Revenue for e-commerce vendor ChannelAdvisor Corp. increased 10.7% to $30.0 million in Q2 2017, up from $27.1 million, ChannelAdvisor reported in its most recent quarterly earnings.
ChannelAdvisor, which offers a number of retail services including helping retailers sell on online marketplaces, works with more than 200 retailers in the Internet Retailer 2017 Top 1000, such as Office Depot Inc. (No. 13), Lenovo Group Ltd. (No. 15) and Bedding Pros LLC (No. 433). 127 retailers in the Top 1000 use ChannelAdvisor to manage their marketplace sales.
Key to ChannelAdvisor’s growth is its ongoing shift to acquire larger retailers and brands as customers—a change from providing services primarily to small and midsized online retailers. As a result, it had a net gain of two more customers in the second quarter compared with first quarter, the company said last week. ChannelAdvisor now has 2,906 customers, compared with 2,878 a year earlier. New clients added in the quarter include Fossil Group, HP Co. Asia-Pacific, VTech and a top 10 global beauty company.
Also indicative of its overall strategic shift is the vendor’s average revenue per customers increasing 10.9% to $41,029 for the 12 months ended June 30, compared with $37,000 for the 12 months ended June 30, 2016. Additionally, the company signed deals with 10 customers in the quarter with a committed annual contract of at least $100,000 each, compared with six such deals in the first quarter, CEO David Spitz said.
“We remain encouraged by growth in revenue per customer, a sign of progress as management continues to focus on attracting larger enterprise customers as well as increasing deal size from existing customers,” Colin Sebastian, e-commerce investment analyst at Robert W. Baird, wrote in a note to investors.
Along with recruiting big retailers, ChannelAdvisor is pursuing more branded manufacturers looking to sell direct-to-consumer as well as on online marketplaces, particularly on Amazon.
“I’m also excited to report that this was our best quarter ever in terms of signing new brands, highlighting the progress we’ve made in positioning ChannelAdvisor to serve this important new customer segment as they transition to a digital world,” Spitz said.
He went on to say that brands are seeking a “holistic Amazon strategy,” and are spending more advertising dollars on Amazon. Brands also need help with fulfillment, “as the on-demand nature of e-commerce forces everyone to evolve from shipping pallets by the truckload to shipping individual orders to consumers,” Spitz said.
ChannelAdvisor acquired fulfillment and logistics vendor HubLogix in May. HubLogix has 150 fulfillment partners and automates order management by connecting online retailers to distribution and fulfillment centers. The financial impact of the acquisition will be immaterial in 2017, ChannelAdvisor says.
The e-commerce vendor says revenue in China in the second quarter grew at the fastest rate in more than a year. Therefore, ChannelAdvisor expects to see more growth in Asia and plans on increasing investments in China in 2018 and expanding to Japan.
For the second quarter, the company had a net loss net loss of $4.0 million, compared with a loss of $6.7 million in Q2 2016.
For the six months ended June 30, ChannelAdvisor Corp. reports:
- Revenue of $58.3 million, up 9.2% from $53.4 million a year ago.
- Net loss of $12.0 million, compared with a net loss of $11.3 million.