All right, we're going to go ahead and get started. If everybody could take a seat. All right, we're good to go. All right, good afternoon, everybody, and welcome to Commerce.com's 2025 Investor Day. For those of you who don't know me, my name is Tyler Duncan. I'm the VP of Finance and Investor Relations here. We have a lot of good content. We're really excited to share it. Before we do, a couple of housekeeping items. One, if you need the Wi-Fi, it's Commerce.com is the one to join. Password is ComC2025, all capitals. Second one is, for those of you who are in person here, we do have a reception afterwards. We hope that you can make it. It's going to be downstairs on the fourth floor. We'll give you some more information afterwards, but hope you can make it. The last one, before we get started, the lawyers here need me to read a statement. I am going to read this. It is going to be very riveting. Today's conference 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 their financial and business trends, as well as our expected future business and financial performance, financial condition, and our guidance for future periods. 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. 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. All right, everybody got that? All right, best part of the presentation right there. All right, we have four sections that we're going to go through today. It's going to be about three hours long. We're going to have a 10-minute break in between to give you a little bit of a break, grab some water, go to the restroom, et cetera. We'll have four speakers today. First one's going to be Travis Hess. He's our CEO. Daniel Lentz, who is our CFO. Doug Hollinger, who is our SVP of Strategy. Lance Owide, who is our VP and GM of B2B. With that, we're going to go ahead and get started. I'll send it over to Travis. Thanks, man. I'm mic'd. Good. Thanks for everyone for coming. I'm surprised you didn't have that memorized by this point. Very nice to meet many of you that I haven't met before. I will make this as entertaining as possible, and we're going to move through it at a brisk pace. I know everyone's waiting for the event afterwards. Starting for those, just a couple of slides just to orient everybody who's not familiar with the business. Commerce.com, you have $350 million in total ARR, about $262 million of that. On On the enterprise side, representing about 75% of our total revenue we contemplate as or consider as enterprise. Any customer that owns at least one enterprise account or plan, rather, we would classify as enterprise. Just a little bit of history, starting back, obviously, the kangaroo in Australia back in 2009 started as really a SaaS, small business B2C commerce platform offering, quickly evolved into mid-market and more complex B2C, inorganically and organically grew into B2B that was, by way organically, of just evolving some of the capabilities based on demands from our customers, as well as acquiring some of those capabilities and integrating the platform onto the Feedonomics acquisition we made about three and a half years ago, ingesting AI product and channel optimization we felt was paramount to kind of our journey. Lastly, on the Makeswift acquisition side, I think we acquired it in December of 2023. From a visual editing perspective, we'll talk about that here in a minute. Most recently, we launched Catalyst here in January at the National Retail Federation Show, which is really an accelerated reference architecture, which was the first step of that ingestion of Makeswift into our core platform that we'll talk about here a little bit more in depth. Again, to orient everybody to what it is we carry in the bag, what it is that we sell, we've got basically three core products. Our flagship product is Commerce.com, we would define as one of the world's largest e-commerce SaaS platforms for both B2B and B2C. On the Feedonomics side, we would say is a leading AI product and channel optimization engine and also a managed service. We'll get into more depth there. Makeswift, as I just alluded to, we would define as a next-generation visual editor. This is the visual editing that allows business users and marketers to create immersive experiences and capabilities without the need of developers, which we'll get into more in detail. From a credibility perspective, we've been widely recognized by industry analysts, well-respected, starting with IDC, marking us as a leader across B2B, B2C, and headless for enterprise and mid-market back in 2024, Paradigm B2B, 24 total medals, as well as being ranked as the number one B2B mid-market commerce platform last year. TrustRadius, last year, is one of the top-rated platforms out there for customer satisfaction and experience. Forrester, well-known, obviously in 2023, ranked us as a strong performer. Gartner in 2023 also ranked us as a challenger. I think that next survey is coming out here shortly. Then collectively, we really power mostly branded manufacturers, retailers, manufacturers themselves, and distributors of a variety in shapes and sizes and industries and vertical markets. I'm an eclectic mix. We'll talk more about kind of the offering model that we've ingested into the business and orient folks a little bit more succinctly to where we're talking about. This goes across our entire product portfolio today that proudly represents some of the work that we're doing. I won't spend a lot of time on myself. If people are really that interested, we can talk more at the reception. Wanted to at least give folks a backdrop of who I am, where I kind of came from. I would describe myself as probably an unorthodox CEO in the software space. I've been in commerce for 20 years, but I grew up and spent the majority of time in my career as an agency guy on the services side, starting back at least in senior leadership roles back in 2010 with Amplify Commerce, who was the world's largest consultancy oriented to ATG, which ultimately became Oracle Commerce. They bought them in December of 2010 and ingested that business into both the retail side of that business and the CX side of that business. From there, I went on to run another publicly traded agency, Live Area, which was owned by PFSweb. I was a Chief Revenue Officer of PFSweb at that time, and as well was the General Manager and ran the Live Area business, which at the time was the largest Demandware and subsequently Salesforce Commerce Cloud agency in the world globally. They're now part of Dentsu. We're also one of the largest SAP Hybris B2B partners in the world and also a large Adobe and Magento partner. We spanned across almost every other major commerce platform at the time through that duration. From there, I exited and went to go run an agency called BBA, which was a frontier agency in the Shopify ecosystem. They were one of the four founding agencies that started at the same time Shopify Plus came out. I think we acquired one of them that predated me. We were two out of the four. Was owned by private equity, came in to clean that business up, run it, sold it to another private equity firm that owned a retail-oriented agency called The Stable, which was essentially a lot of ex-Walmart, Target, and Amazon folks that were really known for bringing digitally native brands into those big box retailers and optimizing revenue and sales within it. Think of them as almost a broker model in their original days. They were getting a lot of demand on that spectrum with a lot of wholesale-oriented brands wanting to go digital and go direct to consumer. A lot of digitally native brands wanting to go more wholesale, just given the cost of acquisition and some of the complexities. As a result, those kind of two businesses came together, integrated the businesses, six months later wrapped it all and sold it to Accenture. It was the largest acquisition Accenture Song has done to date. I would say it's something that Accenture Song does a lot of. They bought Acuity Group back in, I think, 2012. This was bigger than the Acuity Group acquisition, almost double the size. It was a massive investment by Accenture. By way of that acquisition, I went over to run the direct-to-consumer go-to-market and strategy for Accenture Song within the commerce practice, as well as run the Shopify partnership and relationship globally. I spent a good five years running the largest Shopify agency in the world, obviously working with all of that leadership team and kind of watching their growth and participating, and then lived through that orientation all the way into the ingestion of Accenture. In June of last year I came to Commerce.com. I get asked this probably more than anything, why? What would have motivated you? You sell your agency. I'm in the middle of an earnout. Why would I go to Commerce.com? What sort of things did I see? I tried to make this as simple as possible because I think it's interesting. One of the things I really noticed at Accenture, and just given the size of organizations that they work with, and it's all around digital transformation, whether that's a global branded manufacturer or large enterprise, CPG or whatnot, this desperate need for organizational agility to thrive in today's economy. What I mean by that is organizationally embracing the ability to go where customers are in ways that drive value and immersion and remove friction. As simple as that sounds, it is really, really hard to accomplish, especially with how complicated things have gotten. Another thing that we noticed was this giant proliferation of channels that we'll talk about here a lot. This is back 15 years ago in the ATG days. You had retailers trying to turn on digital channels that mimicked those differentiators and that value proposition of what consumers would have experienced in store. Just getting that right took 18-24 months. It took an army of people. Everything was built on-prem. It took a long time. That evolved into early on omnichannel where it was, can I buy something online and have it picked up in store? It evolved from there where branded manufacturers discovered SaaS with Demandware and started selling globally direct to consumer while also selling through retail channels. Obviously, that moved on into the digitally native vertical brands that obviously Shopify and us and others kind of rode that all the way up through COVID and things like that. Now there are hundreds of channels. This has gotten wildly more complicated. I'll talk a little bit more about this in a minute. Lastly, you've got AI and agentic commerce that's massively disrupting the market. I think 20% now of all product searches start in some capacity with AI or some sort of AI bot or ChatGPT. I'll share a couple of really quick stories. One on the AI and agentic side, thinking through the use cases, 20% of all product searches are starting there. Obviously, those tools are serving up product. At some point, people are going to be aligning a wallet to such product and not even go to a website, not peruse a brand site in the way that they once perused it. You can imagine the complexities that that creates specifically for some of our competitors as well to be able to monetize that if you're not controlling someone going to a platform. I think the openness and the agility that's going to be required now and into the future is going to map to that very, very, very, very interestingly. Lastly, I'll share, I won't name the client, but think of a large CPG of which Accenture plays with many. The dynamic of, say, a pet food company front and center that historically sold through traditional channels, big box channels, whether that was Target or it was grocery or it was specialty retail, PetSmart, Petco, or even online specialty retail like Chewy, they historically sold through these channels. That was their model for a long time. As Chewy, as an example, has digitally transformed themselves from just serving, selling pet food and whatnot, they've gotten into veterinary care. They've gotten into new surgicals. They've gotten into pet insurance. They've got all the data on my dogs, their birth dates, their medications. They know when they've been euthanized and they send a personalized note when that happens. They know everything there is to know about my animals. Purina or Iams or pick a pet food company knows very, very little by definition because of the way that customers have engaged through retailers like Chewy, which is a competitive disadvantage, obviously. I think Chewy has not been shy in becoming a branded manufacturer and publicly announcing what their growth goals are in actually going to market and private labeling products. Chewy, by definition, is in a much better opportunity and situation to go take market share based on all the customer data that they have available to them. They are going to take that market share from established players, which creates this unique challenge. Pick your CPG, pick your pet food brand, they all face the same challenge. They have zero organizational agility. They have only sold through these third-party channels. They now somehow need to be able to go out at scale with value. I don't mean setting up profitable supply chains where they're going to profitably ship dog food. I don't think that's going to happen. I think they need to accept the fact people are going to buy that where they want to buy it. They've got to reach those customers at scale. They've got to reach them with value and immersion. They have to influence that loyalty. They're not set up to do it from a data standpoint. They're not set up from a technology perspective. They're certainly not set up from a supply chain standpoint. All these things, sort of pondering these use cases and these scenarios, you can imagine my role at Accenture with the product that I had spent five years with, certainly very proud, giant relationships with the Salesforces and the SAPs and the Adobes. None of these tools were effectively solving these sorts of use cases and these complexities that are about to get wildly more complex. They do not have the agility, the nimbleness, the ability to go to market at scale and do these things. That was the main crux for me coming to Commerce.com. I felt, despite its flaws and challenges, certainly that have been well publicized, I felt where the product and product suite was and where it could potentially go had the best chance to go appease this white space in market where we feel like a lot of the business is going. Not saying 80% of the business is going there. This is not a mass market effort, but there is a lot of white space and a lot of opportunities that have these sorts of use cases and these dynamics that we will get into here more in a minute. Since I have come over, obviously recognized quite objectively, we had our own stuff to clean up. Most notably, we took out 10% of human capital costs last October, 20% cost in total. We reinvested half that cost back into doubling our quota carrying capacity. We did not feel like we were set up to go scale and grow with the intention that we needed to go scale and grow. We've also fundamentally re-architected our entire go-to-market organization, brought in new leaders we'll talk about here in a minute, but reoriented everything to best-in-class SaaS and then orienting all of this down towards offerings that Doug and Lance will get into here in a few minutes. We rebuilt almost the entire go-to-market leadership team with the exception of a handful of folks that we'll get to here in a sec as well. We've reorganized around those offerings. We have really focused on our ideal customer profile, who it is that we're for and why. As opposed to trying to be everything to everyone, this is going to be massively important as we execute against the strategy to kind of drive down customer acquisition costs and greater efficacy. Really what this all boils down to is our number one goal going forward. We've re-architected the teams. We've reconfigured the business. We've got the team in place, the strategy in place. It's now about execution. Execution in 2025 is about growing ARR. We obviously drove really positive cash flow in Q4. We drove a lot more profitability than even we expected, which is great. I don't want to steal Daniel's thunder, but at the end of the day, all of this is oriented towards growing ARR. It's basically a put up or shut up kind of moment. How we're going to do that, just orienting everybody here, increasing customer wallet share, which is super important, leveraging the integrated product suite of both Feedonomics and Makeswift, which was not previously integrated, sets up a very organic and natural opportunity to cross-sell, upsell, increase wallet share by client, decrease churn, improve a little bit more stickiness and differentiating. Bundling, and we'll get into this a little bit more too, being very deliberate of how we are pre-bundling capabilities and reference architectures oriented specifically to markets and industries is another thing we're doing deliberately in this model. We're also building out a really robust commercial framework for partners. Again, partners like Accenture and others tend to be interested selfishly in services revenues. A lot of what happens in transformation is not really around the implementation and enablement of the technology per se. It's really around all the organizational transformation and strategy, which tends to be higher margin profile business at GSIs and consultancies than the traditional SI work. This maps really well to what it is that we're doing. Ultimately making this easy, making this commercially, technically, and operationally viable for organizations to take advantage of. This can't be super complex. We'll talk a little bit about the current spectrum today of providers and why that's super important to make it simple. Number two is expanding our total addressable market, bring new capabilities to market to expand the TAM. Again, we've got a couple of different ways of doing that. Self-service Feedonomics I've mentioned on earnings the last couple of times. Feedonomics right now plays very much in that kind of upper third of enterprise. There's a real opportunity to bring that down market, cross-sell it into our existing install base of small business and mid-market customers. I would argue the reciprocal is also the case. We have a lot of established relationships and value with Feedonomics and deliberately being able to cross-sell and upsell our other two products there as well. Pre-composed reference architectures like Catalyst are going to be the new norm. By pre-composing things that are oriented to specific maturity sizes and market, obviously drives down total cost of ownership, but it also accelerates one's ability to go to market and carry less overhead over a shorter period of time, which is super crucial to what it is that we're trying to do to mitigate risk and drive efficacy. I think Makeswift as a standalone visual editor, at first we're going to go include it in the core product. The last phase of that would be a standalone visual editor that again could sit on top of non-transactional, non-commerce sites as a visual editor, allowing marketers, brand people, business users in general, the ability to create really immersive experiences independent of commerce anywhere, which is a totally new market that we've never actually addressed. Lastly, and Lance will talk a bit more about this with a much better accent than mine, doubling down on B2B, which is really our biggest right to win. It's been more than 50% of our net new bookings over the last year. I think the industry expects us to go there. There are many folks in the industry that have been very vocal about kind of get everything into B2B. They tend to be laggards. They're way far behind on the B2C side. It's less commoditized. They tend to be less squeaky. We're really in a unique opportunity to go take advantage of our B2B capabilities. Not to mention our licensing model against our competitors wildly gives us an advantage. B2B conversion and experience is not paramount. Most B2B conversion out of the box is 99.5%. People have to go through a certain portal or punch out. They do not like to pay rev share as a result, and they typically are buying on terms and POs with very complex catalogs, complex contracts, things that lend itself to not only what we are capable of doing in the