Third Quarter Total Revenue of $39.7 Million, an Increase of 41% Versus Prior Year Total ARR of $167.0 Million, an Increase of 38% Versus Prior Year
AUSTIN, Texas, Nov. 05, 2020 (GLOBE NEWSWIRE) — BigCommerce Holdings, Inc. (“BigCommerce”) (Nasdaq: BIGC), a leading open SaaS ecommerce platform for fast-growing and established brands, today announced financial results for its third quarter ended September 30, 2020.
“Our third quarter was one of the best quarters in BigCommerce’s history. Our third quarter revenue was up 41% year over year, which was a further acceleration versus the 33% growth rate we saw just last quarter. Our ability to deliver continued accelerating growth is a testament to our merchants’ continued success on the BigCommerce platform,” said Brent Bellm, CEO at BigCommerce. “As we head into the busiest time of year for retail, we remain focused on providing our merchants the technology, partnerships and resources they need to usher in a successful holiday sales season.”
Third Quarter Financial Highlights
Total revenue was $39.7 million, up 41% compared to the third quarter of 2019.
Total annual revenue run-rate (ARR) was $167.0 million, up 38% compared to the third quarter of 2019.
Operating Income/(Loss)
GAAP operating loss was ($10.1) million, compared to ($10.3) million in the third quarter of 2019.
Non-GAAP operating loss was ($7.2) million, compared to ($9.5) million in the third quarter of 2019.
Net Income/(Loss) and Earnings Per Share
GAAP net loss was ($10.9) million or (27%) of total revenue, compared to ($10.7) million or (38%) of total revenue in the third quarter of 2019. The nearly 11 point improvement in net loss as a percent of revenue was primarily a result of the significant increase in high margin PSR and the Company’s ability to manage spend effectively while driving further leverage in the business as the Company continues to scale.
Non-GAAP net loss was ($8.0) million, compared to ($9.9) million in the third quarter of 2019.
GAAP net loss per share was ($0.16) based on 49.4 million weighted-average shares of common stock outstanding, compared to ($0.70) based on 18.0 million weighted-average shares of common stock outstanding in the third quarter of 2019.
Non-GAAP net loss per share was ($0.16) based on 49.4 million weighted-average shares of common stock outstanding, compared to ($0.55) based on 18.0 million weighted-average shares of common stock outstanding in the third quarter of 2019.
Adjusted EBITDA
Adjusted EBITDA was ($6.6) million, compared to ($8.9) million in the third quarter of 2019. The increase in Adjusted EBITDA was primarily a result of the significant increase in high margin PSR and the Company’s ability to manage spend effectively while driving leverage.
Cash
Cash and cash equivalents totaled $178.8 million as of September 30, 2020.
For the nine months ended September 30, 2020, net cash used in operating activities was ($23.2) million, compared to ($31.1) million for the same period in 2019.
Key Business Metrics
ARR from accounts with at least one Enterprise plan (“Enterprise accounts”) was $89.8 million, up 48% compared to the third quarter of 2019.
ARR from Enterprise accounts as a percent of total ARR was 54%, up from 50% from the third quarter of 2019.
Number of accounts greater than $2,000 in annual contract value (ACV) was 9,777, up 10% compared to the third quarter of 2019.
Average revenue per account (ARPA) of accounts greater than $2,000 in ACV was $13,792, up 31% compared to the third quarter of 2019.
Accounts greater than $2,000 in ACV as a percent of total ARR was 81%, up from 77% from the third quarter of 2019.
Business Highlights
Product Highlights: The Company continues to invest in building the best open SaaS ecommerce platform in the world, supported and integrated with the Company’s extensive network of best-of-breed technology and agency partners. The Company launched the availability of Channel Manager, a platform feature that allows merchants to seamlessly discover and connect new sales channels and manage their omnichannel operations. Additionally, the Company launched international marketing sites in France, Italy and the Netherlands.
Merchant Highlights: The Company added leading brands across multiple industries including ChapStick, a leader in lip care; 5-Hour Energy; the well-known camera manufacturer Nikon Canada; Little League International; and Chivas, a leading football club in the top professional division in Mexico.
