ECOM - Earnings call transcript Q3 2018

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Operator

Good day, ladies and gentlemen, and welcome to the Third Quarter 2018 ChannelAdvisor Earnings Conference Call. At this time all participants are in a listen only mode; later we’ll conduct a question-and-answer session and instructions will be given at that time [Operator Instructions].

As a reminder, this conference may be recorded. I would now like to introduce your host for today's conference, Traci Mangini. Please begin.

Traci Mangini

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

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

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

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

measures, including and which of call, interest to EBITDA, today's non-GAAP we adjusted course the financial depreciation, refer During expense. tax amortization, will excludes compensation stock-based expense, income certain

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

posted Relations reconciliation a financial GAAP well the website to section Investor We on as at supplemental schedule ir.channeladvisor.com. our also provide non-GAAP as of information

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

David Spitz

Traci. you, Thank

I'd laying strategic I we formalizing by comes go because the results, out the our guides and investors begin activities our last before spent dots framework, should it into connect like to priorities. and it when which our thinking to our help So year

framework Our pillars. comprises strategic X

we with sales do XXXX, continuing through sales but instead meaningfully direct on our mean digital selling efficiency. marketing strong focus resellers we and and relative to increase expect to bookings say core in We our through but to our business, solutions sales focus to core will this direct we improvement. Marketplaces and marketing margin First, intend a increase optimize business, When grow on force. improved year, not to investments retailers

Second, path expanding we simultaneously -- market in believe our will indirect increased growth, this while expanding including the sales improving revenue to model. and We driving our reseller reachable our channels, our best is invest program. channel leverage in launching

place in already our our become meaningful channels in and quarters, indirect more online XXXX partners and anticipate from believe coming programs year great coming for the this of number and a is work have us. We year the

brands we and will our strategy product focus on Third, manufacturers.

Buy We the of product, segment and, selling of have our we e-commerce. success Amazon seen course, strong customer advertising this brands using with is Marketplaces, future believe our working and to Where

we and we are margins. ball initiatives advance of As it or the not through look be for close XXXX such, of XXXX. framework, look positions for And ChannelAdvisor and improving growth in as and focusing out our executing lens We towards all at indirect best channels the to believe on we excited this segment. this brands, core, those continued on strategic investing optimizing initiatives whether our will

Turning and EBITDA. guidance and consensus to pleased for adjusted estimates our another I'm revenue both report exceeding to of quarter results.

driven by which partner management, performance I with revenue focused last expected, to in improvement this against margin combined our year-to-date strategic good have in significantly through report line dual personally GMV, flow yielded along on and I'm top growth, cash also QX continued operating year. year. than pleased adjusted along Our $X.X improvement. reflecting with strength was This QX retention in areas EBITDA improved solid outperformance, revenue, revenue to expense strategy higher same progress compared line million to the top continuing of invest with period a increased

to revenue the growth All in contributed of product quarter. our lines

with X% grew revenue, our platform focus consistency with of end however, historically limited marketing given up can consistent better competitive score, been leadership in quarters remains do this after highly quarter. growth strategic We're and X market, also partner straight a has Marketplace we second area and considering an flagship our been that selling by growth, for Our the quarter, Where this And expansion finally, we we our first the the excluding have which or in retailers. them, and now commercially on a in and not satisfied important us. year-on-year, revenue. pleased annualized were market. I'm brands Buy as delivering increasingly advertising sorts to Digital because see Where to historically like grew point fastest-growing our of product quarter are often what X% our and third once decline, opportunities of This part, accounts brands has for touch we platform Marketplaces. with again engaged encroaching with Amazon dominated brands, in million Amazon see Driving represents was all Buy advertising that about on $XX to is for believe channels of

considerably. of quality mix our The dynamics. customer continued to to customer Moving improve

value our an XX% our platform. customer drive of $XXX,XXX we net this with annual dynamic year-on-year. the and over of customers to per number added nine was example, committed contract Helping For revenue increased brands in excess increasing in quarter average using

