands)	Gross amount		Accumulated amortization			Net carrying amount		Gross amount		Accumulated amortization			Net carrying amount		Weighted average remaining useful life as of March 31, 2024 (in years)
Developed technology	$	19,967	$	(9,591	)	$	10,376	$	19,967	$	(8,401	)	$	11,566		3.2
Customer relationship		23,725		(10,882	)		12,843		23,725		(9,786	)		13,939		3.1
Tradename		2,560		(1,336	)		1,224		2,560		(1,208	)		1,352		2.5
Non-compete agreement		162		(145	)		17		162		(132	)		30		0.3
Other intangibles		485		(361	)		124		485		(320	)		165		1.6
Total intangible assets	$	46,899	$	(22,315	)	$	24,584	$	46,899	$	(19,847	)	$	27,052

As of March 31, ~~2023,~~2024, expected amortization expense for ~~definite-lived~~ intangible assets was as follows:


(in thousands)	March 31, 2023		March 31, 2024

2023 (April 1st through December 31st)		6,099
2024		7,997
Remaining nine months of 2024			$	7,267
2025		6,308		8,046
2026		3,429		5,100
2027		1,717		3,056
2028				1,115
Thereafter		—		0
Total	$	25,550	$	24,584

7. Commitments, contingencies, and leases

~~Liabilities~~Legal Proceedings

From time to time, the Company may become involved in legal proceedings arising in the ordinary course of its business. In general, the resolution of a legal matter could prevent the Company from offering its service to others, could be material to the Company’s financial condition or cash flows, or both, or could otherwise adversely affect the Company’s reputation and future operating results.

In the ordinary course of business, the Company makes a provision for ~~loss contingencies arising from claims, assessments, litigation, fines, penalties, and other sources are recorded~~a liability relating to legal matters when it is both probable that a liability has been incurred and ~~that~~ the amount of the loss can be reasonably estimated. ~~Legal costs incurred in connection with loss~~These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. The outcomes of legal proceedings and other contingencies are, ~~expensed as incurred. From time to time, we are~~however, inherently unpredictable and subject to ~~various claims~~significant uncertainties. The Company is not presently a party to any legal proceedings that, ~~arise in~~if determined adversely to the ~~normal course of business. In the opinion of management, we are unaware of any pending or unasserted claims that~~Company, would have a material adverse effect on ~~our~~the Company's condensed consolidated financial ~~position, liquidity, or results. Certain executive officers are entitled to payments in the event of termination of employment in connection with a certain change in control.~~statements.

Purchase Obligations

~~Our certificate of incorporation~~The Company has contractual commitments for services with third-parties related to hosting and ~~certain contractual arrangements provide for indemnification of our officers~~internal software systems. These commitments are non-cancellable and ~~directors for certain events or occurrences. We maintain a directors and officers insurance policy~~expire within one to ~~provide coverage in the event of a claim against an officer or director. Historically, we have not been obligated to make any payments for indemnification~~three years. The Company had unconditional purchase obligations ~~and~~ no ~~liabilities have been recorded for these obligations on the consolidated balance sheets~~ as of March 31, ~~2023 or December 31, 2022.~~2024 as follows:


(in thousands)	March 31, 2024
Remaining nine months of 2024	$	8,489
2025		16,152
2026		4,976
2027 and thereafter	0
Total	$	29,617

Leases

~~We lease~~The Company leases certain facilities under operating lease agreements that expire at various dates through 2028. Some of these arrangements contain renewal options and require usthe Company to pay taxes, insurance and maintenance costs. Renewal options were not included in the ~~ROU~~right-of-use asset and lease liability calculation. As of March 31, 2024, there were no finance leases.

Table of Content

Operating ~~and short-term rent expenses~~expense relating to leases was $~~0.9~~0.8 million and $~~1.4~~0.9 million for the three months ended March 31, 2024 and 2023, ~~and 2022,~~ respectively. ~~Short-term rent expense was not material for any of the periods presented.~~

~~Table of Content~~

~~7. Commitments, contingencies, and leases (continued)~~

~~Supplemental lease information~~

Cash flow information (in thousands)

Three months ended March 31,

2023

2022

Cash paid for operating lease liabilities

$
901

$
1,326

Right-of-use assets obtained in acquisition

$
—

$
—

Operating lease information

Three months ended March 31,

2023

2022

Weighted-average remaining lease-term

4.1 years

5.2 years

Weighted-average discount rate

5.38
%

5.41
%

The future maturities of operating lease liabilities are as follows:


(in thousands)	March 31, 2023			As of March 31, 2024

2023 (April 1st through December 31st)		2,306
2024		2,957
Remaining nine months of 2024				$	2,225
2025		2,775			2,838
2026		2,528			2,555
2027		2,133			2,133
2028					718
Thereafter		718		0
Total minimum lease payments	$	13,417		$	10,469
Less imputed interest		(1,548	)		(978	)
Total lease liabilities	$	11,869		$	9,491

Restructuring charges

The Company recognizes employee severance costs when payments are probable and amounts are estimable or when notification occurs, depending on whether the severance costs paid are part of the Company’s general plan. Facilities costs related to contracts without future benefit or contract termination are recognized at the earlier of the contract termination or the cease-use dates. Other exit-related costs are recognized as incurred.

In ~~December~~September 2023, the Company commenced a restructuring plan (the “2023 Restructure”) which includes a reduction of ~~2022, we executed a plan~~the Company’s workforce that is intended to ~~reduce our cost structure (the “2022 Restructure”).~~advance the Company’s ongoing commitment to profitable growth. The ~~2022~~actions associated with the employee restructuring under the 2023 Restructure ~~included workforce reduction initiatives which resulted in~~are expected to be complete by the end of the Company’s fiscal 2024, subject to employee jurisdictions.

The Company recorded approximately $~~3.6~~ ~~million of severance and other compensation charges to be paid in the first quarter of 2023. During the three months ended March 31, 2023, we had additional compensation charges of $0.4~~5.5 million in ~~relation to the 2022 Restructure. Furthermore, we have $0.2~~ ~~million still accrued as of March 31, 2023,~~expenses in connection with the ~~2022 Restructure. We do not expect any more material~~2023 Restructure in fiscal 2023, which consists of charges ~~under this plan.~~

~~The 2022 Restructure also included the decision~~related to ~~cease using certain leased office space in Texas~~severance payments, employee benefits, and ~~to make this office space available for sublease in January 2023. As a result, in 2022, we evaluated the recoverability of our right-of-use assets~~professional service and determined the carrying values were not fully recoverable. We calculated the impairment by comparing the carrying amount of the asset group to its estimated fair value based on inputs derived from market prices for similar assets. As a result, we impaired $~~3.7~~ million in right-of-use assets and have recorded this amount in Restructuring Charges on the accompanying consolidated statements of operations for the previous year ended December 31, 2022. The impairment charge represents the amount by which the carrying value exceeded the estimated fair value of the asset group.

legal fees. These charges were recorded within the operating expenses on the accompanying consolidated statement of operations. The Company does not expect any more material charges under this plan.

The following table summarizes the activities related to the 2023 Restructure as of March 31, 2024:


(in thousands)	Workforce reduction
Liability, as of December 31, 2023	$	1,516
Payments		(1,173	)
Liability, as of March 31, 2024	$	343

8. Other liabilities

The following table summarizes the components of other current liabilities:


	As of March 31,		As of December 31,		As of March 31,		As of December 31,
(in thousands)	2023		2022		2024		2023
Sales tax payable	$	1,313	$	1,887	$	2,115	$	1,632
Payroll and payroll related expenses		7,726		16,900		8,480		13,080
Acquisition related compensation		28,892		24,743		286		403
Restructuring related charges						343		1,516
Other		4,385		4,914		8,606		8,154
Other current liabilities	$	42,316	$	48,444	$	19,830	$	24,785

~~Table of Content~~

9. Debt

2021 Convertible Senior Notes

In September 2021, wethe Company issued $345.0 million aggregate principal amount of 0.25% percent convertible senior notes due 2026 (the “Notes”). The Notes were issued in a private offering to qualified institutional buyers pursuant to Rule 144A under the

Table of Content

Securities Act of 1933, as amended (the “Securities Act”). The net proceeds from the sales of the Notes was approximately $335.0 million after deducting offering and issuance costs related to the Notes and before the 2021 Capped Call transactions, as described below.

The Notes are ~~our~~the Company’s senior, unsecured obligations and accrue interest at a rate of 0.25% percent per annum, payable semi-annually in arrears on April 1 and October 1 of each year, beginning on April 1, 2022. The Notes will mature on October 1, 2026, unless earlier converted, redeemed or repurchased by us. Before July 1, 2026, noteholders will have the right to convert their Notes only under the following circumstances: (1) during any calendar quarter (and only during such calendar quarter) commencing after the calendar quarter ending on December 31, 2021, if the Last Reported Sale Price (as defined in the indenture for the Notes) per share of Common Stock (as defined in the indenture for the Notes) exceeds one hundred and thirty percent (130%) percent) of the Conversion Price (as defined in the indenture for the Notes) for each of at least twenty (20) Trading Days (as defined in the indenture for the notes) (whether or not consecutive) during the thirty (30) consecutive Trading Days ending on, and including, the last Trading Day of the immediately preceding calendar quarter; (2) during the five (5) consecutive Business Days (as defined in the indenture for the Notes) immediately after any ten (10) consecutive Trading Day period (such ten (10) consecutive Trading Day period, the “Measurement Period”) if the Trading Price per $1,000 principal amount of Notes for each Trading Day of the Measurement Period was less than ~~ninety eight~~ninety-eight percent (98%) percent) of the product of the Last Reported Sale Price per share of Common Stock on such Trading Day and the Conversion Rate (as defined in the indenture for the Notes) on such Trading Day; (3) if ~~we call~~the Company calls any or all of the Notes for redemption, such Notes called for redemption may be converted any time prior to the close of business on the second business day immediately before the redemption date; or (4) upon the occurrence of specified corporate events. From and after July 1, 2026, noteholders may convert their Notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. As of March 31, 2024 and December 31, 2023, no conditions for the notes to convert have been called or met.

WeThe Company will settle conversions by paying or delivering, as applicable, cash, shares of ~~our~~its common stock or a combination of cash and shares of ~~our~~its common stock, at ~~our~~the Company’s election. The initial conversion rate for the Notes is ~~13.6783~~13.68 shares of common stock per $1,000 principal amount of Notes, which represents an initial conversion price of approximately $73.11 per share of common stock. The conversion rate and conversion price will be subject to adjustment upon the occurrence of certain events, such as distribution of stock dividends or stock splits.

