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What changed in Commerce.com, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Commerce.com, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+370 added−344 removedSource: 10-K (2025-02-27) vs 10-K (2024-02-29)

Top changes in Commerce.com, Inc.'s 2024 10-K

370 paragraphs added · 344 removed · 234 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeCulture and values Our culture is built on our corporate values: Customers First, Team on a Mission, Think Big, Act with Integrity, and Make a Difference Every Day. Together our values and caring culture create an atmosphere that enables us to successfully recruit and retain 4 Table of Contents talented and passionate team members.
Biggest changeNone of our employees are represented by a labor union or covered by collective bargaining agreements, and we have not experienced any work stoppages. 5 Table of Contents Culture and values Our culture is built on our corporate values: Customers First, Team on a Mission, Think Big, Act with Integrity, and Make a Difference Every Day.
B2B sellers are embracing digital transformation in pursuit of both efficiency and sales effectiveness, in response to business buyers whose user experience expectations have been reshaped by B2C shopping. 3 Table of Contents Technology, infrastructure and operations We have designed our platform with enterprise-grade security, reliability, and scalability as top priorities.
B2B sellers are embracing digital transformation in pursuit of both efficiency and sales effectiveness, in response to business buyers whose user experience expectations have been reshaped by B2C shopping. 4 Table of Contents Technology, infrastructure and operations We have designed our platform with enterprise-grade security, reliability, and scalability as top priorities.
Our platform is built using best-of-breed open source technologies, deployed across geographically-distributed data centers. Our platform is subject to a rigorous set of security standards designed to ensure the security of customer data. Our customers We serve customers across a range of sizes, geographies, and lines of business including B2C, B2B, and DNBs.
Our platform is built using best-of-breed open source technologies, deployed across geographically-distributed data centers. Our platform is subject to a rigorous set of security standards designed to ensure the security of customer data. Our customers We serve customers across a range of sizes, geographies, and lines of business including B2C, B2B, and SBs.
We intend to use our investor relations website as a means of disclosing information about our business, our financial condition and results of operations and other matters and for complying with our disclosure obligations under Regulation FD. The information we post on our investor relations 5 Table of Contents website, including information contained in investor presentations, may be deemed material.
We intend to use our investor relations website as a means of disclosing information about our business, our financial condition and results of operations and other matters and for complying with our disclosure obligations under Regulation FD. The information we post on our investor relations website, including information contained in investor presentations, may be deemed material.
In addition, the SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. Investors and others should note that we announce material financial information to our investors using our investor relations website (investors.bigcommerce.com), SEC filings, press releases, public conference calls and webcasts.
In addition, the SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. 6 Table of Contents Investors and others should note that we announce material financial information to our investors using our investor relations website (investors.bigcommerce.com), SEC filings, press releases, public conference calls and webcasts.
We strategically partner with, rather than compete against, the leading providers in adjacent categories, including payments, shipping, POS, CMS, customer relationship management (“CRM”), enterprise resource planning (“ERP”), and omnichannel. Our partner-centric strategy stands in contrast to our largest competitors, which operate complex software stacks that compete across categories.
We strategically partner with, rather than compete against, the leading providers in adjacent categories, including payments, shipping, point of sale (“POS”), content management systems (“CMS”), customer relationship management (“CRM”), enterprise resource planning (“ERP”), and omnichannel. Our partner-centric strategy stands in contrast to our largest competitors, which operate complex software stacks that compete across categories.
We have a local presence in a number of key markets, including the Netherlands, France, Italy, Germany, Spain and Mexico, the Nordic region, South America, and additional DACH countries. Competition Our industry is highly competitive and we compete on the principal competitive factors in our market.
We have a local presence in a number of key markets, including the Netherlands, France, Italy, Germany, Spain and Mexico, the Nordic region, Austria, and Switzerland. Competition Our industry is highly competitive and we compete on the principal competitive factors in our market.
Our platform continues to enable customers to self-serve globally, including in regions in which we may lack a local business presence, such as parts of Latin America, Africa, and the Middle East.
Our APAC presence has experienced a 7 percent revenue growth for the years ended December 31, 2024 and 2023. Our platform continues to enable customers to self-serve globally, including in regions in which we may lack a local business presence, such as parts of Latin America, Africa, and the Middle East.
To facilitate attraction and retention, we strive to make BigCommerce a diverse, inclusive, and safe workplace, with opportunities for our employees to grow and develop in their careers, supported by strong compensation and benefits programs. None of our employees are represented by a labor union or covered by collective bargaining agreements, and we have not experienced any work stoppages.
To facilitate attraction and retention, we strive to make BigCommerce a diverse, inclusive, and safe workplace, with opportunities for our employees to grow and develop in their careers, supported by strong compensation and benefits programs.
Our platform enables businesses to create stores in the consumer-facing language and currency of their choice. For the administrative control panel used by our customers to create and manage their stores, we currently allow our customers to select among a range of languages, including English, Chinese, French, Spanish, Italian, and Ukrainian.
For the administrative control panel used by our customers to create and manage their stores, we currently allow our customers to select among a range of languages, including English, Chinese, French, Spanish, Italian, and Ukrainian. A component of our growth strategy involves the further expansion of our operations and customer base internationally. We maintain our headquarters in Austin, Texas.
Our mission is to power global ecommerce success by delivering the industry’s best and most versatile multi-tenant SaaS platform. This mission inspires our employees, who join BigCommerce to accomplish great things for our customers, partners and each other. We, in turn, commit to helping our employees thrive in an environment that is fun, fast-paced, and challenging.
This mission inspires our employees, who join BigCommerce to accomplish great things for our customers, partners and each other. We, in turn, commit to helping our employees thrive in an environment that is fun, fast-paced, and challenging. Facilities Our worldwide corporate headquarters is located in Austin, Texas.
We are highly dependent on our management, highly-skilled software engineers, and sales personnel, and it is crucial that we continue to attract and retain valuable employees.
We consider our culture and employees to be vital to our success. We have invested substantial time and resources in building our team and culture across all our offices. We are highly dependent on our management, highly-skilled software engineers, and sales personnel, and it is crucial that we continue to attract and retain valuable employees.
Purpose-built for the needs of mid-market and enterprise B2C and B2B brands and retailers, Catalyst is designed to provide a simplified starting point for BigCommerce customers, ecommerce developers and agency partners to easily and quickly build online stores using a composable architecture.
Catalyst provides an exceptional experience out of the box, serving as a simplified starting point for BigCommerce customers, ecommerce developers, and agency partners to easily and quickly build online stores using a composable architecture.
We also rely on contractual arrangements, such as license, assignment, and confidentiality agreements, and technical measures. We have two issued patents in the United States, which expire February 10, 2035, and March 20, 2036, respectively. We have been issued federal registrations for trademarks, including “BigCommerce,” related stylized marks, and “Make It Big” and have multiple pending trademark applications.
Intellectual property We rely on a combination of trade secret, trademark, copyright, patent, and other intellectual property laws to protect our intellectual property. We also rely on contractual arrangements, such as license, assignment, and confidentiality agreements, and technical measures. We have two issued patents in the United States, which expire February 10, 2035, and March 20, 2036, respectively.
A component of our growth strategy involves the further expansion of our operations and customer base internationally. We maintain our headquarters in Austin, Texas. Approximately 70 percent of our employees are located in the United States, as of December 31, 2023. We were originally founded in Sydney, Australia.
Approximately 70 percent of our employees are located in the United States, as of December 31, 2024. We were originally founded in Sydney, Australia. EMEA has experienced revenue growth of 10 percent and 25 percent for the years ended December 31, 2024 and 2023, respectively.
This ambiguity includes topics such as data privacy and security, pricing, advertising, taxation, content regulation, and intellectual property ownership and infringement.
For example, we occasionally cannot be certain which laws will be deemed applicable to us given the global nature of our business. This ambiguity includes topics such as data privacy and security, pricing, advertising, taxation, content regulation, and intellectual property ownership and infringement.
Catalyst helps increase the pace of development without sacrificing quality, with fully customizable storefront components and a streamlined GraphQL API client optimized for the latest version of Next.js and React Server Components. Partners are essential to our open strategy. We believe we possess one of the deepest and broadest ecosystems of integrated technology solutions in the ecommerce industry.
Catalyst accelerates development without sacrificing quality, with fully customizable storefront components and a streamlined GraphQL API client optimized for the latest version of Next.js and React Server Components. Catalyst’s flexible, modern framework offers near limitless possibilities to build a best-in-class technology stack.
Additionally, new product introductions can significantly impact revenue, product costs and operating expenses. However, neither historical seasonal patterns nor historical patterns of product introductions should be considered reliable indicators of our future pattern of product introductions, future revenue or financial performance.
However, neither historical seasonal patterns nor historical patterns of product introductions should be considered reliable indicators of our future pattern of product introductions, future revenue or financial performance. Regulatory considerations The legal environment of internet-based businesses, both in the United States and internationally, is evolving rapidly and is often unclear.
That openness has led us to be the second MACH Alliance ecommerce platform vendor. MACH is a not-for-profit industry body that advocates for open and best-of-breed enterprise technology ecosystems and is an industry tech standard describing modern technology. The prerequisites to achieve this standard are: Microservices based, API-first, Cloud-native SaaS and Headless.
Our platform-wide APIs have also resulted in BigCommerce becoming a MACH Alliance ecommerce platform vendor. MACH is a non-profit industry body advocating for open and best-of-breed enterprise technology ecosystems, setting industry standards for modern technology. The prerequisites for this standard include being: microservices-based, API-first, cloud-native SaaS, and headless, the practice of decoupling the front-end external-facing website from the back-end technology.
We believe no other SaaS platform offers comparable enterprise functionality and flexibility at our price point — an advantage increasingly recognized by the world’s most respected technology analysts. We have also introduced Catalyst, our next generation storefront technology, for developers and agency partners.
We lower the financial and operating cost of ecommerce by providing world-class technology as a service, including product, hosting, security, bug fixing, and continuous innovation. We believe no other SaaS platform offers comparable enterprise functionality and flexibility at our price point—an advantage increasingly recognized by the most respected technology analysts.
We hold domestic and international domain names that include “BigCommerce” and similar variations. Employees and human capital resources As of December 31, 2023, we had 1,321 full-time employees, including 393 in cost of sales, 359 in research and development, 369 in sales and marketing and 200 in general and administrative.
Employees and human capital resources As of December 31, 2024, we had 1,161 full-time employees, including 351 in cost of sales, 331 in research and development, 291 in sales and marketing and 188 in general and administrative. Of these employees, 785 are in the United States and 376 are in our international locations.
We believe our current facilities are suitable for the composition of our staff, and additional space is available as needed to accommodate any such expansion of our operations. Seasonality We have historically experienced higher revenue in our fourth quarter compared to other quarters in our fiscal year due in part to seasonal holiday demand.
We also have office locations across the United States and globally, including San Francisco, California; Atlanta, Georgia; and Sydney, Australia. We believe our current facilities are suitable for the composition of our staff, and additional space is available as needed to accommodate any such expansion of our operations.
We distinguish markets based on annual gross merchandise volume (“GMV”) per site, specifically: SMB ($0 to $1 million), mid-market ($1 million to $50 million), and enterprise (greater than $50 million). One individual customer represented more than 5 percent of our total revenue for the year ended December 31, 2023. International presence We serve customers in more than 150 countries.
We categorize markets based on annual revenue, specifically: SB typically range from $0.5 million to $5.0 million and any business with annual revenue greater than $5.0 million are included within either of our B2B or B2C customer base. One individual customer represented more than 5 percent of our total revenue for the year ended December 31, 2024.
Our team members are our “secret sauce.” Their dedication, talent, and spirit create a virtuous cycle of service, product excellence, and customer satisfaction. We have frequently won “best places to work” public recognition across our largest work centers of Austin, Texas; San Francisco, California; Sydney, Australia; and London, United Kingdom.
Together our values and caring culture create an atmosphere that enables us to successfully recruit and retain talented and passionate team members. Our team members are our “secret sauce.” Their dedication, talent, and spirit create a virtuous cycle of service, product excellence, and customer satisfaction.
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Item 1. Bu siness. Overview BigCommerce is leading a new era of ecommerce. Our software-as-a-service (“SaaS”) platform simplifies the creation of engaging online stores by delivering a unique combination of ease-of-use, enterprise functionality, and flexibility. We power both our customers’ branded ecommerce stores and their cross-channel connections to popular online marketplaces, social networks, and offline point-of-sale (“POS”) systems.
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Item 1. Bu siness. Overview BigCommerce Holdings Inc. ("BigCommerce," the "Company," "us," "we", or "our") provides professional-grade commerce solutions that give businesses the power and agility to build for today with an eye toward tomorrow.
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BigCommerce empowers businesses to turn digital transformation into a competitive advantage. We allow merchants to build their ecommerce solution their way with the flexibility to fit their unique business and product offerings.
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Our team of brands - BigCommerce, Feedonomics, and Makeswift - work together to empower our customers with flexible commerce capabilities, powerfully connected data, and engaging digital experiences designed to optimize growth. BigCommerce is our flagship commerce platform and services business. Feedonomics is our AI-based product feed management platform. Makeswift is our brand and commerce site builder and visual editor.
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We provide a comprehensive platform for launching and scaling an ecommerce operation, including store design, catalog management, hosting, checkout, order management, reporting, and pre-integrations into best of breed third-party services like payments, shipping and fulfillment, point of sale, marketing, accounting and omnichannel. We offer access to our platform on a subscription basis.
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As businesses scale, they develop unique and complex needs. When businesses outgrow systems built with minimum functionality for basic needs, they turn to BigCommerce for a long-term solution that has the capabilities to help them thrive in the future. We provide our customers with the flexibility to combine the right tools for the right job with a seamless front-and-back-end experience.
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We serve customers with subscription plans tailored to their size and feature needs. For our larger customers, our Enterprise plan offers our full feature set at a price tailored to each business.
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Our industry-leading team of experts partners with our customers to provide the speed and agility needed to grow on their own terms. We strive to provide the best software-as-a-service (“SaaS”) ecommerce platform for forward-thinking brands and retailers at all stages of ecommerce growth.
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For SMBs, BigCommerce Essentials offers three retail plans: Standard, Plus, and Pro, amortized at $29, $79, and $299 per month when pre-paid in full annually, respectively, or $39, $105 and $399 if paid monthly, respectively. Our Essentials plans include GMV thresholds with programmatic upgrades built in as merchants exceed each plan’s threshold.
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Our platform serves customers across a wide variety of sizes, industries, and product categories seeking to differentiate themselves in-market with more tailored commerce experiences. We serve customers that represent an array of B2C and B2B retail sectors, including fashion and apparel, home and garden, sports and outdoors, food and beverage, jewelry, health and beauty, automotive, industrial, manufacturing, and more.
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We target the following lines of business: • enterprise, which we define as sites with annual online sales over $50 million, • the mid-market, which we define as sites with annual online sales between $1 million and $50 million, and • small businesses (“SMBs”), which we define as sites with annual online sales less than $1 million.
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Our customers sell across channels from online and offline stores to social media platforms to digital marketplaces and countless combinations, connecting with consumers around the world.
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We serve these lines of business with a platform offering enterprise-grade functionality, openness and performance capabilities with friendly simplicity and ease-of-use. Our platform is the result of a multi-year investment in platform transformation. In every important component of our platform, we have added advanced functionality and openness using application programming interface (“API”) endpoints.
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We have organized our product and service solutions into the following core offerings designed to best serve our customer base: • Business-to-consumer ("B2C") • Business-to-business ("B2B") • Small businesses ("SB") Our B2C audience includes branded manufacturers, multi-brand online retailers, and store-based retailers.
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We strive to provide the world’s best SaaS ecommerce platform for all types of customers at all stages of their ecommerce growth. Our platform serves customers across a wide variety of sizes, product categories, and purchase types, including business-to-consumer (“B2C”) and business-to-business (“B2B”) and Hybrid (B2B-B2C).
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We serve this category of business with a platform offering enterprise-grade functionality, openness, and performance capabilities, allowing B2Cs the flexibility to modernize and customize at a lower total cost of ownership (“TCO”) than competitors. Our powerful storefront speed, open partner ecosystem, multi-brand/international capabilities, and robust security make BigCommerce an ideal fit for this group.
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For enterprise and mid-market, we believe our platform combines three elements not typically offered together: • Multi-tenant SaaS. The speed, ease-of-use, high-performance, and continuously-updated benefits associated with multi-tenant SaaS. • Enterprise functionality. Enterprise-grade functionality capable of supporting sophisticated use cases and significant sales volumes. • Open SaaS.
