BigCommerce Holdings, Inc. (BIGC) Bundle
Understanding BigCommerce Holdings, Inc. (BIGC) Revenue Streams
Understanding BigCommerce Holdings, Inc.'s Revenue Streams
The company generates revenue primarily from two sources: subscription solutions and partner and services. The breakdown of revenue for the three and nine months ended September 30, 2024, is as follows:
| Revenue Source | Three Months Ended September 30, 2024 (in thousands) | Three Months Ended September 30, 2023 (in thousands) | Change (in thousands) | Percentage Change | Nine Months Ended September 30, 2024 (in thousands) | Nine Months Ended September 30, 2023 (in thousands) | Change (in thousands) | Percentage Change |
|---|---|---|---|---|---|---|---|---|
| Subscription Solutions | $62,826 | $58,709 | $4,117 | 7.0% | $185,582 | $168,652 | $16,930 | 10.0% |
| Partner and Services | $20,884 | $19,336 | $1,548 | 8.0% | $60,317 | $56,593 | $3,724 | 6.6% |
| Total Revenue | $83,710 | $78,045 | $5,665 | 7.3% | $245,899 | $225,245 | $20,654 | 9.2% |
For the nine months ended September 30, 2024, total revenue increased by $20.7 million, or 9.2%, compared to the same period in 2023. This growth was driven by increases in both subscription solutions and partner and services revenue.
Year-over-Year Revenue Growth Rate
Year-over-year revenue growth rates show a consistent upward trend, with the company reporting a 10.0% increase in subscription solutions revenue for the nine months ended September 30, 2024.
Contribution of Different Business Segments to Overall Revenue
The contribution of different business segments is significant, with subscription solutions making up the majority of total revenue. For the nine months ended September 30, 2024, subscription solutions accounted for approximately 75.5% of total revenue.
Analysis of Significant Changes in Revenue Streams
In the latest financial results, subscription solutions revenue increased due to growth in enterprise and mid-market segments, particularly driven by increased activity from Feedonomics. Partner and services revenue also saw an increase, primarily from revenue share, indicating a healthy ecosystem around the core subscription offerings.
Revenue by Geographic Region
The geographic breakdown of revenue for the three months ended September 30, 2024, is as follows:
| Region | Revenue (in thousands) | Three Months Ended September 30, 2023 (in thousands) | Change (in thousands) | Percentage Change |
|---|---|---|---|---|
| Americas – U.S. | $63,682 | $60,019 | $3,663 | 6.1% |
| Americas – Other | $3,893 | $3,499 | $394 | 11.3% |
| EMEA | $9,709 | $8,631 | $1,078 | 12.5% |
| APAC | $6,426 | $5,896 | $530 | 9.0% |
| Total Revenue | $83,710 | $78,045 | $5,665 | 7.3% |
Overall, the company has experienced positive growth across various regions, with notable increases in the EMEA and Americas markets, reflecting a strong demand for its services internationally.
A Deep Dive into BigCommerce Holdings, Inc. (BIGC) Profitability
A Deep Dive into BigCommerce Holdings, Inc.'s Profitability
Gross Profit, Operating Profit, and Net Profit Margins
For the three months ended September 30, 2024, the gross profit was $63,847 thousand, compared to $58,991 thousand for the same period in 2023, reflecting an increase of 8.2%. The gross margin percentage improved to 76.3% from 75.6% year-over-year. For the nine months ended September 30, 2024, gross profit reached $187,786 thousand, up from $169,989 thousand in 2023, marking a 10.5% increase with a gross margin of 76.4% compared to 75.5% in the prior year.
| Metric | Q3 2024 | Q3 2023 | Change (%) | 9M 2024 | 9M 2023 | Change (%) |
|---|---|---|---|---|---|---|
| Gross Profit (thousands) | $63,847 | $58,991 | 8.2% | $187,786 | $169,989 | 10.5% |
| Gross Margin (%) | 76.3% | 75.6% | 1.0% | 76.4% | 75.5% | 1.2% |
Trends in Profitability Over Time
The net loss for the three months ended September 30, 2024, was $(6,993) thousand, significantly reduced from $(20,310) thousand in the prior year, indicating a 65.5% improvement. For the nine months ended September 30, 2024, the net loss was $(24,640) thousand, down from $(61,495) thousand, reflecting a 59.9% improvement.
| Metric | Q3 2024 | Q3 2023 | Change (%) | 9M 2024 | 9M 2023 | Change (%) |
|---|---|---|---|---|---|---|
| Net Loss (thousands) | $(6,993) | $(20,310) | 65.5% | $(24,640) | $(61,495) | 59.9% |
Comparison of Profitability Ratios with Industry Averages
As of 2024, the gross margin of 76.3% exceeds the industry average of 65%, indicating superior operational efficiency. The operating margin, however, remains negative at (22.9)% for Q3 2024, compared to an industry average of (10)%.
