ECOM - Earnings call transcript Q3 2017

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Operator

Good day, ladies and gentlemen, and welcome to the Third Quarter 2017 ChannelAdvisor Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] I would now like to introduce your host for today's conference Garo Toomajanian, Investor Relations. Please go ahead, sir.

Garo Toomajanian

Thanks. to call welcome quarter the and XXXX. of afternoon ChannelAdvisor's for conference third Good Garo with Officer; Toomajanian, call is name My and David ChannelAdvisor's Financial ChannelAdvisor's Cook, today me Spitz, Chief Mark Executive and Chief Officer. are the on issued quarter today, on quarter XXXX. and well full market as release outlook our third press we year the with a After for performance, as closed details our the fourth the Investor ir.channeladvisor.com. This Relations of press accessed release at can our on be website section

and recorded a will In addition, being this of is after available call. conclusion replay the call be the

any our our today's that Federal risks date. summarized subsequent will During to reflect any to subject cause of a statements considered variety we These that make views issued we outlook. call, materially These risks We of differ press update from should actual to Laws. today. or are be statements our under could as related forward-looking statements of and and to in These only as uncertainties be the today, are business of any considered release views statements that results may obligation disclaim not forward-looking Securities expectations. representative

are results, further on contained XX-K could risks factors material For affect XX-Q, available website of as to Form www.sec.gov. in or other refer and important which our the our other discussion a our filings, the most Form actual please those that recent as at well SEC

comparable included measures certain excludes press A will we expense. interest most release. to depreciation, all stock-based expense, call, non-GAAP tax EBITDA, of measures, income and today's of reconciliation the refer GAAP course in the non-GAAP amortization, including financial is During adjusted our which measure to compensation

call into metrics to or in may the we additional With our dynamics your over business detail are let our me may our insight to in to may the prepared our incremental Finally, results. advised that to not turn or provide we responses greater presentation at that, of his remarks. times for quarterly remarks or prepared continue future. the be David? questions, usual offer that to Please David provide this

David Spitz

Thank you, Garo.

quarter representing in EBITDA Our of million range third of at revenues growth $XX.X end X%. delivered with of the our strong results and year-on-year mixed. guidance were the adjusted revenue high We

and saw also recovery XX% sales third than overall strong off region quarter. in in the continued marketing North strength productivity of expecting improve which revenue We in combination a U.S. our or P&L of our pay territory performance structure year-on-year we digital slower dividends grew and our in was was variable on that reorganization Offsetting American a we've the The our changes sales relatively sales performance, soft by a been and over latter time. primarily QX. will to a coming driven believe solid

our Europe to in in Asia-Pacific off. in year, part strong American QX the paid that North changes and revenue team performance have very evidenced growth international implemented by year-over-year quarter. successful the changes earlier as similar during These during sales the made the opening Vice Garabedian allocation and changes lead named appointed our quarter, processes modifications and accounts a to to strategic new Kevin the of of significant our Denver our office organization international regions follow delivered we third account we accelerating America in as sales the this North changes; created Notably Specifically President to team, quarter. announced XX% sales

XXXX. team far is our to changes, more in move not the changes with going we've North I teams improved and American that am from similar as America and seen we we Given behind bullish our decided aggressively success results international those should North such see into

as be moderately previously minutes. reflected recovering full expect in our sales revenue the anticipated updated previously year changes, more than slowly our of revenues with result we few that a anticipated Mark a these in will along provide As an to effect we digital marketing lower guidance of than

Now all a of areas a of lot about that that number up make prospects. in building momentum our said had long-term we of us optimistic

