Commerce.com, Inc. ($CMRC)

All right. Good afternoon, everyone. Before we begin the Q&A, please note that legal as maybe say this. But please note that our discussion today will include forward-looking statements regarding Commerce's business direction and future plans. These statements are for informational purposes only and are not committed -- are not a commitment to deliver specific materials or functionality because these plans involve risks and uncertainties. Actual results may differ materially. We encourage you to review our SEC filings included in our most recent 10-K for a detailed discussion of these risks. We may also reference non-GAAP financial measures today. You can find the relevant reconciliations in our investor materials. So over the next 90 minutes, you're going to hear directly from Travis, our CEO, followed by a panel with our Chief Product Officer, Vipul Shah; and 3 of our product leaders, sharing on AI, Makela Weber on Payments and Lance Owide on B2B and then we'll close with our CFO, Daniel Lentz. The format is open Q&A for those in the room. We have some questions to get things going, but we want to make sure we answer any questions that you might have. [Operator Instructions] With that, let's get started with our CEO, Travis Hess. So Travis, for those who are online...

Maybe tell us a little bit about how the event is going, what the event is for and what you're most excited about coming out of Commerce Live.

Let's start with what the event is for. Generally speaking, this has been an accumulation of partners both on the tech and the agency side as well as merchants, both existing merchants and prospective merchants certainly and then a bunch of folks in between, it's really a product show to me, right? It's demonstrating where we are with the business, where we are with the product, what's coming, right, validating folks in the building that currently run on one of our products of knowing what it is that we're doing, where it is that we're going and why it is that we're going there and also creating a lot of interactive forms and mediums by which to solicit feedback. It's actually one of the most invaluable mediums for us, particularly around our customer and partner advisory boards where a lot of the prioritization or the inputs to the prioritization framework for product and road map actually come to conversations. So it's really trying to foster think of it less of it as a captive sales pitch, more of it as an input to what we could be doing better, where do we have gaps, where do we have opportunities and at the same time, articulate where it is that we're going and why and obviously taking input both during the sessions and after the sessions and from there, obviously helping synthesize what it is that we're doing. So that's the general gist of it. It's the one time of the year that we bring everybody together. We just did this in EMEA a couple of weeks ago in London at Wembley Stadium. We tend to pick really fancy sporting venues over there. And over here, it's a little more subtle, although I think the venue here is fantastic despite it being April in Chicago could have been much colder.

So you talked about on stage how -- in the last 1.5 years, we went through a lot of transformation, but now we're in execution mode. Can you tell us a little bit about what that means for you?

Well, I think I've been pretty open about the amount of change that we needed to metabolize and digest. I think it started with admitting where I felt there were a lot of gaps mostly around go-to-market, obviously, coming in. I think it was confusing in many capacities, just given the 3 products that we owned, we had not yet integrated. And the fact that the legacy brand was named after the platform, I think I mentioned in my opening remarks today, just Commerce in general is becoming less storefront sense. That doesn't mean the storefront is going away. But I think in my speech, I talked about Commerce moving into more of an environment that is very data center, very distributed and very orchestrated. And what I mean by that is it's never been more important to have enriched organized data as everyone probably in this room uses LLMs on a daily basis, multiple times at least I do, where to be surfaced in those interactions, which are very contextual and very conversational as sharing -- does say and put this in my mind, we've taught robots how to speak human. You've got to be able to have hygiene in your product data and actually have that orchestrated syndicated out to the proper channels where you want to show up. So one of the big changes we've made in the transformation was to integrate our 3 products in a way that not only works better with the core base of customers and depending on what product that they're currently consuming, but also sets them up for the future. It is very often showing up across surfaces, regardless of channel and driving value regardless of where someone may buy your good or service and making that as frictionless as possible. So a lot of the theme here is how did we transformatively bring these products together? How did we create a foundation where we can evolve those products in a very clean and transparent way? How can we modernize them in a way where we can react quickly to market conditions? And how do we just make it easier to do business with, meaning how do we make Feedonomics available, not just way up market with the largest branded manufacturers, retailers in the world, but also for the installed base of e-commerce that didn't exist until Q4 of last year when we launched Surface. How do we move Makeswift and BigCommerce upmarket organically in ways that are now mapping quite nicely to what's going on in the agentic and do that in Harmony and do it responsibly in a way under one brand where, again, we're making a statement as to where this model is going and then obviously earning that credibility over with events like these soliciting that input and evolving the product accordingly. But this is very much a synthesis of a lot of the changes we made behind the scenes, a lot of the cost that we cut where we're reinvesting kind of the fruit of that labor, so to speak, and then give [indiscernible] about where we're operating going forward. But this is very much a product-driven business. Most of this to me I think we have an amazing product team here that's all been demonstrated on stage. And the emphasis here is if we were a restaurant, the product is our food. So we're here kind of giving everybody a taste of the food, and we hope that it's good. And I think not to say we need to be imperfect anywhere else. But I think we haven't spent enough time on the food. We spent a lot of time on the ambulance in the past. And I think it's been a misgiving and it's just in a model now in the market where things are moving so quickly. If you're not foundationally set up for success, the pace by which this model and the market is evolving is such that you can't -- a month behind and us being 6 months to 12 months. So I think we're in a much, much better space with the asset right now. I think it's been hard at times, obviously doing this publicly. But I feel really excited and really enthused about where we are. And I think its momentum from here on out as we ship more product and we drive more customer outcomes and more value. That's the intent.

All right. We have a lot of partners here. What are you hearing from our partners? What are they most excited about? What are the concerns? What are you kind of hearing out there? .

Yes. I think I've tried to take having come out of the services side of the business. I know what it's like to live with these products, implement the products and have merchants of all shapes and sizes digest the products. So I think, a, accessibility to senior leadership, I think, is very well received by partners, I think, cluing them more in on the road map we haven't always been as public as we'd like to be about what it is that we're doing for obvious reasons, maybe some less obvious reasons. I think the big theme, we kind of teed up a year ago was trying to go narrower and deeper with partners of all shapes and sizes. So I think that's probably been the best received input I've gotten is they feel like the partnership, I know it sounds cosmetic. But going deeper with those partners, obviously, AI has disrupted the services business pretty tremendously. So I think anybody investing in our suite of services needs to feel comfortable that they can wrap enriching services around what it is that we're doing. So they like to feel like, a, they're part of that input and b, by proxy, that investment continues to make sense. So we oftentimes need to think like a services provider as well and understand what's enriching for them and what's valuable for them. Because at the end of the day, it's not just self-service software. You need a lot of these partners, whether they're tech partners or payment partners or service providers they're ultimately the ones that are helping execute and reinforce the customer outcomes that we're trying to drive. So that's not something we've done particularly well in the past, not for any nefarious reason. It's just the business tended to be very compartmentalized where we've actually rolled all of our partnerships, both tech and agency under one leader under one group that has never been done before that allows us to run at a pace that we've not been able to run, obviously. And I think that's enthused folks as well where they feel like both sides of that is now harmonized in one group, which didn't exist until about 6 months ago.

[Operator Instructions].

Scott Berg, Needham & Company. Travis, you talked about partners. I know distribution has been a big focus of yours in general, trying to get in more deals over the last 18 months or so. Partners are incredibly important in the space and they're obviously not going away. You lived it last time I checked. But how are you making progress or traction kind of within that to help them either cosell or lead some of these opportunities with you and just getting you more involved? .

