Bigcommerce Holdings Inc

NASDAQ:BIGC

Good morning, ladies and gentlemen. Thank you for standing by, and welcome to the BigCommerce Fourth Quarter and Fiscal Year 2023 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to turn the conference over to your first speaker today, Tyler Duncan, Senior Director, Finance and Investor Relations. You may begin, sir.

Good morning, and welcome to BigCommerce's Fourth Quarter and Fiscal Year 2023 Earnings Call. We will be discussing the results announced in our press release issued before today's market open. With me are BigCommerce's Chief Executive Officer and Chairman, Brent Bellm; and Chief Financial Officer, Daniel Lentz. Today's call will contain certain forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning financial and business trends, our expected future business and financial performance and financial condition and our guidance for the first quarter of 2024 and the full year 2024. These statements can be identified by words such as expect, anticipate, intend, plan, believe, seek, committed, will or similar words. These statements reflect our views as of today only and should not be relied upon as representing our views at any subsequent date, and we do not undertake any duty to update these statements. Forward-looking statements, by their nature, address matters that are subject to risks and uncertainties that could cause actual results to differ materially from expectations. For a discussion of the material risks and other important factors that could affect our actual results, please refer to the risks and other disclosures contained in our filings with the Securities and Exchange Commission. During the call, we will also discuss certain non-GAAP financial measures, which are not prepared in accordance with generally accepted accounting principles. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures as well as how we define these metrics and other metrics is included in our earnings press release, which has been furnished to the SEC and is also available on our website at investors.bigcommerce.com. With that, let me turn the call over to Brent.

