커머스(CMRC) 2026년 3분기 실적 발표 콘퍼런스콜: 이익 전망 상향

핵심 요약

• 2026년 3분기 매출은 8,420만 달러로 경영진 가이던스에 부합했으며, 비GAAP(Non-GAAP) 영업이익은 800만 달러로 회사 가이던스 범위를 상회했다. 비GAAP 영업이익률은 9.5%를 기록했다.
• 총거래액(GMV)은 전년 동기 대비 14% 증가한 약 90억 달러를 기록했다. 경영진은 결제, 교차 판매, 제품 연계 판매율(attach rate) 제고를 GMV 성장과 매출 실적 간 격차를 좁힐 핵심 기회로 꼽았다.
• 빅커머스는 2026년 연간 매출 가이던스를 3억 3,900만~3억 4,200만 달러로 유지한 한편, 연간 비GAAP 영업이익 전망치는 3,530만~3,730만 달러로 상향 조정했다.
• 회사는 연환산 6,000만~8,000만 달러 규모의 비GAAP 운영비용 절감과 2027년부터 연간 비GAAP 영업이익률 최소 20% 달성을 지속해서 목표로 하고 있다.
• 총 ARR(연간반복매출)은 전 분기 대비 약 290만 달러 감소한 3억 5,760만 달러를 기록했으며, 순매출유지율은 2분기 95.8%에서 94.7%로 하락했다.
• 대니얼 렌츠(Daniel Lentz) CFO 겸 COO는 11월 13일 퇴임한다. 후임자 인선 기간 동안 타일러 던컨(Tyler Duncan)이 임시 CFO를 맡고, 다른 임원진이 COO 업무를 분담할 예정이다.

핵심 재무 데이터

매출총이익률 압박은 생태계 변화에 따른 파트너 및 서비스 매출 감소와 AI 관련 인프라 비용 증가를 반영한 것이다. 당초 4분기로 예상됐던 약 300만 달러의 비용 절감은 3분기 중에 실현됐다.

사업 및 운영 실적

빅커머스는 2026년 들어 분기 기준 최대 규모의 신규 영업 파이프라인을 창출했다고 발표했다. 경영진은 B2B 제조 및 유통, 규제 산업, 다단계 마케팅 및 직접 판매 등 전략적 분야에 영업 활동이 집중됐다고 밝혔다. 전통적인 D2C(소비자 직접 판매) 수요는 여전히 부진했으나, 전환율은 연중 대체로 안정적인 수준을 유지했다.

빅커머스 페이먼츠(BigCommerce Payments)는 3분기 실사용 상점 수가 전 분기 대비 약 65% 증가하며 성장에 탄력을 받았다. 해당 서비스는 9월 영국에서 출시됐다. 경영진은 결제 서비스가 현재 신규 고객 유치보다는 주로 수익화와 고객 유지에 집중하고 있으며, 초기 이용 지표에서 고객 락인(lock-in) 효과 개선이 나타나고 있다고 설명했다.

회사는 결제 수익 배분에 더욱 직접적으로 참여할 수 있도록 빅커머스 페이먼츠의 완전한 화이트라벨(white-label) 버전을 검토하고 있다. 경영진은 또한 인보이스 발행, 발주서, 결제 조건 등을 아우르는 B2B 결제 기능도 평가하고 있다.

빅커머스는 AI 및 제품 인텔리전스 제품군을 지속해서 확장했다. 피도노믹스(Feedonomics) 데이터 인리치먼트와 빅커머스 카탈로그 인리치먼트가 정식 출시(GA)됐으며, 출시 첫 주에 수백 개 상점이 카탈로그 인리치먼트를 유료 기능으로 도입했다. 8월 출시된 빅커머스 컴패니언(BigCommerce Companion)은 1만 개 이상의 상점에서 사용됐다.

회사는 또한 대화형 검색, 쇼핑 에이전트(Shopping Agent), B2B 발주 에이전트(B2B Purchase Order Agent), 클라우드플레어 WebMCP, 아마존 숍 다이렉트(Amazon Shop Direct) 연동을 도입 또는 확장했으며, 구글의 유니버설 커머스 프로토콜(Universal Commerce Protocol)에도 참여했다. 3분기 중 로레알(L’Oréal)은 피도노믹스를 글로벌 제품 인텔리전스 관리 파트너로 선정했다.