Yes. I think it's a couple of motions there, Scott, I think on the -- and let's just talk cohort. Enterprise side, I tried to be pretty clear with this. Most of that distribution is going to be through GSIs. It's going to be through the Accentures, the Deloittes, the EPAMs, PwCs, folks that are embedded globally with the largest merchants in the world, largest retailers, primarily in branded manufacturing as well as manufacturers and distributors. So that's been a distribution channel. I've been very keen on and have come out of that model. I know what works, what doesn't work and how it works. So understand the mechanics of what motivates those distribution channels is obviously an advantage coming in. It allows you to spend a lot much -- a lot less time and lose a lot less hair kind of going and trying to figure out the manage of how the machine works. And also to the point I just made a few minutes ago, also has to be enriching for those organizations, right? If Accenture can't sell high-margin valuable services by way of leveraging our product suite, they're just not in a position to invest in what it is that we're doing, and hence, you lose the distribution. So for us, we've been very particular about triangulating this in a way that maps not only to say their best-in-class capabilities and reach. And they all have different nuances and different mechanics and how they operate. So on the enterprise side, for us, we knew we need to get way more efficient in sales and marketing efficiency. We weren't going to be able to go do this and go it alone. So we needed to do this through GSIs. I think that motion has been very exciting and a lot of momentum there, especially with the cohort of feedonomics. On the mid-market side, which is where you're going to see most of the SG&A and the investment for us and where we've lived historically on the platform side and by proxy Makeswift, that's a bit more of a nuanced kind of verticalized solution. So think of with partners pre composing and predefining industry and sub-industry level accelerators, right, where we are aligning those accelerators by industry and by cohort, we could T-shirt size, like even in regulated industries, right? They have specific nuances across not only tech partners but also service providers that have that expertise. So how do we go deeper with those folks with less of them where the product feels very innate to the merchant. We can get them live much faster than we normally would. It mitigates risk. It obviously accelerates revenue recognition. And it actually drives customer outcome and value, and it also allows those service providers to go wrap in valuable services around that, that's typically based on business outcome. On the small business side, it's been less obviously, service partner oriented. We tried to do a new motion where it's more product-led growth that we've not really had and certainly supporting that with prescriptive payment and technical partners. You've seen that I want to sell [indiscernible] on BigCommerce payments, certainly is a motion there where we feel we can improve our take rate and obviously reduce friction outside of any sort of service providers. I don't know a lot of service providers are going to get rich implementing small business regardless of platform. So that's really been the triangulation. We're in a much better spot to do that. We've got a lot better visibility in how we're doing, and we've got a lot more governance around how well we're actually doing this along the way, which wasn't always the case 1.5 years, 2 years ago when I first got here.

John Masina, Raymond James. So lots of new product announcements today focused around this. But just curious how you think about the size of agentic Commerce for your business over the next few years? Where you see your natural advantage? And maybe what signals you're watching for to see if they're materializing in your time line there? .

That's a great question, John. I think there's a lot of enthusiasm, and Sharon will talk to this way more tangibly than that which she lives it every day. There's a lot of enthusiasm, obviously, upmarket. So a lot of these LLM have been gated in nature. So they're not letting everybody in. Google with UCP has been very pragmatic on how old it out. So there's a lot of demand for discoverability right now. Certainly, that's front and center. And arguably, these guys aren't stupid, right? They're not going to allow people to just syndicate and to be discovered. They want, obviously, them to be transacted. That's the thesis, obviously, going forward. I think at first, maybe a little more hesitation by brands not understanding what that experience is going to look like, what the governance model is going to look like. I think it plays well to us, and I'll get to that in a minute. But a lot of enthusiasm upmarket in that cohort, particularly around retail, larger branded manufacturers. I'll let Lance opine on the B2B side. I think we see some really tangible use cases there, maybe rather than later, but it's less obvious because these are typically behind paywalls and logins and things like that, that aren't necessarily obvious to the general public. Mid-market and down intrigue, but less immediacy, right? It's not, oh, my gosh, get me there tomorrow. Some more than others, depending on market, depending on brand. Certainly, I think we need to display credibility there that we're going to put them in a really good spot when that makes sense for their business, whatever that maturity level is. And I think the big advantage for us listen, the iteration of the restructuring has allowed us to go back to really being a product-centric company, allowing us to ship really credible differentiating product very quickly based on a number of different inputs. I think you're seeing that today and a lot of the talk tracks you're going to see it and what we've shipped to market and what will continue to ship. That's been a big shift from where we've gone before. I think it said in my opening remarks, we're going to ship more in the next 6 months than this company has in its entire lifetime, which goes to a lot of credit, other folks in this room that are way more important than I am as it relates to designing and building product and shipping it. So I would encourage you to ask them about it. I think for us, the biggest differentiation, I think the term gets overused this open versus closed or interoperable versus monolithic and things like -- I think people get confused by the vernacular. The reality of it is robots don't care, honestly, like we can give them governance and guidelines and empower merchants to try to give that as much as they possibly can. But they don't really care who your payment provider is as long as it's mapped to the spec. And I think for us, by definition, I said this in my opening remarks as well, I think the value is accruing in a number of different areas that historically accrue different places. Before it accrued at your storefront, right? How do I get folks to my storefront? How do I create this amazing frictionless, immersive experience and how do I get them to check out. That's not going away. There are going to be a lot of -- everyone looks logically and goes, "Yes, I'm not going to have an agent buy a custom couch for me, right? And arguably, I might not buy custom couch online either. I'm many wanting go in the furniture store and I want to touch the fabric and look at the watches. And by the way, last time I checked, and I've learned this the hard way. Generally speaking, when you buy furniture, it's not in stock. Surprised. So yes, there's going to be industries and sub industries that are never going to leverage this in the way that people would think like agent to agent per se, but the foundation and the rails need to be such where that could take place. And it's ultimately going to make that experience more immersive and smarter. I think being agnostic and open, being interoperable componentizing these 3 products in the way that we've done, I think, is brilliant and differentiating. Again, I don't mean that to sound with Bravada or arrogance. I just think it maps way better to where the world is going in the space because not everyone wants to use all 3 of our products. And to make that argument, regardless of who you are, I think, is a fool's errand. I don't care what platform that might have worked 10 years ago just like Super Target works for a lot of people, but I don't particularly enjoy buying my produce there. I buy it because it's convenient and that may work for some. Most people want best-in-class now and in the future. I think we've been really deliberate about how we've set this up that -- we've got a lot of feedonomics clients that don't use BigCommerce as a platform and never will. That's okay. I still want to serve that market with best-in-class feedonomics. And you may make the same argument with MakeSwift, running on different services or in different ecosystems and make the same argument with components of our cart, right, that may sit through agenetic services, but a merchant doesn't use anything else but that. So anyway, my point in all of this is we want the optionality. We want the agnosticism to make sure that we're not operating in a weird way and compensating to try to commercialize this in a way that doesn't map back to what's in a merchant's best needs. By definition, open is harder to articulate and explain which I think frustrates probably folks in this room and frustrates folks in the world. We need to be better about articulating what this all means and why I think that will get easier to digest as you have real live use cases in market, and you've got real client outcomes that they're testifying against. But we're in early days. I think it's exciting. There's obviously a lot of buzz and a lot of noise, and it's very distracting. But I think, again, real client outcomes, real client use cases, this becomes a bit more tangible understanding going forward.

So Travis, you mentioned a few times that we're going to ship more product in the next 6 months than we have in the last 2 years. Can you give us a few examples or things that you would highlight that you want folks to know about?

Well, I mean I think the obvious ones -- I've not been shy by this. I think feedonomics surface we shipped that on time, first and foremost, back in, I think, late October early November, I can't remember the exact date. It was in Q3, Q4. Bringing that into the core base of BigCommerce customers, I think, is fascinating. And again, early days. The early results we're seeing from those folks that are using those merchants using feedonomics is material year-over-year in improvements. And again, never made that available before you had a product that was very service-oriented that was niched very upmarket. It just wasn't a digestible -- wasn't a digestible offering for the vast majority of our BigCommerce versus the tens of thousands of merchants running on the platform. So for surface is one, [indiscernible] sitting on stencil, obviously, is another that's an obvious replacing what I would consider a fairly arguably outdated UI of Page Builder, which is natively running on the platform. I think it received the largest applause last year at the Summit when we announced MakeSwift is going to be on tensile. Also another one that we're really excited about. I think BC Payments, Michaela will talk about here in a minute. Again, a lot of pressure and input outside, how do we improve our take rate, how do we reduce friction for our merchants and things like that. And then, listen, I think there are a lot of genic capabilities and a lot of brilliant basic capabilities that don't sound sexy, but the fact that we're able to ship them as quickly as they are. It's just -- it's like anything else in life, it's a bunch of little things that bother people. It's not big things. And I think Brilliant Basics is a bunch of little things we're able to kind of close gaps, which again, just reinforces the durability and the ability of Platform. I mean our moat honestly, is our installed base. We've just -- we're never set up to ship or sell product to that installed base, regardless of product. That's one of the big foundational changes we've made. So just that motion, that infrastructure in and of itself, human capitalized, systems-wise, product-wise, commercial-wise, we're launching new packaging and pricing coming up here shortly. Like just things that we probably should have done a while ago. But again, it's chicken and egg. We didn't have these things integrated. And that, in and of itself, will also reduce a lot of friction. We'll reduce downgrades and things like that. That's the spirit behind it. Like being better at feature gating our products, right? These things were just stuff that we're in our way, but it's hard to triangulate all at once. So a lot of enthusiasm there. I can see Lance's eyes on me on the B2B side, which gets not as much press I think our dominance there, particularly in mid-market, B2B has been fascinating. Those folks have been very laggardy in general. So a lot of momentum there and really excited about taking that continuing to take that product up market on the platform side is folks like SAP or forcing upgrades and things like that. We're seeing a fascinating moment in time where there's more ERP replatforms in market right now than I've ever seen and it's a fascinating opportunity to marry front office with back office which was never part of the consideration set 10, 15 years ago when this happened the first time. So that's another opportunity we can take advantage of...