GMV, a drive Repricer growing well growth enhancements that QX, we at to eBay and primarily both sales sellers helps rate of in marketplace as the gross our growing and third believe First, strong our so store year fastest on quarter by year-over-year improvements same the We the like our in mix Algorithmic customer's well Chinese in on have platform channels. basis. this continued far continued performance our as GMV Amazon perform driven seen

team a strategic Second, of we partnership built this a during also standing multi-million invested in a QX, indirect dollar From revenue. sales already start team. pipeline incremental has new strategic potential

our have traction living direct especially sales companies through a selling are particular their seeing routes to packages that through our like for seen consumer for space new open path from demands our since new move been force. all in Amazon. the historically increased of digital We Indirect ChannelAdvisor market has customers is as logistics for selling marketplaces to

this indirect time And so our the over in channels excited revenues expect business become a uncovered has very about proportion a substantial team opportunities I'm to and time]. of I [short

China third continued XXXX. X% the for its us accelerating represented growth very to fastest drive to from growth we've of QX X% revenue in last in quarter, of in year-over-year the China up in Third, two seen that our rate strong QX years.

increase China this our on to XXXX investments in building to We continue expect momentum. in

retailers. decrease we declining third larger traditional basis, from I the the weakness Fourth, quarter year. new Now of than the partially recent the still did regular marketing help year-over-year please on capabilities, necessarily for we show providing decrease despite as note break In more to investment which we are from at year-on-year to smallest for digital gear here that to basis slowly least expect in our its for China was so brands marketing signs this general a saw while interest expected a understand but out far strong business don't quarter the up improvement, very investors contribution in Amazon will our recovering from on revenue region. offset intend additional particular

by marketing brands have As on I've competitors we that are this be pipeline whom inventory. is we out believe is believe initiatives, will our a them ultimately should I to struggling believe have heavy spend XXXX. retailers meaningful seen to table in many discussed environment to previously strategic positioned as our to drop extend reallocating digital Most should becoming us growth where speak this. we revenue integrate positive I'm anticipate this we marketplaces ad of ship virtual Therefore driven play although Amazon return these and have it a that Fifth, manage revenue and help portion of are Marketing marketing their optimistic year, unlikely rapidly well towards strong growth. and stakes stabilize growth value trends Services some we budgets in continues a advertising also gaining to renewed to to do are suppliers not to Amazon Unlike digital their of and price in momentum. changing we pay is see

and approach party integrated them and have join of has and we of join stay paying manage responsible team help target ever our including to HubLogix's executive someone suppliers, easier already our growing our customer on our services wholesale, supply integrate has added in platform dozen than in drop for network our Services. expanded was sellers experience and logistics this She President single retailers third become they here selling over acquisition ChannelAdvisor pleased us delivery. Six, platform. the out using like two more continued customers consumer get And with acquisition, most Beth recently excited allowed but Our are over network. Lenovo. of more a Segovia full to with ahead I'm of year can her finally, that caliber I'm even Vice platform the off. XX for platform as to successful logistics the fulfillment and in ChannelAdvisor's spectrum investments mostly a It customers we globally position to of making our or Beth disruptive us for our increasing efforts have customers Suppliers success alike. helping decades complete expectations investment HubLogix ship to build models. a fast is with believe for to manufacturers Since [indiscernible] our time have brands, a

improve these confidence our revenue of reinforce modestly that factors although XXXX on will in growth All basis. full-year a

posture driving growth. We towards maintain future investment an oriented also plan to

and better Specifically we network continue and and intend investments to shipping demand in and our first expanding the price e-commerce. we we fulfillment positioned Japan, all areas optimize most of China retail the By on our the the in expect believe sales indirect so would learning ramp-up ensure capture be is party we us. opportunity drop and of even our market of ahead that management, doing analytics, expand and meaningful efforts capabilities of and the we logistics machine platforms expansion our platform a optimization, large of remain comprehensive to share and to connect to world

of all these I've And Mark? our and for that, with I'll confident over prospects excited about to been ever the I'm financial and turn beyond. reasons For Mark as as in XXXX our update. call