수천 곳의 입점업체가 셀프서비스 제품인 서피스(Surface)를 이용하고 있다. 경영진은 현재의 우선 과제가 이러한 이용을 반복 매출로 전환하는 것이라고 밝혔다. 메이크스위프트(Makeswift)는 기존 입점업체에 대한 하위 호환성을 유지하면서 1분기 초 호스팅 플랫폼의 기본 비주얼 에디터 및 경험 레이어로 적용될 예정이다.

경영진 가이던스

중간값 기준 연간 비GAAP 영업이익 가이던스는 지난 9월 제시된 전망치 대비 230만 달러 상향됐다. 이번 수정 전망에는 이전 예상치였던 약 300만 달러 대신 2026년에 실현될 약 500만 달러의 비용 절감 효과가 반영됐다.

경영진은 연환산 6,000만~8,000만 달러 규모의 비GAAP 운영비용 절감을 지속해서 목표로 하고 있으며, 해당 효과는 2027년에 온전히 나타날 것으로 예상된다. 계획의 실행은 2027년 2분기까지 대체로 완료될 전망이다.

회사의 잠정 사업 계획에 따르면 2027년 매출은 2026년 수준과 대체로 비슷할 것으로 가정됐다. 이러한 가정에도 불구하고 경영진은 2027년부터 연간 비GAAP 영업이익률 최소 20%를 달성하겠다는 목표를 재확인했다. 이 목표는 매출 성장 가속화라는 가정을 전제로 하지 않는다.

빅커머스는 4분기에 400만~850만 달러, 2027년 상반기에 추가로 220만~420만 달러의 구조조정 비용이 발생할 것으로 예상했다. 아울러 이사회는 2028년 9월까지 진행되는 5,000만 달러 규모의 자사주 매입 프로그램을 승인했으며, 실제 매입은 시장 상황, 유동성 및 기타 자본 배분 우선순위에 따라 결정된다.

위험 요인 및 주시 사항

• 기존 '파워드 바이(Powered by)' 계약 1건의 미갱신과 일부 롱테일 파트너 계약 철회로 인해 ARR과 순매출유지율이 하락했다.
• AI 관련 인프라 비용이 매출총이익률을 지속적으로 압박하면서 인프라 효율화가 사업 운영 계획의 중요한 축으로 자리 잡았다.
• 경영진은 파이프라인 성장이 실제 수주와 지속적인 매출 성장으로 이어져야 한다고 밝혔다. 전통적인 D2C 수요는 여전히 부진한 상태다.
• 결제 모델이 보다 통합되면 현재의 순매출 수익 배분 회계처리 대신 총매출 인식 및 관련 결제 처리 비용 반영 방식으로 전환될 수 있다. 경영진은 도입이 점진적으로 확대될 것으로 예상하며, 이러한 잠재적 회계 변경은 2027년 마진율 목표에 이미 반영됐다고 설명했다.
• 구조조정 비용 지급은 비GAAP 영업이익 산정에서는 제외되더라도 집행 기간 동안 잉여현금흐름에 영향을 미칠 예정이다.
• 비용 절감 계획이 진행되는 과정에서 CFO 및 COO 교체에 따른 경영진 변동이 발생했으나, 경영진은 이것이 회사의 전략이나 재무 목표를 바꾸지는 않는다고 밝혔다.

애널리스트 Q&A 주요 내용

경영진은 개선된 파이프라인이 투자가 확대된 분야, 특히 B2B 제조 및 유통과 함께 규제 산업, 직접 판매 등 복잡한 B2C 부문에 집중됐다고 설명했다. 3분기 미갱신 계약과 맞먹는 수준의 중대한 '파워드 바이' 또는 파트너 계약 해지는 현재 가이던스에 반영된 것 외에는 추가로 예상되지 않는다고 덧붙였다.

결제 부문과 관련해 경영진은 빅커머스 페이먼츠가 기존 고객들 사이에서 내부 기대치를 웃돌았으나, 신규 파이프라인 성장을 이 제품 덕분으로 보기에는 아직 이르다고 말했다. 회사는 카드 기반 B2C 거래와 인보이스 발행 및 발주서 처리 등 B2B 워크플로 양쪽 모두에서 추가적인 수익 창출 잠재력이 있다고 보고 있다.

