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ChannelAdvisor Corporation (ECOM)
Q2 2013 Results - Earnings Call Transcript
August 7, 2013 04:30 PM ET
John Baule - CFO
Scot Wingo - CEO and Chairman
David Spitz - President and COO
Heath Perry - Goldman Sachs
Brad Reback - Stifel
Michael Huang - Needham & Company
Chad Bartley - Pacific Crest
Karl Keirstead - BMO Capital Markets
Terry Tillman - Raymond James
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Thank you. Good afternoon and welcome to ChannelAdvisor’s conference call for the second quarter of 2013. I am John Baule, Chief Financial Officer of ChannelAdvisor. With me on the call today are Scot Wingo, CEO and Chairman and David Spitz, President and COO. After the market closed, we issued a press release with details on our second quarter performance. This can be accessed on the Investor Relations section of our website. In addition, this call is being recorded and a replay will be available following the conclusion of the call.
During today’s call, we will make statements related to our business that maybe considered forward-looking under federal securities law. These statements reflect our view only as of today and should not be considered representative of our views as of any subsequent date. We disclaim any obligation to update any forward-looking statements or outlook. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. These risks are summarized in the press release that we issued today.
For a further discussion of the material risk and other important factors that could affect our actual results, please refer to those contained in the final perspectives for our IPO which is on file with the SEC. Also during the course of today’s call, we will refer for certain non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in our press release. And finally at times in our prepared comments or responses to your questions, we may offer metrics that are incremental to our usually presentation to provide greater insight into the dynamics of our business or our quarterly results, please be advised that we may or may not continue to provide this additional detail on the future.
With that let me turn the call over to Scott for his prepared remarks.
Thanks John and welcome everyone to our first earnings call as a public company. We had a very strong second quarter with accelerating revenue growth that was twice the rate of year-over-year for e-commerce, revenue came in at 16 million, an increase of 29% from a year ago, core revenue grew 31% from a year ago. We believe we’ve been establish ChannelAdvisor as a leader in a large under served market that is still in its very early days. Our results for the second quarter reflect growing demand from online retailers for a robust cloud based platform in an environment of continuing secular growth of e-commerce.
Since this is our first call as a public company. I want you to take couple of minutes to provide you some background on ChannelAdvisor including the secular and business trends they are enabling us to capitalize on a significant opportunity in front of us. ChannelAdvisor is a leading provider of software and service solutions that enable online retailers automate, optimize and expand sales. Through a single integrated platform, we enable online retailers to reach buyers across three types of e-commerce channels.
Market places, comparison shopping engines and paid search. Many of you are already familiar with the secular trend of retail sales moving online, this is creating an e-commerce market that gain share and are now pacing the growth of overall retail sales. [For sure] expects that global e-commerce bidding will grow at a compounded annual growth rate of 15% to 1.1 trillion from 2011 to 2016. And in the second quarter e-commerce growth of 15% was consistent with the long term trend. Despite all the growth we experience in e-commerce online sales are still 18% of total retail sales in U.S. so plenty of room to be one in the secular trend. We track five new innovations that are driving the growth of e-commerce, the first of these is proliferation of online market places as a result of what I would like to call the Amazon affect.
Amazon third party market place has been so successful the numerous other retailers and non retailers such as Best Buy, Sears, Wal-Mart, Groupon and Newegg have all created their own third party market places. Next is mobile or local, for anticipates mobile commerce is going from $6 billion in 2011 to $31 billion in 2016 which represents a 39% compounded annual growth rate driving new intersections with local commerce such as the e-Bay Now project.
We expect the rising growth of social network such as Facebook, Twitter and (inaudible) be another long term e-commerce driver even though they are over lapping much today. For example in the second quarter both Pinterest and Twitter announce e-commerce oriented features initiative. The fourth way of innovation that we track is the global e-commerce opportunity.