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We cater to a range of B2B businesses, including manufacturers, distributors, wholesalers, professional services, and hybrid B2B/B2C sellers. We support this group with a platform offering anchored on improved operational efficiency and customer experience through digital transformation.
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Platform-wide APIs that enable businesses to customize their sites and integrate with external applications and services. We believe this powerful combination makes ecommerce success at scale more economically and operationally achievable than ever before. We have become a leader in both branded-site and omnichannel, or cross-channel commerce.
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With its advanced B2B functionality and flexibility, BigCommerce is equipped to serve complex B2B use cases, whether businesses are new to online selling, seeking to scale, or looking to expand into new markets and channels. Small businesses using BigCommerce are growth-oriented B2C and B2B businesses typically ranging from $0.5 million to $5.0 million in total annual revenue.
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Cross-channel commerce involves the integration of a customer’s commerce capabilities with other sites—online and offline—where consumers and businesses make their purchases. We offer free, direct integrations with leading social networks such as Facebook and Instagram, search engines such as Google, online marketplaces such as Amazon and eBay, and POS platforms such as Square.
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We serve the SB market by providing commerce capabilities that meet their changing needs and increasingly complex use cases as they grow and scale up-market. We serve these lines of business with professional-grade commerce solutions, high-touch experiences and seamless integration, providing dependable, customizable, and scalable tools that drive growth and enable business agility.
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A dynamic and growing cross-channel category is “headless commerce” which refers to the integration of a back-end commerce platform like ours with a front-end user experience separately created in a content management system (“CMS”) or design framework. The most dynamic and interactive online user experiences are often created using these tools.
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With a synergistic combination of flexible platform capabilities, powerfully connected data, and visually captivating customer experiences, our BigCommerce, Feedonomics, and Makeswift technologies work together to help businesses transform commerce operations, elevate customer experiences, and optimize revenue across all channels.
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We integrate seamlessly with the leading CMSs, digital experience platforms, design frameworks and custom front ends. Additionally, we see “Composable Commerce” as another growing technology opportunity for Enterprise ecommerce. Our composable SaaS platform delivers superior financial performance and competitive advantage.
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Our mission is to empower businesses to sell more everywhere with our portfolio of brands: • BigCommerce’s flexible, enterprise-grade SaaS ecommerce platform offers an open application programming interface ("API") architecture that allows users to integrate with their chosen tools for a best-of-breed technology stack, enabling them to transform operations and create differentiated online experiences. • Feedonomics syndicates product data feeds to hundreds of digital channels, including many of today’s foremost advertising and marketplace channels, such as Alphabet, Amazon, Meta, Walmart, Target and more.
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Our commitment to composable commerce, which lets customers adapt our platform and integrated applications to their specific needs, appeals to businesses seeking the most modern approach to technology. We lower the financial and operating cost of ecommerce by providing world-class 2 Table of Contents technology as a service, including product, hosting, security, bug fixing and continuous innovation.
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With real-time inventory and order syncing, Feedonomics technology enables businesses to harmonize, optimize, and connect product data across all channels, everywhere their customers shop. 3 Table of Contents • Makeswift helps teams build and manage websites using a visual-first, composable stack.
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We focus our research and development investments in our core product to create a best-of-breed ecommerce platform. We believe this strategy has four advantages: • Core product focus. We can create the industry’s best ecommerce platform and innovate faster than our competition by focusing development on a single core product. • Best-of-breed choice.
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With its intuitive visual design tools, technical and non-technical users can quickly and easily craft more engaging digital experiences and go to market faster. We view composable commerce as both inherent and integral to our portfolio of commerce products.
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We offer our customers the choice of best-of-breed, tightly integrated solutions across verticals. • Cooperative marketing and sales. We co-market and co-sell with our strategic technology partners in each category. • High gross margins. We earn high-margin revenue share from a subset of our strategic technology partners. This complements the high gross margin of our core ecommerce platform.
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Our commitment to composable commerce is reinforced by our open API architecture, enabling customers to leverage best-of-breed technologies and emerging innovations, such as AI, within a flexible, business-friendly framework. We believe our sophisticated functionality and composable SaaS platform make ecommerce success at scale more economically and operationally achievable than the competition.
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Our omnichannel offering helps customers advertise and sell successfully through more channels than they could on competitive platforms. We made remarkable progress following our 2021 acquisition of Feedonomics, the industry’s best solution for managing product catalog integrations at scale through more than 100 of the world’s foremost search, advertising, social network and marketplace channels.
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Catalyst, our modern storefront framework, simplifies composable commerce with its pre-integrated front-end and intuitive visual editor, Makeswift. Built with both marketers and developers in mind, Catalyst enables teams to quickly create and optimize storefronts with newfound freedom and speed while minimizing technical debt.
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Feedonomics features both superior integrations and industry-leading tools for optimizing product feeds to achieve maximum organic performance and return-on-ad-spend. Major channels enabled include Amazon, Facebook/Instagram, Google, Mercado Libre, Microsoft, Target+, TikTok, and Walmart. Commerce-as-a-Service, “CaaS” describes our ability to enable partners to create and sell customized commerce solutions powered by our platform technology.
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With Catalyst, BigCommerce customers can: • Launch a fully optimized storefront in just one click, streamline workflows, and go to market faster; • Build, preview, and publish pages without depending on developers; • Seamlessly integrate with BigCommerce’s APIs and composable ecosystem; and • Access BigCommerce’s core capabilities and industry-leading functionality.
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We aim to leverage our Open SaaS platform to empower our ecosystem, not compete with its constituents. Through Commerce-as-a-Service, our partners can combine the power of our platform with their unique use cases and competitive offerings to create comprehensive solutions for their target markets. Our business has achieved significant growth in recent years.
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BigCommerce customers can leverage pre-built integrations to save time, streamline connections with industry-leading vendors, and optimize strategies with new hosting, search, and content management solutions. Catalyst also allows for rapid innovation by enabling front-end changes without altering the back-end.
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We had total revenue of $309.4 million, $279.1 million and $219.9 million for the years ended December 31, 2023, 2022 and 2021, respectively. We plan to continue to invest in our “Open SaaS” strategy, building new partnerships and continuing to develop a platform that offers best-of-breed functionality with the cost-effectiveness of multi-tenant SaaS.
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Since launching Catalyst functionality in late 2024, our product team continues to optimize this technology with new offerings to broaden our total addressable market in 2025 and beyond. Our vast partner ecosystem is also central to our business strategy. We believe we possess one of the deepest and broadest ecosystems of integrated technology solutions in the ecommerce industry.
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As we work to develop and deliver this platform for our customers, we will also invest in and grow our business by acquiring additional customers to our platform, growing our revenue with existing customers, and expanding our presence in new markets and geographies while maintaining a focus on profitability.
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We focus our research and development investments in our core product with an emphasis on composability, empowering our customers to grow and scale on their terms. We plan to continue to invest in our strategic offerings of B2B, B2C, and SB, as well as building new partnerships and continuing to develop our portfolio of professional-grade commerce solutions for forward-focused businesses.
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We have invested, and intend to continue our disciplined investment strategy, to grow our business by expanding our sales and marketing activities, including increasing the breadth and depth of our agency and technology partner ecosystem, enhancing our platform developments, and scaling our operations to support our existing and growing customer base.
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International presence We serve customers in more than 150 countries. Our platform enables businesses to create stores in the consumer-facing language and currency of their choice.
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Our APAC presence has driven a 7 percent and 9 percent APAC revenue growth for the years ended December 31, 2023 and 2022, respectively. Our London office has contributed to EMEA revenue growth of 25 percent and 34 percent for the years ended December 31, 2023 and 2022, respectively.
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We believe our principal competitive factors in our market are: vision for commerce and product strategy, simplicity and ease of use for merchants and their buyers, integration of multiple sales channels, cost-effective solutions, breadth and depth of functionality, pace of innovation, ability to leverage emerging technologies, including AI, ability to scale, security and reliability, and brand recognition and reputation.
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In mid-market and enterprise, our primary competitors are Magento (an Adobe company), Salesforce Commerce Cloud, Commercetools, and Shopify Plus. In SMB, our primary competitors are Shopify and WooCommerce. Intellectual property We rely on a combination of trade secret, trademark, copyright, patent, and other intellectual property laws to protect our intellectual property.
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We have been issued federal registrations for trademarks, including “BigCommerce,” related stylized marks, and “Make It Big” and have multiple pending trademark applications. We hold domestic and international domain names that include “BigCommerce” and similar variations.
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Of these employees, 934 are in the United States and 387 are in our international locations. We consider our culture and employees to be vital to our success. We have invested substantial time and resources in building our team and culture across all our offices.
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We have frequently won “best places to work” public recognition across our largest work centers of Austin, Texas; Sydney, Australia; and London, United Kingdom. Our mission is to power global ecommerce success by delivering the industry’s best and most versatile multi-tenant SaaS platform.
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Facilities Our worldwide corporate headquarters is located in Austin, Texas. It covers 70,682 square feet pursuant to an operating lease that expires in 2028. We also have office locations across the United States and globally, including San Francisco, Los Angeles, Atlanta, London, UK, Kyiv, Ukraine and Sydney, Australia.
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In September 2024, the Company executed the early lease termination clause for our corporate headquarters in Austin, Texas which will end our lease in October 2025. In January 2025, we executed a sublease agreement in Austin, Texas that will be our corporate headquarters.
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In October 2023, we entered into an agreement to sublease 32,957 rentable square feet in our Austin location which commenced in January 2024. We currently have approximately 7,583 square feet of our Austin headquarters available for sublease.
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Seasonality We have historically experienced higher revenue in our fourth quarter compared to other quarters in our fiscal year due in part to seasonal holiday demand. Additionally, new product introductions can significantly impact revenue, product costs and operating expenses.
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Regulatory considerations The legal environment of internet-based businesses, both in the United States and internationally, is evolving rapidly and is often unclear. For example, we occasionally cannot be certain which laws will be deemed applicable to us given the global nature of our business.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe are subject to risks from geopolitical crises, such as the Russian invasion of Ukraine; • If we fail to adapt and respond effectively to rapidly changing technology, evolving industry standards, and changing customer needs or preferences, our platform may become less competitive; 7 Table of Contents • Changes in subjective assumptions, estimates and judgments by management related to complex accounting matters or changes in accounting principles generally accepted in the United States, could significantly affect our financial condition and results of operations.
Biggest changeWe are subject to risks from geopolitical crises, such as the Russian invasion of Ukraine; • If we fail to adapt and respond effectively to rapidly changing technology, evolving industry standards, and changing customer needs or preferences, our platform may become less competitive; • Changes in subjective assumptions, estimates and judgments by management related to complex accounting matters or changes in accounting principles generally accepted in the United States, could significantly affect our financial condition and results of operations; 8 Table of Contents • Our failure to generate sufficient cash flow from our business to service the interest rate of our 2028 Convertible Notes would adversely affect our business, financial condition and results of operations; • The terms of the indenture (the “2028 Convertible Notes Indenture”) that govern the 2028 Convertible Notes impose restrictions that may limit our current and future operating flexibility, particularly our ability to respond to changes in the economy or our industry or to take certain actions, which could harm our long-term interests; • We have undertaken, and may in the future undertake, restructuring activities that could result in disruptions to our business or otherwise materially harm our results of operations or financial condition; and • Losing key members of our management or operations teams could hinder our ability to attract and retain the necessary talent for continued operations and growth.
Changes in GAAP, these accounting pronouncements or their interpretation or changes in underlying assumptions, estimates, or judgments by our management, the Financial Accounting Standards Board (“FASB”), the SEC, and others could significantly change our reported or expected financial performance, which could impact the market price for our common stock.
GAAP, these accounting pronouncements or their interpretation or changes in underlying assumptions, estimates, or judgments by our management, the Financial Accounting Standards Board (“FASB”), the SEC, and others could significantly change our reported or expected financial performance, which could impact the market price for our common stock.
A component of our growth strategy involves the further expansion of our operations and customer base internationally. In the case of the two most recent fiscal years, approximately 24 percent of our revenue has been generated from customers outside the United States. We currently have locations in the United States, Australia, the United Kingdom (“UK”), and Ukraine.
A component of our growth strategy involves the further expansion of our operations and customer base internationally. In the case of the two most recent fiscal years, approximately 24 percent of our revenue has been generated from customers outside the United States. We currently have locations in the United States, Australia, the United Kingdom, and Ukraine.
If we or our third-party providers fail to protect the security of this information and/or experience a data security incident, our reputation may be harmed and we may be exposed to material financial penalties and legal liability, which could materially adversely affect our business, results of operations, and financial condition; • Increases in cost, interruptions in service, latency, or poor service from our third-party data center providers could impair the delivery of our platform; • If the security of information we possess is compromised or is otherwise accessed without authorization, our reputation may be harmed and we may be exposed to liability and loss of business; • If there are interruptions or performance problems associated with our technology or infrastructure, our customers, partners and prospects may experience service outages, and delays in using our platform; • We have identified a material weakness in our internal controls over financial reporting related to information technology general controls.
If we or our third-party providers fail to protect the security of this information and/or experience a data security incident, our reputation may be harmed and we may be exposed to material financial penalties and legal liability, which could materially adversely affect our business, results of operations, and financial condition; • Increases in cost, interruptions in service, latency, or poor service from our third-party data center providers could impair the delivery of our platform; • If the security of information we possess is compromised or is otherwise accessed without authorization, our reputation may be harmed and we may be exposed to liability and loss of business; • If there are interruptions or performance problems associated with our technology or infrastructure, our customers, partners and prospects may experience service outages, and delays in using our platform; • In 2023 we identified a material weakness in our internal controls over financial reporting related to information technology general controls.
Furthermore, there has been significant scrutiny on the use of personal data in artificial intelligence and modeling globally. On April 25, 2023 a joint statement was issued by US federal regulators indicating their intent to enforce the law as it related to AI.
Furthermore, there has been significant scrutiny on the use of personal data in artificial intelligence and modeling globally. In April 2023 a joint statement was issued by US federal regulators indicating their intent to enforce the law as it related to AI.
Failure to comply with the DSA can result in fines of up to 6% of the total annual worldwide turnover and recipients of services have the right to seek compensation from providers in respect of damage or loss suffered due to providers’ infringement of the DSA.
Failure to comply with the DSA can result in fines of up to 6 percent of the total annual worldwide turnover and recipients of services have the right to seek compensation from providers in respect of damage or loss suffered due to providers’ infringement of the DSA.
Additionally, due to the heightened regulatory environment in which they operate, potential customers in these industries may encounter additional difficulties when trying to move away from legacy ecommerce platforms to an open SaaS platform like the one we provide. 22 Table of Contents We may be subject to additional obligations to collect and remit sales tax and other taxes.
Additionally, due to the heightened regulatory environment in which they operate, potential customers in these industries may encounter additional difficulties when trying to move away from legacy ecommerce platforms to an open SaaS platform like the one we provide. 23 Table of Contents We may be subject to additional obligations to collect and remit sales tax and other taxes.
Any material interruptions or failures in our payment related systems could have a material adverse effect on our business, results of operations and financial condition. If there are 11 Table of Contents amendments to PCI-DSS, the cost of compliance could increase and we may suffer loss of critical data and interruptions or delays in our operations as a result.
Any material interruptions or failures in our payment related systems could have a material adverse effect on our business, results of operations and financial condition. If there are 12 Table of Contents amendments to PCI-DSS, the cost of compliance could increase and we may suffer loss of critical data and interruptions or delays in our operations as a result.
We are in the process of expanding our infrastructure capabilities into overseas data centers of Google Cloud Platform. We serve ancillary functions for our customers from third-party data center hosting facilities operated by Amazon Web Services, located in Virginia. Our platform is deployed to multiple data centers within these geographies, with additional geographies available for disaster recovery.
We are in the process of expanding our infrastructure capabilities into overseas data centers of Google Cloud Platform. We serve ancillary functions for our customers from third-party data center hosting facilities operated by Amazon Web Services. Our platform is deployed to multiple data centers within these geographies, with additional geographies available for disaster recovery.
This could result in one-time tax charges, higher effective tax rates, reduced cash flows, and lower overall profitability of our operations. Our financial statements could fail to reflect adequate reserves to cover such a contingency. The Tax Cuts and Jobs Act (“TCJA”) was enacted on December 22, 2017 and significantly reformed the Code.
