E-commerce software platform provider BigCommerce (NASDAQ: BIGC) met Wall Street’s revenue expectations in Q1 CY2025, with sales up 2.5% year on year to $82.37 million. On the other hand, next quarter’s revenue guidance of $83 million was less impressive, coming in 1.5% below analysts’ estimates. Its non-GAAP profit of $0.07 per share was 32.5% above analysts’ consensus estimates.
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BigCommerce (BIGC) Q1 CY2025 Highlights:
- Revenue: $82.37 million vs analyst estimates of $82.49 million (2.5% year-on-year growth, in line)
- Adjusted EPS: $0.07 vs analyst estimates of $0.05 (32.5% beat)
- Adjusted Operating Income: $7.59 million vs analyst estimates of $4.49 million (9.2% margin, 69% beat)
- The company dropped its revenue guidance for the full year to $343.1 million at the midpoint from $346.1 million, a 0.9% decrease
- Operating Margin: -2.9%, up from -10.2% in the same quarter last year
- Free Cash Flow was -$2.87 million, down from $11.57 million in the previous quarter
- Annual Recurring Revenue: $350.8 million at quarter end, up 3.1% year on year
- Market Capitalization: $413.3 million
“Our transformation efforts are leading to encouraging signs of progress, including positive increases in pipeline and leads in the three months ended March 31, 2025,” said Travis Hess, CEO of BigCommerce.
Company Overview
Founded in Sydney, Australia in 2009 by Mitchell Harper and Eddie Machaalani, BigCommerce (NASDAQ: BIGC) provides software for businesses to easily create online stores.
Sales Growth
A company’s long-term sales performance is one signal of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Over the last three years, BigCommerce grew its sales at a 11.9% compounded annual growth rate. Although this growth is acceptable on an absolute basis, it fell short of our standards for the software sector, which enjoys a number of secular tailwinds.
This quarter, BigCommerce grew its revenue by 2.5% year on year, and its $82.37 million of revenue was in line with Wall Street’s estimates. Company management is currently guiding for a 1.4% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 4.2% over the next 12 months, a deceleration versus the last three years. This projection doesn't excite us and indicates its products and services will see some demand headwinds.
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Annual Recurring Revenue
While reported revenue for a software company can include low-margin items like implementation fees, annual recurring revenue (ARR) is a sum of the next 12 months of contracted revenue purely from software subscriptions, or the high-margin, predictable revenue streams that make SaaS businesses so valuable.
BigCommerce’s ARR came in at $350.8 million in Q1, and over the last four quarters, its growth was underwhelming as it averaged 4% year-on-year increases. This performance mirrored its total sales and suggests that increasing competition is causing challenges in securing longer-term commitments. 
Customer Acquisition Efficiency
The customer acquisition cost (CAC) payback period measures the months a company needs to recoup the money spent on acquiring a new customer. This metric helps assess how quickly a business can break even on its sales and marketing investments.
BigCommerce does a decent job acquiring new customers, and its CAC payback period checked in at 43.5 months this quarter. The company’s relatively fast recovery of its customer acquisition costs gives it the option to accelerate growth by increasing its sales and marketing investments.
Key Takeaways from BigCommerce’s Q1 Results
We were impressed by how significantly BigCommerce blew past analysts’ EBITDA expectations this quarter. On the other hand, its revenue guidance for next quarter slightly missed and its full-year revenue guidance was in line with Wall Street’s estimates. Overall, this quarter was mixed. The stock traded up 4.7% to $5.45 immediately following the results.
So should you invest in BigCommerce right now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.
