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This statistic highlights BigCommerce’s Annual Recurring Revenue or the ARR from Q2 2020 onwards, reported on a quarterly basis.
What is Annual Recurring Revenue (ARR)?
Annual Recurring Revenue (ARR) is a key metric used by SaaS or subscription firms that have term subscription agreements, which means the contract period is predetermined. It’s the value of the term subscriptions’ contractual recurring revenue components standardised to a one-year timeframe. To successfully use ARR as a business statistic, term agreements with a minimum length of one year, or a majority of term agreements with a period of one year or more, are required. It is frequently utilised by subscription businesses with multi-year agreements. There are no set rules for determining what should be included in ARR. It will usually only comprise legally agreed-upon, set subscription rates. One-time fees are nearly generally removed from ARR calculations because they are by definition non-recurring.
|Item||Q3 2020||Q2 2021||Q3 2021|
|Annual Recurring Revenue||$167.00||$209.30||$253.50|
(All figures in millions)
The annual recurring revenue in Q3 2021 was recorded to be $253.5 million which had increased by $44.2 million from annual recurring revenue in Q2 2021 at $209.3 million. This increase is equal to 21.11% in the quarter-on-quarter growth index. There is also an increase in the year-on-year index from $167 million in Q3 2020 to $253.5 million Q3 2021. This accounts for an increase of $86.5 million which is equivalent to a growth of 51.8%.
COVID pandemic has created a para-time shift in the shopping behavior from offline to online. This has benefitted BigCommerce both in accelerating sales growth for existing customers’ stores and in sales of new store subscriptions to customers. Sales of Essentials plans increased, particularly early during the pandemic, as the company supported customers’ efforts to get online through our 90-day free site-wide promotion on Essentials plans. This showed a better ARR of 2019 to 2020 when compared to the ARR increase of 44% from 2018 to 2019. But this trend is uncertain for its continuity if the company is unable to acquire new customers or the growth in e-commerce during the COVID-19 impact fails to continue after the pandemic ends.
BigCommerce is leading a new era of e-commerce. It is a SaaS platform (Software-as-a-service) that simplifies the creation of beautiful, engaging online stores by delivering a unique combination of ease-of-use, enterprise functionality, and flexibility. BigCommerece as a third party, power both type of customers’ branded e-commerce stores and their cross-channel connections to popular online marketplaces, social networks, and offline point-of-sale. They are serving customers in approximately 155 countries. BigCommerce offers direct and free integrations with leading social networks such as Facebook and Instagram, search engine companies like google, online marketplace such as eBay and Amazon, and PoS platforms such as Clover, Square, and Vend. They have segmentized their target audience in the following business- small businesses, which are defined as sites with annual online sales of less than $1 million. The mid-market is defined as sites with annual online sales between $1 million to $50 million. Large scale businesses are defined as sites with annual online sales from $50 million to a billion-dollar. The company has multi-tenant SaaS giving high speed, ease of use, high-performance, and continuously updated benefits associated with multi-tenant SaaS.
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