Scott from Needham again. I wanted to just follow up on your pricing and packaging comment in particular. There's a lot of focus amongst soft investors for the platforms that are rolling out some of these agentic functionality to really around the concern being around gross margins in particular and trying to understand how you price and monetize it effectively is how do you think about monetizing some of these AI products? Are you going to get to a more modular type of pricing opportunity? Or does it get built in the core product platform pricing just kind of gets raised and trying to help us think how you think about that.

Yes. I mean listen, I think that's where it's going to go in a least case. I mean people are already talking about it now around tokens and and usage and things like that. I'll let Sharon and Daniel weighing upon more than I will there. I think historically, an order-based pricing model, I think favors you in certain use cases in industry, certainly B2B when conversion is 100% to try to charge that based on JV as a fool's errand. I think that's an advantage. I think you see it in other subverticals like luxury as an example. If I'm [indiscernible] Berg and I'm selling a $3,000 dress, do I really want to pay a percentage of revenue to sell an AOV that high as an example, not to pick on Diane who's lovely at [indiscernible] ones. There are industries where we've got flexibility around the commercial model and pricing. I think this will organically evolve. And it's part of kind of the plumbing and the wiring that we put in here and kind of tried to signal to the market that we know this is evolving very quickly. . We're very open to adapting to where this is going to go. We're not kind of backed into a corner in any capacity. I think just natively, we've got some advantages there and just the way that we've had a line in my talk track this morning is we're trying to work with your architecture like to think having come from services to think that people are going to blow up their architecture and what they've invested in, again, is foolish to think that that's going to happen. We've got to figure out how to work alongside of it and optimize and map what it is that we're doing, how it is that we're doing and how it is that we're charging for it. So I think, Scott, we talked about this a year from now. It's a fascinating question because I want to see everyone else is considering the same things. I think it will evolve. I think it has to evolve. Daniel, do you want to cover...

It's Daniel. I'll jump in the lens as well. So a couple of points I would just kind of reinforce on this is that fundamentally, our products are -- we consider part of the infrastructure layer withinCommerce. And the trends that are happening in agentic, I think, actually reinforced the monetization model. And meaning we're not on a seasons-based model. We're not -- we don't have to make a big change as a result of this. What we have fundamentally is a consumption-based pricing model. As we end up with more and more surfaces that are either from a discovery or transactions flowing through, it just reinforces the importance of the pipes that are actually processing the orders on the checkout side, we would monetize that through orders on our rails the same way we would and have in the past. Agenetic just makes kind of a more diversified inbound where those orders come from, which actually just reinforces the importance of the pipe. So we still monetize on orders. We still monetize on a share basis payments and a whole host of other things on the platform. That doesn't change necessarily when things go through agentic. And then on the feedonomics side of the business, that's based on SKUs that are going out to these surfaces those. As you see more disparate sourcing of volume feedonomics becomes a more core part of the infrastructure with a consumption-based model in a lot of ways based on SKUs. So I'm oversimplifying a little bit. But I think in general, the pricing model doesn't need to shift. I think there's some improvements and changes that we can make to it to kind of make sure we're capturing a better take rate for the strong GMV growth that we're seeing on the platform. But by and large, we actually are encouraged by where this is going. I don't think we really move into kind of a token-based not necessarily, but I don't think we need to do that, at least not in the short term.

All right. Travis, before we open it up to the product team, last question. If you had to leave our investors with one thing about Commerce, if they may not understand what message would you leave with them?

Well, hopefully, the theme of today is that we've actually built the foundation and integrated the assets to where this has been harmonized, right, under that brand. I think Commerce, by definition, the rebranding process is challenging, just based on availability and domains and how do you name yourself something that doesn't back you into a corner. I think the most encouraging thing is you've got an integrated foundation that is back to being product-centric that's going to ship at speed and map to where the model is ultimately headed. And again, depending on cohort, we're going to see that happen at faster paces than others. But I think, ultimately, at the end of the day, I meant what I said in my speech, this is becoming less storefront centric long term. It doesn't mean it goes away. It's expanded. It's really Again, it's data centric, it's distributed and it's orchestrated. I think I explained that in my speech this morning, but it happens everywhere. And merchants, regardless of size need to show up where their customers want to engage them with value regardless of where they buy their good product. we feel like we've got the best infrastructure and market to enable that to happen at scale. And we need to go execute on that market. That's ultimately where we are at this point. But we're finally at a point where we can go run that offense in market. A lot of the last 18 months has been kind of putting the pieces in place to get there. So I'm relieved to be through a lot of the Reno and I feel like Daniel and I and everyone else has been living in it with the dust and everything else, which isn't always convenient. But we've got to go out and execute on what it is we put in place from a strategy standpoint. So that's exciting.

Thank you very much, Travis. Invite the product team to come up. All right. As we get started with the product team. I'm actually going to ask if you guys wouldn't mind introducing yourselves and maybe give a little bit about your background before we get started.

Hi, everybody. My name is Vipul Shah. I'm the Chief Product Officer here at Commerce. I've been with the company for exactly 1 year. Today is my 1-year anniversary. Thrilled to be here with you all and very excited about the momentum that we're building here. Prior to this, a couple of decades in banking and payments on the banking side with the likes of JPMorgan and Wells Fargo, on the technology side with Google and PayPal. So spent a good chunk of my life, enabling merchants, connecting consumers and bringing technology to bear to help consumers and merchants. So thank you.

Hi, everyone. I'm Michaela Weber. I run the payment product and financial services business working for -- my background is in payments and financial services. I was at Goldman Sachs and JPMorgan and then moved over to payments, working at Worldpay and Molly, the Blackstone backed European payments scale up.

My name is Sharon Gee. I'm the Senior Vice President of Product for our Feedonomics product vertical and then a horizontal AI portfolio offerings across BigCommerce, Feedonomics and Makeswift reporting to Vipul.

Lance Owide. I run our B2B product, which is B2B addition and then working cross-functionally with every product team to make sure that we're building for manufacturing distributor use cases. My background a little bit different similar to kind of Michaela. I was on kind of your side of the fence at UBS and then at Apollo private equity. So great to be speaking with you guys today.

Yes. Thanks, everybody. So it's kind of a loaded question because there's a lot going on in each one of our areas. But what are you most excited about in your product area?

Seeing as I have the mic, I guess, I'll go first. And it's kind of harkens back actually to a question that was asked earlier, you kind of asking what's the size of the potential with AI and B2C, that's harder to answer, and I'll leave that to Sharon. But in B2B, if you think about transactions, it's all about efficiency. I don't need an experience where I can see the shoe I'm buying or where I can feel like I understand the brand and the texture that [indiscernible] about. It's about buying widgets and getting it done really efficiently. And you saw on stage we announced our purchase order agent. That's about -- it's about driving real efficiency through the transactions that are occurring and bringing more of them online. And I think as we start to see AI penetrate into the B2B space, the number of transactions that are going to be touched by AI and improved by AI is going to be dramatic. And that's what's really exciting me, things like that purchase order agent and what we build on top of that with agents to automate workflows and reduce friction are going to be great drivers of efficiency for B2B businesses in the back office and for their buy as well. And that's what's exciting me.

