10-Q 1 bigc-20240331.htm 10-Q 10-Q
Q1--12-31false0001626450P1YP1Y0001626450us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel2Member2024-03-310001626450us-gaap:RetainedEarningsMember2023-03-310001626450us-gaap:FairValueInputsLevel2Member2024-03-310001626450us-gaap:SellingAndMarketingExpenseMember2023-01-012023-03-310001626450us-gaap:AdditionalPaidInCapitalMember2022-12-310001626450us-gaap:TradeNamesMember2024-03-310001626450us-gaap:GeneralAndAdministrativeExpenseMember2023-01-012023-03-310001626450us-gaap:EmployeeStockOptionMember2023-01-012023-03-310001626450us-gaap:FairValueInputsLevel3Memberbigc:ConvertibleSeniorNotesDueTwoThousandTwentySixMember2023-12-310001626450us-gaap:GeographicConcentrationRiskMemberus-gaap:EMEAMemberus-gaap:RevenueFromContractWithCustomerMember2023-01-012023-03-3100016264502024-04-012024-03-310001626450us-gaap:CommercialPaperMember2024-03-310001626450bigc:ZeroPointTwoFivePercentageConvertibleSeniorNotesDueTwoThousandTwentySixMemberbigc:TwentyTradingDaysPeriodMembersrt:MinimumMember2021-09-012021-09-300001626450us-gaap:FairValueInputsLevel3Memberus-gaap:CommercialPaperMember2023-12-310001626450country:USus-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2024-01-012024-03-310001626450us-gaap:RestrictedStockMember2024-03-310001626450bigc:ZeroPointTwoFivePercentageConvertibleSeniorNotesDueTwoThousandTwentySixMember2024-01-012024-03-310001626450bigc:MakeswiftIncMemberus-gaap:TradeNamesMember2023-10-310001626450bigc:ZeroPointTwoFivePercentageConvertibleSeniorNotesDueTwoThousandTwentySixAndTwoThousandTwentyThreeTermDebtMember2024-01-012024-03-310001626450us-gaap:DevelopedTechnologyRightsMember2024-03-310001626450us-gaap:CommonStockMember2024-03-310001626450us-gaap:USTreasurySecuritiesMember2024-03-310001626450bigc:TwoThousandTwentyOneConvertibleSeniorNotesMember2024-01-012024-03-3100016264502023-12-310001626450bigc:ZeroPointTwoFivePercentageConvertibleSeniorNotesDueTwoThousandTwentySixMemberbigc:TwoThousandTwentyOneCappedCallTransactionsMember2021-09-090001626450us-gaap:SubscriptionAndCirculationMember2024-01-012024-03-310001626450bigc:TwoThousandTwentyOneConvertibleSeniorNotesMember2023-12-310001626450us-gaap:ResearchAndDevelopmentExpenseMember2023-01-012023-03-310001626450us-gaap:FairValueInputsLevel2Memberus-gaap:CommercialPaperMember2024-03-310001626450us-gaap:RetainedEarningsMember2024-03-310001626450bigc:MoneyMarketMutualFundsAndCashEquivalentSecuritiesMember2023-12-310001626450us-gaap:RestrictedStockUnitsRSUMember2024-01-012024-03-310001626450us-gaap:SubscriptionAndCirculationMember2023-01-012023-03-310001626450bigc:ZeroPointTwoFivePercentageConvertibleSeniorNotesDueTwoThousandTwentySixMember2021-09-300001626450us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel3Member2023-12-310001626450us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-03-310001626450bigc:MarketBasedAwardsMember2024-01-012024-03-310001626450us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-03-310001626450us-gaap:RestrictedStockUnitsRSUMember2024-01-012024-03-310001626450srt:AsiaPacificMember2024-01-012024-03-310001626450srt:MaximumMemberus-gaap:PerformanceSharesMember2024-01-012024-03-310001626450bigc:PrepaidExpensesAndOtherCurrentAssetsAndOtherAssetsMemberbigc:MakeswiftIncMember2024-03-310001626450us-gaap:RetainedEarningsMember2023-12-310001626450us-gaap:CommonStockMember2022-12-310001626450bigc:TwoThousandTwentyOneConvertibleSeniorNotesMember2024-03-310001626450bigc:ZeroPointTwoFivePercentageConvertibleSeniorNotesDueTwoThousandTwentySixMembersrt:MinimumMember2021-09-300001626450us-gaap:FairValueInputsLevel3Memberus-gaap:CorporateBondSecuritiesMember2024-03-310001626450bigc:NonCompeteAgreementMember2024-03-310001626450us-gaap:CommonStockMember2024-01-012024-03-310001626450us-gaap:EmployeeStockOptionMember2024-01-012024-03-310001626450us-gaap:FairValueInputsLevel2Memberbigc:MoneyMarketMutualFundsAndCashEquivalentSecuritiesMember2023-12-310001626450bigc:MakeswiftIncMember2023-10-310001626450us-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueInputsLevel3Member2024-03-310001626450us-gaap:ResearchAndDevelopmentExpenseMember2024-01-012024-03-310001626450bigc:AcquisitionRelatedCompensationMember2023-01-012023-03-310001626450bigc:CompensationCostMemberbigc:MakeswiftIncMember2024-03-310001626450us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-310001626450srt:MinimumMember2023-01-012023-12-310001626450us-gaap:RetainedEarningsMember2022-12-310001626450us-gaap:FairValueInputsLevel3Memberbigc:MoneyMarketMutualFundsAndCashEquivalentSecuritiesMember2024-03-310001626450bigc:MakeswiftIncMemberus-gaap:TradeNamesMember2023-10-012023-10-310001626450bigc:PartnerAndServicesMember2024-01-012024-03-310001626450srt:MaximumMember2023-01-012023-12-310001626450us-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel2Member2023-12-310001626450us-gaap:AdditionalPaidInCapitalMember2023-12-310001626450srt:AsiaPacificMember2023-01-012023-03-3100016264502024-05-0700016264502023-03-3100016264502024-01-012024-03-310001626450us-gaap:CustomerRelationshipsMemberbigc:MakeswiftIncMember2023-10-012023-10-310001626450us-gaap:FairValueInputsLevel3Member2023-12-310001626450us-gaap:CashMember2024-03-310001626450us-gaap:EMEAMember2023-01-012023-03-310001626450bigc:AcquisitionRelatedCompensationMember2024-01-012024-03-310001626450bigc:Series1CommonStockMemberbigc:TwoThousandTwentyEquityIncentivesPlanMember2023-01-012023-01-010001626450us-gaap:FairValueInputsLevel1Memberbigc:ConvertibleSeniorNotesDueTwoThousandTwentySixMember2024-03-310001626450us-gaap:RestrictedStockMember2024-01-012024-03-310001626450bigc:TwoThousandTwentyEquityIncentivesPlanMemberus-gaap:SubsequentEventMember2024-04-012024-04-010001626450bigc:MakeswiftIncMember2024-01-012024-03-310001626450us-gaap:DevelopedTechnologyRightsMember2023-12-310001626450bigc:TwoThousandTwentyEquityIncentivesPlanMember2020-07-310001626450us-gaap:GeneralAndAdministrativeExpenseMember2024-01-012024-03-310001626450us-gaap:PerformanceSharesMember2024-01-012024-03-310001626450srt:MinimumMember2024-01-012024-03-310001626450us-gaap:CustomerRelationshipsMember2023-12-310001626450us-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Member2023-12-310001626450bigc:TwoThousandAndTwentyThreeRestructureMemberus-gaap:EmployeeSeveranceMember2023-12-310001626450srt:MaximumMemberbigc:MarketBasedAwardsMember2024-01-012024-03-310001626450us-gaap:CashMember2023-12-310001626450bigc:TwoThousandTwentyEquityIncentivesPlanMemberbigc:Series1CommonStockMember2022-01-012022-01-010001626450us-gaap:RestrictedStockUnitsRSUMember2024-03-310001626450bigc:TwoThousandAndTwentyThreeRestructureMemberus-gaap:EmployeeSeveranceMember2024-03-310001626450us-gaap:FairValueInputsLevel1Memberus-gaap:CorporateBondSecuritiesMember2024-03-310001626450bigc:NonCompeteAgreementMember2023-12-310001626450us-gaap:FairValueInputsLevel1Memberbigc:ConvertibleSeniorNotesDueTwoThousandTwentySixMember2023-12-310001626450bigc:DevelopedTechnologyMemberbigc:MakeswiftIncMember2023-10-310001626450us-gaap:ConvertibleDebtSecuritiesMember2024-01-012024-03-310001626450bigc:AmericasOtherMember2024-01-012024-03-310001626450srt:MaximumMember2024-01-012024-03-310001626450us-gaap:FairValueInputsLevel1Memberbigc:MoneyMarketMutualFundsAndCashEquivalentSecuritiesMember2024-03-310001626450bigc:Series1CommonStockMemberbigc:TwoThousandTwentyEquityIncentivesPlanMember2024-01-012024-01-010001626450bigc:TwoThousandAndTwentyThreeRestructureMember2023-01-012023-12-310001626450us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-310001626450us-gaap:FairValueInputsLevel2Memberus-gaap:CorporateBondSecuritiesMember2024-03-310001626450us-gaap:CommercialPaperMember2023-12-310001626450us-gaap:CustomerRelationshipsMemberbigc:MakeswiftIncMember2023-10-310001626450us-gaap:FairValueInputsLevel2Member2023-12-310001626450us-gaap:CommonStockMember2023-12-310001626450us-gaap:FairValueInputsLevel2Memberbigc:ConvertibleSeniorNotesDueTwoThousandTwentySixMember2024-03-310001626450us-gaap:FairValueInputsLevel1Memberus-gaap:CommercialPaperMember2023-12-310001626450bigc:Series1CommonStockMemberbigc:TwoThousandTwentyEquityIncentivesPlanMember2020-07-310001626450us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel2Member2023-12-310001626450us-gaap:FairValueInputsLevel3Memberus-gaap:CorporateBondSecuritiesMember2023-12-310001626450us-gaap:RetainedEarningsMember2024-01-012024-03-310001626450us-gaap:AdditionalPaidInCapitalMember2023-03-310001626450us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-03-310001626450us-gaap:OtherIntangibleAssetsMember2023-12-310001626450bigc:AmericasOtherMember2023-01-012023-03-310001626450us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel1Member2023-12-310001626450bigc:AmericasUSMember2024-01-012024-03-310001626450us-gaap:TradeNamesMember2023-12-310001626450us-gaap:FairValueInputsLevel1Memberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2024-03-310001626450us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-01-012024-03-310001626450us-gaap:FairValueInputsLevel3Member2024-03-310001626450srt:MinimumMemberus-gaap:SubscriptionAndCirculationMember2024-01-012024-03-310001626450bigc:Series1CommonStockMemberbigc:TwoThousandTwentyEquityIncentivesPlanMember2024-03-310001626450us-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueInputsLevel3Member2023-12-310001626450us-gaap:RetainedEarningsMember2023-01-012023-03-3100016264502023-01-012023-03-310001626450bigc:PartnerAndServicesMember2023-01-012023-03-310001626450bigc:TwoThousandAndTwentyThreeRestructureMemberus-gaap:EmployeeSeveranceMember2024-01-012024-03-310001626450us-gaap:FairValueInputsLevel1Memberbigc:MoneyMarketMutualFundsAndCashEquivalentSecuritiesMember2023-12-310001626450bigc:ConvertibleSeniorNotesDueTwoThousandTwentySixMember2024-03-310001626450us-gaap:AdditionalPaidInCapitalMember2024-01-012024-03-310001626450us-gaap:FairValueInputsLevel1Member2024-03-310001626450us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-3100016264502024-03-310001626450us-gaap:CostOfSalesMember2023-01-012023-03-310001626450us-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-12-310001626450bigc:TwoThousandTwentyThreeTermDebtMember2023-12-310001626450us-gaap:FairValueInputsLevel2Memberbigc:MoneyMarketMutualFundsAndCashEquivalentSecuritiesMember2024-03-310001626450srt:MinimumMemberus-gaap:PerformanceSharesMember2024-01-012024-03-310001626450us-gaap:CommonStockMember2023-01-012023-03-310001626450us-gaap:SellingAndMarketingExpenseMember2024-01-012024-03-310001626450bigc:AmericasUSMember2023-01-