This could result in one-time tax charges, higher effective tax rates, reduced cash flows, and lower overall profitability of our operations. Our financial statements could fail to reflect adequate reserves to cover such a contingency. The Tax Cuts and Jobs Act (“TCJA”) was enacted in December 2017 and significantly reformed the Code.
As a result of this material weakness, management concluded that our internal control over ITGCs was not effective as of December 31, 2023. As described in Part II, Item 9A, Controls and Procedures, of this Annual Report on Form 10-K, we are implementing additional controls intended to remediate the material weakness.
As a result of this material weakness, management concluded that our internal control over ITGCs was not effective as of December 31, 2024. As described in Part II, Item 9A, Controls and Procedures, of this Annual Report on Form 10-K, we are implementing additional controls intended to remediate the material weakness.
If we or our third-party providers fail to protect the security of this information and/or experience a data security incident, our reputation may 10 Table of Contents be harmed and we may be exposed to material financial penalties and legal liability, which could materially adversely affect our business, results of operations, and financial condition.
If we or our third-party providers fail to protect the security of this information and/or experience a data security incident, our reputation may 11 Table of Contents be harmed and we may be exposed to material financial penalties and legal liability, which could materially adversely affect our business, results of operations, and financial condition.
If we invest substantial time and resources to expand our international operations and are 21 Table of Contents unable to do so successfully, our business and operating results will suffer. We have previously adjusted our pricing levels and may in the future need to reduce or change our pricing model to remain competitive.
If we invest substantial time and resources to expand our international operations and are 22 Table of Contents unable to do so successfully, our business and operating results will suffer. We have previously adjusted our pricing levels and may in the future need to reduce or change our pricing model to remain competitive.
For one or more of those transactions, we may: • issue additional equity securities that would dilute our stockholders; • use cash that we may need in the future to operate our business; • incur debt on terms unfavorable to us or that we are unable to repay; • incur large charges or substantial liabilities; • encounter difficulties retaining key employees of the acquired company or integrating diverse software codes or business cultures; and • become subject to adverse tax consequences, substantial depreciation, or deferred compensation charges.
For one or more of those transactions, we may: • issue additional equity securities that would dilute our stockholders; • use cash that we may need in the future to operate our business; • incur debt on terms unfavorable to us or that we are unable to repay; • incur large charges or substantial liabilities; 17 Table of Contents • encounter difficulties retaining key employees of the acquired company or integrating diverse software codes or business cultures; and • become subject to adverse tax consequences, substantial depreciation, or deferred compensation charges.
If our platform is unavailable or if our customers are unable to access our platform within a reasonable amount of time, our business would 12 Table of Contents be harmed. Any outage on our platform would impair the ability of our customers to engage in ecommerce, which would negatively impact our brand, reputation and customer satisfaction.
If our platform is unavailable or if our customers are unable to access our platform within a reasonable amount of time, our business would 13 Table of Contents be harmed. Any outage on our platform would impair the ability of our customers to engage in ecommerce, which would negatively impact our brand, reputation and customer satisfaction.
The EU GDPR and UK GDPR impose specific requirements for transferring personal information (including allowing remote access) outside the EEA and the UK. We currently rely on the EU-US Data Privacy Framework (“DPF”), the UK Extension to the DPF and 18 Table of Contents the Swiss-US DPF to transfer data from the EEA, UK and Switzerland (respectively) to the U.S.
The EU GDPR and UK GDPR impose specific requirements for transferring personal information (including allowing remote access) outside the EEA and the UK. We currently rely on the EU-US Data Privacy Framework (“DPF”), the UK Extension to the DPF and 19 Table of Contents the Swiss-US DPF to transfer data from the EEA, UK and Switzerland (respectively) to the U.S.
Some of our larger competitors also have substantially broader product lines and market focus and will therefore not be as susceptible to downturns in a particular market. Conditions in our market could change rapidly and significantly as a result of 19 Table of Contents technological advancements, partnering by our competitors, or continuing market consolidation.
Some of our larger competitors also have substantially broader product lines and market focus and will therefore not be as susceptible to downturns in a particular market. Conditions in our market could change rapidly and significantly as a result of 20 Table of Contents technological advancements, partnering by our competitors, or continuing market consolidation.
Furthermore, the recently enacted Inflation Reduction Act introduced, among other changes, a 15 percent corporate minimum tax on certain United States corporations and a 1 percent excise tax on certain stock redemptions by United States corporations. The impact of this tax legislation on holders of our common stock is uncertain and could be adverse.
Furthermore, the recently enacted Inflation Reduction Act introduced, among other changes, a 15 percent corporate minimum tax on certain United States corporations and a one percent excise tax on certain stock redemptions by United States corporations. The impact of this tax legislation on holders of our common stock is uncertain and could be adverse.
As our efforts increasingly focus on enterprise accounts, we may face greater sales, marketing, development and support costs, longer sales cycles and more unpredictability in attracting or retaining enterprise accounts. Our success in this enterprise focus will depend on our ability to effectively transition some existing SMB sales and marketing personnel and resources to enterprise.
As our efforts increasingly focus on enterprise accounts, we may face greater sales, marketing, development and support costs, longer sales cycles and more unpredictability in attracting or retaining enterprise accounts. Our success in this enterprise focus will depend on our ability to effectively transition some existing SB sales and marketing personnel and resources to enterprise.
Additional factors that may influence the length and variability of our sales cycle include: • the effectiveness of our sales force as we hire and train our new salespeople to sell to mid-market and enterprise customers; • the discretionary nature of purchasing and budget cycles and decisions; • the obstacles placed by customers’ procurement process; • economic conditions and other factors impacting customer budgets; • customers’ integration complexity; • customers’ familiarity with SaaS ecommerce solutions; • customers’ evaluation of competing products during the purchasing process; and • evolving customer demands.
Additional factors that may influence the length and variability of our sales cycle include: • the effectiveness of our sales force as we hire and train our new salespeople to sell to customers; • the discretionary nature of purchasing and budget cycles and decisions; • the obstacles placed by customers’ procurement process; • economic conditions and other factors impacting customer budgets; • customers’ integration complexity; • customers’ familiarity with SaaS ecommerce solutions; • customers’ evaluation of competing products during the purchasing process; and • evolving customer demands.
Our business may suffer if it is alleged or determined that our technology infringes the intellectual property rights of others; 6 Table of Contents • We may acquire or invest in companies, which may divert our management’s attention and result in additional dilution to our stockholders.
Our business may suffer if it is alleged or determined that our technology infringes the intellectual property rights of others; 7 Table of Contents • We may acquire or invest in companies, which may divert our management’s attention and result in additional dilution to our stockholders.
If we are unable to generate the necessary cash flow, we may be required to adopt one or more alternatives, such as selling assets or obtaining debt financing or equity capital on terms that 23 Table of Contents may be onerous or highly dilutive.
If we are unable to generate the necessary cash flow, we may be required to adopt one or more alternatives, such as selling assets or obtaining debt financing or equity capital on terms that 24 Table of Contents may be onerous or highly dilutive.
Our increased focus on enterprise accounts may cause near-term variability in our operating results as we attempt to expand our enterprise sales pipeline. We may see a decrease in bookings with SMB merchants as our sales and marketing efforts are increasingly directed toward enterprise opportunities.
Our increased focus on enterprise accounts may cause near-term variability in our operating results as we attempt to expand our enterprise sales pipeline. We may see a decrease in bookings with SB merchants as our sales and marketing efforts are increasingly directed toward enterprise opportunities.
Additionally, on October 30, 2023 the Biden Administration released an Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence, which provided agencies direction on implementation of rule making with regard to AI within their agencies.
Additionally, in October 2023 the Biden Administration released an Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence, which provided agencies direction on implementation of rule making with regard to AI within their agencies.
While we believe that recent pricing changes will prove competitive, in the future, mid-market and enterprise customers may demand substantial price discounts as part of the negotiation of sales contracts. As a result, we may be required or choose to reduce our prices or otherwise change our pricing model, which could adversely affect our business, operating results, and financial condition.
While we believe that recent pricing changes will prove competitive, in the future, customers may demand substantial price discounts as part of the negotiation of sales contracts. As a result, we may be required or choose to reduce our prices or otherwise change our pricing model, which could adversely affect our business, operating results, and financial condition.
Failure to overcome any of these difficulties could negatively affect our results of operations. 20 Table of Contents Our current international operations and future initiatives involve a variety of risks, including: • geopolitical crises, such as the Russian invasion of Ukraine and other escalating global tensions that could lead to disruption, instability and volatility in global markets and industries; • changes in a country’s or region’s political or economic conditions; • the need to adapt and localize our platform for specific countries; • greater difficulty collecting accounts receivable and longer payment cycles; • potential changes in trade relations arising from policy initiatives critical of existing and proposed trade agreements; • unexpected changes in laws, regulatory requirements, taxes, or trade laws; • more stringent regulations relating to privacy and data security and the unauthorized use of, or access to, commercial and personal information, increasingly common around the globe; • differing labor regulations, especially in Europe, where labor laws are generally more advantageous to employees as compared to the United States, including deemed hourly wage and overtime regulations in these locations; • challenges inherent in efficiently managing an increased number of employees over large geographic distances (including in a work-from-home environment), with the need to implement appropriate systems, policies, benefits, and compliance programs; • difficulties in managing a business in new markets with diverse cultures, languages, customs, legal systems, alternative dispute systems, and regulatory systems; • increased travel, real estate, infrastructure, and legal compliance costs associated with international operations; • currency exchange rate fluctuations and the resulting effect on our revenue and expenses, and the cost and risk of entering into hedging transactions if we chose to do so in the future; • limitations on our ability to reinvest earnings from operations in one country to fund the capital needs of our operations in other countries; • laws and business practices favoring local competitors or general preferences for local vendors; • limited or insufficient intellectual property protection or difficulties enforcing our intellectual property; • political instability or terrorist activities; • risks related to global health epidemics, including restrictions on our ability and our customers’ ability to travel, disruptions in our customers’ ability to distribute products, and temporary closures of our customers’ facilities; • exposure to liabilities under anti-corruption and anti-money laundering laws, including the U.S.
Failure to overcome any of these difficulties could negatively affect our results of operations. 21 Table of Contents Our current international operations and future initiatives involve a variety of risks, including: • geopolitical crises, such as the Russian invasion of Ukraine and other escalating global tensions that could lead to disruption, instability and volatility in global markets and industries; • changes in a country’s or region’s political or economic conditions; • the need to adapt and localize our platform for specific countries; • greater difficulty collecting accounts receivable and longer payment cycles; • potential changes in trade relations arising from policy initiatives critical of existing and proposed trade agreements; • unexpected changes in laws, regulatory requirements, taxes, or trade laws; • more stringent regulations relating to privacy and data security and the unauthorized use of, or access to, commercial and personal information, increasingly common around the globe; • differing labor regulations, especially in Europe, where labor laws are generally more advantageous to employees as compared to the United States, including deemed hourly wage and overtime regulations in these locations; • challenges inherent in efficiently managing an increased number of employees over large geographic distances (including in a work-from-home environment), with the need to implement appropriate systems, policies, benefits, and compliance programs; • difficulties in managing a business in new markets with diverse cultures, languages, customs, legal systems, alternative dispute systems, and regulatory systems; • increased travel, real estate, infrastructure, and legal compliance costs associated with international operations; • currency exchange rate fluctuations and the resulting effect on our revenue and expenses, and the cost and risk of entering into hedging transactions if we chose to do so in the future; • limitations on our ability to reinvest earnings from operations in one country to fund the capital needs of our operations in other countries; • laws and business practices favoring local competitors or general preferences for local vendors; • limited or insufficient intellectual property protection or difficulties enforcing our intellectual property; • political instability or terrorist activities; • exposure to liabilities under anti-corruption and anti-money laundering laws, including the U.S.
The accounting method for the Convertible Notes could adversely affect our reported financial condition and results. The accounting method for reflecting the Convertible Notes on our balance sheet, accruing interest expense for the notes and reflecting the underlying shares of our common stock in our reported diluted earnings per share may adversely affect our reported earnings and financial condition.
The accounting method for reflecting the Convertible Notes on our balance sheet, accruing interest expense for the notes and reflecting the underlying shares of our common stock in our reported diluted earnings per share may adversely affect our reported earnings and financial condition.
If it is determined that we have in the past experienced an ownership change, or if we undergo one or more ownership changes as a result of future transactions in our stock, then our ability to utilize NOLs and other pre-change tax attributes could be limited by Sections 382 and 383 of the Code.
If it is determined that we have in the past 18 Table of Contents experienced an ownership change, or if we undergo one or more ownership changes as a result of future transactions in our stock, then our ability to utilize NOLs and other pre-change tax attributes could be limited by Sections 382 and 383 of the Code.
In December 2022 and November 2023, we implemented reductions in force. Any reduction in force may yield unintended consequences and costs, such as attrition beyond the intended reduction in force, the distraction of employees and reduced employee morale, which could, in turn, adversely impact productivity, including through a loss of continuity, loss of accumulated knowledge and/or inefficiency during transitional periods.
In November 2023 and 2024, we implemented reductions in force. Any reduction in force may yield unintended consequences and costs, such as attrition beyond the intended reduction in force, the distraction of employees and reduced employee morale, which could, in turn, adversely impact productivity, including through a loss of continuity, loss of accumulated knowledge and/or inefficiency during transitional periods.
In addition, we or our third-party intermediaries may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities. We can be held liable for corrupt or other illegal activities of these third-party intermediaries, our employees, representatives, contractors, partners, and agents, even if we do not explicitly authorize such activities.
In addition, we or our third-party intermediaries may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities. We 31 Table of Contents can be held liable for corrupt or other illegal activities of these third-party intermediaries, our employees, representatives, contractors, partners, and agents, even if we do not explicitly authorize such activities.
In accordance with ASU 2020-06, the Convertible Notes we issued are reflected as a liability on our balance sheets, with the initial carrying amount equal to the principal amount of the notes, net of issuance costs.
In accordance with ASU 2020-06, the Convertible Notes we issued are reflected as a liability on our balance sheets, with the initial carrying amount equal to the principal amount of the notes, net of issuance costs and premiums.
Our revenue may be disproportionately affected by delays or reductions in general IT spending. Competitors, many of whom are larger and more 27 Table of Contents established than we are, may respond to market conditions by lowering prices and attempting to lure away our customers. In addition, consolidation in certain industries may result in reduced overall spending on our platform.
Our revenue may be disproportionately affected by delays or reductions in general IT spending. Competitors, many of whom are larger and more established than we are, may respond to market conditions by lowering prices and attempting to lure away our customers. In addition, consolidation in certain industries may result in reduced overall spending on our platform.
It further provides that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the sole and exclusive forum for the resolutions of any complaint asserting a cause of action arising under the Securities Act.
It further provides that, unless we consent in writing to the selection of an alternative forum, the federal 34 Table of Contents district courts of the United States of America shall, to the fullest extent permitted by law, be the sole and exclusive forum for the resolutions of any complaint asserting a cause of action arising under the Securities Act.
If we fail to meaningfully protect our intellectual property and proprietary rights, our business, operating results, and financial condition could be adversely affected. We have been, and may in the future be, subject to legal proceedings and litigation, including intellectual property disputes, which are costly and may subject us to significant liability and increased costs of doing business.
If we fail to meaningfully protect our intellectual property and proprietary rights, our business, operating results, and financial condition could be adversely affected. 16 Table of Contents We have been, and may in the future be, subject to legal proceedings and litigation, including intellectual property disputes, which are costly and may subject us to significant liability and increased costs of doing business.
Legal standards relating to the validity, enforceability, and scope of protection of intellectual property rights are uncertain. Despite our precautions, it may be possible for 14 Table of Contents unauthorized third parties to copy our platform and use information that we regard as proprietary to create products and services that compete with ours.
Legal standards relating to the validity, enforceability, and scope of protection of intellectual property rights are uncertain. Despite our precautions, it may be possible for unauthorized third parties to copy our platform and use information that we regard as proprietary to create products and services that compete with ours.
Moreover, if one or more of the analysts who 24 Table of Contents cover us downgrades our common stock or if our reporting results do not meet their expectations, the market price of our common stock could decline.
Moreover, if one or more of the analysts who 25 Table of Contents cover us downgrades our common stock or if our reporting results do not meet their expectations, the market price of our common stock could decline.
