BigCommerce's (NASDAQ:BIGC) Q1 Sales Top Estimates, Provides Optimistic Full Year Guidance

Kayode Omotosho /
2022/05/02 4:16 pm EDT
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E-commerce software platform provider BigCommerce (NASDAQ: BIGC) announced better-than-expected results in the Q1 FY2022 quarter, with revenue up 41.5% year on year to $66 million. Guidance for the full year also exceeded estimates, however the guidance for the next quarter was less impressive, coming in at $66 million, 0.22% below analyst estimates. BigCommerce made a GAAP loss of $37 million, down on its loss of $8.54 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) Q1 FY2022 Highlights:

  • Revenue: $66 million vs analyst estimates of $63.8 million (3.46% beat)
  • EPS (non-GAAP): -$0.18 vs analyst estimates of -$0.18
  • Revenue guidance for Q2 2022 is $66 million at the midpoint, roughly in line with what analysts were expecting
  • The company lifted revenue guidance for the full year, from $277.6 million to $282.2 million at the midpoint, a 1.65% increase
  • Free cash flow was negative $23.3 million, compared to negative free cash flow of $9.92 million in previous quarter
  • Customers: 12,972 customers paying more than $2,000 annually
  • Gross Margin (GAAP): 74.1%, down from 80.1% same quarter last year

“Q1 marked another excellent period of growth and accomplishments at BigCommerce,” said Brent Bellm, CEO 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.

While e-commerce has been around for over two decades and enjoyed meaningful growth, its overall penetration of retail still remains low. Only around $1 in every $5 spent on retail purchases comes from digital orders, leaving over 80% of the retail market still ripe for online disruption. It is these large swathes of the retail where e-commerce has not yet taken hold that drives the demand for various e-commerce software solutions.

Sales Growth

As you can see below, BigCommerce's revenue growth has been impressive over the last year, growing from quarterly revenue of $46.6 million, to $66 million.

BigCommerce Total Revenue

And unsurprisingly, this was another great quarter for BigCommerce with revenue up 41.5% year on year. But the growth did slow down compared to last quarter, as the revenue increased by just $1.15 million in Q1, compared to $5.61 million in Q4 2021. We'd like to see revenue increase by a greater amount each quarter, but a one-off fluctuation is usually not concerning.

Guidance for the next quarter indicates BigCommerce is expecting revenue to grow 34.7% year on year to $66 million, in line with the 34.9% year-over-year increase in revenue the company had recorded in the same quarter last year. Ahead of the earnings results the analysts covering the company were estimating sales to grow 23.1% over the next twelve months.

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Large Customers Growth

You can see below that at the end of the quarter BigCommerce reported 12,972 enterprise customers paying more than $2,000 annually, an increase of 218 on last quarter. That is a bit less contract wins than last quarter and also quite a bit below what we have typically seen over the past couple of quarters, suggesting that the sales momentum with large customers is slowing down.

BigCommerce customers paying more than $2,000 annually

Key Takeaways from BigCommerce's Q1 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 $1.29 billion and more than $376.1 million in cash, the company has the capacity to continue to prioritise growth over profitability.

We enjoyed seeing BigCommerce’s impressive revenue growth this quarter. And we were also excited to see that it outperformed analysts' revenue expectations. On the other hand, it was unfortunate to see the slowdown in new contract wins and the revenue guidance for the next quarter missed analysts' expectations. Zooming out, we think this was still a decent, albeit mixed, quarter, showing the company is staying on target. The company is up 1.11% on the results and currently trades at $19 per share.

Should you invest in BigCommerce 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.