Commerce.com, Inc. Series 1 Common Stock Oppenheimer 29th Annual Technology Conference

Daniel, welcome aboard. Hey, glad to be here.

Sorry about the delay. For everybody on the call, to be clear, my delay is not Oppenheimer's. Sorry about that this morning.

Yeah. Commerce.com plays within the e-commerce space. We have two major assets. BigCommerce, which is our platform that actually processes orders and payments and allows customers to build websites to transact online. We describe that as our transaction layer. The second major part of the business is called Feedonomics. This is the data orchestration layer. This is a business that helps customers take their product catalog and optimize all of its data attributes for discovery and transaction in all of the surfaces where customers are shopping online today, which is becoming increasingly important as the LLMs are really starting to take primary share in actual shopping discovery, which has changed tremendously over the course of the last even just six to nine months. Which we believe is a really good thing and a tailwind in the long run for our business.

And then finally, the third area of the business is called Makeswift, which is a very small part of the business. Think about that almost as kind of like the page builder, front-end storefront builder layer of the solution as a whole. It is not a material part of the revenue of the business today, but we are actually in the process of building out that solution as the core storefront design in the core BigCommerce product, which is going to end up really doing great things for our existing customers and new customers alike when it launches here by the end of the year.

Yeah. I would say Travis Hess is our CEO. He took over about 2 years ago, give or take. And there were kind of 4 main objectives that Travis called out that he wanted to do when he took over as CEO. Number 1, he wanted to make some pretty significant changes to the management team, which is now complete. Second, he wanted to really pivot the focus of the business towards net revenue retention, where historically in the past, like a lot of other SaaS businesses, I would say we over-indexed on new account acquisition as a primary means of driving growth.

The third thing that he wanted to do was really unify the brands under one overall brand architecture, and as a part of that, integrate Makeswift and Feedonomics, which were acquisitions that were made in the last 3-5 years, which were never really fully integrated, either in operations or in technical architecture. And then finally, and perhaps most importantly, he felt when he took over that commerce was going to be shifting much more towards the battleground being discovery and the data orchestration part of the business. And that very much has proven the case. I think it has gone a little faster than what we expected maybe 2 years ago. And what I mean by that is really if you think about commerce historically, e-commerce in particular, it has really been about a very kind of set funnel that leads to transactions.

Customers go through and do discovery through search, SEO search, typically through Google. That traffic then leads a browsing experience direct to the front door of a customer's website, their branded website, and from there, it leads to product pages, which leads to shopping carts and leads to checkouts and transactions. That's really been changing over the course of the last few years. I think that started with a lot of discovery being on different surfaces outside of the core branded website. We talked about this a few years back. You'd hear this term thrown around all the time, called omnichannel within e-commerce. That was really just a way of saying, look, we need to get your product catalog so that it may be discovered in either social channels or marketplaces as well as digital ad channels.

It's even changing further now with how much AI is really starting to take over product discovery, where the surfaces in which products are being discovered in browsing experience is becoming increasingly disparate, and that funnel now looks quite different. The customer's branded website is still a very important channel, but the top of funnel aspect of that, it's one of many channels. You may go to OpenAI or you may go to Perplexity or Gemini, any number of LLM-based search tools. You may go through and say, "Look, I'm taking a hiking trip in 3 weeks.

I need a new pair of boots." You give it the criteria and you say, "Based on what you know about me, what would you recommend?" That LLM needs to be able to access the product data in a way that works for the algorithm itself, and it's best if it has direct access to that catalog. It'll recommend 2 or 3 different sets of boots. Then in most cases, the customer will then out-click from that semantic search result directly to the product page on that customer website and then go to cart and transaction and go from there. But in what I just described, it actually in many cases bypasses the front door of that merchant website.

E-commerce is moving much more towards a notion of where what we really are doing is running Empowering discovery and transaction of product catalogs and the branded website is one channel of many, and increasingly more and more, we think this is where e-commerce is going to shift. Now, it's primarily, I would say, a discovery path today. I think the amount of transactions going through agentic discovery is, quite frankly, fairly overblown. The volumes are fairly immaterial across the industry, but I don't think that'll be the case probably 3 or 4 years ago. But right now, it's very much taking over discovery in a material way.