WeThe Company may not redeem the Notes prior to October 7, 2024. The Notes will be redeemable, in whole or in part (subject to certain limitations), for cash at ~~our~~the Company’s option at any time, and from time to time, on or after October 7, 2024 and on or before the 25th scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of ~~our~~the Company’s common stock exceeds ~~130%~~130 percent of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date ~~we send~~the Company sends the related redemption notice; and (ii) the trading day immediately before the date ~~we send~~the Company sends such notice. The redemption price will be a cash amount equal to the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, up to, but excluding, the redemption date. Pursuant to the Partial Redemption Limitation (as defined in the indenture for the Notes), wethe company may not elect to redeem less than all of the outstanding Notes unless at least $150.0 million aggregate principal amount of Notes are outstanding and not subject to redemption as of the time ~~we send~~the Company sends the related redemption notice.

If a “fundamental change” (as defined in the indenture for the Notes) occurs, then, subject to a limited exception, noteholders may require usthe Company to repurchase their Notes for cash. The repurchase price will be equal to the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any, up to, but excluding, the applicable repurchase date.

In accounting for the issuance of the Notes, wethe Company recorded the Notes as a liability at face value. The effective interest rate for the Notes was 0.84%. percent. Transaction costs of $10.0 million, attributable to the issuance of the Notes were recorded as a direct deduction from the related debt liability in the Consolidated Balance Sheet and are amortized to interest expense over the term of the Notes.

The net carrying amount of the ~~Notes~~Company's debt consists of the following:

(in thousands)

March 31,
2023

December 31,
2022

Principal balance

$
345,000

$
345,000

Unamortized issuance costs

$
(7,011
)

$
(7,503
)
Carrying value, net

$
337,989

$
337,497


(in thousands)	Date of Issuance	Maturity Date	Contractual Interest Rate			Outstanding Principal as of March 31, 2024		Carrying Value as of March 31, 2024			Carrying Value as of December 31, 2023
2021 Convertible Senior Notes	September 2021	10/1/2026		0.25	%	$	345,000	$	339,970		$	339,473
2023 Term Debt	June 2023	3/1/2025		4.40	%		553		553			688
Total carrying value of debt									340,523			340,161
Less: current portion of debt									(553	)		(547	)
Total long-term portion of debt								$	339,970		$	339,614

2018

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~~9. Debt (continued)~~

The total interest expense recognized related to the ~~Notes~~Company's debt consists of the following:


	Three months ended March 31,				Three months ended March 31,
(in thousands)	2023		2022		2024		2023
Contractual interest expense	$	216	$	221	$	223	$	216
Amortization of issuance costs		493		488		497		493
Total	$	709	$	709	$	720	$	709

~~Debt fees~~

Lender fees that were paid upfront to the lenders and debt issuance fees paid to third parties are recorded as a discount to the carrying amount of debt and are being amortized to interest expense over the life of the debt.

2021 Capped Call Transactions

In connection with the pricing of the Notes, wethe Company used $35.6 million of the net proceeds from the Notes to enter into privately negotiated capped call transactions (the “Capped Call Transactions”) with certain financial institutions.

The Capped Call Transactions are generally expected to reduce potential dilution to holders of ~~our~~the Company’s common stock upon any conversion of the Notes and/or offset any cash payments ~~we are~~the Company is required to make in excess of the principal amount of the Notes upon conversion of the Notes in the event that the market price per share of ~~our~~the Company’s common stock is greater than the strike price of the Capped Call Transactions with such reduction and/or offset subject to a cap.

The Capped Call Transactions have an initial cap price of approximately $106.34 per share, which represents a premium of 100% percent over the last reported sale prices of ~~our~~the Company’s common stock of $53.17 per share on September 9, 2021, and is subject to certain adjustments under the terms of the Capped Call Transactions. Collectively, the Capped Call Transactions cover, initially, the number of shares of ~~our~~the Company’s common stock underlying the Notes, subject to anti-dilution adjustments substantially similar to those applicable to the Notes.

The Capped Call Transactions do not meet the criteria for separate accounting as a derivative as they are indexed to ~~our~~the Company’s common stock. The premiums paid for the Capped Call Transaction have been included as a net reduction to additional paid-in capital within stockholders’ equity.

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10. Stockholders’ equity ~~(deficit)~~

2020 Equity incentive plan

In 2020, the Company adopted the 2020 Equity Incentive ~~Plans –~~ Plan, or “2020 Plan”, under which stock options, stock appreciation rights, restricted stock, restricted stock units, performance-based restricted stock units and other cash-based or stock-based awards may be granted to employees, consultants and directors. Shares of common stock that are issued and available for issuance under the 2020 Plan consist of authorized, but unissued or reacquired shares of common stock or any combination thereof. The Company has granted awards of stock options, restricted stock units, and market-based and performance-based restricted stock units under the 2020 Plan.

A total of 3,873,885 shares of common stock were initially authorized and reserved for issuance under the 2020 Plan. This share reserve automatically increased on January 1, 2021, 2022, and 2023 and will increase on each subsequent January 1st through and including January 1, 2031, by an amount equal to the smaller of (a) 5% of the number of shares of common stock issued and outstanding on the immediately preceding December 31 and (b) an amount determined by the board of directors. On January 1, 2024, 2023 and January 1, 2022 the share reserve increased by 3,820,681 shares, 3,695,569 shares and 3,616,312 shares, respectively. As of March 31, 2024, a total of 1,096,370 registered shares of common stock remained available for future issuance under the 2020 Plan.

Subsequent to March 31, 2024, the Company registered an additional 9,548,587 shares on Form S-8.

Stock Options

~~During the three months ended March 31, 2023, we granted an aggregate of~~ ~~661,378~~ ~~shares of stock~~Stock options ~~with~~generally vest and become exercisable over a ~~weighted average exercise price of $10.42~~ ~~per share. The fair value of options granted was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions (i) expected term of~~ ~~6.1~~ ~~years, (ii) expected volatility of~~ 67~~%, (iii) risk-free interest rate~~ ~~4.2% and (iv) expected dividend yield of~~ 0%.

~~Restricted Stock Units~~

~~During the three months ended March 31, 2023, we granted an aggregate of~~ ~~1,522,237~~ ~~RSUs with a weighted grant-date fair value of $10.42. The RSUs vest over the requisite~~ service period of 4 years from the date of grant, subject to continued service. The following table summarizes the ~~continued employment~~weighted-average grant date value of options and the ~~employees.~~assumptions used to develop their fair value.


	Three months ended March 31,			Year ended December 31,
	2024			2023
Weighted-average grant date fair value of options	$	4.54		$	6.55
Risk-free interest rate		4.10	%	3.65% - 4.30%
Expected volatility		64.53	%	65.02% - 66.56%
Expected life in years	6.10 years			6.06 - 6.11 years

21The Company estimated its future stock price volatility using a combination of its observed option-implied volatilities and its peer historical volatility calculations. Management believes this is the best estimate of the expected volatility over the expected life of its stock options. The estimated life for the stock options is based on the weighted average of the remaining vesting term and the remaining contractual life of each award. The risk-free interest rate is based on the rate for a U.S. government security with the same estimated life at the time of the option grant. The estimated forfeiture rate applied is based on historical forfeiture rates. The Company does not anticipate paying any cash dividends in the foreseeable future and therefore uses an expected dividend yield of zero in the option pricing model.


Stock option activity for the three months ended March 31, 2024 was as follows:

(in thousands)	Outstanding			Weighted-Average Exercise Price		Aggregate Intrinsic Value
Balance as of December 31, 2023		5,109		$	9.54	$	20,571
Options granted under all plans		662			7.25		0
Exercised		(308	)		3.16		1,506
Plan shares expired or canceled		(533	)		15.39		6
Balance as of March 31, 2024		4,930		$	9.00	$	11,068
Vested and expected to vest		4,694		$	8.93	$	11,068
Exercisable as of March 31, 2024		3,505		$	7.73	$	11,068

The expected stock-based compensation expense remaining to be recognized as of March 31, 2024 is $8.6 million, which reflects outstanding stock option awards that are vested and outstanding stock option awards that are expected to vest. This expense will be recognized over a weighted-average period of 2.76 years.

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~~10. Stockholders’ equity (deficit) (continued)~~

~~Stock Based Compensation Expense~~

Restricted Stock Units


Restricted stock unit activity for the three months ended March 31, 2024 was as follows:

(in thousands)	Outstanding			Grant Date Fair Value		Aggregate Intrinsic Value
Balance as of December 31, 2023		6,725		$	15.86	$	65,436
Granted – restricted stock units		854			7.25		6,189
Granted – market-based and performance-based restricted stock units		400			8.91		2,901
Canceled		(682	)		13.67		4,855
Vested and converted to shares		(689	)	$	19.62	$	5,154
Balance as of March 31, 2024		6,608		$	14.16	$	45,415
Vested and expected to vest		5,310		$	14.63	$	36,474

The grant date fair value of the market-based awards was $10.01. Significant assumptions used in the Monte Carlo simulation model for the market-based awards granted are as follows:

~~Stock-based~~


	Three months ended March 31,
	2024
Volatility		75.43	%
Risk-free interest rate		4.31	%
Dividend yield		0.00	%

As of March 31, 2024, no market-based or performance-based restricted stock units have been canceled or vested. Stock compensation expense recognized for the market-based and performance-based awards was ~~included in~~not material for the ~~following line items in the accompanying condensed consolidated statements of operations during the periods presented:~~three months ended March 31, 2024.

Three months ended
March 31,

(in thousands)

2023

2022

Cost of revenue

$
1,176

$
862

Sales and marketing

2,808

2,912

Research and development

3,461

2,526

General and administrative

3,042

2,662

Total stock-based compensation expense

$
10,487

$
8,962

The aggregate expected stock-based compensation expense remaining to be recognized as of March 31, 2024 is $63.6 million related to RSUs, which reflects outstanding stock awards that are vested and outstanding stock awards that are expected to vest. This expense will be recognized over a weighted-average period of 2.46 years.

11. Income taxes

~~In accordance with applicable accounting guidance, the~~The income tax expense for the three months ended March 31, ~~2023~~2024 is based on the estimated annual effective tax rate for ~~calendar year 2023. Our~~fiscal 2024. The Company’s provision for income taxes is based on estimated effective tax rates derived from an estimate of annual consolidated earnings before taxes, adjusted for nondeductible expenses, other permanent items, valuation allowances, and any applicable income tax credits.

~~Our~~The Company’s provision for income taxes reflected an effective tax rate of ~~approximately~~(4.75) percent and (0.90)~~% and (0.31~~%) percent for the three months ended March 31, 2024 and 2023, ~~and 2022,~~ respectively.