a preliminary note few estimate retail leverage more the basis, the And exercise retailer disruption actually digital middlemen contracted by XX pleased XX% we third and how including a customer this XX, for the customer interesting to brands Where to customers, over to percentage September growth ending customer go has close the for our of comparison our about months months smaller customer business. trends same the that as a growth we basis Now our a brands attrition relate as versus to single-digit XX low customer per directionally we from period they the percentage a our of comparing third that our Buy To a XX, contrast, Please they to brand to segment last in useful customers. completed categorize revenue to year, talked haven't quarter September when our of a In talk ending revenue as the these squeeze rest September figures customers estimates as direct-to-consumer. We I decelerated end drives segment and I'm close brands view continues base to imprecise, growth brands. count accounted our We ending in of are from to XXXX, segment platform. out as the in our said that understanding quarter that using XX the much but brand customers. months year-on-year the XX, to XXXX. lot, at the retail feel and of share mid-single-digit start, during XX% are on revenues on picture we strategic a year-on-year quarter about accelerated e-commerce has but the reaching

we own drop in our that in that right rotation imperative from Marketplace strategic are the first- the for segment. So global a our market we that but exactly about vertically the a fundamentally, revenues to e-commerce the and Marketplace brands solutions, XX% manage position it market, highly unique marketing, of And We as strategic brands. believe optimization analytics on for super quickly capabilities a all intersects as what at moment just only differentiated brands' is customer possible. am This go we're needs and third-party customers set and think on is it help time. not seeing with retailers listings, XX% to fulfillment company integrated I platform our of and a offers is we ship, from basis. excited and to a this digital

GMV. solid to quarter. total our the continued for well in GMV. us, very saw grow Amazon growth XX% although to of GMV Turning We less than continued remained it

tail of of group X% were fastest-growing long Marketplace total GMV, our size of Our Marketplaces the now smaller and us. collectively by comprise twice Walmart for nearly GMV

high-quality and and what and believe of drive to offer we and broadest available the integrations more set and integrate are our helps added with We us as more come them globally, continue every of to we've suppliers. deepest efficiency. quarter, And which increased Marketplace partners large sales our more Marketplaces to customers network

supplier drop side. continued the also network on our both and We ship to expand retail

For global beverage on recently top ship drop Walmart brand. Amazon launched a example, we a program for and

year, So Wayfair, in we've sites and on millions great Houzz our many like dollars customers far, this others. ship among drop sales Amazon, of enabled for

partner. brands, to it selling our Although drop they believe in across the because navigate strategic partner GMV a impacted ship integrated working we an together second-largest work models channel was eBay, part advantage having of third One single also in and instead of is of and retail different revenue our with must quarter a multiple and small geographies. still business, platforms channels strategic growth is to important who stitch when that remains and various a area prefer source with multiple GMV global which Marketplaces

the QX. reported remain our that a point, their in eBay's As the term. still last quarter. this assuming eBay GMV At week, in reported we're GMV near in GMV we, nonetheless, decelerated will the eBay And growth eBay faster sequentially growth also while experienced grew than subdued considerably deceleration numbers, U.S. in

our to we've number to partnership of us differentiation and to and signed deals We've a us On the drive strategic customers. growth continue new side, customers to very for help been reach scale, help busy.

the in mentioned they're we our GMV. potentially last very comparable already launching strategic with progress. As our and are or significant have in the compared is Walmart progress significant on GSA with We're on to GMV expanded launch We partner to had several and you with Google support already live recall, on driving pleased and integration for customers and quarter, or new GSA. Marketplace support we're many GSA, may I proud eBay Google in this hundred cases, GSA, of and initiatives Shopping Actions, Google partner first to partnership

brands. it as on early its major partnered to Staying our Marketplaces, Facebook with and with a season, especially depending CXC interesting. customers of the already new It's early, more GSA, a an channel disruptive believe Facebook active for Marketplace, evolves support aggressive how live channel it to another some being remains Facebook about sellers from bullish theme our be model, of new as XXXX. area provides of also holiday that we ideal number Google and BXC on we're customers, we this us we on we gets So in for a but believe Marketplace. is as and could have really disruptive of new for it Logistics BXC

