Commerce.com, Inc. Series 1 Common Stock 2026 Q2 Earnings Call

Thank you. Good morning, and welcome to Commerce's second quarter of 2026 earnings call.

We will be discussing the results announced in our press release issued before today's market open. With me, are Commerce's Chief Executive Officer, Travis Hess, and Chief Financial Officer and Chief Operating Officer, Daniel Lentz. Today's call will contain certain forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning financial and business trends, as well as our expected future business and financial performance, financial condition, and our guidance for both the third quarter of 2026 and the full year 2026. These statements can be identified by words such as expect, anticipate, intend, plan, believe, seek, committed, will, or similar words.

These statements reflect our views as of today only and should not be relied upon as representing our views at any subsequent date, and we do not undertake any duty to update these statements. Forward-looking statements, by their nature, address matters that are subject to risks and uncertainties that could cause actual results to differ materially from expectations. For a discussion of the material risks and other important factors that could affect our actual results, please refer to the risks and other disclosures contained in our filings with the Securities and Exchange Commission. During the call, we will also discuss certain non-GAAP financial measures, which are not prepared in accordance with generally accepted accounting principles.

A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure, as well as how we define these metrics and other metrics, is included in our earnings press release, which has been furnished to the SEC and is also available on our website at investors.commerce.com. With that, let me turn the call over to Travis.

Q2 2026 was another quarter of steady execution for Commerce. We delivered revenue of $84.5 million within our guidance range and non-GAAP operating income of $8.1 million, above the high end of our guidance range of $4 million-$5 million. GMV grew 14% year-over-year to $8.8 billion. We generated positive GAAP net income for the second consecutive quarter, and net revenue retention improved sequentially for the third consecutive quarter to 95.8%. These results reinforce the priority that we've discussed over the past several quarters, building a business with a more durable earnings profile. We believe the structural changes we are making are improving the quality of our revenue, strengthening execution, and positioning Commerce for more sustainable long-term growth. As we look to the second half of the year, we are also making several deliberate decisions that affect our near-term outlook.

Those decisions reflect both the realities of today's market and where we believe Commerce is headed over the long term. Daniel will discuss the financial implications in more detail shortly. Before discussing the quarter further, I want to spend a few minutes on the broader context because it explains both our investment priorities and the decisions we are making today. Commerce is undergoing one of the most significant structural shifts in more than a decade. B2C replatforming activity remains softer than we have seen historically, while AI is changing how merchants evaluate technology investments and delaying monetization across portions of the industry. At the same time, product discovery is becoming increasingly distributed across marketplaces, retail media, AI search, shopping agents, and other emerging buying experiences rather than beginning and ending on a merchant's website. We believe those changes require a different approach.

Rather than optimizing for every possible source of near-term revenue, we are concentrating our investments where we believe we have the greatest differentiation, the strongest right to win, and the opportunity to create the most durable long-term value for merchants and shareholders. We believe one of those areas is product intelligence. AI agents, marketplaces, retail media networks, search engines, and emerging buying experiences all depend on structured, enriched, and continuously optimized product data. As commerce becomes more distributed, we believe product intelligence is becoming foundational infrastructure for modern commerce. That is why Feedonomics has become such an important part of our strategy. Today, Feedonomics synthesizes and transforms more than one trillion product listings every month, giving us unique insight into how product information is structured, enriched, and optimized across the global commerce ecosystem.

We believe that scale positions us to play an increasingly important role as AI-driven discovery and agentic commerce continue to evolve. We have intentionally organized Commerce around three complementary layers or control planes that reflect how we believe modern commerce is evolving. Feedonomics is our product intelligence layer, helping merchants structure, enrich, optimize, and distribute product information wherever discovery or emerging buying experiences occur. Makeswift is our experience layer, enabling merchants to create consistent content and brand experiences across an expanding number of digital touchpoints. BigCommerce is our transaction layer, powering pricing, checkout, orders, APIs, and the operational workflows merchants rely on every day. Each layer is designed to operate independently through an open architecture. Our objective is not to replace everything a merchant already has.