We have strategic technology partnerships with third parties that pay us a revenue share on their gross sales to our joint customers and/or collaborate to co-sell and co-market BigCommerce to new customers. Certain of those strategic technology partners generate significant revenue for us, including PayPal, Google, and Stripe.
We have strategic technology partnerships with third parties that pay us a revenue share on their gross sales to our joint customers and/or collaborate to co-sell and co-market BigCommerce to new customers. Certain of those strategic technology partners generate 10 Table of Contents significant revenue for us, including PayPal, Google, and Stripe.
In addition, our business operations are or may become subject to EU regulations governing digital services and use of artificial intelligence. For example, the EU Digital Services Act (the “DSA”) came into force on November 16, 2022, with the majority of substantive provisions starting to take effect on February 17, 2024.
In addition, our business operations are or may become subject to EU regulations governing digital services and use of artificial intelligence. For example, the EU Digital Services Act (the “DSA”) came into force in November 2022, with the majority of substantive provisions starting to take effect in February 2024.
If new technologies emerge that deliver competitive solutions at lower prices, more efficiently, more conveniently, or more securely, it could adversely impact our ability to compete. Our platform must also integrate with a variety of network, hardware, mobile, and software platforms and technologies.
If new technologies emerge that deliver competitive solutions at lower prices, more efficiently, more conveniently, or more securely, it could adversely impact our ability to compete. 26 Table of Contents Our platform must also integrate with a variety of network, hardware, mobile, and software platforms and technologies.
Negative conditions in the global economy or individual markets, including changes in gross domestic product growth, financial and credit market fluctuations, political turmoil, natural catastrophes, warfare and terrorist attacks on the United States, Europe, Australia, the Asia Pacific region or elsewhere, could cause a decrease in business investments, including spending on IT and negatively affect our business.
Negative conditions in the global economy or 28 Table of Contents individual markets, including changes in gross domestic product growth, financial and credit market fluctuations, political turmoil, natural catastrophes, warfare and terrorist attacks on the United States, Europe, Australia, the Asia Pacific region or elsewhere, could cause a decrease in business investments, including spending on IT and negatively affect our business.
It is possible that, in connection with any applicable action brought against us, a court could find the choice of forum provisions contained in our amended and restated 32 Table of Contents certificate of incorporation to be inapplicable or unenforceable in such action.
It is possible that, in connection with any applicable action brought against us, a court could find the choice of forum provisions contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in such action.
There can be no assurance that our remediation efforts will be successful.
There can be no assurance that our continued remediation efforts will be successful.
Obtaining the necessary export 29 Table of Contents license or other authorization for a particular sale may be time-consuming and may result in the delay or loss of sales opportunities even if the export license ultimately may be granted.
Obtaining the necessary export license or other authorization for a particular sale may be time-consuming and may result in the delay or loss of sales opportunities even if the export license ultimately may be granted.
We have identified a material weakness in our internal controls over financial reporting related to information technology general controls (“ITGCs”).
In 2023 we identified a material weakness in our internal controls over financial reporting related to information technology general controls (“ITGCs”).
GAAP and related pronouncements, implementation guidelines, and interpretations apply to a wide range of matters that are relevant to our business, including revenue recognition, stock-based compensation, and deferred commissions. These matters are complex and involve subjective assumptions, estimates, and judgments by our management.
GAAP and related pronouncements, implementation guidelines, and interpretations apply to a wide range of matters that are relevant to our business, including revenue recognition, stock-based compensation, and deferred commissions. These matters are complex and involve subjective assumptions, estimates, and judgments by our management. Changes in U.S.
We have a history of operating losses, and we may not be able to generate sufficient revenue to achieve profitability on our anticipated timeline or sustain it thereafter. We have not yet achieved profitability. We incurred net losses of $64.7 million, $139.9 million and $76.7 million for the years ended December 31, 2023, 2022, and 2021 respectively.
We have a history of operating losses, and we may not be able to generate sufficient revenue to achieve profitability on our anticipated timeline or sustain it thereafter. We have not yet achieved profitability. We incurred net losses of $27.0 million, $64.7 million and $139.9 million for the years ended December 31, 2024, 2023, and 2022 respectively.
Even if the war moderates or a resolution between Ukraine and Russia is reached, we expect that we may continue to experience ongoing financial and operational impacts resulting from the war for the foreseeable future as Ukraine rebuilds its economy and infrastructure.
Even if the war moderates or a resolution between Ukraine and Russia is reached, we expect that we may continue to experience ongoing financial and operational impacts resulting from the war for the foreseeable future as Ukraine rebuilds its economy and 29 Table of Contents infrastructure.
If we fail to successfully promote and maintain our brand, we may fail to attract enough new customers or retain our existing customers to realize a sufficient return on our brand-building efforts, and our business could suffer. If we fail to offer high quality support, our business and reputation could suffer.
If we fail to successfully promote and maintain our brand, we may fail to attract enough new customers or retain our existing customers to realize a sufficient return on our brand-building efforts, and our business could suffer. 15 Table of Contents If we fail to offer high quality support, our business and reputation could suffer.
Our customers rely on our personnel for support related to our subscription and customer solutions. High-quality support is important for the renewal and expansion of our agreements with existing customers. The importance of high-quality support will increase as we expand our business and pursue new customers, particularly mid-market and enterprise customers.
Our customers rely on our personnel for support related to our subscription and customer solutions. High-quality support is important for the renewal and expansion of our agreements with existing customers. The importance of high-quality support will increase as we expand our business and pursue new customers.
Specifically, management determined that we did not maintain effective controls over (i) user access to ensure appropriate segregation of duties and adequately restrict user and privileged access to financial applications, programs and data to appropriate personnel; (ii) program change management for financial applications to ensure that information technology (“IT”) program and data changes affecting financial IT applications and underlying accounting records are identified, tested, authorized and implemented appropriately; and (iii) IT operations controls to ensure that critical interface jobs are monitored.
Specifically, management determined that we did not maintain effective controls over (i) user access to ensure appropriate segregation of duties and adequately restrict user and privileged access to financial applications, programs and data to appropriate personnel; and (ii) and program change management for financial applications to ensure that information technology (“IT”) program and data changes affecting financial IT applications and underlying accounting records are identified, tested, authorized and implemented appropriately.
If we are unable to develop and sell new technology, features, and functionality for our platform that satisfy our customers and that keep pace with rapid technological and industry change, our revenue and operating results could be adversely 25 Table of Contents affected.
If we are unable to develop and sell new technology, features, and functionality for our platform that satisfy our customers and that keep pace with rapid technological and industry change, our revenue and operating results could be adversely affected.
These risks and uncertainties include, but are not limited to, the following: • We have a history of operating losses, and we may not be able to generate sufficient revenue to achieve profitability on our anticipated timeline or sustain it thereafter; • We have experienced significant growth in recent periods, and our recent growth rates may not be indicative of our future growth; • We face intense competition and may lack sufficient financial or other resources to maintain or improve our competitive position, which may harm our ability to add new customers, retain existing customers, and grow our business; • Our success depends in part on our partner-centric strategy; • Failure to effectively develop and expand our marketing and sales capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our platform; • We store and process confidential information, including personal information of our customers and their shoppers.
These risks and uncertainties include, but are not limited to, the following: • We have a history of operating losses, and we may not be able to generate sufficient revenue to achieve profitability on our anticipated timeline or sustain it thereafter; • We face intense competition and may lack sufficient financial or other resources to maintain or improve our competitive position, which may harm our ability to add new customers, retain existing customers, and grow our business; • Our success depends in part on our partner-centric strategy; • Failure to effectively develop and expand our marketing and sales capabilities, including any failure to integrate significant new hires into our sales and marketing teams, could harm our ability to increase our customer base and achieve broader market acceptance of our platform; • We store and process confidential information, including personal information of our customers and their shoppers.
Additionally, we currently have significant numbers of securities outstanding that may be exercisable for our common stock, which may result in significant dilution and downward pressure on our stock price. As of December 31, 2023, we had approximately 76.4 million shares of Series 1 common stock and no shares of Series 2 common stock outstanding.
Additionally, we currently have significant numbers of securities outstanding that may be exercisable for our common stock, which may result in significant dilution and downward pressure on our stock price. As of December 31, 2024, we had approximately 78.6 million shares of Series 1 common stock and no shares of Series 2 common stock outstanding.
We rely on our leadership team for research and development, marketing, sales, services, and general and administrative functions, and on mission-critical individual contributors. From time to time, our executive management team may change from the hiring or departure of executives, which could disrupt our business.
Our success depends largely upon the continued services of our executive officers. We rely on our leadership team for research and development, marketing, sales, services, and general and administrative functions, and on mission-critical individual contributors. From time to time, our executive management team may change from the hiring or departure of executives, which could disrupt our business.
We also will need to manage our sales processes as our sales personnel and 26 Table of Contents partner network continue to grow and become more complex, and as we continue to expand into new geographies and markets.
We also will need to manage our sales processes as our sales personnel and partner network continue to grow and become more complex, and as we continue to expand into new geographies and markets.
We may continue to experience growth and organizational change, even as we transition to prioritizing profitability, which may continue to place significant demands on our management and our operational and financial resources.
We may continue to experience growth and organizational change, even as we transition to prioritizing reaccelerating revenue growth profitably, which may continue to place significant demands on our management and our operational and financial resources.
These encryption products and the underlying technology may be exported outside of the United States only with the required export authorizations, including by license, a license exception or other appropriate government authorizations.
We incorporate encryption technology into our platform. These encryption products and the underlying technology may be exported outside of the United States only with the required export authorizations, including by license, a license exception or other appropriate government authorizations.
Even if the market in which we compete achieves the forecasted growth, our business could fail to grow at similar rates, if at all; • We anticipate that our operations will continue to increase in complexity as we grow, which will create management challenges; • We depend on our senior management team and the loss of one or more key employees or an inability to attract and retain highly skilled employees could adversely affect our business; • Unfavorable conditions in our industry or the global economy, or reductions in IT spending, could limit our ability to grow our business and negatively affect our results of operations; • Natural catastrophic events and man-made problems such as power disruptions, computer viruses, global pandemics, data security breaches and terrorism may disrupt our business; • Indemnity provisions in various agreements potentially expose us to substantial liability for intellectual property infringement, data protection, and other losses; • Our current operations are international in scope.
Even if the market in which we compete achieves the forecasted growth, our business could fail to grow at similar rates, if at all; • We anticipate that our operations will continue to increase in complexity as we grow, which will create management challenges; • Unfavorable conditions in our industry or the global economy, or reductions in IT spending, could limit our ability to grow our business and negatively affect our results of operations; • Natural catastrophic events and man-made problems such as power disruptions, computer viruses, global pandemics, data security breaches and terrorism may disrupt our business; • Indemnity provisions in various agreements potentially expose us to substantial liability for intellectual property infringement, data protection, and other losses; • Our current operations are international in scope.
Holders of our common stock may be subject to further dilution upon issuance of the shares reserved under our 2020 Plan and Employee Stock Purchase Plan. In addition, the Convertible Notes we issued on September 14, 2021 may be converted into shares of our common stock at certain times and in certain circumstances.
Holders of our common stock may be subject to further dilution upon issuance of the shares reserved under our 2020 Plan and Employee Stock Purchase Plan. In addition, the Convertible Notes may be converted into shares of our common stock at certain times and in certain circumstances.
We have historically operated a strategic development center in Ukraine where we employed 64 individuals as of December 31, 2023. We have also invested significant resources in Ukraine over the last several years. As a result, warfare, political turmoil or terrorist attacks in Ukraine could negatively affect our Ukrainian operations and our business.
We have historically operated a strategic development center in Ukraine where we employed engineering personnel. We have also invested significant resources in Ukraine over the last several years. As a result, warfare, political turmoil or terrorist attacks in Ukraine could negatively affect our Ukrainian operations and our business.
A catastrophic event that results in the destruction or disruption of our data centers, or our network infrastructure or IT systems, including any errors, defects, or failures in third-party hardware, could affect our ability to conduct normal business operations, and adversely affect our operating results.
Such events could prevent us from providing our platform to our customers. A catastrophic event that results in the destruction or disruption of our data centers, or our network infrastructure or IT systems, including any errors, defects, or failures in third-party hardware, could affect our ability to conduct normal business operations, and adversely affect our operating results.
Any companies we may acquire may have strategic technology partners, which may be different or competitive with the relationships we have. If our relationships with our strategic technology partners or the partners of companies we acquire are disrupted, we may receive less revenue and incur costs to form other revenue-generating strategic technology partnerships.
If our relationships with our strategic technology partners or the partners of companies we acquire are disrupted, we may receive less revenue and incur costs to form other revenue-generating strategic technology partnerships.
Any liability attributed to us could adversely affect our brand, reputation, ability to expand our subscriber base, and financial results. We provide our ecommerce platform to businesses in highly-regulated industries, which subjects us to a number of challenges and risks. We provide our ecommerce platform to customers in highly regulated industries such as pharmaceuticals, insurance, healthcare and life sciences.
Any liability attributed to us could adversely affect our brand, reputation, ability to expand our subscriber base, and financial results. We provide our ecommerce platform to businesses in highly-regulated industries, which subjects us to a number of challenges and risks.
In either case, and in other cases, our obligations under the Convertible Notes and the indenture governing the Convertible Notes could increase the cost of acquiring us or otherwise discourage a third party from acquiring us or removing incumbent management, including in a transaction that noteholders or holders of our common stock may view as favorable.
In either case, and in other cases, our obligations under the Convertible Notes and the indenture governing the Convertible Notes could increase the cost of acquiring us or otherwise discourage a third party from acquiring us or removing incumbent management, including in a transaction that noteholders or holders of our common stock may view as favorable. 32 Table of Contents The accounting method for the Convertible Notes could adversely affect our reported financial condition and results.
We expect a relatively small number of new enterprise accounts to constitute a more material portion of our total bookings in any given period. As a result, even if our increased shift toward enterprise accounts is successful, we may experience less stable or less predictable bookings between periods. This may make it challenging for us to accurately forecast our results.
We expect a relatively small number of new enterprise accounts to constitute a more material 9 Table of Contents portion of our total bookings in any given period. As a result, even if our increased shift toward enterprise accounts is successful, we may experience less stable or less predictable bookings between periods.
Consequently, we or our customers may discover defects or errors after our platform has been employed. We implement bug fixes and upgrades as part of our regularly scheduled system maintenance.
We may not be able to detect and correct defects or errors before release. Consequently, we or our customers may discover defects or errors after our platform has been employed. We implement bug fixes and upgrades as part of our regularly scheduled system maintenance.
As of December 31, 2023, we had net operating loss (“NOL”) carryforwards of approximately $288.0 million and $157.7 million for federal and state tax purposes, respectively, that are available to reduce future taxable income. If not utilized, the federal and state NOL (net operating loss) carryforwards will begin to expire in 2036.
As of December 31, 2024, we had net operating loss (“NOL”) carryforwards for federal and state tax purposes, that are available to reduce future taxable income. If not utilized, the federal and state NOL (net operating loss) carryforwards will begin to expire in 2036. The federal and state tax credits will begin to expire in 2034.
Defects, errors, disruptions in service, cyber-attacks, or other performance problems with our software, whether in connection with the day-to-day operation, upgrades or otherwise, could result in: loss of customers; lost or delayed market acceptance and sales of our platform; delays in payment to us by customers; injury to our reputation and brand; legal claims, including warranty and service claims, against us; diversion of our resources, including through increased service and warranty expenses or financial concessions; and increased insurance costs.
Defects, errors, disruptions in service, cyber-attacks, or other performance problems with our software, whether in connection with the day-to-day operation, upgrades or otherwise, could result in: loss of customers; lost or delayed market acceptance and sales of our platform; delays in payment to us by customers; injury to our reputation and brand; legal claims, including warranty and service claims, against us; diversion of our resources, including through increased service and warranty expenses or financial concessions; and increased insurance costs. 14 Table of Contents We have found defects in our platform and may discover additional defects in the future that could result in data unavailability, unauthorized access to, loss, corruption, or other harm to our customers’ data.
Our operations are dependent upon our ability to prevent system interruption. The applications underlying our platform are inherently complex and may contain material defects or errors, which may cause disruptions in availability or other performance problems.
The applications underlying our platform are inherently complex and may contain material defects or errors, which may cause disruptions in availability or other performance problems.
Enforcement actions and sanctions could further harm our business, results of operations, and financial condition. 30 Table of Contents Changes in subjective assumptions, estimates and judgments by management related to complex accounting matters or changes in accounting principles generally accepted in the United States, could significantly affect our financial condition and results of operations.