I think in the agenetic space, merchants have 2 problems. They are no longer as discoverable as they once were on the channels that they are used to acquiring customers on and then they need to run efficiently like you said. And so what agentic, there was a good question that said, what is the opportunity in agentic and how big is it going to be? Well, it depends on the category, and it depends on who define agentic. Agentic experiences live across both third-party services like ChatGPT and Gemini, but also one of the biggest opportunities is for merchants to launch their own Agentic experiences within their own properties, right? So a shopping assistant that can help you buy a gift for -- based on everything it knows about you. Our merchants understand all of this. And so when I think about what I'm the most excited about, it's the agentic's foundation that in this new world, Commerce is an infrastructure layer. It's no longer just a destination of a storefront on a dot-com. The dot-com is just another channel. It's another front end. And in agentic, it becomes the brain. It becomes the foundation that knows everything about your customers, what they've ordered, what their pricing -- their unique pricing is what their loyalty is and that beating heart, that foundation externalizes to all the channels right, that data that you're improving the catalog, the inventory, the shipping in rules, that becomes the foundation that powers experiences on Gemini, ChatGPT and agentic experience on Slack or WhatsApp, and it's all underpinned by this brain. So I'm the most excited about building that foundation because it becomes critical infrastructure because in agentic merchants are still merchant of record. So they need this in order to be able to participate at scale.

On the payment side, we're making a lot of VB positive changes to reduce the number of partners that we work with and invest more heavily in a select group of integration think one of the unexpected negative outcomes from Commerce being so open to partners for so long with that we had literally over 70 payment partner integrations and especially for our self-serve merchants, the retail plan merchants, they want help. They're not payments experts. They're running their business on a day-to-day. And so while we thought we were doing the right thing by showing them in Travis' word the Cheesecake Factory menu -- actually an enterprise merchant that has a really specific set of needs. They may bring their own payment provider but with the launch of BigCommerce payments, being able to have -- give the option to a merchant to select a bundle that is going to work really well with their storefront plan -- that's something we've had really positive initial feedback. And then we're actively working on taking partners off the platform who haven't updated their integrations who are not having good acceptance rates who are harming our customers' conversion, and you've seen that with some of the pricing and packaging changes we've announced to really move towards still a very generous list of payment providers that our self-serve merchants can choose from, but helping them choose providers that we have a strong relationship with, who are invested in their integration who are going to offer Apple Pay, who are going to work well with our standard one-page checkout. These are really important changes for our merchants to help them run their business better and for us to support their growth. And we know that the net revenue retention is higher for merchants who use one of our core payments partners. So that's what I'm super excited about.

Yes, I'm excited about all those things and the benefit of going last year but probably most importantly, about bringing these assets together and the people assets as well, not just the software assets into cohesion, right? I think Travis settle to really bring Makeswift and BigCommerce and Feedonomics together. There's a real synergy there. We think we're starting to see the benefit of that with our customers, whether it be mix with on stencil whether it be agentic checkout, which allows us to bring agentic Commerce to customers that aren't even on our platform right now, as Sharon has discussed on stage or whether it's stencil, right, bringing multichannel capabilities to the tens of thousands of customers on our platform. So I'm excited about the connective tissue, they're building from a product perspective. between the assets that we have. And then from a people perspective, having been with some of the best companies in the world and the best talent, I'd say this team is right up there with them and really pleased about the team coming together as well.

How do you think about prioritizing? There's a lot of good things going on in Commerce. Travis talked about how we're going to ship more products in the next 6 months than we have in the last 2 years. As a product leader, how do you think about prioritizing the launch of those new products?

It's a great question. All of us product leaders kind of grapple with that. There's always more to do than we have the resources to do -- but I think fundamentally, it's about anchoring in our merchants' needs. We're here in events like this, but even outside of this, the real conversations are happening one-on-one with various customers across the spectrum, right, small, middle, large to understand what the needs are and to understand where we get the maximum leverage in our investments, right, to benefit the larger set of customers. . So a lot of our work is around understanding sort of the common denominator across diverse customer sets that we serve and deploying capital in a way that allows us to get the maximum lift in that, right? So these conversations here today and many happening outside of this room are essential to that prioritization and then working obviously with our finance teams making sure that we get the return on that investment that is absolutely necessary, right? So my background is banking. I come from the finance function as well prior to going over the product side of things. So I understand the need to serve customers, but also to make sure that we're driving value for our shareholders. So there's a disciplined effort, as you know, teller around how we think about value at a project level, how we crystallize that value. And that discipline, I think, is an important part of the prioritization as well.

Maybe one for you, Sharon. So Agentic Commerce has meant a lot of things, and it seems to get thrown to a very broad category. Can you maybe dive down and get specific about what Agentic Commerce means for Commerce and how we compete.

Yes. It's helping our merchants be discoverable on Agentic third-party services like you've seen the announcements with our partnership with Google around Universal Commerce protocol to be able to make Commerce catalogs shoppable, discoverable and shoppable on AI surfaces within Google, our announcements with CoPilot and perplexity and PayPal and Amazon Shop Direct. So it's about discoverability. That's one category of Agentic. And then the other is, it's really about being able to run with agents. So how can you make Europe is more efficient with the launch of BigCommerce companion directly within the control panel, the ability to have a companion that knows everything about how to run a BigCommerce store, how to knows everything about your data and any of the orders that you've had and can be a companion to you and in helping run a store more efficiently to save your team's time. So -- and then lastly, I would say, merchants who are launching agentic experiences that interface with their customers. So when we think about a storefront agent, these are the areas that we're investing in because merchants know so much about their customers. They know what they've ordered and everything. And so when we look at the like the purchase order agent for B2B merchants or a shopping assistant that lives on the front end of a merchant site that can answer, where is my order, tell me about these products? What should I buy my wife for her birthday. These are the kinds of interactions that our merchants are going to be able to turn on very seamlessly with the launch of BigCommerce MCP as of yesterday, that's available to all the Commerce stores. So when we break it down to kind of 3 different areas. And then the fourth, I would say is being able to build the Commerce experiences and Commerce experiences more effectively with agents. So when we think about launching BigCommerce MCP and CLI soon, all of these things are making it possible for Claude to be able to help you build these experiences even more effectively.

Very good. Sharon, one more for you, actually. So these products, they sound really good. Do we have them in hands of merchants right now? And who's using them? And what's the reaction that these products were rolling out?

Yes, we do. You may have seen the public announcement with Dell yesterday about us supporting Dell's Agentic catalog exports to open AI to Google. And so we've been working with Dell for years. We've been sending -- they've been working with Feedonomics to send global catalog in many multiple languages to Google, Meta, Amazon, various different channels from ads, social and sometimes marketplaces perspective, depending on the customer. And then now, increasingly, the identic channels because it's additional data fields that need to go to channels like Google to support Universal Commerce protocol or it's new data completely that's being sent to someone like OpenAI or Perplexity. So when we look at that capability, Dell, Live, for live. We are live with agentic check out kit with PacSun. They run on Salesforce Commerce Cloud, but they're using our infrastructure for the catalog from Feedonomics, the back-end headless checkout capability, that's integrated with PayPal Store Sync that just launched, makes PacSun's catalog shoppable on Perplexity, CoPilot and soon Google as well. And we're working with all of the partner who have major inroads in the agentic. So PayPal, Stripe, Amazon, all the major players in Meta, all of those folks.

So one for Michaela. Michaela, for those new to our payment story, can you talk a little bit about what our journey was to get to BCP, why it's important and how it helps merchants?

Sure. I mentioned earlier that there was open SaaS principles for a long time, which involved really allowing -- partnering with everyone taking a very democratic partner approach to allowing merchants to bring their own provider and then really offering a huge range of payment providers and wallets and some local payment methods for our merchants. And that has resulted in -- I think I mentioned earlier bit of a mixed experience, especially for some of the smaller merchants who really are looking to their platform for guidance on what the best payment provider for them will be for enterprise merchants. It also has resulted in them sometimes not being able to get on an optimal integration because they're, again, choosing from a list. And also, to be totally directed financially, there wasn't an optimized take rate set up. So some of the payment partners that we work with that have volume with our merchants, we don't have attractive rev share economics with, some we do. And so to, number one, be very focused on improving the overall merchant experience and store performance. We took steps to reduce the number of payment providers we're working with to kind of form this more cohesive embedded list, but then also to take the step to launch our own embedded payment solution BigCommerce payments. We did select PayPal as the provider behind that. We're really proud to have announced on March 30 that solution is do have merchants live on the solution today, both self-serve merchants and enterprise merchants. Primarily, we're offering the solution in a product-led growth motion through the BigCommerce control panel. So if you saw the product session, there is within the BigCommerce control panel, a tab where merchants can see BigCommerce payments. We also are rolling out a comprehensive marketing campaign to eligible merchants for whom we think this would be a great fit. And the best thing about the BigCommerce payments is -- not only is it an embedded payment experience within your control panel, which for a merchant saves you from having to log in to 2 different places to see the same thing. But we're also coming to them with a bundle of the payment methods that we know are going to help you run your business, Venmo, PayPal Wallet, Google Pay, Apple Pay, Basic wallet, you'd be shocked by the number of payment providers that we have on our platform who don't offer Apple Pay. If you're a B2C merchant today, Apple Pay is a no-brainer, right? Some of our regulated merchants aren't able to offer Apple Pay, but let's set that to the side. So really ensuring that merchants can have this embedded experience and the initial feedback has been great. So we're really pleased to have launched this journey. I think very importantly, enterprise merchants still have a range of solutions they can choose from. So enterprise merchants can bring their own payment provider on the self-serve side. So are historically retail plan merchants. We have launched an embedded list. BigCommerce Payments is one of the embedded payment providers they can choose from, and it is the only payment provider that has within the control panel experience for customers to manage their payouts and view their balance.