It is to allow merchants the flexibility to adapt the capabilities that create the most value while preserving flexibility across an increasingly distributed commerce ecosystem. More importantly, this framework shapes how we run the company. As commerce undergoes structural change, we do not believe success comes from trying to participate in every opportunity. It comes from concentrating our capital, engineering resources, and partnerships where we have the greatest differentiation, the clearest right to win, and the opportunity to create the most durable long-term value. That philosophy has led us to make a series of deliberate decisions this year. We've narrowed portions of our partner ecosystem, focused our embedded payment strategy around a smaller group of strategic partners, increased investment in product intelligence and AI, and deliberately kept merchant storefronts broadly accessible to AI agents, even though doing so creates an additional infrastructure cost today.

Collectively, those decisions reduce certain near-term revenue opportunities and increase investment in others. They also position Commerce more effectively for where we believe the market is heading. Those trade-offs are reflected in the outlook Daniel will discuss shortly. That operating philosophy is reflected across four priority investment areas. First, AI and agentic commerce. Momentum continued following Commerce Live 2026 as we expanded merchant distribution across leading AI assistants, commerce platforms, and payment ecosystems. We also continued to see growing adoption of Commerce Companion within the BigCommerce platform, helping merchants automate workflows, analyze data, and become more productive. Looking ahead, we remain excited about several new capabilities launching in the second half of this year. In Q3, we expect to introduce new data enrichment offerings across both Feedonomics and BigCommerce that improve and measure how products are discovered across traditional and AI-driven channels. In early Q4, we expect to launch the B2C brand agent and conversational search for BigCommerce.

That sequencing is intentional. We believe intelligent commerce begins with high-quality product intelligence, and each of these capabilities becomes more valuable as the underlying catalog becomes richer, more complete, and better optimized. Second, Feedonomics Surface and Makeswift. Surface continues extending the power of Feedonomics to SMB and mid-market merchants through a self-service experience, making enterprise-grade product intelligence accessible to a much broader segment of the market. We continue to see encouraging adoption and stronger GMV growth among Surface merchants, reinforcing our conviction that product intelligence should be accessible regardless of merchant size. Makeswift also remains on track for a year-end freemium launch within BigCommerce, bringing modern visual editing directly into the platform.

Together, Surface and Makeswift expand our addressable market, strengthen our product-led growth strategy, and create additional opportunities to increase customer adoption over time. Third, BigCommerce Payments. BigCommerce Payments continued building momentum following its U.S. launch earlier this year. Merchant adoption and payment volume continue to exceed our expectations. We've expanded availability to additional merchant cohorts, and we remain on track for a U.K. launch later this year. Strategically, Payments represents much more than another product offering. It expands how Commerce participates in the growing volume of commerce flowing across our platform. As GMV grows, Payments creates an opportunity to deepen merchant relationships, increase monetization, and further strengthen the long-term economics of our business. Finally, B2B. We also continued investing in the capabilities that matter most for manufacturers, distributors, and other complex commerce businesses.

B2B remains one of the areas where we believe we have a durable competitive advantage, and we continue to invest accordingly. That leadership was recognized again this quarter as BigCommerce earned all 24 possible medals across the enterprise and mid-market editions of the 2026 Paradigm B2B Combine for the fourth consecutive year, including recognition for vision and strategy, ability to execute, and customer support. Taken together, these investments reflect a common theme. We are concentrating our resources behind the areas where we believe Commerce has the strongest differentiation, the clearest right to win, and the greatest opportunity to create durable long-term value for both merchants and shareholders. Beyond our product roadmap, we also continue to see encouraging execution across the business. Our strategic partnership with Accenture continued to build momentum during the quarter, including a product intelligence win with one of the world's largest branded footwear and apparel manufacturers.