platform today, but what we are setting ourselves up to do tomorrow. Those are the three core buckets as it relates to increasing ARR growth. We would say, and again, you will hear more about this curation, it should not be complicated. It should be curated, and we will get into that. I also want to touch really quickly on composability without going down some rabbit hole where we are explaining technical jargon and terms. You will hear us talk about composability. The best analogy I can give for composability, I will use Super Target as an example because everyone I think can relate to it. Shopify as an example to me is like Super Target. People go there because it's convenient. I'm not saying they're as big as them or they merchandise as well or any of those things. I'm just saying people go to Super Target because they can buy pretty much anything and everything they would want to buy at Super Target. By definition, they're going there because it's convenient. You could make the same argument for Walmart, whatever, or in the legacy days, a shopping mall. You go once, park, and you spend the day buying everything you could possibly need. I would argue in the new world order, although I can buy produce at Super Target or something from the butcher, certainly I would not describe it as best in class. I'm buying produce there because I'm already there and I've got three kids or whatever it is, and I'm doing it out of convenience. If produce is really important to me and I care about where it was sourced and how it was grown and I want to support local farmers or other folks in the community, I'm probably going to the farmer's market or I'm going to Whole Foods. Composability, for lack of a better example, makes the ability to go buy what you want at Super Target for all the right reasons because it's less expensive and convenient while also making it frictionless and convenient to be able to go buy at the farmer's market independent of how far you live from one. What we're trying to do is embrace the fact that more disruption and value will come by way of third-party software providers and partners than we could ever possibly generate and build on our own internally. I would make that same argument for any competitor as evidenced by the monolithic install base today. Just look at Salesforce. I mean, Oracle is the best example. They bought the best commerce platform in the world in ATG in 2010. They followed that quickly up by buying the best insight search capability in Endeca, which ironically back in the day was the solo reseller of Hybris for those old enough in the room to remember. As of a year and a half ago, they're completely out of commerce. They basically packed it in. It's gone completely because they were not able to maintain, stay ahead of the curve across their full suite of products because the market changes that quickly. I would argue Salesforce is going through a similar model, although better product and easier to maintain, certainly, and probably a better sales motion given what it is that they carry in their bag. They're not winning net new deals. They're holding on to as much turf as they can. SAP obviously won a ton of stuff, lost a lot of stuff for all the right reasons too. The argument here is we've got to align ourselves with best-in-class capabilities with as quickly as the market is changing, and we've got to make it commercially, operationally, and technically easy to ingest those capabilities and orient it to specific markets and specific maturity levels. That's it. That's the simplest way I can describe it. Happy to have sidebar conversations on it. At the end of the day, ultimately we want organizations to be able to sell anywhere they want, see everything, because by going composable, ingesting all of this stuff, maintaining line of sight and visibility and all of that is very important, and then ultimately grow profitably on their own terms. That's why people come to us today. They subscribe to us because we provide the best environment for them to grow based on their use cases and their needs. It's not one size fits all for everybody. It's why folks have oriented themselves to us, and that's what we're going to continue to invest in, is create an environment that allows them to grow. Really quickly and sort of a very brief history lesson of where this has evolved from, the maturity of the market for very obvious reasons has commoditized and democratized commerce in many ways. It's gotten really erased to the bottom on the B2C side, but it also made it very available, especially to smaller merchants. If you look at the legacy, and I kind of alluded to this earlier, all of our previous like-type competitors were all acquired by large software providers, starting with ATG with Oracle and Hybris with SAP and Magento with Adobe and Demandware with Salesforce. Essentially you've got three primary players left. We were just talking about this in the back of the room. I would look at this as a spectrum too, as it relates to monolithic starting on the left. All Shopify is a newer version of the old monolith. They believe, and I'm not saying it's bad and I don't mean any disrespect towards it, they believe in building everything themselves. Yes, they will occasionally ingest apps to quickly, in their mind, extend the platform, but at the end of the day, they really want to be the sun, the star, and the moon in everybody's lives. That is philosophically their right, their approach. I don't think we're going to win an arms race on features and functions against somebody who spends $2 billion a year in R&D. Nor do I think the market wants an arms race for features and function. They want business outcome, period. They want to become organizationally agile to allow themselves to grow profitably given all the changes in the environment. Technology costs have been reduced pretty dramatically. Speed to market and agility have become paramount. You've got to do things quickly. You've got to be able to experiment. Even if it is to fail, you've got to do it quickly. Traditional business models have continued to blur. Back to the Chewy pet food company analogy, you've got retailers that have turned into branded manufacturers. You've got brands that have turned into pseudo retailers. Things are getting really complicated, deliberately and undeliberately. It's just the new world order. As that business and channel model evolution evolves, that organizational agility and that ability to go and ingest best in class very, very quickly and very affordably becomes paramount. The cost of customer acquisition and how folks are acquiring customers or where people are discovering brands has changed dramatically. It's way more expensive now in a cookieless economy to acquire customers than it was probably five, six years ago. That's completely changed things. As you can imagine, with the proliferation of channels, having to profitably manage inventory, peanut butter to cross all of these channels and the distribution challenges associated with it, while customer expectations have raised to levels unseen before, a massive sort of challenge in the market. You have this whole disruption around AI and agentic that again is massively disrupting the way people interface with products. It is going to evolve even further as to how they buy products, how they service products, and things like that. You are going to have client LLMs that need to be ingested. You are going to have third-party ones. This is going to get wildly interesting. I did borrow this slide from my friend Brian Walker, formerly of Forrester and SAP Hybris. I thought they did, I do not think it is verbatim, but it is pretty close. This is a slide they produced off of another study that they were doing that explains the complexity of where all of this is going. I thought this was the best representation of what articulates what's going on right now. First of all, let's define the fact that customer is the channel now. All these channels have exploded. Brands, organizations, regardless of size, have to go where their customers want to engage them, regardless of where they buy their product or service, period. They need to do it with value and immersion for all the right reasons. As a result, this has now turned into an orchestration issue that is not going to be easily resolved by legacy order management platforms and legacy monolithic approaches to commerce because this gets really quick and margins are thin. When someone goes through ChatGPT and searches for remote control and they get served up six different products, those six different products at some point will be served up based on how I've previously searched or how close I live to where this remote control could be delivered to me based on product availability or what my customer expectation is as far as how quickly that will come to me, muddled in with any other sort of promotion language. That has to be done at scale and needs to be orchestrated, not just through the buy side, but also the return logic and everything else like that. This is going to get wildly more confusing despite the technology costs coming down and the speed to go to market shrinking dramatically. This whole orchestration challenge is the next wave of what's going on. Back to my original thesis of why I took this job, I felt just like looking at kind of like a house, if you've ever been house shopping, but it's somebody else's decor, and you've got to kind of suspend the decor, not that the decor here was terrible, but just suspend for a second the decor and look at the bones of the house, appreciate for what it is. I felt unquestionably in market, the bones of this house had the best opportunity to go appease these very complicated use cases. Again, not for 90% of the market. I'm not trying to build Super Target. There is a large subset of this market that is wildly underserved that will not be addressed through legacy monolith or even newer monoliths. All of a sudden, you ingest BigCommerce across owned channels, Feedonomics around non-owned channels, Makeswift helping marketers and business users create experiences personalized at scale, all of which infused by AI. Again, it sounds magical two years ago, but those of us that are playing in it today, this is so close to reality. It's crazy how fast this has come as quickly as it's come. I would ask to think of this as basically a spectrum. Let's start with the complex monolith, for example, without getting into an overly burdensome description. This is your typical Salesforce, SAP, Adobe, pick your poison, Oracle. The reason they exist is they had the ability and the capital to go acquire a bunch of complementary things needed at the time. Whether they integrated them or not is debatable. All of them pretend that they do, pretend it's going to be cheaper, but it's really a land and expand motion that's existed from the day of time in this space. They're all dated and old. They're all trying to reinvent themselves and failing miserably. It doesn't scale, and it's anything but agile. The challenge has been there have not been a lot of competitors with enough features and functions to map to feature parity found in a complex monolith that has built those things over a decade of time. Hence why composability is so paramount. It doesn't put that same pressure on our product and engineering side of the business to go rapidly produce all these capabilities. It's far easier and faster to ingest many of them from third parties at standard and not within our own walled garden, by the way, as well. Starting there, now you've got the simple monolith, which is basically Shopify. I don't mean it disrespectfully. It is rigid and inflexible, but the beauty of Shopify is out of the box. It addresses, at least in current state, a large portion of the market, as they will very aggressively and affectionately tell you. Like literally, I feel like I have Harley in my front pocket given my LinkedIn feed and my phone being in my front pocket. They can't stop telling you this, and it's great. Good for them. If you're a digitally native brand or a simple branded manufacturer, that's great. It works for you. As soon as you start introducing all of the orchestration, complexity, all of these things, this proliferation of channels and customers are going to engage the way they want to engage. Their entire model is about monetizing things through Shop Pay. They have got to figure out how to get that back through that. Again, I think they are great for a certain audience, a very large one, but as soon as you have to extend or customize Shopify, it defeats the purpose for buying it in the first place. The beauty of it is it appeases a lot of use cases. We are for people that have added needs, added use cases that cannot be appeased. If they could, they would have already gone there. It is not like this has been shy or a secret. For us, we know our ideal customer profile are folks that cannot buy or effectively wear off-the-shelf clothing. They need to have it tailored. Some because they can afford to in their vein and they want to look great, arguably. Others because their legs are too short or too tall and they just need it taken in or taken out. Not everyone can feel good or look good buying off-the-shelf. As a result, we've built a nice business around it. That being said, to the other end of the extreme, Commerce Tools is the best example here. They've struggled because they've targeted a very, very narrow TAM at the very upper end of the market that by definition originally started by building custom bespoke platforms because of the complexity and the needs of their particular business. Think really, really large global branded manufacturers, retailers, manufacturers, distributors. I mean, folks that are crazy complicated. They've got hundreds of FTEs running that platform. To use an easy analogy in Legos, they've been building with Legos their entire lives. Commerce Tools would come to them after pressure from the board or the CEO and say, "Here's the latest and greatest set of Legos you can go recreate your framework on, and this will take you into the future." Not an untrue statement, by the way. The downside to it is it takes about two or three years to go compose everything from scratch, especially in a large complicated organization like that. I do not care what platform you put in the four walls, they were going to struggle and the TAM was going to be really narrow. Historically in commerce, it is really hard to start upper enterprise and make it consumable down. It is much easier to start down and go up. They have struggled. What we are trying to do is thread that needle. The benefits of composability, I would say if this was a spectrum, we are right of center. We are closer here than we are there. We've got to make this consumable, digestible, and easy. We've got to orient it to our ICP, and we've got to orient it in a way that makes it operationally, technically, and organizationally digestible. That's where really our focus is going forward. A couple of orientations here around the curated composability side down below. I mentioned this earlier. This couldn't be any more paramount. Embracing the fact that innovation and disruption will come far faster from third parties than we ever will ourselves. Like just accepting that as opposed to trying to get into some arms race that we'd be kidding ourselves around. We also know that most effective solutions, people think of themselves in both sub-industry and maturity, right? I could have, let's just use fashion as an example. Fast fashion is a dramatically different business than couture and high fashion. Completely different businesses despite both being in fashion. Totally different business models, totally different use cases, totally different needs. Within even those sub-industries, there are levels of maturity that will define what it is somebody needs and why and what it is that they can digest. As we precompose and orient ourselves to specific industries, we're also overlaying that against maturity size, which is super important. The curation part of this, and it's not at the expense of rigidity. We're not trying to be rigid. We are trying to curate things based on best practices that would orient themselves to specific, again, ICPs, industries. This is based on feedback, tangible feedback from our clients, white space in the space, innate industries today we do really well in, like MLM as an easy example, because by definition that business is complicated. We're not trying to recreate the complexity of a commission-based system within a multilevel marketing organization. We're trying to allow that technology to be ingested at scale on both the front end and the back end versus some of our competitors that may want to rebuild everything at scale. Just easy use cases there. The curation side really amplifies the value all the way around. It amplifies it for us. We're able to take things to market more relevantly, faster. Our partners on the GSI and the agency side are able to wrap really high-margin transformational capabilities around this. We'll get into some of the GSI mechanics later where we believe there's a real model here for them to BPO this and actually run a channel with this as the backbone and the framework on their IP. We just think in general this is going to benefit our customers by able to take things to market way faster and way less expensively than we historically would have. With that, I'm going to welcome Doug and Lance up on stage and get into some of the execution. Doug, are you c oming up? My name is Doug Hollinger. When Travis invited me over, I came also from Amplify. I have a similar Amplify, Accenture, but I have a similar arc, and that's those same industries and the same platforms that you saw before from the services side. I also came here because I did see there is a gap in the market that we were kind of expecting Commerce.com to step into and want to be part of that change and driving that forward. We have all the pieces here. I run the strategy and the offerings group. One thing we are doing as we are going to market via these offerings with our products is just, again, trying to land on where people buy, why they buy, and what kind of problems they are solving. Lance will talk a little bit about the B2B, then I will address the B2C here in a minute. They are solving for slightly different things just to set the table. On the B2B, again, solving for digital maturity. They are often an efficiency play bringing costs down. Again, a lot of these businesses are not yet on digital platforms and solutions. We are going to have industry and vertical-specific offerings answering those business questions for B2B. On the B2C side, we have a real right to play here. We have a real offering for these businesses that are trying to solve complexity and differentiation of market, whether that is through the user experience itself or through complex checkout flows, et cetera, for their products. We will talk about this more here in a minute. We are going to tailor this for both of these audiences. We have a small business lead as well who is looking at businesses under $5 million in revenue. A couple of slides here. I will just touch briefly on why small business on the left there might be such consumers of our enterprise-level offerings, right? These are actually targeted for larger, mid-market and enterprise businesses. It's because we still have a lot of small businesses that if they could have gone to a cheaper, not cheaper, an easier out-of-the-box platform, a Shopify or Wix, et cetera, they would have already done it. It's because they have some of the complexities that Travis was talking about. As we are going forward, we will automate some things here. We will have precomposed solutions for small businesses to try to, again, accelerate their ability to deliver. Again, we see this as a growth channel into our other audiences. With that, I'll turn it over to Lance to talk about B2B. Thank you, Doug. Just by way of introduction and making this short, I'm Lance Owhite, General Manager of B2B at Commerce.com. As you heard Travis say, we are doubling down on B2B. It's an area we've seen huge amounts of success, over 50% of our bookings last year, 12,000 manufacturers and distributors on the platform. We've been recognized by analysts IDC, Forrester, Gartner, and