E-commerce software company Commerce (NASDAQ: CMRC) announced better-than-expected revenue in Q3 2026, but sales fell by 2.1% year on year to $84.25 million. The company expects next quarter’s revenue to be around $84.9 million, close to analysts’ estimates. Its non-GAAP profit of $0.08 per share was significantly above analysts’ consensus estimates.

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StockStory’s take

Commerce’s latest quarter was met with a positive market reaction, as the company reported revenue and non-GAAP profit above Wall Street expectations. Management attributed the outperformance to improved cost discipline and ongoing execution of its strategic operating plan, which focused on streamlining the business while investing in core product areas. CEO Travis Hess highlighted progress in commercial pipeline generation and cited strong adoption of new AI-powered product features, as well as traction in payments and B2B commerce as key contributors to the results.

For the upcoming quarter, Commerce’s guidance reflects management’s emphasis on driving higher profitability through cost actions and expanded monetization initiatives. The company expects to benefit from continued development in AI and product intelligence, broader payments adoption, and commercial wins in B2B markets. CFO Daniel Lentz noted that the margin improvement targets are based on incremental operating efficiencies and not dependent on immediate revenue acceleration, stating, “We remain on track to deliver the targeted savings and to substantially complete implementation by Q2 2027.”

Key insights from management’s remarks

Management attributed Q3 performance to new AI and product intelligence initiatives, a growing pipeline in B2B commerce, and improvements in payments adoption and cost structure.

• AI product intelligence rollout: The launch of Feedonomics Enrichment and BigCommerce Catalog Enrichment brought new AI-driven capabilities to hundreds of stores, with rapid early adoption and additional opportunities for monetization.
• B2B commerce focus: The company prioritized complex B2B customers, citing recent wins such as Gutter Supply and Brompton, which showcase its ability to support advanced pricing, quoting, and inventory management needs.
• Payments adoption expands: BigCommerce Payments, powered by PayPal, saw a 65% sequential increase in live stores, driving improved customer retention and providing a foundation for further monetization of transaction volume.
• Cost reduction and organizational streamlining: Ongoing cost reductions and the use of AI for automation have helped deliver higher-than-expected operating income, with management reaffirming its commitment to a more efficient cost structure.
• Leadership transition: The departure of CFO Daniel Lentz marks a significant management change, with Tyler Duncan named interim CFO. Leadership emphasized that the transition does not alter strategic or financial targets.

Drivers of future performance

Commerce’s updated outlook centers on monetizing its commerce platform, expanding AI capabilities, and maintaining disciplined cost management to achieve margin targets.

• AI and agentic commerce innovation: Management anticipates that continued investment in product intelligence, including agentic commerce and conversational search, will enhance customer retention and unlock new revenue streams, especially as more merchants adopt advanced shopping experiences.
• Payments and B2B monetization: Greater integration of BigCommerce Payments and new payment processing models are expected to boost monetization of growing transaction volume, particularly as the B2B customer base expands. Management is evaluating a white-labeled payments solution, which could alter revenue recognition and economics over time.
• Cost efficiency and restructuring: The company remains focused on achieving targeted operating cost reductions, leveraging automation, and streamlining operations. Management believes these actions will deliver improved non-GAAP operating margins and increased free cash flow, even if top-line revenue growth remains modest in the near term.

Catalysts in upcoming quarters

In the coming quarters, the StockStory team will watch (1) how quickly Commerce can convert its expanded pipeline into bookings, (2) the pace of merchant adoption for new AI-driven product intelligence and payments features, and (3) progress on planned cost reductions and margin improvements. Updates on leadership transitions and any changes to the payments business model will also be important signals for future performance.

Commerce currently trades at $3.55, up from $3.45 just before the earnings. Is there an opportunity in the stock? Find out in our full research report (it’s free).

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