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    CMRC
    Earnings call· Jun 2026(Q2 FY26)

    Commerce.com Q2 FY26 earnings call CMRC

    Aug 6, 2026 Source

    Executive summary

    Commerce.com Q2 FY26 — Strategic Investments and AI-Driven Shift Amidst B2C Softness

    Commerce.com delivered a quarter of steady execution, marked by strong GMV growth and improved profitability, while strategically shifting investments towards product intelligence and AI. The company made deliberate decisions to concentrate its partner ecosystem and increase R&D in AI, impacting near-term revenue guidance due to B2C replatforming softness and a cautious outlook on new account bookings. Despite these trade-offs, management remains confident in the long-term quality and monetization potential of the business, particularly in B2B and payments.

    Highlights

    7

    • Revenue of $84.5 million was within the guidance range.

    • Non-GAAP operating income reached $8.1 million, exceeding the high end of guidance ($4M-$5M).

    • GMV grew 14% year-over-year to nearly $8.8 billion.

    • Net revenue retention improved sequentially for the third consecutive quarter to 95.8%.

    • The company delivered positive GAAP net income for the second consecutive quarter.

    • Cash and investments balance stood at $157 million, reflecting a $22 million year-over-year increase in net cash position.

    • B2B GMV demonstrated strong growth, increasing 17% year-over-year.

    Concerns

    6

    • Full-year 2026 revenue guidance was revised down by $18 million at the midpoint.

    • Full-year 2026 non-GAAP operating income guidance was reduced by $12.5 million at the midpoint.

    • B2C replatforming activity remains softer than historically seen, leading to a more cautious view on new account bookings.

    • Non-GAAP gross margin declined sequentially from 77.4% to 75.7% due to higher hosting costs from AI crawlers.

    • Strategic decisions, including partner ecosystem concentration, reduce certain near-term revenue opportunities.

    • The broader software spending environment remains measured, with scrutinized sales cycles.

    Guidance & targets

    5
    CategoryTargetConfidence
    Revenue
    $82.5 million to $85.5 million
    high materiality
    High
    Non-GAAP operating income
    $3.3 million to $5.3 million
    high materiality
    High
    Revenue
    $336.5 million to $344.5 million
    high materiality
    High
    Non-GAAP operating income
    $28 million to $34 million
    high materiality
    High
    GAAP profitability
    On track to deliver GAAP profitability
    medium materiality
    High

    Segment performance

    1
    SegmentRevenueYoYQoQMargin
    B2B
    B2B GMV growth was particularly strong, increasing 17% year-over-year. This segment shows better pipeline growth, GMV growth, win rates, and gross retention rates. However, it has fewer credit card transactions, impacting partner revenue share.
    GMV growth: 17% YoYPipeline growth: Faster rateWin rates: HigherGross retention rates: Higher
    		—17%——

    Operational metrics

    11
    Non-GAAP operating income
    $8.1 millionAbove guidance range of $4M-$5M
    Q2 FY26

    Exceeded the high end of the guidance range.

    Non-GAAP operating margin
    9.6%Up nearly 400 bps YoY
    Q2 FY26

    Improved significantly year-over-year.

    ARR
    $360.5 millionUp sequentially from $359.8 million in prior quarter
    End of Q2 FY26

    Annual Recurring Revenue at the end of the quarter.

    Cash and investments balance
    $157 millionUp $22 million YoY
    End of Q2 FY26

    Includes cash, cash equivalents, restricted cash, and marketable securities. Net cash position up year-over-year.

    GMV
    $8.8 billionUp 14% YoY
    Q2 FY26

    Gross Merchandise Volume for the quarter.

    GMV
    $34 billion
    Trailing four quarters

    Total GMV facilitated over the prior four quarters.

    Stock-based compensation as % of revenue
    4.7%Down from 8.7% in Q2 FY25 and 7% for FY25
    Q2 FY26

    Reflects responsible management of dilution.

