Commerce.com targets $60 million to $80 million in savings, raises profit outlook

Commerce.com is seeking a sharp increase in profitability from its existing business, announcing a plan on September 10 to cut annualized costs by $60 million to $80 million without reducing its revenue outlook. The immediate benefit is smaller: just $3 million of savings expected this year, with restructuring expenses arriving before the full payoff.

Commerce.com, the Nasdaq-listed parent of BigCommerce, Feedonomics and Makeswift, committed to the plan on September 9. It is targeting full-year non-GAAP operating margins of at least 20% beginning in 2027 and continuing thereafter, alongside materially higher free cash flow. Its board separately authorized up to $50 million in share repurchases.

“At our current revenue base, we believe the business can generate meaningfully more cash,” said Daniel Lentz, chief financial officer and chief operating officer, in the announcement. That places the focus on how much spending Commerce can remove while protecting the products it expects to drive growth.

A higher profit forecast on unchanged revenue

Commerce raised its full-year 2026 non-GAAP operating income forecast to $31.0 million–$37.0 million from $28.0 million–$34.0 million. The $3 million increase reflects the savings expected during the remainder of the year. Revenue guidance remains $336.5 million–$344.5 million, and management said the plan itself is not expected to materially affect that outlook.

Using the midpoints of those ranges, the revised forecast implies a non-GAAP operating margin of about 10.0%, compared with about 9.1% previously. Those are calculations from company guidance, rather than separately issued margin forecasts. They illustrate the distance between this year's expected profitability and the at-least-20% target for 2027.

Third-quarter guidance also remains unchanged from August 6: revenue of $82.5 million–$85.5 million and non-GAAP operating income of $3.3 million–$5.3 million.

Commerce expects the full annualized savings benefit to be reflected in 2027. It describes the approximately $3 million expected in 2026 as 4% of anticipated savings. The annual target concerns a reduction in its non-GAAP operating cost base; it is not money already saved.

The company also expresses that target as $0.73–$0.97 per diluted share, using its June 30, 2026 diluted share count. The release reports approximately 82.6 million fully diluted shares for the six months ended June 30. The per-share figures translate the cost target into shareholder terms; they are not an earnings-per-share forecast.

Cutting expenses while protecting growth investments

The reductions cover staffing, professional services, facilities, software and infrastructure. Commerce also expects expanded internal use of AI to improve efficiency. The announcement does not specify a headcount reduction or identify facilities to be closed.

Management says investment will remain focused on complex business-to-business and business-to-consumer commerce, especially its B2B offerings, along with payments, Feedonomics, product intelligence and agentic commerce. Spending will decline in areas it considers less central to its strategy or less likely to deliver sufficient returns.

“We also need to be more disciplined about what we spend and the returns we generate from those investments,” Chief Executive Officer Travis Hess said. “This plan reduces costs while protecting our key growth investments, and we expect it to meaningfully increase profitability and free cash flow.”

Preserving those investments is an execution challenge. The company identifies possible disruption to operations, customers and employees, as well as the risk that expected savings will not be fully realized.

Upfront charges and differing completion timetables

Commerce estimates $4.2 million–$8.8 million in plan expenses for the third quarter ending September 30, 2026. Its filing anticipates another $4.3 million–$17.5 million through completion, which that discussion places in the fourth quarter ending December 31, 2026. The expenses primarily concern severance, facilities, professional services, infrastructure and related costs.

Adding the two disclosed ranges produces an estimated $8.5 million–$26.3 million in expenses. Even the low end exceeds the savings expected this year, although the expense estimates do not establish when every cash payment will occur. Commerce cautions that actual expenses could differ and that additional costs or cash outflows are possible.

The release gives a longer completion timetable than the filing's expense discussion. It expects most actions and expenses to be implemented and recorded by the end of 2026, but substantial completion by the second quarter of fiscal 2027. The documents do not explain that difference.

Commerce intends to exclude plan charges from non-GAAP operating income, adjusted EBITDA and non-GAAP net income. Its non-GAAP operating income definition also excludes stock-based compensation and related payroll taxes, intangible-asset amortization and acquisition-related costs. Consequently, the higher adjusted profit outlook will not show the full restructuring burden. The company provides no GAAP operating income forecast or forward-looking reconciliation, citing unavailable reliable estimates for certain reconciling items.

Cash generation and an optional buyback

Commerce expects most savings to become additional free cash flow, which it defines as operating cash flow less capital expenditures. It cites approximately $353 million in net operating loss carryforwards and other tax attributes as of June 30, 2026, which it expects to reduce cash taxes on incremental earnings. Those attributes support management's cash-conversion expectations; they are not a cash balance available for spending.

The buyback authorization took effect September 10, 2026, and expires on September 10, 2028, or earlier if purchases reach $50 million. The filing says purchases would use available cash and cash equivalents, while the release says the program is expected to be funded by cash flow generated through operating performance and capital allocation.

Purchases may occur in the open market or through private transactions. Their timing and size depend on market conditions, the company's financial position and competing uses of capital. The authorization requires no specific purchase amount, and the board can modify, suspend, extend or terminate it.

The next financial reports will provide the first measures of execution: third-quarter charges against the initial estimate, followed by year-end progress on savings and implementation. Further disclosure will also be needed to clarify the completion timetable. In 2027, the central test will be whether the cost reductions produce the promised margin and cash-flow gains while Commerce maintains its growth investments.