012023-03-310001626450us-gaap:FairValueInputsLevel3Memberus-gaap:CommercialPaperMember2024-03-310001626450bigc:TwoThousandTwentyThreeTermDebtMember2024-03-310001626450us-gaap:EMEAMember2024-01-012024-03-310001626450us-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Member2024-03-310001626450us-gaap:CorporateBondSecuritiesMember2023-12-310001626450bigc:MarketBasedAwardsMember2024-03-310001626450us-gaap:CostOfSalesMember2024-01-012024-03-310001626450us-gaap:FairValueInputsLevel2Memberus-gaap:CorporateBondSecuritiesMember2023-12-310001626450us-gaap:CorporateBondSecuritiesMember2024-03-310001626450us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-310001626450us-gaap:FairValueInputsLevel2Memberbigc:ConvertibleSeniorNotesDueTwoThousandTwentySixMember2023-12-310001626450us-gaap:FairValueInputsLevel1Memberus-gaap:CommercialPaperMember2024-03-310001626450srt:MaximumMemberbigc:ZeroPointTwoFivePercentageConvertibleSeniorNotesDueTwoThousandTwentySixMemberbigc:TenTradingDaysPeriodMember2021-09-012021-09-300001626450us-gaap:FairValueInputsLevel3Memberbigc:MoneyMarketMutualFundsAndCashEquivalentSecuritiesMember2023-12-310001626450us-gaap:RestrictedStockMember2023-12-310001626450us-gaap:StockOptionMember2024-01-012024-03-3100016264502023-04-012023-03-310001626450us-gaap:AdditionalPaidInCapitalMember2024-03-3100016264502023-01-012023-12-310001626450bigc:MakeswiftIncMemberus-gaap:SubsequentEventMember2024-04-010001626450us-gaap:FairValueInputsLevel1Memberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-12-310001626450bigc:ZeroPointTwoFivePercentageConvertibleSeniorNotesDueTwoThousandTwentySixMemberbigc:TwoThousandTwentyOneCappedCallTransactionsMember2021-09-092021-09-090001626450us-gaap:CommonStockMember2023-03-310001626450us-gaap:FairValueInputsLevel1Memberus-gaap:CorporateBondSecuritiesMember2023-12-310001626450us-gaap:ConvertibleDebtSecuritiesMember2023-01-012023-03-310001626450bigc:DevelopedTechnologyMemberbigc:MakeswiftIncMember2023-10-012023-10-310001626450us-gaap:USTreasurySecuritiesMember2023-12-310001626450country:USus-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2023-01-012023-03-310001626450bigc:ZeroPointTwoFivePercentageConvertibleSeniorNotesDueTwoThousandTwentySixAndTwoThousandTwentyThreeTermDebtMember2023-01-012023-03-310001626450us-gaap:USGovernmentAgenciesDebtSecuritiesMember2024-03-310001626450us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel3Member2024-03-310001626450bigc:MakeswiftIncMember2023-10-012023-10-310001626450srt:MaximumMemberus-gaap:SubscriptionAndCirculationMember2024-01-012024-03-3100016264502022-12-310001626450bigc:ZeroPointTwoFivePercentageConvertibleSeniorNotesDueTwoThousandTwentySixMember2021-09-012021-09-3000016264502024-04-012024-01-012024-03-310001626450bigc:MoneyMarketMutualFundsAndCashEquivalentSecuritiesMember2024-03-310001626450bigc:TwoThousandTwentyThreeTermDebtMember2024-01-012024-03-310001626450us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel1Member2024-03-310001626450us-gaap:FairValueInputsLevel1Member2023-12-310001626450us-gaap:GeographicConcentrationRiskMemberus-gaap:EMEAMemberus-gaap:RevenueFromContractWithCustomerMember2024-01-012024-03-310001626450us-gaap:OtherIntangibleAssetsMember2024-03-310001626450us-gaap:CustomerRelationshipsMember2024-03-310001626450bigc:MarketBasedAwardsMembersrt:MinimumMember2024-01-012024-03-310001626450bigc:ConvertibleSeniorNotesDueTwoThousandTwentySixMember2023-12-31xbrli:purebigc:Tranchebigc:Daysxbrli:sharesiso4217:USDxbrli:sharesiso4217:USD