Partner Highlights: During the third quarter, the Company added multiple key strategic partnerships to expand its technology ecosystem. In cross-channel, the Company signed new partnerships with CED Commerce, Wish, SureDone, Feedonomics, and Deliverr. The Company further strengthened its community of advertising partners by adding Tinuiti and Teikametrics to support omnichannel sales efforts. The Company expanded its accessibility services by partnering with Essential Accessibility to allow ease of shopping for all shoppers. In addition, the Company expanded its partnership with PayPal by integrating with iZettle, the #1 payment gateway in the Netherlands, in order to further support international merchants.
Team/Culture: The Company was recently awarded “Best and Brightest Company” in San Francisco. Additionally, the Company hired its first Vice President of Diversity, Equity and Inclusion, Sharon Brogdon. Sharon joined the Company from Vericast where she was the executive director and head of diversity, equity and inclusion, and created and implemented a DEI strategy designed to be infused into and have a positive impact on all aspects of the culture, people and business.
Q4 and 2020 Financial Outlook For the fourth quarter of 2020, the Company currently expects:
For the full year 2020, the Company currently expects:
The Company’s third quarter and 2020 financial outlook is based on a number of assumptions that are subject to change and many of which are outside the Company’s control. If actual results vary from these assumptions, the Company’s expectations may change. There can be no assurance that the Company will achieve these results.
The Company does not provide guidance for operating loss, the most directly comparable GAAP measure to non-GAAP operating loss, and similarly cannot provide a reconciliation between its forecasted non-GAAP operating loss and its directly comparable GAAP measure without unreasonable effort due to the unavailability of reliable estimates for certain items. These items are not within the Company’s control and may vary greatly between periods and could significantly impact future financial results.
Conference Call Information
BigCommerce will host a conference call and webcast at 4:00 p.m. CT (5:00 p.m. ET) on Thursday, November 5, 2020, to discuss its financial results and business highlights. The conference call can be accessed by dialing (833) 519-1347 from the United States and Canada or (914) 800-3909 internationally with conference ID 3834549. The live webcast of the conference call and other materials related to BigCommerce’s financial performance can be accessed from BigCommerce’s investor relations website at http://investors.bigcommerce.com.
Following the completion of the call through 8:00 p.m. ET on November 12, 2020, a telephone replay will be available by dialing (855) 859-2056 from the United States and Canada or (404) 537-3406 internationally with conference ID 3834549. A webcast replay will also be available at http://investors.bigcommerce.com for 12 months.
About BigCommerce
BigCommerce (Nasdaq: BIGC) is a leading software-as-a-service (SaaS) ecommerce platform that empowers merchants of all sizes to build, innovate and grow their businesses online. As a leading open SaaS solution, BigCommerce provides merchants sophisticated enterprise-grade functionality, customization and performance with simplicity and ease-of-use. Tens of thousands of B2B and B2C companies across 150 countries and numerous industries use BigCommerce to create beautiful, engaging online stores, including Ben & Jerry’s, Molton Brown, S.C. Johnson, Skullcandy, Sony, Vodafone and Woolrich. Headquartered in Austin, BigCommerce has offices in San Francisco, Sydney and London.
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “outlook,” “may,” “might,” “plan,” “project,” “will,” “would,” “should,” “could,” “can,” “predict,” “potential,” “strategy, “target,” “explore,” “continue,” or the negative of these terms, and similar expressions intended to identify forward-looking statements. However, not all forward-looking statements contain these identifying words. These statements may relate to our market size and growth strategy, our estimated and projected costs, margins, revenue, expenditures and customer and financial growth rates, our Q4 and 2020 financial outlook, our plans and objectives for future operations, growth, initiatives or strategies. By their nature, these statements are subject to numerous uncertainties and risks, including factors beyond our control, that could cause actual results, performance or achievement to differ materially and adversely from those anticipated or implied in the forward-looking statements. These assumptions, uncertainties and risks include that, among others, our business would be harmed by any decline in new customers, renewals or upgrades, our limited operating history makes it difficult to evaluate our prospects and future results of operations, we operate in competitive markets, we may not be able to sustain our revenue growth rate in the future, our business would be harmed by any significant interruptions, delays or outages in services from our platform or certain social media platforms, and a cybersecurity-related attack, significant data breach or disruption of the information technology systems or networks could negatively affect our business. Additional risks and uncertainties that could cause actual outcomes and results to differ materially from those contemplated by the forward-looking statements are included under the caption “Risk Factors” and elsewhere in our filings with the Securities and Exchange Commission (the “SEC”), including our final prospectus under Rule 424(b) filed with the SEC on August 5, 2020, our Annual Report on Form 10-K for the year ended December 31, 2020 to be filed with the SEC and the future quarterly and current reports that we file with the SEC. Forward-looking statements speak only as of the date the statements are made and are based on information available to BigCommerce at the time those statements are made and/or management’s good faith belief as of that time with respect to future events. BigCommerce assumes no obligation to update forward-looking statements to reflect events or circumstances after the date they were made, except as required by law.