Thanks, Tyler, and thanks, everyone, for joining us. I'm excited to share the progress and momentum that we see in our business and the strong execution we showed in 2023. We began last year with the #1 goal of improving our business' ability to deliver sustainable profitability and positive cash flow. That required difficult trade-offs and disciplined execution, and I'm proud to say that our team has delivered on our commitment to our stakeholders. We finished the year with strong results, both top line and bottom line, and I'm encouraged by the underlying momentum in this business. I'll begin my remarks today by addressing our financial performance at a high level, and Daniel will later cover our financial results in detail. The majority of my remarks will focus on what drives our business, our customers and how we serve them. Their success is our passion. I'll highlight notable accomplishments on behalf of our customers in 2023, where we are investing in 2024 and the go-to-market progress we are making. In 2023, we balanced growth with significant improvement in operating cash flow. Q4 and full year revenue grew 16% and 11% year-over-year, respectively. Non-GAAP operating margin improved over 19 percentage points year-over-year to a positive margin of 6%. One year ago, we set a goal to hit quarterly breakeven on an adjusted EBITDA basis in Q4. We exceeded that goal with adjusted EBITDA of nearly $7 million in Q4. In fact, we nearly reached adjusted EBITDA breakeven for the full year. We delivered $13 million in operating cash flow on the quarter as well. I'm proud of the hard work and dedication of our team to make this happen, which Daniel will discuss in more detail in a few minutes. Let's now focus on my favorite topics and our passion, our customers. It is my belief that BigCommerce can become the most loved ecommerce platform in the world. To maximize our customers' ecommerce success and platform satisfaction, we are making focused investments across all aspects of our business, our go-to-market teams, customer support teams, security, our partners and, of course, our products. I'd like to elaborate on each one of these aspects a little further. Our go-to-market teams relentlessly focused on identifying, signing and launching customers best positioned to thrive on big commerce. We have aligned the teams around our ideal customer profiles and have focused our sellers on the types of companies that are most successful using the BigCommerce platform and accompanying solutions. We also partner closely with the world's best agencies and systems integrators to maximize customer success. Our customer teams continue to be some of the most dedicated and well respected in the industry. Our customers and partners know that when they have a support question or a challenge, they can easily pick up the phone and speak to an actual BigCommerce employee. During Cyber Week, enterprise customers with priority support had to wait an average of only 13 seconds for their support calls to be answered, while customers with our standard base level support had to weight on average, only slightly more than 90 seconds. We are innovating with generative AI tools to enable customers to get answers directly in their store control panel and customers resolved nearly 1/4 of all support chats during the holiday period using this new technology without picking up the phone. We believe in the power of choice for our customers, and we'll continue to offer multiple options for engagement. We believe that our security practices are industry leading. We are the only ecommerce platform among our key competitors that has been awarded an ISO 27701 certification for privacy. This is the only certification designed to align with GDPR privacy requirements. We also expect to soon have 2 new certifications, Coalfire systems, cloud security and cloud privacy, awarding BigCommerce more international certifications than any of our major competitors. Simplifying ecommerce success is the goal of our product strategy, support model and partner ecosystem. We partner with hundreds of exceptional ecommerce and performance marketing agencies around the world to help our customers grow their businesses. The number of agency developers completing our advanced certification programs grew 125% year-over-year in 2023, bolstering the deep pool of expert resources in B2C and B2B e-commerce and omnichannel growth dedicated to big commerce. We have grown from a platform-only business to a multi-product portfolio of world-class products and services, offering enterprise-grade security and functionality without sacrificing any of the ease and flexibility that comes with open SaaS. Our customers want simple, elegant solutions to complex problems. They depend on the performance of the BigCommerce platform, which continues to set the industry standard. For the 10th year in a row, we achieved 100% platform uptime over the Cyber 5 holiday selling period and customers such as Luxo Living, Lunacycle and Priority Tire saw GMV growth rates of approximately 140% to 150% year-over-year during that period on BigCommerce. We invest to build not only a scalable dependable platform but also to drive market-leading results for our customers. Our out-of-the-box checkout user experience is optimized with the world's leading payments and checkout providers to maximize conversion. In the back half of 2023, enterprise customers using any of our flagship payment solutions plus PayPal Wallet and Apple Pay, achieved an average site visit conversion rate of 2.67%, which is 15% higher than the results reported by one of our closest competitors. Similarly, those same enterprise stores achieved an average checkout conversion rate of approximately 71% during that period, which is roughly 46% higher than the Internet average of a little less than 50%. We are leveraging generative AI technology to drive customer growth on big commerce. Big AI is our suite of AI-powered tools that enables better converting storefronts, more efficient store operations and new creative ways to market and reach shoppers. Big AI copywriter built using generate from Google's Vertex AI launched in 2023 and provides customers the capability to streamline their workflows and save time by generating high-quality, high-performing product descriptions, matching their businesses voices and target audiences. Later this year, we will also launch product recommendations using Google AI technology. Customers will be able to serve personalized and highly relevant product suggestions to their shoppers in real time, increasing average order value and conversion. In early tests on live stores, we've seen the solution drive more than a 20% increase in the click-through rate on related products and more than 100% lift in revenue among shoppers who engage with related products. We're also investing in semantic search using AI to understand the intent of shoppers search terms to deliver more accurate and relevant in-store search results, ultimately creating a better shopper experience and further increasing conversion rates. Our innovative AI use extends to Feedonomics feed AI, a proprietary AI tool that customers such as Conair, Ethan Allen and Tecovas leverage as part of the phenomics suite of solutions to categorize millions of products to the Google taxonomy with a 96% accuracy rate. Feedonomics customers can see strong improvements in return on advertising spend, click-through rate and omnichannel revenue. Dell uses Feedonomics to categorize, enrich and connect catalog data feeds via event-driven sync for 18 different channels, 17 different countries and 9 different languages across 1.3 million SKUs globally. New Balance realized a 95% increase in return on ad spend by leveraging Feedonomics as well. We also recently released a beta program, leveraging generative AI for creative content generation at scale. Similarly, our recently acquired visual site editor, Makeswift, is investing in AI to generate page layout and website creative content. In addition to our native AI capabilities, we have empowered our partner and developer community to integrate their expertise seamlessly within our platform. For example, we've released an open source AI app foundation package, simplifying generative AI integrations with BigCommerce. 27 powerful AI solutions already exist in our apps marketplace, ranging from AI-powered merchandising, search, chat and more. We are investing in AI technology to make running a growing business on BigCommerce simpler than ever, and I'm very excited about the possibilities this emerging technology presents to our customers. Fundamentally, BigCommerce empowers customers to build beautiful and engaging stores. Customers such as British fashion and lifestyle brand White Stuff have leveraged our platform and partners to compose agile, flexible and fast tech stats that can adapt to future needs. Two weeks ago, we announced Catalyst, which ushers in the next era of composable storefront technology, enabling customers to create incredible shopper experiences faster. It's purpose built for today's modern commerce landscape and is optimized for the most important aspects of online commerce, including speed, SEO, mobile and accessibility. Coupled with Makeswift, it gives nontechnical merchandisers and marketers powerful and flexible tools to design and publish beautiful and engaging site content, no coding required. Catalyst's reception from developers and partners has been extraordinary. We believe Catalyst and Makeswift will power the next era of storefront experiences and will be a game changer for B2C and B2B commerce. In partnership with PayPal, we have codeveloped the next generation of accelerated checkout called Fastlane, which benefits from PayPal's existing network of over 400 million registered shoppers. Early test results are outstanding. When Fastlane is enabled, brands have seen conversion rates in the 70% range and accelerated checkout speeds nearly 40% faster than traditional guest checkout processes. Our customers get the best of both worlds -- industry-leading checkout experience and conversion rates out of the box, plus the flexibility to customize as their businesses require it. Importantly, we provide our customers choice among the world's leading payment providers with best-in-class integration. We don't try to force adoption of a proprietary payment solution. We don't surcharge customers for using the solution of their choice, and we don't surcharge them for B2B transactions. The combination of payments choice, exceptional integrations and superior checkout user experience are what drives great checkout conversion and payment economics for our customers. In May, BigCommerce launched the B2B buyer portal, the most modern out-of-the-box B2B buying experience of any ecommerce platform. This new functionality is packed with the features B2B businesses need to engage their buyers, quoting, invoicing, buyer approval workflows, automated trade applications and much more. Our B2B customers are seeing incredible results. MKM Building Supplies the largest independent building supplies distributor in the United Kingdom, revolutionized their ecommerce site using BigCommerce's B2B functionality, delivering a personalized omnichannel experience rarely seen in B2B. The results speak for themselves. MKM saw a 44% increase in average order value and a 42% increase in store traffic, leading to an 82% increase in revenue. But it's not just about one story. In 2023, we welcomed industry giants like Twin Liquors, AAPC Medical, Asahi Beverages, Bunzl, Srixon Sports and Imperial Data as well. Total B2B addition GMV grew 78% year-on-year, and we're laser-focused on extending BigCommerce's leadership position in B2B ecommerce to help our customers grow and scale efficiently. Our latest multi-store front features make it even easier for customers like Brompton Bicycles to sell in multiple geographies, allowing brands and B2B businesses to deliver high converting, fully localized experiences, all centrally and efficiently managed from single-store instance. This saves customers' time and money that would otherwise be spent managing individual store instances for each market. Customers can streamline their international expansion by swiftly launching storefronts worldwide without clones and localize the entire customer journey across search, shopping and shipping for a tailored experience. Efficient management of global storefront channels from a centralized back end enables rapid launches, changes and optimization, all while reducing the need for extensive custom development work. As I close, I would like to look back on our performance and priorities. I said on our fourth quarter 2022 earnings call that our #1 business priority for 2023 was profitability. We have improved our non-GAAP operating profit margin by 26 points in the last 6 quarters. We met our goal, and I'm proud of our team for doing so. As I look forward to 2024, it's time for us to build on our strong financial position and accelerate top line momentum. 2023's #1 priority was profitability. 2024 is #1 priority is efficient revenue growth. Ultimately, it all comes back to taking care of our customers. We are passionate about serving our customers not just because it's the right thing to do for them, but also because it's the best way to drive long-term value for BigCommerce. Customer focus can help make us the most loved ecommerce platform and partner in the world, and it can deliver healthy long-term returns for our shareholders. With that, I'll turn it over to Daniel.