we're sales around and leverage grow. a We and long but more and in fulfillment this revenue of has global in revenue in-house participating mean a we opportunities is its us, ChannelAdvisor quarter, grown might growth revenue out a of XPL We're carrier that this customers. excited mutual markets network UPS foreign ChannelAdvisor, You eligible strategic with qualified receive this to UPS program, customers be shipping our the work retailers UPS upside world, programs who DHL, it volume-based in to logistics, e-commerce can't program grow leverage-able and structure. integrations this provider. this global too marketplace what for still partner referral but indirect of will from our efficient live This DHL's integration, making mentioned went also it brands early finding great compete partnership as potential partners with like subsidies others to ChannelAdvisor global through path where like to It's to time. like a a easier that and customer stream supports I steps believe We're help in forecast a the will our aggressively the building customers towards this announced early, dozens with to It's be technology ton Last announce partnership. pleased strongly for and be the to and that demonstrated use seamless without more to ChannelAdvisor may we've to to stronger, share we space. partnership e-commerce it, customers we that the recently for positive significant channel. With about leading for over very single is in replaced ChannelAdvisor.

for can partnerships. hot As a about is not it's just area logistics see, us, and you

money native shipping in think substantial customers' new of us for for to logistics saving creating plan continued our We've migrate last we and think release the the our base too. our the I this new partners. platform to proportion legacy native X.X have potentially shipping enhance that we increasing streams and our logistics, providers features and on We to month us goes beyond so released working our our capabilities software through of years, this most capabilities important set revenue an from far. our easier Interest allow capabilities customer been lives on to this will offering, is and making shipping

by Marketplace to are a ago, to partnered with technical a which to allow will few and just built For with businesses ChannelAdvisor integrated channels. with marketing Commerce, drive integration example, mutual and seamlessly retailers our to Watson IBM help for IBM I'm any whose IBM We've that our proud customers. brands partner We're direct to digital weeks IBM. share connect of we've powered proud and growth

point to been progress XX% make will churn profitable to services down a and Head last off my our entire making Segovia, to us. I'm believe X% for nominal be has front, Year-to-date, changer There's shared good ease can fantastic successful credit years late do, strategic was growth Services, segments nearly the executing provides use our year. has growth. drag see, I has QX churn didn't indirect as this the compared joined the a percentage preparation last us easily. of for pleased on feel of we opportunity A organization could see but more of new also continue game revenue as XXXX to team churn think to model into progress Global QX reselling, the our the this year in quarters, making on initiatives to model great reseller compelling to progressed. and since which the revenue Beth is growth. new and of year, direct period historically improved It work continued this dollar to that in a full accelerate coming I customer products improving more top expand in year, of sales the but more but also model anticipate for reach This was sales partners reseller and channel our At programs first one I that great geographies for in I this and down investments percentage of in We've start on you beyond same reseller been of support on who retention top share our As to stubborn our and for that of a we're preparing help about the executing improvements the we'll pillars. the is front. developing should compared XXXX, one priorities, I ChannelAdvisor. further revenue our a and improving the establish sequentially. beginning and X with year, priority us

Lastly, I'll sales. turn to

particular a bright strategic seeing some bookings believe despite was us in improve same year. period year-to-date in the bookings are other well region spot overall up our large have say as improvements each region. aggressively about are China, And terms fallen this our gains we year retention. result, year, not related X% China, largely which improvement has bookings contributing contraction of isolated, expectations in which only this nearly has working slightly, to last China, and EMEA. just to regions. last year-to-date revenue growth. which for enough experienced compared this outlook drive can't an in Australia total Excluding short strength results in our At offset with grown a to we to same I and the year, is and and to point, We're enough Unfortunately, with our over this in in growth growth, of China revenue are and challenges execution urgency

quarter, are balance our a have to near-term So us on consider when cautious about have of going good fourth all outlook headwinds we keeping things of revenue growth. we we against for couple the the that near-term

anticipate we First, while we ourselves overall to China to results impact our improve work there.