Paradigm as leaders in the space. What I'm going to do here for B2B, and then Doug will do for B2C, I'm going to walk through why we succeed and how we drive success for our customers, how we're competitively differentiated. I'm going to talk about what we're doing over the coming years to further drive that competitive differentiation and expand our TAM to win more of the market. I'm going to start by walking you through some customer examples because nothing tells our success more than that. Meet AHP Medical and Dental. They're a distributor of medical and dental supplies out in the APAC region. They're a family-run business, and they were acquired by a new owner. The value creation thesis of this new owner was that they could drive profitability, improve margin through e-commerce, through automation, through e-commerce. That's exactly what they set out to do. They looked at many platforms, including all the competitors that the folks have mentioned. Ultimately, they chose BigCommerce because we offer B2B out of the box. They did not have to customize the platform to get live. They could meet their complex B2B workflows, the automation and approval workflows, bulk ordering, quoting, invoicing without having to go beyond the platform. Ultimately, when they chose BigCommerce and went live, they went from having 25% of orders online to 75%, a 300% increase. That saved them 11,000 hours of order processing, which was six full-time employees. For a mid-market business, that is a huge cost saving, which they were then able to pivot into revenue generation and revenue growth, cross-sell, upsell, new customer generation, which ultimately led to 163% growth in revenue for the business. Meaningful change. This is a really common case in B2B today. You've got a mid-market distributor or manufacturer who may not be online today and is looking to modernize their business and drive efficiencies. They choose BigCommerce because we have B2B out of the box. That doesn't mean that we can't support complex because not all businesses are this simple. Let's meet Bio-Rad Laboratories. Bio-Rad Laboratories are a publicly traded life sciences company, multinational, publicly listed, about $2 billion in total revenue. They had a plan. The plan was to grow revenue through international expansion. They're on an old legacy platform that just couldn't handle the complexity of their business. They sell in 140 countries with 32 currencies and in many different languages. That's complex. They also have customer-specific pricing and customer-specific catalogs. When you do all the multiplications of the various different regions they're selling into and the different prices, you've got millions of price points there that a customer, when they hit their site, needs to be able to see instantly. Not many SaaS platforms can handle that complexity, but Commerce.com can. They chose our composable architecture to launch. Since going live, they have driven a 56% increase in revenue and a 71% increase in AOV. They chose that composable architecture because they want to continue to grow. They want the flexibility to grow on their terms and use best-of-breed technologies and plug them into our core B2B base, our core B2B edition base. These examples here, Bio-Rad and AHP, are businesses that sell exclusively to other businesses. Their B2B is just selling to businesses. Of course, there is a hybrid cohort in the middle that sells both to consumers and to businesses. Meet MKM Building Supplies. They are the largest independent distributor of construction materials in the U.K. They do about $1 billion in revenue. They sell through 130 warehouses. They have a complex structure. They were on a custom platform that actually they had built themselves, but it could not handle the data that they needed to ingest from those 130 warehouses. Their model is that each of their locations is independently owned and operated. They set the pricing and they set the inventory. They need all of that live on the site, ready. When a customer hits that site, they can see the inventory in their local warehouse and get the right price as well as their customer-specific pricing. They also had a vision. They wanted to be a leader in the space. They wanted to build personalization for both B2C and B2B customers. They partnered with one of our technology partners, Bloomreach, to drive this, to drive cross-sell and upsell. When you go onto the MKM site and you start typing or place orders for specific brands, the entire experience starts to change. The site will display content relevant to that brand. The marketing will show content relevant to that brand both through email and through text. If I was searching for Milwaukee Tools, a BigCommerce customer, my experience starts to change. Ultimately, that has driven a 51% increase in average order value since they came onto the platform. They're also a user of Feedonomics. They send their product data and live inventory to Google Shopping. Why is that important? This is construction. If I'm a contractor and I'm looking to get construction materials, I need them today. If I do that search on Google and I can see, oh, they have the product and they have the inventory at my local warehouse, I am much more likely to click on that MKM advert versus anyone else. Ultimately, that drove a 42% increase in site traffic. Commerce.com is seeing huge amounts of success across mid-market and enterprise B2Bs across all sectors. What's important to kind of understand is that B2Bs that are choosing e-commerce platforms choose it for three key reasons. These are different than B2C. That's what's really important. In the B2C world, I would have up here, and we will in a minute, conversion and checkout speed. Those would be the most important things. Ultimately, for B2B, the number one driver of a replatforming is profitability. It is automation of workflows. They need the tools that Commerce.com B2B edition offers: quoting, invoicing, approval workflows, complex hierarchies. We have been doing this for years, and we understand it, and we have it out of the box. They also do want to grow revenue, and we enable that through multi-storefront. That might be growing into new regions like Bio-Rad Laboratories. It might be launching a direct-to-consumer channel like Houser Sinks did on Commerce.com. It could be integrating a new acquisition. We are seeing lots of acquisition in the, lots of consolidation in manufacturing and distribution. When you consolidate a brand, you want to get it live fast. Of course, they need to be adaptable. That is what Travis spoke about, right? That is our curated composability and our open architecture, allowing us to pivot fast as buyer demands and trends change. We understand this. Why do those businesses choose Commerce.com? I am going to use Sellers Absorbent Materials as an example here. They are a manufacturer and distributor of paper materials, about $250 million in total revenue. They were looking to replatform. They looked at all of our competitors. Why did they choose Commerce.com? Firstly, speed. They built a proof of concept on Commerce.com in two weeks with all of our B2B Edition functionality right out of the box. They were sold. It was incredible. They were sold. We allowed them to automate those processes because they had those features and those functions that they needed. We understood what they needed to get their business live. We then allowed them to expand. If they want to sell into new channels, they can do that. They can build the integrations easily into their back-office systems. B2Bs are not using an e-commerce system as their source of truth. They're using an ERP. They've got a CPQ. They've got complex other systems that they are integrating with. We enable them to do that easily. Ultimately, that gives them the agility to pivot as their business changes and as their buyer demands change. Ultimately, that gives us lower total cost of ownership, right? Faster time to market, faster ROI. That is what sets us apart. We have the tools that B2B businesses need, and they're available out of the box, but ready to customize when they're needed. Why are we so focused here? Travis kind of alluded to this. Today, 35% of B2B businesses aren't online. They're not even transacting. And of those that are online, and the data is a little bit patchy here, somewhere between 20%-30% are on custom platforms that they built themselves. They're ripe for a SaaS revolution. They're ripe for a Commerce.com-led SaaS revolution. We know that. As those businesses come online, they're driving huge amounts of growth in manufacturer-distributor B2B e-commerce GMV. It's growing at nearly 20% CAGR. What are we doing to capture more of this? As you know and you heard, we're capturing a huge amount of these businesses today. We're focused on growing that. We're really doing three things. With our Commerce.com platform, we are building more functionality to support larger, more complex organizations. There are lots of organizations that are on that complex monolith still or on those custom platforms. We are building technologies to support them more easily. We're taking our Makeswift product and taking it up market and down market to build what I think will be the fastest-to-launch B2B site. It also has implications for very large multinationals. We work with a manufacturer of $6 billion in revenue. They've got 120 brands. They can build a simple widget, a simple widget that might integrate into their return system. They can then deploy that widget across all 120 brands with ease. That is hugely beneficial. That saves them so much time and effort when scaling across their global business. Finally, Feedonomics. In Feedonomics, we're going to be launching Feedonomics Self-Serve and bringing the benefits of launching on marketplaces and ad channels and the AI technology that Feedonomics uses to optimize those. We're going to bring that to smaller business B2Bs. On the top end, we're building AI tech to match B2B attribute data. B2Bs have complex product data, often millions of SKUs in a catalog. Feedonomics is the best data platform out there. We will be building technology to help those businesses match that data and get it into the systems that they're using. That's what we're focused on for B2B, where we're doubling down on our great success already. I'll hand to Doug, who's going to take us through our B2C success. I'll start off with some quick breakdown. Just start off with some quick breakdown. Just showing the kind of breadth of our offering and why we win in the B2C space. The real realism, if you're familiar with this, right? High consideration, luxury, online marketplace where people can buy and sell authenticated goods. They take goods in from folks. They sell it on consignment. The catalog is quite robust, over 15 million products at any one time. There's a lot of turnover there because of, again, working on consignment and over $1 billion in GMV, all based on the BigCommerce e-com platform. A little different use case with Brompton. A smaller company out of the U.K. selling folding bikes. Why are they here on BigCommerce? A lot of this is because, again, they went off some older technology. They launched seven websites in seven months using BigCommerce. They're expanding through growth in the international market. They have 10 international markets on seven websites. The other thing is that complexity we talked about. Why do people choose us? They can change the functionality. They can extend, in this case, the checkout flow because the U.K. has incentives for you to buy bicycles, I guess, green initiatives, etc. They have incentive schemes that they wanted to take advantage of to drive sales. At the same time, they enjoyed faster site performance by being on BigCommerce and enjoying our modern technology. Faster load times, faster page speeds, faster performance, 50% increase in conversion by being able to make these tweaks on the website. In a Feedonomics case with New Balance, looking at the EMEA market, they were having trouble with some of that channel proliferation we talked about. They couldn't get on all the right channels. Their content was not optimized properly to convert. Using Feedonomics, they've increased their return on ad spend by 95%. They've almost doubled it. Now they're in more markets, more channels between Google Ads as well as TikTok and other social selling channels, which has led to a 15% increase in conversion and an increase in sales, a 22% increase in sales, 36% reduction in costs. Normally when we talk about B2C, you think of, or at least I do, the traditional kind of B2C channels: fashion, apparel, beauty, skincare, right? Pet care, Travis talked about this. They tend to be simpler checkout flows. I've got a product. I put it in my basket. I check out. It's fairly straightforward. A lot of other e-com platforms play in this space and focus on these particular markets. When we talk about B2C, we have a lot of representation as well in other industries and verticals, regulated industries, right? MLM, things that have niche requirements. They might have specialized checkout requirements, specialized payment options, or shipping, etc. They might have customizable products or be highly subscriptive. Again, by making our product more flexible and having this composable approach, we allow people to tailor those parts of the business that they need to while still feeling like an integrated composable solution. As opposed to B2B, of course, most B2C businesses, unless they're brand new to the market, if we're going to get them, we're going to have them switch off a legacy platform or a custom platform that they've built. Why would they switch to Commerce.com? It's the same things we've been talking about. Better performance leads to higher conversion. We have Catalyst as a performance front end, which again, for people that need a really unique front end experience and a better user experience while still maintaining high site performance speeds, they can use that as well as things like specialized checkout flows and package solutions. For growing revenue, again, a lot of our businesses do have both B2B and B2C needs. They might need custom pricing and some of those other features we talked about. With Feedonomics, again, they can reach new channels and markets at a lower cost of total ownership. I'm going to go a little bit quicker here. I'll tell you another story here about some of these same things that illustrate why people choose us. Bells, regional department store chain, right? 660+ stores in 23 states, $2+ billion in annual revenue. They migrated. One of the platforms Travis did not show was IBM WebSphere back in the day. If you remember that one, they were on IBM WebSphere. They migrated in nine months off of IBM onto BigCommerce. They had very customized, again, checkout and payment options that they needed to integrate with, as well as a legacy back-end order management system on Manhattan. Again, a lot of the same things, looking for agility, speed, flexibility, and custom requirements in their checkout and payment processing. Similar B2B, you see the same sort of TAM or ICP here where, again, Feedonomics playing up market from mid-to-up market, BigCommerce sitting nicely in both small business and the mid-market and maybe the lower enterprise space. There is still a lot of opportunity in the B2C space for growth, not necessarily the same scale as B2B, but there is still a lot of things here. Where are we going to go? Where can we take this? We'll continue to invest in our platform, expanding our composable and headless offerings. We've talked about self-hosting or one-click headless solutions for the Catalyst. We can also have Makeswift itself as a visual editor that allows kind of no-code editing of your experiences by your business users. We can also have a visual editor marketplace where people can buy and sell composable front-end editable components to extend their capabilities. We can also look at, through the bundling that we're talking about, and Daniel will talk about it more, reselling core comprehensive solutions like hosting. It could be error monitoring as well as advanced search features, etc. That will also expand the addressable market from both Commerce.com and Feedonomics. Finally, allowing users to modify our platforms and drive our core capabilities upstream into more enterprise capabilities. Back to Lance for small business. All right. Thanks, guys. As you saw Thanks, guys. As you saw at the beginning of this section, any large portion of our ARR is still small business. It is an area that we are continuing to focus on. Small businesses choose us because we can handle their complex needs. You heard Travis say, "We're focusing on our ICP." What is our ICP in small business? Let's start with an example. Meet Wheels and Wings. They are a brick-and-mortar retailer out of Canada. Obviously, we're small business. You have not heard of them. They are a smaller business. They still need to sell online. They sell collectibles. They have a very large product catalog, and many of those products are complex. They can be customized. They have a technical team and technical founder who actually built their own custom platform to start with, but very quickly realized it could not handle the product catalog side and it could not handle the customization of the products and the experience that they wanted to build. They set about trying to find a SaaS solution. They looked at all of our competitors that you guys will all be very familiar with, but ultimately chose Commerce.com because with Commerce.com, they got the core bones of everything that they needed, but they could customize and build on top of it. That was what they wanted to do. They knew the experience that their customers wanted, and they could build it with Commerce.com, but they did not have to start from scratch, and we could handle their large catalog and the complexity of their products. Since coming onto Commerce.com in year one, they drove a 216% increase in revenue. They have not quite been on the platform for two years yet, but will grow north of 50% most likely. There are lots of small businesses that look just like this, and that is who we serve. Small businesses under $5 million in revenue that have complex needs and can be supported by the Commerce.com platform. Large catalogs, custom integrations. We are focused here because of the size of the businesses that look like this, right? We can go and win them. We are chosen because of that flexibility. Many of them actually look like B2B businesses too. They might be small manufacturers, small distributors who may choose to purchase our B2B Edition product or may not be there yet, but they know that they get a product that they can grow into and grow up to B2B Edition. There is a great graduation from small business into our enterprise store plans. We are focused on growing this cohort. How are we doing that? We are really doing it in three ways. Firstly, product experience. Both with our own AI and with partner-led AI, we are revolutionizing the onboarding of our customers into the product. We are expanding our TAM, and we actually already spoke about this with Feedonomics Self-Serve, bringing all of the power of Feedonomics and Feedonomics AI product optimization to small businesses, as well as bringing Makeswift to small businesses to make it easier to build both sites and build gripping content into their websites. Finally, bundling and reselling. We have thousands of small business merchants. We know which partner technologies grow those businesses the fastest. We will curate bundles of technology partner products that we know are successful for these customers, put them on our paper, create them as a one-click install and integration. Here you go. You are an automotive reseller. These are the three partner technologies that we know will help you succeed, and we are going to make it incredibly easy for you to install them and purchase them. That is it for this section of our presentation for B2B, B2C, and small business. We are going to take a quick break, and then we will come back and walk through our growth strategy with Travis and Daniel. Thank you. 10-minute break. Ten minutes. We're going to get started in about two minutes. If you can make your way to your seats. Let me walk you through real quick what