Changes in subjective assumptions, estimates and judgments by management related to complex accounting matters or changes in accounting principles generally accepted in the United States, could significantly affect our financial condition and results of operations. U.S.
If we do not effectively manage this increasing complexity, the quality of our platform and customer service could suffer, and we may not be able to adequately address competitive challenges. These factors could impair our ability to attract and retain customers and expand our customers’ use of our platform.
If we do not effectively manage this increasing complexity, the quality of our platform and customer service could suffer, and we may not be able to adequately address competitive challenges.
The issuance costs will be treated as a debt discount for accounting purposes, which will be amortized into interest expense over the term of the Convertible Notes.
The issuance costs will be treated as a debt discount for accounting purposes, which will be amortized into interest expense over the term of the Convertible Notes. The premium related to the fair value adjustment of the 2028 Convertible Notes will be amortized over the term of the 2028 Convertible Note as a reduction to interest expense.
An acquisition, investment or business relationship may result in unforeseen operating difficulties and expenditures. In particular, we may encounter difficulties assimilating or integrating the businesses, technologies, products, personnel, or operations of the acquired companies.
We may evaluate and consider potential strategic transactions, including acquisitions of, or investments in, businesses, technologies, services, products, and other assets in the future. An acquisition, investment or business relationship may result in unforeseen operating difficulties and expenditures. In particular, we may encounter difficulties assimilating or integrating the businesses, technologies, products, personnel, or operations of the acquired companies.
The costs incurred or delays resulting from the correction of defects or errors in our software or other performance problems may be substantial and could adversely affect our operating results.
The costs incurred or delays resulting from the correction of defects or errors in our software or other performance problems may be substantial and could adversely affect our operating results. Our sales cycle with our customers can be long and unpredictable, and our sales efforts require considerable time and expense.
Customers often view a subscription to our ecommerce platform and services as a strategic decision with significant investment. As a result, customers frequently require considerable time to evaluate, test, and qualify our platform prior to entering into or expanding a subscription.
Much of our revenue is generated from the recognition of deferred revenue from contracts entered into during previous periods. Customers often view a subscription to our ecommerce platform and services as a strategic decision with significant investment. As a result, customers frequently require considerable time to evaluate, test, and qualify our platform prior to entering into or expanding a subscription.
Furthermore, search engines and digital marketing platforms may change their advertising policies from time to time. If these policies delay or prevent us from advertising through these channels, it could result in reduced traffic to our website and subscriptions to our platform.
If these policies delay or prevent us from advertising through these channels, it could result in reduced traffic to our website and subscriptions to our platform. New search engines and other digital marketing platforms may develop, particularly in specific jurisdictions, that reduce traffic on existing search engines and digital marketing platforms.
While our contracts with strategic technology partners generally limit the ability of such partners to terminate the contract for convenience on short notice, certain of our strategic technology partners have 9 Table of Contents termination for convenience clauses in their contracts with us.
While our contracts with strategic technology partners generally limit the ability of such partners to terminate the contract for convenience on short notice, certain of our strategic technology partners have termination for convenience clauses in their contracts with us. Any companies we may acquire may have strategic technology partners, which may be different or competitive with the relationships we have.
To the extent that our platform depends upon the successful operation of third-party software, any undetected errors or defects in such third-party software could impair the functionality of our platform, delay new feature introductions, result in a failure of our platform, and injure our reputation. 16 Table of Contents Our use of open source software could subject us to possible litigation or cause us to subject our platform to unwanted open source license conditions that could negatively impact our sales.
To the extent that our platform depends upon the successful operation of third-party software, any undetected errors or defects in such third-party software could impair the functionality of our platform, delay new feature introductions, result in a failure of our platform, and injure our reputation.
Payment transactions on our ecommerce platform subject us to regulatory requirements, additional fees, and other risks that could be costly and difficult to comply with or that could harm our business.
Releasing our source code could substantially help our competitors develop products that are similar to or better than ours. Payment transactions on our ecommerce platform subject us to regulatory requirements, additional fees, and other risks that could be costly and difficult to comply with or that could harm our business.
For example, comprehensive privacy statutes that share similarities with the CCPA are now in effect and enforceable in Virginia, Colorado, Connecticut, and Utah, and will soon be enforceable in several other states as well.
For example, comprehensive privacy statutes that share similarities with the CCPA are now in effect and enforceable in numerous states and will likely soon be enforceable in additional states.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeCybersecurity Governance Our Board of Directors and Audit Committee jointly oversee management’s implementation of our security organization, which is charged with assessing and taking steps to mitigate the data privacy and cybersecurity risks that we face as a software-as-a-service platform. The Board and Audit Committee receive regular reports from management on our cybersecurity risks.
Biggest changeIf we or our third-party providers fail to protect the security of 35 Table of Contents this information and/or experience a data security incident, our reputation may be harmed and we may be exposed to material financial penalties and legal liability, which could materially adversely affect our business, results of operations, and financial condition. ” Cybersecurity Governance Our Board of Directors and Audit Committee jointly oversee management’s implementation of our security organization, which is charged with assessing and taking steps to mitigate the data privacy and cybersecurity risks that we face as a software-as-a-service platform.
This does not imply that we meet any particular technical standards, specifications, or requirements of these frameworks, only that we use these standards as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.
This does not imply that we meet any particular technical standards, specifications, or requirements, only that we use these standards as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.
Our cybersecurity risk management program includes but is not limited to: • risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment; • a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls; • cybersecurity awareness training of our employees, incident response personnel, and senior management; • an annual tabletop exercise conducted by a third party to simulate a cyber emergency and practice our response to such a scenario; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a third-party risk management process for relevant service providers, suppliers, and vendors.
Our cybersecurity risk management program includes but is not limited to: • risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment; • a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls; • cybersecurity awareness training of our employees, including incident response personnel, and senior management; • an annual tabletop exercise conducted by a third party to simulate a cyber emergency and practice our response to such a scenario; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a third-party risk management process for relevant service providers, suppliers, and vendors based on our assessment of their criticality to our operations and respective risk profile.
Our management team supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the IT environment.
Our management team takes steps to stay informed about and monitor efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel ; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in our IT environment.
In addition, management updates the Committee, as necessary, regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential. The Audit Committee reports to the full Board regarding its activities, including those related to cybersecurity. The full Board also regularly receives briefings from management on our cyber risk management program.
The Board and Audit Committee receive regular reports from management on our cybersecurity risks. In addition, management updates the Audit Committee, as necessary, regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential. The Audit Committee reports to the full Board regarding its activities, including those related to cybersecurity.
Board and Committee members receive presentations on cybersecurity topics from our Chief Technology Officer and others within the Chief Technology Officer’s team, as well as other internal security staff or external experts as part of the Board’s continuing education on topics that impact public companies. 33 Table of Contents Our management team, including our Chief Technology Officer and the Chief Technology Officer’s team are responsible for assessing and managing our material risks from cybersecurity threats.
Board and Audit Committee members receive presentations on cybersecurity topics from our Chief Technology Officer and others within the Chief Technology Officer’s team, as well as other internal security staff or external experts as part of the Board’s continuing education on topics that impact public companies.
The team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants. Our management team’s experience includes decades of experience across several public companies, including in the IT, cybersecurity, retail, and financial industries.
Our management team’s experience includes decades of experience across several public companies, including in the IT, cybersecurity, retail, and financial industries.
Added
We face risks from cybersecurity threats that, if realized, could materially affect us, including our operations, business strategy, results of operations, or financial condition. See Risk Factors – “ We store and process confidential information, including personal information of our customers and their shoppers.
Added
The full Board also regularly receives briefings from management on our cyber risk management program.
Added
Our management team, including our Chief Technology Officer and the Chief Technology Officer’s team are responsible for assessing and managing our material risks from cybersecurity threats. The team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe also lease office space in San Francisco, California; Los Angeles, California; Atlanta, Georgia; Kyiv, Ukraine Sydney, Australia; and London, United Kingdom. We believe our current facilities are suitable for the composition of our staff and additional or substitute space will be available as needed to accommodate any such expansion of our operations.
Biggest changeWe believe our current facilities are suitable for the composition of our staff, and additional space is available as needed to accommodate any such expansion of our operations.
Removed
Item 2. Pr operties. Our principal executive offices are located in Austin, Texas. We lease approximately 70,682 square feet of office space under a lease agreement with an initial term that expires on April 30, 2028, with the option to extend the lease for an additional two, five-year terms.
Added
Item 2. Pr operties. Our worldwide corporate headquarters is located in Austin, Texas. In September 2024, the Company executed the early lease termination clause (the "Lease Termination") for our corporate headquarters in Austin, Texas which will end our lease in October 2025.
Removed
We have made the decision to put approximately 40,540 square feet, up for sub-lease. In October 2023, we entered into an agreement to sublease 32,957 square feet in our Austin location which commenced in January 2024 with an initial term of 12 months.
Added
In January 2025, we executed a sublease agreement in Austin, Texas for approximately 65,000 square feet of office space that will be our corporate headquarters. We also have office locations across the United States and globally, including San Francisco, California; Atlanta, Georgia; and Sydney, Australia.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Pro ceedings. From time to time, we may become involved in litigation related to claims arising from the ordinary course of our business. We believe that there are no claims or actions pending or threatened against us, the ultimate disposition of which would have a material adverse effect on us. Item 4. Mine Safe ty Disclosures.
Biggest changeItem 3. Legal Pro ceedings. From time to time, we may become involved in litigation related to claims arising from the ordinary course of our business. We believe that there are no claims or actions pending or threatened against us, the ultimate disposition of which would have a material adverse effect on us.
Removed
Not applicable. 34 Table of Contents PART II
Added
The Company is not presently a party to any legal proceedings that, if determined adversely to us, would individually or taken together have a material adverse effect on our business, results of operations, financial condition or cash flows Item 4. Mine Safe ty Disclosures. Not applicable. 36 Table of Contents PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 34 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 35 Item 6. Reserved 36 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 37 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 51 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 36 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 37 Item 6. Reserved 38 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 39 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 53 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeEquity Compensation Plan Information Information regarding the securities authorized for issuance under our equity compensation plans will be included in our Proxy Statement relating to our 2023 annual meeting of stockholders to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 2023 and is incorporated herein by reference.
Biggest changeEquity Compensation Plan Information Information regarding the securities authorized for issuance under our equity compensation plans will be included in our Proxy Statement relating to our 2024 annual meeting of stockholders to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 2024 and is incorporated herein by reference.
Performance Graph The graph set forth below compares the cumulative total stockholder return on our common stock between August 5, 2020 (our first day of trading) and December 31, 2023, with the cumulative total return of (i) the S&P 500 Index, (ii) the NASDAQ Computer Index and (iii) the Russell 2000 Index.
Performance Graph The graph set forth below compares the cumulative total stockholder return on our common stock between August 5, 2020 (our first day of trading) and December 31, 2024, with the cumulative total return of (i) the S&P 500 Index, (ii) the NASDAQ Computer Index and (iii) the Russell 2000 Index.
The information contained in the Stock Performance Graph shall not be deemed to be soliciting material or to be filed with the SEC nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or the Exchange Act, except to the extent we specifically incorporate it by reference into such filing. 35 Table of Contents Issuer Purchases of Equity Securities There were no share repurchases of our common stock for the three months ended December 31, 2023 .
The information contained in the Stock Performance Graph shall not be deemed to be soliciting material or to be filed with the SEC nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or the Exchange Act, except to the extent we specifically incorporate it by reference into such filing. 37 Table of Contents Issuer Purchases of Equity Securities There were no share repurchases of our common stock for the three months ended December 31, 2024 .
We do not anticipate paying cash dividends on our common stock for the foreseeable future. Sales of Unregistered Securities Unregistered Sales of Equity Securities There were no unregistered sales of equity securities for the year ended December 31, 2023.
We do not anticipate paying cash dividends on our common stock for the foreseeable future. Sales of Unregistered Securities Unregistered Sales of Equity Securities There were no unregistered sales of equity securities for the year ended December 31, 2024.
As of December 31, 2023, we had 178 holders of record of our common stock. The actual number of shareholders is greater than this number of record holders, and includes shareholders who are beneficial owners, but whose shares are held in street names by brokers and other nominees.
As of December 31, 2024, we had 154 holders of record of our common stock. The actual number of shareholders is greater than this number of record holders, and includes shareholders who are beneficial owners, but whose shares are held in street names by brokers and other nominees.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeYear ended December 31, 2023 2022 2021 (in thousands) Revenue $ 309,394 $ 279,075 $ 219,855 Cost of revenue (1)(2) 74,202 69,980 48,479 Gross profit 235,192 209,095 171,376 Operating expenses: (1)(2) Sales and marketing 140,230 141,342 104,872 Research and development 83,460 88,253 64,547 General and administrative 58,838 69,441 51,317 Acquisition related expenses 10,252 35,216 23,299 Restructuring charges 6,434 7,332 — Amortization of intangible assets 8,422 8,078 3,284 Total operating expenses 307,636 349,662 247,319 Loss from operations (72,444 ) (140,567 ) (75,943 ) Interest income 11,493 4,198 130 Interest expense (2,884 ) (2,828 ) (828 ) Other expenses (836 ) (227 ) (70 ) Loss before provision for income taxes (64,671 ) (139,424 ) (76,711 ) Benefit (provision) for income taxes 0 (495 ) 34 Net loss $ (64,671 ) $ (139,919 ) $ (76,677 ) Basic net loss per share $ (0.86 ) $ (1.91 ) $ (1.08 ) Shares used to compute basic net loss per share 75,143 73,226 70,933 (1) Amounts include stock-based compensation expense and associated payroll tax costs, as follows: Year ended December 31, 2023 2022 2021 (in thousands) Cost of revenue $ 4,949 $ 4,226 $ 2,122 Sales and marketing 13,474 13,551 9,392 Research and development 13,478 12,388 6,169 General and administrative 9,785 12,821 8,851 Total stock-based compensation expense and associated payroll tax costs $ 41,686 $ 42,986 $ 26,534 (2) Amounts include depreciation as follows: Year ended December 31, 2023 2022 2021 (in thousands) Cost of revenue $ 550 $ 722 $ 847 Sales and marketing 612 888 1,030 Research and development 897 404 506 General and administrative 2,000 1,330 484 Total depreciation expense $ 4,059 $ 3,344 $ 2,867 43 Table of Contents Revenue by geographic region The composition of our revenue by geographic region during the years ended December 31, 2023 and 2022, and years ended December 31, 2022 and 2021 were as follows: Year ended December 31, Change Year ended December 31, Change 2023 2022 Amount Percent 2022 2021 Amount Percent (in thousands) (in thousands) Revenue Americas – U.S. $ 236,502 $ 216,639 $ 19,863 9.2 % $ 216,639 $ 169,737 $ 46,902 27.6 % Americas – other 14,103 12,124 1,979 16.3 12,124 8,559 3,565 41.7 EMEA 34,661 27,743 6,918 24.9 27,743 20,783 6,960 33.5 APAC 24,128 22,569 1,559 6.9 22,569 20,776 1,793 8.6 Total Revenue $ 309,394 $ 279,075 $ 30,319 10.9 % $ 279,075 $ 219,855 $ 59,220 26.9 % (1) Americas-other revenue includes revenue from North and South America, other than the U.S.