Thanks, Brent, and thank you, everyone, for joining us today. During my prepared remarks, I will cover our Q4 and full year 2023 results in detail, provide additional detail on our progress in 2023, both where we are showing strengthening trends and where we need to improve and provide guidance for Q1 and the full year 2024. In Q4, revenue was just over $84 million, up 16% year-over-year. Full year 2023 revenue grew to $309 million, up 11% year-over-year. In Q4, subscription revenue grew 14% year-over-year to approximately $61 million, while partner and services revenue, or PSR, was up 23% year-over-year to just under $24 million, driven by strong seasonal consumer spending. Revenue in all of the Americas was up approximately 15%, while EMEA revenue grew 24% and APAC revenue was up 22% compared to prior year. Our Q4 non-GAAP operating income was just over $5 million and the full year was a loss of $6 million. In the last 6 quarters, our business has grown from a non-GAAP operating margin of approximately negative 20% to a non-GAAP operating margin of positive 6%. That's more than a 26-point improvement in profitability in only 6 quarters. That progress reflects the hard work and dedication of our entire team, and it fulfills the commitment to profitability that we made to shareholders at the beginning of 2023. We've also made significant improvements in cash, finishing Q4 with operating cash flow and free cash flow of $13 million and $12 million, respectively. This progress in both non-GAAP operating income and cash flow is evidence of our continued commitment to operating a strong, profitable long-term growth business. We concluded Q4 with an annual revenue run rate, or ARR, of nearly $337 million, up 8% year-over-year. That represents a sequential growth in ARR of just over $4 million. Enterprise account ARR was approximately $245 million, up 9% year-over-year. As of the end of Q4, enterprise accounts represent 73% of our total company ARR. Accounts using exclusively our retail plans, which we refer to as non-enterprise accounts finished with ARR slightly over $91 million, up 4% year-over-year. I'll speak in more detail to what we're seeing with respect to ARR growth and what we're seeing from a macroeconomic point of view as we head into 2024, later in my remarks. Like many other software companies, we redoubled our efforts to drive efficiency and profitability improvements in response to market conditions during 2022, and our business has executed a notable financial transformation over the last 6 quarters as a result. Even as we take decisive steps to reaccelerate top line growth, we have delivered major improvements to our financial results. Over the last 6 quarters, adjusted EBITDA has grown from approximately negative $13 million or an adjusted EBITDA margin of negative 19% to approximately positive $7 million or an adjusted EBITDA margin of positive 8%. That represents an average quarter-over-quarter adjusted EBITDA margin improvement of 444 basis points every quarter for 6 consecutive quarters. We've made significant improvements in working capital and collections, decreasing days sales outstanding or DSO from 61 to 41 days. We nearly doubled our deferred revenue balance from approximately $17 million to $32 million and drove prepayment levels over 4x higher. As we continue to make progress with advanced billing with our customers and partners, I expect deferred revenue and the current portion of remaining performance obligations, or RPO, to become more indicative of the underlying health of our business as well. This progress drove significant improvement in cash flow. Apart from the acquisition-related payments for Feedonomics and Makeswift of $32.5 million and $9 million, respectively, 2023 free cash flow finished at just over $13 million compared to underlying non-GAAP operating loss of just under $6 million. On top of improvements to profitability and cash flow, we also remain focused on strong stewardship of our equity programs. Stock-based compensation finished Q4 at 9% of revenue compared to 17% a year ago. This has driven a lower annual net dilution of approximately 3.7% in 2023 compared to 6.6% in 2022. As Brent discussed, we continue to orient our business around the best interest of our customers, our partners and the ecosystem. A core tenet of our customer-first approach is the freedom of choice our open SaaS platform offers. BigCommerce customers get to pick the best-in-breed partners for their particular use case. Unlike what we're seeing across the ecommerce space, we are not pressuring our customers into using solutions that are self-serving. We take an agnostic approach to partners. In addition to flexibility, this approach is also economically advantageous for our customers. For example, we offer integrations with many of the world's leading payments partners, and we do not impose additional fees on our customers based on their payment processor choice. Mid-market and enterprise customers on BigCommerce can save 25% or more of their existing credit card processing fees by leveraging rates with BigCommerce's preferred payments partners. In some cases, these savings can more than offset the cost of the BigCommerce platform itself. And that 25% savings on payment processing doesn't even account for the surcharges some of our leading competitors are required to pressure customers into using their white label payment solutions or additional surcharges recently introduced on B2B orders as well. We maintain the view that our customer first open platform is a core differentiator for BigCommerce, and we see this becoming exponentially more valuable to customers as our competitors shift increasingly to a walled garden approach. Our approach leads to better relationships with our customers, improve retention and enables customers to adjust their technology choices to their needs as they grow without needing to re-platform. As I discussed last quarter, we have streamlined our go-to-market motions and organizational structure to reinforce the criticality of our customers. Historically, our business has sourced revenue growth disproportionately from new customer acquisition. Our Q3 2023 restructuring and 2024 financial plan aim for a more balanced growth profile between existing customers and new customers. That restructuring consolidated all go-to-market efforts under the leadership of a global president role. While we are actively recruiting a strong go-to-market leader to step into that role, we are not missing a beat on our plans for 2024. We have a playbook that is oriented around sustainable customer first retention and growth, a multi-product portfolio of market-leading solutions and a long-tenured, highly motivated commercial team. We're already seeing signs of success in this improved model. Cross-sell results are improving, retention is improving, and we continue to see healthy competitive win rates as well. We are confident that these improvements will also drive improvements to our net revenue retention, or NRR, which finished at 100% for enterprise accounts in 2023. Let me take a moment to elaborate on what we're seeing with respect to revenue and ARR. Two primary macroeconomic factors affect our business -- consumer spending and platform investment spending. Consumer spending has proven a bit more resilient than we had planned, particularly during the holiday period in Q4. I'm cautiously optimistic by the trends I see in this area, though I believe we will continue to face risk in key markets, such as the U.S. and the U.K. in 2024. Signals on platform investment spending remain mixed. Sales cycle times remain elevated and customers continue to seek opportunities to reduce contractual volumes to decrease spending, though at a lower rate than what we saw during mid-2023. Competitive win rates remain healthy, and our redoubled focus on gross and net retention is showing positive results in recent months as well. Overall, we are taking a cautious approach to 2024, and our plans balance investments against our ideal customer profiles and key markets with the need to run the business in a lean, accountable way. I would now like to shift to discuss our 3 main financial focus areas for 2024. First, while we made significant progress in the financial performance of the business in 2023, we are not satisfied with our top line growth rates. As Brett said, our #1 priority in 2024 is efficient revenue growth, and we have the people, the partnerships and products to do so. For example, we have improved our processes and measurements to evaluate our go-to-market performance and efficiency, including customer-first goals that measure product performance and quality, customer satisfaction and improvements to gross and net revenue retention. We are confident that these shifts in our go-to-market will unlock faster revenue growth as the year progresses by driving improvements to NRR and focusing on customer expansion and cross-sell. Second, our goal is to improve our non-GAAP operating margin in the mid-single digits on a full year basis. As I've said, our progress thus far is notable but our commitment to improving profitability is unchanged, even as we look to improve revenue growth rates as we progress through 2024. Third, we have seen success in driving consistent cash flow generation. We will continue to focus on advanced billings on new subscriptions. We will also invest in systems to improve customer data management, CRM capabilities, quote-to-cash processes and back office systems and controls, while maintaining tight discipline around accounts receivable inflections. I continue to be encouraged by our progress in this area, and I believe we will continue to see further improvement through 2024. I'll now share an updated view on our outlook and guidance for the first quarter and full year 2024. For the first quarter, we expect revenue in the range of $76 million to $78 million, implying a year-over-year growth rate of 6% to 9%. For the full year, we expect revenue between $327.1 million to $335.1 million, translating to a year-over-year growth rate of approximately 6% to 8%. For Q1, our non-GAAP operating income is expected to be between $1 million and $2 million. For the full year, we expect non-GAAP operating income between $8.5 million and $12.5 million. Note that we expect revenue growth rates and profit margins to be sequentially lower in the first quarter compared to the prior quarter. This is primarily due to the Q4 seasonal factors in partner and services revenue that I mentioned earlier and planned sales and marketing spend in Q1. Our outlook reflects an assumption that similar to 2023, consumer spending remains resilient though muted and that business investment remains cautious in 2024. In addition, though we expect our recent go-to-market restructuring to yield strong long-term improvements in top line growth, we are taking a moderately conservative view on front half growth as we execute those changes. While 2023 was a challenging year for BigCommerce in many respects, I am tremendously proud of the financial improvements we delivered. Again, we have a long way to go. We are not satisfied, and we're committed to our customers and to our shareholders. We believe that we have the best customers in the world, and it's by aligning our success with theirs that we will continue to drive profitable revenue growth for our team and our shareholders. With that, Brent and I are happy to take any of your questions. Operator?