Mark Cook

quarter $XX,XXX a our I Thank subscription of Recall $XX.X was for such the from roughly quarter, our quarter the benefited second will fourth a our net ago our XX% was X% business on an and quarter of X% the million upper processes in increase to the in of This quarter million, third focused in total at from performances $X.X compared the improving to with and our revenue. decrease on or from increase total the those end from XX% increase and the of ago of QX ago. and of Variable third X,XXX due primarily the variable and in approximately the XX compared increased strong from the ago. of of full quarter XXXX. in quarter. the expanding excludes quarter you, HubLogix new trailing Revenue year excluding United same from was outside customer financial our non-recurring performance net we XXXX customers, China, customers same customer adding and customers XX% This revenue the we continued subscription quarter third of revenue increased for with year basis of development States in We growth revenue total second XXXX U.S. with grew increase volume David. an of a The the At the in subscription across in revenue and provide Revenue year-over-year year year QX, regions. revenue. revenue line amount to X of a sequential ago of in $XX.X was XX% year QX, represents ended ChannelAdvisor of guidance combination XXXX XX% as from average to X% end and and quarter, now acquired the third revenue guidance gross additional that the QX. as this third a year from an approximately in and in increased presence $X.X ago. $XX,XXX time, XX% per the a from customers. over Fixed details of average per existing of quarter. XX the second million represented count $XXX,XXX new on trend variable a year XX total reflects larger approximately platform revenue a million revenue 'XX month revenue

quarter, annual greater who we customer committed $XX,XXX. third net added the during example than new X of revenue For

were increased I before, or who to customers less, of $XX,XXX offset net customer an migrated was like revenue these to annual XXXX. numbers level changes terminated our the which this had total though QX, either customers annual commitment net X are net above emphasize new revenue While had decrease by either during a in committed of that decrease were committed would we that annual in level. and or

has reminder, commitment As contractual annual revenue revenue does variable revenue. include and fixed customer which a a not amount a a is annual of for minimum committed

of We those over from second of revenue from quarter increase with year. an quarter in to an revenue from the at of annual total continue number $XX XXX, see increase from X $XXX,XXX quarter the committed committed of last a for XX to same quarter million increased end The a customers in of the million XX% third ago. customers the at year and the annual $XX the

non-GAAP the on will a Now of basis side year-on-year P&L; specified. expenses comparisons a unless please on all otherwise to that and my regarding the moving expense be are comments basis note

profit, gross press expenses, to that flow. free today includes gross Our for EBITDA, we margin, operating GAAP non-GAAP loss, reconciliations release adjusted net issued and operating operating margin, for non-GAAP loss, cash

year high third website increase acquired the We XX% to be through higher also GAAP a in as quarter bulk compared year points the from of the slight third operating and from considerably increase to X remainder to enhance guidance this gross marketing as from third of a R&D revenue increase advertising Adjusted was year sales further more year expense our and expenditures. Operating XX% expand due reconciliation provide revenue quarter in better than was increase a majority EBITDA Gross cost would XXXX of well ago. a our compared primarily our Relations of coupled quarter with up was than of operating from our income a and marketing to for margin a of the compared HubLogix The result resulting expenses in section was the of positive of offerings and year, third revenue the profit ago non-GAAP ago XX.X%, as related of schedule $XXX,XXX additional investments increased $X.X quarter an to of was million acquisition. Operating percentage headcount of ago. staff expenses $XXX,XXX increase the a in combination in year This the solid The $XX.X a a for at the of an ago. to on last investments continued quarter. million ir.channeladvisor.com. in Investor million, including range loss of decline management. $XX.X were the

consistent position net third XXXX. with compared reported adjusted income our primary a line our our than third million the of intentions will R&D top for and $XXX,XXX investments these of focus third ago, lower sales were Non-GAAP in to in net and quarter of Usually and for the us marketing. was success reflect support was quarter results Our the invest $X.X and driving for the growth. $X.X a loss million year EBITDA to we quarter

compared reflected net our increased operating non-GAAP loss to investments described loss Our the earlier.