Biggest changeYear ended December 31, 2024 2023 2022 (in thousands) Revenue $ 332,927 $ 309,394 $ 279,075 Cost of revenue (1)(2) 77,589 74,202 69,980 Gross profit 255,338 235,192 209,095 Operating expenses: (1)(2) Sales and marketing 129,602 140,230 141,342 Research and development 80,879 83,460 88,253 General and administrative 61,794 58,838 69,441 Amortization of intangible assets 9,736 8,422 8,078 Acquisition related costs 1,334 10,252 35,216 Restructuring charges 13,677 6,434 7,332 Total operating expenses 297,022 307,636 349,662 Loss from operations (41,684 ) (72,444 ) (140,567 ) Gain on convertible note extinguishment 12,110 0 0 Interest income 10,568 11,493 4,198 Interest expense (6,051 ) (2,884 ) (2,828 ) Other expenses (958 ) (836 ) (227 ) Loss before provision for income taxes (26,015 ) (64,671 ) (139,424 ) Provision for income taxes (1,015 ) 0 (495 ) Net loss $ (27,030 ) $ (64,671 ) $ (139,919 ) (1) Amounts include stock-based compensation expense and associated payroll tax costs, as follows: Year ended December 31, 2024 2023 2022 (in thousands) Cost of revenue $ 3,533 $ 4,949 $ 4,226 Sales and marketing 9,252 13,474 13,551 Research and development 13,614 13,478 12,388 General and administrative 10,000 9,785 12,821 Total stock-based compensation expense and associated payroll tax costs $ 36,399 $ 41,686 $ 42,986 (2) Amounts include depreciation as follows: 44 Table of Contents Year ended December 31, 2024 2023 2022 (in thousands) Cost of revenue $ 282 $ 550 $ 722 Sales and marketing 308 612 888 Research and development 1,257 897 404 General and administrative 2,228 2,000 1,330 Total depreciation expense $ 4,075 $ 4,059 $ 3,344 Revenue by geographic region The composition of our revenue by geographic region during the years ended December 31, 2024 and 2023 were as follows: Year ended December 31, Change 2024 2023 Amount Percent (in thousands) Revenue Americas – U.S. $ 253,484 $ 236,502 $ 16,982 7.2 % Americas – other (1) 15,662 14,103 1,559 11.1 EMEA 38,031 34,661 3,370 9.7 APAC 25,750 24,128 1,622 6.7 Total Revenue $ 332,927 $ 309,394 $ 23,533 7.6 % (1) Americas-other revenue includes revenue from North and South America, other than the U.S.
The Convertible Notes have customary provisions relating to the occurrence of “Events of Default” (as defined in the Convertible Notes Indenture), which include the following: (i) certain payment defaults on the Convertible Notes (which, in the case of a default in the payment of interest on the Convertible Notes, will be subject to a 30-day cure period); (ii) our failure to send certain notices under the Convertible Notes Indenture within specified periods of time; (iii) our failure to comply with certain covenants in the Convertible Notes Indenture relating to our ability to consolidate with or merge with or into, or sell, lease or otherwise transfer, in one transaction or a series of transactions, all or substantially all of the assets of us and our subsidiaries, taken as a whole, to another person; (iv) a default by us in our other obligations or agreements under the Convertible Notes Indenture or the Convertible Notes if such default is not cured or waived within 60 days after notice is given in accordance with the Convertible Notes Indenture; (v) certain defaults by us or any of our significant subsidiaries with respect to indebtedness for borrowed money of at least $65.0 million; and (vi) certain events of bankruptcy, insolvency and reorganization involving us or any of our significant subsidiaries.
The 2026 Convertible Notes have customary provisions relating to the occurrence of “Events of Default” (as defined in the Convertible Notes Indenture), which include the following: (i) certain payment defaults on the 2026 Convertible Notes (which, in the case of a default in the payment of interest on the 2026 Convertible Notes, will be subject to a 30-day cure period); (ii) our failure to send certain notices under the 2026 Convertible Notes Indenture within specified periods of time; (iii) our failure to comply with certain covenants in the 2026 Convertible Notes Indenture relating to our ability to consolidate with or merge with or into, or sell, lease or otherwise transfer, in one transaction or a series of transactions, all or substantially all of the assets of us and our subsidiaries, taken as a whole, to another person; (iv) a default by us in our other obligations or agreements under the 2026 Convertible Notes Indenture or the 2026 Convertible Notes if such default is not cured or waived within 60 days after notice is given in accordance with the 2026 Convertible Notes Indenture; (v) certain defaults by us or any of our significant subsidiaries with respect to indebtedness for borrowed money of at least $65.0 million; and (vi) certain events of bankruptcy, insolvency and reorganization involving us or any of our significant subsidiaries.
However, notwithstanding the foregoing, we may elect, at our option, that the sole remedy for an Event of Default relating to certain failures by us to comply with certain reporting covenants in the Convertible Notes Indenture consists exclusively of the right of the noteholders to receive special interest on the Convertible Notes for up to 180 days at a specified rate per annum not exceeding 0.50 percent on the principal amount of the Convertible Notes.
However, notwithstanding the foregoing, we may elect, at our option, that the sole remedy for an Event of Default relating to certain failures by us to comply with certain reporting covenants in the 2026 Convertible Notes Indenture consists exclusively of the right of the noteholders to receive special interest on the 2026 Convertible Notes for up to 180 days at a specified rate per annum not exceeding 0.50 percent on the principal amount of the 2026 Convertible Notes.
The Convertible Notes are our senior, unsecured obligations and are (i) equal in right of payment with our future senior, unsecured indebtedness; (ii) senior in right of payment to our future indebtedness that is expressly subordinated to the Convertible Notes in right of payment; (iii) effectively subordinated to our future secured indebtedness, to the extent of the value of the collateral securing that indebtedness; and (iv) structurally subordinated to all future indebtedness and other liabilities, including trade payables, and (to the extent we are not a holder thereof) preferred equity, if any, of our subsidiaries.
The 2026 Convertible Notes are our senior, unsecured obligations and are (i) equal in right of payment with our future senior, unsecured indebtedness; (ii) senior in right of payment to our future indebtedness that is expressly subordinated to the 2026 Convertible Notes in right of payment; (iii) effectively subordinated to our future secured indebtedness, to the extent of the value of the collateral securing that indebtedness; and (iv) structurally subordinated to all future indebtedness and other liabilities, including trade payables, and (to the extent we are not a holder thereof) preferred equity, if any, of our subsidiaries.
If an Event of Default involving bankruptcy, insolvency or reorganization events with respect to us (and not solely with respect to a significant subsidiary of us) occurs, then the principal amount of, and all accrued and unpaid interest on, all of the Convertible Notes then outstanding will immediately become due and payable without any further action or notice by any person.
If an Event of Default involving bankruptcy, insolvency or reorganization events with respect to us (and not solely with respect to a significant subsidiary of us) occurs, then the principal amount of, and all accrued and unpaid interest on, all of the 2026 Convertible Notes then outstanding will immediately become due and payable without any further action or notice by any person.
If any other Event of Default occurs and is continuing, then, the trustee, by notice to us, or noteholders of at least 25 percent of the aggregate principal amount of Convertible Notes then outstanding, by notice to us and the trustee, may declare the principal amount of, and all accrued and unpaid interest on, all of the Convertible Notes then outstanding to become due and payable immediately.
If any other Event of Default occurs and is continuing, then, the trustee, by notice to us, or noteholders of at least 25 percent of the aggregate principal amount of 2026 Convertible Notes then outstanding, by notice to us and the trustee, may declare the principal amount of, and all accrued and unpaid interest on, all of the 2026 Convertible Notes then outstanding to become due and payable immediately.
In addition, calling any Convertible Note for redemption will constitute a Make-Whole Fundamental Change with respect to that Convertible Note, in which case the conversion rate applicable to the conversion of that Convertible Note will be increased in certain circumstances if it is converted after it is called for redemption.
In addition, calling any 2028 Convertible Note for redemption will constitute a Make-Whole Fundamental Change with respect to that 2028 Convertible Note, in which case the conversion rate applicable to the conversion of that 2028 Convertible Note will be increased in certain circumstances if it is converted after it is called for redemption.
The redemption price will be a cash amount equal to the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
The redemption price will be a cash amount equal to the principal amount of the 2026 Convertible Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
Cash and cash equivalents consist of highly-liquid investments with original maturities of less than three months. Our restricted cash balance of $1.1 million and $1.5 million at December 31, 2023 and December 31, 2022, respectively, consists of security deposits for future chargebacks and amounts on deposit with certain financial institutions.
Cash and cash equivalents consist of highly-liquid investments with original maturities of less than three months. Our restricted cash balance of $1.5 million and $1.1 million at December 31, 2024 and December 31, 2023, respectively, consists of security deposits for future chargebacks and amounts on deposit with certain financial institutions.
Financing activities Net cash provided by financing activities during the year ended December 31, 2023 was $1.2 million primarily consisting of an increase in net debt of $0.7 million and issuance of shares of common stock pursuant to the exercise of stock options of $0.5 million.
Net cash provided by financing activities during the year ended December 31, 2023 was $1.2 million primarily consisting of an increase in net debt of $0.7 million and issuance of shares of common stock pursuant to the exercise of stock options and restricted stock units of $0.5 million.
Annual revenue run-rate We calculate annual revenue run-rate (“ARR”) at the end of each month as the sum of: (1) contractual monthly recurring revenue at the end of the period, which includes platform subscription fees, invoiced growth adjustments, product feed management subscription fees, recurring professional services revenue, and other recurring revenue, multiplied by twelve to prospectively annualize recurring revenue, and (2) the sum of the trailing twelve-month non-recurring and variable revenue, which includes one-time partner integrations, one-time fees, payments revenue share, and any other revenue that is non-recurring and variable.
Annual revenue run-rate We calculate ARR at the end of each month as the sum of: (1) contractual monthly recurring revenue at the end of the period, which includes platform subscription fees, invoiced growth adjustments, feed management subscription fees, recurring professional services revenue, and other recurring revenue, multiplied by twelve to prospectively annualize recurring revenue, and (2) the sum of the trailing twelve-month non-recurring and variable revenue, which includes one-time partner integrations, one-time fees, payments revenue share, and any other revenue that is non-recurring and variable.
These accounts may have more than one Enterprise plan or a combination of Enterprise plans and Essentials plans. The chart below illustrates certain of our key business metrics as of the periods ended.
These accounts may have more than one Enterprise plan or a combination of Enterprise plans and non-enterprise plans. The chart below illustrates certain of our key business metrics as of the periods ended.
The rapid growth in ecommerce is prompting companies to adopt ecommerce platforms like BigCommerce to create compelling branded ecommerce stores and power cross-channel connections to online marketplaces, social networks, and offline POS systems. Acquisition of new customers The growth of our customer base is important to our continued revenue growth.
The rapid growth in ecommerce is prompting companies to adopt ecommerce platforms like BigCommerce to create compelling branded ecommerce stores and power cross-channel connections to online marketplaces, social networks, and offline POS systems. 39 Table of Contents Acquisition of new customers The growth of our customer base is important to our continued revenue growth.
The initial conversion rate was 13.6783 shares of common stock per $1,000 principal amount of Convertible Notes, which represents an initial conversion price of approximately $73.11 per share of common stock. The conversion rate and conversion price are subject to customary adjustments upon the occurrence of certain events.
The initial conversion rate of the remaining outstanding 2026 Convertible Notes was 13.6783 shares of common stock per $1,000 principal amount of 2026 Convertible Notes, which represents an initial conversion price of approximately $73.11 per share of common stock. The conversion rate and conversion price are subject to customary adjustments upon the occurrence of certain events.
Under both models, merchants have full access to the functionality of our platform upon contract execution, and revenue is recognized ratably over the contract life. Our retail plans are generally month-to-month contracts. Monthly subscription fees for Pro and Enterprise plans are adjusted if a customer’s GMV or orders processed are outside of specified plan thresholds on a trailing twelve-month basis.
Merchants have full access to the functionality of our platform upon contract execution, and revenue is recognized ratably over the contract life. Our retail plans are generally month-to-month contracts. Monthly subscription fees for Enterprise plans are adjusted if a customer’s GMV or orders processed are outside of specified plan thresholds on a trailing twelve-month basis.
The Convertible Notes will be redeemable, in whole or in part (subject to the “Partial Redemption Limitation” (as defined in the Convertible Notes Indenture)), at our option at any time, and from time to time, on or after October 7, 2024 and on or before the 25th scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of our common stock exceeds 130 percent of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date we send the related redemption notice; and (ii) the trading day immediately before the date we send such notice.
The remaining outstanding 2026 Convertible Notes are redeemable, in whole or in part (subject to the “Partial Redemption Limitation” (as defined in the 2026 Convertible Notes Indenture)), at our option at any time, and from time to time, on or after October 7, 2024 and on or before the 25th scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of our common stock exceeds 130 percent of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date we send the related redemption notice; and (ii) the trading day immediately before the date we send such notice.
Components of results of operations Revenue We generate revenue from two sources: (1) subscription solutions revenue and (2) partner and services revenue. Subscription solutions revenue consists primarily of platform subscription fees from plans and recurring professional services. Subscription solutions are charged monthly, quarterly, or annually for our customers to sell their products and process transactions on our platform.
Components of results of operations Revenue We generate revenue from two sources: (1) subscription solutions revenue and (2) partner and services revenue. Subscription solutions revenue consists primarily of platform subscription fees from plans and recurring professional services. Subscription solutions are typically charged annually for our customers to sell their products and process transactions on our platform.
In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” (as defined in the Convertible Notes Indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time. We may not redeem the Convertible Notes at our option at any time before October 7, 2024.
In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” (as defined in the 2028 Convertible Notes Indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time. We may not redeem the 2028 Convertible Notes at its option at any time before October 7, 2026.
If certain corporate events that constitute a “Fundamental Change” (as defined in the Convertible Notes Indenture) occur, then, subject to a limited exception for certain cash mergers, noteholders may require us to repurchase their Convertible Notes at a cash 48 Table of Contents repurchase price equal to the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date.
If certain corporate events that constitute a “Fundamental Change” (as defined in the 2028 Convertible Notes Indenture) occur, then, subject to a limited exception for certain cash mergers, noteholders may require the Company to repurchase their 2028 Convertible Notes at a cash repurchase price equal to the principal amount of the 2028 Convertible Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date.
NRR for enterprise accounts was 100 percent and 111 percent for years ended December 31, 2023 and 2022, respectively. We update our reported NRR at the end of each fiscal year and do not report quarterly changes in NRR.
NRR for enterprise accounts was 99 percent and 100 percent for the years ended December 31, 2024 and 2023, respectively. We update our reported NRR at the end of each fiscal year and do not report quarterly changes in NRR.
Amortization of intangible assets Amortization of intangible assets consist of amortization of acquired intangible assets which were recognized as a result of business combinations and are being amortized over their expected useful life.
Amortization of intangible assets Amortization of intangible assets consist of amortization of developed technology and acquired intangible assets which were recognized as a result of business combinations. These assets are being amortized over their expected useful life.
Cost of revenue Cost of revenue consists primarily of: (1) personnel-related costs (including stock-based compensation expense and associated payroll costs) for our customer success teams, (2) costs that are directly related to hosting and maintaining our platform, (3) fees for processing customer payments, (4) personnel and other costs related to feed management, and (5) allocated costs, such as, depreciation, technology and facility costs.
Cost of revenue Cost of revenue consists primarily of: (1) personnel-related costs (including stock-based compensation expense and associated payroll costs) for our customer success teams, (2) costs that are directly related to hosting and maintaining our platform, (3) fees for processing customer payments such as credit card processing charges, (4) personnel and other costs related to feed management, and (5) allocated costs, such as, amortization of purchased intangibles, depreciation, technology and facility costs.
Off-balance sheet arrangements We did not have any off-balance sheet arrangements as of December 31, 2023 or as of December 31, 2022. Critical accounting policies and estimates Our consolidated financial statements have been prepared in accordance with GAAP.
Off-balance sheet arrangements We did not have any off-balance sheet arrangements as of December 31, 2024 or as of December 31, 2023. Critical accounting policies and estimates Our consolidated financial statements have been prepared in accordance with U.S. GAAP.
Each account’s partner revenue allocation is calculated by taking the account’s trailing twelve-month partner revenue, then dividing by twelve to create a monthly average to apply to the applicable period in order to normalize ARPA for seasonality.
Each account’s partner 41 Table of Contents revenue allocation is calculated by taking the account’s trailing twelve-month partner revenue, then dividing by twelve to create a monthly average to apply to the applicable period in order to normalize ARPA for seasonality.
Before July 1, 2026, noteholders have the right to convert their Convertible Notes only upon the occurrence of certain events. From and after July 1, 2026, noteholders may convert their Convertible Notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date.
Before July 3, 2028, noteholders will have the right to convert their 2028 Convertible Notes only upon the occurrence of certain events. From and after July 3, 2028, noteholders may convert their 2028 Convertible Notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date.
Equity-based compensation We measure stock-based compensation for stock options at fair value on the date of grant using the Black-Scholes option pricing model. We measure stock-based compensation for restricted stock units (RSUs) based on the fair market value of the common stock on the grant date. Compensation cost is recognized on a straight-line basis over the requisite service period.
Equity-based compensation We measure stock-based compensation for stock options at fair value on the date of grant using the Black-Scholes option pricing model. Compensation cost is recognized on a straight-line basis over the requisite service period.