For the three months ended March 31, 2024 and 2023, ~~and 2022, our~~the Company’s effective tax rate was lower than the U.S. federal statutory rate of 21% percent primarily due to ~~our~~the Company’s valuation allowance offsetting the benefits of losses. ~~Current~~The Company’s current income tax expenses and benefits consist primarily of state current income tax expense, deferred income tax expense relating to the tax amortization of acquired goodwill and current income tax expense from foreign operations.

~~To date, we have~~The Company has provided a valuation allowance against most of ~~our~~the Company’s deferred tax assets as ~~we believe~~it believes the objective and verifiable evidence of ~~our~~the Company’s historical pretax net losses outweighs any positive evidence of ~~our~~ forecasted future results. WeThe Company will continue to monitor the positive and negative evidence and will adjust the valuation allowance as sufficient objective positive evidence becomes available.

As of March 31, ~~2023, we~~2024, the Company had approximately $~~396~~0.4 ~~thousand~~million in uncertain tax positions representing no increase from the balance on December 31, ~~2022.~~2023. Operating losses generated in years prior to ~~2017~~2019 remain open to adjustment until the statute of

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limitations closes for the tax year in which the net operating losses are utilized. ~~Our tax~~Tax years ~~2018~~2019 through ~~2022~~2021 generally remain open to examination by the major taxing jurisdictions to which ~~we are~~the Company is subject. ~~We are~~The Company is currently not under audit by any taxing jurisdiction.

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12. ~~Net loss per share~~

Net loss per share

Basic net loss per share ~~attributable to common stockholders~~ is computed by dividing net loss ~~attributable to common stockholders~~ by the ~~weighted-average~~ number of shares of common stock outstanding for the period. Because ~~we have~~the Company has reported a net loss for the three months ended March 31, ~~2023,~~2024, and ~~2022,~~2023, the number of shares used to calculate diluted net loss per share ~~of common stock attributable to common stockholders~~ is the same as the number of shares used to calculate basic net loss per share ~~of common stock attributable to common stockholders~~ for the period presented because the potentially dilutive shares would have been antidilutive if included in the calculation.Series 1 and Series 2 have the same rights and privileges except Series 2 are not entitled to vote on any matter except as required by law. A pre-IPO preferred shareholder received Series 2 upon the conversion of their preferred shares at the time of our initial public offering, all of which were subsequently converted to shares of Series 1 common stock. There are no ~~Series 2 shares outstanding as of March 31, 2023. Series 1 common stock is referred to as common stock throughout, unless otherwise noted.~~


	Three months ended March 31,
(in thousands)	2024			2023
Numerator:
Net loss per share available to shareholders	$	(6,392	)	$	(22,120	)
Denominator:
Weighted average shares outstanding		76,626			74,142
Net loss per share	$	(0.08	)	$	(0.30	)

The following potentially dilutive securities outstanding have been excluded from the computation of ~~diluted~~basic weighted-average shares outstanding because such securities have an antidilutive impact due to losses reported:

As of March 31,

(in thousands)

2023

2022

Stock options outstanding

6,008

6,307

Restricted stock units

6,784

4,094

Acquisition related compensation (1)

3,558

2,835

Convertible debt

4,719

4,719

Total potentially dilutive securities

21,069

17,955

~~(1)~~

In connection with the acquisition of Feedonomics and B2B Ninja, we entered into contingent compensation arrangements for post-acquisition services.
Additionally, our acquisition of Bundle included $~~1.5~~ ~~million of contingent consideration. Of the $33.8~~ ~~million to be paid as of March 31, 2023, $31.8~~ million can be
settled in shares of common stock assuming a price of $~~8.94~~ ~~per share. As of December 31, 2022, of the $33.8~~ ~~million to be paid, $31.8~~ million can be settled in shares of
common stock assuming a price of $~~8.74~~ ~~per share.~~


	As of March 31,
(in thousands)	2024		2023
Stock options outstanding		4,930		6,008
Restricted stock units		6,608		6,784
Acquisition related compensation		42		3,558
Convertible debt		4,719		4,719
Total potentially dilutive securities		16,299		21,069

Special ~~Note Regarding Forward-Looking Statements~~note regarding forward-looking statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1993, as amended ("the Securities Act"), and Section 21E of the Securities Exchange ~~Act.~~Act of 1934, as amended (the "Exchange Act"). Any statements about our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions, or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “will,” and similar words or phrases. These forward-looking statements include statements concerning the following:

•

our expectations regarding our revenue, expenses, sales, and operations;

•

anticipated trends and challenges in our business and the markets in which we operate;

•

the war involving Russia and Ukraine and the potential impact on our operations, global economic and geopolitical conditions;

•

our anticipated areas of investments and expectations relating to such investments;

•

our anticipated cash needs and our estimates
regarding our capital requirements and our need for additional ~~financing;~~financing or refinancing;

•

our ability to compete in our industry and innovation by our competitors;

•

our ability to anticipate market needs or develop new or enhanced services to meet those needs;

•

our ability to manage growth and to expand our infrastructure;

•

our ability to establish and maintain intellectual property rights;

•

our ability to manage expansion into international markets and new industries;

•

our ability to hire and retain key personnel;

•

our ability to successfully identify, manage, and integrate any existing and potential acquisitions;

•

our ability to adapt to emerging regulatory developments, technological changes, and cybersecurity needs;

•

the anticipated effect on our business of litigation to which we are or may become a ~~party;~~party

•

our ability to remediate the material weakness; and

•

other statements described in this Quarterly Report on Form 10-Q under “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

Although we believe the expectations reflected in these forward-looking statements are reasonable, these statements are not guarantees of future performance and involve risks and uncertainties which are subject to change based on various important factors, some of which are beyond our control. For more information regarding these risks and uncertainties as well as certain additional risks that we face, refer to “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2022,~~2023, filed on February 29, 2024 and “Risk Factors,” in this Quarterly Report on Form 10-Q as well as factors more fully described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Quarterly Report on Form 10-Q.

If one or more of the factors affecting the expectations reflected in our forward-looking information and statements proves incorrect, our actual results, performance, or achievements could differ materially from those expressed in, or implied by, forward-looking information and statements. Therefore, we caution the reader not to place undue reliance on any forward-looking information or statements. The effect of these factors is difficult to predict. Factors other than these also could adversely affect our results, and the reader should not consider these factors to be a complete set of all potential risks or uncertainties. New factors emerge from time to time, and management cannot assess the impact of any such factor on our business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. Any forward-looking statements only speak as of the date of this document, and we undertake no obligation to update any forward-looking information or statements, whether written or oral, to reflect any change, except as required by law. All forward-looking statements attributable to us are expressly qualified by these cautionary statements.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. In addition to historical condensed consolidated financial information, the following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Quarterly Report on Form 10-Q, particularly in “Risk Factors.” See “Special Note Regarding Forward-Looking Statements.”

Investors and others should note that we announce material financial information to our investors using our investor relations website (investors.bigcommerce.com), SEC filings, press releases, public conference calls and webcasts. We intend to use our investor relations website as a means of disclosing information about our business, our financial condition and results of operations and other matters and for complying with our disclosure obligations under Regulation FD. The information we post on our investor relations website, including information contained in investor presentations, may be deemed material. Accordingly, investors should monitor our investor relations website, in addition to following our press releases, SEC filings and public conference calls and webcasts.

Overview

BigCommerce is leading a new era of ecommerce. Our SaaS platform simplifies the creation of ~~beautiful, engaging~~ online stores by delivering a unique combination of ease-of-use, enterprise functionality, composability and flexibility. We allow merchants to build their ecommerce solution their way with the flexibility to fit their unique business and product offerings. We power both our customers’ branded ecommerce stores and their cross-channel connections to popular online marketplaces, social networks, and offline ~~POS~~point of sale systems. Our strategy is to provide the world’s best combination of freedom of choice and flexibility in a multi-tenant SaaS platform. We describe this strategy as “Open SaaS.” As of March 31, ~~2023~~2024 we served ~~5,828~~5,970 accounts with at least one unique enterprise ~~accounts.~~

plan subscription or an enterprise-level feed management subscription (collectively "enterprise accounts"). These accounts may have more than one Enterprise plan or a combination of Enterprise plans and Essentials plans.

We provide a comprehensive platform for launching and scaling an ecommerce operation, including store design, catalog management, hosting, checkout, order management, reporting, and pre-integration into third-party services like payments, shipping, and accounting. All of our stores run on a single code base and share a global, multi-tenant architecture purpose built for security, high performance, and innovation. Our platform serves stores in a wide variety of sizes, product categories, and purchase types, including B2C and B2B. ~~Our customers include Ben & Jerry’s, Molton Brown, Burrow, SC Johnson, SkullCandy, SoloStove and Vodafone.~~

We offer access to our platform on a subscription basis. We serve customers with subscription plans tailored to their size and feature needs. For our larger customers, our Enterprise plan offers our full feature set at a ~~monthly~~ subscription price tailored to each business. For SMBs, ~~BigCommerce Essentials offers~~we offer three retail plans: Standard, Plus, and Pro, priced at ~~$29.95, $79.95,~~$29, $79, and ~~$299.95~~$299 per month (our "Essentials" plans) when ~~paid~~pre-paid annually, or $39, $105, and $399 per month (our "Essentials plans"), when paid monthly, respectively. Our Essentials plans include GMV thresholds with programmatic upgrades built in as merchants exceed each plan’s threshold.

Our differentiated Open SaaS technology approach combines the flexibility and customization potential of open source software with the performance, security, usability, and value benefits of multi-tenant SaaS. This combination helps businesses turn digital transformation into competitive advantage. While some software conglomerate providers attempt to lock customers into their proprietary suites, we focus on the configurability and flexibility of our open platform, enabling each business to optimize their ecommerce approach based on their specific needs.

Partners are essential to our open strategy. We believe we possess one of the deepest and broadest ecosystems of integrated technology solutions in the ecommerce industry. We strategically partner with, rather than compete against, the leading providers in adjacent categories, including payments, shipping, ~~POS, CMS, CRM,~~point of sale, content management system, customer relationship management, and ~~ERP.~~enterprise resource planning. We focus our research and development investments in our core product to create a best-of-breed ecommerce platform and co-market and co-sell with our strategic technology partners to our mutual prospects and customers. As a result, we earn high-margin revenue share from a subset of our strategic technology partners, which complements the high gross margin of our core ecommerce platform.

Our business has achieved significant growth since our inception. We plan to continue to invest in our “Open SaaS” strategy, building new partnerships and continuing to develop a platform that offers best-of-breed functionality with the cost-effectiveness of multi-tenant SaaS. As we work to develop and deliver this platform for our customers, we will also invest and grow our business by acquiring additional customers to our platform, growing our revenue with existing customers, cross-selling owned and partner solutions to existing customers, expanding our presence in new markets and geographies, and considering targeted acquisitions that can enhance our service to customers.