경영진은 에이전틱 커머스(agentic commerce)를 고도화된 제품 데이터, 거래 조율(orchestration), 커머스 프로토콜을 아우르는 인프라 측면의 기회로 규정했다. 피도노믹스는 입점업체의 기반 커머스 플랫폼과 관계없이 서비스를 제공할 수 있는 제품 인텔리전스 레이어로 자리매김하고 있다.

회사는 2027년 비GAAP 영업이익률 최소 20% 달성 목표가 연말 기준 도달률(exit rate)이 아닌 연간 기준 약속임을 분명히 했다. 경영진은 결제 총매출 인식 방식으로의 점진적 전환이 해당 목표의 재검토를 요구할 것으로는 현재 예상하지 않고 있다.

실적 발표 컨퍼런스 콜 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Good morning, everyone, and welcome to Commerce Third Quarter 2026 Financial Results Conference Call. [Operator Instructions] Please note that this event is being recorded.

I would now like to turn the conference over to Tyler Duncan, Senior Vice President, Finance and Investor Relations.

Tyler Duncan

Good morning and welcome to Commerce's third quarter 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 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 fourth quarter of 2026 and the full year of 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 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.

Unknown Speaker

Thanks, Tyler. Q3 revenue was $84.2 million, in line with guidance, and non-GAAP operating income was $8 million, above our guidance range. GMV grew 14% year over year to $9 billion. Following our Q3 results, we are raising our full-year profitability outlook while maintaining our revenue guidance midpoint, which Daniel will walk you through shortly.

Our results reflect progress on the strategic operating plan announced in September. We remain on track towards our target of at least 20% full-year non-GAAP operating margins beginning in 2027. We are reducing costs in areas that are not central to our strategy. We are simplifying the organization and using AI and automation to improve productivity. At the same time, we are protecting investment in the products and teams needed to retain customers, improve monetization, and drive revenue growth. The priorities that we'll discuss today reflect where we're choosing to invest as we execute this plan. Daniel will cover the financial details.

I will focus on our strategy and what we are seeing in the business. For investors newer to Commerce, we operate across 3 connected parts of the commerce technology stack: Productsup provides technology that helps merchants organize, improve, and distribute product information across traditional and AI-powered commerce and discovery channels. Makeswift enables merchants to create and manage flexible, engaging digital experiences. And BigCommerce powers transactions and complex commerce operations, particularly for manufacturers, distributors, and retailers with sophisticated requirements. Merchants can leverage these capabilities independently or together, giving us multiple ways to serve customers and expand our relationships over time. Our strategy reflects how commerce is evolving. As discovery and purchasing increasingly extend beyond traditional storefronts, merchants need better product intelligence, more flexible digital experiences, and reliable infrastructure to manage complex transactions.

We have differentiated assets across these areas, and we are concentrating our investments where we see the clearest opportunities to improve customer retention, monetization, and long-term growth. Let me start with commercial execution. Q3 was our strongest quarter of the year so far for pipeline generation. Our focus is converting that activity into bookings and revenue while improving retention. We are also developing our capabilities for emerging agentic commerce use cases. While we still have work to do translating this momentum into sustained revenue growth, the underlying trends are encouraging. Turning to our 4 product priorities, I'll start with AI and product intelligence.

Agentic commerce is changing how products are discovered, how shoppers make purchasing decisions, and how merchants run their businesses. We are building the product intelligence and commerce infrastructure to support these experiences across BigCommerce and Feedonomics. Feedonomics data enrichment and BigCommerce catalog enrichment are now generally available, and hundreds of stores adopted catalog enrichment as an additional paid feature in its first week. More than 10,000 stores have used BigCommerce Companion since its launch in August to help manage their stores, customize storefronts, and improve discoverability. We also recently opened conversational search to paid BigCommerce stores in the U.S. and Europe. Our Shopping Agent and B2B Purchase Order Agent are in early access, supporting guided shopping and turning emailed purchase orders into ready-to-checkout carts. We are also expanding the channels through which AI agents can discover and transact with our merchants.

Through our partnership with Cloudflare, WebMCP is now live, enabling browser-based shopping agents to interact with BigCommerce storefronts. Feedonomics has launched early access to Amazon Shop Direct, allowing eligible merchants to connect their existing product catalogs to an additional discovery channel. We are also participating in early access to Google's Universal Commerce Protocol with approved BigCommerce merchants already receiving orders. Together, these capabilities help merchants participate in emerging shopping experiences while creating additional opportunities for adoption and monetization across our products. L'Oréal, the world's largest beauty company, selected Feedonomics as its global product intelligence management partner in Q3. This demonstrates our ability to compete for complex global enterprise opportunities. As product discovery expands across marketplaces, advertising channels, search, social, and AI-powered experiences, accurate and enriched product information is becoming increasingly critical.