[Operator Instructions] And the first question today will come from Ken Wong with Oppenheimer & Company.

Brett or maybe, Daniel, I wanted to just maybe circle up on just the go-to-market. You guys mentioned consolidating everything under the president's role that was obviously vacated by Steven Chung. How should we think about sales execution in the first half relative to your guide? And does this require someone to step into that role before we start to see some acceleration?

This is Brent. Thanks, Ken. There'll be no loss of momentum. Stephen in his 6 months here, made some tremendously positive changes in our go-to-market model. All of those are now in place. We have very strong regional GMs in each of the Americas, EMEA and APAC. They lead sales, no loss in momentum and I'm expecting us to be better than ever as we go forward.I have close relationships with all of those reports. I was obviously president up until 6 months ago, and I am again on an interim basis. I'm focused on hiring a great new president to come in. We'll get that person as fast as we can. No loss of the momentum.

And then, Daniel, just really quickly, any color on how we should be thinking about the split between subscription and services as we build out our models for next year?

Yes. I would say -- thanks, Ken. I would say pretty balanced. I mean we're expecting growth rates to be pretty similar as we think about the guide. In early quarters, Q1, especially where we're coming off of a really good seasonal quarter in Q4, expect PSR growth rates to be a little bit lower than where we are on subscription. But overall for the year, we expect it to be relatively balanced.

The next question will come from Koji Ikeda with Bank of America.

I wanted to ask about margin expansion. So when looking at the guidance, it's about 5 points of margin expansion for less than 10% growth in 2024. Is this the right way to think about a framework for margin expansion over the medium term? And then how should we be thinking about the bridge between potentially slowing down margin expansion in the future to drive higher growth? How long could that bridge be?

Great question, Koji. I would say, at least as we're thinking about going into the front half of the year, I think that's reasonable, and it's reflected in the guide. What Brent and I really wanted to get across in the prepared remarks is how we're thinking about this year. In 2023, we were really, really, really focused on executing a transformation with respect to profitability and with respect to cash flow.That comes with the cost. And we said going into the year that if we had to sacrifice a couple of points of growth in order to get an outsized change to what we were doing from a cash flow and a profitability perspective that we would do that. I do not believe that we overcorrected. That said, we definitely want to focus in 2024, and this is clear throughout the organization to be on accelerating top line momentum in an efficient way. And going into the year, we're taking a little bit of a conservative view, which we think is prudent given market conditions, and I think that's reflected in the guidance. But we're wanting to make bets. We think we are in a really, really good position to really build on the financial situation that we're in, which is very, very good and start getting top line growth rates where we expect them to be, where our investors expect them to be, and we think that we can definitely do that.

Got it. And as a follow-up here, I wanted to ask about the pricing increase that occurred last year. So I realize it was announced about a year ago and began to roll through the customer base around June 1. I do understand the monthly versus annual discount mechanics. So just wanted to hear some commentary on how much contribution there could be from the monthly customer price increase that's embedded in the guidance, I guess, specifically around as a tailwind for the first half of '24.

Yes. Let me elaborate on that. Let me speak to the question specifically. And then maybe just address pricing philosophically just a little bit in general because there's been a lot going on in our industry in this over the course of the last several months, honestly, even the last several days.So with respect specifically to the pricing action that we did last year on small business plans, we have that tailwind baked into the guidance that affected primarily small business customers. We really have been encouraging small business customers to not go up in price, honestly, but rather just to focus on annual prepay, we think that, that creates some stability for them as they look at the invoices they get. It's also more stable for us, obviously, as we plan the business, and it's better for us from a working capital point of view. We also take product pricing from time to time on the enterprise side of things as well where we think it makes sense from a value perspective. And we'll continue to do that this year, just as we have in prior years. But I want to take just a couple of moments here also just to address some of the movement that we've seen in the market in general over the course of the last few days, Look, I typically don't like to address specific competitors on these calls, but Shopify just raised their plus pricing by enormous amounts. And that decision affects the entire industry in a really material way. They increased their Shopify Plus variable fee by an incredible 60%, their fixed monthly fee by 25%, and they even increased the extra payments transaction fees that they used to pressure customers into Shopify payments by 33%. They also instituted, I think, an 18 basis point additional fee on B2B transactions. I mean, again, these are just enormous price increases for customers within margins, especially in an uncertain economic climate. Now I just want to be clear about this. BigCommerce does not impose variable transaction fees like this. We don't impose payments transaction fees. We don't impose a B2B transaction fee. And our fixed monthly enterprise subscriptions are negotiated based on customer size, including at levels far below $2,500 a month. Just to be really clear, we think Shopify Plus has priced itself at uncompetitive levels when compared to BigCommerce. We think we have far more true enterprise functionality like multi-storefront, and B2B at more competitive prices. And we think that Shopify Plus customers ought to be looking carefully at what these price increases mean and also specifically what they're being charged for. And we're here to help those brands. And again, we take pricing as well. This isn't about pricing, it's more about what that means to the market and specifically what we think customers are being charged for.