All right. We had a couple of questions.

It seems like you did a really good job moving the product to next level. I'd be curious from your perspective. What you have that you think is truly differentiated from the competition as opposed to where you've just caught up? And then how do you get that differentiation out there from a sales and marketing perspective, to your point, to turn the products into actually growth, right? Because I mean, the business needs to start growing again. So like how are you going -- how are you wrapping sales and marketing and market and that messaging to make it very clear and easy to see why you guys and not Shopify somebody else.

Yes. So I'll start with one. One of the biggest differentiators is in this new era, you need control of the data. You need data governance. You need the ability to understand what data you have and then know what you're missing in order to be able to send it to all the channels because that will require different data. And then you need to be able to tune that generated data with a brand tone, right? So yes, you can go tell Claude to rewrite your product descriptions, but how do you know that it's not going to -- how do you know it's going to sound like the brand tone that you need. However, you know it's going to include the right content and that it's not going to experience drift when you're doing more than 100 SKUs. You need control and data governance layers and observability. We were meeting with one of our customers. And so we are uniquely positioned to do that because Feedonomics has done it with the biggest platforms in the world for over 10 years. We have customers on those other platforms who use Feedonomics for that specific reason. So we have merchants on other e-commerce platforms who know that they need that capability for data governance and so when you think about bringing those 3 things together in terms of differentiation by nature, our ability to understand what data destination scheme as required and then auto generate the best version of that to deliver you the best outcome is a unique differentiator. It's not -- it's about bringing all 3 of the powers together because in this new era, you need not only the flexibility to be able to make sure that works with the text that you have else be forced into a different model that doesn't meet our business requirements, particularly if you're B2B or otherwise. And so the differentiators are both that we give you data control and governance and freedom of choice to be able to make that work with your stack, it's one of the biggest differentiators that exists and why merchants on other platforms use of our components, whether it's front end like Makeswift or data control orchestration capabilities of feedonomics?

I feel quite proud to be able to sit up here and say, our B2B product is pretty differentiated and pretty market-leading, especially in the mid-market. Andy Ho, who is an analyst that just focuses on B2B, last year, he ranked us the #1 B2B mid-market e-commerce platform, which is awesome. And he did that because we've built an incredible set of features that meet the needs and use cases of those businesses, quoting, invoicing approval workflow -- it's built in. It's out of the box. It's ready to go. But if you need to customize it, you can, that's how we support businesses that are doing some $30 billion down to those doing $10 million, the [indiscernible] distribution, right? That was your question. How do we get that out -- and that's what Travis spoke about. It's about getting that story out there with the GSIs for the large enterprise, right? You'll see Accenture here, Deloitte was here, I was meeting with them 1.5 hours ago, talking about exactly that. How do we get our story out. And in fact, in a couple of weeks, I'll be presenting to the Deloitte sales team about Bigcommerce B2B. We need to do a better job there. It's about technology partners as well. Folks like Acumatica, you'll see them, they have a booth out there. That's an ERP platform that's growing -- I misquote it. So it's growing incredibly fast. And we have a huge joint customer base, over 300 customers. We can keep growing that. We're working with their product team to build better and stronger integrations, and that's a pipeline I'm really excited about. And so it's about -- obviously, we just bought JD on board as our new SVP of Partnerships. So working with him both on the agentic side to bring in more of those leads, but also with the technology partners that sit downstream of us, mostly those ERPs in NetSuite, Acumatica, Dynamics, et cetera, to build those relationships and drive more leads over. And a lot of it's an education and positioning problem, but we're working on that and solving that with the vision that Travis set out.

And I would echo that on the channel partners, right? You may have seen an announcement with PayPal today as well as many, many others in the past few months. We go to market with folks like Google and perplexity and Microsoft because if they're advocating, hey, you get really good data from this partner who can support these experiences that we're launching, certainly, that's distribution that we need.

And I think on the differentiation on the payment side, with some of our really standout opportunities with B2B. One of the things that I've been working very closely with Lance on how we continue to innovate on the B2B payment side to ensure that, that is something else that we can take as an asset when we go to market out to win those deals. .

Yes. I'll just add one more thing. Back to the Unity, right? I think you guys might have been expecting for some time now that Makeswift platform, Feedonomics come together and you start to see the fruit of that. And I think to me, that's probably the biggest competitive advantage we have, which is these amazing assets. Business isn't happening in compartments. Customers benefit when we can bring these things together for them in Harmony. And I think with this team, and with the connections we're building between the products, it's just a much more seamless experience for merchants that I think is unparalleled in the industry..

Scott from Needham. Kind of a 2-part question, one for Michaela and one for Sharon. But both of them surround how you think about the future opportunity in your respective areas. I guess on the payment side, Michaela is you have one particular competitor out there that forces all their customers to use their payments. Obviously, on the platform, otherwise, they charge a high fee. But -- how do you think about adoption amongst your customer base if we're looking out 4 or 5 years from now of BigCommerce payments in particular? Just trying to understand the impact there. Both on the existing customer side and maybe what it does for attracting new customers there, helping try to take that friction out. And then Sharon, on the genic side, and I've had a couple of conversations on UCP and what can do in the environment. But what are you starting to hear from some other merchants out there. There's not a lot of volumes out there. I know merchants are kind of slow, but at the same point, they want to run fast there. But as you think about the impact of the business a couple of years out, is this opportunity small, large, too early to define. I'd love to hear how you think about your areas over the next couple of years?

Sure. For the payments adoption question. So we have a benchmark for what we think are best-in-class payments adoption is for merchants using an embedded solution. So we kind of understand what we're working towards. One change that you would see if you signed up for a BigCommerce storefront today is in the self-serve boarding flow, BigCommerce payments is the only prominent tile. So we are -- we have worked very closely with our product and design team to not force merchants to take it, but to make that an attractive option with a very clear call to action and product differentiators and we've been very pleased with the results since we've been live on the new flow of the percentage of new self-serve merchants that have adopted the solution. Our focus right now has been especially lifting and shifting with the support of PayPal, some of our existing PayPal customers onto the new experience. As we move into more of an enterprise motion. Obviously, that's something where currently merchants can choose their own solution. So we would need to ensure that the solution is competitive in terms of features and payment methods with some of the larger solutions that we have on the platform. We have a clear marker internally of what we think good looks like in terms of percentages. But certainly, for our B2C merchants and with some of the developments we have on B2B in terms of adding ACH, for example, and B2B payment methods, we feel really good at the applicability of the solution to a broad set of our customer base.

My response, I'm going to give you agentic once again, I don't think about it as only third-party channels like Gemini and otherwise, right? So the answer is it depends on adoption. So certainly, discovery is critical on these channels right now, right? I want to be discovered on people are asking questions to ChatGPT and Gemini every day. I want my product to be discoverable there. It's early days in terms of GMV flowing through those channels. So I think too early to tell on that. But certainly, it will be by -- it will be different by category. Imagine the mascara that I know that I like to buy, it's not -- it's very easy for me to think I will use a thumbprint to buy that. What about a custom couch and I need to schedule quick delivery for. So it will be different by category, depending on what merchants sell. And then the other thing I would say is it depends on whether you're on owned Agentic. So I think B2B owned Agentic, where you can -- using an agent to automatically build a purchase order to make it easier than ever for a sales team to sell agent informed B2B purchasing, I think, is a really huge opportunity. So I think about it maybe a little bit differently than just third-party agentic channels for discovery.