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Key factors affecting our performance

Our operational and financial results have been, and will continue to be, affected by a number of factors that present significant opportunities as well as risks and challenges, including those discussed below and elsewhere in this quarterly report and in our Annual Report on Form 10-K, particularly in Part I, Item 1A, “Risk Factors.” The key factors discussed below impacted our 2023 results or are anticipated to impact our future results.

“Go-to-Market” Strategy

BigCommerce was originally founded to serve the needs of small business customers. We have radically improved our product and service capabilities on behalf of the complex needs of midmarket and enterprise businesses, and we have successfully moved our customer base up-market as a result. We plan to continue our focus on enterprise businesses and we describe examples of advancements taken by us below.

~~Key~~We reorganized our business teams and leadership structure to introduce clear and unified end to end ownership of the customer. Sales, customer success, marketing, and our business development teams have congruent and clear targets that unify their efforts around customer success and growth. In the fourth quarter of 2023 we centralized end to end customer success ownership under our Company President. Our Company President now oversees all go-to-market efforts across the business, including the platform product, Feedonomics, and partner and services revenue.

New customer acquisition remains a priority, but it is now balanced with a strong focus on customer retention, satisfaction, and growth. This advancement includes a greater focus on portfolio cross-sell of Feedonomics and partner solutions.

We made a commitment to drive revenue growth and we are beginning to see progress in the first quarter since initiating many of the advancements discussed above. First quarter of fiscal 2024 net retention rates improved versus the prior quarter, and we continue to focus on customer success and growth.

Macroeconomic environment and customer spend

Consumer spending remains resilient across our major markets, though aggregate ecommerce is growing at lower rates than during the pandemic. We are encouraged overall by the underlying consumption signals that we are seeing in our business.

As described above, we are making progress in our go to market transformation. We continue to see longer sales cycle times relative to the pandemic and elevated scrutiny on platform investment spending. We believe sales cycle times and platform investment spending will improve, and we are transforming our go-to-market capabilities to capitalize on that improvement.

Business metrics

We review the following ~~key~~ business metrics to measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions. Increases or decreases in our ~~key~~ business metrics may not correspond with increases or decreases in our revenue. ~~We have included the activity~~As an example, some of ~~Feedonomics in~~ our ~~key~~ business metrics ~~from the acquisition date of July 23, 2021, through March 31, 2023. Our key business metrics, such as~~include annual revenue run-rate ("ARR"), subscription annual revenue ~~run rate,~~run-rate ("Subscription ARR") , average revenue per account, lifetime value ("LTV") to customer acquisition costs ("CAC") and others are calculated as of the end of the last month of the reporting period.

Annual revenue run-rate

We calculate ~~annual revenue run-rate (“ARR”)~~ARR at the end of each month as the sum of: (1) contractual monthly recurring revenue at the end of the period, which includes platform subscription fees, invoiced growth adjustments, product feed management subscription fees, recurring professional services revenue, and other recurring revenue, multiplied by twelve to prospectively annualize recurring revenue, and (2) the sum of the trailing twelve-month non-recurring and variable revenue, which includes one-time partner integrations, one-time fees, payments revenue share, and any other revenue that is non-recurring and variable.

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Subscription annual revenue run-rate

We calculate ~~subscription annual revenue run-rate (“ARR”)~~Subscription ARR at the end of each month as the sum of contractual monthly recurring revenue at the end of the period, which includes platform subscription fees, invoiced growth adjustments, product feed management subscription fees, recurring professional services revenue, and other recurring revenue, multiplied by twelve to prospectively annualize recurring revenue.

Average revenue per account

We calculate average revenue per account (“ARPA”) at the end of a period by including customer-billed revenue and an allocation of partner and services revenue, where applicable. We bill customers for subscription solutions and professional services, and we

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include both in ARPA for the reported period. For example, ARPA as of March 31, ~~2023,~~2024, includes all subscription solutions and professional services billed between January 1, ~~2023,~~2024, and March 31, ~~2023.~~2024. We allocate partner revenue, where applicable, primarily based on each customer’s share of GMV processed through that partner’s solution. Partner revenue that is not directly linked to customer usage of a partner’s solution is allocated based on each customer’s share of total platform GMV. Each account’s partner revenue allocation is calculated by taking the account’s trailing twelve-month partner revenue, then dividing by twelve to create a monthly average to apply to the applicable period in order to normalize ARPA for seasonality.

Enterprise Account metrics

To measure the effectiveness of our ability to execute against our growth strategy, particularly within the mid-market and enterprise lines of business, ~~segments,~~ we calculate ARR attributable to Enterprise Accounts. We define Enterprise Accounts as accounts with at least one unique Enterprise plan subscription or an enterprise level feed management subscription (collectively “Enterprise Accounts”). These accounts may have more than one Enterprise plan or a combination of Enterprise plans and Essentials plans.

The chart below illustrates certain of our key business metrics as of the periods ended:

March 31,
2023

December 31,
2022

September 30,
2022

June 30,
2022

March 31,
2022

Total ARR (in thousands)

$
316,688

$
311,670

$
305,320

$
295,946

$
280,426

Subscription ARR (in thousands)

$
243,527

$
238,395

$
233,134

$
225,757

$
212,096

Enterprise Account Metrics:

# of Accounts

5,828

5,786

5,560

5,418

5,365

ARR $

$
228,805

$
223,964

$
216,202

$
206,604

$
188,983

ARR % of Total ARR

72
%

72
%

71
%

70
%

67
%
ARPA

$
39,260

$
38,708

$
38,885

$
38,133

$
35,225


	March 31, 2024		December 31, 2023		September 30, 2023		June 30, 2023		March 31, 2023
ARR (in thousands)	$	340,147	$	336,541	$	332,245	$	331,103	$	316,688
Subscription ARR (in thousands)	$	258,566	$	256,412	$	256,518	$	255,552	$	243,527
Enterprise Account metrics:
Number of Enterprise Accounts		5,970		5,994		5,951		5,929		5,828
ARR attributable to Enterprise Accounts (in thousands)	$	248,236	$	245,100	$	240,602	$	236,386	$	228,805
ARR attributable to Enterprise Accounts as a percentage of ARR		73		73		72		71		72
ARPA	$	41,581	$	40,981	$	40,431	$	39,870	$	39,260

Lifetime value to customer acquisition costs

We measure the efficiency of new customer acquisition by comparing the lifetime value of newly-acquired customers to the customer acquisition costs of the associated time period to get an “LTV:CAC ratio.” We calculate LTV as gross profit from new sales during the four quarters of any given year divided by the estimated future subscription churn rate.

Net revenue retention

We use net revenue retention (“NRR”) to evaluate our ability to maintain and expand our revenue with our account base of enterprise customers exceeding the ACV threshold over time. The total billings and allocated partner revenue, where applicable, for the measured period are divided by the total billings and allocated partner revenue for such accounts, corresponding to the period one year prior. An NRR greater than ~~100%~~100 percent implies positive net revenue retention. This methodology includes stores added to or subtracted from an account’s subscription during the previous twelve months. It also includes changes to subscription and partner and services revenue billings, and revenue reductions from stores or accounts that leave the platform during the previous one-year period. Net new accounts added after the previous one-year period are excluded from our NRR calculations. NRR for enterprise accounts was ~~111%~~100 percent and ~~118%~~111 percent for the years ended December 31, ~~2022~~2023 and ~~2021,~~2022, respectively. We update our reported NRR at the end of each fiscal year and do not report quarterly changes in NRR.

Components of results of operations

Revenue

We generate revenue from two sources: (1) subscription solutions revenue and (2) partner and services revenue.

Subscription solutions revenue consists primarily of platform subscription fees from ~~all plans. It also includes~~plans and recurring professional ~~services and sales of SSL certificates.~~services. Subscription solutions are charged monthly, quarterly, or annually for our customers to sell their products and process transactions on our platform. Subscription solutions are generally charged per online store and are based on the store’s subscription plan. Our Enterprise plan contracts are generally for a fixed term of ~~one~~12 to ~~three years~~36 months and are ~~non-cancelable~~non-cancelable. In the first half of 2023, we implemented a new pricing strategy that provided enterprise merchants a discount for ~~convenience. Certain~~a period of time from their contractual monthly fee. Prior to this new strategy, certain enterprise agreements contain promotional periods. ~~Since~~Under both models, merchants have full access to the

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functionality of our platform upon contract execution, and revenue is recognized ratably over the contract life. Our retail plans are generally month-to-month contracts. Monthly subscription fees for ~~Pro and~~ Enterprise plans are adjusted if a customer’s GMV or orders processed are outside of specified plan thresholds on a trailing twelve-month basis. Fixed monthly fees and any transaction charges related to subscription solutions are recognized as revenue in the month they are earned.

~~Subsequent to our acquisition~~27

Table of ~~Feedonomics on July 23, 2021, subscription revenue also includes revenue from Feedonomics.~~ Content

Through Feedonomics, ~~BigCommerce provides~~we provide feed management solutions under service contracts which are generally one year or less and, in many cases, month-to-month. These service types may be sold stand-alone or as part of a multi-service bundle (e.g. both marketplaces and advertising) and are billed monthly in arrears.

We generate partner revenue from our technology application ecosystem. Customers tailor their stores to meet their feature needs by integrating applications developed by our strategic technology partners. We enter into contracts with our strategic technology partners that are generally for one year or longer. We generate revenue from these contracts in three ways: (1) revenue-sharing arrangements, (2) technology integrations, and (3) partner marketing and promotion. We recognize revenue on a net basis from revenue-sharing arrangements when the underlying transaction occurs.

We also generate revenue from non-recurring professional services that we provide to complement the capabilities of our customers and their agency partners. Our services help improve customers’ time-to-market and the success of their businesses using BigCommerce. Our non-recurring services include education packages, launch services, solutions architecting, implementation consulting, and catalog transfer services.

Cost of revenue

Cost of revenue consists primarily of: (1) personnel-related costs (including stock-based compensation ~~expense)~~expense and associated payroll costs) for our customer success teams, (2) costs that are directly related to hosting and maintaining our platform, (3) fees for processing customer payments such as credit card processing charges, (4) personnel and ~~(4)~~other costs related to feed management, and (5) allocated costs, such as, depreciation, technology and facility costs. We expect that cost of revenue will increase in absolute dollars, but may fluctuate as a percentage of total revenue from period to period. ~~With~~

As a result of our ~~acquisition~~growth plans and integration of ~~Feedonomics on July 23, 2021, cost~~our previously acquired businesses, we have incurred expenses for equity and amortization of ~~revenue also includes personnel and other costs related to feed management along with other customer support personnel.~~purchased intangibles.

