BigCommerce Shifts From Growth to Profitability as Interest Rates Rise

BigCommerce expects inflation and interest rates to slow its revenue growth this year.

The Software-as-a-Service (SaaS) eCommerce platform said in a Thursday (Feb. 23) earnings release that it expects year-over-year revenue growth of 8% to 12% in 2023 after having achieved a growth rate of 27% in 2022.

“As we look ahead to 2023, the economic conditions of 2022 motivated us to prioritize profitability as our No. 1 goal by year-end,” BigCommerce CEO Brent Bellm said Thursday during the company’s quarterly earnings call. “Obviously, rising inflation and interest rates have made the cost of growth funded by operating losses unattractive to both us and our shareholders.”

The company’s stock fell on the news. In pre-market trading Friday morning (Feb. 24), it was down about 15% from the previous day’s close.

The drop was driven by the revenue projections falling short of investors’ expectations, Seeking Alpha reported Friday.

While BigCommerce forecast full-year 2023 revenue of between $301 million and $313 million, analysts had been expecting the guidance to be stronger at $319.4 million, according to the report.

The company’s shift to prioritizing profitability comes after a quarter in which it launched an Omnichannel Certified Partner (OCP) program that connects its technology partners with merchants that want to boost their omnichannel capabilities; added a StagingPro feature that lets merchants and developers more easily test code; and integrated with accounting technology provider Sage to help merchants pair their online storefronts with their back-office operations, according to the press release.

In December, BigCommerce announced its plan to cut costs and speed its move to profitability.

The company said Dec. 15 that it was laying off 13% of its workforce as it aimed to accelerate its breakeven timeline from mid- to late-2024 to the fourth quarter of 2023.

Bellm said at the time that the firm was refocusing its spending and resources, concentrating on the areas in which it has the greatest advantages and enhancing the strength of its financial profile amidst a challenging economic environment.

In the Thursday earnings release, Bellm said that BigCommerce grew faster than the broader eCommerce industry during a challenging year.

“This strong performance in a tough economy delivered our best-ever gains in market share and global presence,” Bellm said in the release. “BigCommerce’s 2023 plan achieves profitability in Q4 and focuses our execution on eCommerce leadership in the enterprise segment.”

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