The next question will come from Terry Tillman with Truist.

Connor Passarella on for Terry. Just one from me. With the continued focus on cross-sell into this year and growing spend from existing customers, what specific products are resonating well within your merchant base? And how do you kind of see that progressing throughout the year?

Feedonomics, which is our omnichannel subsidiary is an extraordinary lead asset for us in cross-sell. And for those who are unfamiliar, Feedonomics is the leading enterprise solution globally to help brands optimize their omnichannel product seats into all leading ad channels like Google Shopping ads and listings, the search engines, the social networks, affiliates, but also more than 200 marketplace channels from Amazon, Walmart, Target, to all the department stores that you know of.On average, it helps merchants boost their traffic and sales conversion through the advertising and marketplace channels they use by about 20% or alternatively improve their return on ad spend by an average of about 20%. And it's relevant to every one of our customers. It's also relevant to businesses that are on custom or alternative ecommerce platforms. So it's an amazing business, amazing service and an amazing cross-sell. Up next, we have more than 1,000 technology partners in our apps marketplace, but our payments partners, shipping partners, content management and search partners are particularly outstanding cross-sell motions for us. It's their product that we are recommending. But in most cases, we get healthy rev share from doing so. And it's always in our customer's best interest to help them get on the partner solutions that are best for their businesses. And looking forward, and we have a bunch of other cross-sell products, but I am extremely excited about Makeswift. And Makeswift, as announced last quarter, is our visual editing -- is our new visual editor. It's the world's best for businesses who are running their websites on NxJS. It has multiuser editing, publishing, permissions workflows. And as we get ever more customers that are using our Catalyst technology stack for composable builds, we think Makeswift is going to be an extraordinarily powerful optional visual editor for them to look at. So those are the ones I would highlight.

The next question will come from Scott Berg with Needham & Company.

This is Rob Morelli here on for Scott Berg. When you look at 2023, can you discuss the contribution that came from Agency Partners for the year and then what you're expecting into 2024?

Yes. We had a good year actually with agency partners in 2023, like we did in several channels. Agency partners, both systems integrators and performance marketing agencies are really a critical channel for us as a kind of partner-agnostic best-of-breed open platform, the relationships that we cultivate both with agencies and technology partners is really core to how to go -- how we go to market. We really think of ourselves kind of at the forefront of going to market for the ecosystem in a kind of partner-agnostic way, which I think really resonates with tech partners and also with agencies. We're going to continue to focus on that as one of our, if not our most important channels as we think about how we're going to be growing on the year. That will have just as much importance going into 2024 as well.We have several different partner programs that we have, whether it's for the platform product for the Feedonomics product as well where we really focus on building that out. It's been a very successful channel for us, and we anticipate it will continue to be so.

And it sounds like you guys had strong performances from all of your key regions, still seeing some elongated sales cycles. Are there any specific industries or verticals where you see strength or weakness as of late?

I'd say it's pretty broad-based in terms of -- I don't think there's any one particular industry or vertical where that is really more of an issue with others. We're seeing good momentum in a lot of different industries and a lot of different sectors. I just think, in general, there's still quite a bit of caution when it comes to platform investment, which makes sense. We're being really disciplined about what we are spending as well and looking to reduce costs. And we're seeing the same behavior with customers. What I really want to call out and differentiate BigCommerce on, we're trying to work with our customers and make sure what they're spending with us is transparent. It's easy to understand. It's matching the needs of their business and that we're also being acute and sensitive to the type of economic pressures that they're facing as well. I think it's important in being a customer-first company to continue to do that.

The next question will come from DJ Hynes with Canaccord.

So Brian, just looking at GEO performance, what do you think is resonating in international markets that maybe isn't as well in the U.S.? Is it under dynamic, something about the go-to-market approach? Any color there would be interesting.

Well, one of the real strengths of our platform that resonates very highly for businesses based outside the U.S., in EMEA or APAC is our multi-store front and multi-geo capabilities. And also a second pillar of that is our composable capabilities. Because if you are a business, for example, based in Europe, you're going to have to sell into multiple currencies, languages, even trading blocks and having true enterprise multi-storefront capabilities, which only the enterprise platforms like us have is essential for those companies.And it's less essential for businesses here in North America who might only be focused on the U.S. and Canada and not need all of that multi-storefront, multi-geo capabilities. And because of the importance of that composable is particularly valuable as an option, especially in EMEA, and we're really bullish on Catalyst being our next-generation composable storefront reference architecture. We think that's going to help us further improve our competitive advantage outside of the U.S., but also for the first time, make composable approachable for brands in the U.S. And I would highlight this because historically, anybody in the MACH Alliance would tell you that U.S. and Canada have been slower adopters of composable. The reason is partly because they haven't had to do it in most cases out of necessity like they have in EMEA. And the burden of adopting composable has been historically high because you have a different front end than you do back-end platform. You have to stitch together the various components of your tech stack, hosting, content management, search, et cetera. And what's revolutionary about our Catalyst approach is it's an out-of-the-box reference architecture that a business can press a button and literally in under 60 seconds, have a sandbox storefront up and running with the best tech in the world, NxJS, React, Vercel hosting, choice of multiple market-leading content management systems, choice of multiple market-leading search and merch engines and have Google out-of-the-box lighthouse scores of 100. It is an extraordinary change in just how approachable and easy to implement composable is with the most popular and highest performing technologies in the world. And so it's our hope that we're actually bringing some of our strongest industry-leading capabilities from outside the U.S. now to something that American companies who really want to lead with best-of-breed user experience and best-of-breed site performance and the market-leading tech stacks that developers love to work, NxJS and React. We're bringing that now to North America at a usability price point and scalability way that has never existed before. And it's why we and so many agency partners are extremely bullish about Catalyst. So I'm emphasizing a set of competitive advantages in multi-storefront, multi-geo and composable that have really helped us outside the U.S. and emphasizing that we're now bringing that in the best ever way to North America, and we really hope that accelerates the adoption of composable and MACH approaches when those make sense for a given business.