Yes. I know you didn't ask me, Scott. I think the thing that people often miss in UCP is that it has a logged-in state. And so if you go to Gemini, Gemini knows you when you're searching for a product, you're not looking at your orders and your history for that particular store. But for B2B, where it's an owned agents. And here I mean, we all -- a lot of you work at large companies. You're not allowed to go on Gemini and just give it all your data. You're in your own workspace. A lot of enterprise B2B, that's what they look like. They'll be building their own agents internally. And they can use UCP to log into their suppliers agent and get their bespoke catalog, their bespoke pricing and up-to-date inventory. A lot of B2B today is just data files going back and forth. And now they're dumb pipes really done. And now it's going to be smart. And so I actually think while yes, in B2C, there's a big opportunity, especially around discovery. In B2B, the opportunity is bigger because we can replace a lot more of the tech stack today that is dumb pipes of filed XML files going back and forth with this new logged in agent state -- that means if I buy and I'm looking -- I have 10 suppliers I can purchase from the only ones I can purchase from. That's a lot of big B2B businesses out there. They're not allowed to just go and type in Gemini find me this product. It's not how it works, right? I can't go and purchase products for BigCommerce. I have no, I cannot exactly. I have a list. And I could just go into that agent and say, "Hey, I need this product don't find the suppliers that have actually tell me the price to my work is available and get it for me. UCP enables that. And I actually think the opportunity in B2B is bigger than in B2C. It's a really big opportunity because you could see a huge transformation in the way the transactions occur.

I realize -- sorry, John Masina, Raymond James. I realize a major focus here has been unifying BigCommerce, Feedonomics and Makeswift into a more integrated experience -- but I think you're also kind of focusing on maintaining that stand-alone value. So maybe how do you think about the right balance between deeper integrations while also enhancing the solution so we continue to standalone.

Stand-alone? That's a good question. I think right now, the stand-alone offers are reasonably well understood. So Feedonomics for example, right? I think as a category leader, I think merchants really understand it for the value that it can generate independent of the platform independent of makes with platform itself been around for 15 years, and I think people understand that independent of Feedonomics. I think -- for customers that want to purchase a la carte, they'll continue to have the ability to do that. Composability, the componentization of our infrastructure overall Commerce infrastructure is going to be a fundamental principle. We'll continue to abide by, right? That openness will not a weight. But I think where we can make big strides are in some of the examples I cited, whether it be Makeswift on stencil or Feedonomics surface or agentic checkout is just bringing those together in more seamless ways, right, for customers that are looking for the package, and we know that many of them are as they navigate this complex world of solutions and particularly in the world of Agentic, I think they're looking for more connected solutions, and that's where I think we have a big opportunity to do so, right? So I think we'll be looking at a number of different opportunities to componentize our technology stack to the extent that customers can avail of a capability, ala carte, we'd like to provide that capability and functionality but for many others, we're finding that, that unification is quite beneficial, and we want to pave way for that as well. Anybody want to add anything to that?

John, go ahead, .

Maybe just to follow up on the payment side. I realize that we -- GA a month ago. But just curious if you could talk about how you're thinking about the international rollout there, the opportunity internationally. And then it's been referenced quite a few times on the B2B side. But then as we think about B2B payments as a category here. Maybe can you talk more about where that investment needs to go, so you can continue to serve those merchants well or expand into the B2B payment side? .

Sure. So let's talk about the international rollout. And I would say this is all subject to obviously -- this is in our plans. So the next market we're launching in is the U.K. And then we're planning to launch some select European markets. So the U.K. and some of Europe is Q3. Some of this is dependent on PayPal. We are distributing in this view of some regulators of PayPal solution. So obviously, by market, there's some nuances there. But we're excited about getting to market in those countries where we think this is a really competitive solution. And then I think in terms of rest of world being available in 160 countries, I don't think that, that thing that we view as a differentiator. We want to focus on the core markets where we have both installed customer base and where we know that this is going to be a competitive solution with good adoption. In terms of B2B payments, obviously, B2B payments get a lot of focus because B2B TAM is enormous, and so there's tons of companies focused on how to crack B2B payments. You've heard from Lance. There's so many companies that we work with and in the world from B2B that are using quite manual processes. So our focus is really coordinated with some of the Agentic solutions, some of the B2B developments we have how can we make it easier for merchants to use some of those features and also loop in payments. So invoicing is a great example where there are opportunities to incorporate an easy payments flow where we know and B2B customers would benefit. They are using card payments in some cases. And then also to have that opportunity -- so invoicing is a great example. Just really working through our B2B purchase order flow. We have the new purchase order agent, which is so exciting. So really keeping payments in concert with that because if you have a great purchase order agent that's awesome. But if you're still getting a check payment or COD, which is actually a payment method that we see today from some of our customers, that's slowing down your business process. And so the education also for us with some of our merchants who are heavily allergic to a card payment or anything beyond a manual PO. And one of the journeys that we've been on is trying to help them understand that and also for some of the card volumes, there are regionally compliant surcharging programs that some of our payment provider partners offer and so it's something that we've been discussing is that something that could be attractive to our B2B customers, they'd be able to offer a card payment, but could pass on in a compliant way, the payment processing fee. Would that encourage them to accept card payments. So really focus on B2B payments. It's great if you've got the Ferrari, but if you've got the golf cart engine because you're still accepting very manual payments, like you're not going to be fully optimized so how can we build that in concert with Sharon and Lance and the things they're working on.

Bringing it back to Commerce Live. You're talking to a lot of partners ask us of Travis, but curious to get your opinion. What are our partners talking to you about? What are their concerns? What are they excited about? What's it like out there?

Yes. Well, I think a lot of merchants their data is not ready. And so with the data enrichment capability of Feedonomics, there's a lot of excitement around that because a lot of merchants know my data is in disarray and in order to be able to participate at speed and with relevance in this agentic era, they have to get attributed data ready together. And so a lot of excitement around that product release, which is the ability for us to use GenAI to understand what data you have auto generate up to 4 additional attributes that can be leveraged to better answer the queries of answer engines to make you more discoverable, lots of excitement around that product.

Yes. I think from a partner perspective, it's -- let's get out there and tell the story. I mentioned that with delight, but that's what I'm hearing across the board. And then from a B2B merchant perspective, they're all getting pressure from their boards, what's your AI strategy? And they're looking to us to give them the deck that says, here's take this. And I think the purchase order agent, that's why I get so many of them excited because they can take that to the Board, and they can say, look, here's something we can deliver. It's live on customer sites today. You can go on AS color as I showed on color.com as unique log in, it's logged in only right now for their customers, but you'd be able to do it if you could log in and you've put a PO in and that's because they have customer specific pricing you can't go into. And that we can roll that out onto customer stores. And the way you should think about that is how do we think about that as grabbing operational efficiency? Wolf Automation, there are $5 million to $10 million business. They're here in the audience today. They have a single individual. They pay $80,000 a year. All they do is process POs that's it. They're in the alpha. They're going to be using this tool instead. We get to extract that value. And not only are we providing those merchants with an answer to what's my strategy, I'm doing something, and I'm driving operational efficiency, we're going to save money as we do.

I would say, from the payments and financial services side, we're getting a lot of questions about road map planning together. You saw we launched our Strike OCS integration, updated link integration. We've shipped over 30 new local payment methods on native integrations in the past 12 months. We're working with some of our partners on a forward-looking basis. What features do you have coming out? What do we need to make road map capacity for. We've got a couple of exciting merchant implementations with large partners where they have specific local payment method needs, making sure that those get in the road map that we're working closely with those teams. . So really forward looking. And then I would say all the partners want to co-market with us co-sell, it's big themes of how can we do more together, show up together, especially with some of the accelerators and verticalized industry go-to-market place we've been talking about?

All right. Last question before we bring on Daniel. What's the last thing. If you had one thing to say to our investors, what would you leave them with? How would you describe Commerce and our product team.

I'll go first on holding the mic. I think the product team has been -- is a great source of energy for the organization. I'm so proud of being part of the team and all the new features and developments that we've shipped and what's coming on the road map. And the thing I would leave you with is we are making step changes in the payments business that are really exciting and going to make a big difference long term. And I'm really excited about the time and effort the team has put in to shaping that and the ongoing work ahead of us to continue to improve payments and financial services.