Sales and marketing

Sales and marketing expenses consist primarily of: (1) personnel-related expenses (including stock-based compensation ~~expense)~~expense and associated payroll costs), (2) sales commissions, (3) marketing programs, (4) travel-related expenses, and (5) allocated overhead sales and ~~sales~~ support costs such as technology and facility costs. We focus our sales and marketing efforts on creating sales leads and establishing and promoting our brand. We plan to increase our investment in sales and marketing by ~~hiring additional sales and marketing personnel,~~ executing our go-to-market strategy globally and building our brand awareness. Incremental sales commissions for new customer contracts are deferred and amortized ratably over the estimated period of our relationship with such customers. ~~No incremental sales commissions are incurred on renewals of customer contracts.~~ We expect our sales and marketing expenses will increase in absolute dollars, but will decrease as a percentage of total revenue over time.

Research and development

Research and development expenses consist primarily of personnel-related expenses (including stock-based compensation ~~expense)~~expense and associated payroll costs) incurred in maintaining and developing enhancements to our ecommerce platform and allocated overhead costs. ~~To date, software~~Software development costs ~~eligible for capitalization have not been significant.~~associated with internal use software which are incurred during the application development phase and meet other requirements are capitalized.

We believe delivering new functionality is critical to attracting new customers and enhancing the success of existing customers. We expect to continue to make ~~substantial~~ investments in research and development. We expect our research and development expenses to increase in absolute dollars, but decrease as a percentage of total revenue over time, as we continue to leverage engineers in other low-cost international locations. ~~We expense research and development expenses as incurred.~~

General and administrative

General and administrative expenses consist primarily of: (1) personnel-related expenses (including stock-based compensation ~~expense)~~expense and associated payroll costs) for finance, legal and compliance, and human resources, ~~and IT,~~ (2) external professional services, and (3) allocated overhead costs, such as technology and facility costs. We expect to incur additional general and administrative expenses as a result of operating as a public company. We also expect to increase the size of our general and administrative functions to support the growth of our business. As a result, we expect that our general and administrative expenses ~~will~~to increase in absolute dollars but ~~may fluctuate~~will decrease as a ~~percentage~~percent of ~~total revenue from period to period.~~revenue.

~~Table of Content~~

Acquisition related expenses

Acquisition related expenses consists of cash payments for third-party acquisition costs and other acquisition related expenses, including contingent compensation arrangements entered into in connection with acquisitions.

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Amortization of intangible assets

Amortization of intangible assets consist of ~~non-cash~~ amortization of acquired intangible assets which were recognized as a result of business combinations and are being amortized over their expected useful life.

~~Restructuring charges~~Interest income

~~Restructuring charges are comprised~~Interest income is earned on our cash, cash equivalents and marketable securities.

Interest expense

Interest expense consists primarily of the interest expense from the amortization of the debt issuance costs ~~incurred as a result of~~and coupon interest attributable to our ~~2022 Restructure~~convertible note issued in 2021, as well as ~~an impairment~~interest associated with a financing agreement entered into in the first half of ~~the right of use asset triggered by our decision to cease using a significant portion of certain leased facilities.~~2023.

Other ~~expenses, net~~income (expense)

Other ~~expenses, net~~income (expense) primarily consists ~~primarily~~ of ~~interest expense on our bank borrowings partially offset by interest income on corporate funds invested in money market instruments~~loss from share issuance related to the Bundle acquisition and ~~highly liquid short-term investments.~~foreign currency translation adjustments.

Provision for income taxes

Our Provision for income taxes consists primarily of deferred income taxes associated with amortization of tax deductible goodwill and current income taxes related to certain foreign and state jurisdictions in which we conduct business. For U.S. federal income tax purposes and in certain foreign and state jurisdictions, we have NOL carryforwards. The foreign jurisdictions in which we operate have different statutory tax rates than those of the United States. Additionally, certain of our foreign earnings may also be currently taxable in the United States. Accordingly, our effective tax rate will vary depending on the relative proportion of foreign to domestic income, use of foreign tax credits, changes in the valuation of our deferred tax assets and liabilities, applicability of any valuation allowances, and changes in tax laws in jurisdictions in which we operate.

Results of operations

The following table ~~sets forth~~summarizes our ~~results~~historical consolidated statement of operations data. The period-to-period comparison of operating results is not necessarily indicative of results for ~~the periods presented:~~future periods.


	Three months ended March 31,
	2023			2022			For the three months ended March 31,
	(in thousands)						2024			2023
Revenue	$	71,757		$	66,050		$	80,360		$	71,757
Cost of revenue(1)		17,446			17,103
Cost of revenue (1)								18,439			17,446
Gross profit		54,311			48,947			61,921			54,311
Operating expenses:
Sales and marketing(1)		34,052			33,639
Research and development(1)		20,845			20,944
General and administrative(1)		16,494			15,846
Operating expenses: (1)
Sales and marketing								32,432			34,052
Research and development								19,988			20,845
General and administrative								14,929			16,494
Acquisition related expenses		4,125			12,660			333			4,125
Restructuring charges		420			—		0				420
Amortization of intangible assets		2,033			2,037			2,467			2,033
Total operating expenses		77,969			85,126			70,149			77,969
Loss from operations		(23,658	)		(36,179	)		(8,228	)		(23,658	)
Interest income		2,426			122			3,178			2,426
Interest expense		(722	)		(709	)		(720	)		(722	)
Other expense		31			(156	)
Other income (expense)								(332	)		31
Loss before provision for income taxes		(21,923	)		(36,922	)		(6,102	)		(21,923	)
Provision for income taxes		197			115			(290	)		(197	)
Net loss	$	(22,120	)	$	(37,037	)	$	(6,392	)	$	(22,120	)

2829

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(1)

~~Includes~~ Amounts include stock-based compensation expense and associated payroll tax costs, as follows:


	Three months ended March 31,				Three months ended March 31,
	2023		2022		2024		2023
	(in thousands)				(in thousands)
Cost of revenue	$	1,176	$	862	$	656	$	1,189
Sales and marketing		2,808		2,912		1,867		2,867
Research and development		3,461		2,526		3,476		3,503
General and administrative		3,042		2,662		2,592		3,079
Total stock-based compensation expense	$	10,487	$	8,962

Revenue by geographic region

The composition of our revenue by geographic region during the three months ended March 31, ~~2023~~2024 and March 31, ~~2022~~2023 were as follows:


	Three months ended March 31,				Change				Three months ended March 31,				Change
	2023		2022		Amount		%		2024		2023		Amount		Percent
	(dollars in thousands)								(dollars in thousands)
Revenue
Americas – U.S.	$	54,809	$	51,500	$	3,309		6.4	$	61,138	$	54,809	$	6,329		11.5	%
Americas – other		3,351		2,684		667		24.9
Americas – other (1)										3,776		3,351		425		12.7
EMEA		7,983		6,284		1,699		27.0		9,192		7,983		1,209		15.1
APAC		5,614		5,582		32		0.6		6,254		5,614		640		11.4
Total Revenue	$	71,757	$	66,050	$	5,707		8.6	$	80,360	$	71,757	$	8,603		12.0	%

(1)Americas-other revenue includes revenue from North and South America, other than the U.S.

Comparison of the three months ended March 31, ~~2023~~2024 and March 31, ~~2022~~2023

Revenue

The following table presents the components of our revenue for each of the periods indicated:

Three months ended March 31,

Change

2023

2022

Amount

%

(dollars in thousands)

Revenue

Subscription solutions

$
53,808

$
47,987

$
5,821

12.1
%
Partner and services

17,949

18,063

(114
)

(0.6
)%
Total revenue

$
71,757

$
66,050

$
5,707

8.6
%


	Three months ended March 31,				Change
	2024		2023		Amount		Percent
	(dollars in thousands)
Revenue
Subscription solutions	$	60,959	$	53,808	$	7,151		13.3	%
Partner and services		19,401		17,949		1,452		8.1
Total revenue	$	80,360	$	71,757	$	8,603		12.0	%

~~Revenue~~Total revenue increased ~~$5.7~~$8.6 million, or ~~8.6%,~~12.0 percent, to $80.4 million for the three months ended March 31, 2024, from $71.8 million ~~from $66.1 million,~~for the three months ended March 31, 2023, as a result of increases in both subscription solutions and partner and services revenue. Subscription solutions revenue increased ~~$5.8~~$7.2 million, or ~~12.1%,~~13.3 percent, to $61.0 million for the three months ended March 31, 2024, from $53.8 million ~~from $48.0 million,~~for the three months ended March 31, 2023, primarily due to ~~growth~~increases in enterprise, mid-market, and ~~enterprise activity along with strong overall enterprise retention.~~Feedonomics activity. Partner and services revenue ~~decreased $0.1~~increased $1.5 million, or ~~(0.6%),~~8.1 percent, to ~~$18.0 million, from $18.1 million, primarily as a result of decreases in revenue-sharing activity with our technology partners.~~

~~Cost of revenue, gross profit, and gross margin~~

Three months ended March 31,

Change

2023

2022

Amount

%

(dollars in thousands)

Cost of revenue

$
17,446

$
17,103

$
343

2.0

Gross profit

$
54,311

$
48,947

$
5,364

11.0

Gross margin

75.7
%

74.1
%

Cost of revenue increased $0.3 million, or 2.0%, to $17.4 million from $17.1 million, primarily as a result of higher hosting costs resulting from increased transactions processed of $0.3 million. Gross margin increased to 75.7% from 74.1%, primarily as a result of the restructuring plan.

~~Table of Content~~

~~Operating expenses~~

~~Sales and marketing~~

Three months ended March 31,

Change

2023

2022

Amount

%

(dollars in thousands)

Sales and marketing

$
34,052

$
33,639

$
413

1.2

Percentage of revenue

47.5
%

50.9
%

Sales and marketing expenses increased $0.4 million, or 1.2%, to $34.0 million from $33.6 million, primarily due to additional spend to support revenue growth of $0.4 million in various areas including, but not limited to marketing, travel, contracting services. As a percentage of total revenue, sales and marketing expenses decreased to 47.5% from 50.9%, primarily as a result of cost cutting measures from the restructuring plan.

~~Research and development~~

Three months ended March 31,

Change

2023

2022

Amount

%

(dollars in thousands)

Research and development

$
20,845

$
20,944

$
(99
)

(0.5
)
Percentage of revenue

29.0
%

31.7
%

Research and development decreased $0.1 million, or (0.5)%, to $20.8 million from $20.9 million, due to cost cutting measures. As a percentage of total revenue, research and development expenses decreased to 29.0% from 31.7%, primarily as a result of cost cutting measures from the restructuring plan.