Daniel, maybe transitioning to you. So you talked about wanting to get growth rates back to where both investors and you guys expect them to be. What is that growth rate at this point? Where do you think BigCommerce can get back to?

I think it's still consistent with what we talked about in our last Investor Day, which is I think this is a business that can and should be growing over time at 20%-plus growth rates with a balanced profile at or above a Rule of 40. We just need time to get there. I think if we look at where we've been over the course of the last year, I mean, we're in -- we're hardly the only small cap company that needed to make a pivot from a profit perspective as interest rates started to move in 2022.I think that the progress we've made is really, really notable, but I want to be really clear, like we're not stopping there and satisfied with that. Like this is a growth business. and we really are excited about where we can go. I think we talked about on our call last quarter as we were thinking about this year, trying to set internal plans in high single to low double digits. That's still how we're thinking about the year. We're opening the year trying to be a little bit conservative as we think about that. But we view this as a year we really, really want to see successful adoption of really a tried and true successful B2B go-to-market program that we've really started to execute that we're excited about. I think that that can lead to a much more balanced growth profile in the future that's much more cost-effective than being so new logo reliant like we've been in past years. And I think as we really move into kind of that tried-and-true best-in-class model, that's going to get us towards those long-term growth rates, which we feel we have every right to be and that we know our investors expect.

The next question will come from Raimo Lenschow with Barclays.

A quick question for me is if I think PSR revenue is better at the moment, and Daniel talked about like consumer getting better. Like how do you think this will translate into the investment decisions on the corporate side or on your real customer side? And do you see -- do they need like a few quarters of better consumer spending and then their confidence increases and then eventually, they start thinking about high investment levels and then you will see it? Or how do you think that plays out as we kind of go through the year?

That's a good question. Part of the reason why in my prepared remarks, I called out that we really see 2 different areas of macroeconomic impact is because consumer spend is a really, really, really good leading indicator, but it's not always the only leading indicator.Obviously, business investment sentiment is just as important to our business. When we have -- we're booking rev share on a net basis. And so it's different for us in terms of total predictor for revenue. I think that if we continue to see resilience in consumer spending, I think that is going to translate into more positive just sentiment in general on a macroeconomic basis, which I think will also pull through where we will see business investment as well in time. And what we're seeing right now is it's -- there's good news and there's some headwinds that we're dealing with, I think, like a lot of other companies. We're seeing customers really, really focused on making sure their long-term investments in ecommerce are really shored up because that continues to be a major growth area. But they're also wanting to make sure that they've got the spending right sized in a way that makes sense with where the business is at today and for the volumes that they're seeing with consumer spending today. And then I think they're also looking at how does the pricing structure look? Is it straightforward? Are they paying a straightforward price where they know what they're getting? Or are they paying a 2, 3, or 4 part pricing scheme where the actual effective price looks very different than the land price when they're signing on with a customer. And we're getting a lot of questions about that, which is part of why I'm being very explicit in calling this out because I think it really merits looking at. So we're focused on taking care of our customers. I'm confident as consumer spending stays resilient, this is going to provide tailwinds, and it's going to be good for the business.

Yes. And then the second question I had was if you think about the sales capacity or the capacity out there. Obviously, as things get better, you kind of need to think about pre-investing a little bit because it takes a little bit of time to get people on brand. So where are you at the moment in terms of productivity and buffer that you have in there versus kind of investing into once growth starts picking up again?

We have more than enough sales capacity for the internal targets that we have set up. I feel confident about that. We also have really, really good ramp times with new reps as growth starts to pick up. I'm really confident that we can add capacity and it will not be a barrier to our growth.

The next question will come from Parker Lane with Stifel.

Congrats on the tremendous progress here. I was curious, Brent, if you could talk a little bit about the demand gen between your internal go-to-market teams and partner-led motions. I know there's a lot of restructuring efforts around go-to-market and things that you were emphasizing more now. But with the emergence of that partner channel, how much of the business is being driven by those 2 components?

For our Enterprise plans, which are, of course, more than 70% of our total ARR, partners have, over time, driven between 35% and 40% of the top-of-funnel lead flow that ends up converting. And it's probably running closer to 40% right now. Our agency partners and technology partners are really tremendous at working with us and helping us go to market and win business together.What is incremental now to our go-to-market motions are improvements in the way we outbound prospect, whether it is in our sales development rep channel or it is in -- with our enterprise AEs, there is an incremental amount of outbound hunting that we are doing, I think, rather successfully. And then finally, I'd emphasize our events focus. We are really showing up at quality events with a quality presence and looking to get -- whether it's category or vertical-specific events or general ecommerce industry events -- we're showing up with a strong big commerce presence, strong partner presence and trying to prospect as effectively as possible in those areas. And we see great returns from those channels.

And I know it's early, but you announced or have disclosed a bunch of different AI advancements over the last couple of quarters here. I would love to hear your thoughts on how you think that transforms the ecommerce landscape and how it translates directly to merchant growth and success over time?

I've said in the past that I think our Feedonomics subsidiary has arguably already the best AI engine in the world of ecommerce. Why? Because their Feed AI is extraordinarily powerful and optimized for taking a merchant's product catalog and then transforming it to perform through the Google schema.A typical business has out of the box, only about a 60% match rate in words for performance in the Google schema. And Feed AI automatically, we'll get that to over 95%. And then sort of human movement and intervention will get from 95% to 100%. What that does, though, is it lets a business perform optimally through Google Shopping, Google Ads and listings. And Google and search in general is on average, we see with our customers something like 35% to 40% of their last click source of GMV. It's an extraordinarily big channel. And Feedonomics is the best AI in the world for optimizing that. And by the way, most other ad channels, social networks, search engines, affiliates, display ads kind of utilize the Google schema. Not perfectly, but once you optimize using Feedonomics for Google, you are 80%, 90% of the way there to being able to add and perform optimally through any other advertising channel. There's nothing else that's going to boost the top line bigger than that, that I know of. On top of that, let me just to be very quick, our other -- some of our AI products are already live, and that includes both how we're using AI to better serve customers through chat and give them better answers directly. AI for creating product listings and content around that. We've announced partnership with Google around product recommendations that we're really excited about and have seen great testing results, a few other things. And then there are already dozens of very good AI products live in our apps marketplace. So there's widespread impact across all of those, but I always like to anchor on what Feedonomics can do for ad channel performance, really starting with Google.