I think the thing I would leave you with is in an era where you need to get your data together, owning the market leader for data capabilities across channels that has been a market leader for 30% of the Internet Retailer 1000 is a really good position to be in. The market needs the thing we have right now, and we are working to make sure that all parts of our customer base across BigCommerce, feedonomics and Makeswift can access that at speed and that it's empowered with agentic capabilities. And so I think that's what I would leave you with is it's a good moment to need to be a data vendor when everybody needs good data.

We have a market-leading product. We are building on that and innovating to deliver more solutions that give us greater attraction that we can charge for. And that's, I think, really what I would leave you guys with. And as we think about how do we distribute more, you have Travis talk about it, and we're working on it. So we have the product. We continue to innovate, greater attach in our customer base and now we're working on that distribution piece.

Yes. And I would just leave you with, we've got a bunch of product people and engineers as well, focused on building great things. That's product people and engineers by Spirit, and that's what they do. I think the one big step change in the last year or so has been the focus on value. So not that each engineer is going to be residing weighted average cost of capital or doing dissertations on Cap M and stuff like that. But every single person in our product and engineering team now knows that what we build needs to make a big difference for our customers and for our shareholders. So there's a level of scrutiny there that hasn't existed in a long, long time. And so I just want to leave you with -- we're not here to just build widgets for widgets sake and get it numbered by this is an agentic thing we built or this is some fancy widget. This is stuff very deeply rooted in customer value and in share value Okay? That's all.

Thank you, Hess, very much. Appreciate it. We'll bring up Daniel Lentz, CFO and COO. All right. So Daniel, first question for you. For those who are not familiar with the story, maybe just give a little background and give the financial profile of the business, just to kick us off. .

Yes. So we do about $32 billion a year in GMV. It's grown 11% and 12% over the last couple of years. We do roughly $350 million a year in ARR, give or taking a little more than that. I think we finished last year, maybe $355 million, something like that. It's profitable business. Last year, we did about nearly $30 million in non-GAAP operating income, almost as much in operating cash flow as well. Historically, the business, I'd say, for several years, like a lot of companies within SaaS. It was growing really fast, was burning a lot of cash. That changed a lot over the course of the last 3 years. And we've really made a ton of progress in terms of balance sheet health, profitability, cash generation, where we are as a business is we're not monetizing that GMV growth as well as we need to be. That's fundamentally where we're at. So when I get questions about kind of where we're at as a business, it's kind of a tale of 2 things. If you look at the fundamental core health of the business, it's a very large scale business. $32 billion in GMV within the Commerce space is very, very large. It's probably the #2 or #3 largest platform on an independent basis, I would say. Where we've had struggles is just the take rate on that GMV. And there are several reasons for that. Michaela mentioned several of those. We just -- we get a lot of revenue share from payments. B2B customers don't do as much credit card transactions, and so we don't see quite as much revenue share there. And then there's other parts of the business where it wasn't really configured to focus on kind of having a really good congruency between customer GMV growth and then revenue growth to the business. And we try to be very transparent about that with our shareholders because a lot of the decisions that we've been making over the course of the last couple of years are really, really laser-focused on improving monetization gap to really show the growth that's proportionate to the scale of the business and also do it in a way that's really healthy underlying net revenue retention dynamics, which I would say are not nearly where they need to be as a business, which we've we started disclosing that metric last quarter as well. So just if you step back and look at the business, it's a healthy, profitable cash flowing business. we're trading where we're trading because we're not growing fast enough. We're not monetizing the growth in the GMV scale that we have, the way that we need to, and that's really, really where the business has been focused.

So we recently announced some pricing changes that are going to go into effect on June 1. Would you mind walking through those, what it is, what it is and why we went about making this pricing change.

Yes. So really glad you asked this question, actually. So soft, we have -- traditionally, we've had 4 plans that we sell on the platform side. And what we announced is the pricing change on the BigCommerce product. We have other changes we're going to be contemplating in the future on other products. But for now, all we've talked about is BigCommerce. We had 4 plans, which were called Standard Plus Pro and then enterprise accounts. Really the differentiation between them is the first 3 were bought just in a served fashion. We've called them retail. We've called them small business. In a lot of different ways, they're misnomers because you may have really large customers that are building test sites on a pro plan, but we're calling it a retail business, but they're actually B2B is really confusing in the way that we name them. And then enterprise plans were exclusively sold through a sales assist motion, but we have small businesses that are in term agreements that are buying enterprise plans, and it leads to just a lot of confusion and market sometimes we get this question, where you have a customer that's doing $1 million a year in GMV. You know that's not an enterprise merchant, right? Like that's a small business. Yes, we know there's a lot of things that were kind of confusing in that, and we said, okay, well, let's do a couple of different things here. Fundamentally, we needed to rethink how we are going about packaging the core platform products. So first, we said, look, let's wipe the light clean in terms of the naming because the naming is a little bit strange in some ways and has been for quite some time. And so we switched the 4 platform products into core growth, scale and performance. Performance plans, it's really the same exact thing as what we had before with enterprise plans. It's literally just a name change. So there's no effect on any customer that is in a negotiated term plan from anything that we have done on the pricing side at all, which is the vast majority of the ARR and GMV that's on the platform. For the other 3 plans that are primarily sold through a self-service motion, we made a couple of different changes. Number one, the entry-level plan, we made a change to the service that goes as a part of that. So we used to offer unlimited free phone technical support if you're buying a $30 a month plan very generous. I don't know of any other competitor that offers that because from a cost to serve basis, it's really difficult to make that work. You get 1 or 2 technical support calls that are challenging, and you may end up paying more than that on the cost side versus what you're getting on the revenue. So we needed to kind of get, I'd say, more in line with best practice and in line with everybody else in the space. So it's unlimited chat. You can a la carte buy to be able to get an upgrade with that plan type in order to get phone technical support, but you have unlimited phone support starting on our growth plans and on up, no change for those at all. Two other changes that we made as a part of this. We also wanted to make sure that all of our customers, as they grew in GMV on the platform product, we're getting a progressively lower take rate, the more that they grew and scaled on the platform. This is not rocket science, this is how pricing works. We had some strange the snow though with our 2 lowest level plans or actually as they would upgrade. Their take rate would sometimes go up and down as they upgraded and it just led to some real confusion for customers. It almost felt like they were being penalized for growth as they were going up some of these self-serve plans. So we needed to change the way the discount slopes worked so that customers had a much more linear improving kind of declining marginal cost as they went up the curve. I sound like such a nerd here as I'm talking about this, but this is the thinking behind it. It was important. And then the last piece is we introduced an open payments provider fee. I mean let me just explain kind of what this is. It only applies to the 3 plans that are available through self-serve, which is very much a minority of the ARR on the platform, but it is a large number of customers that is on the platform it's almost identical to how our largest competitor does this with 1 very notable exception. It is not -- we are not trying to force customers to use BigCommerce payments. I want to be really, really clear about this. We are an open platform. As Michaela was talking about earlier, we have over 100 probably different payments providers that we have built connections into. That's very, very good when customers need that, but it also comes with a lot of overhead cost and complexity for us. where we're carrying a lot of cost to maintain all of those different integrations. And when customers are using our kind of top flight payments providers, we see a demonstrable difference in their GMV growth rates, the net revenue rates that we see on the business -- and so we want to remain open, but we're going to be a little bit more opinionated when we think it gives benefit to the merchants. And so what we've done, what's very different from Shopify as an example, is I think we have 15 or 20 different providers that merchants can choose from and not be subject to any of those open payment provider fees. But if you're going outside of that kind of 20 list that is the best -- have the best integrations has the highest quality product experience, the best growth. Then it carries extra cost for us that can be fairly significant. So we've introduced a fee when you go outside of those top 20. But to be very frank, I want to be clear about this from the CFO and of view. We're not trying to make any money off of that. Like the goal is not to make money off of that fee. It's to really help get merchants on to the payment providers that have Apple Pay and have all of these things are going to make them more successful but ultimately allow us to have a lot better concentration of resources within R&D to focus on a smaller number of partners where we can have the best ingressions possible. And it's really expensive to say, choose your own adventure, you can use any 1 of 200 different payment providers. But I want to be clear, if you're on one of our negotiated agreements, one of our performance plans, there is no open provider fee whatsoever. You still have complete choice and freedom to use whoever you want. That's very core to our ethos as a company. If you're a multinational company operating in 5 different markets. It's very unlike we're going to want to use the exact same credit card provider in Germany that you want to use in Brazil and that you want to use in the United States. And we're not going to put some sort of a financial disincentive in place on really large customers that have that type of complexity to try to get them to go down that path. But for smaller customers, we're really they're going to benefit from having an integrated experience in the coal panel anyway. We wanted to make sure that we incorporated that as well. So the pricing changes are really more about packaging and rightsizing the way that we did discounting we have kind of some cost to serve things in mind, but it actually impacts a fairly small amount of the actual ARR in the business.