Importantly, this win reinforces the role Feedonomics can play as a product intelligence layer across the broader commerce ecosystem, independent of a merchant's underlying commerce platform. Second is Surface and Makeswift. Surface makes Feedonomics available to smaller merchants through a self-service product, allowing them to get started without a traditional enterprise sales process. Thousands of merchants are now using Surface, and early usage data shows higher average revenue growth among those users compared with merchants not using the product. Our focus is converting that adoption into recurring revenue. Makeswift gives merchants the tools to visually build, customize, and update their storefronts, helping their teams bring differentiated shopping experiences to market faster. As we've mentioned previously, we are launching Makeswift in early Q1 as the default visual editor and experience layer for our hosted platform, which will also have full backwards compatibility for our existing merchants. These products support our product-led growth strategy.

They also create opportunities to introduce additional commerce capabilities to customers over time. Third is BigCommerce Payments. Our platform processed approximately $9 billion in GMV overall during the quarter, growing 14% year over year. That growth continues to outpace our top-line revenue performance, highlighting the opportunity to generate more revenue from commerce already flowing through our platform. Payments is a key part of that opportunity, particularly as we expand our capabilities to support the more complex transaction requirements of B2B merchants. BigCommerce Payments, powered by PayPal, continues to gain traction, with the number of live stores growing approximately 65% sequentially during Q3. We are seeing adoption across small and large customers, and we continue to broaden availability to more performance plan merchants. We also launched in the U.K. in September and have been very pleased with early adoption and merchant feedback.

These efforts, alongside continued enhancements to the merchant experience, support our opportunity to expand payment adoption and improve monetization of the transaction volume on the BigCommerce platform. Daniel will discuss some of the additional payment capabilities we are evaluating and their potential financial implications here shortly. Fourth is B2B commerce. Complex B2B commerce remains an important area of differentiation, particularly among manufacturers and distributors. These customers require capabilities such as contract-specific pricing, quoting, complex inventory management, and integration with existing business systems. Our recent customer announcements show how we are winning in this market. Gutter Supply selected BigCommerce to replace a legacy platform serving contractors and retail customers. Its implementation supports tiered pricing, invoicing, purchasing terms, and an improved customer experience. It also uses Feedonomics to manage its Google Merchant Center feed.

Waterco is another example. The manufacturer and distributor moved from phone and email ordering to a digital experience supporting more than 45,000 products, including complex inventory, quoting, and freight requirements. Brompton, the British foldable bicycle manufacturer, launched its new Brompton Partner Portal on BigCommerce B2B Edition, giving its global network of independent retailers a modern ordering experience. Brompton first launched its direct-to-consumer site on BigCommerce in 2024. The new partner portal extends that foundation to the wholesale side of the business, which accounts for roughly 75% of Brompton's total sales across over 1,000 retail partners worldwide. These are the types of customers and use cases we are prioritizing. We believe these implementations demonstrate our strength in complex B2B commerce. They also illustrate how we can expand customer relationships across BigCommerce and Feedonomics.

Let me close by reaffirming our operating priorities. Our priorities are clear: convert pipeline into bookings, improve retention, and expand monetization. We are concentrating our resources on these objectives while delivering the more efficient cost structure we've targeted. The next step is demonstrating progress through stronger commercial execution and measurable financial results. Before turning to Daniel, I want to share a leadership update. Daniel has accepted an opportunity to serve as Chief Financial Officer at another publicly traded technology company and will depart effective November 13th. On behalf of our board and team, I want to thank Daniel for his contributions over the past 8 years. He has helped strengthen our financial discipline and balance sheet, and we wish him the best in his next role.

Tyler Duncan, our SVP of Finance and Investor Relations, will become interim CFO upon Daniel's departure. Tyler has played an important role in our planning and execution of our operating plan. He knows our business and priorities well and will provide continuity through this transition. Other members of our leadership team will assume the COO responsibilities while the board evaluates candidates for the permanent CFO and COO roles. This transition does not change our strategy or our financial targets. Daniel, I'll turn it over to you.