 

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, 2024

OR

 

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.

 

Large accelerated filer

 

 

Accelerated filer

 

 

 

 

Non-accelerated filer

 

 

Smaller reporting company

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

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 May 7, 2024, the registrant had 77,274,527 shares of common stock, $0.0001 par value per share outstanding.

 

 


Table of Contents

 

Page

PART I.

FINANCIAL INFORMATION

Item 1.

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 Comprehensive Loss for the three months ended March 31, 2024 and 2023

4

 

Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2024 and 2023

5

Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023

6

Notes to Condensed Consolidated Financial Statements

7

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

25

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

35

Item 4.

Controls and Procedures

35

PART II.

OTHER INFORMATION

37

Item 1.

Legal Proceedings

37

Item 1A.

Risk Factors

37

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

37

Item 3.

Defaults Upon Senior Securities

37

Item 4.

Mine Safety Disclosures

37

Item 5.

Other Information

37

Item 6.

Exhibits

37

 

Signatures

38

 

 

 

i


PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

BigCommerce Holdings, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

 

 

 

March 31,

 

 

December 31,

 

 

 

2024

 

 

2023

 

 

 

(unaudited)

 

 

 

 

Assets

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

60,900

 

 

$

71,719

 

Restricted cash

 

 

1,112

 

 

 

1,126

 

Marketable securities

 

 

204,281

 

 

 

198,415

 

Accounts receivable, net

 

 

39,302

 

 

 

37,713

 

Prepaid expenses and other assets, net

 

 

29,251

 

 

 

24,733

 

Deferred commissions

 

 

8,695

 

 

 

8,280

 

Total current assets

 

 

343,541

 

 

 

341,986

 

Property and equipment, net

 

 

9,991

 

 

 

10,233

 

Operating lease, right-of-use-assets

 

 

4,024

 

 

 

4,405

 

Prepaid expenses, net of current portion

 

 

1,817

 

 

 

1,240

 

Deferred commissions, net of current portion

 

 

6,430

 

 

 

7,056

 

Intangible assets, net

 

 

24,584

 

 

 

27,052

 

Goodwill

 

 

52,086

 

 

 

52,086

 

Total assets

 

$

442,473

 

 

$

444,058

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

7,063

 

 

$

7,982

 

Accrued liabilities

 

 

3,212

 

 

 

2,652

 

Deferred revenue

 

 

34,810

 

 

 

32,242

 

Current portion of debt

 

 

553

 

 

 

547

 

Current portion of operating lease liabilities

 

 

2,477

 

 

 

2,542

 

Other current liabilities

 

 

19,830

 

 

 

24,785

 

Total current liabilities

 

 

67,945

 

 

 

70,750

 

Long-term portion of debt

 

 

339,970

 

 

 

339,614

 

Operating lease liabilities, net of current portion

 

 

7,014

 

 

 

7,610

 

Other long-term liabilities, net of current portion

 

 

625

 

 

 

551

 

Total liabilities

 

 

415,554

 

 

 

418,525

 

Stockholders’ equity

 

 

 

 

 

 

Common stock

 

 

7

 

 

 

7

 

Additional paid-in capital

 

 

628,058

 

 

 

620,021

 

Accumulated other comprehensive gain (loss)

 

 

(96

)

 

 

163

 

Accumulated deficit

 

 

(601,050

)

 

 

(594,658

)

Total stockholders’ equity

 

 

26,919

 

 

 

25,533

 

Total liabilities and stockholders’ equity

 

$

442,473

 

 

$

444,058

 

 

 

 

 

 

 

 

 

 

 

 

 

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

2


BigCommerce Holdings, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)

 

 

 

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.

3


BigCommerce Holdings, Inc.

Condensed Consolidated Statements of Comprehensive Loss

(in thousands)

(unaudited)

 

 

 

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.

4


BigCommerce Holdings, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(in thousands)

(unaudited)

 

 

 

Three months ended March 31, 2024

 

 

 

Common Stock

 

 

Additional
Paid-in

 

 

Accumulated

 

 

Accumulated
Other
Comprehensive

 

 

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Loss

 

 

Equity

 

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

 

 

507

 

 

 

0

 

 

 

(1,325

)

 

 

0

 

 

 

0

 

 

 

(1,325

)

Stock-based compensation

 

 

0

 

 

 

0

 

 

 

8,388

 

 

 

0

 

 

 

0

 

 

 

8,388

 

Total other comprehensive loss

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

(259

)

 

 

(259

)

Net loss

 

 

0

 

 

 

0

 

 

 

0

 

 

 

(6,392

)

 

 

0

 

 

 

(6,392

)

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.

5


 

BigCommerce Holdings, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(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.

 

6


BigCommerce Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

1. Overview

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

The Company empowers businesses to turn digital transformation into a competitive advantage, and allows merchants to build their ecommerce solution their way with the flexibility to fit their unique business and product offerings. 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 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. 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.