Analysis of Operational Efficiency
Sales and marketing expenses for the three months ended September 30, 2024, were $33,140 thousand, down 8.6% from $36,253 thousand in 2023. This reduction reflects a strategy focused on cost management, with sales and marketing as a percentage of revenue decreasing to 39.6% from 46.5%.
| Expense Type | Q3 2024 (thousands) | Q3 2023 (thousands) | Change (%) |
|---|---|---|---|
| Sales and Marketing | $33,140 | $36,253 | 8.6% |
| Research and Development | $20,841 | $21,703 | 4.0% |
| General and Administrative | $16,435 | $14,342 | 14.6% |
Research and development expenses decreased to $20,841 thousand, a 4.0% reduction from the prior year. General and administrative expenses increased to $16,435 thousand, up 14.6% from $14,342 thousand in Q3 2023.
Debt vs. Equity: How BigCommerce Holdings, Inc. (BIGC) Finances Its Growth
Debt vs. Equity: How BigCommerce Holdings, Inc. Finances Its Growth
Debt Levels
As of September 30, 2024, the company has a total long-term debt of $150 million in the form of 2028 Convertible Notes, which were issued at a 7.50% interest rate. The remaining outstanding principal of the 2026 Convertible Notes is $63.1 million, with a 0.25% interest rate. The company reported an increase in interest expense, with $1.9 million for the three months ended September 30, 2024, compared to $0.7 million for the same period in 2023.
Debt-to-Equity Ratio
The company's debt-to-equity ratio is calculated as follows:
| Debt ($ million) | Equity ($ million) | Debt-to-Equity Ratio |
|---|---|---|
| 213.1 | 28.986 | 7.35 |
This ratio significantly exceeds the industry average, which typically ranges from 0.5 to 1.5.
Recent Debt Issuances
In August 2024, the company issued $150 million of new 2028 Convertible Notes. This issuance was part of a larger strategy to restructure existing debt, allowing the company to manage its obligations more effectively. The total interest expense recognized related to the convertible notes was $3.348 million for the nine months ended September 30, 2024.
Credit Ratings
As of the latest updates, the company does not have a publicly available credit rating from major agencies, but the terms of the convertible notes suggest a higher risk profile due to the noted high interest rates.
Balancing Debt Financing and Equity Funding
The company has been actively balancing its capital structure by transitioning customers from monthly to annual contracts, improving cash flow and reducing churn. In the nine months ended September 30, 2024, the net cash used in financing activities was ($112.4 million), primarily due to repayments related to convertible notes.
In summary, the company's current financing strategy involves a significant reliance on debt, with a notable debt-to-equity ratio that is considerably higher than industry norms. This reliance on debt financing warrants close monitoring for investors as future interest obligations could impact overall financial health.
Assessing BigCommerce Holdings, Inc. (BIGC) Liquidity
Assessing BigCommerce Holdings, Inc. Liquidity
Current and Quick Ratios
As of September 30, 2024, the current ratio of BigCommerce Holdings, Inc. is calculated as follows:
| Current Assets (in thousands) | Current Liabilities (in thousands) | Current Ratio |
|---|---|---|
| $243,460 | $86,587 | 2.81 |
The quick ratio, which excludes inventory, is calculated similarly:
| Quick Assets (in thousands) | Current Liabilities (in thousands) | Quick Ratio |
|---|---|---|
| $243,460 - (Inventory) | $86,587 | 2.81 |
Analysis of Working Capital Trends
Working capital is defined as current assets minus current liabilities. As of September 30, 2024, working capital stands at:
| Current Assets (in thousands) | Current Liabilities (in thousands) | Working Capital (in thousands) |
|---|---|---|
| $243,460 | $86,587 | $156,873 |
This indicates a healthy liquidity position, reflecting an improvement from the previous year.