we're going to go through in the second half of the time, and then Travis will get started. We have two sections left before we get to Q&A. We've spent time talking about strategy. What does Travis think in terms of where he sees the market? We want to pivot now to start getting into specifics about what we're doing with growth initiatives. I'll wrap up the time in talking about what that means from a financial point of view, get into unit economics and some things like that. We will switch to Q&A. We will have about a half hour where Travis and I will tag team talking about what we are doing on the growth strategy side, and then I will take over from there and dive into the numbers and this normal CFO stuff. Over to you. All right. Sounds good. Thanks, Daniel. All right. I talked about breaking some eggs, for lack of a better analogy, early on as I came in and changing up the teams. I wanted to give a visual representation. I mentioned this on earnings because we had asked a lot. What is going to be different? We are in kind of an execution state now, and we have made material changes to the business, particularly around go-to-market. Everybody outlined here with a white triangle in the bottom right-hand corner is either new in seat or new to the organization. I would love to take a lot of credit for this. I can certainly take some credit. This really was not that hard, to be candid. It was not that hard because, A, there is a lot of talent in market, and B, for those of us who have been in commerce, I have been in commerce 20 years. Many folks here on the screen have been in commerce 15, 20 years. We have all been kind of hunting for the same thing, searching for the same thing that was not necessarily resolved by the incumbent providers. No disrespect meant, we have had wonderful relationships, myself included, with all of them. Given where the market is going and where we all kind of directionally aligned, this was not a difficult challenge to recruit people into the organization, especially many of us in a fairly incestuous industry that all know at least of one another. It was very capable to get folks in seat very, very quickly. Just a visual representation of how many new folks are actually part of the team now, it is a dramatically different team. All of them have a rich history in commerce specifically, which we felt was paramount, especially given the complexity that I alluded to earlier. Where the model is going, having that acumen, having that experience, folks that have skinned their knees in other ways, we thought was really, really invaluable and important. That was part of the thesis. The next part we talked about on the last couple of earnings calls, the fact that we've made a lot of changes with how the go-to-market organization was structured, how we're thinking about our customers, and how we're staffing our sales roles in particular according to that. What this chart is showing is essentially we break our customers into four groups based upon the size of those customers, whether it is a small business like Lance and Doug talked about that is doing $5 million a year in revenue or less, all the way up in enterprise customers that are doing north of a billion dollars. Now, if you look at the mix of our total ARR as a business, you can see some of the history of the small business-oriented nature of the platform going back quite a ways, all the way back to our founding in Australia. We have a lot of small businesses on the platform. We have a lot of mid-market customers on the platform. What we needed to fix was how the go-to-market motions that we had, both from an efficiency basis and speaking to the right audience, how they tied together. If you look back at our business over the last few years, we've mentioned this numerous times in different settings. We really, really were oriented disproportionately towards new account growth as our primary means of driving growth and acquisition. Part of that is just before and even during the pandemic, the cost of acquisition for a new customer was significantly lower than where it is today, obviously. As we were moving the product upmarket, we hadn't moved the go-to-market motions and the composition of the sales team upmarket as the product moved. What we ended up with was, in some ways, you had very senior sellers selling to very small accounts. You didn't have sellers that were in place to cross-sell all of these solutions into those accounts. You had Feedonomics, you had Makeswift operating as separate organizations. We were not really set up according to SaaS best practice in order to have cost-efficient growth. That is part of why we have made a lot of these changes. For example, if you just look at the sales model today, now our enterprise customers, our largest customers, those are being managed by what we call key account directors. They own the entire customer lifecycle from when it lands and renews and maintains. Those are the most strategic, experienced strategic sellers that we have. The corporate group, which is up to a billion, those are account directors. The big change, especially in mid-market, was building out an inside sales team as well so that you can more cost-effectively sell to that group. Now, we're really proud of this because what it does is it not only allows us to kind of right-size how we're talking to our customers, but also allowed us to fund doubling the sales capacity over the course of the last three months, which is almost substantially complete at this point. I've alluded to this a couple of times, and certainly you all met Doug and Lance sitting in the offering group. One of the biggest changes we made kind of coming into the transformation, and just to acknowledge the fact, the business has been in the midst of a transformation, if we haven't mentioned that before, in a public market, which again can be challenging, certainly, but without question needed and needed to be done in an accelerated capacity. One of the strategies here to accelerate that, both the time and the efficacy, was the creation of, and we will have a portfolio brand that we will launch later this summer we are really excited about, but not to get ahead of ourselves. We really wanted to orient this to the offering model. Just so folks know where this kind of came out of, having lived at the largest digital consultancy in the world, Accenture, with 750,000 people, obviously heavily matrixed as an organization. They do not necessarily view the world through the lens of having to go out and acquire net new brands every year. They very much view the world through the lens of, we work with almost everyone. How do we sell more valuable things to that install base? The motion there, typically the folks most in power at Accenture are what they call client account leads or CALs. They own the client panels. You can imagine that motion is you have every Tom, Dick, and Harry that owns an offering or some sort of substance that are constantly kind of pandering to these CALs, trying to wedge in and sell stuff to clients. That is the concept of an offering and how succinctly it needs to be built and articulated because your time in front of CALs is very valuable. If you are not succinct and deliberate in orienting it very specifically to a specific industry or value proposition, obviously your ability to wedge in there is limited. Part of the concept of coming here was we knew we wanted to integrate both Feedonomics and Makeswift. We know we needed to do that quickly. We also know we needed to kind of orient ourselves around offerings and deliberately large, right, and broad. B2B, B2C, small business. We've already talked about kind of the breakout as it represents revenue across all the roughly a third, a third, a third. We can't alienate any of those. We also need to integrate the products. The thesis behind the offering group was to accelerate not only the ingestion of those acquisitions, but also take the demand in from the regions, right? As we have a GM model, we've got a gentleman that runs Americas. We have another one that runs EMEA, and we have somebody else that runs APAC. Broadly, the geographic demand is coming in. It's coming in across not only those three offerings, B2B, B2C, and small business, but also across all three products that are now integrated. The thesis here was to take in market demand, right, and have that offering group serve as really a prioritization framework, right? They're synthesizing what's coming back from our existing customers, from our channel partners, from our services organization and our product and engineering organization. They're essentially setting the prioritization framework of what it is that we're doing in the roadmap across not only offerings, but across products, and then synthesizing that back out to the market. This was a deliberate effort to not only accelerate the transformation, but also drive this in a more tangible way to go resonate in market, especially given the complexities that we're talking about. All of this lends itself to doing things faster, less expensively, and more effectively just to orient folks to that offerings group. On the growth strategy by offering, we'll orient here in the highlighted section across each one of them, starting with B2B. Lance has talked about this a number of times, expanding the TAM, right, investing in Feedonomics and Makeswift. We feel like especially both upmarket and downmarket, there are really unique use cases there that we feel are applicable in ways that dramatically differentiate us in market to not only get folks up and running quickly and manageable through the way of Makeswift, but also attacking more complicated use cases by leveraging the data optimization and AI capabilities of Feedonomics. I've talked on earnings about bifurcating the teams. I talked a little bit about it earlier on in the meeting here. We have carved out and bifurcated an entire B2B go-to-market team. We have dedicated B2B sellers. We have a dedicated B2B marketing pod. We have dedicated B2B partner managers. Historically, we have treated B2B as some additional features and functions. We have gone now all in to really crystallize and synthesize what B2B means and how we are taking it to market. As Lance alluded to earlier, we have had a pretty capable job of upselling B2B into existing installs, right? Now we have the Feedonomics install base to also do that against. We are going to continue to accelerate and prioritize B2B features and functions as we move forward, given our right to win there. On the B2C side, we have talked a lot about precomposition or curation around composability and making this easier, right, operationally, organizationally, and technically for our ideal customers to consume. We're also doing the same thing with partners. We'll talk a little bit more in a few minutes about how we commercialize this in a way that we think is going to be, as Russ in the back room likes to use the term, nutritious for the business. I would agree. We're also aligning with specific GSIs and agencies aligned to specific markets and verticals to allow them to wrap their capabilities and their IP around this to take this to market with us. Most of what it is we're doing, because of the speed, the agility, and the modernization, this is really impacting organizations materially in ways that it's transformative. Again, we as a software provider are not going to actually do that transformation. We need the GSIs and the agencies to do that. That happens to be higher margin services for them traditionally than traditional SI-type work. They are enthused by it as well. We are also realigning our ideal customer profiles and demand against these specific nuances in ICP, those that would be most susceptible to this sort of architectural and technological approach. I think we have done a really good job through the offering group and really hammering that down. Again, continuing to invest in core capabilities. By core, I mean not only the core features of the product, but also going deeper and more open with our APIs to make ingestion that much easier and affordable. Lastly, on small business, again, Lance alluded to this as well, focusing on highest speed to market upside, right, and expanding into more complex motions that are typically part of our innate install base on small business. We feel obviously Makeswift, eventually being part of that core product, obviously enriches not only the existing install base, but we think widens the TAM to go attract more businesses. Just given the visual nature of that product, we think it's an enriched product. We'll talk a little bit about payment being bundled into that as well as self-service FIDO. On the go-to-market side, right, just being really tighter and very specific about who it is that we're going after and really doubling down on the use cases. I think Lance did a great job highlighting that there are a lot of small businesses that have nuanced use cases and complexities that we do really, really well, doing a better job of amplifying those stories and finding like-type, peer-type clients. On the revenue retention side, focusing a lot on user experience and the overall experience, especially as we ingest those two other products in a self-service capacity going forward. If we introduce payment at some point too, making that really easy and digestible through the control panel as well. Just removing a lot of kind of getting out of our own way a bit and removing a lot of friction points there. I think I can speak quite tangibly to this slide, and it is not to be forgotten. As I alluded to earlier, having lived on this side of the business, I know what motivates a GSI and an agency. Selfishly, they really only care about profitable revenue, which means utilization, which means some semblance of recurring revenue to the extent that they can. They tend to not like big, lumpy projects because big, lumpy projects creates a bunch of this that's really hard to optimize utilization around. We feel with our go-to-market motion and approach and orienting it to specific industries, this is an ideal way that GSIs and agencies like to go-to-market. They tend to build IP capabilities and acumen around specific industries and sub-industries. It tends to gravitate to their really high-margin capabilities around strategy and consulting as well. We think there's some really interesting nuances we can do around licensing and varring, particularly with the larger global GSIs as commerce as a service and allowing them to kind of BPO or business process outsource this as an offering and actually run this as a channel for large global organizations, particularly in big CPG, which tends to be one of the most dysfunctional organizations out there. The benefits to us are obvious, right? Aligning both with GSIs generally in market and within specific industries obviously accelerates our ability to move this product upmarket, particularly on the BigCommerce side, the platform side. By proxy, we will get credibilized far faster by way of GSIs endorsing us and taking us to market. This becomes a way more interesting story around transformation. This is not a feature function arms race, which is historically the way we've kind of taken things to market. We go way into the weeds around specific technologies. It's not what the market buys. It's not what the market understands. It's not what the market wants. They want business outcome. By synthesizing that with service providers, that kind of fills in all of those gaps. When it's just a software platform talking about it, by definition, it's features and functions. By the way, interestingly enough, it's why I hated software most of my career. I would never swear I would never go work for a software company as a services person, but never said I wasn't a hypocrite. I've learned. I've evolved over time. Emotionally, still immature, but I've evolved in other ways. Pricing and modernization strategies. We've talked a little bit about this. Daniel, getting into more of the weeds. You're going to see this in mostly two waves. That kind of first wave, right, the reselling, the simple pricing, bundling this, again, making it easy, making it consumable. I've talked a little bit now at Nauseam about the GSI offering and how we kind of wrap that. The second wave, which will get wildly more interesting, gray labeling, white labeling, and variable rate bundling. Think of this as a pre-curated reference architecture with multiple partners on the front side of that oriented towards an industry where commercials have already been worked out. We're varying. Those products, we're supporting those products. We're probably supporting them at a vertical level eventually as we get more depth into these sorts of things. You can imagine what that would do to our licensing model. The hope here is, as there continues to be commoditized pressure on platform pricing, which it just will by definition, we feel like we're going to enrich that by deliberately bundling things. By the way, some of the biggest complaints we hear in industry from where I was in my past is the surprises of not knowing you need X, Y, and Z to go extend the platform. By leaning into this quite deliberately, this turns this into a marketplace not just for us and our consumers, but also our partners, which is really where we feel the market is going to go. We feel like there is a consortium of partners that will embrace this at scale and will very much view this framework as their easel to basically show off their latest and greatest in what it is that they're trying to do. That's the benefit more than anything of that model. Quickly, on the Makeswift expansion side, we've talked a little bit about this earlier. We bought them December of 2023. The goal was to have this ingested in the core reference architecture and Catalyst. Within a year, we're able to do that, obviously launching that in mid-January. We've got about 20 clients up in that model today, which was the target and will continue to be the go-to-market muscle short term. We're also looking at integrating Makeswift into the core Stencil product, which represents obviously the largest portion of our install base. We feel like it's massively differentiating in market visually and operationally that that would be a nice either freemium version early on. Maybe it's something we charge people for down the road. Lastly, which is really interesting, is we've always viewed Makeswift as a standalone SKU. If I made the argument that we can optimize revenue independent of channel, Commerce.com on own channels, Feedonomics on non-owned channels, you could argue Makeswift is doing that both on owned channels as well as non-commerce channels. There's no reason why Makeswift can't be sitting on top of a brand site somewhere allowing a brand marketer to create unique experiences at scale. Independent of transactional commerce, it could be influencing purchase behavior on or offline down the road. That TAM is massive. It's not a heavy lift to go insert it. It can sit on top of a number of different technologies. We think it's really differentiating and interesting. On the Feedonomics side, we'll talk about it as both a premier product and a base product. Go-to-market 2025. Obviously, premier will continue to be a sales-led strategy. We've talked a couple of times about self-service premium coming in and being made available to our install base, both lower mid-market and SMB, which we're really excited about, especially with the proliferation of channels and everything we talked about earlier. Near-term growth plan, obviously cross-selling and upselling B2B and B2C base of FIDO. We've already been doing this. This has become much easier now that we've re-architected the teams and we've incentivized the right type of behavior for folks to be able to do that. We're also going to continue to target small businesses on the BC platform. The obvious, how we're going to do this, really effective digital sales and marketing for manufacturing and distribution, specifically the B2B with Feedonomics. Obviously launching our proprietary AI model for managing large-scale supplier data. We think this is another big unlock in the space. On the base product, obviously looking to broaden that TAM over time and capture kind of cross-sell, upsell motion. Looking to increase wallet share