I would say when you look at the, quote-unquote, normal playbook for what cross-sell and up-sell looks like within B2B SaaS, a lot of that I really see as greenfield ahead of us as a business. We’ve had strength in the past due to organic expansion with our customers, but we have a ton of upside in very efficient lower cost of acquisition revenue growth that we can see in this business by adopting this model, which I would really say–I don’t know that I would even characterize it as a pivot, I would characterize is as an evolution that is representative of our move-up market. Like Brent said, our roots on the small business side of things, you bring in a small business customer, you’ve landed that customer and they grow organically, that’s a very different motion to acquiring a brand with Procter and Gamble and then cross-selling into all of the other brands underneath the umbrella of Procter and Gamble, as an example.
When we talk about this internally with our organization, this is not an about-face or a change, this is a continued evolution and a culmination of our move up market, and positioning our go-to-market functions in line with the strategy that we’ve taken with the product over several years, so I don’t think that this is a change. I think that this is something that is going to be very successful and is going to really allow us to accelerate revenue growth in an even more leveraged profitable way, that gets me really, really excited as a CFO.
Ken Wong: Got it, okay. Appreciate the color there. Then maybe if you could just add a little color in terms of how the demand environment might have progressed over the last few months. I think a lot of your software peers, they noticed kind of end of September through October, things materially dropped off. Just wondering what you guys saw during that same stretch.
Daniel Lentz: I wouldn’t say that we saw anything all that different in September or October versus what we’ve seen at other points during the year. Like we said in our prepared remarks, we’ve seen macro in general as a bit of a headwind for the year and a number of different ways that it’s manifested. We’ve offset that by really tight financial discipline and the way we’re running the company. I don’t think that I’ve seen anything or heard anything that makes me feel like it’s getting materially better or worse, based on the last couple of months. That’s how we set guidance for Q4, and that’s how we’re planning financials for next year as well.
Ken Wong: Thank you very much.
Operator: Our final question today comes from Chris Kuntarich of UBS. Please go ahead.
Chris Kuntarich: Great, thanks for taking my question. Maybe just following up on that last point, just to be clear, as we think about that high single digits to low double digit guidance range versus where we’re at in 4Q, at that 10% to 16% year-over-year revenue growth, should we be thinking about maybe just specifically on the macro and enterprise opportunity? Should the high end be–we be thinking about that as a continuation of the current macro environment in the low end would be getting worse? Just any more color you can share, kind of how enterprise would be fitting into that structure and your initial thoughts. Thanks.
Daniel Lentz: Yes, good question, Chris. What I would say is when we’re talking about numbers for next year, we’ll set guidance officially in February. Our intent in providing those numbers was really just to help everybody understand how we’re thinking about internal planning for next year. To your point about what macro conditions are embedded in that range, what I would say is kind of the midpoint of those numbers reflects a continuation of where we’ve been. If things get a little worse, we’d be closer to the low end of the range; if things get a little bit better, I think we’d be closer to the high end. If things get a lot better in terms of going back more towards the long term pre-pandemic ecommerce growth rates, I think that gives us upside above what we’ve talked about.
But we have a long way to go before we get to the February call, when we issue official guidance. We still have to build out our plans. What our commitment is, is to profitable accelerating revenue growth. We are a growth company, we want to do so profitably, and we’re confident that we can do that.
Chris Kuntarich: Very helpful, thank you.
Operator: This concludes our question and answer session. I would like to turn the conference back over to your CEO and Chairman, Brent Bellm for any closing remarks.
Brent Bellm: Thanks. I’ll conclude with five main takeaways from the prepared remarks and Q&A. The first is we’re proud that in Q3, we delivered our second quarter of positive free operating cash flow, excluding acquisitions, and breakeven adjusted EBITDA a quarter earlier than we guided to the street. Second, the restructuring that we announced today is being done to continue this path of very rapid improvement in our profitability – again, we’ve added 19 percentage points to our adjusted EBITDA profitability in the last five quarters, and the restructuring positions us to add five to upper single digit growth in our adjusted EBITDA profitability next year, going towards our long term goal of 20% or higher. Third, the restructuring is also really valuable to us organizationally because it both de-layers the organization and implements the structural changes in Steven’s go-to-market playbook for enterprise.
The fourth is that this go-to-market is now going to be able to shift from solution marketing and selling to value marketing and selling, and it’s worth folks really focusing on some of the content of the prepared remarks because the statistics we’re now sharing about far above internet average performance for our enterprise customers on site-wide performance, checkout performance, sales lift through Feedonomics, those are extraordinary statistics and the types of value improvement that really can attract and convert merchants who are wanting to get the best possible performance and growth out of their ecommerce. Then the final point, which seemed to be lost in the Q&A but I want to emphasize, the acquisition of Makeswift and the reference architecture going forward for composable with us, based on Next.js and React, which are the most flexible, high performing and popular framework for web design today, the Makeswift acquisition is extraordinary because it is a true Next.js no-code visual editor that empowers marketers and merchandisers to make changes and manage extraordinarily dynamic user experiences without a dependency on developmental changes.
That type of leadership with enterprise capabilities for multi-user editing, publishing workflows and permissions, is a demonstration on how even in a tight financial stewardship for BigCommerce of our own P&L, we are innovating in the ways that deliver the greatest tools and the greatest performance to our merchants, and we’re very excited to talk about that as we bring it to market in 2024. With that, thanks everybody for tuning in, and we’ll talk at the end of the quarter.
Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