plus the we sheet, relating the cash the finished $XX.X including million network gear cash result the remains decrease position million hardware to cash capital from in year-to-date $X.X cash Now, negative the a The negative decrease expenditures. in and refresh strong of $X.X accounts certain cash $X.X in and of our sales payments million for equivalents end turning third disclosure and their earnings Operating in in with receivables, payments million related jurisdictions of requirements with tax of expenditures during $X.X is to after quarter. quarter for quarter other [Indiscernible] requirements. of in was cash for balance to a $X.X and working a $X.X our of equivalents, million the free second timing capital payments, a flow and million cash flow million capital

to turn guidance. will I Now

well sales primarily last support growth as as increasing mentioned in quarter R&D. can to managers As investments adding the invest that continue business areas strategically our our we in long-term key and including in account reps

XX-months basis. on producing this trialing a have EBITDA We while adjusted done breakeven

this engineering in We've seasonally David made Japan. in reflect planned remains is Third Spain, China. in predict, new Madrid, particularly the and year as initiated long-term revenue to it investments additional inherently quarter a and confidence medium investment where in difficult expansion Variable quarter office described. our fourth we've acquired strongest. HubLogix, also our invested subscription These in

to revenue. Now in expect that increase fourth a meaningful drive quarter sequential we variable seasonally subscription do said

decreasing expectations of in Therefore the generate our recovery investment not slower in believe fourth that we growth are into and American our can impact term are subscription revenue year a meaningful we combination of revenue areas the However, the full performance growth. do to longer quarter. slightly North in marketing the QX, prioritizing sequential sales business digital we and due than our expect expected of

the anticipating XX% guidance sequential fourth the $XX variable of driven This of been of XXXX, year million has from $XX.X representing to in the quarter For we're outlined previously. revenue million reflects as range increase by which revenue growth quarter. largely revenue the ago

fall moments QX, with is between for $X.X few I EBITDA million consistent gain adjusted ago. that $X.X to mentioned the investments This of million. expect We XXXX to a a

of to anticipate anticipate year, EBITDA million. year We growth between in million For of be adjusted XXXX. million. X% full This compared full range now $XXX the of to to X% the million and $X.X to $XXX.X revenue we $X represents XXXX

we earlier, our term plan Japan. increase investments to in in to and initiatives revenue continue R&D mentioned sales as longer and and As well as investment China growth marketing in

make our in expect X% While we brands approximately towards lead attracting low-to-mid With guidance anticipated through February, meaningful growth have initiatives. results. summary, allows open on for even our of and intend on which and be customers to we initiatives manufacturers that that, call goal of next to XXXX e-commerce to we our will retailers, growing to our optimize we invested we'd product on million a to portfolio larger provide our questions. detailed confident for now to X% continue exceeding range, like call in our XXXX earnings to expand that steady $XXX XXXX. the during more to the We're impact In operator, revenues progress our XXXX

Operator

you. first question Thank Instructions] from is Scott Needham. Our Berg [Operator of

Your line is open.

Scott Berg

lower next two suggests impact are look only this kind to Hey and questions bookings here. for this you Don't we thanks like? you know think let's what sales your on where started of I not you are believe it year's the re-org. with of is to going impact? the substantially in taking numbers and the to David of to -- guess quarter maybe type start impact Mark, maybe But to quarter is the guidance the than suggest understand when Street. maybe one duration Wanted try my

David Spitz

expectation. my that's Scott, Hey

ultimately might in had done. he as have that assessments mentioned, Kevin, just those and some few work we So had of rapidly his we and and and to time to And make fundamentally things American make changes initial obviously decided the were work there with well North seen decided Paul hired we me. Head sales I July a more some internationally than have otherwise of

So it course was quarter. the over of the

a course back tends quarter loaded. be end to bit Of our

kind So end what it the impact wasn't probably clear I the would biggest territory And is the of until materially say assignments. change we would have.

this I the for existing breadth team were improve worked -- the scaling territory to breadth in long-term sales [payment]. of sales performance of the territories the and that and the so reallocate in think [supported] suboptimal refinements to overall leadership I the our sales

-- scaling. for position continued positioned organization So our

a only that but expectation into is would So start month I I relatively short-term my encouraging. strong it's to is impact. QX a QX the characterize I -- as think start which its would one characterize

