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TheStreet Open House

ChannelAdvisor Announces Fourth Quarter And Full Year 2013 Financial Results

Stock quotes in this article: ECOM

ChannelAdvisor Corporation (NYSE: ECOM), a leading provider of cloud-based e-commerce solutions that enable retailers and manufacturers to increase global sales, today announced its financial results for the fourth quarter and full year ended December 31, 2013.

“We are pleased to report a record fourth quarter with total revenue of $20.5 million and a 30% year-over-year increase in core revenue. Full-year 2013 total revenue was $68.0 million with a 29% year-over-year increase in core revenue," said Scot Wingo, Chief Executive Officer of ChannelAdvisor. “Our revenue growth accelerated due to the secular e-commerce trends, as well as increased fragmentation and complexity. In 2013, we grew our customer base 26%, adding 501 customers and ending the year with 2,429 customers. This illustrates that retailers are partnering with ChannelAdvisor as their strategic cloud-based platform for managing and optimizing their e-commerce channels. With the solid success we have seen from our increased investments in sales and marketing, we plan to continue this strategy in 2014 in order to further capitalize on the significant opportunity ahead of us.”

Fourth Quarter 2013 Financial Results

  • Total revenue of $20.5 million for the fourth quarter of 2013 increased 28 percent compared with total revenue of $16.0 million in the fourth quarter of 2012.
  • Core revenue increased by 30 percent to $20.1 million from $15.4 million in the fourth quarter of 2012. The company’s method for calculating this and other key operating metrics that it reports is included later in this press release.
  • GAAP net loss was $(8.6) million compared with net income of $0.6 million in the fourth quarter of 2012. GAAP net loss per share was $(0.38), based on 22.7 million weighted average diluted shares outstanding, compared with net income per share of $0.04, based on 16.0 million weighted average diluted shares outstanding in the year-ago period.
  • Non-GAAP net loss, which excludes the impact of non-cash stock-based compensation expense and loss on extinguishment of debt, was $(4.8) million compared with non-GAAP net income of $0.9 million for the fourth quarter of 2012. Non-GAAP net loss per share was $(0.21) for the fourth quarter of 2013, based on 22.7 million weighted average diluted shares outstanding, compared with non-GAAP net income per share of $0.05 for the fourth quarter of 2012, based on 16.0 million weighted average diluted shares outstanding. Per share figures for the fourth quarter of 2012 assume that the company’s pre-IPO preferred stock was converted to common stock at the beginning of the quarter.
  • Adjusted EBITDA, a non-GAAP measure, was $(3.2) million for the fourth quarter of 2013 compared with $1.9 million for the fourth quarter of 2012. Adjusted EBITDA excludes depreciation, amortization, income tax, interest and stock-based compensation expenses, as well as loss on extinguishment of debt.
  • Cash at quarter end totaled $104.4 million, compared with $90.3 million at the end of the third quarter of 2013. The increase was primarily due to proceeds from our registered public follow-on offering in November, partially offset by the repayment of our debt and investments in our long-term growth.

Full Year 2013 Financial Results

  • Total revenue of $68.0 million for the year increased 27 percent compared with total revenue of $53.6 million in 2012.
  • Core revenue increased by 29 percent to $66.2 million from $51.2 million in 2012.
  • GAAP net loss was $(20.6) million compared with a net loss of $(4.9) million in the year ended 2012. GAAP net loss per share was $(1.51), based on 13.7 million weighted average shares outstanding, compared with a net loss per share of $(4.23), based on 1.2 million weighted average shares outstanding in the year-ago period.
  • Non-GAAP net loss was $(15.4) million compared with a non-GAAP net loss of $(4.3) million for the year ended 2012. Non-GAAP net loss per share was $(0.80) for 2013, based on 19.2 million weighted average shares outstanding, compared with a non-GAAP net loss per share of $(0.30) for 2012, based on 14.6 million weighted average shares outstanding. Per share figures for 2012 assume that the company’s pre-IPO preferred stock was converted to common stock at the beginning of the year.
  • Adjusted EBITDA was $(8.5) million in 2013 compared with $(0.3) million in 2012.

Recent Business Highlights

  • Added 142 net core customers in the fourth quarter. Total core customer count was 2,429 at the end of the fourth quarter, an increase of 26 percent from 1,928 core customers at the end of the fourth quarter of 2012.
  • Average revenue per core customer, calculated on a trailing twelve-month basis, increased 9 percent to $30,670 at the end of the fourth quarter, compared with $28,050 at the end of the fourth quarter of 2012.
  • Fixed subscription fees were 67 percent of total revenue and variable subscription fees were 33 percent of total revenue for 2013. This compares to 61 percent and 39 percent, respectively, for 2012.
  • Subscription dollar retention rate, the primary metric that we use to measure customer retention, exceeded 100 percent for the quarter, consistent with recent performance.
  • Processed $4.4 billion in total gross merchandise value in 2013, an increase of 26 percent from 2012.
  • Added new top-tier customers including Alex & Ani, BlueStem Brands, Quiksilver, TireBuyer.com and WMF Americas Group, Inc.
  • Expanded Webstores Amplifier solution with the addition of support for Shopify, allowing customers to maintain a single system of record within the ChannelAdvisor platform while automatically pushing inventory to a Shopify store.
  • Participated at the 2013 SEMA Auto Show at the Las Vegas Convention Center.
  • Recognized by the North Carolina Technology Association (NCTA) as the winner of this year’s NCTA 21 Software Company of the Year award.
  • Appointed industry veteran James Huang as managing director for Greater China.

Business Outlook

Based on information available as of today, ChannelAdvisor is issuing the following guidance for the first quarter and full year of 2014:

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