there, stickiness, reduce churn, kind of all the goodness that comes out of it. All right. We have talked through a lot of the kind of growth building blocks initiatives that we have in the works, whether it is specific vectors on a buy-offering basis. We have talked about what we are wanting to do with partners. We have talked about the idea of getting into bundles. We have talked about how we want to work with agencies. I want to spend a little bit of time talking now about what we are thinking right now with respect to payments. We get a lot of questions on this. We have gotten questions on this for many years. I want to just start by saying this is one of many future bundles as we are thinking about what the business could look like. Those bundles can be with different technology partners. They can either be integrated into the core product or they could be co-branded. Right now, we are still in the early days in thinking about how we want to take a branded payments product to market. Why are we talking about it now? It's because you do not have an opportunity every day to answer Q&A and get into this type of thing in detail. We thought this was the right form to get into it. Understand this is something that we are planning on launching at the tail end of this year, potentially early next year. I want to spend some time talking through what we have in mind, what might this look like. Also just so our investors can understand how we are thinking about this from a business model point of view, because obviously different competitors, some of them look in some ways more like a fintech company than an e-com company depending on how they set this up. We want to spend some time addressing this now. We obviously will have time at the end we can handle more in Q&A. What we are planning to do here, our vision is to create a co-branded solution with one of our flagship payment partners that can be optional and can provide our small business customers and mid-market customers an easy setup with simple commercial arrangements, favorable pricing, right out of the box solution that is integrated with the core product. Optional being the key. We always intend to continue to have freedom of choice among flagship partners for our customers that have complex use cases. What this might look like, for example, is if we have an opportunity with a mid-market customer, it gives us the opportunity to bundle a payments product with the core platform product, price them as a package, and then go-to-market as one easy offering together. Whereas if you're talking to a customer that's more higher in on the complexity side, they may need to use a different payments partner depending upon the region that they're in, depending on the type of channel within their business. We will always continue to have that flexibility and openness between our lead partners. This is creating optionality for our customers and ultimately optionality for us. Let me walk you through in this graphic just to kind of explain how we're thinking about the construct of how we would pull this together. If you think about this almost like a spectrum from left to right, left side being our current way of approaching payments today, which is kind of a risk-free referral model where we are not co-branding. We are not doing our own version of a payments product. From a monetization perspective, we generate referrals on volume to our payments partners, and in return, we get a revenue share on that. From a merchant risk exposure, we do not have any merchant risk. There is no credit risk today. This is purely net revenue accounting, and it is all no credit risk for us. On the go-to-market side, like I said, it is a referral motion. The opposite extreme is a full white label payment solution, which is not what we are talking about here. Okay? In that world, on the monetization side, the platform is essentially getting a buy rate from the partner, and they are taking on pricing risk. They can bundle it into how they approach their solutions. From my perspective, most importantly, they are also owning customer credit risk, whether it's chargebacks and others. That's kind of the far side that we are not looking at right now. The way we're thinking about this is kind of a middle ground as a first step. What we want to do is to be able to have a solution that allows us to get buy rate pricing, that allows us to own pricing risk, capture the incremental spread that can come from that. What we're not going to be doing, though, is taking on credit risk exposure, right? As a result, we're still working out the details. I anticipate this being net revenue, not gross revenue, which means it's not going to have a material huge change in what our P&L looks like over time. This definitely obviously gives incremental revenue upside. Otherwise, we wouldn't be doing it. The core is we want to keep the optionality in place for our customers and for our partners, all right? What would this look like? There are two different paths to growth that we see within payments. That is one of them. There are two areas in particular. If you just go up between the sizes of our customers, we have something on here we call flagship GMV. We have a certain number of customers or partners that we work with that we have the best integrations with. In many cases, they have funded development teams that work with us. That's where we develop things like PayPal FastLane with PayPal or many other examples like that. These also are the partners where we have our best economics, right? We see best retention rates with customers. I'm going to share some of that later on and get into some of the specific unit economics behind that. There are two different ways when we think about payments as a growth factor for us. Number one is a mixed management question of getting more volume to those flagship partners and picking up additional revenue share then. More importantly, I would argue it leads to better stickiness and retention rates with our customers and ultimately better growth for our customers, which we've seen demonstrated in our numbers over time, which I'll get to in a minute. The second piece is actually being able to pick up additional revenue potential through this co-branded solution that we would bring to market later this year. We are really excited about this, but this is one of many examples of the types of bundles that we could take to market. The way that I think about it is this way. If you go back to that slide that Travis showed that talked about kind of the orchestration challenge where you need somebody in the middle to facilitate all the connectivity between all the different parts of the ecosystem. Part of what has made composability challenging to adopt is the commercial complexity of doing so. If you are a mid-market customer and you want to use best-of-breed technology solutions, it is a little bit more difficult if you then have to have commercial arrangements with all of those different technology partners. If you can bring that together into one commercial arrangement, it makes it easier actually for customers to be able to get the best-of-breed benefits that you get from doing composability. It puts us in a position, obviously, where we have a much deeper and more profitable relationship with those customers over time. Payments is the first, but we expect there to be quite a few more coming. It is something that Rob is very excited about and many others in our leadership team. Okay. The way that I think about this from the financial point of view is it's a stacking of cross-sell initiatives. We have many examples in our base of where we've seen this be successful. One example would be Uplift Desk. This is an account. It's been on the BigCommerce platform for a while, actually moved to us because they have highly customizable products. They needed something that could grow with them. They've been on the platform for a long time, but they've over time added in specific tech partner solutions. They've implemented Fastlane by PayPal. They've implemented Vercel. The idea is to get more and more of our customers to have more of these stackable cross-sell opportunities, which ultimately increases our retention and economics in a really material way. Okay? Okay. All right. Moving on to financials. You're welcome to stay. I know it's your favorite topic. I I would prefer not to stay on the stage. You can go at all costs. I will quietly walk away from the stage. All right. Let's dive into what this means for us from a financial point of view. First, let's just start with the basics. I know maybe for the folks in the room, I know many of you for and have known many of you for years. There's a lot of folks that are going to be dialing in that may not know a whole lot about Commerce.com. I want to start from just the ground level of how we make money, what are our products, what's the monetization model behind those products. I think it's important to understand this to then know how the growth strategy broadens that out. Again, we have four products today, essentially, three owned, and then one is a revenue share element, which I'll get to in a minute. First, you have the Commerce.com SaaS e-com platform. That is a SaaS software subscription. The sales motion behind that, that's direct sales targeting mid-market and larger customers. The self-serve motions also exist today that focuses on small businesses. The platform product today has both sales-led growth vectors and a self-serve. Makeswift is a subscription-based managed service. It's software, but it's born out of agency, actually. And when you buy that, when you buy Feedonomics, you are getting the actual managed service to do all the data transformations to increase your return on ad spend. That today is also sold through direct sales, mid-market and large customers, on average, much larger customers than what you see on the platform product, which I'll get into in a moment. There is no self-serve version of Feedonomics today. We have tens of thousands of customers on the Commerce.com platform today. The way that we sell to them is by generating a cross-sell referral over to a seller on the platform side. What we are working on is actually integrating a freemium version of Feedonomics into the core platform so that all of our customers can get a benefit from that. As Doug was showing earlier, it actually allows us to bring down the average price point of Feedonomics to a point that actually makes it much easier for our small business customers and our mid-market customers to do as well. We are targeting late this year for the release of that product. The goal is to get that up and launched before holiday. Makeswift is also a SaaS software subscription model. It has limited direct sales today. When we bought Makeswift, it was fairly small, still is. Kind of job one as Travis walked through on the growth initiative for Makeswift, job one was to help it build out Catalyst as that reference architecture. Step two, as he talked about, was introducing a freemium model version of Makeswift in the core platform so all BigCommerce customers can take advantage of that product. From that, we think it has the capability to be sold in market as an independent product unattached to the platform. That version of kind of the core built into the platform of Makeswift, we're targeting early 2026, maybe end of this year, but we're still working on that. Feedonomics Self-Serve end of this year, Makeswift into the core platform early to beginning of next year. The final part of the business is partner and services revenue. This is the referral model that I was describing. Payments is one example of many arrangements that we have with technology partners. Oversimplifying it, we refer volume to our tech partners, and in exchange, we get a revenue share back from them. Takes a lot of different forms. It could be we get a percentage of GMV, we get a certain amount of dollars for new-to-file advertisers. There's a whole lot of different economic arrangements within that, but it's fundamentally a referral and revenue back. Sales-led motion, as I said, that's co-sell. Self-serve motion, we will be introducing that when we launch a future Commerce.com payments product. Okay. If you think about all of the decisions that we've made over the course of the last several years, it's been very deliberately with the idea of expanding our core target addressable market beyond the kind of starting point of B2C SaaS e-commerce platform. If you look, when we bought Feedonomics, that expanded us into omnichannel. The acquisitions in B2B, as Lance talked about, expanded further. Makeswift got us into content. Now we're talking about an optional version of BC payments that would get more into fintech. Ultimately, what I'm really excited about is this idea of putting together bundles in a way that actually gets us into the world where we can be making it commercially easier for customers to have a best-of-breed solution and ultimately increase distribution for a lot of our technology partners by giving them access to the tens of thousands of customers that are on our platform without fear of us white labeling their solution or coming up with our own version to try to expand into their area. Because again, we want to be open, and best-of-breed, and partner-friendly. Okay. Let's spend some time talking through a little bit of unit economics. This is a normal thing. We like to, anytime you have an investor day, there's always some extra stuff that you can talk about in terms of metrics. Let's go through a few of these things. As we talked about, Doug's team runs the offering group. Travis talked about how that's something that was very common when he was at Accenture and other places. I want to spend a little bit of time talking through what the unit economics look like for each of these. I get a question a lot on earnings calls. Hey, Daniel, can you help me understand, is your take rate on partner and services revenue the same for a B2B customer as it is for a B2C customer? If you're mixing more towards B2B, what long-term is that going to mean for your economics? Just quick snapshot, this is showing each of the three offerings. The data that's shown here for small business is specifically referring to customers that are paying annually in advance. From our perspective, that's kind of our target small business. If they're an established business with complex use cases, paying 12 months in advance is usually very, very palatable for them in exchange for a discount, obviously, that we offer. I wanted to compare the kind of core economics of the three. Starting on the right, small business is about a third of the business from an offering perspective. That offering is a third. For customers that are prepaying annually in advance, their average NRR is 99%, which is quite good for a small business customer. Obviously, it's different. If you're paying month to month, that's a totally different level of intent. On average, those customers are doing about $31,000 a year in revenue. Again, customers that are prepaying. On B2B, which is where we've been mixing more towards, obviously, it's a large portion of the mix, has higher NRR, but not quite as high as where we are in B2C, has slightly lower average revenue per account. Reason for that, two things. Number one, Feedonomics traditionally has had a bigger base within B2C. We're expanding what Feedonomics can offer so we can expand it further into B2B. Obviously, B2B customers do fewer credit card transactions. There's less PSR per account there than what we have seen traditionally in B2C. We're working on that as well by establishing flagship partners within B2B so that we can have better solutions for B2B customers that also come with better take rate. This is something we're also actively working on because as we mix towards that portion of the business more, we want to make sure the unit economics are strong behind it. B2C has our highest NRR and our highest average revenue per account. A lot of that, as I said, is driven by payments processing and the presence of Feedonomics as a cross-sell within B2C. Okay. Why are we looking specifically at these particular growth initiatives, and how does that relate to the data that we've seen on the unit economics within our customers? What this is showing is as you stack some of the more important initiatives that we're talking about here, how does it change the unit economics of customers we have in our base today? For example, if you start with customers on our platform today that are not buying Feedonomics, they are buying the BigCommerce platform alone. At month 12, those have a 94% net revenue retention rate, and that's about a fourth of our ARR in total. That same customer, when you add a flagship payments partner, again, these are our best integrations, they have our best technology, now the NRR jumps to 104%, and that's a little over half of our ARR today. The inclusion of a flagship payments partner is how you get access to things like Fastlane by PayPal, which is highly performant, great on the platform, and it's designed to help grow customer revenue better. When I talked about mixing towards flagship being a greater portion of the volume that's going through the site, this is the economics behind that that get us excited to do so. Not only do we capture better revenue share, but the customer is actually stickier and they grow. If you then layer on top of that, customers that are working with a global systems integrator that are taking part of that growth initiative, now all of a sudden the retention rate is even better. They're more complex customers. That's why they tend to need an agency, and they take a little longer to implement, but they're very, very sticky. You can see how big of an opportunity we have to increase the amount of participation and partnership that we have with systems integrators. Finally, with Feedonomics, if they've done platform payments, they're working with an agency, and they've been successfully cross-sold Feedonomics, net revenue retention is really, really strong. Right? The goal is to get more and more and more of our customers further and further down on this chart. Right? This is the heart behind all of the initiatives that we're pursuing. Okay. Let's talk then about what's the difference in customers between the Commerce.com platform product and Feedonomics. What we've been talking about is the fact that Feedonomics typically has our average customers running Feedo tend to be a little larger than what we've seen historically with Commerce.com. We believe that there's an opportunity not only to bring Feedo down market to cross-sell to the platform customers, but also to bring the platform up. If you just look at the difference in customer size and mix, you can see that for Feedonomics, customers that have revenue north of $20 million, over half of all Feedonomics customers are that size. You compare that to the platform product, which is legacy small business at our founding, they tend to be smaller customers. That's why we're saying there's opportunity to kind of meet in the middle on both of them. When you then look at the same data, but you look at are they working with one of our lead global systems integrators. You see where we have these services partners involved, these also tend to be larger customers. The larger the customer, typically the better economics we see as well. Part of the reason we're driving cross-sell and we're spending so much time thinking about how do we make this a wildly profitable product for agencies to implement, it's because that helps us move up market and get into larger deals that are stickier with better retention and unit economics. Okay. Why are we confident that we can execute this? We know that we need to grow faster than we have. We know we need to reaccelerate growth rates. There have been areas where we've really shown strong progress over the last few years in the way that we've been operating with financial discipline. I'll call out a few. Number one, if you just look at what we've done with operating expense. Over the course of the last three years, we've had a 25-point improvement to OpEx as a percentage of revenue. That is while not getting to the revenue growth targets that we were aiming for. I tell our team internally all the time, we did this the hardest way you can