Use of Non-GAAP Financial Measures
We have provided in this press release certain financial information that has not been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). Our management uses these non-GAAP financial measures internally in analyzing our financial results and believes that use of these non-GAAP financial measures is useful to investors as an additional tool to evaluate ongoing operating results and trends and in comparing our financial results with other companies in our industry, many of which present similar non-GAAP financial measures. Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable financial measures prepared in accordance with GAAP and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. A reconciliation of our historical non-GAAP financial measures to the most directly comparable GAAP measures has been provided in the financial statement tables included in this press release, and investors are encouraged to review these reconciliations.
Annual revenue run-rate
We calculate annual revenue run-rate (“ARR”) at the end of each month as the sum of: (1) the product of the current month’s monthly recurring revenue (“MRR”) multiplied by twelve (to prospectively annualize subscription revenue), and (2) the trailing twelve-month partner and services revenue, including non-recurring services revenue, such as one-time partner integration fees and store-launch services. MRR includes BigCommerce platform subscription fees and invoiced growth adjustments as customers’ businesses grow past contracted order thresholds after a threshold has been met. It also includes recurring professional services revenue, such as recurring technical account management services and product training services.
Accounts with greater than $2,000 ACV
We track the total number of accounts with annual contract value (“ACV”) greater than $2,000 (the “ACV threshold”) as of the end of a monthly billing period. To define this $2,000 ACV cohort, we include only subscription plan revenue and exclude partner and services revenue and recurring services revenue. We consider all stores added and subtracted as of the end of the monthly billing period. This metric includes accounts that may have either one single store above the ACV threshold or multiple stores that together exceed the ACV threshold. Accordingly, this cohort would include: (1) customers on Enterprise plans, (2) customers on Pro plans, and (3) customers with multiple plans that together exceed the ACV threshold.
Average revenue per account
We calculate average revenue per account (ARPA) for accounts above the ACV threshold at the end of a period by including customer-billed revenue and an allocation of partner and services revenue.
Adjusted EBITDA
We define Adjusted EBITDA as our net loss, excluding the impact of stock-based compensation expense, depreciation and amortization expense, interest income, interest expense, changes in fair value of financial instruments, and our provision for income taxes. The most directly comparable GAAP measure is net loss.
Non-GAAP Operating Loss
We define Non-GAAP Operating Loss as our GAAP Loss from operations, excluding the impact of stock-based compensation expense. The most directly comparable GAAP measure is our loss from operations.
Non-GAAP Net Loss
We define Non-GAAP Net Loss as our GAAP net loss, excluding the impact of stock-based compensation expense. The most directly comparable GAAP measure is our net loss.
Non-GAAP Net Loss per Share
We define Non-GAAP Net Loss per Share as our Non-GAAP Net Loss, defined above, divided by our basic and diluted GAAP weighted average shares outstanding. The most directly comparable GAAP measure is our net loss per share.
Source: BigCommerce Holdings, Inc.