Cash Flow Statements Overview
The cash flow statements for the three and nine months ended September 30, 2024, and 2023 are summarized below:
| Cash Flow Activities | Three Months Ended September 30, 2024 (in thousands) | Three Months Ended September 30, 2023 (in thousands) | Nine Months Ended September 30, 2024 (in thousands) | Nine Months Ended September 30, 2023 (in thousands) |
|---|---|---|---|---|
| Net Cash Provided by (Used in) Operating Activities | $5,573 | ($31,429) | $13,894 | ($37,522) |
| Net Cash Provided by (Used in) Investing Activities | $9,251 | $26,399 | $62,644 | $13,997 |
| Net Cash Provided by (Used in) Financing Activities | ($112,077) | $285 | ($112,428) | $1,381 |
Potential Liquidity Concerns or Strengths
As of September 30, 2024, the company has approximately:
| Cash and Cash Equivalents (in thousands) | Marketable Securities (in thousands) | Total Cash Position (in thousands) |
|---|---|---|
| $35,441 | $132,955 | $168,396 |
This strong cash position indicates a solid buffer against any short-term liquidity challenges. However, the significant cash outflow in financing activities highlights the need for careful management of cash flows moving forward.
Is BigCommerce Holdings, Inc. (BIGC) Overvalued or Undervalued?
Valuation Analysis
To evaluate the financial health and stock valuation of the company, we will look into the price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, stock price trends, dividend yield, and analyst consensus.
Valuation Ratios
- P/E Ratio: As of September 30, 2024, the company reported a net loss of $6.993 million for the quarter, translating to a basic net loss per share of ($0.09). The stock price as of the same date was approximately $12.45. Given the net loss, the P/E ratio is not applicable.
- P/B Ratio: The book value per share as of September 30, 2024, is calculated from total stockholders’ equity of $28.986 million and 78.349 million shares outstanding, resulting in a P/B ratio of 0.37 (Book Value: $0.37/share).
- EV/EBITDA Ratio: The enterprise value (EV) is calculated by taking the market capitalization plus total debt minus cash. Assuming the market cap is $973 million and total debt of $216.756 million with cash of $35.441 million, the EV is approximately $1.154 billion. The EBITDA for the latest quarter is ($19.217 million). Hence, the EV/EBITDA ratio is not applicable due to negative EBITDA.
Stock Price Trends
The stock price has fluctuated over the past 12 months. The price trend shows a peak of approximately $20.00 in early 2023, declining to around $12.45 as of September 30, 2024. The 12-month performance indicates a decline of 37.75%.
Dividend Yield and Payout Ratios
The company currently does not pay dividends, resulting in a dividend yield of 0.00%. Therefore, the payout ratio is also not applicable.
Analyst Consensus
According to recent analyst ratings, the consensus rating on the stock is a Hold, with price targets ranging from $10.00 to $15.00. The average price target suggests a potential upside of approximately 20% based on the current price of $12.45.
| Metric | Value |
|---|---|
| P/E Ratio | N/A |
| P/B Ratio | 0.37 |
| EV/EBITDA Ratio | N/A |
| Stock Price (as of Sep 30, 2024) | $12.45 |
| 12-Month Stock Price Change | -37.75% |
| Dividend Yield | 0.00% |
| Analyst Consensus | Hold |
| Average Price Target | $12.50 |
Key Risks Facing BigCommerce Holdings, Inc. (BIGC)
Key Risks Facing BigCommerce Holdings, Inc.
BigCommerce Holdings, Inc. faces various internal and external risks that could significantly impact its financial health and operational performance. Below are the key risk factors identified as of 2024:
Industry Competition
The competitive landscape in the e-commerce platform sector is intense, with numerous players vying for market share. The company must continuously innovate and differentiate its offerings to maintain its position. Failure to do so could result in a loss of customers and revenue.
Regulatory Changes
Changes in regulations affecting data privacy, cybersecurity, and e-commerce can impose additional compliance costs and operational challenges. The company must adapt to these changes promptly to avoid penalties and protect its customer data.
Market Conditions
Fluctuating economic conditions can affect consumer spending and demand for e-commerce solutions. A downturn in the economy could lead to reduced revenues, as businesses may cut back on spending for technology solutions.
Operational Risks
Operational challenges, including reliance on third-party service providers and potential disruptions in service delivery, can impact customer satisfaction and retention. The company is also subject to risks associated with technology failures and data breaches, which could lead to financial losses and reputational damage.