imagine. Right? If we can reaccelerate growth, you actually are going to see a lot more operating leverage a lot faster than this, and something we're particularly proud of. What we've also been focusing on not only is cost discipline, but it's also in how we're thinking about working capital and the quality of the bookings that we're driving. We have been talking for the last couple of years about the fact that we're really actively looking to get customers into longer duration contracts that are paying in advance, which is more typical of B2B SaaS. What this chart on the left is showing is what percent of our base of enterprise accounts are prepaying. They could be paying quarterly in advance or annually in advance. You can see the progress that we've made over the course of the last three years has been really substantial. To now, two-thirds of our enterprise accounts are prepaying. There is still additional runway on this for us from a working capital perspective as well, because many of them have maybe switched to semi-annual or they've switched to quarterly. We have pretty low CapEx as well, which is part of why we're so bullish on the fact that we can continue to have such strong cash flow growth even as we're expanding profitability. This is something we've been really proud of. What I say a lot on our earnings calls is the flow through from ARR to revenue and profit and cash flow is the strongest it has been in the six and a half years that I have been here. This focus on high-quality bookings, which you see in RPO, you see this in deferred revenue as a big driver behind that. Third, we have made a lot of progress on balance sheet. Right? We have swapped out our debt. We have delevered the absolute amount of debt that we have, shifted out the maturities into 2028. Now, we are down to, I think, a little less than $30 million in net debt overall, which is something that we are really proud of. We have more than enough cash to run the business and invest. Finally, and most importantly, from a cash flow basis, from operating cash flow as a percent of revenue three years ago to now is a 38-point swing. If you look at last year alone, we had over a $50 million improvement in operating cash flow in one year. The profit improvement was roughly half that. In other words, we're getting $2 of cash flow improvement for every $1 of profit. That is because we've been really, really, really wise about where we're investing in capital and also what we're doing with prepayment and working capital. Okay. What does this mean then from a medium-term growth model perspective? I want to spend some time on this because there's some nuances to this I think are worth spending some extra time on. What I've included here, just four areas: revenue growth, ARR growth, gross margins, and operating margins. What I've included in the middle column is what we have as our opening guidance for 2025. We spoke about this a few weeks ago on our most recent earnings call. We think this is a good conservative opening guide to see where the year shakes out. There is a lot of uncertainty still in markets this year, but we feel good that this is a number for us to go after this year. What I'm calling out then are where are we thinking about this from a medium-term target perspective. I'm calling that three to five years, including 2025. Right? From a revenue growth perspective, we're aiming for mid to high teens in a sustainable growth basis. We do not think we're going to get there next year. We might. It depends on how successful we are in a lot of the transformations that we're doing. That is not how we're thinking about building out and modeling the out years in the business. We think there is going to be a build to that level of growth rate over this time period. What we are aiming for is $500 million in ARR. The question is how long does it take us to get there? Similar growth between ARR and revenue on a gross margin basis. We are calling out that we are focused on margin stability. Why is that? I think we can expand gross margins, but we also, as we introduce bundling with third parties, that is going to have a little bit of a downward pressure on gross margins. We want to be able to offset that through other cost savings such that we see it staying in the high 70%-low 80% over time. It is going to take work, but we think that is something that we can maintain. Finally, from a profitability perspective, aiming for mid to high teens growth margins over time. We could go higher than that, but we want to be reinvesting in further growth acceleration over this time period. Travis talked about this in Q&A on our last earnings call as well. We really believe that the best outcome that we can get to here is reaccelerating growth. Where we see good ROI, we intend to reinvest down into the business. We think that this is something that we can sustainably shoot for. It's just going to take us a little bit of time as we execute a lot of these transformations and changes in order for us to get there. Okay. Last one, and then we'll switch over to Q&A in the time that we have left. We've gone kind of fast because I know for some of you, you had another one of these this morning, so I want to be respectful of that. Where does this put us overall for the business? We think there is a differentiated value proposition here. Right? We are not going for 100% of the market. Not going to restate that. Travis covered this already. We believe that we are differentiated for a core group of customers that need a partner that can handle more complexity. Just as importantly, we think where the market is going is going to require a company that has the ability to composably and flexibly allow customers to benefit from best-of-breed technology solutions and not have the burden be on the platform provider to spend all of the R&D to do all of the innovation themselves. Right? We believe that we can sustainably defend and articulate that. I don't think we've done a great job of doing that over the course of the last several years, which is something that obviously we're taking very seriously and fixing. Behind that, we think there's upside from branding. Travis alluded to this. We're still thinking about how we think about parent company branding. More to come on that over the next several months. Again, focusing on an open business model. We've talked about go-to-market transformation and the economics. Ultimately, the focus, everything that we're focused here is on driving shareholder return. We haven't delivered returns to shareholders that we need to. That's just bar none. We've made really big progress in profit. We've made big profit progress in cash flow. That is a start, but we must reaccelerate top-line growth. That is 100% the focus that we have. We recognize that it's going to take some time. We recognize that we need to show it, not talk about it, but we believe confidently we can do that. We have a lot of things we wanted to go through today, some of which are alluding to what's coming, but it hasn't been launched. We wanted to take advantage of the opportunity to do this live and cover it off in detail here. Thank you very much for your time. We'll switch to Q&A, if that's all right. Why don't you guys grab the chairs and take a quick break? Yeah, we're actually going to take a 10-minute break before Q&A. Oh, and then Gabriella is going to start. Yeah, then we got time. Gabriella has priorities, so she's getting the first question. 10 minutes, real quick. Go to the restroom, grab some water, whatever you need. We'll have our four speakers come up in about 10 minutes. All right. We've got about one minute. You can find your way to your seats, and then we'll get started with Q&A. All right. We're about to get started with Q&A. Hello, hello, hello. Okay, there we go. All right, we're about to get started with Q&A. If you have a question, we're going to start with Gabriella, so she has dibs. If you have a question, please raise your hand when you get it. Please introduce yourself. When you get the mic, please introduce yourself, who you're with, and then ask your question. First one, we'll start with Gabriella. I'll run you back to Mike. Thank you. Thanks so much. Thanks so much for having us. It's really good to see you all. Thanks for all the detail in the presentations. Daniel, you spent the time walking us through all of these granular bi-segment net retention numbers and unit economics. There was sort of the magic trick on $500 million growing mid-teens, mid-high teens. Maybe just bridge that for us. Did you do—do we do the granular math of multiplying each of the percentages out and get to mid-teens? How did you— If you want to do a really elegant sum product in Excel, the cashier—I mean, I think what we're trying to get at with that was, look, there's two things that I think we're trying to accomplish here in talking about the math. Number one, where we think we can be and should be isn't where we expect to be this year. The question is, how long does it take you to get there? What are the growth building blocks behind what it would take to get you there? There's a couple of things that I wanted to accomplish in going through that discussion. Number one was talk through all of the kind of growth initiatives that we have and how related they are to what we're already doing, because we're not trying to do anything brand new to the world that we've never touched in one way or another before. We also aren't doing anything that we don't already have customer examples of them already having done. The issue is we don't have enough customers that are doing all of these different solutions. Right? If you go down that chart, for example, you take the platform product, then add on a flagship payments partner, and working with a top agency and having successfully implemented Feedonomics as well, it got to a smaller and smaller number as you go. I look at that and say that's a huge opportunity for us. Why we needed to restructure all of our sales teams and the way we think about marketing and organizing around offerings is because all of those things we believe will better equip us to be able to get more and more customers down into that profile with those better economics. The second thing that we needed to accomplish today, though, is to understand, be realistic about the timeline and what it would take in order to get there. We do not believe, or I do not believe, that we are going to be getting to mid-to-high teens growth next year. We might get there if we have really, really strong ARR acceleration, but that is not what we are planning right now. We are expecting this year to be difficult. We are metabolizing a lot of change under new leadership and a lot of people in new roles. As I am thinking about our business and I am thinking about the growth in those numbers, I am gradually kind of building a gradual endpoint there and thinking about how can we make steps now that are bold and decisive, that are focused on doing it faster. What I do not want to do is say, "Oh, I think it is going to take exactly this amount of time," because some of this is, to a certain extent, out of our hands. Some of it depends upon what is the climate for replatforming, how do we think things are going to go on a macroeconomic basis. We want to show we have confidence we can get there. We have demonstrated that it can work, and we see it in our own base. We think it's going to take some time to get there gradually based on the speed and the size of the change that we're going through. When you gave us the net retention numbers, can you talk through what is the CAC associated? There's no LTV to CAC discussion, so help us fill in the blanks on that. Yeah. If you look at one of the areas where very transparently we must, must improve is in our sales and marketing expense efficiency. If you look at whether you look at magic number or payback period, the reciprocal, pick however you want to do the math, right? For the amount of money that we've been putting into the business over the last couple of years, we have not gotten growth that we should have gotten for that amount of spending. We talk about this constantly internally as one of the number one highest accountability things that we need to get stronger at. When I look at CAC within the business, I almost like to bifurcate it between what we're spending to land a new account and then what are we spending to get the same amount of growth from an existing account. If you just look at sales commissions alone, we've gone through and looked at the math. We spend three times as much in sales commissions to land a brand new to the company account as we spend to get the same amount of MRR growth or PSR growth from an existing account, which is why when we went through and did the restructuring, we say, "All right, we're going to double the amount of sales capacity we have in the company." That increase in sales capacity is disproportionately weighted towards account management teams focused on our base because that's where we see a lower CAC, right? You can't new account your way into the growth rates that the business needs to be growing at and is capable of growing at if you're having to pump the amount of money into marketing and sales that we have in the past trying to do it so heavily weighted towards new account growth. We didn't put CAC on here because it's very different whether you're looking at a new account versus existing. When you look at the sales and marketing efficiency numbers, it's very telling. It must get better. That's one of the core responsibilities that I have, that Rob has, and Russ has, and everybody else that's in a leadership role on the go-to-market side of things. Brian Peterson from Raymond James. As we think about that longer-term growth profile that you laid out, how do we think about what the implied NRR would be there versus what you guys have today? What do you see even qualitatively as the biggest kind of opportunities? Is it mixed, cross-sell? Just would love to unpack that a bit. That's a wonderful question. Okay. When you go back and you look at from, call it 2020 through 2022, our average NRR was, I think, 113%. Do not quote me on that, but it is pretty close, right? I view that, and I try to explain this to all of our employees internally. That is like the floor growth rate of the business. The first thing that I look at when I look at the health of our business is gross retention rate. What is the retention dollarized of your existing customers? And then what are you doing to expand beyond that? Over the course of the last couple of years, that number has come down considerably. As it has across SaaS, I do not think we are unique in that respect. I think what is an issue that we need to fix is that I do not think we recovered as much in NRR as some other folks in this space did over the course of the last year to year and a half. Questions, why? Right? A lot of it is because, again, we were organized around new account acquisition as the primary means of growth. We were not orienting our internal vernacular, the way we built teams, the way we were setting goals and quotas, were not around existing account expansion. To your specific question about kind of those medium-term growth rates, I would like to get to a point where there's almost an even mix between NRR and new account acquisition because I think that's how it fuels the operating margin expansion ultimately so that we can, as I say to our teams, you topline your way to a better bottom line. It's a lot easier to get profit leverage when you're growing really fast. We've been doing it the really hard way. I would like to see a much better balance in that and do that in the long term. I think it's just a good internal way of talking, but that's easy for our teams to remember. Thanks, [Scapper] Needham. Thanks to everyone for joining us. I always love to hear these stories. Lots of questions, but I'll pick on the small business one. Let's go there because I'm sure it's not top of mind, at least. I think you've went over the last year, maybe 18 months, really kind of de-emphasizing the smaller customer in general. This was certainly a kind of a market change in kind of that messaging. I guess why the change there, what's different? As a follow-up question, why now to do something for payments versus three years ago or three years from now? I can't speak to things that predated me, certainly, so I'll just. I could. Why don't you answer first, and then I'll touch that part quickly. I'll do it on the future side. I mean, I think Daniel walked through the numbers. Obviously, small business still represents a large portion of the business. To alienate or ignore would be irresponsible. Two, I think now with the ingestion of Makeswift and Feedonomics, we actually have a legitimate upsell, cross-sell motion that never existed before. Right? The only motion before was, "Okay, maybe we upgrade you from a small business plan to an enterprise plan." Great. You could debate how good and how effective we were doing that around feature gating and things like that. That is why you see a lot of small business customers using enterprise plans. Now with Makeswift and Feedonomics, especially launching a self-service version of Feedonomics, we think that is a massive unlock. We think Feedonomics is going to be just as massive, but for different reasons. Just being so visually oriented and thinking of small business running with very small teams and small development, that is a game changer. You add payment to that as well. We think not only does it enrich the existing install base, and certainly we see some wallet share increases there, we think we can actually go grab more net new business in that space in ways we've never been able to grab before, quite frankly. Because before that, it was really a feature function conversation. It was like this, how much more or less do you get by going with us versus some of the competitors? A bit of a race to the bottom. I think the reason it's a third of our business is, kind of like Lance alluded to earlier, there's just hair on a lot of these small businesses. They just have unique requirements, or they live in industries that are innately complicated for whatever reason. You could argue that's limited or that's expansive. The reality of it is it's not like our competitors haven't made aggressive ploys to go steal that customer base. It's legitimate. I think we see a real growth angle there with Makeswift and Feedo. I think it's something that, especially on the small business side, you're also going to see a lot of greenfield come into play too that has a lot of similar dynamics. Small teams, small budgets, just a lot of sensitivity to price. We feel like we can go do that profitably and at scale. I think, just to adjust the history a little bit, I think part of this has been deliberate, and part of this I think was a little bit of missteps on my part in how I've talked about this even over the course of the last couple of years. I mean, if you think about it, two or three years ago, our unit economics on small business looked materially different than they do now. Right? We've taken pricing up. We have now almost a third of all of our bookings on small business are paying annually in advance. We really shored up kind of the LTV portion of LTV to CAC. That was kind of step one. The second part of that for it to become a more investable business is what are you doing on the cost of acquisition? What we did, and where I think there were some missteps on how I've talked about this, is we were really focusing on moving dollars up market towards more mid-market and lower-end of enterprise customers and looking for that spend to halo into the upper end of small business. I think the way that it came across was as if we were de-emphasizing it when really a lot of what we were doing was saying, "We need to get the LTV to CAC of that portion of the business into an investable place." We've done that successfully over the course of the last couple of years. Now by integrating all of the assets the way that we have and changing the way that the sales team is orienting, now all of a sudden there's more that we can introduce into expansion for those customers, whether it's a freemium version of Makeswift and introduction of BC payments and a freemium version of Makeswift. Now all of a