RESEARCH TRIANGLE PARK, N.C., Nov. 05, 2020 (GLOBE NEWSWIRE) -- ChannelAdvisor Corporation (NYSE: ECOM), a leading provider of cloud-based e-commerce solutions that enable brands and retailers to increase global sales, today reported financial results for the quarter ended September 30, 2020.

“We delivered strong financial results again in the third quarter, with revenue and adjusted EBITDA that both exceeded our guidance for the quarter,” said David Spitz, ChannelAdvisor’s chief executive officer. “What excites me even more is the strong performance we had in sales, especially with brands, and overall outstanding revenue retention for the quarter, both of which combined to drive an acceleration in fixed revenue growth. Our strategic shift towards brands has continued to pay off, with revenue growth from brands accelerating to 29% year over year for the quarter, and our solid overall execution in the quarter positions us for continued strong performance as we close out the year.”

Third Quarter 2020 Financial Results

• Revenue: Total revenue was $35.3 million for the third quarter 2020, an increase of 11.4% from the year-ago period. Brands revenue increased 29.3% from the year-ago period and reached a new high of 34.2% of total revenue. Variable revenue was $8.2 million, or 23.2% of total revenue for the third quarter 2020, compared with $5.8 million, or 18.5% of total revenue for the year-ago period. Fixed subscription revenue was $27.1 million, or 76.8% of total revenue for the third quarter 2020, compared with $25.8 million, or 81.5% of total revenue for the year-ago period.
• Gross Profit: GAAP gross profit was $27.6 million, representing a 78.2% gross margin for the third quarter 2020, compared with $24.4 million and 77.1%, respectively, for the year-ago period. Non-GAAP gross profit was $27.8 million, representing a 78.8% non-GAAP gross margin for the third quarter 2020, compared with $24.8 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: GAAP net income was $3.7 million for the third quarter 2020, compared with $1.7 million for the year-ago period. GAAP net income per diluted share was $0.12 based on 30.4 million diluted weighted average shares outstanding for the third quarter 2020, compared with $0.06 per diluted share based on 28.8 million diluted weighted average shares outstanding for the year-ago period. Non-GAAP net income was $6.2 million for the third quarter 2020, compared with $3.5 million for the year-ago period. Non-GAAP net income per diluted share was $0.20 based on 30.4 million diluted weighted average shares outstanding for the third quarter 2020, compared with $0.12 based on 28.8 million diluted weighted average shares outstanding for the year-ago period.
• Adjusted EBITDA: Adjusted EBITDA, a non-GAAP measure, was $7.4 million for the third quarter 2020, compared with $5.2 million for the year-ago period. Adjusted EBITDA margin, which is adjusted EBITDA divided by revenue, was 21.1% for the third quarter 2020, compared with 16.3% for the year-ago period. Adjusted EBITDA for the twelve months ended September 30, 2020 totaled $34.8 million.
• Cash: Cash and cash equivalents totaled $66.4 million as of September 30, 2020, compared with $51.8 million as of December 31, 2019. Cash generated from operations was $26.0 million for the nine months ended September 30, 2020, compared with $7.5 million for the year-ago period. Free cash flow, a non-GAAP measure, was $22.7 million for the nine months ended September 30, 2020, compared with $4.8 million for the year-ago period.

Recent Business Highlights

• Launch of ‘Shoppable Media’, a Comprehensive Suite of Multi-Channel Solutions for Brands: From inspiration to conversion, brands can ease the path to purchase directly from their websites and across various marketing and advertising channels with ChannelAdvisor’s Shoppable Media, a product offering that comprises Where to Buy Online, Where to Buy Local, Dynamic Shopping Links, and Buy Now Interstitial, a new dynamic linking feature.
• Search Terms Generator for Amazon: Seller Central merchants advertising and selling on Amazon through ChannelAdvisor can save time and resources with the Search Terms Generator. This new feature automatically generates Search Terms and provides updates based on advertising performance to help improve organic listings.
• New Marketplace Integrations: ChannelAdvisor is committed to helping brands and retailers reach new global audiences through the support of Bunnings Marketlink (AU), Grupo Exito (US CBT to CO), Kroger (US), Love the Sales (UK), Onceit (NZ), and Stockd (US), adding to the global total of more than 100 marketplace integrations.
• New First-Party Retail Dropship Connections: ChannelAdvisor added support for first-party integrations with Bluestem (US), JClub (US), OTTO VAL (DE), and Walgreens (US).
• Enhanced Client Experience to Improve Operational Agility:
  • New Knowledge Center: New services IT infrastructure improves the ability of clients to answer questions, solve problems and learn new features. With improved self-help content that is easier to find, forums to encourage and facilitate client engagement, and a new set of tools to enable team members to better address client questions, ChannelAdvisor continues to invest in making our clients successful.
  • New Order Pipeline Dashboard: With this new analytics tool, ChannelAdvisor continues to help brands and retailers minimize costly order processing delays, especially during peak volume periods with powerful visualization and monitoring of where those delays may be occurring in the processing pipeline.
  • New Channel Health Console: Allows ChannelAdvisor Marketplace users to understand and gauge operational health across all channel integrations, enabling prioritization and focus on the most important areas of the business.
  • Deal Planner: Introduces a new way to manage short-term promotions in dozens of marketplaces. Brands and retailers can create deals for a specified time period and then adjust the price for the deal’s duration. When the time window expires, the listing returns to the original price.
• ChannelAdvisor Consumer Survey Indicates Significant Shift In Online Shopping Behavior: Results from our recent consumer survey of more than one thousand active shoppers in the US and the UK indicated significant shifts in online shopping behavior among purchase-ready consumers across all age groups and genders during the pandemic. ChannelAdvisor presented the survey findings in a webinar that can be found on our corporate website.
• Customer Details: ChannelAdvisor recently added notable new customers including Epson U.S., Gant, Geox, Omron Healthcare Europe and Universal Music Group Germany, and expanded its relationship with customers such as Brady Corporation and Simone Perele SAS.

About ChannelAdvisor

ChannelAdvisor (NYSE: ECOM) is a leading e-commerce cloud platform whose mission is to connect and optimize the world’s commerce. For nearly two decades, ChannelAdvisor has helped brands and retailers worldwide improve their online performance by expanding sales channels, connecting with consumers around the world, optimizing their operations for peak performance and providing actionable analytics to improve competitiveness. Thousands of customers depend on ChannelAdvisor to securely power their sales and optimize fulfillment on channels such as Amazon, eBay, Facebook, Google, Walmart, and hundreds more. For more information, visit www.channeladvisor.com.