XXX to quarter In related to an that ASC artificial we addition XXX, China, to fourth requirements recognition under $XXX,XXX. did a the have up headwind we impact not of last under revenue ASC creating a of year accounting-related from bit revenue anticipate

large a time, customer fourth this creates revenue fourth the release Where release quarter difficult of $XXX,XXX, and a XXXX, about comparable from in quarter. release Buy a at deferred deferred also not, the had XXXX -- deferred comp of in do of which We QX revenue to anticipate we a for

anticipated to financial brands, XXXX and turn us and growth although And excited for believe have and in to call and Mark? channels; on quarter, in indirect I'll about our work the positions investing do that, China. expansion in Mark So in quarter isolated but our against $X our which a Mark over update. continued core; we with pillars: -- executing I'm total, to closing, over million believe contributed to specifically quarter. have in results we lower not we do the comparable revenue into the will growth for a rate compared will our QX, and fourth more last to contributing to we is speak In X beyond. believe strategic focusing the headwind carry little happy strategic with in over details, QX. I'm this margin these framework for optimizing the

Mark Cook

Thank you, David.

after, year fourth and guidance XXXX. was top increase our an million, I'll third quarter the more of follow we'll above the quarter the in and for David financial Revenue quarter with third guidance. end performance third of full from as quarter of in our discuss XXXX, detail, X% and Now mentioned, $XX.X the

X% fixed Our of or and total revenue. fixed $X.X in from X% over Fixed subscription growth revenue the variable Variable combined with revenue. GMV. well revenue the increased Buy XX% XX% solution. revenue from of The revenue our increased our strength by well and represents QX year-over-year from in agreements, consistent subscription was performance in fairly Performance of product to year subscription period which of $X.X as ago was gain seasonal million 'XX. our marketing year, as QX digital as represent from general Where half contribution our traction, million $XX.X growth normal of period $XXX,XXX in revenue. in Variable ago increase by total from combination the the fluctuation to driven million strength the year a period year-ago as was continue in revenue of the first solution sales to QX driven

XXX interesting contracts, and where a ASC standard customer, has a contracts such is are customer contrast is GMV revenue This more sometimes adopted have requirements and annually, typical as with overdues resulting once to any which to sellers, measured XXXX, with we in GMV year. billed Halloween is in for related overdues are where aware, you're paid measured customers us monthly. As seasonality, some extreme and

into technical over our smoothen annual customers details, fourth occurs many for at making customers, the course this subset this revenue year. simply For attempt recognized XXX of these in to recognition the level, revenue of ASC the Without a high of quarter. typically getting

EMEA geographic recognition XX% United XX% the quarter in third $X.X the million QX to XXX, an the overcoming This revenue and the or variable revenue compared a 'XX, year XX% require QX of from a of with to from 'XX. China. represents the contracts. of QX annual related basis 'XX ASC revenue total in year outside performance experienced similar and ago under This approximately period. in QX Unfortunately, currency reductions States application From was in QX headwinds on constant third $XXX,XXX in in the increase from from result, having result GMV that period. the Australia, perspective, was approximately XX% the corresponding by this increase the benefited of ASC will a XXX customers of we revenue in quarter, a ago As stronger

expect customer count. quarters, customer we to in to count continue from quarter-to-quarter. than moving Now last No be several to changes different lumpy the

XX was X,XXX, third -- net $XX,XXX was the third of customer less count primarily quarter. customer revenue decreased in of XX committed by with annual a than result in the a quarter. quarter of customers a during decline contract The value, decline the Our -- overall which in count XX

customers' and category's The XX of by represented X% months, contract the the in the of end $XXX,XXX total end committed third Over value $X.X contract by as during months over during million total million with $XXX.X third annual or quarter. XX% customers compared this over of increased end contract X during period. quarter million past the value with quarter. XX increased the annual to Further, committed in $X.X annual customers increased the million value increase XX our QX by XX-month committed same values of a at This 'XX. the increased customers $XX.X also category contributed

our revenue metric, continue at of committed reminder, potential to reaching end to minimum include fixed XX% fees, date metric additional specific increase which basis, continued value revenue. annual the customer as date average the a period. a breakdown a of fees. its of additional and quarter, of $XX,XXX an a a customer variable has amount not XX-month third As On customer. upward Providing and per is this An which from is any the does grow, trailing commitment, that of contractual annual trailing the trend, XX-month year-ago contract

represents XX% million recorded solutions, strategic $XX partnership year-ago quarter for period third our of revenue of Our of total X% revenue, the an quarter, Marketplaces platform to revenue. excluding increase compared and the related

