ChannelAdvisor CEO Scot Wingo said Thursday that although the e-commerce technology company still expects revenue to grow at least 20 percent a year over the long-term, this year’s revenue will fall short of that mark.
The Morrisville-based company is projecting that revenue this year will range between $94 million and $97 million, which would be an increase of 11 percent to 14 percent over its 2014 revenue.
“I know that some of you are disappointed with the lower-than-anticipated growth we are expecting in 2015 and, quite frankly, so am I,” Wingo told analysts during a conference call.
The company’s disappointing projection comes on the heel’s of last month’s announcement that the company’s fourth-quarter revenue would fall short of expectations. That triggered a 54 percent plummet in the company’s stock.
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ChannelAdvisor issued its actual fourth-quarter numbers Thursday.
Revenue rose 16 percent to $23.8 million. The company also posted a $3.4 million loss, or 14 cents per share, after excluding certain expenses, versus a loss of $4.8 million a year ago.
“Although the fourth quarter was disappointing, it is important to keep in context, we continue to grow at a healthy pace,” said David Spitz, the company’s president and chief operating officer. However, prior to issuing its advisory last month, the company was projecting revenue would range between $25.6 million and $26.1 million.
ChannelAdvisor’s cloud-based software enables retailers to integrate and manage online sales across a multitude of sales channels. Retailers also use its software to automatically advertise products on search engines such as Google and Yahoo and to promote products on Facebook.
Company executives said they had already altered some pricing policies and are considering other changes that would benefit revenue. But, said Spitz, “it will take time for the changes we are implementing to impact our top line.”
Revenue was hurt by a shift by consumers to larger online retailers; larger retailers get a volume discount from ChannelAdvisor.
Also, revenue was depressed by retailers opting for new contracts that call for higher minimum sales volume. That affects revenue because customers typically pay a fixed fee on the minimum sales volume anticipated by their contracts plus additional fees, at a higher rate, for sales that exceed that amount.
Chief Financial Officer John Baule said that ChannelAdvisor has changed its pricing so that when customers renegotiate contracts for higher sales volumes, the end result will be “more advantageous” to ChannelAdvisor.
In addition, Spitz said the company has “adopted an internal policy to discourage such upgrades except when contractually obligated and requested” by a customer.
ChannelAdvisor issued its fourth-quarter results Thursday after the markets closed. Earlier in the day, its shares closed at $9.41, up 18 cents. The stock’s 52-week high is nearly $50.
For all of 2014, ChannelAdvisor’s revenue rose 25 percent to $84.9 million. Its loss for the year was $26 million after excluding certain expenses, versus a $15.4 million loss in 2013.