BigCommerce (NASDAQ:BIGC) Delivers Strong Q3 Numbers, Next Quarter Growth Looks Optimistic

Adam Hejl /
2021/11/04 4:17 pm EDT
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E-commerce software platform provider BigCommerce (NASDAQ: BIGC) reported Q3 FY2021 results that beat analyst expectations, with revenue up 49.2% year on year to $59.2 million. The company expects that next quarter's revenue would be around $61.5 million, which is the midpoint of the guidance range. That was in roughly line with analyst expectations. BigCommerce made a GAAP loss of $21.6 million, down on its loss of $10.8 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) Q3 FY2021 Highlights:

  • Revenue: $59.2 million vs analyst estimates of $54.8 million (8.09% beat)
  • EPS (non-GAAP): -$0.06 vs analyst estimates of -$0.14
  • Revenue guidance for Q4 2021 is $61.5 million at the midpoint, above analyst estimates of $60.9 million
  • Free cash flow was negative $14.7 million, compared to negative free cash flow of -$5.82 million in previous quarter
  • Customers: 12,378 customers paying more than $2,000 annually
  • Gross Margin (GAAP): 79%, in line with same quarter last year

“Q3 was a record quarter on many dimensions for BigCommerce, including our 49% year-over-year revenue growth rate, which was our highest as a public company. This rapid growth reflects the success of our Open SaaS platform in serving ever-larger enterprise customers, B2B and headless use cases and new European markets,” said Brent Bellm, chief executive officer at BigCommerce.

Founded in Sydney, Australia in 2009 by Mitchell Harper and Eddie Machaalani, BigCommerce (NASDAQ:BIGC) 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 impressive over the last year, growing from quarterly revenue of $39.7 million, to $59.2 million.

BigCommerce Total Revenue

And unsurprisingly, this was another great quarter for BigCommerce with revenue up an absolutely stunning 49.2% year on year. On top of that, revenue increased $10.2 million quarter on quarter, a very strong improvement on the $2.35 million increase in Q2 2021, and a sign of acceleration of growth.

Analysts covering the company are expecting the revenues to grow 30.7% over the next twelve months, although estimates are likely to change post earnings.

There are others doing even better than BigCommerce. Founded by ex-Google engineers, a small company making software for banks has been growing revenue 90% year on year and is already up more than 400% since the IPO in December. You can find it on our platform for free.

Large Customers Growth

You can see below that at the end of the quarter BigCommerce reported 12,378 enterprise customers paying more than $2,000 annually, an increase of 1,392 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 Q3 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 a market capitalization of $3.2 billion and more than $408.3 million in cash, the company has the capacity to continue to prioritise growth over profitability.

We were very impressed how strongly BigCommerce accelerated the rate of new contract wins this quarter. And we were also excited to see the really strong revenue growth. Zooming out, we think this was a great quarter and shareholders will likely feel excited about the results. The company is up 1.41% on the results and currently trades at $46.5 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 actionable report which you can read here, it's free.

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