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ChannelAdvisor Announces First Quarter 2014 Financial Results

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 quarter ended March 31, 2014.

"We are pleased to start the year with quarterly core revenue growth of 32% year-over-year, which exceeded our expectations and is the fastest organic quarterly growth rate we've experienced in the last seven years," said Scot Wingo, Chief Executive Officer of ChannelAdvisor. "The accelerating revenue growth we saw in the first quarter is evidence that our investments in sales and marketing are generating the return we expected."

First Quarter 2014 Financial Results

  • Total revenue of $19.3 million for the first quarter of 2014 increased 30 percent compared with total revenue of $14.9 million for the first quarter of 2013.
  • Core revenue increased by 32 percent to $19.0 million from $14.4 million in the first quarter of 2013. 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 $(9.4) million compared with a net loss of $(2.7) million in the first quarter of 2013. GAAP net loss per share was $(0.39), based on 24.2 million weighted average shares outstanding, compared with a net loss per share of $(2.10), based on 1.3 million weighted average shares outstanding in the year-ago period.
  • Non-GAAP net loss, which excludes the impact of non-cash stock-based compensation, was $(8.7) million compared with non-GAAP net loss of $(2.3) million for the first quarter of 2013. Non-GAAP net loss per share was $(0.36) for the first quarter of 2014, based on 24.2 million weighted average shares outstanding, compared with a non-GAAP net loss per share of $(0.16) for the first quarter of 2013, based on 14.7 million weighted average shares outstanding. Per share figures for the first quarter of 2013 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 $(7.3) million for the first quarter of 2014 compared with $(0.9) million for the first quarter of 2013. Adjusted EBITDA excludes depreciation, amortization, income tax expense, interest and stock-based compensation expenses.
  • Cash at quarter end totaled $95.0 million, compared with $104.4 million at the end of 2013. The decrease was primarily due to investments in our long-term growth.

Recent Business Highlights

  • Added 136 net core customers in the first quarter. Total core customer count was 2,565 at the end of the first quarter, an increase of 28 percent from 1,997 core customers at the end of the first quarter of 2013.
  • Added new top-tier customers including Air & Water, The Clorox Company, CWI, Inc., Denby Retail, Ltd., JB Hi-Fi Limited, Kirkland's, Inc., Styletread and The Talbots, Inc.
  • Average revenue per core customer, calculated on a trailing twelve-month basis, increased 7 percent to $30,883 for the first quarter, compared with $28,730 for the first quarter of 2013.
  • Fixed subscription fees were 73 percent of total revenue and variable subscription fees were 27 percent of total revenue for the first quarter of 2014. This compares to 65 percent and 35 percent, respectively, for the first quarter of 2013.
  • Subscription dollar retention rate, the primary metric that we use to measure customer retention, exceeded 100 percent for the quarter, consistent with recent performance.
  • Hosted Catalyst Americas Conference at the Wynn Las Vegas on March 10-12.
  • Introduced ChannelAdvisor Digital Marketing, a retail-focused answer to the complicated world of online advertising.
  • Integrated with Alibaba Group's Tmall Global Solution, helping retailers and manufacturers extend their businesses across borders.

Financial Outlook

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

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