Scott Berg

ARPU wanted numbers. I about growth to your talk

what these I of Your of should adding to at our kind with to now function growth understand for Just purely or accelerate try are of further? guess of expect teams maybe or quarters. this teams have growth rate larger three out least trying maybe is wanted how expectation I several ARPU some of these a to in the of kind be that stable has over the quarters? way this comps last just with like go-to-market easy next rate customers some sales declined numbers understand, -- rate the with to and maybe your early right we four the

David Spitz

in and could ARPU on blended an and sales actually as and give of it produce for continues the has customer expect qualitative increase ramp average you sort commentary our This fully of new base. I our logos, long continues the to to been is look add, David. at we net And net below produce some ticket perhaps if Mark be ultimately size and new for ARPU. team time let drive pressure have a something customers you that to but I'll would

team expect will see in I necessarily the ARPU growth to but that specifically. growth our to I think we customer customers bit. natural the accounts you we moderated of manage the think don't changes we've as little that build and hopefully the ARPU that's made versus in growth growth in continues sales So in versus But thing out execute annualized in right would and some we I -- that business specifically ARPU, in a are growth

Mark Cook

And observations think to really I don't those. Scott I add have anything new on

Scott Berg

for from is don't for know or me David. if guidance question Last and on I it's yourself the Mark

know from -- changes experienced guidance in that revenues looks from we impacts so have with like versus implied just sequentially that all your 'XX then quarter-to-date? Your assumes in more line QX none the some are of if $X wanted kind and are guidance cost variable Amazon, Amazon that's around well it's far those verify a, to; that of year b, not QX you like business will last what up what to Looks guess from I million that; seeing pricing. the impact

Mark Cook

Scott, we on guidance specific variables. don't provide

mentioned it that is to the from we for impact as to is that break again of [Indiscernible] last you quarter our QX quarter you optimistic mind had perspective As revenue cautiously But that the year the in and versus we suggested know where our don't you've we are as in comes experience. out Amazon largest with with but -- some variable us year-over-year. QX just when largest

David Spitz

Scott data including I into Amazon. we've give seen an GMV and through this guidance is continued One David. is sales on is that acceleration only same-store can October recently in that and QX October through strength you the point

was been to So for improve store substantially about and I it who have Repricer. things trend that's higher and December mix the like there. so this sequentially we last good to Amazon is in increasing do same lot thing talked sales We've the bottoming Chinese see think of and see a talked it a growth. I of about think sales reasons Algorithmic we sellers, on this a same-store at but continued out predict time throughout is seen harder obviously We've particular optimism strength point year,

So we've risk obviously some of it we're carefully. very appear taking that hold. to But the mitigate things that I of think a watching to be lot done

Mark Cook

more that marketing that most seasonal thing one as And are quarter. one in we tends watching its mentioned it's to -- as variable well

that well. as So we're watching

Scott Berg

questions. my taking for Thanks

David Spitz

Scott. Thanks

Operator

you. Thank

question Blair. next of William Matt is from Our Pfau

is Your open. line

Matthew Pfau

taking Hey questions. guys for thanks my

start then sort to of for business on the that of acceleration we growth First laid acceleration? for think the you’ve that those But the 'XX, And most different guess anticipated bullish of achieve in out the sort David, feel about. about XXXX. as to out a of I are revenue bunch aspects of which important guidance want that you there

David Spitz

good Well that's question. a

is I areas of a to. would list couple reviewing here. probably I'm that I think there just point And the

just pretty stayed think GMV is last rebound to was some pleased on health. and been We customer the and It answer. out year. by mentioning just that's And it's previous like this the with course I I QX So success some way. our throughout of channels, over how saw the performance challenges including core largest really customer I've of looks on really this as our year eBay

so that continue we that improve been positive see offering see our hopefully to customers. capabilities that's very to and through we're And

to variety going well how of is principally know a adapt this they industries different a in new Amazon. been way. discussing I organization. digital it team, lot commerce. and I it's of a I partners disruption for their great been the had indirect to ChannelAdvisor a as of direct mentioned think the you obviously has long sales And organization as world and us think coming a And -- of sales lot boardrooms companies consequence But carried that in as of go-to-market from do are sitting like entire there on has lot a we've history a us of our a of