We've talked a lot about products and Travis again had said, we're going to launch more products in the next 6 months than we have in the last 2 years. What your CFO hat on, how do you think about that? What are you most excited about with launching all these new products?

The monetization models that come with them, actually, that's a complete CFO question or [indiscernible], I recognize that. But I've talked about this a lot over the years in a lot of ways, our business was overly reliant on a sales assist motion to drive growth. We had a self-serve way for small businesses to buy the platform product directly. But once they were on the platform, there were not a lot of additional monetization paths that were available in order to grow the business. I think if you look at some of our competitors, whether it's Wix, who I think does a really nice job in this area and several others. They have a really good revenue retention even among small customers because I think they've done a nice job in thinking about what is that customer experience how do they need to grow with the business? And then how do you develop product that has congruency between their growth and the monetization? And so with a lot of the things that we're launching, we're introducing new monetization models that can drive long-term growth in net revenue retention that pulls us away from having such a disproportionate weightedness towards a sales assist motion. So the Feedonomics surface product is an example, which we've launched, that's actually our first freemium pricing model that I can think of that we've launched in the time that I've been here, and I've been here almost 8 years, where you use the product, it's free up to a certain amount of usage or a certain number of channels. And if for a lot of our customers, that's all they may need, they may never need to pay anything extra for surface, and that's okay. We will make our money with higher retention of the core platform product, and that I'm totally fine with that. But for the customers that are really more sophisticated, and are growing faster because their product is discoverable on more surfaces, then as they use that product, they will get more and more benefit. And then we have monetization models that kick in behind that. And whether you look at features and how we're setting up Makeswift on stencil, it will have a freemium pricing model baked in behind that. And you may have noticed when we were going through the background of the product leaders that are up here, there's a consistency across all of them that they all come from a Commercial background. And that was a very, very deliberate choice that we had as we were staffing out our leadership team as we wanted folks that were on the product leadership team from my perspective that we're customer-centric, that really, really were strong in product, and we're also very, very good commercially. And so that we can have, as Vipul said, a really good congruency between what's right for the customer, but also what's right for the shareholder. And that's different I think that's a market difference in what I see and what we're launching is now it's much easier for me to see the relationship between the shareholder outcome and what we're launching on product. Whereas before over the last few years, sometimes it felt like we were launching features, but it didn't have as much focus on what that was going to do for the P&L and what was it going to do for our monetization rates. And I get really excited about that. The question in the back of the room.

John [indiscernible] Raymond James. Maybe following up on that. So you've obviously emphasized investments in a number of different categories. So -- just kind of want to double-click on how you think about those as growth levers over time. Which one you expect to see ramp the fastest? And then any impact that could have on sort of the model, right, just from AI, higher compute costs, things like that, just how it can flow through?

I think the disproportionate grower that I would expect is B2B. This has been true. I think it will continue to be true. We are growing disproportionately. I think B2B has probably been the majority of new customer acquisitions for maybe the last 2 years. I'm looking at you teller, it sounds about right. I think that's going to continue. Now what it means from a business model point of view is it puts a lot of focus on the work that Michaela and others are doing and finding ways to better breadth of monetization options to the business for B2B payment methods because it's different. If you look at some of our competitors, as they grow in B2B, they've struggled if they're especially if they're really, really focused on credit card monetization as a primary means of driving revenue growth -- that's not really the core in B2B, and we're not trying to force B2B customers into things that are not good for them, but the payment methods are really quite different. And so it has a little bit of a different effect on what it does from a take rate basis. And so I talked about on our last earnings call as an example, like part of the reason that we have had take rates, the GMV growth has exceeded where we've been on the revenue growth side, that's -- the disproportionate growth of B2B is one of the reasons behind that. Now as we thought about the disclosures we wanted to make and what metrics we're wanting to share, we wanted to be very deliberately transparent with investors to show what exactly is the underlying health of the platform -- and what are some of these issues that we're having to tackle so that we could provide some context behind the product development decisions that we're making because they're very much acutely focused on issues like that. So I think we're going to continue to see a lot of growth in a lot of areas in the business. There's a lot of areas in B2C, where I think we're still doing a very, very good job. We're not going to go after digitally native start-ups in B2C as an example. That's not really an area where we tend to focus. But for complex businesses in B2C, especially whether it's multilevel marketing or just different use cases and stuff in the B2C space, whether it's regulated industries and things like that, we do very, very well there. And then everything that we're doing that Sharon was describing on the AI front, I think, is a good thing for us. I don't think of that necessarily as its own separate business necessarily because we're working so hard to integrate the functionality of those things into all of the core products. Like there's a lot of great things that we're doing to try to help drive agentic shopping. We're seeing a lot more traction, I would say, on agentic discovery, then agenetic checkout today as an example, but the tooling benefits that are good for our customers, whether it's the PO example that Lance talked about, that you could get that excited about drag on dropping a PDF into -- into the control plan will be amazed. It's revolutionary, but it actually is. That's an agentic function that's actually an operational improvement, even though it's not directly affecting shopping. And so I think that when I think about what's going on in the AI world, it's just as much about usability for the customer as it is whether or not it's going to be affecting a direct checkout transaction. And if you look at what we're doing in the product road map, we're not being myopic in my opinion. We're not -- I think we're doing it right. We're not just trying to play soundbiting go about AI and how every transaction that's going to come online is going to come through an agent. It's going to increase in share but that's not going to be the dominant thing. I also care a whole lot about things that may not be as appealing but are directly applicable to our B2B customers or B2C customers like, can you automate the way that I can get PO data input without having to pay somebody to literally do data entry like at 1992, right, those are important things. I think we're going to keep focusing on that.

So last question, Daniel. For those investors who might be on the fence or those investors who are here, what would you leave them with? What would be your pitch be for Commerce?

Yes. I think that we are trading where we are trading because we're not growing fast enough. That's, I think, the fundamental issue. But I think it's really important to separate -- where are we with the fundamentals of the sales the profitability and the cash flow of the business while also being transparent and acknowledging the issues that we need to work with. If you look at where we are as a business, we're a $350-plus million ARR business from -- we guided on our last call, the profit is going to be up almost 60% year-over-year. Profit margins in the kind of mid-teens. You've got 80 million shares outstanding and it's just -- it's a very, very healthy cash flowing business. We have almost no net debt left, really strong cash generation. We're not growing fast enough. Why is that the case? It's because our net revenue retention hasn't been as strong as it needs to be. A lot of that is in product decisions that we are actively investing correct. I mentioned on the last call, we took a lot of painful, but I think good actions over the course of the last year to actually get smaller in certain departments, many of whom report to me so that we could invest more capital back into what we're doing on product and engineering. And I'm really encouraged by what I'm seeing in not only the velocity, but the quality of what we are shipping and what we're putting out in market. I'm more encouraged about that than I have been about anything we've been putting out on the R&D side in the last 8 years that I've been here, and I'm sincere about that. And so I feel really good about what we're seeing in that area. And I think over time, we have the right people in place to also improve what we're doing from a monetization rate basis. But this is a $32 billion GMV business that's trading at less than 1x revenue. While it's cash flowing, has almost no net debt. It's a very, very healthy business. We need to grow faster. And I think we're trying to be very transparent about what are the issues that are behind that, that we're trying to tackle. But I think it's a fundamentally very sticky business. It's an infrastructure business that as AI is starting to really cause more of a disparate inbound channels of where order volume is coming from what we have effectively isCommerce pipes, right? That makes it more important that you have very reliable pipes to actually transact from all those disparate surfaces and we have a product like Feedonomics that's been #1 in this area for over [indiscernible] with huge brands running on it. I think we haven't done a great job in articulating how those 3 assets come together. We've been working on it. I'd say we've done just okay. We still need to do a lot better at that. But there's a lot of things here that I'm really encouraged by that. I think it's I'm not going to speculate on share price. The markets are where they are. But I think fundamentally, the business is a very, very healthy business. We need to be growing faster.

All right. That concludes today's event. So I want to thank all the speakers, those in the room and those who listened online. Thank you.