I’ve said this for a long time. In a world where Shopify does not exist, BigCommerce would be a fine offering. Unfortunately for BigCommerce, we do not live in that world.

Despite its Enterprise messaging… in previous years, it has not been Enterprise enough to take share from Salesforce. Instead, the company has focused on scooping up Magento refugees, which in retrospect feels like a miss.

And despite the company’s SMB roots, it has not captured entrepreneur’s imagination like Shopify, and has focused all its attention up-market.

The one area where BigCommerce has solid (and growing) market presence is in small to mid-sized B2B manufacturers and distributors who are not really interested in B2C. This is an area which has been totally inaccessible to Shopify, and likely will be for at least a little bit, given their focus. Even here, however, Salesforce is the leader above their segment, and the company truly needs to be purchased by someone like a Hubspot (in a similar manner to Salesforce purchased Demandware and CloudCraze) in order to have a more complete B2B offering. That or go in the other direction of an ERP, which would point to an Oracle Netsuite acquisition.

In this environment, however, PE is the most likely outcome.

2023 Q1 Results:

* ARR grew 12% (Enteprrise: 14%) y/y to $331M (compared to 13% Q1), flat/slight deceleration quarter over quarter [Shopify is growing 3x faster]

* Enterprise is 71% of ARR, off slightly from previous 72%. Enterprise ARPA up 5% to ~$40k, again declerating from its previous 11% growth, another worrying sign.

* Revenue grew 11% y/y to $75M, compared to a Q1 growth rate of 9%.

* The company operating at a -25% net loss (-$19M compared to $75M revenue). The culprit is 28% of revenue spent on R&D (Shopify at 38%) and 47% of revenue spent on Sales & Marketing (Shopify at 19%). This is BigCommerce’s core dilemma: Shopify can afford to innovate more, and spend less to acquire customers than BigCommerce.

Not a formula for long-term BigCommerce success.

Commentary:

* I would like to see Bigcommerce Enterprise ARR growing at least in the 15-20% range to keep up with other platforms. They are losing ground in the replatform wave. Enterprise ARR deceleration feels like attrition up-market - not a great sign for the company.

* Positive recent hiring of Stephen Chung as President. Next CEO of BigCommerce, even if BigCommerce stays independent? If I’m Brent, I may not have been satisfied with my succession plan and deceleration.

* Certainly Shopify’s recent acquisition (?) of Codisto is a feather in BigCommerce’s cap regarding its previous purchase of Feedonomics. That said, feed management tends to be a commodity relative to financial and payment-oriented offerings -- meaning it's hard to get EBIT leverage from it.