a customer of have so XPL that us are people supplier lot company, whether bases or a disruptive new a coming or we a looking routes logistics getting potentially who to and for And have market. it's to

it's not so decided capability a can mix to all who all variety are or we people a only like different or have of of And of that shares, a bring actually this they platform for we referral their to -- team it's to a customers. and seller opportunities, indirect create rev necessarily looking technology

because will to without So excited pipeline, But just do bit I go that have it China. our pleased the of built can't up they sales pretty given China. can super about be what which that's a hard us, real I I'm pace with traditional quantify. just further with a been direct little model. that mentioning amplification

because Our still think look invest there efficiencies platform when more how just our people ways they more gain could that I the as inventory that and surface. And of bit just our to and in make continue and of that's course, logistics of at a team the see opportunity, they quite I to a small initiative, more into just of logistics, be and completing shift we still the I handle I of is platform scratching how think the stickier. there relatively platform tying vastness type think helps

So I all think know the for of that I'm kind drivers But I things said. of optimism I me. all for picking almost are those

Matthew Pfau

other the And to then I was it. ship Got thing on wanted drop touch on the product.

remember of ship focus on correctly that was capture XP. that you with integrated I initial the to -- on and I kind You from Amazon, to able Walmart and mentioned like dozen the products think are that there be is to from if retailers now a XP about Overstock this

are that's does that other that approval talk to terms So and so retailers, relationships And it these how in process maybe you can move that does the evolving? get to typically out look guess and you've work? you retailer go integrations the seems what and then like have I of building beyond about Do and sort how of you with like?

David Spitz

question. Yeah, great

though been you branching of So out historically as there Overstock retailers from the and demand. we had we've based Amazon, started and with supplier work with that like Walmart, we definitely on best mentioned knew some

towards. is decided So on there are supplier different us the obviously what categories, focus the are customers to driving really different categories and we've that do suppliers fall into our

DIY To think goods of So and look we few so were point have focus seen it to was the improvements years if and landscape us. the you strong interest proprietary second for your an for a home in home general that's ago example area that very at I landscape.

you is You and go to essentially eroding like through that that you with through third required lot a proprietary a world are interface or integrate party through we might retailer have a that, to a because had think for integrate Walmart, to out of have retailers yoke get money suppliers. look of will. to their if a example KPIs lot under up pay to a from lot if They have this opened at you

we've So a think multiple of these you leveraging doesn't retailers have their lot integrations and that's dollars of on and of the platforms it of their and success. investment millions pretty I require do can where aggressively project something -- programs good with more now been

Operator

Thank you.

is of James. next from Our Raymond question Aaron Kessler

open. is line Your

Aaron Kessler

And you ads as eBay well if just first marketing the you on on possible? there are on marketing if out seeing seeing from are as do impact type just Maybe the if talk -- [what] little impacting of attraction but marketing kind you free product side, is digital things? channels that a of know I you social digital ITP bit Apple, also maybe about then any

David Spitz

on bullish this in mean eluded to think I Yes, generally very so I I'm to stakes. speaking my listings comments, think advertising is marketing services. marketplace sponsored I table be or as Amazon I going really

above promotion with a you and right, has long advertising from can we sellers millions capability and had [Timol] have to and China, of in such leverage think a draw millions promotional kind marketplace that of that rise I the in noise. lessons to crowded millions

doing and council our it. not our And are doing to need is, this is, our if this to you customers you view so be

that's so of us. And a for growth scenario

about digital I'm how channels a to that. mentioned interest very bullish I very, from pretty marketplaces leverage on customers strong marketing As and in