~~General and administrative~~

Three months ended March 31,

Change

2023

2022

Amount

%

(dollars in thousands)

General and administrative

$
16,494

$
15,846

$
648

4.1

Percentage of revenue

23.0
%

24.0
%

General and administrative expenses increased $0.6 million, or 4.1%, to $16.5 million from $15.9 million, primarily due to increased spend of $0.6 million in various areas including, but not limited to audit fees, insurance, contracting services.

~~Acquisition related expenses~~

~~Acquisition related expense was $4.1 million and $12.7~~$19.4 million for the three ~~month periods~~months ended March 31, ~~2023 and March 31, 2022, respectively, primarily as a result of acquisition related compensation in conjunction with our business combination.~~

~~Restructuring charges~~

~~Restructuring charges were $0.4~~2024, from $17.9 million for the three months ended March 31, 2023, primarily as a result of ~~severance charges~~increases in revenue share activity offset by decreases in stand ready and integration activity.

Cost of revenue, gross profit, and gross margin


	Three months ended March 31,				Change
	2024		2023		Amount		Percent
	(dollars in thousands)
Cost of revenue	$	18,439	$	17,446	$	993		5.7	%
Gross profit		61,921		54,311		7,610		14.0
Gross margin percentage		77.1		75.7

Table of Content

Cost of revenue increased $1.0 million, or 5.7 percent, to $18.4 million for the three months ended March 31, 2024, from $17.4 million for the three months ended March 31, 2023, primarily as a result of higher software costs and processing fees of $1.1 million and decreased spend of $0.3 million in salaries and shared-based compensation driven by decreases in headcount from the ~~reduction~~2023 Restructure. Gross margin increased to 77.1 percent from 75.7 percent, primarily as a result of cost cutting measures from the 2023 Restructure.

Operating income (expenses)

Sales and marketing


	Three months ended March 31,						Change
	2024			2023			Amount			Percent
	(dollars in thousands)
Sales and marketing	$	32,432		$	34,052		$	(1,620	)		(4.8	)	%
Percentage of revenue		40.4	%		47.5	%

Sales and marketing expenses decreased $1.6 million, or (4.8) percent, to $32.4 million for the three months ended March 31, 2024 from $34.1 million for the three months ended March 31, 2023, primarily due to decreased salaries of $1.8 million and share-based compensation driven by cost cutting measures from the 2023 Restructure. As a percentage of total revenue, sales and marketing expenses decreased to 40.4 percent from 47.5 percent, primarily as a result of cost cutting measures from the 2023 Restructure.

Research and development


	Three months ended March 31,				Change
	2024		2023		Amount			Percent
	(dollars in thousands)
Research and development	$	19,988	$	20,845	$	(857	)		(4.1	)	%
Percentage of revenue		24.9		29.0

Research and development decreased $0.9 million, or (4.1) percent, to $20.0 million for the three months ended March 31, 2024 from $20.8 million for the three months ended March 31, 2023, due to the cost cutting measures from the 2023 Restructure. As a percentage of total revenue, research and development expenses decreased to 24.9 percent from 29.0 percent, primarily as a result of cost cutting measures from the 2023 Restructure.

General and administrative


	Three months ended March 31,				Change
	2024		2023		Amount			Percent
	(dollars in thousands)
General and administrative	$	14,929	$	16,494	$	(1,565	)		(9.5	)	%
Percentage of revenue		18.6		23.0

General and administrative expenses decreased $1.6 million, or (9.5)% percent , to $14.9 million for the three months ended March 31, 2024 from $16.5 million for the three months ended March 31, 2023, primarily due to decreased bad debt expense of $0.3 million due to focus on collection efforts, decreased spend of $0.7 million in ~~workforce.~~ salaries and share-based compensation driven by cost cutting measures from the 2023 Restructure, and decreased insurance expense of $0.4 million as a result of improved renewal rates. As a percentage of total revenue, general and administrative expenses decreased to 18.6 percent from 23.0 percent, primarily as a result of cost cutting measures from the 2023 Restructure.

Acquisition related expenses

Acquisition related expense decreased $3.8 million, or (91.9) percent, to $0.3 million for the three months ended March 31, 2024, from $4.1 million for the three months ended March 31, 2023. Acquisition costs related to Feedonomics were recognized through Q3 2023, which was the second anniversary date of the acquisition. The remaining acquisition expenses are recognized on other transactions that occurred, while the prior years balance included costs related to the Feedonomics acquisition.

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Restructuring charges

Restructuring charges were $0.0 million for the three months ended March 31, ~~2022.~~2024, and $0.4 million for the three months ended March 31, 2023.

Interest income

Interest income ~~was~~increased $0.8 million, or 31.0 percent, to $3.2 million for the three months ended March 31, 2024, from $2.4 million for the three ~~month period~~months ended March 31, ~~2023,~~2023. This increase was primarily as a result of investment income reinvested at higher interest rates for our cash, cash equivalents and ~~insignificant for the three months ended March 31, 2022 .~~marketable securities.

Interest expense

Interest expense was $0.7 million and $0.7 million for the three ~~month periods~~months ended March 31, 2024 and 2023, respectively, and ~~March 31, 2022.~~

~~Table of Content~~

~~Other expense~~

~~Other expense~~ was ~~insignificant for the three month periods March 31, 2023 and March 31, 2022.~~related to our outstanding debt.

~~Provision for income taxes~~

~~Our provision for income taxes was insignificant in the three month periods ended March 31, 2023 and 2022.~~

Liquidity and capital resources

We ~~have incurred losses since our inception~~are committed to healthy cash flow generation and ~~may~~cash management, and continue to ~~generate negative operating~~evaluate all of our spending to look for opportunities to drive improvements in cash ~~flow, however we believe we have sufficient cash~~flow. Our improvements in internal systems and ~~cash equivalents~~controls, together with discipline around accounts receivable and ~~marketable securities~~collections has led to ~~continue to fund operations. During the year ended December 31, 2021, we issued approximately $345.0 million~~improvements in ~~convertible debt~~working capital and ~~used $35.6 million of the proceeds to enter into capped call transactions.~~accounts receivable.

Our operational short-term liquidity needs primarily include working capital for sales and marketing, research and development, and continued innovation. We have generated significant operating losses and negative cash flows from operations as reflected in our accumulated deficit and condensed consolidated statements of cash flows. We expect to continue to incur operating losses and negative cash flows from operations for the full year 2023 and may require additional capital resources to execute strategic initiatives to grow our business. Our future capital requirements will depend on many factors, including our growth rate, levels of revenue, the expansion of sales and marketing activities, market acceptance of our platform, the results of business initiatives, the timing of new product introductions, ~~and~~ the continued impact of the ~~conflict in Ukraine and~~ inflation on the global economy, ~~and~~ our business, financial condition, and results of operations.

We believe that our existing cash and cash equivalents and our cash flows from operating activities will be sufficient to meet our working capital and capital expenditure needs for at least the next twelve months. In the future, we may attempt to raise additional capital through the sale of additional equity or debt financing.

In ~~connection~~the future, we will continue to work with our ~~acquisition of Feedonomics, we paid $32.5 million~~customer base to move billings from monthly to annually in efforts to better manage cash ~~at the first anniversary of closing~~flow and are obligated to make a payment of up to $32.5 million to be paid at the second anniversary of closing or upon the earlier achievement of certain milestones. We may elect to make the second anniversary payment partially or entirely in shares of our common stock in lieu of cash. If we choose to issue stock to settle the remaining payment, we will be required to register these shares with the Securities and Exchange Commission. The sale of additional equity would be dilutive to our stockholders. Additional debt financing could result in increased debt service obligations and more restrictive financial and operational covenants. In the event that additional financing is required from outside sources,reduce churn. Additionally, we may ~~not be able~~attempt to ~~raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired,~~restructure our ~~business, operating results and financial condition could be adversely affected.~~debt financing. From time to time, we may seek to repurchase, redeem or otherwise retire our convertible notes through cash repurchases and/or exchanges for equity securities, in open market repurchases, privately negotiated transactions, tender offers or otherwise. Such repurchases, redemptions or other transactions, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors. The amounts involved may be material. We do not have any material off-balance sheet arrangements that we expect would materially affect our liquidity and capital resources.

Cash flows

The following table sets forth a summary of our cash flows for the periods indicated.


	Three months ended March 31,						Three months ended March 31,
	2023			2022			2024			2023
	(in thousands)						(in thousands)
Net cash used in operating activities	$	(20,836	)	$	(21,985	)	$	(3,417	)	$	(20,836	)
Net cash used in investing activities	$	(9,677	)	$	(24,813	)		(6,931	)		(9,677	)
Net cash provided by (used in) financing activities	$	(330	)	$	184
Net cash used in financing activities								(485	)		(330	)
Net decrease in cash, cash equivalents and restricted cash	$	(30,843	)	$	(46,614	)	$	(10,833	)	$	(30,843	)

As of March 31, ~~2023,~~2024, we had ~~$283.5~~$62.0 million in cash, cash equivalents, and restricted cash, ~~and marketable securities, a decrease~~an increase of ~~$93.8~~$0.2 million compared to ~~$377.3~~$62.2 million as of March 31, ~~2022.~~2023. Cash and cash equivalents consist of highly-liquid investments with original maturities of less than three months. Our restricted cash balance of $1.1 million and ~~$1.2~~$1.1 million at March 31, ~~2023~~2024 and ~~2022~~2023 respectively, consists of security deposits for future chargebacks and amounts on deposit with certain financial institutions. Our marketable securities balance of ~~$221.3~~$204.3 million and ~~$125.2~~$221.3 million at March 31, ~~2023~~2024 and ~~2022~~2023 respectively, consists of investments in ~~debt securities.~~corporate and US treasury securities . We maintain cash account balances in excess of ~~FDIC-insured~~Federal Deposit Insurance Corporation (FDIC) insured limits.

31Operating activities

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~~Operating activities~~

Net cash used in operating activities for the three months ended March 31, 2024 and 2023 ~~and 2022~~ was ~~$20.8~~$3.4 million and ~~$22.0~~$20.8 million, respectively. This consisted primarily of our net losses adjusted for certain non-cash items including depreciation, stock-based compensation, debt discount amortization, amortization of intangible assets, bad debt expense, and the effect of changes in working capital.

