ChannelAdvisor posted a better-than-expected 15 percent jump in revenue in the third quarter and reported encouraging results for a new enhancement to its e-commerce technology platform.
The Morrisville company reported that revenue totaled $28 million, up from $24.4 million a year ago and about $800,000 more than analysts polled by Bloomberg News were projecting. Revenue rose 18 percent after adjusting for currency fluctuations.
ChannelAdvisor’s adjusted net income, which excludes stock-based compensation, was about $300,000, down from a net loss of $1.7 million a year ago.
The company also continued to make progress on its focus on larger, more lucrative customers.
Chief Financial Officer Mark Cook said that during the quarter the company ended relationships with 46 business customers who had contracted to sell at least $50,000 in merchandise annually and added 48 customers who committed to sell in excess of $100,000.
Overall, the company has 2,880 customers, two more than it had at the end of the second quarter. But the number of customers that have committed to $100,000-plus in annual sales has jumped 42 percent from a year ago.
ChannelAdvisor’s cloud-based software enables retailers to integrate and manage online sales across a multitude of channels. Retailers also use its software to automatically advertise products on search engines.
Last month the company launched several major enhancements to its technology platform, including a Repricer for retailers that sell on Amazon and Jet.com. The Repricer constantly surveys prices charged by competitors who offer the same product and then automatically reprices the customer’s offering – within set parameters – to make it more attractive and appear more prominently on the website.
Early adapters of the Repricer have reported double-digit sales growth “while simultaneously expanding profit margins,” Spitz said.
“These results exceeded expectations and were so strong, in fact, that we are rushing to convert hundreds of customers to this new Repricer in advance of the holidays,” Spitz said.
The company projected that revenue would rise between 8 percent and 9 percent in the fourth quarter compared to a year ago.
Cook said that currency fluctuations, especially the weak British pound, would shave fourth-quarter revenue growth by about 4 percentage points. In addition, he said, the year-over-year comparison was challenging because the company enjoyed an “exceptionally strong revenue performance” in the fourth quarter of 2015.
Spitz said the company continues to expect an “inflection in growth” in 2017 but gave no specifics.
ChannelAdvisor issued its quarterly results after the markets closed Thursday. Earlier in the days, its shares closed at $10.50, down 20 cents. Its shares have fallen 24 percent this year.