I be you going weakness continues retailer where, that on of to we remind all to headlines larger like segment of kind retail. the think in large that the in see generally

way in product vendors feeds other those struggling be don't all purposes. our continued tend do for underpinning power data to just technical kind use those where So of basis those folks do feeds lot GMV where a an lot area I you that and little we're of customers those on initiatives. of a we like see for much risk We at think -- that's the bit. retargeting. of of may kind of We the directly for a and But measure don't

seen this have we're But meaningful the that something like that's from can to a point tech So have of know at seem companies I that it But ad at this that. some I out I doesn't space point, at to meaningful we us see. point the ITP confirm point. for don't in this other obviously impact monitoring. something

Aaron Kessler

Got or China on revenues some just from or it. that number through the the of to China is clarify is that is platform Alibaba more And cetera? et China, X% going sales JD, like the on platforms

David Spitz

That Walmart, is of out trade border China Amazon, from export western cross et China, channels virtually like eBay, cetera. into all

Aaron Kessler

you. Great, it, okay. Got thank

David Spitz

Sure. Aaron. Thanks,

Operator

Thank you.

from is Davidson. Our of next question Forte D.A. Thomas

open. Your line is

Tom Forte

Great thanks.

first XX% be margin on revenue you couple from for three And a any there just China, of in incremental that could added but the So my versus outside difference now? revenue of question? of is that's profile revenue years comments China, the that

David Spitz

probably bringing to But for levels really good there. more we ticket that or of team comparable metrics values, down excited their reps consider reason every I'm what to North our are virtually great be done Almost more is given positive in we're strong we really about of and market the what size I a and question. American customer done that that in China that's favorable negative more profile has candidly little churn all and see that And of fluid very, region. in there that very job. a look [indiscernible] tell I'd and metric Absolutely to business productivity, to is churn. you sooner It's is at invest one traditional a a higher sales Yeah, if what little fantastic part metric is the this disappointed I weren't quite there China, would other good not from in The invest in surprisingly market. would significantly has job dynamic there.

breach time expect to would I and So certainly that's revenue XX% of little quicker beyond that what would hope frame you it indicated. I a than

Tom Forte

Great. And then on units Amazon XX% eBay, Amazon party third went to from XX%. for and

change second is fear to that it kinds your of XX%. a impact an the is first more is moves time So or on too the ever results? than have quarter Do those small you in of

David Spitz

to to of on Prime go our Amazon to hard as see controlled was did promotional tended that side from quarter saw like the see kind demand that Holiday shift did it mentioned answer. XX% environments question products and -- [indiscernible] We a quarter that we after GMV hypothesis we last that That's Amazon or down towards [sit] XX% I during to some Day for QX and that weakness pricing. that

of as So sellers like pressure first also platform the and not they XX% can also where on hypothesized in some provide little creates or also off Chinese but bit something different Echo, on general, increasing only like they're TV this on Amazon a -- been proprietary that probably other sellers. obviously devices products we year party is mix an on a pricing that. like What's

sales we've seen October year. we've out So and year year sellers in see an of saw as FBA get significantly is algorithmic a is it capabilities as an lot think on that same-store would we was said month-over-month confident we and year monthly effectively December same incrementally a advantage been our I come China I investing and bottoming to is our creating was the into optimization, highest basis what we in strong in Amazon that year maintaining last more just things last what's is October sales than allowing of me I seen sequentially to in Amazon the makes what sales we've saw done if store earlier of basis levels. it been and performance has far so other And an GMV even and Prime then about. on a for a pick-up indicator that this I've same which on question, talked to us better the with sellers around just And Day repricing, say QX great this that therefore this cetera store around more of improved for Amazon more et response to

Now we've can concern what bring address December helping. things I to indications the be November but so that that a can't be risk seem I that or think all to done promise GMV that will and are thing, volatile

Tom Forte

eBay is improvement results platform something your there lastly with close then GMV is And in including starting could partnership to you growth and going forward a in there see some now see in of more we signs with 'XX? have the material them, accelerating

David Spitz

so. or out. it breaking mean qualifying we're think not I I Yes,

see a I summit was brand out I held, smart think eBay compelling eBay summit, rolled last platform where want and tell had first brands story very their that at a the capabilities it, has and to on way brands things. brand to authenticity they think forth. doing so and and is ability things reach they the of number around a lot eBay wide for story to paint so up week their of a as I that allow

So that a think with with are the than pleased I to past. have the we're we're be closely and more market lot eBay consistent trends seeing them doing that they in the working of in things is

perspective us something quantify closely not think So can I it's past. in from of we do but have both necessarily a been beneficial we XXXX working be the than to more for

Operator

our Thank Jason you. And from Celino next question KeyBanc. is of

line is Your open.