Consolidated Balance Sheet (in thousands, except per share amounts)
September30,
December31,
2020
2019
Assets
Current assets
Cash and cash equivalents
$
178,846
$
7,795
Restricted cash
1,133
1,355
Accounts receivable, net
21,458
15,548
Prepaid expenses and other assets
9,259
5,296
Deferred commissions
2,224
1,677
Total current assets
212,920
31,671
Property and equipment, net
7,242
8,241
Right-of-use-assets
12,345
14,065
Deferred commissions, net of current portion
2,995
2,087
Total assets
$
235,502
$
56,064
Liabilities, convertible preferred stock, and stockholders’ equity (deficit)
Current liabilities
Accounts payable
$
5,566
$
3,881
Accrued liabilities
2,584
5,849
Deferred revenue
11,842
9,399
Current portion of long-term debt
11,895
2,363
Current portion of operating lease liabilities
3,074
2,718
Other current liabilities
17,516
9,704
Total current liabilities
52,477
33,914
Deferred revenue, net of current portion
1,127
1,492
Long-term debt, net of current portion
10,000
38,502
Operating lease liabilities, net of current portion
13,400
15,705
Total liabilities
77,004
89,613
Commitments and contingencies (Note 6)
Convertible preferred stock
Convertible preferred stock, $0.0001 par value; 10,000 and 102,031 shares authorized at September 30, 2020 and December 31, 2019, respectively; 0 shares and 102,031 shares issued and outstanding, at September 30, 2020 and December 31, 2019, respectively.
—
223,754
Stockholders’ equity (deficit)
Common stock, $0.0001 par value; 500,000 shares Series 1 and, 5,051 shares Series 2 authorized at September 30, 2020 and 200,000 shares voting and 30,000 shares of non-voting authorized at December 31, 2019; 62,757, and 18,544 shares Series 1 and voting issued and, outstanding at September 30, 2020 and December 31, 2019, respectively and 5,051 and 0 shares Series 2 and non-voting issued and, outstanding at September 30, 2020, and December 31, 2019, respectively.
7
2
Additional paid-in capital
457,681
17,244
Accumulated deficit
(299,190
)
(274,549
)
Total stockholders’ equity (deficit)
158,498
(257,303
)
Total liabilities, convertible preferred stock, and stockholders’ equity (deficit)
$
235,502
$
56,064
Consolidated Statements of Operations (in thousands, except per share amounts)
Three months ended September30,
Nine months ended September30,
2020
2019
2020
2019
Revenue
$
39,735
$
28,264
$
109,225
$
81,083
Cost of revenue
8,593
6,806
23,910
18,958
Gross profit
31,142
21,458
85,315
62,125
Operating expenses:
Sales and marketing
19,328
15,346
51,893
45,445
Research and development
12,124
10,862
34,390
32,162
General and administrative
9,745
5,527
23,925
15,748
Total operating expenses
41,197
31,735
110,208
93,355
Loss from operations
(10,055
)
(10,277
)
(24,893
)
(31,230
)
Interest income
2
4
20
245
Interest expense
(741
)
(359
)
(2,655
)
(1,129
)
Change in fair value of financial instruments
—
—
4,413
—
Other expense
(75
)
(86
)
(238
)
(163
)
Loss before provision for income taxes
(10,869
)
(10,718
)
(23,353
)
(32,277
)
Provision for income taxes
(14
)
7
6
21
Net loss
$
(10,855
)
$
(10,725
)
$
(23,359
)
$
(32,298
)
Dividends and accretion of issuance costs on Series F preferred stock
$
2,732
$
(1,865
)
$
(962
)
$
(5,417
)
Net loss attributable to common stockholders
$
(8,123
)
$
(12,590
)
$
(24,321
)
$
(37,715
)
Basic and diluted net loss per share attributable to common stockholders
$
(0.16
)
$
(0.70
)
$
(0.83
)
$
(2.13
)
Weighted average shares used to compute basic and diluted net loss per share attributable to common stockholders
49,355
17,959
29,145
17,681
Revenue by Source (in thousands)
Three months ended September30,
Nine months ended September30,
(Unaudited, in thousands)
2020
2019
2020
2019
Subscription solutions
$
26,545
$
21,021
$
74,041
$
60,406
Partner and services
13,190
7,243
35,184
20,677
Total revenue
$
39,735
$
28,264
$
109,225
$
81,083