Daniel Lentz

Thanks, Travis. Let me start with our financial results for the quarter. Q3 revenue was $84.2 million, in line with our guidance range of $82.5 million to $85.5 million. Subscription solutions revenue was $64.7 million, and partner and services revenue was $19.5 million. Non-GAAP operating income was $8 million, above the high end of our guidance range of $3.3 million to $5.3 million, representing a non-GAAP operating margin of 9.5%. The outperformance was primarily driven by approximately $3 million in savings originally anticipated in Q4 that we realized in Q3. We are maintaining our full-year revenue outlook at the midpoint and raising our full-year non-GAAP operating income outlook, as I'll detail shortly. Non-GAAP gross margin was 74.5%, down approximately 110 basis points sequentially. The decline reflected lower partner and services revenue following the ecosystem changes discussed last quarter, along with continued pressure from AI-related infrastructure costs. Improving infrastructure efficiency remains a priority within our strategic operating plan.

We ended the quarter with $162.8 million in cash, cash equivalents, restricted cash, and marketable securities, and $154.1 million in outstanding debt. We repaid the remaining approximately $4 million of our 2026 convertible notes at maturity on October 1st. Operating cash flow was $9.4 million, and free cash flow was $5.7 million after $3.6 million in capital expenditures. We recorded a GAAP net loss of $3.2 million for the third quarter, including $4 million in restructuring charges associated with our strategic operating plans. Excluding the $4.9 million of restructuring charges recorded year to date, net income would have been approximately $6.6 million compared with the reported GAAP net income of $1.6 million year-to-date. While the upfront restructuring charges from our strategic operating plan are expected to result in a GAAP net loss for the full year, our underlying operating performance remains consistent with the trajectory that supported our prior goal of GAAP profitability for the full year 2026 before we initiated the plan previously announced. Turning to operating metrics, GMV grew 14% year-over-year to approximately $9 billion, highlighting the scale of commerce flowing through our platform and the opportunity to improve monetization.

Narrowing the gap between GMV growth and revenue performance through payments monetization, cross-sell, and higher attach rates remains a priority. Our growing B2B mix creates an opportunity to better monetize transactions involving invoicing, payment terms, and other methods beyond traditional credit cards. While we have not finalized our 2027 operating plan, we are evaluating new payments capabilities, including a potential fully white-labeled version of BigCommerce Payments to provide a more integrated merchant experience and participate more directly in payments economics. Certain new offerings may introduce gross revenue recognition and associated processing costs rather than our existing net revenue share model. We expect adoption to build gradually, and we believe these initiatives can expand our ability to monetize the substantial GMV already on our platform. Total ARR ended the quarter at $357.6 million, down approximately $2.9 million sequentially, reflecting 2 distinct factors. Subscription ARR declined by approximately $1.1 million, primarily due to the non-renewal of a single legacy Powered by agreement, which both parties mutually elected not to renew.

The remaining approximately $1.8 million decline came from partner and services revenue, reflecting our deliberate decision to move away from certain long-tail partner arrangements, as discussed in connection with our updated guidance last quarter. Net revenue retention was 94.7%, compared with 95.8% in Q2, reflecting these same dynamics. Note our ARR methodology includes trailing, variable, and non-recurring revenue, including certain partner contributions. We believe concentrating on higher-value partner relationships will improve the durability and quality of revenue over time. We continue to manage stock-based compensation and dilution responsibly. Stock-based compensation was 5.2% of revenue in Q3, down from 7.5% a year ago and 7% for the full year 2025. For the quarter, we had approximately 83 million common shares outstanding and 83.3 million fully diluted shares outstanding.

Turning to guidance for Q4 2026, we expect revenue between $83.4 million and $86.4 million. And we expect non-GAAP operating income between $6.8 million and $8.8 million. For the full year 2026, we now expect revenue between $339 million and $342 million, and we expect non-GAAP operating income between $35.3 million and $37.3 million. At the midpoint, we are raising our full-year non-GAAP operating income outlook by $2.3 million relative to the updated outlook we provided in September. While part of our Q3 outperformance reflected savings accelerated from Q4, the remaining benefit increases our expected profitability for the year. Now let me discuss the financial implications of our recently announced strategic operating plan. We continue to target $60 million to $80 million in annualized non-GAAP operating cost reductions and full-year non-GAAP operating margins of at least 20% beginning in 2027. In September, we anticipated approximately $3 million, or 4%, of the annualized savings would be realized in 2026.

