ChannelAdvisor (ECOM) Tops Q2 EPS by 5c, Revenues Beat; Offers 3Q Revenue Guidance Above Consensus

ChannelAdvisor (NYSE: ECOM ) reported Q2 EPS of $0.33, $0.05 better than the analyst estimate of $0.28. Revenue for the quarter came in at $37.4 million versus the consensus estimate of $36.35 million.

Second Quarter 2020 Financial Results

• Revenue: Total revenue was $37.4 million for the second quarter 2020, an increase of 17.3% from the year-ago period. On a trailing twelve month basis, brands revenue continued to expand for the second quarter 2020 to a new high of 31.1% of total revenue. Variable revenues were $11.7 million, or 31.4% of total revenue for the second quarter 2020, compared with $6.2 million, or 19.5% of total revenue for the year-ago period. Fixed subscription revenues were $25.7 million, or 68.6% of total revenue for the second quarter 2020, compared with $25.7 million, or 80.5% of total revenue for the year-ago period.
• Gross Profit: GAAP gross profit was $30.4 million, representing a 81.2% gross margin for the second quarter 2020, compared with $24.8 million and 77.8%, respectively, for the year-ago period. Non-GAAP gross profit was $30.6 million, representing a 81.8% non-GAAP gross margin for the second quarter 2020, compared with $25.0 million and 78.4%, respectively, for the year-ago period. For a description of non-GAAP gross profit, non-GAAP gross margin and other non-GAAP measures included in this press release, including their potential limitations, see “Non-GAAP Financial Measures” below.
• Net Income (Loss): GAAP net income was $7.0 million for the second quarter 2020, compared with GAAP net loss of $(1.3) million for the year-ago period. GAAP net income per diluted share was $0.24 based on 29.7 million diluted weighted average shares outstanding for the second quarter 2020, compared with GAAP net loss of $(0.05) per diluted share based on 27.9 million diluted weighted average shares outstanding for the year-ago period. Non-GAAP net income was $9.8 million for the second quarter 2020, compared with non-GAAP net income of $1.5 million for the year-ago period. Non-GAAP net income per diluted share was $0.33 based on 29.7 million diluted weighted average shares outstanding for the second quarter 2020, compared with non-GAAP net income per diluted share of $0.05 based on 27.9 million diluted weighted average shares outstanding for the year-ago period.
• Adjusted EBITDA: Adjusted EBITDA, a non-GAAP measure, was $11.6 million for the second quarter 2020, compared with $3.0 million for the year-ago period. Adjusted EBITDA margin, which is adjusted EBITDA divided by revenue, was 30.9% for the second quarter 2020, compared with 9.4% for the year-ago period. Adjusted EBITDA for the twelve months ended June 30, 2020 totaled $32.6 million.
• Cash: Cash and cash equivalents totaled $63.9 million as of June 30, 2020, compared with $51.8 million as of December 31, 2019. Cash generated from operations was $13.5 million for the six months ended June 30, 2020, compared with $4.5 million for the year-ago period. Free cash flow, a non-GAAP measure, was $11.5 million for the six months ended June 30, 2020, compared with $3.0 million for the year-ago period.

"Our second quarter results were exceptional, with record revenues and record adjusted EBITDA both substantially exceeding our original guidance for the quarter," said David Spitz, ChannelAdvisor’s chief executive officer. "Strong revenues were driven by sustained and broad-based growth in GMV as e-commerce spending remained elevated throughout the quarter, consistent with broader e-commerce trends as the COVID-19 pandemic caused a shift in consumer buying behavior. Continued expense discipline and the scalability of our business model contributed to a significant improvement in profitability and cash flow as well. Although it remains difficult to forecast near-term GMV and variable revenues, we believe e-commerce trends are likely to remain strong and that we are well positioned to benefit from these trends."

GUIDANCE:

ChannelAdvisor sees Q3 2020 revenue of $34 million, versus the consensus of $33.2 million.

• ChannelAdvisor is issuing guidance foChannelAdvisor (NYSE: ECOM)
  r its third quarter 2020 but is not issuing guidance for the full year 2020.

For earnings history and earnings-related data on ChannelAdvisor (ECOM ) click here.

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