The next question will come from Samad Samana with Jefferies.

This is Jeremy Sahler on for Samad. So last quarter, you guys called out some customer launches being delayed until after the holiday. I guess can you provide an update on whether all of these are closed and what the impact was in the quarter? And then you mentioned in your prepared remarks, the sales cycle remains lengthened. Are there any new deals that you expect to close this quarter that are being pushed out further?

Well, in terms of launch, one really big customer is launching right now. In fact, I've already done transactions on them, and we're very excited about that. We had a good quarter for enterprise launches in Q4. We'll start to see that GMV ramp this year. And then in terms of sales cycles, it's, I think, a continuation of the story of last year. They're just longer than they were before 2022.They happened a lot faster especially during the pandemic, but pre-pandemic sales cycles were shorter. They're longer now, and it's just a reality that we're living in until and unless the economy changes.

And then I guess, as you shift to this new [ land and expand ] heavy model, I guess, how are you thinking about NRR for 2024? Is there room for that to move? How much room is there for that to move above 100?

I think there's room for it to move above 100. But going into the year, our outlook is kind of based on an expectation that 2024 is going to look pretty similar to 2023. All of the motions that we are taking on the go-to-market side are specifically geared towards addressing that number because we think it is almost -- if not the best, it's one of the best long-term indicators of growth in any SaaS business.So that's a clear area of focus for us. Just to be clear about how we're thinking about the year, however, we're building our plans assuming that 2024 is going to look a lot like 2023 in that respect. And we're taking decisive action in order to control our own destiny and improve that number.

The next question will come from Maddy Schrage with KeyBanc.

My first one for you is I'm just wondering if there's any early learnings from January and February consumer trends? And then my second one is, I'm just wondering if you could talk a bit about the level of B2B penetration that you've made so far and maybe how much it's going to contribute in 2024.

I can address the first part briefly, and then Brent will take the question on B2B. January and February, I'd say so far, so good. There's been obviously differences seasonally, which is normal, which is in line with what we would have expected. What we've seen so far is in line with where we set the guidance.

Yes. On B2B, I am so bullish on where we are and where we're going there. Remember, we didn't even have an A B2B product 3, 4 years ago. We then started with a partner product that we white labeled. We bought that product. But what's most compelling now is that our B2B buyer portal has been built inside of BigCommerce from the ground up. It is the best user experience and most powerful buyer portal, we believe in all of ecommerce.And the pace of innovation that we are rolling out just in the last quarter, invoicing capabilities, credit management capabilities, we think that we can and will be over time the world's leading B2B platform. Our penetration today in B2B is de minimis. And so this is largely upside. It's a high percentage of our sales mix. In fact, our general sales mix, B2C versus B2B is, I think, roughly in line with global platform spend between the 2. And again, for a company that for its first 10, 12 years was B2C only to now be competing as successfully proportionately in both categories, I think, is a great testament to the work our B2B teams have pulled off in the last couple of years. Momentum is very big. And I really hope we do earn our way there to being the world's largest and best B2B platform.

One small thing I would add on top of that as well. Our B2B customers are really excited about the possibility that BigCommerce offers them to pull all of their online and off-line orders in together on one platform. And we are not charging transaction fees on off-line orders when they are brought into our platform because we're very much aligning the way we're going to market with what our customers are trying to accomplish. And I think that's a differentiator for us and something that's really, really been resonating powerfully with our B2B customers.

Your next question will come from Matt Pfau with William Blair.

Just one for me. In terms of the guidance for 2024, just wondering how you're thinking about the split in growth between the retail and enterprise account segments. Because if I remember correctly, relative to where you were originally expecting '23 to come in, I think retail was a bit better, enterprise a bit weaker than you expected. So just wondering how you're thinking about that trend into 2024.

Yes. Good question. We're expecting growth rates in the non-enterprise portion of the business to be a little bit lower than where the enterprise would be. Where we're focusing our go-to-market resources and dollars remains on the enterprise side, where we see better long-term economics, higher LTV to CAC, but we are not ignoring our small business customers, and we're not ignoring that part of our business. I think it's just one that we're very much kind of thinking more about that as more of a self-serve, less sales generated heavy motion just to make sure that the economics stay efficient.And we're focusing on our ideal customer profiles, which are established small businesses, doing hundreds of thousands of dollars a year in the low single-digit millions in terms of GMV. Once you get above that, I think again, we have an enterprise plan that we can price competitively even for those businesses that are $1,000 around there, a little bit more a month. So we're still focused on that part of the business. I'd like to see it stable across the year and then gradually starting to grow potentially as we exit the year, but really, really laser-focused on acceleration on the enterprise portion of ARR.

The next question will come from Josh Baer with Morgan Stanley.

Congrats on the strong profitability. I was hoping you could give some more context for the 100% enterprise net retention rate. Just trying to get a sense for the drop, if it's more a function of this quarter versus the year ago period? Or if dynamics got worse, better, stayed the same from last quarter. I guess in regard to customer downsizing as well as sales cycles, like how did these compare this quarter in Q4 versus Q3?

Great question. The number that we quoted once a year. It's a simple average of what we've seen across all 4 quarters. We've seen similar numbers across the year. Obviously, the time period that you're referring to, obviously, is when we saw the most downgrade pressure, I would say, from existing customers. I think that's reflective overall in the NRR results for the year.That specific issue has gotten better over the course of the last quarter or 2. We're still seeing more kind of customer-initiated downgrades where they're wanting to call it, right-size their contractual order volumes to the volumes that they're seeing out of the pandemic relative to the numbers that they thought they would see in some cases when they entered into those contracts during the pandemic. And as I've said, we're working with customers on that. We end up with higher price for orders. We're not giving the same volume discounts, normal pricing negotiations, as you would expect. But we're seeing improving trends in that area. Still elevated. We're still expecting that to be a little bit higher than where it's been for us in the years past as we think about 2024. But we're definitely seeing improving trends in that respect versus where we were in mid-2023, like I had mentioned in my prepared remarks.