Based on our progress to date, our updated outlook reflects approximately $5 million of in-year savings, with the full annualized benefit in 2027. We remain on track to deliver the targeted savings and to substantially complete the implementation by Q2 2027. The actions address staffing, professional services, facilities, software, and infrastructure costs, while leveraging AI and automation to improve efficiency. Importantly, we are protecting investment in our highest priority growth initiatives, including payments economics, product intelligence, and agentic commerce. Our margin target is not based on an assumed acceleration in revenue growth. We believe the plan enables materially stronger profitability from the scale of our current business while allowing us to continue investing in retention, cross-sell, and monetization. Now to put the magnitude of the opportunity in perspective, the $60 million to $80 million in annualized cost savings represents approximately $0.72 to $0.97 per diluted share, based on our diluted share count for the 9 months ended September 30, 2026.

While this is not an earnings per share forecast, it illustrates the magnitude of the improvement we are targeting in the underlying earnings power of Commerce. We also expect the majority of these savings to translate into incremental free cash flow. Supporting that conversion, we had approximately $353 million in net operating loss carry-forwards and other tax attributes as of September 30th, which we expect to help reduce cash taxes on future earnings subject to applicable limitations. There are upfront costs associated with implementing this plan. We recorded $4 million in restructuring charges in Q3, compared with our original expectation of $4.2 million to $8.8 million. We continue to expect additional restructuring charges in Q4, consistent with the implementation timeline outlined in September. We now estimate Q4 charges of $4 million to $8.5 million on the quarter, compared with our original expectation of $4.3 million to $17.5 million.

In addition, we expect to incur restructuring charges of $2.2 million to $4.2 million in the first half of 2027 as we substantially complete the implementation of the plan. Our non-GAAP operating income excludes these charges, although associated cash payments will affect free cash flow during the implementation. While we are still finalizing our 2027 operating plan and will provide formal 2027 guidance on our fourth quarter call, our preliminary planning assumptions contemplate 2027 revenue broadly in line with 2026 levels. Against that backdrop, we remain on track towards our target of full-year non-GAAP operating margins of at least 20% beginning in 2027. Turning to capital allocation, our board authorized a $50 million share repurchase program extending through September 2028. We may pursue repurchases from time to time, with timing and amounts dependent on market conditions, liquidity, and other capital priorities. As cash generation improves, we believe we will have greater flexibility to return capital to shareholders while continuing to invest in the business.

To close, we are raising our full-year 2026 profitability outlook and reaffirming both our revenue outlook at the midpoint and our target of at least 20% full-year non-GAAP operating margins beginning in 2027. Our priorities are clear: improve retention and monetization, execute the operating plan, convert the resulting savings into stronger free cash flow, and allocate capital with discipline. Before opening the call for questions, I want to thank our colleagues, customers, and shareholders for their support during my time at Commerce. It's been a privilege to work with this team. Tyler has been instrumental in planning and executing our strategic operating plan. He knows the business and our financial priorities extremely well, and I'm confident in our ability to execute against these targets and priorities with him leading as interim CFO. With that, operator, let's open it up for questions.

Operator

[Operator Instructions] Your first question comes from Hoi-Fung Wong with Oppenheimer. Please go ahead.

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Hoi-Fung Wong

And for Daniel, congratulations and farewell. This is bittersweet. We've been here since the beginning and we wish you the best.

Daniel Lentz

Thanks, Ken.

Hoi-Fung Wong

Travis, maybe for you, you guys didn't really touch too much on what you're seeing in the pipeline and sales cycles. The last quarter, that was a dynamic where you guys called out extending sales cycles. What are you seeing today, and how should we think about the conversion of that pipeline going forward?

Unknown Speaker

Yes, that's a good question, Ken. Good morning, by the way. I would say pipeline increased substantially. It's the best pipeline we've had this year, obviously, and most of that pipeline is centered around where we've been placing our investments. So think B2B, think retail in the spirit of regulated industries, MLM and direct selling, things along those lines. Traditional B2C direct-to-consumer remains soft. We've seen that from the beginning of the year, but that's not particularly an area that we've been over-indexing on. Conversion rates are largely the same throughout the year, although we've seen better conversion and retention in those areas that we've been focusing on, so consistent with that as well, but certainly encouraging with the lift in pipeline. And obviously the focus now is on converting that pipeline into bookings and revenue.