We believe we possess one of the deepest and broadest ecosystems of integrated technology solutions in the ecommerce industry. We strategically partner with, rather than compete against, the leading providers in adjacent categories, including payments, shipping, point of sale (POS), content management system (CMS), customer relationship management (CRM), and enterprise resource planning (ERP).
We believe we possess one of the deepest and broadest ecosystems of integrated technology solutions in the ecommerce industry. We strategically partner with, rather than compete against, the leading providers in adjacent categories, including payments, shipping, point of sale, content management systems, customer relationship management, enterprise resource planning, and omnichannel.
Pursuant to the Partial Redemption Limitation, we may not elect to redeem less than all of the outstanding Convertible Notes unless at least $150.0 million aggregate principal amount of Convertible Notes are outstanding and not subject to redemption as of the time we send the related redemption notice.
Pursuant to the Partial Redemption Limitation, we may not elect to redeem less than all of the outstanding 2028 Convertible Notes unless at least $100.0 million aggregate principal amount of 2028 Convertible Notes are outstanding and not subject to redemption as of the time the Company sends the related redemption notice.
Enterprise Account metrics To measure the effectiveness of our ability to execute against our growth strategy, particularly within the mid-market and enterprise lines of business, we calculate ARR attributable to Enterprise Accounts. We define Enterprise Accounts as accounts with at least one unique Enterprise plan subscription or an enterprise level feed management subscription (collectively “Enterprise Accounts”).
Enterprise Account metrics To measure the effectiveness of our ability to execute against our growth strategy, we calculate ARR attributable to Enterprise Accounts. We define Enterprise Accounts as accounts with at least one unique Enterprise plan subscription or an enterprise level feed management subscription (collectively “Enterprise Accounts”).
Investing activities Net cash provided by investing activities during the year ended December 31, 2023 was $2.8 million.
Net cash used in investing activities during the year ended December 31, 2023 was $2.8 million.
The Convertible Notes accrue interest at a rate of 0.25 percent per annum, payable semi-annually in arrears on April 1 and October 1 of each year, beginning on April 1, 2022. The Convertible Notes will mature on October 1, 2026, unless earlier repurchased, redeemed or converted.
The 2026 Convertible Notes accrue interest at a rate of 0.25 percent per annum, payable semi-annually in arrears on April 1 and October 1 of each year, beginning on April 1, 2022.
We recognize revenue from Feedonomics’ technology platform and related services under service contracts which are generally one year or less, and in many cases month-to-month. These service types may be sold stand-alone or as part of a multi-service bundle (e.g. both marketplaces and advertising). Services are performed and fees are determined based on monthly usage and are billed in arrears.
We recognize revenue from Feedonomics’ technology platform and related services under service contracts which are generally one year or less, and in many cases month-to-month. These service types may be sold stand-alone or as part of a multi-service bundle 51 Table of Contents (e.g. both marketplaces and advertising).
We enter into contracts with our strategic technology partners that are generally for one year or longer. We generate revenue from these contracts in three ways: (1) revenue-sharing arrangements, (2) technology integrations, and (3) partner marketing and promotion. We recognize revenue on a net basis from revenue-sharing arrangements when the underlying transaction occurs.
We enter into contracts with our strategic technology partners that are generally for one year or longer. We generate revenue from these contracts in three ways: (1) revenue-sharing arrangements, (2) technology integrations, and (3) partner marketing and promotion.
We allocate partner revenue, where applicable, primarily based on each customer’s share of GMV processed through that partner’s solution. Partner revenue that is not directly linked to customer usage of a partner’s solution is allocated based on each customer’s share of total platform GMV.
Partner revenue that is not directly linked to customer usage of a partner’s solution is allocated based on each customer’s share of total platform GMV.
Accordingly, our effective tax rate will vary depending on the relative proportion of foreign to domestic income, use of foreign tax credits, changes in the valuation of our deferred tax assets and liabilities, applicability of any valuation allowances, and changes in tax laws in jurisdictions in which we operate. 42 Table of Contents Results of operations The following table summarizes our historical consolidated statement of operations data.
Accordingly, our effective tax rate will vary depending on the relative proportion of foreign to domestic income, use of foreign tax credits, changes in the valuation of our deferred tax assets and liabilities, applicability of any valuation allowances, and changes in tax laws in jurisdictions in which we operate.
Our future capital requirements will depend on many factors, including our growth rate, levels of revenue, the expansion of sales and marketing activities, market acceptance of our platform, the results of business initiatives, the timing of new product introductions, and the continued impact of the conflict in Ukraine and inflation on the global economy and our business, financial condition, and results of operations.
Our future capital requirements will depend on many factors, including our growth rate, levels of revenue, the expansion of sales and marketing activities, market acceptance of our platform, the results of business initiatives including our efforts in transitioning our customers to annual billings, continued reduction in churn, the timing of new product introductions, the continued impact of the inflation on the global economy, market risk due to elevated interest rates, our business, financial condition, and results of operations.
For U.S. federal income tax purposes and in certain foreign and state jurisdictions, we have NOL carryforwards. The foreign jurisdictions in which we operate have different statutory tax rates than those of the United States. Additionally, certain of our foreign earnings may also be currently taxable in the United States.
The foreign jurisdictions in which we operate have different statutory tax rates than those of the United States. Additionally, certain of our foreign earnings may also be currently taxable in the United States.
The decrease was primarily due to a $7.0 million decrease in bad debt expense, and a decrease of $6.1 million in personnel-related expense. The decrease was partially offset by a $2.5 million increase in professional services fees, including legal and accounting fees associated with growth in the business.
The increase was primarily due to a $2.2 million increase in bad debt expense, and a $1.0 million increase in professional services fees, including legal and accounting fees associated with growth in the business.
We add new partners and expand existing partner relationships to enhance the utility of our platform, while creating new opportunities to expand our revenue share in partner and services revenue.
We continually evaluate prospective and existing partners’ abilities to enhance the capabilities of our customers’ commerce businesses. We add new partners and expand existing partner relationships to enhance the utility of our platform, while creating new opportunities to expand our revenue share in partner and services revenue.
Subscription annual revenue run-rate We calculate subscription ARR at the end of each month as the sum of contractual monthly recurring revenue at the end of the period, which includes platform subscription fees, invoiced growth adjustments, product feed management subscription fees, recurring professional services revenue, and other recurring revenue, multiplied by twelve to prospectively annualize recurring revenue. 39 Table of Contents Average revenue per account We calculate average revenue per account (“ARPA”) at the end of a period by including customer-billed revenue and an allocation of partner and services revenue, where applicable.
Subscription annual revenue run-rate We calculate Subscription ARR at the end of each month as the sum of contractual monthly recurring revenue at the end of the period, which includes platform subscription fees, invoiced growth adjustments, product feed management subscription fees, recurring professional services revenue, and other recurring revenue, multiplied by twelve to prospectively annualize recurring revenue.
Year ended December 31, 2023 2022 2021 Total ARR (in thousands) $ 336,541 $ 311,670 $ 268,665 Subscription ARR (in thousands) $ 256,412 $ 238,395 $ 203,743 Enterprise account metrics: Number of enterprise accounts 5,994 5,786 5,036 ARR attributable to enterprise accounts (in thousands) $ 245,100 $ 223,964 $ 172,858 ARR attributable to enterprise accounts as a percentage of Total ARR 73 72 64 ARPA $ 40,981 $ 38,708 $ 34,324 Net revenue retention We use net revenue retention (“NRR”) to evaluate our ability to maintain and expand our revenue with our account base of enterprise customers exceeding the ACV threshold over time.
Year ended December 31, 2024 2023 2022 Total ARR (in thousands) $ 349,599 $ 336,541 $ 311,670 Subscription ARR (in thousands) $ 264,541 $ 256,412 $ 238,395 Enterprise account metrics: Number of enterprise accounts 5,884 5,994 5,786 ARR attributable to enterprise accounts (in thousands) $ 261,590 $ 245,100 $ 223,964 ARR attributable to enterprise accounts as a percentage of Total ARR 75% 73% 72% ARPA $ 44,458 $ 40,891 $ 38,708 Net revenue retention We use net revenue retention (“NRR”) to evaluate our ability to maintain and expand our revenue with our account base of enterprise customers exceeding the annual contract value ("ACV") threshold over time.
As an example, some of our business metrics include annual revenue run-rate, subscription annual revenue run rate, average revenue per account, lifetime value (“LTV”) to customer acquisition costs (“CAC”) and others are calculated as of the end of the last month of the reporting period.
As an example, some of our business metrics include annual revenue run-rate (“ARR”), subscription annual revenue run-rate (“Subscription ARR”), average revenue per account, and others are calculated as of the end of the last month of the reporting period.
Year ended December 31, 2023 2022 2021 (in thousands) Net cash used in operating activities $ (24,243 ) $ (89,357 ) $ (40,300 ) Net cash provided by (used in) investing activities 2,816 (116,526 ) (186,877 ) Net cash provided by financing activities 1,242 209 305,274 Net increase (decrease) in cash, cash equivalents and restricted cash $ (20,185 ) $ (205,674 ) $ 78,097 As of December 31, 2023, we had $271.3 million in cash, cash equivalents, restricted cash, and marketable securities, a decrease of $33.7 million compared to $305.0 million for the year ended December 31, 2022.
Year ended December 31, 2024 2023 2022 (in thousands) Net cash provided by (used in) operating activities $ 26,254 $ (24,243 ) $ (89,357 ) Net cash provided by (used in) investing activities 105,293 2,816 (116,526 ) Net cash provided by (used in) financing activities (114,036 ) 1,242 209 Net increase (decrease) in cash, cash equivalents and restricted cash $ 17,511 $ (20,185 ) $ (205,674 ) As of December 31, 2024, we had $179.6 million in cash, cash equivalents, restricted cash, and marketable securities, a decrease of $91.7 million compared to $271.3 million for the year ended December 31, 2023.
Subscription solutions are generally charged per online store and are based on the store’s subscription plan. Our 40 Table of Contents Enterprise plan contracts are generally for a fixed term of 12 to 36 months and are non-cancelable.
Subscription solutions are generally charged per online store and are based on the store’s subscription plan. Our Enterprise plan contracts are generally for a fixed term of 12 to 36 months and are non-cancelable. Our pricing strategy provides enterprise merchants a discount for a period of time from their contractual obligations.
We recognize revenue from technology integration fees ratably over the contractual term because technology integration and platform access are deemed to be a single performance obligation.
We recognize revenue from technology integration fees ratably over the contractual term because technology integration and platform access are deemed to be a single performance obligation. Revenue from partner marketing and promotion and non-recurring professional services is recognized as the service is performed.
Subscription solutions revenue increased $23.5 million, or 11.4 percent, to $229.3 million for the year ended December 31, 2023 from $205.8 million for the year ended December 31, 2022, primarily due to the increases in mid-market and enterprise customers along with increases from Feedonomics revenue.
Subscription solutions revenue increased $18.6 million, or 8.1 percent, to $247.9 million for the year ended December 31, 2024 from $229.3 million for the year ended December 31, 2023, primarily due to the increases in SB and enterprise customers along with increases from Feedonomics revenue.
Indebtedness 2021 Convertible senior notes In September 2021, we issued $345.0 million principal amount of 0.25 percent Convertible Senior Notes due 2026 (the “Convertible Notes”). The Convertible Notes were issued pursuant to, and are governed by, an indenture (the “Convertible Notes Indenture”), dated as of September 14, 2021, between us and U.S. Bank National Association, as trustee.
The 2026 Convertible Notes were issued pursuant to, and are governed by, an indenture (the “2026 Convertible Notes Indenture”), dated as of September 14, 2021, between us and U.S. Bank National Association, as trustee.
Our larger customers will often first use our platform to build a single online store that serves a single brand within their portfolio. These customers can then expand their usage of our platform by launching additional stores to serve additional brands, geographies, or use cases (e.g., B2B in addition to B2C).
These customers can then expand their usage of our platform by launching additional stores to serve additional brands, geographies, or use cases (e.g., B2B in addition to B2C).
We believe that our existing cash and cash equivalents and our cash flows from operating activities will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months.
We believe that our existing cash and cash equivalents and our cash flows from operating activities will be sufficient to meet our working capital and capital expenditure needs for at least the next twelve months. Additionally, with our 2026 Convertible Notes restructuring, there was a reduction in liquidity.
Allowance for credit losses We assess the collectability of outstanding accounts receivable on an ongoing basis and maintain an allowance for credit losses for accounts receivable deemed uncollectible.
Services are performed and fees are determined based on monthly usage and are billed in arrears. Allowance for credit losses We assess the collectability of outstanding accounts receivable on an ongoing basis and maintain an allowance for credit losses for accounts receivable deemed uncollectible.
Gross margin increased to 76.0 percent during 2023 from 74.9 percent during 2022, due to increased efficiency in customer service spending.
Gross margin increased to 76.7 percent during 2024 from 76.0 percent during 2023, due to increased efficiency in customer service staffing and spending and the 2024 Restructure.
The period-to-period comparison of operating results is not necessarily indicative of results for future periods.
Results of operations The following table summarizes our historical consolidated statement of operations data. The period-to-period comparison of operating results is not necessarily indicative of results for future periods.
Partner and services revenue increased $6.9 million, or 9.4 percent, to $80.1 million for the year ended December 31, 2023 from $73.3 million for the year ended December 31, 2022, primarily as a result of increases in revenue-sharing activity with our technology partners and improved monetization of partner revenue share.
Partner and services revenue increased $4.9 million, or 6.2 percent, to $85.1 million for the year ended December 31, 2024 from $80.1 million for the year ended December 31, 2023, primarily as a result of increases in revenue- sharing activity offset by decreases in stand ready hosting and integration activity.
As we continue to grow as a platform, we believe our ability to realize more favorable and expansive revenue share agreements will grow as well. 38 Table of Contents We also grow by selling additional stores to existing customers.
As we continue to grow as a platform, we believe our ability to realize more favorable and expansive revenue share agreements will grow as well. We also grow by selling additional stores to existing customers. Our larger customers will often first use our platform to build a single online store that serves a single brand within their portfolio.
We also generate revenue from non-recurring professional services that we provide to complement the capabilities of our customers and their agency partners. Our services help improve customers’ time-to-market and the success of their businesses using BigCommerce. Our non-recurring services include education packages, launch services, solutions architecting, implementation consulting, and catalog transfer services.
We recognize revenue on a net basis from revenue-sharing arrangements when the underlying transaction occurs. 42 Table of Contents We also generate revenue from non-recurring professional services that we provide to complement the capabilities of our customers and their agency partners. Our services help improve customers’ time-to-market and the success of their businesses using BigCommerce.
Comparison of years ended December 31, 2023 and 2022, and the years ended December 31, 2022 and 2021 Revenue The following table presents the components of our revenue for each of the periods indicated: Year ended December 31, Change Year ended December 31, Change 2023 2022 Amount Percent 2022 2021 Amount Percent (dollars in thousands) Revenue Subscription solutions $ 229,265 $ 205,800 $ 23,465 11.4 % $ 205,800 $ 154,933 $ 50,867 32.8 % Partner and services 80,129 73,275 6,854 9.4 73,275 64,922 8,353 12.9 Total revenue $ 309,394 $ 279,075 $ 30,319 10.9 % $ 279,075 $ 219,855 $ 59,220 26.9 % Total revenue increased $30.3 million, or 10.9 percent, to $309.4 million for the year ended December 31, 2023 from $279.1 million for the year ended December 31, 2022, due to an increase in both subscription solutions and partner and services revenue.
Comparison of years ended December 31, 2024 and 2023 Revenue The following table presents the components of our revenue for each of the periods indicated: Year ended December 31, Change 2024 2023 Amount Percent (dollars in thousands) Revenue Subscription solutions $ 247,870 $ 229,265 $ 18,605 8.1 % Partner and services 85,057 80,129 4,928 6.2 Total revenue $ 332,927 $ 309,394 $ 23,533 7.6 % Total revenue increased $23.5 million, or 7.6 percent, to $332.9 million for the year ended December 31, 2024 from $309.4 million for the year ended December 31, 2023, due to an increase in both subscription solutions and partner and services revenue.
Benefit (provision) for income taxes Our benefit for income taxes consists primarily of deferred income taxes associated with amortization of tax deductible goodwill and a tax benefit related to the reduction of the valuation allowance due to the purchase of Makeswift during the year as well as current income taxes related to certain foreign and state jurisdictions in which we conduct business.