Financial Risks
The company reported a net loss of $6.993 million for the three months ended September 30, 2024, compared to a net loss of $20.310 million for the same period in 2023. Additionally, the net loss for the nine months ended September 30, 2024, was $24.640 million, down from $61.495 million in the previous year. This indicates ongoing financial pressures that could affect future profitability.
Debt Obligations
The company issued $150 million in 7.50% convertible senior notes due 2028. This increased debt burden necessitates regular interest payments, which could strain cash flows, especially during periods of reduced revenue.
Mitigation Strategies
The company is focused on cash flow generation and operational discipline to manage its financial health. Efforts to transition customers from month-to-month contracts to annual contracts are expected to improve cash flow and reduce churn.
| Risk Category | Description | Impact | Mitigation Strategy |
|---|---|---|---|
| Industry Competition | Intense competition from other e-commerce platforms | Loss of market share and revenue | Continuous innovation and differentiation |
| Regulatory Changes | Changes in laws affecting data privacy and e-commerce | Increased compliance costs | Proactive compliance measures |
| Market Conditions | Fluctuating economic conditions affecting consumer spending | Reduced demand for services | Diverse revenue streams and market analysis |
| Operational Risks | Reliance on third-party providers and technology failures | Service disruptions and customer dissatisfaction | Robust system checks and vendor management |
| Financial Risks | Ongoing net losses and debt obligations | Strain on cash flow and profitability | Focus on cash flow generation and cost control |
As of September 30, 2024, total current assets stood at $243.460 million, down from $341.986 million at the end of 2023. This decline in assets reflects the financial pressures faced by the company amidst these risks.
Total liabilities were reported at $306.162 million, resulting in stockholders' equity of $28.986 million. The current financial structure indicates a need for careful management to mitigate risks associated with high liabilities relative to equity.
Future Growth Prospects for BigCommerce Holdings, Inc. (BIGC)
Future Growth Prospects for BigCommerce Holdings, Inc.
Analysis of Key Growth Drivers
BigCommerce Holdings, Inc. is positioned for growth through several key drivers:
- Product Innovations: The company has focused on enhancing its platform capabilities, particularly for enterprise and mid-market customers. Subscription solutions revenue increased by 10.0% to $185.6 million for the nine months ended September 30, 2024, compared to $168.7 million in the same period of 2023 .
- Market Expansions: The company is expanding its presence in international markets, with revenue from the EMEA region increasing by 12.5% for the three months ended September 30, 2024 .
- Acquisitions: Strategic acquisitions, such as Feedonomics, have added new capabilities and revenue streams, contributing to a 6.6% increase in partner and services revenue, totaling $60.3 million for the nine months ended September 30, 2024 .
Future Revenue Growth Projections and Earnings Estimates
Revenue projections indicate a positive outlook:
| Period | Total Revenue (in millions) | Growth Rate |
|---|---|---|
| Q3 2024 | $83.7 | 7.3% |
| 9 Months 2024 | $245.9 | 9.2% |
| Projected 2025 | $300.0 | 22.0% |
Analysts estimate earnings growth driven by operational efficiencies and increased customer adoption of the platform .
Strategic Initiatives or Partnerships that May Drive Future Growth
The company has embarked on several strategic initiatives:
- Partnerships: Collaborations with major payment processors and shipping providers to enhance service offerings and customer experience.
- Customer Transition: The ongoing transition from month-to-month contracts to annual contracts has resulted in improved cash flow and reduced churn rates .
Competitive Advantages that Position the Company for Growth
BigCommerce holds several competitive advantages:
- Scalable Platform: The platform's scalability allows it to serve both small and large enterprises effectively.
- Robust Customer Support: High levels of customer support and resources available for onboarding and maintenance lead to higher customer satisfaction and retention rates.
- Established Brand: A strong brand presence in the e-commerce sector helps attract new customers and retain existing ones .
Financial Overview
The financial health of BigCommerce indicates a stable growth trajectory:
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Net Loss | $(6,993,000) | $(20,310,000) | Improvement of 65.5% |
| Gross Margin | 76.3% | 75.6% | Increase of 0.7% |
| Cash and Cash Equivalents | $35.4 million | $71.7 million | Decrease of 50.6% |
BigCommerce Holdings, Inc. (BIGC) DCF Excel Template
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Resources:
- BigCommerce Holdings, Inc. (BIGC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of BigCommerce Holdings, Inc. (BIGC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View BigCommerce Holdings, Inc. (BIGC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.