Great. And this metric should rebound later in '24, room for it to go above 100%. But is 100% this quarter, the floor? Or could that dip further before rebounding later?

I mean as I said, it's an average across the year. There could be -- if we think that's where it's going to be kind of as a theme for the year as a whole, there may be some quarters that are a little below, there may be some quarters that are a little bit above. Part of this is still macro driven. We need to see how the year shakes out. What I'm calling us specifically is how we're thinking about the year from a sentiment perspective, just so it's clear how the guide has been put together. But we still need to see how the actual year plays itself out.

[Operator Instructions] Our next question will come from Brian Peterson with Raymond James.

This is John on for Brian. Just one from us here. On international expansion, clearly, it's been an area of focus for the company to expand internationally. I think in the past, you've mentioned more of a partner-led motion though, with that expansion going forward. I'm just curious, given the results you've seen here internationally, if that's still the case or how you're thinking about international expansion as we move into 2024.

Correct. In the first, call it, 3, 4 years of international expansion, we were focused on major new markets where we would lead with both our own personnel in sales marketing and partnership as well as building out a partner network in those countries. So think going from the U.K. and Europe into France, Germany, Italy, Spain, Benelux, Nordics as an example.And then what we are doing now is staying strong in those major markets across EMEA, obviously, Australia, New Zealand, U.S. and Mexico, Canada, but we're not looking in last year or this year to put additional big commerce employees on the ground in the markets we're expanding into, but instead work with partners. And we're seeing very interesting partnerships develop in Japan, in Korea, in India. India is another country where we do have people on the ground and the partner network is extraordinary. But if we think about South America, we think about other regions for the time being, where we're focused on efficient growth, yes, it will be partner-led in these new markets rather than big commerce people lab.

The next question will come from Mark Murphy with JPMorgan.

Brent, you mentioned using AI-based chat bots for customer support in your prepared comments. I'm just curious at a high level, is any of the positive margin progress that you've had so far at this point attributable to efficiency gains or productivity gains that are stemming from that kind of internal usage of Gen AI products, whether it be GitHub, CoPilot or customer support chat bots or anything else? Or would you look at it and say that all of this was kind of 100% unrelated to AI? And then I have a quick follow-up.

I'm not going to say it rises to the level of major financial significance. But what I would emphasize is on the customer experience side, two things. #1 is unlike one of our biggest competitors, we provide BigCommerce human support ourselves with live phone numbers for all customers globally. And we're able to do that at an efficient level, partly because we're very operationally disciplined. Many of our Tier 1 support personnel are now down in Mexico, which we've had real success hiring in.And on top of that, the chatbot option enables many customers to come in, ask a question, get it answered and never even need to talk to a live human being. And that's one of the reasons why I'm very proud of the like only, I think it was 8 or 18 second wait time on average for our enterprise customers during peak holiday volumes. That's pretty outstanding to get such fast and excellent customer service while we are delivering ever-improving gross margins. So it is helping there. But I think the benefits are even bigger on the customer experience and customer success side than they are on the financial side.

Yes. Let me add one point to that before you ask your follow-up question as well. I think that I really see it as a productivity boost more so than it is a cost cutting thing in the short run. I think that the fact that so many customers are able to get the answers and that example, right, the fact that they're able to get their questions answered that quickly. It's just really a good thing.And to Brent's point, from a cost structure perspective. That enables us to continue to have really, really efficient, cost-effective support. As Brent mentioned, we're hiring folks in diverse locations. We have some folks that we're hiring in Mexico. We have other folks that we're hiring in the United States, and we'll continue to do so. We're not looking to outsource or geographically move where our support is sitting. We're wanting that to be mixed as we really also see, and I think this is something that's really not really always widely understood about BigCommerce is that the folks that we have in tech support internally, we call them Ninjas because they are on the front line kind of taking care of our customers. And that's also an amazing pipeline development that we have for future engineers as a career development path for us, and that's something that's going to continue to be a really big priority for us. So while it's great that it's differentiating the level of service and support that our customers get, having such great investment on those resources internally in multiple different geographies is also great from a talent management and development point of view for us as well.

Yes. Ireland is our other location for European language support.

Okay. Yes, I think it was 13 seconds on the wait time. But I mean, whether it was 8 or 13 or 18, it seems like you're having great success. I just wanted to ask you, if you kind of extend this thought where you have the partnership with Google. You have access to all of Google's AI technology for the product descriptions, the customer recommendations, understanding the intent of search terms, et cetera. Do you think that that can create some sustainable differentiation? Like, in other words, are you getting earlier access to Google products? Are you getting more help from Google to kind of infuse all that into your own products?

We absolutely are -- they're very closely partnered with us and think of us as a lead partner for everything they're doing in AI as it relates to ecommerce. I would also note that our approach is differentiated from our multiple of our competitors because it's not proprietary.I would point to all of Shopify, Salesforce and Adobe as focusing on proprietary branded AI, whereas BigCommerce is being open and best-of-breed lead. We'll work with Google's best AI, we will work with any other AI chat GPT engines. We will both do proprietary AI products but will also heavily bring our ecosystem partners, our tech partners, our agency partners, actually to the hackathons and the development sessions with Google and other AI partners. And I think that open approach, it might have been the case 2 years ago, where the best AI was being done by the giant global software conglomerates, but that's not the case anymore, right? It's been democratized by Google, by open AI and Microsoft by Facebook. And I think our open approach is going to lead to more and better AI options for our ecosystem than the proprietary approaches of the 3 competitors I named.

This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Brent Bellm, CEO and Chairman, for any closing remarks. Please go ahead, sir.

Great. As we go into 2024, 2 summary messages from us. The first is customer focus and customer success. We are absolutely truly committed to bringing the world's best ecommerce product and service to our customers and our ecosystem, whether it's enterprise B2B and B2C product, the world's best omnichannel capabilities, multi-geography and international selling capabilities or composable. We're focused on the best product and service for our customers in the world.Second main point is about efficient growth. We showed in 2023 that we can, in a short time frame, turn our business into a highly profitable, highly cash flow generating business with good macro and micro unit economics. Now that those are in place, the story for 2024 is efficient growth, where we would really like to demonstrate an ability to kind of bend the growth curve and get top line growth back to strong levels but with extraordinarily good macro and micro unit economics that are now in place. And so thanks for everybody who is following us or joining us on this journey, and we look forward to talking again next quarter. Thanks.

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