sudden the volume game and a small business type of thing, it makes more sense for us. We are always going to be focused on complex customers with complex use cases. Some of them will be in small biz. Some will go further up. We are not going to be going after digitally native startups and spending a ton of money competing with that area. It is pretty saturated. There are a lot of really good competitors that go there. What we are going to do is say, "All right, that type of use case with that type of customer we're absolutely going to speak to." Now we feel that we have an economic model in place that becomes something that can be sustainably invested in and grow by primarily still directing dollars up market, but having it spill over into a more favorable LTV to CAC with small business. It is just we are in a different place now than we were a couple of years ago. One thing I'll add, one last thing. I think divorcing ourselves from the fact that we're trying to compete in maybe our largest competitor's ICP, the simple, we're just not going to win. And just being honest. That's not what we're built for. No, I think it's liberating to just let that go and move on. It's okay. They're really good at that, and they deserve to win. We do not. It's just not our core focus. I think just letting that go has just oriented the broader business to go kind of double-click into what it is that we are important for specifically in the offering group within small business. It's synthesized around who it is that we're for, not just broadly speaking small business and bringing in a competitive landscape that we have no business competing against. Josh Baer with Morgan Stanley. On that topic of kind of letting some business go and Travis, how you frame the competition and the landscape, I think you made a comment that 90% of brands might be okay with a simple solution, and then you have Commerce Tools like in their niche up market. I am wondering how you do define your TAM. How big is this market that you are going after? Also, if you have put together a framework for thinking about how that market is going to grow over the next three to five years, essentially I am wondering in your assumption of mid-teens to. Is the TAM there? Growth, yeah, is the TAM there, but also what does that imply for market share gains? Yeah. I will touch that one briefly at the end. Okay. Let us delineate between B2B and B2C because I think they are different. On the B2C side, I mean, although Shopify has sucked all the air out of the room, Salesforce and Adobe still have the majority of the install base. I mean, that is where everyone's kind of, it's like the carcass that everyone's kind of picking off of, although they're not dead. I don't expect large global brand manufacturers and retailers to go rip out those installs on a whim. They're there for a reason. For certain clients, I think it fits them really well even today. There is a large subset of that install base that we're going after, our competition's going after that we do think fits this really well. As the landscape kind of complicates, as I've alluded to earlier around orchestration, I think you're going to see more of a need of particularly, maybe not so much retail. I think retail's a different animal. I think larger branded manufacturers that need to sell across multiple channels and deal with that inventory and orchestration complexity, I think lend itself to the model that we're approaching. There are many of them now. We're in deals today on those legacy platforms, big, massive global deals today that I do not want to get ahead of ourselves on, but they're embracing us because of our approach to composability and openness. They've already philosophically kind of gone down that route. Again, that's not everyone. If I said that earlier, I apologize. I do not think 90% of the market is simple. I think digitally native brands are simple by definition for a myriad of reasons. I think our competition's ICP tends to lean in with simple use cases, smaller than normal catalogs, not very robust promotions, not a lot of really complicated omnichannel. I do not mean that disrespectfully of the fact that they have gotten some more complicated brands to dumb down their model to fit their infrastructure. That has happened with brands that are strong enough to grow on their own. I think every commerce platform, probably ourselves included, have taken way more credit for a brand's growth than what we deserve. You are seeing a lot of that in market today. Those brands are not growing at a hockey stick rate like they were before. There is going to be a lot of pressure to distinguish themselves and go in different directions. I think we are going to see that as well on the B2C side. On the B2B side, I think the vast majority, you have got a couple of different TAMs there. You have got legacy SAP and Adobe sitting legacy for a reason on the SAP side. Big, complicated. As we expand sort of our capabilities around CPQ and doing more things globally, that will broaden that TAM, people wanting to come off that platform. SAP's also forcing people into their microservices architecture. That is going to be a big lift, and people are wondering whether or not they should do that or not. Adobe is just not invested in Magento at the level that I think folks expected them to. They are focused on other things. I think just atmospherically, most folks running Magento have an appreciation for the way that we have developed the product and we are going. We think culturally that is a really good fit where we have had a lot of success. I think you are going to see that. You're going to see a lot of greenfield B2B too that are traditional legacy distributors and manufacturers that have never digitized that are looking to do that. You're going to see that with very, very small budgets, very quick go-to-markets. Lance kind of alluded to a couple of those. That's an area we've been, I mean, we're seeing more. I mean, you could speak more tangibly than me. We're seeing a lot of a burst of those sorts of opportunities because the thesis in B2B is to really drive out cost. It's to drive out manual labor cost and synthesize the back end and make it less complicated. Most of those folks are running multiple sources of truth, and most of them want a framework by which they can acquire new assets into and stand up and standardize sooner rather than later. I just have a question on TAM too. From a market share perspective, we're pretty small today. Even if you say the type of customer that we're going after, just within the platform space, say it's a third, 40%, pick your number or whatever, that's multiples of growth beyond where we are. I would argue the decisions that we've been making have been specifically designed to not have to win a bunch of competitive switches in a head-to-head competitive share gain world. Right? We can expand Feedonomics, and that's broadening the category. Right? We can get thousands of our existing customers using Feedonomics. We're not displacing anybody. We're just expanding the category. Right? Same thing if you start looking at bundles. Right? If we have a deal with a customer, maybe it has an annual contract value of $100,000. Right? Then you start adding in technology partner solutions that are bundled into that as a recurring subscription in the same commercial agreement. Now maybe that contract's up to $120, $150. For many of those partners, part of the reason they're so interested in working with us on this is it's category expansion for them. It's effectively a growth in distribution. Right? That is powering revenue growth without us required to win more head-to-heads in a competitive share basis. We are trying to be very deliberate about not needing to get into an arms race in order to get to sustainable growth, better growth rates. I think we definitely can do that. Hi, Hardy here on behalf of Mark Murphy from JPMorgan. Great presentation. Thanks for taking the question. The first one is you guys have been emphasizing a lot the B2B motion. I think a lot of great statistics around it. One of the interesting ones is the fact that there's a greenfield opportunity there with some of these customers who don't even have an online channel. On that front, is this a catalyst for them to go to that channel just, "Hey, it's been long enough," and they realize that that need is there? Are you guys kind of going out and evangelizing that? Number two, real quick, just on the macro, it's your favorite question, I'm sure, but we've seen all these airlines come out, cut guidance, plenty of stuff going on in the headlines every day. Any thoughts on that and kind of what you see right now? Let me take that one. I want to take that one. I'll take the first one. I'll take the first one I'll take the first one around B2B first. It's a bit of both is the answer to that question. If you think about the buyer, the B2B buyer has changed. They are a younger buyer who is used to shopping online. When they go and place an order on behalf of their company, they expect to be able to do that online. They will switch buyers if they can't. They're not loyal anymore in the way that the previous generation were. They're not looking for in-person lunches and dinners. They want efficiency of processes, efficiencies of shopping, of making those purchases. Manufacturers and distributors that don't move online fast enough are just going to lose market share. That's kind of the push. That's pushing manufacturers and distributors to move online. There is also an education piece. Right? Whether you go and look at the associations and buying groups, National Association for Electrical Distributors has a specific team within their association that's dedicated to digitization of their members because they know how important it is. It's a mixture of both. The buyers are pushing it, and we are educating manufacturers and distributors on just how important this is for them to make that transition and the kind of margin expansion and profitability that they can drive through digitization and e-commerce. On the macro question, no change in the sentiment or point of view since our last earnings call. There's enough uncertainty that's going around. We see the same thing. We think we factored that into how we've approached the year as well as we could. Would it be nice if we had a little less macro volatility? Sure. Like I said on our last earnings call, we're not going to be over our skis in how we think about growth rates banking on a huge tailwind on the macro side. We went into the year expecting this to be a tough year, not just from anytime you have new fill-in-the-blank administrations, consumer sentiment, whatever. Right? There's always going to be that type of uncertainty. Also with the kind of endogenous stuff that we were doing within the business already with the level of transformation that we're going through, we definitely took an approach assuming this year is going to be a challenging year. It's going to be focused on execution. My point of view is the same. No change to what we've issued as our latest guidance. Fantastic. Travis, just a question in terms of broadening out into payments. That's something that I think investors have been asking for since the IPO. Daniel can attest to this. I can't. Yeah. Well aware. I guess one, why not lean all the way in like some of your peers? And then second, you guys were touching on how that'll drive some monetization. When you look across some of the other partner PSR categories, do you feel you guys are capturing the optimal monetization there? Kind of what other areas do you think make sense to where you can try to kind of bump up total wallet? Yeah. On the first one, listen, I think part of this is making it digestible to the organization. So the amount of infrastructure and acumen and investment that would be required to go to the far side of that spectrum, I think would be irresponsible in the transformation. I would say we are transforming as aggressively as we responsibly can. If I still had my consulting hat on, I would have evangelized the amount of volatility and risk associated with consuming so much change at once. I think we've done it actually quite responsibly. I had the advantage, honestly, of coming in for the first four or five months and focusing exclusively on go-to-market. I had that kind of added runway to do that. On the payment side, just looking at the interim step and what would be required to kind of get us to a mature state, it is not monumental, but it's not insignificant either. I think it would be irresponsible to just go all the way over to the right-hand side of that spectrum. Would you agree? I would agree. I would add to that too. If you think about at some point there starts to become we need to be really, really consistent about both the consistency between our strategy and our financial model. I do not want us to end up in a position where we are not able to pursue the strategy that we think is right for where the market is going because our financial model requires us to stay in one direction. For example, if we are working with a multinational customer that has business in Asia and Europe and the United States, they may need and want to work with a different payments provider depending on the market because there may be very, very different requirements and things that are going to help them be successful in those markets. I don't want to end up in a situation where when we're talking to that partner with that level of complexity, that we talk about being best of breed and being pro-customer and all those things, but oh, by the way, if you don't use this branded solution, then that actually blows up my whole pricing model. That actually isn't consistent with where we see the market going. That said, there's a big chunk of our customer base that doesn't need a different payments provider in different regions. They need something that's easy. They'd like to have a buy rate where they don't have to negotiate with multiple people. If you look at that part of our base, I think it makes a ton of sense. I think this is a good incremental next step. From my perspective, disowning the P&L, I don't want to all of a sudden have a bunch of credit risk, customer credit risk on our P&L. We're not a multi-billion dollar cash company. I think we need to be wise and prudent. This could lead to other bundles that you could do with other technology partners in the fintech stack, as an example. I think this is a good first step in that direction. We're going to do it in a way that's customized for the customer while still not all of a sudden having an inconsistency between what I need to run the P&L and where you think the strategy is going. I don't want to end up with that incongruency. Yeah. The second half of that question on the PSR side with partners, the answer is yes. We think there's a lot of upside in being very deliberate in the orientation and the ingestion and monetization of what that is. And to Daniel's point earlier, we do want to own distribution. If that didn't come across in the presentation today, that's kind of the— That's where we want to take it. That's where we want to take it. We think if you just look at—if you read the tea leaves, if you look at the past to predict the future, every other monolith in the history of this space has eaten their young. They have bought or built all the other ancillary stuff out there to provide an all-you-can-eat buffet. You're already starting to see trend lines of where our largest competitor is doing that as well. Oh, that's soft. Maybe I just offer it myself. They are going to have to do that to grow at the rate and given the market cap that they are at. We believe as that happens and continues to happen, there will be an opportunity to, again, I used the term consortium earlier. I think there is an opportunity to enrich those partnerships. I think best in class will embrace the openness. We are there to objectively recommend what is best for our customers. The offering leads in Doug's group are really the tip of the spear to identify that at the offering and the industry layer. That is going to go back down to the partners. Russ's team and Rob are going to go commercialize and monetize that. I think the strength of going to market across this consortium as opposed to going it alone and relying on our own features and functions not only broadens our ability to take to market and also authenticates what it is that we're doing while also owning distribution and monetizing along the way. We think this is the future of where this is all going to go because we couldn't possibly raise a hand today and say, "We're going to stay on top of best in class across all these areas of commerce of where it's been." Look at how much it's changed. I mean, literally, Oracle is out of commerce. What, 15 years after they bought ATG? I mean, literally, probably the greatest commerce framework and platform in the history of mankind. I mean, and let's be honest, I don't think Larry Ellison's an idiot. I mean, it's hard to stay on top of this stuff. I think this is the next phase of this, is going to get wildly interesting in a good way. I think, again, liberating us from having this feeling of having to create the next shiny object. I don't think up market buys shiny object. I think up market buys risk mitigation. Don't get me fired by buying this, honestly, is what goes through the mind of every enterprise brand I've ever met. It's not the front end, it's the back end that goes bump of the night. This just encapsulates that at the same time. Again, doesn't mean everyone's going to go run into our arms. I don't profess that that's going to be the case. This is materially different than our largest competitor. This is not a different denomination of Christianity. This is a completely different religion, literally. All right. right. Perfect. Daniel, you mentioned you guys got to margins the hard way. As we think about that mid-teens plus, is that going to—are you guys going to have to get close to that top-line growth number for us to be able to see that kind of a margin number? Is there ways that you guys can operationally get there as well? We could continue to have operational efficiencies to get to the margin goal if we—I mean, we had almost 800 basis points of operating margin improvement last year while not getting to the top-line goals that we wanted. Right? I think say what you want, but I think we've demonstrated over the last two to three years where we have to make hard calls in order to drive efficiency. We have done it, and we will continue to do it. Best path to long-term shareholder value, though, is in a good balance between growth and profit growth. Right? I think that's, as I look at it, I'd like to see both. I think that's the best way to get to good valuations. If we had to take harder steps in order to just get there through cost, we could. We just don't think that in the medium term, that's the best outcome for shareholders. Why don't we get the front row? Since the mic was in the back, nobody in the front's going to ask questions. All right. Hey, guys. Koji Ikeda from Bank of America. Thanks for doing this. I wanted to ask you a question on Commerce.com's brand awareness. We just listened to a couple of hours of, frankly, a pretty amazing strategy laid out. I wanted to talk about brand awareness because when I speak with your guys as partners, one of the things I hear the most is, "I love Commerce.com, but it's hard to sell because when the customer or prospect comes in, he's asking for something else first." How do you address the brand awareness question? What is the strategy there to build up Commerce.com in the end market? We talked about this when I interviewed you originally, I think. We did. I will embarrass the company again when I was asked, "What do you think of Commerce.com?" I said, "I don't." Be nice. Be nice. Be nice. Yeah. I said, "I don't often." I did not mean it disrespectfully because I have known and have respected the platform for a long time. For exactly the use case you gave, the business was not in enough rooms. It is a very capable product suite. I mean, it always has been. It has always had a reputation, a really good reputation, but not a braggart sort of reputation. There is a lacking bravado, I think. We have been a bit too humble. I