Company targets full-year non-GAAP operating margins of at least 20% beginning in 2027 and materially higher free cash flow
Plan expected to generate approximately $60 million to $80 million of annualized cost savings, or $0.73 to $0.97 on a per diluted share basis
Board authorizes up to $50 million of share repurchases over the next two years
Commerce.com, Inc., a data-centric provider of an open, AI-driven commerce ecosystem that enables businesses to unlock data, power intelligent discovery and deliver personalized experiences at scale, announced a strategic operating plan designed to reduce costs and materially increase profitability and free cash flow.
The plan is expected to generate approximately $60 million to $80 million of annualized cost savings, or $0.73 to $0.97 on a per diluted share basis (based on diluted share count as of June 30th, 2026). Commerce expects to realize approximately $3 million, or 4%, of the anticipated savings during 2026, with the full annualized benefit reflected in 2027.
The plan increases efficiency while protecting investments in the products and capabilities that will drive future growth. Investment will stay focused on complex commerce needs across B2B and B2C, especially the Company’s differentiated B2B position, along with continued investment in payments, Feedonomics, product intelligence, and agentic commerce. Spending will be reduced in areas that are less central to the Company’s strategy or where expected returns are lower.
“Over the past several quarters, we have focused Commerce on the parts of the business where we see the strongest opportunities to grow,” said Travis Hess, Chief Executive Officer of Commerce. “We also need to be more disciplined about what we spend and the returns we generate from those investments. This plan reduces costs while protecting our key growth investments, and we expect it to meaningfully increase profitability and free cash flow.”
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Financial Impact and Objectives
As part of the plan, Commerce is targeting full-year non-GAAP operating margins of at least 20% beginning in 2027 and on an ongoing basis thereafter.
The plan is expected to:
- Reduce the Company’s annualized non-GAAP operating cost base by approximately $60 million to $80 million, with the majority of these savings expected to translate into additional free cash flow.
- Deliver approximately $0.73 to $0.97 on a per diluted share basis (based on diluted share count as of June 30, 2026) of annualized cost savings.
- Benefit from approximately $353 million of total net operating loss carryforwards and other tax attributes as of June 30, 2026, which are expected to reduce cash taxes on incremental earnings and support strong conversion to free cash flow.
The plan primarily includes reductions in operating costs, such as staffing, professional services, facilities, software, and infrastructure. Commerce also expects to realize continued efficiency improvements through the expanded use of AI across its internal operations. Commerce expects the majority of the actions and expenses related to the Plan to be implemented and recorded by the end of our fiscal fourth quarter 2026 and the plan to be substantially complete by our second quarter in fiscal 2027.
The Company currently expects to incur approximately $4.2 million to $8.8 million of restructuring and other one-time expenses in the Company’s third quarter ended September 30, 2026 and $4.3 million to $17.5 million of restructuring expenses in the Company’s fourth quarter of fiscal 2026.
“This plan materially increases the profitability and free cash flow we believe Commerce can generate without changing our growth strategy,” said Daniel Lentz, Chief Financial Officer and Chief Operating Officer of Commerce. “At our current revenue base, we believe the business can generate meaningfully more cash. Our existing tax attributes should also help limit cash taxes and support strong free cash flow conversion. As free cash flow increases, we expect to have greater flexibility to return capital to shareholders while maintaining a strong balance sheet and continuing to invest in the business.”
Share Repurchase Authorization
The Company’s Board of Directors has authorized the repurchase of up to $50 million of Commerce common stock over the next two years beginning on September 10, 2026 through September 10, 2028. The repurchase is expected to be funded from cash flow generated by the Company’s disciplined approach to capital allocation and operating performance.
Any repurchases of shares may be made from time to time at the Company’s discretion. The timing, amount and method of any repurchases will depend on market conditions, the Company’s financial position, other uses of capital and other relevant factors. The authorization does not require Commerce to repurchase any specific amount of stock and may be modified, suspended or discontinued at any time.
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2026 Financial Outlook
As a result of the plan, Commerce is updating its full-year 2026 guidance. The Company is reaffirming its full-year revenue guidance and raising its full-year non-GAAP operating income guidance by $3 million to reflect savings expected to be realized in 2026. The Company currently expects:
- Total revenue between $336.5 million and $344.5 million.
- Non-GAAP operating income between $31.0 million and $37.0 million.
The Company is also reaffirming its third quarter 2026 guidance of total revenue between $82.5 million and $85.5 million and non-GAAP operating income between $3.3 million and $5.3 million, unchanged from the guidance provided on August 6, 2026.
Prior full-year 2026 guidance was for total revenue of $336.5 million to $344.5 million and non-GAAP operating income of $28.0 million to $34.0 million. The Company currently has approximately 82.6 million fully diluted shares outstanding for the six months ended June 30, 2026.
The updated outlook incorporates approximately $3 million of savings expected to be realized during the remainder of 2026 (as reflected in our updated non-GAAP operating income outlook above). The strategic operating plan is not expected, by itself, to have a material impact on the Company’s 2026 revenue outlook.