Consolidated Statements of Cash Flows (in thousands)
Nine months ended September30,
Nine months ended September30,
2020
2019
Cash flows from operating activities:
Net loss
$
(23,359
)
$
(32,298
)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization
2,377
1,751
Amortization of discount on debt
480
41
Stock-based compensation
5,038
2,231
Allowance for credit losses
1,198
741
Accretion on discount to marketable securities
—
(69
)
Change in fair value of financial instrument
(4,413
)
—
Changes in operating assets and liabilities:
Accounts receivable
(7,473
)
(3,587
)
Prepaid expenses
(3,675
)
1,612
Deferred commissions
(1,454
)
(2,482
)
Accounts payable
1,685
(1,050
)
Accrued and other current liabilities
4,319
2,920
Deferred revenue
2,077
(920
)
Net cash used in operating activities
(23,200
)
(31,110
)
Cash flows from investing activities:
Purchase of property and equipment
(1,378
)
(5,326
)
Maturity of marketable securities
—
23,450
Net cash (used in) provided by investing activities
(1,378
)
18,124
Cash flows from financing activities:
Proceeds from exercise of stock options
1,947
471
Payment of dividends
(12,814
)
—
Proceeds from issuance of common stock upon initial public offering, net of underwriting discounts and commissions and other offering costs
171,128
—
Proceeds from debt
41,861
8,591
Repayment of debt
(6,715
)
(1,538
)
Net cash provided by financing activities
195,407
7,524
Net change in cash and cash equivalents and restricted cash
170,829
(5,462
)
Cash and cash equivalents and restricted cash, beginning of period
9,150
13,897
Cash and cash equivalents and restricted cash, end of period
$
179,979
$
8,435
Supplemental cash flow information:
Cash paid for interest
$
1,519
$
1,117
Noncash investing and financing activities:
Conversion of convertible preferred stock into common stock upon initial public offering
$
211,899
$
—
Conversion of convertible debt into common stock upon initial public offering
$
50,172
$
—
Reconciliation from GAAP to Non-GAAP Results (in thousands, except per share amounts)
Three months ended September30,
Nine months ended September30,
2020
2019
2020
2019
Operating loss
$
(10,055
)
$
(10,277
)
$
(24,893
)
$
(31,230
)
Less: Stock-based compensation expense
2,868
815
5,038
2,231
Non-GAAP operating loss
(7,187
)
(9,462
)
(19,855
)
(28,999
)
Non-GAAP operating margin
(18.1
)%
(33.5
)%
(18.2
)%
(35.8
)%
Three months ended September30,
Nine months ended September30,
2020
2019
2020
2019
Net loss
$
(10,855
)
$
(10,725
)
$
(23,359
)
$
(32,298
)
less: Stock-based compensation expense
2,868
815
5,038
2,231
less: Change in fair value of financial instruments
—
—
(4,413
)
—
Non-GAAP net loss
(7,987
)
(9,910
)
(22,734
)
(30,067
)
Non-GAAP net loss per share
(0.16
)
(0.55
)
(0.78
)
(1.70
)
Weighted average shares used to compute basic and diluted net loss per share attributable to common stockholders
49,355
17,959
29,145
17,681
Non-GAAP net loss margin
(20.1
)%
(35.1
)%
(20.8
)%
(37.1
)%
Three months ended September30,
Nine months ended September30,
2020
2019
2020
2019
Net loss
$
(10,855
)
$
(10,725
)
$
(23,359
)
$
(32,298
)
Stock-based compensation expense
2,868
815
5,038
2,231
Depreciation and amortization
699
635
2,377
1,751
Interest income
(2
)
(4
)
(20
)
(245
)
Interest expense
741
359
2,655
1,129
Change in fair value of financial instrument
—
—
(4,413
)
—
Provision for income taxes
(14
)
7
6
21
Adjusted EBITDA
$
(6,563
)
$
(8,913
)
$
(17,716
)
$
(27,411
)
Adjusted EBITDA Margin
(16.5
)%
(31.5
)%
(16.2
)%
(33.8
)%
Nine months ended September30,
Nine months ended September30,
(in thousands)
2020
2019
Net cash used in operating activities
$
(23,200
)
$
(31,110
)
Capital expenditures
$
(1,378
)
$
(5,326
)
Free cash flow
$
(24,578
)
$
(36,436
)
Reconciliation from GAAP to Non-GAAP Results (continued) (in thousands, except per share amounts)
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
