E-commerce technology company ChannelAdvisor reported that first-quarter revenue rose 30 percent as its aggressive investment in sales and marketing continues to pay off.
The Morrisville company’s revenue and its bottom line, which were announced after the markets closed Monday, also were slightly ahead of analysts’ projections.
However, in after-hours trading, shares initially climbed as much as 6 percent but then reversed course and dipped about 2 percent.
CEO Scot Wingo said during a conference call with analysts that revenue from core operations rose 32 percent, more than twice the rate of growth for the e-commerce market as a whole.
“In addition to record revenue growth, we also booked more business in Q1 than any quarter in the company’s history and, despite the record bookings, we still finished with the largest pipeline in the company’s history,” said David Spitz, president and chief operating officer. “In short, we are just warming up.”
ChannelAdvisor reported after the markets closed that revenue totaled $19.3 million, versus $14.9 million a year ago. Analysts were expecting revenue to be $19 million, according to those polled by Thomson Reuters.
The company’s net loss, after excluding certain expenses, was $8.7 million, or 36 cents per share, versus a loss of $2.3 million a year ago. Analysts were expecting a a slightly wider loss of 37 cents per share.
ChannelAdvisor’s cloud-based software enables retailers to integrate and manage online sales across a multitude of sales channels. Customers also use its software to automatically advertise products on search engines such as Google and Yahoo and to promote products on Facebook.
ChannelAdvisor has been investing heavily in sales and marketing. That means sacrificing short-term results – especially since it takes time for new salespeople to ramp up sales – in order to accelerate its revenue trajectory over the long-term.
The company has 2,565 customers but estimates there are well over 100,000 potential customers for its software worldwide, leaving plenty of room for growth.
“That’s why we have been investing so aggressively,” Spitz said.
The company’s roster of customers has risen 28 percent in the past 12 months.
At the same time, ChannelAdvisor’s sales and marketing staff has climbed from 216 employees at the end of the first quarter a year ago to 344 today, an increase of about 59 percent. Overall, ChannelAdvisor has more than 600 employees.
Earlier in the day, the company’s shares rose 91 cents to $28.51. Its shares are down about 32 percent for the year but remain roughly twice the price they fetched when the company went public 12 months ago.