02/11/2017 ChannelAdvisor Announces Third Quarter 2017 Financial Results
Revenue of $30.1 million increases 8 percent year-over-year
GAAP net loss of $(4.1) million
Adjusted EBITDA of $0.4 million exceeds guidance
Research Triangle Park, N.C., Nov. 02, 2017 (GLOBE NEWSWIRE) — ChannelAdvisor Corporation (NYSE:ECOM), a leading provider of cloud-based e-commerce solutions that enable retailers and branded manufacturers to increase global sales, today announced its financial results for the quarter ended September 30, 2017.
“Revenue in the third quarter was at the top end of our guidance range,” said David Spitz, CEO of ChannelAdvisor. “This revenue, combined with our careful expense management, produced adjusted EBITDA that was above the high end of our guidance. Our long-term trend of increasing average revenue per customer continued in the third quarter, reflecting both the value we bring to customers, as well as our focus on larger deals. In addition, we are encouraged by growing interest from brands and manufacturers looking to partner with us for their marketplace strategies. We were also pleased to see our international revenue increase 16% year over year for the quarter. Offsetting our overall performance in the quarter was a slower than expected recovery in digital marketing, as well as a sales reorganization in North America that impacted execution in the quarter. As a result of these factors, we are now moderating our revenue and adjusted EBITDA expectations for full year 2017, but we remain confident in our ability to drive faster growth next year, as these changes in the North America sales organization are designed to replicate the strong results we have seen internationally following similar organizational changes earlier in the year. With these changes and continued investments in our technology leadership, we are confident we are now even better positioned to make improving progress toward our long-term financial targets.”
Third Quarter 2017 Financial Results
- Total revenue of $30.1 million for the third quarter of 2017 increased 8 percent compared with total revenue of $28.0 million for the third quarter of 2016.
- GAAP net loss was $(4.1) million compared with GAAP net loss of $(2.6) million in the third quarter of 2016. GAAP net loss per share was $(0.15), based on 26.4 million weighted average shares outstanding, compared with a GAAP net loss per share of $(0.10) in the year-ago period, based on 25.7 million weighted average shares then outstanding.
- Non-GAAP net loss, which excludes the impact of non-cash stock-based compensation, was $(1.2) million for the third quarter of 2017 compared with non-GAAP net income of $0.3 million for the third quarter of 2016.
- Adjusted EBITDA, a non-GAAP measure, was $0.4 million for the third quarter of 2017 compared with $2.2 million for the third quarter of 2016. Adjusted EBITDA excludes depreciation, amortization, income tax expense (benefit), interest, and stock-based compensation expense.
- Cash and cash equivalents at quarter-end totaled $54.2 million, compared with $57.9 million at the end of the second quarter of 2017.
Recent Business Highlights
- Average revenue per customer, calculated on a trailing twelve-month basis, increased 9 percent to $41,748 for the twelve months ended September 30, 2017, compared with $38,400 for the twelve months ended September 30, 2016. Total customer count was 2,902 at the end of the third quarter of 2017, compared with 2,880 customers at the end of the third quarter of 2016. These metrics do not include approximately 50 net new customers acquired with our acquisition of HubLogix Commerce Corp. during the second quarter of 2017.
- Fixed subscription fees were 79 percent of total revenue and variable subscription fees were 21 percent of total revenue for the third quarter of 2017. This compares to 80 percent and 20 percent, respectively, for the third quarter of 2016.
- Added new top-tier customers including Edgewell Personal Care Oceania, Gildan, LG Electronics Nordic, RadioShack, and Stanley Black & Decker.
- Released new platform capabilities in the company’s second release this year, featuring an integration for Amazon Marketing Services (AMS), the introduction of ChannelAdvisor’s new Price Manager and Demand Forecaster, along with support for eBay Guaranteed Delivery and Amazon Seller Fulfilled Prime in the UK and Germany.
- Expanded its research and development team with a new office in Madrid, Spain, and announced plans to open an office in Denver, CO.
- Announced support for both Catch and Amazon Marketplaces in Australia.
- Recognized as one of the Triangle Business Journal’s 2017 Best Places to Work and named a finalist for the NC Tech Awards – Use of Technology, E-Commerce award.
Based on information available as of today, ChannelAdvisor is issuing the following guidance for the fourth quarter and full year of 2017:
Fourth Quarter 2017
- Total revenue between $34.0 million and $34.6 million.
- Adjusted EBITDA between $3.7 million and $4.3 million.
- Stock-based compensation expense between $3.0 million and $3.4 million.
- 26.6 million weighted average shares outstanding.
Full Year 2017
- Total revenue between $122.4 million and $123.0 million.
- Adjusted EBITDA between $4.4 million and $5.0 million.
- Stock-based compensation expense between $12.1 million and $12.5 million.
- 26.4 million weighted average shares outstanding.
Refer to the “Adjusted EBITDA Guidance Reconciliation” table included with the financial tables at the end of this release for the reconciliation to the most comparable GAAP financial measure.
Conference Call Information
|What:||ChannelAdvisor Third Quarter 2017 Financial Results Conference Call|
|When:||Thursday, November 2, 2017|
|Time:||4:30 p.m. ET|
|Live Call:||(855) 638-4821, Passcode 2143219, Domestic|
|(704) 288-0612, Passcode 2143219, International|
|Webcast:||http://ir.channeladvisor.com (live and replay)|
Key Operating Metrics
Average revenue per customer is revenue divided by the average monthly number of customers during the period, which is calculated by taking the sum of the number of customers at the end of each month in the period and dividing by the number of months in the period.
Number of customers includes all customers who subscribe to at least one of our solutions, but excludes customers acquired from our acquisition of HubLogix and customers who subscribe only to certain legacy product offerings that are no longer part of our strategic focus.
Non-GAAP Financial Measures
This press release contains the following non-GAAP financial measures: non-GAAP net (loss) income and adjusted EBITDA.
ChannelAdvisor believes that these non-GAAP measures of financial results provide useful information to management and investors relating to ChannelAdvisor’s financial condition and results of operations. The company’s management uses these non-GAAP measures to compare the company’s performance to that of prior periods for trend analyses, and for budgeting and planning purposes. The company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the company’s financial measures with other software companies, many of which present similar non-GAAP financial measures to investors, and that it allows for greater transparency with respect to key metrics used by management in its financial and operational decision-making.
Management of the company does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses that are required by GAAP to be recorded in the company’s financial statements. In order to compensate for these limitations, management presents non-GAAP financial measures together with GAAP results. Non-GAAP measures should be considered in addition to results and guidance prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. Reconciliation tables of the most comparable GAAP financial measures to the non-GAAP financial measures used in this press release are included with the financial tables at the end of this release. ChannelAdvisor urges investors to review the reconciliation and not to rely on any single financial measure to evaluate the company’s business. In addition, other companies, including companies in our industry, may calculate similarly named non-GAAP measures differently than we do, which limits their usefulness in comparing our financial results with theirs.