    Diluted shares outstanding
    82.8 million
    June 30, 2026

    Fully diluted shares outstanding at quarter end.

    Non-GAAP gross margin
    75.7%Down sequentially from 77.4% in Q1
    Q2 FY26

    Sequential decline attributed to increased infrastructure costs for AI-driven discovery.

    Feedonomics business size
    Roughly 20%Growing at a bit faster rate than the business as a whole
    Q2 FY26

    Estimated contribution to Annual Recurring Revenue.

    BigCommerce Payments GMV
    >30%Ahead of internal plans
    Since launch

    Merchant adoption and payment volume exceeding expectations.

    Industry KPIs

    4
    MetricValueDetails
    Rpo current rpoUp 11%%
    GMV take rate payments$8.8 billionUSD
    Software recurring arr$360.5 millionUSD
    Net revenue dollar retention95.8%%

    Orderbook & backlog

    2
    Remaining performance obligationsUp 11%Q2 FY26

    YoY

    Important forward-looking indicator of contracted customer commitments.

    Deferred revenueUp 25%Q2 FY26

    YoY

    Important forward-looking indicator of contracted customer commitments and booking quality/duration.

    Product announcements

    4
    ProductTypeDetails
    New data enrichment offeringslaunch
    B2C brand agent and conversational searchlaunch
    MakeSwiftlaunch
    BigCommerce Paymentsexpansion

    Deals & partnerships

    2
    AccentureStrategic partnership focused on product intelligence

    Secured a product intelligence win with one of the world's largest branded footwear and apparel manufacturers. The partnership is expected to expand with the company's product intelligence and agentic suite.

    WP EngineStrategic distribution partnership

    Enables high-growth brands to add BigCommerce's commerce capabilities while preserving their existing WordPress content, SEO, and customer experiences, leveraging an open architecture approach.

    Capital programs

    1
    2026 Product Investmentunderway
    Period spend: $5 million

    Capital expenditures stepped up to $5 million in Q2 FY26 from $1.7 million a year ago to fund product investments.

    Risks & headwinds

    7
    B2C replatforming activity softnessCurrent

    Softer than historically seen

    Mitigation: Concentrating investments in areas of differentiation like product intelligence and B2B, while adapting to longer decision cycles.

    AI delaying monetization and technology evaluationsNear-term

    Delaying monetization across portions of the industry

    Mitigation: Focusing on product intelligence as foundational infrastructure for AI-driven discovery and agentic commerce, making deliberate investment decisions.

    Distributed product discoveryOngoing

    Product discovery becoming increasingly distributed across marketplaces, retail media, AI search, shopping agents

    Mitigation: Organizing around three complementary layers (E-Dynomics, MakeSwift, BigCommerce) with an open architecture to adapt to expanding digital touchpoints.

    Partner ecosystem concentration impact on near-term revenueNear-term

    Forego some partner revenue

    Mitigation: Deliberate management decision to focus on a smaller number of deeper, healthier technology partner relationships for more durable aligned economics and long-term quality of revenue.

    Cautious view of second-half new account bookingsH2 FY26

    Reflecting continued softness and B2C replatforming activity and a broader software spending environment that remains measured

    Mitigation: Updated outlook is prudent, providing a foundation to execute. Investments are targeted at specific parts of the roadmap (B2B, payments, AI, MakeSwift, Feedonomics Surface) to drive attach rates, retention, and monetization.

    Higher hosting costs from AI crawlersQ2 FY26

    Non-GAAP gross margin came down sequentially from 77.4% in Q1 to 75.7% in Q2

    Mitigation: Keeping access open for AI traffic is viewed as a right long-term decision, particularly given operational efficiencies generated elsewhere in the business, allowing absorption of incremental costs.

    GMV mix weighted towards B2BOngoing

    Card-based payment volume represents a smaller portion of transactions and generates less partner revenue share

    Mitigation: Platform activity is growing faster than revenue; narrowing that gap through payments, monetization, product cross-sell, and higher attach rates remains a top priority.