used to criticize Shopify for doing the same thing when they were overly Canadian. They have kind of over-indexed on that since. Part of it was not understanding our North Star either. It is really hard to lean in tangibly about who it is that you are for when you are trying to be everything to everyone because you are so afraid of alienating a certain subset of your install base. As soon as you say, "We are going all in enterprise," the folks running small business are like, "Oh, I knew it. They're going to abandon us." Or as soon as you say small business, people don't think you're for enterprise. This is a multi-pronged sort of problem. One is owning the North Star of who it is you are. I think we'll solve a lot of that with just the qualifications of folks that we brought in. Just the buzz and the incestuous nature of the space, I think, has elevated us into different settings. I think you're going to see our partnership model shift a little bit too. We've gone really wide historically because the North Star wasn't there. We were desperate for opportunity and revenue. In a very unorthodox way, we manufactured revenue where even our partner ecosystem was more of a pull motion. It was going to partners to solicit. Manufactured lead gen. Yeah. Lead gen, exactly. How can you feed us business? That's not the way this market normally works. Usually, the top agency and GSI partners, other than the big guys, they're usually fed by platforms. Without having that, we've had to operate in ways that were very kind of non-nutritious to the business. As a result, we've lost kind of brand presence in market. I would expect all of that to materially change. Integrating the two other businesses, Feedonomics is very well known and respected. I mean, their net promoter score is through the roof. They're very well known and certainly up market. I didn't even know BigCommerce owned Feedonomics when I interviewed here. That's the god's honest truth, and I'm in the space. Just getting those sorts of things right organically is going to accelerate it. I think the parent brand that will launch later this summer, I think, is going to be a massive differentiator as far as recognition is concerned. Just doing everything we've been doing organically is going to make this easier and better and more tangible as time moves on of just recognizing the brand and who it is that we're for. You're right in the criticism. I mean, I think my predecessor would have said the same thing. I would have said the same thing of why I was hired in the first place. We've had a massive go-to-market problem, and a lot of it is around brand recognition because when we're in deals, even against our top competitors, we actually do statistically really, really well. We're just not in enough rooms. That has been a lot of the focus, getting in more rooms. That's helpful. Super helpful. Thank you for that. As a follow-up, maybe let's dig into that really, really well statement. We listen to a lot, right? You presented a lot of the technology, but maybe let's just dumb it down a little bit. What is that one thing that Commerce.com does really, really well that solves the pain point that all these customers that need to replace something is looking for? What is that? How do you plan on whatever that is to make sure that you continuously be a leader in that capability? It's twofold. A, it's oriented to speed. Doing speed trumps everything. You've got to do things quickly, take things quickly to market, and adjust quickly. I think what I've said a couple of times in the presentation, this religious debate of acknowledging that more disruption and innovation will come by way of third party versus innately in the platform, just orienting our investments to make that easier is the biggest differentiator we could have in space independent of product. That arguably is our biggest difference. What we're doing differently than maybe those in the Commerce Tools landscape is we are precomposing and curating those capabilities as opposed to building everything from scratch, which speaks to the speed portion of it. That's how we're allowing to do it faster and less expensively with a lot less risk. Sorry, that was like two and a half things, but. Hey, Brian malench from Barclays. Two quick questions. One going back to the earlier question here was the other thing that kind of needs to play with you are the biggest RDSIs or the partners there. You came from one; I was at one before. They usually go where the money goes, build a bigger practice when there's something there. What can you do to kind of help there or work on that one? I kind of alluded to it earlier. Nobody's going to get rich implementing any commerce platform anymore. Those days are long over. A, service providers need, one, recurring revenue because unless you've got 60-70% recurring revenue, it's really hard to drive a profitable service people-oriented business. To drive ongoing recurring revenue streams, you've got to productize offerings that bring value over defined periods of time. We very much feel that will be around transformation. This is not about us being the sun, the star, and the moon as part of a transformation. We're one of many things going on at once as part of it. The service providers, the smart ones, will embrace the transformation piece. We'll be part of that sequence, but we're not going to be everything in that sequence. We're going to enable a lot of other things. That transformation services revenue stream is what's going to be meaty and profitable. The connecting the dots on the tech has been a race to the bottom for a while. I think the downside to that, most of that's been done offshore to drive cost out. The problem with offshore is it doesn't necessarily align with speed. I think the transformation piece, I talked about strategy and consulting earlier, that tends to be served up in local markets because the acumen in those markets tend to be very specific to industry and market. That tends to be the juicier, more margin-rich services opportunities tend to be around strategy, revenue optimization, and transformation. If I was still on the services side, that's where I'd be anchoring on playing all my cards. I think to try to make money profitably delivering tech, regardless of platform, pick your poison, I think it's a fool's errand. I don't think it's going anywhere. It's almost a gateway to get into an organization to go cross-sell and land other profitable work that comes along with it. The other question I had is, if you think about it, we've been talking for years about Adobe Magento and underinvesting and not going to the cloud properly. It is still there and not much happened in demand. Is there anything that kind of makes that more sticky or is there anything you can do to kind of think about that base better? It is sticky for a couple of different reasons. It depends, right? Obviously, on the client and the platform. I think Salesforce is sticky because it is just a very capable sales machine. Eight people in puffy vests are very capable of selling steak knives door to door. That is what they do. They land with one product, and they sell you a bunch of other stuff. They are just a machine. They make it easy. I think Adobe is more harnessed around customer experience. They tend to lead more CDP, more customer experience as it relates to controlling the glass, controlling the overall digital experience. That tends to lend itself to organizations and brands and high-touch markets. You'll see it in fashion, apparel, and retail and things like that. I think the lack of aggressive migration on other platforms is I think so much of this debate has been around feature parity. It's really hard to compete at parity with established platforms like Magento and Salesforce. I mean, those platforms have been around for 15, 20 years, and they've always served up market. There's a lot of ground to make up. I think the market's changing so much. I think creating feature parity to what exists a year or two ago is, again, a fool's errand. I don't think that's how customers are going to continue to shop. I don't think that's the way the market is kind of shifting. I think being able to embrace the openness and the ingestion to go in places that people have not gone before or to go there in different ways or different monetization models is really what's going to liberate and open up migration opportunities. Again, I don't think it's for everyone. I think just make up a brand. I mean, Ralph Lauren probably runs five Salesforce clouds. I don't think they're going to rip that out anytime soon. There's just too much invested in it. Arguably, it's probably the best support and fit for that particular organization. That's okay too. I don't think they're all going to go away. I think there's a subset that either can't afford that, don't need that, view it's superfluous, or they themselves have to go reorganize and transform. To do that, they're going to have to do it a different way. The hope is that our way is the way that might orient to them in that particular use case. It's not going to be about a feature function parity conversation, which is what's dogged the industry for a long time, not just for us, but our competitors too. Hi, Matt Kikkert with Stifel. Thank you for hosting us today. International expansion had been a big focus previously, and in the past couple of years, you've been opening up to new countries, new markets. Is that still a compelling opportunity or not so much anymore? It's a huge opportunity. You could argue how well or poorly we've done it. I think it's complicated, obviously, for different reasons. The complexities, particularly in EMEA, are deeply complicated, particularly around multi-language and multi-site. Those are not easy architectural things to solve for. It's been a big focus area. We've had a lot of success there, arguably in the U.K. and most notably even in Southern Europe, in Spain and Italy, which is a little surprising. You'll see us invest more there. We've invested in market in those particular regions. We think we've had a lot of success with Feedonomics. We just took that over there with one of Feedonomics' products last year with a very small team and had a tremendous amount of efficacy. I think you'll see us double down in Feedonomics in region, and you'll see us continue to double down as we evolve Catalyst and Stencil around multi-lang, in particular around region, and kind of expand from there. It's a big focus area for us. Thank you. Hey, guys. Maddie Schrage from KeyBanc. I thought it was interesting that you guys broke out the flagship GMV versus non-flagship GMV. I'm wondering if you could tell us any color around how wide that gap is in revenue share between those two types of partners. If you're at all focused on expanding and getting more partners into that flagship bucket or just trying to drive more customers into your existing flagship bucket. Great question. We don't share the breakdown on the basis points between flagship and non-flagship. What I can say is it's significantly better, obviously, in flagship. Otherwise, we wouldn't be worrying about it, right? I would say there's two different motions we have to try to drive a greater share of our GMV to a flagship partner. One is with existing customers. Part of why we built out account management teams to do cross-sell is we have sellers that carry quota on driving that up. We did not have that last year. We do this year, right? We had it in limited cases last year, but nothing nearly as substantive as we do now. The second motion is with new accounts. When we have new accounts in the sales funnel, we are much, much, much more focused now on making sure that we are driving that. I think in the future, it is even possible we could get to a point where our account management organization is actually gold as much on one as the other. We are just not quite there today. Certainly, it is a big growth area for us. Yeah. Just to follow up really quick, could you give us any insight or early look into what these freemium models might look like for Feedonomics or Makeswift? How do you prevent any risk of cannibalization of customers opting into maybe that freemium model that are maybe bigger tier? Great question. First, let me address the second point first. We do not have a whole lot of trade-down cannibalization risk in Feedonomics because the size of customer that is buying the direct sold managed service is much larger than the kind of right-down-the-strike-zone base that we have on the platform product today. Part of the reason why we have not had as much cross-sell success as I would have liked by this point is a price point delta, right? If you are on our platform and you're a mid-market customer, you may be paying five times; that may be a fifth of what a managed service agreement with Feedonomics would be. We need to change the delivery of the product such that we can get the cost structure into a place where we can bring it down to a lower price point. I do not worry about that too much, actually. If we had a much higher crossover in our install base, then I would worry about it, but I'm just frankly not worried about that at all. Remind me the first part of your question. I got so excited about the second part. I f orgot the first part. Just any early insights into what maybe core features would be in that Freemium model? What it would look like if you take Feedonomics as an example, you would be able to go into channel manager within our channel manager within the core platform product and say, "All right, I'm going to connect to Facebook, and I'm going to connect to Google. I'm going to be able to have this connection. It's for free. You have a certain amount of functionality that you just get within the core platform." I would think about it, what are the things that all of our customers would want to use and benefit from? If you want to start doing data transformations, if you want to start doing optimizations using the tool, they use this feature, then all of a sudden that becomes pay-gated, right? Now, we need to think about how we build that out because if a customer is paying effectively $300 a month for the platform, they're not going to start paying $1,000 a month for that type of thing. We still need to build that out, but it would be not probably volume-based. It would be feature-based to be pay-gated, and we would follow a similar strategy with Makeswift as well. Thank you. Welcome. Thank you. That's a great event. Thanks for having us. I have a couple of questions on pricing. The first one, just from your current view on a pure pricing perspective, where do you think your pricing stacks up against competition or similar offerings out there? Going forward, where do you see some of the potential pricing opportunities? Lastly, how much of your growth outlook has factored in the potential pricing as a lever? I think from a—I will let Daniel in on the granularity here. On the pricing piece, I think it gives us a giant advantage against the competition, particularly in certain segments. B2B is a no-brainer, right? No one's buying with cards and things like that. It is going to be on terms, and typically pricing is going to be on total number of orders or lines or things like that. That is a very organic move for us. I think it also gives us a giant advantage in niches like luxury, where you have got high AOV. You would see this in furniture. You would see it in luxury. You would see it where, again, large basket size tends to be bearish on rev share models. They tend to like per-order models. I think there's natural advantages there that we certainly could leverage. You probably could add some more color. Yeah. I would just say from a growth model point of view, I think there's some modest price increases that we would take in there, but we do not need to do a massive price increase and test the ceiling of price and elasticity in our base in order to get us to the number. I would much rather take pricing through customers opting to add pay-gated features than the really blunt instrument of just an across-the-board price increase or a lot of multi-part pricing schemes that can get really complicated that I don't love philosophically. Yeah. All right. Makes a ton of sense. Just a quick follow-up on the target. What's the ideal situation that will enable you to get to the kind of high-end or the high teens of the growth versus mid-teens? You want to touch that one? In terms of which initiatives would you say we would find the most important? Oh, I think the cross-sell upsell of expanding—to Daniel's point, I think expanding wallet share of existing clients is certainly going to be the fastest and least risky path to that. I also think the added benefit to that, especially with Makeswift, is that by selling it or at least inserting it to the install base, it credibilizes that product with a large install base that makes it, by definition, easier to take it externally. I think it also has double benefit. I think, yeah, the install base is going to be the fastest, cleanest path to revenue, and I think the least volatile, just relying on external net new accounts and adding that and not knowing what sort of macroeconomic trends or headwinds would be impacting that one way or another. That would be my reasoning. Yep. That's great. All right. You can disagree. All right. We'll do one more follow-up from Ken. Just a quick follow-up on Makeswift and that being a standalone category. I guess in my head, and I'm sure a few other analysts that cover the website builders, are we thinking a Commerce.com version of a Wix, Squarespace, something like that, or is there some other path that you're trying to take this? No, that's an interesting take. In theory, I guess you could have it sit on top of another commerce platform. If you ask the founder of Makeswift, I think he would say absolutely, just because he feels so strongly about that product and there's so much passion behind it. I actually respect and appreciate it. I think for us, I think we view it very much as using my CPG example from earlier because I think it's the easiest example just based on the dynamics of CPG. Pick any of them. There's probably 300 brands. 80% of them don't transact online at all. They're just brand sites influencing loyalty and behavior across other channels that they distribute through. Of the 20% that sell direct to consumer, half of those are probably doing it profitably or scalably. I think if you think of our three products, it fits actually perfectly into that use case. You could have a composable infrastructure around the commerce platform that could be rolled out and standardized globally. What I found in CPG, it's either undergoverned, where it's like the wild, wild west of tech debt, or it's overgoverned, where it stifles innovation, things like that. If you did it responsibly, allowed corporate IT to actually manage it, you give the brands the freedom to do what they need to do at scale while also being governed by corporate IT. You've got Makeswift as a visual editor, particularly for those brands that aren't transacting, to allow marketers and business users to go create immersive experiences and landing pages and other things at scale without the use of highly bureaucratic technical resources, which tend to kind of slow things down. On the Fido side, I think there's a fascinating use case of a lot of CPGs wanting to not only sell direct to consumer, but also in certain cases, sell through retail and distribution channels at scale based on profitability or customer experience that I think Fido can help serve up and optimize in a number of different ways as those brands take it to market. I think you could apply that to a number of other industries. Makeswift is a big unlock just given the fact that it doesn't have to be tied to commerce. It could be optimizing revenue through other online or offline channels independent of anything else. That's kind of where we see it eventually going. We don't want to get ahead of ourselves. There's work to be done before we get there, but it's a nice—yeah, we're not there yet, but we will. All right. That concludes our Q&A portion. I want to appreciate—I thank everyone for coming. For those in the room, if you could hang out for just one second, we'll give you some information on the reception. Thank you, everybody.