Hoi-Fung Wong

Perfect. And Daniel, when thinking about your view of the revenue trajectory going forward, any other notable Powered by or PSR arrangements in the coming quarters that we should be aware of that could potentially pressure NRR or ARR revenue?

Daniel Lentz

No, nothing material or substantial. We've got what we anticipate baked into the guidance, but no outliers like the agreement that we had to deal with this quarter.

Hoi-Fung Wong

All right. Thank you.

Operator

Our next question comes from the line of Scott Berg with Needham. Please go ahead.

Scott Berg

Travis, I wanted to follow up on the pipeline commentary. You know, the company obviously released its first version of payments earlier this year, but as you look through some of the pipeline improvements that you have, are you able to tie any of it to your new payment strategy or given where your priorities are? And, you know, is that really still more focused on B2C on the payments side? Thanks.

Unknown Speaker

It's a great – good morning, Scott. Thank you for the question. It's both. I would say probably too soon to tell if that strategy is impacting net new pipeline. A lot of the focus has been on obviously existing customers, and it's been very well received and has exceeded sort of expectations on our side. I think the other thing I didn't mention in Ken's question previously, I think the other part of the pipeline where we've seen a lot of demand for some time now is around the Feedonomics product intelligence side with agentic. And I think you'll see more and more of that as product comes to market and that broader market matures into more commercializable sort of offerings. I would expect to see that continue to improve over time and that's particularly strong upmarket retail brand manufacturing, although plenty of interest in the mid market and even self-service we've seen through Surface as well. So we'll have more to update on that next quarter.

But I think generally speaking, payment, I would expect to continue to evolve the way that it has. We've been more than pleased in evolving that, but not yet in net new pipeline as a result, if that's helpful?

Daniel Lentz

Scott, I would add to that maybe 2 points. I would say our focus on that product is about monetization and retention, I would argue, first and foremost, even more so than new client acquisition. We've seen very encouraging results in customer stickiness getting better and retention getting better when they're using BigCommerce Payments, which is what we hope for and what we are seeing. So that's encouraging. As we look forward, we think there's a lot of continued opportunity in this space in B2B and B2C. I mentioned this in my remarks as we're kind of thinking about next year and thinking through what our next version of BigCommerce Payments would be.

We do anticipate that we are going to continue to have that be a more integrated solution into the core product where we are going to take on more of the processing burden. We would take on more of the support burden associated with that as we finalize what our plans look like for next year. That may come with a change in how we need to treat the accounting on that. That's not 100% set yet, but we think it's at least likely enough, and I think it's encouraging as an upside point for us. We think there's additional economics to capture in that and spread to capture in that. So that's something we're considering. I think that affects card transactions, especially on the B2C side. As I mentioned in the script, there's also a lot of things we're looking at on the B2B side and how we can get a lot better economics through invoicing, processing your purchase orders, and a lot of other areas. So this is, I would say, probably one of the top 2 highest priorities that we have next to agentic in terms of how we're thinking about growth going into next year.

Scott Berg

Understood. And Daniel, it's been a lot of fun. It's been, you know, 6-plus years since the IPO. Looking forward to you staying in touch. My follow-up question, though, is kind of tangential to your commentary you just said about potential rev rec changes around payments. A two-part question: 1, if I think about the 20% non-GAAP operating margins into next year, do you expect the company to report full-year 20% operating margins, or is this a run rate as you exit second quarter when the rest of those charges are taken? And then the second part of that question is, what does that look like if you change the rev rec policies on payments? My guess is, given what the gross margins of that structure look like, 20% is probably not the right lens to look through.

Daniel Lentz

That's a great question. I would say, first, that's a full-year commitment that we're talking about. We expect to have some ups and downs on a quarterly basis, but that's a full-year commitment. Probably build, I think, as we go through the year. To your point, once we get some of the restructuring charges behind us, I think that starts to become easier, certainly in how it flows down to net income. Okay. What I would say is if we do end up making a change in the payments product and it moves towards gross revenue recognition, it's not like we're all of a sudden going to flip 80% of our GMV base into that model over time. We are going to continue to give our customers choice on the payments products that they would be using. And if it makes sense to them to use an embedded payments partner that is not our branded payment solution, we would encourage them to continue to do so.