    What to watch in Q3 FY26

    5

    B2C replatforming activity

    Next quarter (Q3 FY26)
    CurrentSofter than historically seen, longer cycles
    TargetImprovement in aggression/speed of decisions

    Why it matters

    Indicates broader market demand for core platform services and impacts new account bookings.

    We've seen some softness in B2C replatforming for a while for us. And we're seeing longer, a bit longer cycles there with evidence that, again, evaluations are taking a little bit longer.

    Q&A highlights

    6

    What is driving the current softness in B2C replatforming, and how is AI influencing this trend, causing longer decision cycles?

    The softness is primarily due to longer decision cycles, with AI being a leading factor. Merchants are taking more time to evaluate how AI will impact their technology decisions, focusing on discoverability and agentic products, which sometimes delays replatforming rather than canceling it. The upcoming holiday season also contributes to prudence in the outlook.

    “I think AI most notably, what we're seeing in increased demand and some of the adjacent demand, agentically oriented products, I think is a leading factor to what's making maybe folks deliberate a little bit longer in some of the replatforming.”

    asked by Scott Berg · answered by Daniel Lentz

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Shift to Product Intelligence and AI

    Commerce is undergoing a significant structural shift, with B2C replatforming activity softening and AI influencing merchant technology evaluations. The company is concentrating investments in areas of differentiation, particularly product intelligence, which is becoming foundational infrastructure for modern, distributed commerce. Feedonomics, processing over 1 trillion product listings monthly, is central to this strategy, providing insights into product data optimization across the global ecosystem.

    02

    Three Complementary Layers of Commerce

    The company has organized its offerings into three layers: E-Dynomics for product intelligence, MakeSwift for experience management, and BigCommerce for transaction processing. This open architecture allows merchants flexibility to adopt specific capabilities without replacing existing systems, adapting to an increasingly distributed commerce ecosystem. This framework guides capital allocation and engineering resources towards areas with the strongest right to win.

    03

    Key Investment Priorities and Product Roadmap

    Commerce is prioritizing investments in AI and agentic commerce, expanding merchant distribution across AI assistants and payment ecosystems, and growing adoption of Commerce Companion. Upcoming launches include new data enrichment offerings in Q3 and the B2C brand agent and conversational search in early Q4. Other key areas are Feedonomics Surface for SMB/mid-market, MakeSwift's year-end freemium launch, BigCommerce Payments expansion (including a UK launch), and continued investment in B2B capabilities, where the company holds a competitive advantage.

    04

    Partnerships and Global Customer Growth

    Strategic partnerships are building momentum, including a product intelligence win with a major footwear and apparel manufacturer through Accenture. A new distribution partnership with WP Engine enables high-growth brands to integrate BigCommerce capabilities with existing WordPress content. The platform continues to attract global customers across B2B and consumer segments, demonstrating its breadth and the value of its flexibility, openness, and product intelligence capabilities.

    05

    Updated Pricing and Financial Discipline

    The updated pricing and packaging strategy, effective June 1st, is designed to deepen alignment with embedded payment partners and improve long-term economics, rather than being a broad price increase. This change has not impacted pipeline or conversion. The company maintains operational strength, identifying efficiencies to redirect savings towards strategic investments, absorbing incremental costs associated with AI-driven discovery while preserving long-term financial objectives.

    06

    B2B Strength and Monetization Gap

    B2B continues to be a significant area of strength, with 17% GMV growth year-over-year, higher win rates, and gross retention. The platform's capabilities are well-suited for complex B2B requirements. However, the B2B mix, with fewer card-based transactions, creates a monetization gap where platform activity grows faster than revenue. The company is actively working to close this gap through payment strategies and product cross-sell, acknowledging that B2B monetization will always differ from B2C.

    AI-generated summary of the company’s earnings call. Not investment advice.