Provision for income taxes Our provision for income taxes consists primarily of current state and foreign jurisdictions in which we conduct business, deferred income taxes associated with amortization of tax deductible goodwill. For U.S. federal income tax purposes and in certain foreign and state jurisdictions, we have NOL carryforwards.
There have been no material changes to our critical accounting policies and estimates as compared to the critical accounting policies and estimates described in Management’s Discussion and Analysis of Financial Condition and Results of Operations set forth in our Annual Report on Form 10-K for the year ended December 31, 2023.
Fiscal Year Ended December 31, 2023 and 2022 For a discussion of the year ended December 31, 2023 compared to the year ended December 31, 2022, refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2023.
It consisted primarily of the cash paid for an acquisition of $81.1 million, the purchases of marketable securities of $107.0 million and the purchases of property and equipment of $3.3 million, partially offset by the maturity of marketable securities of $4.5 million.
It consisted primarily of the cash paid for the acquisition of $7.9 million, the purchases of marketable securities of $228.3 million and the purchases of property, equipment, leasehold improvements, and capitalized internal-use software of $4.2 million, offset by the maturity of marketable securities of $243.2 million.
Our ability to retain and grow our customers’ ecommerce businesses often depends on the continued expansion of our platform and the capabilities of our strategic technology partners to provide revenue generating services to our customers. We continually evaluate prospective and existing partners’ abilities to enhance the capabilities of our customers’ ecommerce businesses.
As our customers’ online sales increase, our partner and services revenue generated by revenue-sharing agreements with our strategic technology partners increases as well. Our ability to retain and grow our customers’ commerce businesses often depends on the continued expansion of our platform and the capabilities of our strategic technology partners to provide revenue generating services to our customers.
Interest income Interest income increased by $7.3 million, or 173.8 percent to $11.5 million for the year ended December 31, 2023 from $4.2 million for the year ended December 31, 2022. This increase was the due to higher yields on our cash equivalents and marketable securities in 2023 primarily as a result of interest rate increases.
This decrease was due to lower yields on our cash equivalents and marketable securities in 2024 primarily as a result of less cash, cash equivalents, and marketable securities during the period. Interest expense increased for the year ended December 31, 2024 from December 31, 2023.
Our marketable securities balance of $198.4 million and $211.9 million at December 31, 2023 and December 31, 2022, respectively, consists of investments in corporate and U.S. treasury securities. We maintain cash account balances in excess of Federal Deposit Insurance Corporation (FDIC) insured limits.
Our marketable securities balance of $89.3 million and $198.4 million at December 31, 2024 and December 31, 2023, respectively, consists of investments in corporate and U.S. treasury securities.
If we are unable to raise additional capital when desired, our business, operating results and financial condition could be adversely affected. From time to time, we may seek to repurchase, redeem or otherwise retire our convertible notes through cash repurchases and/or exchanges for equity securities, in open market repurchases, privately negotiated transactions, tender offers or otherwise.
From time to time, we may seek to repurchase, redeem or otherwise retire our Convertible Notes through cash repurchases and/or exchanges for equity securities, in open market repurchases, privately negotiated transactions, tender offers or otherwise. Such repurchases, redemptions or other transactions, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors.
Acquisition related expenses Acquisition related expense decreased by $24.9 million or (70.7) percent to $10.3 million for the year ended December 31, 2023 from $35.2 million for the year ended December 31, 2022.The decrease was primarily attributable to the completion of the recognition period related to the Feedonomics acquisition that occurred in the third quarter of 2023.
Acquisition related expenses Acquisition related expense decreased for the year ended December 31, 2024 from December 31, 2023.The decrease was primarily attributable to the completion of the recognition period related to the Makeswift acquisition that occurred in fiscal 2023. 46 Table of Contents Restructuring charges Restructuring charges increased for the year ended December 31, 2024 from December 31, 2023.
Partner and services revenue increased $8.4 million, or 12.9 percent, to $73.3 million for the year ended December 31, 2022 from $64.9 million for the year ended December 31, 2021, primarily as a result of increases in revenue-sharing activity with our technology partners and improved monetization of partner revenue share. 44 Table of Contents Cost of revenue, gross profit, and gross margin The following table presents our cost of revenue, gross profit, and gross margin for each of the periods indicated: Year ended December 31, Change Year ended December 31, Change 2023 2022 Amount Percent 2022 2021 Amount Percent (dollars in thousands) Cost of revenue $ 74,202 $ 69,980 $ 4,222 6.0 % $ 69,980 $ 48,479 $ 21,501 44.4 % Gross profit 235,192 209,095 26,097 12.5 209,095 171,376 37,719 22.0 Gross margin percentage 76.0 % 74.9 % 74.9 % 77.9 % Cost of revenue increased $4.2 million, or 6.0 percent, to $74.2 million for the year ended December 31, 2023 from $70.0 million for the year ended December 31, 2022, primarily as a result of higher hosting costs of $2.9 million, and $0.9 million of personnel-related costs including stock-based compensation expense and associated payroll costs, and $0.4 million of variable costs.
Cost of revenue, gross profit, and gross margin The following table presents our cost of revenue, gross profit, and gross margin for each of the periods indicated: Year ended December 31, Change 2024 2023 Amount Percent (dollars in thousands) Cost of revenue $ 77,589 $ 74,202 $ 3,387 4.6 % Gross profit 255,338 235,192 20,146 8.6 Gross margin percentage 76.7 % 76.0 % 45 Table of Contents Cost of revenue increased $3.4 million, or 4.6 percent, to $77.6 million for the year ended December 31, 2024 from $74.2 million for the year ended December 31, 2023, primarily as a result of higher hosting costs of $3.1 million.
We expect our sales and marketing expenses will increase in absolute dollars, but will decrease as a percentage of total revenue over time. Research and development Research and development expenses consist primarily of personnel-related expenses (including stock-based compensation expense and associated payroll costs) incurred in maintaining and developing enhancements to our ecommerce platform and allocated overhead costs.
Research and development Research and development expenses consist primarily of personnel-related expenses (including stock-based compensation expense and associated payroll costs) incurred in maintaining and developing enhancements to our ecommerce platform and allocated overhead costs. Software development costs associated with internal use software which are incurred during the application development phase and meet other requirements are capitalized.
Typical Enterprise contracts have terms ranging from 12 to 36 months and do not include the ability to terminate for convenience. As our customers’ online sales increase, our partner and services revenue generated by revenue-sharing agreements with our strategic technology partners increases as well.
As they generate more online sales, we generate more subscription revenue through automated sales-based upgrades on our Non-Enterprise plans and order adjustments on our Enterprise plans. Typical Enterprise contracts have terms ranging from 12 to 36 months and do not include the ability to terminate for convenience.
Accordingly, investors should monitor our investor relations website, in addition to following our press releases, SEC filings and public conference calls and webcasts. Overview BigCommerce is leading a new era of ecommerce. Our SaaS platform simplifies the creation of online stores by delivering a unique combination of ease-of-use, enterprise functionality, composability and flexibility.
Accordingly, investors should monitor our investor relations website, in addition to following our press releases, SEC filings and public conference calls and webcasts. Overview BigCommerce is leading a new era of ecommerce. We provide professional-grade commerce solutions that give businesses the power and agility to build for today with an eye toward tomorrow.
It consisted primarily of the cash paid for an acquisition of $7.9 million, the purchases of marketable securities of $228.3 million and the purchases of property and equipment of $4.2 million, offset by the maturity of marketable securities of $243.2 million. 47 Table of Contents Net cash used in investing activities during the year ended December 31, 2022 was $116.5 million.
Investing activities Net cash provided by investing activities during the year ended December 31, 2024 was $105.3 million. It consisted primarily of the sale and maturity of marketable securities of $205.2 million offset by the purchase of property, equipment, leasehold improvements and capitalized internal-use software of $3.7 million and the purchase of marketable securities of $96.1 million.
This consisted primarily of our net losses adjusted for certain non-cash items, including depreciation and amortization, stock-based compensation expense, amortization of discount on debt, provision for expected credit losses, impairment of right-of-use assets, the effect of changes in working capital and in fiscal year 2023 a one-time final payment related to the Feedonomics acquisition.
This consisted primarily of our net losses adjusted for certain non-cash items including depreciation, amortization of intangible assets, convertible note premium and convertible note issuance costs amortization, stock-based compensation, bad debt expense, impairment losses and accelerated depreciation associated with restructuring, gains on settlement of lease liabilities, gain on extinguishment of convertible notes, and the effect of changes in working capital.
Net cash provided by financing activities during the year ended December 31, 2022 was $0.2 million. primarily consisting of issuance of shares of common stock pursuant to the exercise of stock options. Net cash provided by financing activities during the year ended December 31, 2021 was $305.3 million.
Financing activities Net cash provided by (used in) financing activities during the year ended December 31, 2024 was ($114.0) million primarily consisting of repayment of convertible notes and financing obligations of $109.1 million, payment of issuance costs of $3.2 million related to the Convertible Notes, and taxes paid related to net share settlement of stock options and restricted stock units of $2.4 million.
Operating activities Net cash used in operating activities for the years ended December 31, 2023, 2022 and 2021 was $24.2 million, $89.4 million and $40.3 million, respectively.
We maintain cash account balances in excess of Federal Deposit Insurance Corporation (FDIC) insured limits. 47 Table of Contents Operating activities Net cash provided by (used in) operating activities for the years ended December 31, 2024 and 2023 was $26.3 million and ($24.2) million, respectively.
Operating expenses The following tables present our operating expenses for each of the periods indicated: Sales and marketing Year ended December 31, Change Year ended December 31, Change 2023 2022 Amount Percent 2022 2021 Amount Percent (dollars in thousands) Sales and marketing $ 140,230 $ 141,342 $ (1,112 ) (0.8 ) % $ 141,342 $ 104,872 $ 36,470 34.8 % Percentage of revenue 45.3 % 50.6 % 50.6 % 47.7 % Sales and marketing expenses decreased $1.1 million, or (0.8) percent, to $140.2 million for the year ended December 31, 2023 from $141.3 million for the year ended December 31, 2022, primarily due to a decrease of $3.7 million in personnel-related costs, including stock-based compensation expense and associated payroll costs, offset by a $2.0 million increase in software spend, $0.5 million increase in marketing spend to support revenue growth, and $0.1 million of variable costs.
Operating expenses The following tables present our operating expenses for each of the periods indicated: Year ended December 31, Change 2024 As a % of Total Revenue 2023 As a % of Total Revenue Amount Percent (dollars in thousands) Sales and marketing $ 129,602 38.9 % $ 140,230 45.3 % $ (10,628 ) (7.6 ) % Research and development 80,879 24.3 83,460 27.0 (2,581 ) (3.1 ) General and administrative 61,794 18.6 58,838 19.0 2,956 5.0 Amortization of intangible assets 9,736 2.9 8,422 2.7 1,314 15.6 Acquisition related expenses 1,334 0.4 10,252 3.3 (8,918 ) (87.0 ) Restructuring charges 13,677 4.1 6,434 2.1 7,243 112.6 Total operating expenses 297,022 89.2 % $ 307,636 99.4 % $ (10,614 ) (3.5 ) % Sales and marketing Sales and marketing expenses decreased for the year ended December 31, 2024 primarily due to a decrease of $6.4 million in personnel-related costs, including stock-based compensation expense and associated payroll costs as part of the 2024 Restructure, and a decrease of $4.5 million in variable marketing spend due to efforts to reduce expenditures including the 2024 Restructure.
As we work to develop and deliver this platform for our customers, we will also invest and grow our business by acquiring additional customers to our platform, growing our revenue with existing customers, cross-selling owned and partner solutions to existing customers, expanding our presence in new markets and geographies, and considering targeted acquisitions that can enhance our service to customers. 37 Table of Contents Key factors affecting our performance We believe our future performance will depend on many factors, including the following: Continued growth of ecommerce domestically and globally Ecommerce is rapidly transforming global B2C and B2B commerce.
Key factors affecting our performance We believe our future performance will depend on many factors, including the following: Continued growth of ecommerce domestically and globally Ecommerce is rapidly transforming global B2C and B2B commerce.
We bill customers for subscription solutions and professional services, and we include both in ARPA for the reported period. For example, ARPA as of December 31, 2023, includes all subscription solutions and professional services billed between January 1, 2023, and December 31, 2023.
For example, ARPA as of December 31, 2024, includes all subscription solutions and professional services billed between January 1, 2024, and December 31, 2024. We allocate partner revenue, where applicable, primarily based on each customer’s share of GMV processed through that partner’s solution.
We continue to invest in product functionality to maximize customer success and retention. Our revenue grows with that of our customers. As they generate more online sales, we generate more subscription revenue through automated sales-based upgrades on our Essentials plans and order adjustments on our Enterprise plans.
Retention and growth of our existing customers We believe our long-term revenue growth is correlated with the growth of our existing customers’ commerce businesses. We continue to invest in product functionality to maximize customer success and retention. Our revenue grows with that of our customers.
Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated statements of operations. 50 Table of Contents Recent accounting pronouncements A discussion of recent accounting pronouncements is included in Note 2 to our included audited consolidated financial statements.
Recent accounting pronouncements A discussion of recent accounting pronouncements is included in Note 2 to our included audited consolidated financial statements.
Other expenses Other expenses, net primarily consists of loss from share issuance related to the Bundle acquisition and foreign currency translation adjustments.
Interest expense 43 Table of Contents Interest expense consists primarily of the interest expense from the amortization of the debt issuance costs and coupon interest attributable to our 2028 and 2026 Convertible Notes with offsetting amortization of the debt premium related to the 2028 Convertible Notes. Other expenses Other expense primarily consists of foreign currency translation adjustments.
We expect our general and administrative expenses to increase in absolute dollars but will decrease as a percent of revenue. 41 Table of Contents Acquisition related expenses Acquisition related expenses consists of cash payments for third-party acquisition costs and other acquisition related expenses, including contingent compensation arrangements entered into in connection with acquisitions.
Acquisition related expenses Acquisition related expenses consists of cash payments for third-party acquisition costs and other acquisition related expenses, including contingent compensation arrangements entered into in connection with acquisitions. Restructuring charges Restructuring charges consist primarily of severance benefits, right-of-use asset impairments, lease termination gain, software impairments, accelerated depreciation and amortization, and professional services costs.
Cost of revenue increased $21.5 million, or 44.4 percent, to $70.0 million for the year ended December 31, 2022 from $48.5 million for the year ended December 31, 2021, primarily as a result of higher hosting costs of $4.7 million and increases in personnel-related costs of $6.8 million, including stock-based compensation expense, for personnel involved in providing customer support and professional services and Feedonomics related expenses of $10.0 million.
Research and development Research and development expenses decreased for the year ended December 31, 2024 from December 31, 2023, primarily due to a decrease in staffing costs of $1.0 million, including stock-based compensation and associated payroll costs, and a decrease of $1.4 million in professional services.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAn immediate increase or decrease in interest rates of 100 basis points at December 31, 2023 could result in a $2 million market value reduction or increase of the same amount.
Biggest changeAn immediate increase or decrease in interest rates of 100 basis points at December 31, 2024 could result in a $1.3 million market value reduction or increase of the same amount. In August 2024, we issued the 2028 Convertible Notes with an aggregate principal amount of $150.0 million, the full amount of which is outstanding as of December 31, 2024.
Foreign currency exchange risk All of our revenue and a majority of our expense and capital purchasing activities for the year ended December 31, 2023 were transacted in U.S. dollars. As we expand our sales and operations internationally, we will be more exposed to changes in foreign exchange rates. Our international revenue is currently collected in U.S. dollars.
Foreign currency exchange risk All of our revenue and a majority of our expense and capital purchasing activities for the year ended December 31, 2024 were transacted in U.S. dollars. As we expand our sales and operations internationally, we will be more exposed to changes in foreign exchange rates. Our international revenue is currently collected in U.S. dollars.
We are exposed to credit risk in the event of default by the financial institutions holding our cash and cash equivalents or an event of default by the issuers of the corporate debt securities we hold.
We are exposed to credit risk in the event of default by the financial institutions holding our cash and cash equivalents or an event of default by the issuers of the corporate debt securities we hold. 53 Table of Contents
Added
The 2028 Convertible Notes have a fixed interest rate of 7.50 percent; we do not face variable interest rate risk with respect to the 2028 Convertible Notes. The fair value of the 2028 Convertible Notes changes when the market price of our stock fluctuates or market interest rates change.

Other CMRC 10-K year-over-year comparisons