And that will continue to be booked net, not gross. And so I think we're going to, as we head down this path, we are going to be communicating a lot more about what mix looks like among payment solutions, including BCP, so that investors have a little bit of line of sight into what that mix effect looks like over time. We're still working out what that's going to look like, because you don't need to share too much, obviously. But we think at least for the first year or 2 as we go down that path, we don't anticipate that from a mix perspective to be such an immediate step-size change that all of a sudden makes the P&L look different, such that we would need to revisit the 20% commitment. We took that dynamic into account when we set that commitment originally in September.

Scott Berg

Understood. Thanks for taking my questions.

Daniel Lentz

Thank you.

Operator

[Operator Instructions] Our next question comes from Brian Peterson with Raymond James. Please go ahead.

Brian Peterson

And Daniel, congrats. Really will miss working with you. So just maybe to start, there's obviously been a lot of buzz on agentic commerce and Muse, I think, has been the latest topic. I'd love to understand how your merchants and potential customers are thinking about that, and are they leveraging some of the category and capabilities that you're referencing, and that's really drawing them to you? Or I could also see an environment where maybe that's extending sales cycles as they try to think through those dynamics. So, Travis, I'd love to understand maybe how you're thinking about agentic commerce utilization and maybe what that's doing to sales cycles.

Unknown Speaker

Yes, Brian, good morning, thanks for the question. Yes, I would say Muse is a great use case and an example of a horizontal agent. Then you'll see many others like it that actually maps to our strategy quite nicely. Those agents at their core need to consume enriched data for the purposes of the user leveraging that agent, which obviously is provided not only by Feedonomics, from a product catalog perspective, that enrichment's being enriched for the specific schema and service by which it's going to be consumed, including Muse as an example. That doesn't go away, by the way, and that's not a one and done. And so think of it more as strategic product intelligence infrastructure, regardless of agent, that needs to be consumed. And then on the transaction front, sort of same sort of scenario, the transaction orchestration is those agents are consuming, you know, what products are available under what circumstances, under what guidelines, under what context, you know, are they eligible for a promotion, can they stack promotions, can they be shipped in time for the contextualized rationalization, be that a human or an agent itself doing that discovery, that purchase? So I think you're seeing more and more of this.

I would encourage everyone to think of this as strategic infrastructure around product data that's continuously enriched by schema and surface and protocol that will continue to evolve. The experience to the extent a human is involved needs to be orchestrated and governed in many capacities, and then from a transaction independent of where that transaction takes place, be that on an agentic surface, be that in a marketplace, social commerce, and own domain, that needs to be done with trust and accuracy, obviously, to maintain brand guidelines and transaction protocols so that things are being done the right way as we would expect on an own domain. So I would expect to see this continue to evolve and think of us as kind of the backbone and the infrastructure providing what these agents would consume, if that's helpful?

Brian Peterson

No, I appreciate the perspective. Maybe just a follow-up on the pipeline build that you referenced. Is there a way to kind of segment that between B2C and B2B? I know B2B has been pretty steady, at least that's my stance on it. But is the incrementality more on B2C or ramp up in B2B? Any color on that?

Unknown Speaker

Yes, it's a good question. I would say, as I alluded to, I think in Ken's question earlier, it is directionally where we are investing, which is a mix, primarily B2B around manufacturing and distribution. We gave several examples in my opening remarks. And on the B2C side, you're seeing it primarily in regulated industries, multi-level marketing, direct selling, industries that lend itself to complexity, which is where we've got some really durable differentiation, and we'll continue to over-index there and invest. It's not been from areas that I kind of alluded to earlier that have been soft, I think, at least for us, and I assume with other folks in market in the traditional D2C space sort of models. That's the stuff that's been probably softer than it was a year or 2 ago when I first got here. But from our perspective, that's been intentional, at least with where we're spending our money, energy, and efforts and narrowing the focus.

Brian Peterson

Thanks, Travis.

Unknown Speaker

You bet. Thank you.

Operator

This concludes our question and answer session. I would like to turn the conference back over to Travis Hess, CEO, for closing remarks.

Unknown Speaker

Thanks, and thanks everyone for joining this morning. I think we're very pleased about where we are as an organization, obviously deep in execution. I think that's reflected in the forward guidance that Daniel shared earlier. We look forward to speaking with you next quarter as we continue to execute against the plan. And thank you all for joining.

Operator

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

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