Commerce.com Inc (CMRC) Q3 2025 Earnings Call Highlights: Strong Partnerships and Financial ...

This article first appeared on GuruFocus.

Release Date: November 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Commerce.com Inc (NASDAQ:CMRC) delivered Q3 revenue of $86 million, in line with guidance, and non-GAAP operating income of $8 million, exceeding profitability guidance. The company has strong partnerships with major players like PayPal, Microsoft, Google, and Stripe, enhancing its position in AI-led commerce. Feedonomics Surface, a new product, is gaining traction and is the most downloaded app in its category, indicating strong market interest. The company has reduced its net debt by 86% since Q3 2023, strengthening its financial position. Commerce.com Inc (NASDAQ:CMRC) continues to attract respected brands, with strong B2B momentum and recognition from IDC and Gartner for its B2B capabilities.

Negative Points

There was a sequential decline in enterprise ARR and a downtick in enterprise customers, indicating challenges in customer retention or acquisition. The company acknowledges the need to grow faster and more profitably, indicating current growth rates may not be meeting internal expectations. The demand for re-platforming has softened, particularly among larger merchants, due to shifts in focus towards AI and data strategies. The guidance range for Q4 is wider than usual, reflecting uncertainty in consumer behavior during the holiday season. Commerce.com Inc (NASDAQ:CMRC) has not yet fully capitalized on product-led growth, with a high reliance on landing new accounts rather than expanding within the existing customer base.

Q & A Highlights

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Q: Can you address the sequential decline in enterprise ARR and the downtick in enterprise customers? A: Daniel Lentz, CFO: The decline reflects our progress through the year. We aimed to be further along in bookings by now. It's primarily a function of net revenue retention, which remains similar to last year at around 98-99%. We're focusing on existing customer expansion to drive growth. The market's focus on AI and agenic is beneficial for us, but it's been tougher on the platform side, which is reflected in the numbers.

Q: Could you expand on the strong signals you're seeing for the holiday season? A: Travis Hess, CEO: The momentum is largely around AI. We've had large brand manufacturers and retailers in closed beta for AI readiness, adding more weekly. This is where peak demand is, especially on the B2C side with Feedonomics. We're in a good position with our existing install base, and this will extend into more Makeswift developments. On the B2B side, we've seen strong platform momentum throughout the year.

Story Continues

Q: How do you view the competitive dynamics of discoverability with answer engines? A: Travis Hess, CEO: It's about the quality of data, both structured and unstructured. We combine various data types to optimize for answer engines. Our strength lies in having enriched product data for syndication. Being open and agnostic is a massive advantage, allowing us to adapt to different commercial models and market changes.

Q: Can you discuss the wide range for Q4 guidance and your investment plans? A: Daniel Lentz, CFO: The $5 million revenue range accounts for potential holiday season outcomes. We're cautious but not signaling higher risk than usual. We've seen stable revenue growth and significant profit and cash flow improvements. We're launching new products, particularly in AI, and expect stronger growth in 2026. We're focused on improving shareholder returns through better profit and cash flow.

Q: Which new product rollouts are you most excited for in 2026, and any early learnings from Feedonomics Surface? A: Travis Hess, CEO: Excited about Feedonomics Surface, our most downloaded app, and its expansion. It's part of our shift to product-led growth. Feedonomics already runs agnostically, supporting platforms like Shopify. We're also excited about Makeswift's expansion on Stencil and other surfaces, which could enrich shareholder value.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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