Investing activities

Net cash used in investing activities during the three months ended March 31, 2024 and 2023 ~~and 2022~~ was ~~$9.7~~$6.9 million and ~~$24.8~~($9.7) million, respectively. In the three months ended March 31, 2024, this consists primarily of the sale and maturity of marketable securities of $29.4 million offset by the purchase of property and equipment of $0.8 million and the purchase of marketable securities of $35.5 million. In the three months ended March 31, 2023, this consists primarily of the purchases of marketable securities of $48.0 million and the purchases of property and equipment of $1.1 million offset by the maturity of marketable securities of $39.4 million. In the three months ended March 31, 2022, this consists primarily of the purchases of marketable securities of $32.5 million, the purchases of property and equipment of $1.3 million partially offset by the maturity of marketable securities of $9.0 million.

Financing activities

Net cash ~~provided by (used in)~~used in financing activities during the three months ended March 31, 2024 and 2023 was $0.5 million and ~~2022 was~~ $0.3 million, respectively. In the three months ended March 31, 2024, this was attributable to proceeds from exercise of stock options of $0.1 million offset by withholdings from the issuance of shares of common stock pursuant to the exercise of stock options and ~~$0.2~~vesting of restricted stock units of $1.3 million ~~respectively.~~and repayments of debt of $0.1 million. In the three months ended March 31, 2023, this was attributable to withholdings from the issuance of shares of common stock pursuant to the exercise of stock options of $0.3 ~~million. In the three months ended March 31, 2022, this consisted of the proceeds from the issuance of shares of common stock pursuant to the exercise of stock options of $0.2 million.~~million

Indebtedness

2021 Convertible senior notes

In September 2021, we issued ~~$345,000,000~~$345.0 million principal amount of ~~0.25%~~0.25 percent Convertible Senior Notes due 2026 (the ~~“Convertible Notes”~~“Notes”). The ~~Convertible~~ Notes were issued pursuant to, and are governed by, an indenture (the “Convertible Notes Indenture”), dated as of September 14, 2021, between us and U.S. Bank National Association, as trustee.

The ~~Convertible~~ Notes are our senior, unsecured obligations and are (i) equal in right of payment with our future senior, unsecured indebtedness; (ii) senior in right of payment to our future indebtedness that is expressly subordinated to the ~~Convertible~~ Notes in right of payment; (iii) effectively subordinated to our future secured indebtedness, to the extent of the value of the collateral securing that indebtedness; and (iv) structurally subordinated to all future indebtedness and other liabilities, including trade payables, and (to the extent we are not a holder thereof) preferred equity, if any, of our subsidiaries.

The ~~Convertible~~ Notes accrue interest at a rate of ~~0.25%~~0.25 percent per annum, payable semi-annually in arrears on April 1 and October 1 of each year, beginning on April 1, 2022. The ~~Convertible~~ Notes will mature on October 1, 2026, unless earlier repurchased, redeemed or converted. Before July 1, 2026, noteholders have the right to convert their ~~Convertible~~ Notes only upon the occurrence of certain events. From and after July 1, 2026, noteholders may convert their ~~Convertible~~ Notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. We will settle conversions by paying or delivering, as applicable, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election. The initial conversion rate was 13.6783 shares of common stock per $1,000 principal amount of ~~Convertible~~ Notes, which represents an initial conversion price of approximately $73.11 per share of common stock. The conversion rate and conversion price are subject to customary adjustments upon the occurrence of certain events. In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” (as defined in the Convertible Notes Indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time.

We may not redeem the ~~Convertible~~ Notes at our option at any time before October 7, 2024. The ~~Convertible~~ Notes will be redeemable, in whole or in part (subject to the “Partial Redemption Limitation” (as defined in the Convertible Notes Indenture)), at our option at any time, and from time to time, on or after October 7, 2024 and on or before the 25th scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of our common stock exceeds ~~130%~~130 percent of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date we send the related redemption notice; and (ii) the trading day immediately before the date we send such notice. The redemption price will be a cash amount equal to the principal amount of the ~~Convertible~~ Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. In addition, calling any ~~Convertible~~ Note for redemption will constitute a Make-Whole Fundamental Change with respect to that ~~Convertible~~ Note, in which case the conversion rate applicable to the conversion of that ~~Convertible~~ Note will be increased in certain circumstances if it is converted after it is called for redemption. Pursuant to the Partial Redemption Limitation, we may not elect to redeem less than all of

~~Table of Content~~

the outstanding ~~Convertible~~ Notes unless at least $150.0 million aggregate principal amount of ~~Convertible~~ Notes are outstanding and not subject to redemption as of the time we send the related redemption notice.

If certain corporate events that constitute a “Fundamental Change” (as defined in the Convertible Notes Indenture) occur, then, subject to a limited exception for certain cash mergers, noteholders may require us to repurchase their ~~Convertible~~ Notes at a cash repurchase price equal to the principal amount of the ~~Convertible~~ Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the

Table of Content

fundamental change repurchase date. The definition of Fundamental Change includes certain business combination transactions involving us and certain de-listing events with respect to our common stock.

The ~~Convertible~~ Notes have customary provisions relating to the occurrence of “Events of Default” (as defined in the Convertible Notes Indenture), which include the following: (i) certain payment defaults on the ~~Convertible~~ Notes (which, in the case of a default in the payment of interest on the ~~Convertible~~ Notes, will be subject to a 30-day cure period); (ii) our failure to send certain notices under the ~~Convertible~~ Notes Indenture within specified periods of time; (iii) our failure to comply with certain covenants in the ~~Convertible~~ Notes Indenture relating to our ability to consolidate with or merge with or into, or sell, lease or otherwise transfer, in one transaction or a series of transactions, all or substantially all of the assets of us and our subsidiaries, taken as a whole, to another person; (iv) a default by us in our other obligations or agreements under the Convertible Notes Indenture or the ~~Convertible~~ Notes if such default is not cured or waived within 60 days after notice is given in accordance with the Convertible Notes Indenture; (v) certain defaults by us or any of our significant subsidiaries with respect to indebtedness for borrowed money of at least ~~$65,000,000;~~$65.0 million; and (vi) certain events of bankruptcy, insolvency and reorganization involving us or any of our significant subsidiaries.

If an Event of Default involving bankruptcy, insolvency or reorganization events with respect to us (and not solely with respect to a significant subsidiary of us) occurs, then the principal amount of, and all accrued and unpaid interest on, all of the ~~Convertible~~ Notes then outstanding will immediately become due and payable without any further action or notice by any person. If any other Event of Default occurs and is continuing, then, the trustee, by notice to us, or noteholders of at least ~~25%~~25 percent of the aggregate principal amount of ~~Convertible~~ Notes then outstanding, by notice to us and the trustee, may declare the principal amount of, and all accrued and unpaid interest on, all of the ~~Convertible~~ Notes then outstanding to become due and payable immediately. However, notwithstanding the foregoing, we may elect, at our option, that the sole remedy for an Event of Default relating to certain failures by us to comply with certain reporting covenants in the ~~Convertible~~ Notes Indenture consists exclusively of the right of the noteholders to receive special interest on the ~~Convertible~~ Notes for up to 180 days at a specified rate per annum not exceeding ~~0.50%~~0.50 percent on the principal amount of the ~~Convertible~~ Notes.

Off-balance sheet arrangements

We did not have any off-balance sheet arrangements as of March 31, ~~2023~~2024 or as of December 31, ~~2022.~~2023.

Critical accounting policies and estimates

Our condensed consolidated financial statements have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. We also make estimates and assumptions on the reported revenue generated and reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

There have been no material changes to our critical accounting policies and estimates as compared to the critical accounting policies and estimates described in ~~“Management's~~“Management’s Discussion and Analysis of Financial Condition and Results of Operations” set forth in our Annual Report on Form 10-K for the year ended December 31, ~~2022.~~2023.

Recent accounting pronouncements

A discussion of recent accounting pronouncements is included in Note 2 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

3334

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Interest rate risk

Our cash, cash equivalents and restricted cash, consist primarily of interest-bearing accounts. Such interest-earning instruments carry a degree of interest rate risk. To minimize interest rate risk in the future, we intend to maintain our portfolio of cash equivalents in a variety of investment-grade securities, which may include commercial paper, money market funds, and government and non-government debt securities. Because of the short-term maturities of our cash, cash equivalents, restricted cash, and marketable securities, we do not believe that an increase in market rates would have any significant negative impact on the realized value of our investments. ~~A one-eighth percent change~~An immediate increase or decrease in interest ~~expense would have an annual impact~~rates of ~~approximately $0.4~~100 basis points at March 31, 2024 could result in a $2 million ~~on cash interest expense.~~market value reduction or increase of the same amount.

Foreign currency exchange risk

All of our revenue and a majority of our expense and capital purchasing activities for the ~~year~~three months ended ~~December~~March 31, ~~2022~~2024 were transacted in U.S. dollars. As we expand our sales and operations internationally, we will be more exposed to changes in foreign exchange rates. Our international revenue is currently collected in U.S. dollars. In the future, as we expand into additional international jurisdictions, we expect that our international sales will be primarily denominated in U.S. dollars. If we decide in the future to denominate international sales in currencies other than the U.S. dollar, unfavorable movement in the exchange rates between the U.S. dollar and the currencies in which we conduct foreign sales could have an adverse impact on our revenue.

A portion of our operating expenses are incurred outside the United States and are denominated in foreign currencies, which are subject to fluctuations due to changes in foreign currency exchange rates. In particular, in our Mexico, Australia and UK-based operations, we pay payroll and other expenses in Mexican pesos, Australian dollars and British pounds sterling, respectively. Our operating results and cash flows are, therefore, subject to fluctuations due to changes in foreign currency exchange rates. However, we believe that the exposure to foreign currency fluctuation from operating expenses is relatively small at this time as the related costs do not constitute a significant portion of our total expenses.

We currently do not hedge foreign currency exposure. We may in the future hedge our foreign currency exposure and may use currency forward contracts, currency options, and/or other common derivative financial instruments to reduce foreign currency risk. It is difficult to predict the effect future hedging activities would have on our operating results.

