BigCommerce (NASDAQ:BIGC) Delivers Impressive Q2, Provides Optimistic Guidance For Next Quarter

Adam Hejl /
2021/08/05 4:50 pm EDT

E-commerce software platform provider BigCommerce (NASDAQ: BIGC) reported Q2 FY2021 results that beat analyst expectations, with revenue up 34.9% year on year to $49 million. BigCommerce made a GAAP loss of $12.2 million, down on its loss of $8.48 million, in the same quarter last year.

Is now the time to buy BigCommerce? Access our full analysis of the earnings results here, it's free.

BigCommerce (BIGC) Q2 FY2021 Highlights:

  • Revenue: $49 million vs analyst estimates of $46.8 million (4.71% beat)
  • EPS (non-GAAP): -$0.06 vs analyst estimates of -$0.11
  • Revenue guidance for Q3 2021 is $54.7 million at the midpoint, above analyst estimates of $49.8 million
  • The company lifted revenue guidance for the full year, from $197.4 million to $211.2 million at the midpoint, a 6.96% increase
  • Free cash flow was negative -$5.82 million, compared to negative free cash flow of -$13.24 million in previous quarter
  • Customers: 10,986 customers paying more than $2,000 annually
  • Gross Margin (GAAP): 79.2%, down from 80.1% previous quarter

“Q2 concludes our first full year as a public company. Our revenue growth rate this quarter, which surpassed what we achieved the same period last year, marks the sixth consecutive quarter above 30% and reflects our continued momentum in powering digital commerce success,” said Brent Bellm, CEO at BigCommerce.

Founded in 2009, BigCommerce provides software for businesses to easily create online stores.

The COVID-19 pandemic has accelerated the global shift to e-commerce, and we can expect this trend to continue as consumers embrace flexible and fast online shopping options.

Sales Growth

As you can see below, BigCommerce's revenue growth has been very strong over the last year, growing from quarterly revenue of $36.3 million, to $49 million.

BigCommerce Total Revenue

And unsurprisingly, this was another great quarter for BigCommerce with revenue up an absolutely stunning 34.9% year on year. But the growth did slow down compared to last quarter, as the revenue increased by just $2.35 million in Q2, compared to $3.51 million in Q1 2021. We'd like to see revenue increase by a greater amount each quarter, but a one-off fluctuation is usually not concerning.

Analysts covering the company are expecting the revenues to grow 22.5% over the next twelve months, although we would expect them to review their estimates once they get to read these results.

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Large Customers Growth

You can see below that at the end of the quarter BigCommerce reported 10,986 enterprise customers paying more than $2,000 annually, an increase of 477 on last quarter. That is quite a bit more contract wins than last quarter and quite a bit above what we have typically seen lately, demonstrating that the business itself has good sales momentum. We've no doubt shareholders will take this as an indication that the company's go-to-market strategy is working very well.

BigCommerce customers paying more than $2,000 annually

Key Takeaways from BigCommerce's Q2 Results

Since it has still been burning cash over the last twelve months it is worth keeping an eye on BigCommerce’s balance sheet, but we note that with market capitalisation of $4.86 billion and more than $203.2 million in cash, the company has the capacity to continue to prioritise growth over profitability.

We were impressed by the very optimistic revenue guidance BigCommerce provided for the next quarter. And we were also glad to see the acceleration in new contract wins. On the other hand, there was a deterioration in gross margin. Zooming out, we think this was a fantastic quarter that should have shareholders cheering. The company is down -2.55% on the results and currently trades at $69.5 per share.

BigCommerce may have had a good quarter, so should you invest right now? It is important that you take into account its valuation and business qualities, as well as what happened in the latest quarter. We look at that in our full report which you can read here, it's free.

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The author has no position in any of the stocks mentioned.