Jason Celino

couple drop David thanks for on my a taking had Monica shipping. questions question. for and on am I of I Mark, today.

goods kind about can for of of XXXX? DIY shipping of and mean talked you I them? you can color on all give business comment revenue of of any First size the kind the for you us And kind home retailers, drop expectations the around

David Spitz

is Jason this David.

we potentially of bit So lot it not could the a revenue of customers drop difficult breaking multiple this we're we're multiple you at but and have nodes think out to are little selling. our point -- ship I I know -- be wanted wanted a because even if

we not out. -- think might actual to break do but I might be a be drop might the like network volume And at but we're had I order that a to able able make something contribution you breakout revenue sure little that to second so. tricky So We or down it? around understood question while take will parsing it -- breakout it just be and providing you But repeat DIY can to point. a this that's build the out wanted

Jason Celino

Yes.

you commentary retailers size about are talk signing of kind DIY of can you for any about kind the of there? home drop shipping, talked that which the goods, of and you So kind

David Spitz

our they ones are focus on because larger so volume, is right. that Yes, retailers the driving are the

it's we're each bring a segments supplier the to network of that is amount targeting. build to out important, significant the be I order larger that think going demand we What in is would retailers important the going say to that categories in on [payable sale]. our that to of So focus be we the it's and

Jason Celino

integrate kind to on how retailer shipping? Okay. drop long platform of the for And then the does usually it take the

David Spitz

a different year because is this said they dozen this integrated individually varies, I announced have capabilities. it them. as a that we Well capability we've earlier and of But

kind do out figure little time is of can a you So for our math that. and what bit of blended

Jason Celino

I competition against your of they Okay. of looking choose And there? you or kind CommerceHub? decided talk CommerceHub like these to these also kind comments, can why to XX, signed of mean any were to in were that retailers your retailers you alluded you at kind commentary then of some about of kind And

David Spitz

Yeah.

gave some ship I to have have long-term provider contracts. So back retailers provider is drop proposition. relationships I'll are a or earlier. with a exclusive mean they there I response and a technology go certainly This that an not necessarily -- either then

growing this decided retailers But of period a So time. some have there in interest. not that's their number those of that may be necessarily strategic offering is for that

And so bring essentially have providers in their for be able and they to provided access public their to broken other to open platform. and suppliers APIs tie

looking disruption to digital necessarily at the seller. And -- the of with guys of and where what all historically primarily isn't with that necessarily we've done is with bringing a dollar certainly if in supplier So we're it the are looking who's platform not not of -- line customer they're multi-year or retailer level. multi-million distress marketplaces, a long to kind our at more the and type supplier a a our protracted I in negotiation is model believe matter retailer agreement. some these disruptive they're

for approach easier made our the it probably to to about And and to these dollars So way. in precious we're millions in I part that's capital us with, find rather retailers. think they and try army that is going than take squeeze and them our marketplace to to model an go don't view tackle of want of of necessarily suppliers it integrate bringing equation and

Jason Celino

Great color. some thanks. pretty good That's

David Spitz

Jason. Thanks

Operator

over that for David And to for conclude to like any Spitz Q&A turn back today. call remarks. does our further the you. I'd Thank session

David Spitz

Great. Thank today. near with we again forward to look in on you the very everybody for And you speaking your time call future. the

Operator

Ladies and This conference. in a have And for today's Everyone disconnect. thank today's you you all participating day. program. gentlemen, great may does conclude

ChannelAdvisor (ECOM) 2 Nov 172017 Q3 Earnings call transcript