Credit risk

Financial instruments that potentially subject us to ~~concentration~~concentrations of credit risk consist of cash and cash equivalents, restricted cash, and accounts ~~receivable and marketable securities. We invest our cash equivalents in highly rated money market funds.~~receivable. Our ~~marketable securities consist of debt~~investment policy limits investments to high credit quality securities issued by the U.S. government, U.S. government-sponsored agencies, and highly rated corporate ~~entities, foreign governments, the U.S. federal government or state and local governments. Our exposure~~securities, subject to ~~any individual corporate entity is limited by policy. Deposits may exceed federally insured~~certain concentration limits and werestrictions on maturities. Our cash and cash equivalents and restricted cash are held by financial institutions that management believes are of high credit quality. Amounts on deposit may at times exceed FDIC insured limits. We have not experienced any losses on our deposits of cash and cash equivalents, and accounts are monitored by management to mitigate risk. We are exposed to credit risk ~~on deposits~~ in the event of default by the financial institutions to the extent account balances exceed the amount insured by the Federal Deposit Insurance Corporation (FDIC). We are closely monitoring ongoing events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions or other companies in the financial services industry or the financial services industry generally, including Silicon Valley Bank (SVB). On March 10, 2023, SVB, where we maintained an operating account with aholding our cash ~~balance of less than 1% of our total cash, cash equivalents~~ and marketable securities, was closed by the California Department of Financial Protection and Innovation and the FDIC was appointed as receiver. On March 12, 2023, the U.S. Department of the Treasury, Federal Reserve Board, and FDIC released a joint statement announcing that the FDIC would complete its resolution of SVB in a manner that fully protected all depositors at SVB and that depositors would have access to all of their money starting March 13, 2023. On March 26, 2023, it was announced that First-Citizens Bank & Trust Company would assume all of SVB's deposits and loans as of March 27, 2023. In light of the foregoing, we do not believe we have exposure to loss as a result of SVB’s receivership. During the periods presented, we have not experienced any losses on its deposits of cash, cash equivalents or ~~marketable securities.~~an event of default by the issuers of the corporate debt securities we hold.

Item 4. Controls and Procedures.

Evaluation of disclosure controls and procedures

~~The term “disclosure controls~~As of March 31, 2024, and ~~procedures,” as defined in Rules 13a-15(e) and 15d-15(e)~~ under the Exchange Act refers to controls and procedures that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that such

~~Table of Content~~

information is accumulated and communicated to a company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

~~Our management, with the participation~~direction of our Chief Executive Officer and Chief Financial Officer, ~~has~~we have evaluated the effectiveness of our disclosure controls and procedures, as ~~of March 31, 2023,~~defined in Rule 13a-15(e) under the ~~end of the period covered by this Quarterly Report on Form 10-Q.~~Exchange Act. Based upon ~~such~~this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded as of March 31, 2024, that our disclosure controls and procedures were not effective asbecause of ~~such date.~~

~~Changes in Internal Control over Financial Reporting~~

~~There were no changes~~the material weakness in our internal control over financial reporting that was disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023 (“Form 10-K”).

As discussed in Part II, Item 9A, “Controls and Procedures” in our Form 10-K, we identified material weaknesses in internal control over financial reporting in the following areas:

(i)

information technology (“IT”) general controls.

We did not maintain effective controls over (i) user access to ensure appropriate segregation of duties and adequately restrict user and privileged access to financial applications, programs and data to the appropriate personnel; (ii) program change management for financial applications to ensure that IT program and data changes affecting financial IT applications and underlying accounting records are identified, tested, authorized and implemented appropriately; and (iii) IT operations controls to ensure that critical interface jobs are monitored.

Table of Content

Status of Remediation Efforts

In response to the material weakness identified and described above, our management, with the oversight of the Audit Committee of our Board of Directors, will continue through 2024 to dedicate significant efforts and resources to further improve our control environment and to take steps to remediate this material weakness.

Changes in internal control over financial reporting

Except for the implementation of our remediation plans in connection with our ineffective disclosure controls and procedures described above, there have been no significant changes in our internal controls over financial reporting that occurred during the three ~~months~~month period ended March 31, ~~2023,~~2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Table of Content

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, wethe Company may become involved in litigation related to claims arising from the ordinary course of our business. ~~We believe~~The Company believes that there are no claims or actions pending or threatened against us, the ultimate disposition of which would have a material adverse effect on us.

Item 1A. Risk Factors.

As of the date of this report, there are no material changes to our risk factors as previously disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, ~~2022.~~2023.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a)

Recent Sales of Unregistered Equity Securities

None.

(b)

Use of Proceeds

None.

(c)

Repurchases

~~(in thousands)~~

None.

~~Total number of shares purchased~~

~~Average price paid per share~~

~~Total number of shares purchased as part of publicly announced plans or programs~~

~~Approximate dollar value of shares that may be purchased under the plans or program~~

~~January 2023~~

—

~~February 2023~~

—

~~March 2023~~

—

~~Total~~

—

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

(a)

None.

(b)

None.

(c)

During the three months ended March 31, 2024, no director or officer of the Company adopted or

36terminated

~~Table~~ a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each such terms are defined in Item 408(a) of ~~Content~~Regulation S-K.

Item 6. Exhibits

Exhibit Index

Exhibit

Incorporated by Reference

Number
Description
Form
File No.
Exhibit
Filing Date

2.1
Asset Purchase Agreement by and among BigCommerce Holdings, Inc, BigCommerce Omni LLC, Feedonomics LLC, and certain other affiliated parties and significant equity holders of Feedonomics LLC, dated July 23, 2021
8-K
001-39423
2.1
July 23, 2021

3.1
Seventh Amended and Restated Certificate of Incorporation of the registrant.
8-K
001-39423
3.1
August 10, 2020

3.2
Amended and Restated Bylaws of the registrant.
8-K
001-39423
3.2
August 10, 2020

4.1
Indenture, dated September 14, 2021 between Registrant and U.S Bank National Association
8-K
001-39423
4.1
September 15, 2021

4.2
Form of certificate representing the 0.25% Convertible Senior Notes due 2026 (included as Exhibit A to Exhibit 4.1)
8-K
001-39423
4.1
September 15, 2021

31.1**
Certification of Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2**
Certification of Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1†
Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350c, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS
Inline XBRL Instance Document. (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).

101.SCH
Inline XBRL Taxonomy Extension Schema Document.

101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).


Exhibit		Incorporated by Reference
Number	Description	Form	File No.	Exhibit	Effective Date

2.1	Asset Purchase Agreement by and among BigCommerce Holdings, Inc, BigCommerce Omni LLC, Feedonomics LLC, and certain other affiliated parties and significant equity holders of Feedonomics LLC, dated July 23, 2021	8-K	001-39423	2.1	July 23, 2021

3.1	Seventh Amended and Restated Certificate of Incorporation of the registrant.	8-K	001-39423	3.1	August 10, 2020

3.2	Second Amended and Restated Bylaws of the registrant.	8-K	001-39423	3.2	September 1, 2023

Table of Content


4.1	Indenture, dated September 14, 2021 between Registrant and U.S Bank National Association	8-K	001-39423	4.1	September 15, 2021

4.2	Form of certificate representing the 0.25% Convertible Senior Notes due 2026 (included as Exhibit A to Exhibit 4.1)	8-K	001-39423	4.1	September 15, 2021

10.1	Form of Performance Unit Agreement	8-K	001-39423	10.1	March 8, 2024

10.2	Form of Notice of Grant of Performance Units (Adjusted EBITDA)	8-K	001-39423	10.2	March 8, 2024

10.3	Form of Notice of Grant of Performance Units (Revenue)	8-K	001-39423	10.3	March 8, 2024

10.4	Form of Notice of Grant of Performance Units (Total Stockholder Return)	8-K	001-39423	10.4	March 8, 2024

31.1**	Certification of Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2**	Certification of Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1†	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350c, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS	Inline XBRL Instance Document- the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH	Inline XBRL Taxonomy Extension Schema Document with Embedded Linkbases Document.

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).


†	The certifications attached as Exhibit 32.1 that accompanies this Quarterly Report on Form 10-Q is deemed furnished and not filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of BigCommerce Holdings, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.
**	Filed herewith.

~~Table of Content~~

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	BigCommerce Holdings, Inc.

Date: May ~~5, 2023~~9, 2024	By:	/s/ Brent Bellm
		Brent Bellm
		~~President~~Chairman and Chief Executive Officer

Date: May ~~5, 2023~~9, 2024	By:	/s/ ~~Robert Alvarez~~Daniel Lentz
		~~Robert Alvarez~~Daniel Lentz
		Chief Financial Officer

Table of Content


(in thousands)
Balance at December 31, 2022	$	9,995
Provision for expected credit losses		1,075
Accounts written off		(1,476	)
Balance at March 31, 2023		9,594


	As of March 31, 2023
(in thousands)	(Level 1)		(Level 2)		(Level 3)		Total
Financial assets:
Money market funds	$	40,337	$	—	$	—	$	40,337
U.S. treasury securities	$	64,272	$	—	$	—	$	64,272
Corporate securities	$	—	$	157,000	$	—	$	157,000
Total financial assets	$	104,609	$	157,000	$	—	$	261,609


(in thousands)	March 31, 2023							December 31, 2022							Weighted average remaining useful life as of March 31, 2023 (in years)
	Gross amount		Accumulated amortization			Net carrying amount		Gross amount		Accumulated amortization			Net carrying amount
Developed technology	$	13,367	$	(5,604	)	$	7,763	$	13,367	$	(4,745	)	$	8,622		2.3
Customer relationship	$	22,525	$	(6,731	)	$	15,794	$	22,525	$	(5,734	)	$	16,791		4.1
Tradename	$	2,470	$	(834	)	$	1,636	$	2,470	$	(711	)	$	1,759		3.3
Non-compete agreement	$	162	$	(91	)	$	71	$	162	$	(78	)	$	84		1.3
Other intangibles	$	485	$	(199	)	$	286	$	485	$	(158	)	$	327		1.8
Total definite-lived intangible	$	39,009	$	(13,459	)	$	25,550	$	39,009	$	(11,426	)	$	27,583


Cash flow information (in thousands)	Three months ended March 31,
	2023		2022

Cash paid for operating lease liabilities	$	901	$	1,326
Right-of-use assets obtained in acquisition	$	—	$	—


Operating lease information	Three months ended March 31,
	2023			2022

Weighted-average remaining lease-term	4.1 years			5.2 years
Weighted-average discount rate		5.38	%		5.41	%


(in thousands)	March 31, 2023			December 31, 2022

Principal balance	$	345,000		$	345,000
Unamortized issuance costs	$	(7,011	)	$	(7,503	)
Carrying value, net	$	337,989		$	337,497


	March 31, 2023			December 31, 2022			September 30, 2022			June 30, 2022			March 31, 2022
Total ARR (in thousands)	$	316,688		$	311,670		$	305,320		$	295,946		$	280,426
Subscription ARR (in thousands)	$	243,527		$	238,395		$	233,134		$	225,757		$	212,096
Enterprise Account Metrics:
# of Accounts		5,828			5,786			5,560			5,418			5,365
ARR $	$	228,805		$	223,964		$	216,202		$	206,604		$	188,983
ARR % of Total ARR		72	%		72	%		71	%		70	%		67	%
ARPA	$	39,260		$	38,708		$	38,885		$	38,133		$	35,225

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company