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This statistic highlights BigCommerce’s Net Retention Rate, reported on a quarterly basis from 2019 onwards.
Let’s start with a definition of the term “Net Revenue Retention Rate.” The proportion of recurrent income maintained from existing customers in a given time period, including downgrades, expansion revenue, and cancellations, is known as the Net Revenue Retention (NRR) Rate.
BigCommerce evaluates their ability to keep and grow revenue with a client base that exceeds the ACV (Annual Contract Value) benchmark over time using net revenue retention (“NRR”). The total billings and assigned partner revenue for the measurement period are divided by the total invoices and allotted partner revenue for these kinds of accounts for the previous year.
|Period||Q4 2019||Q3 2020||Q4 2020|
|NRR for accounts with ACV > $2K (%)||106%||113%||113%|
A positive NRR is indicated by a net revenue retention that is greater than 100%. This technique takes into account stores that have been added to or removed from an account’s subscription in the past twelve months. It also includes income decreases from stores or accounts that left the platform during the preceding one-year period, as well as adjustments to subscription and partner and services revenue billings. In the company’s NRR estimates, the net new accounts created after the prior one-year period are excluded. For the years ending December 31, 2020 and 2019, the NRR for accounts with ACV more than $2,000 was 113 percent and 106 percent, respectively. The quarterly changes in NRR are not reflected in the update on reported NRR after each fiscal year.
NRR is a churn indicator that provides a holistic perspective of both positive and negative changes in customer retention and revenue growth. As a consequence of gains in both subscription solutions and partner and services income, revenue witnessed an increase. Revenue rose by 35.9% or $40.3 million to $152.4 million from $112.1 million for the year ended December 31, 2020 from December 31, 2019. Subscription solutions revenue increased $21.0 million, or 25.4%, to $103.7 million for the year ended December 31, 2020, up from $82.7 million for the year ended December 31, 2019. This was owing to combined growth within the domestic and international retail division, mid-market, enterprise subscription sales, along with improved customer retention.
Increases in revenue-sharing activity with our technology partners and improved monetization of partner revenue share drove up partner and services revenue by $19.2 million, or 65.4 percent, to $48.7 million for the year ended December 31, 2020 from $29.4 million for the year ended December 31, 2019, primarily due to increased revenue-sharing activity with our technology partners and improved monetization of partner revenue share. The year-over-year improvement in net retention rates may be explained by all these revenue income increases from 2019 to 2020.
BigCommerce is ushering in a new eCommerce age. By offering a unique combination of ease-of-use, enterprise capabilities, and flexibility, the company’s software-as-a-service (“SaaS”) platform streamlines the building of beautiful, engaging online businesses. Our clients’ branded eCommerce stores, as well as their cross-channel links to prominent online marketplaces, social networks, and offline point-of-sale (“POS”) systems, are all powered by the firm.
BigCommerce enables companies to leverage digital transformation as a competitive advantage. Allowing merchants to customize their eCommerce solution in the way that makes the most sense for their specific business and product offers. Store design, catalog management, hosting, checkout, order management, reporting, and pre-integrations into best-of-breed third-party services like payments, shipping and fulfillment, point of sale, marketing, and accounting are all included in the company’s comprehensive platform for launching and scaling an eCommerce operation.
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