References in these condensed consolidated financial statements to “we”, “us”, “our”, the “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.

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 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, 2023, which are included in the Company's Annual Report on Form 10-K, filed with the SEC on February 29, 2024. The results of operations for the three months ended March 31, 2024, are not necessarily indicative of the results to be expected for the year ending December 31, 2024, or for any other period.

Basis of consolidation

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

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

Use of estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions in the Company’s consolidated financial statements and notes thereto.

Significant estimates and assumptions made by management in these consolidated financial statements include:

 

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, measurement and valuation of current and deferred income taxes and uncertain tax positions;

7


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

Recent Accounting Pronouncements Not Yet Adopted

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 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. 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, the Company has determined that it operates as a single operating and reportable segment.

Revenue Recognition

Subscription solutions

Subscription solutions revenue consists primarily of platform subscription fees from all plans and recurring professional services. Subscription solutions are charged monthly, quarterly, or annually for the Company’s customers to sell their products and process transactions on 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 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, the Company has determined the Company meets the variable consideration allocation exception and, therefore, 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. 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 included an upfront promotional period in order to incentivize the customer to enter into a subscription arrangement. In both of these scenarios, the total subscription fee is recognized on a straight-line basis over the term of the contract. In determining the amount of revenue to be recognized, 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.

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.). 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

8


multi-service bundle (e.g. both marketplaces and advertising). Services are performed and fees are determined based on monthly usage and are billed in arrears.

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 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

The Company’s partner and services revenue includes revenue share, partner technology integrations, and marketing services provided to partners. Revenue share relates to fees earned by the Company’s partners from customers using the Company’s platform, where 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 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.

The Company also derives revenue from the sales of website themes and applications upon delivery.

The Company recognizes partner revenue share on a net basis as the Company has determined that the Company is the agent in the Company’s arrangements with third-party application providers. All other revenue is recognized on a gross basis, as the Company has determined 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.

The Company’s subscription contracts are generally comprised of a single performance obligation to provide access to 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, the Company may be required to allocate the contract’s transaction price to each performance obligation using the Company’s best estimate of SSP. Judgment is required to determine the SSP for each distinct performance obligation. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The primary method used to estimate SSP is the observable prices of products or services sold or priced separately in comparable circumstances to similar customers.

Contracts with 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 the Company considers various factors. These considerations include the level of integration, interdependency, and interrelation between the implementation and hosting services. The Company has concluded that the integration services included in contracts with hosting obligations are not distinct. As a result, 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, 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. For most of the Company’s contracts, the Company has determined the variable consideration allocation exception has been met and therefore 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,

9


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 infrastructure and platform; allocation of overhead costs and credit card processing; and amortization expense associated with capitalized internal-use software.

Accounts receivable

Accounts receivable are stated at net realizable value and include both billed and unbilled receivables. 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, 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.

10


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.

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

The following table disaggregates revenue 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:

11


 

 

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 North and South America, other than the 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 EMEA was 11 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 total revenue during the three months ended March 31, 2024 and 2023.

Deferred commissions

Certain sales commissions earned by the Company’s go-to-market teams are considered incremental and recoverable costs of obtaining a contract with a customer. The Company amortizes deferred sales commissions ratably over the average customer life which is three years. The Company includes amortization of deferred commissions in sales and marketing expense in the condensed consolidated statements of operations. The Company periodically 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. The Company did not recognize an impairment of deferred commissions during the three months ended March 31, 2024 and the year ended December 31, 2023.

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

4. Fair value measurements

Financial instruments carried at fair value include cash and cash equivalents, restricted cash and marketable securities.

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, 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 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:

 

12


 

 

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

 

 

13


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

 

 

As of March 31, 2024

 

(in thousands)

 

Amortized Cost/ Principal amount

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Losses

 

 

Estimated
Fair Value

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

56,312

 

 

 

9

 

 

 

(70

)

 

 

56,251

 

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, 2023

 

(in thousands)

 

Amortized Cost/ Principal amount

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Losses

 

 

Estimated
Fair Value

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

48,061

 

 

 

86

 

 

 

(9

)

 

 

48,138

 

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

 

 

5. Business combinations

Acquisition of Makeswift

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.

 

14


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.

 

The fair value of 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