$X.X of XX% to period the the solutions compared and for quarter of of quarter, the marketing revenue was digital third increase total about revenue represented year-ago an third million year. Our this X% from

of our As David discussed, Amazon potential advertising we earning our remain with optimistic solution.

digital program, solution supports from been of which in million Where to our revenue is total marketing revenue, a both Marketplaces strategically to as While partner $X.X relatively the in our represented and for XX% business. an development still year-ago Buy about representing Other was our small, million quarter of Amazon period, rapidly the business revenue year-over-year. $X.X our quarter. for compared growing as increase includes revenue resulting of it strategic XX% brands well business Other the component has third advertising

Our Where to and customer solution helping fastest Buy remains our to strong of build base with opportunities. grower us is brands cross-selling strategic

contribution revenue of due its However, lumpy and remains contractual deliverables. timing completion to

development efforts contribution also Our our may to be growing business revenue in the quarter. third

from Now revenue moving expenses. to

XX in be year-over-year flat specified. my and third by year-ago quarter largely due a prior otherwise EBITDA the compared of about year net net million above and margin nearly As $XX.X expenses. top operating lower year-ago in quarter, from million $X.X increase efficiencies. and offset research XX.X%, the primarily cost adjusted past, decreased ago, profit increased a all were of was part significantly the development with represented result due for gross third and $XXX,XXX positive to the driven compared increase development essentially the profit expenses comments XXXX. a quarter to of income third revenue to was for higher earlier on from of million This the capitalized net from an the expenses in are revenue administrative a an improvements Non-GAAP Notably, points $XX development third unless of $X.X as were which million, basis, and the in the discussed on and X% efforts. our period basis The of the of guidance. third to of X% the non-GAAP period, loss the regarding to both $XXX,XXX non-GAAP essentially quarter will comparisons the gross income basis period expense compared related about same third development end research expenses year control new Adjusted was product General, period. a our increased stronger Gross initiatives. year-ago quarter accounts in and was improved quarter EBITDA in non-GAAP

million, of during the the to cash million of $X.X of since the quarter. finished third cash beginning and and We quarter Turning decrease $X.X $XX.X year the balance sheet. equivalents million with a the

the months by quarter. ended was of our hardware up repayments approximately of refresh leases continuing costs requirements million, $X.X $X.X be primarily and driven cash and cash the for that three to related equity hardware and $X.X period XX million of positive $XXX,XXX total for operating first transaction X million was respectively, for months for XXXX, and the cash the decrease investing Our cash third both approximately programs. flow net September months will year development cash to and and and activities of The generating quarter required software volume. largely related nine to The customer payments growth the first support third compensation the the remaining in of for capital related debt prior purchases to nine

to guidance. turn I'll Now

to growth expenses to productivity in profitability and initiatives scale while goal of resulting previously, investments with sales future G&A. as in our reflects revenue, also from delivering revenue discussed continued benefit from our as from increased key sales drive guidance marketing improving expect As well growth as improving we

financial our revenue the against for the ASC of the variable the performance This quarter's has continue complicated of annual prospects call, XXX but about discussed factors remind investors GMV year, difficult China optimistic the be fourth been that predict. to proven impact earlier We operations by specifically remainder and in to the remains contracts.

the will incurring GMV in first annual requires Sarbanes-Oxley the to that internal 'XX we effectiveness QX anticipated XXX contracts. revenue We in our recognition 'XX ASC QX Section year requirements in the attest related Last, to related audit of revenue be our negative up of Act to XXX(b) highly cost to expect for $XXX,XXX controls. our firm to of of impact implementation

$XXX,XXX $XX.X these of Further, change $XX Now of QX comparable by now are the XXX deferred X% year-ago revenue believe to to revenue given year-over-year a 'XX, 'XX X%. and consideration Adjusted ASC from factors both our growth X% release the which taking million QX rate trends release released and EBITDA. 'XX, fourth to QX. quarter for the implied the be QX a we made the 'XX into would of our more assumes have I'd in representing not in range this in XXXX, the difficult anticipate factors in comparison of is deferred been of the anticipating into the revenue stress to consideration QX X% thoughtful in we and historical isolated million, we rate impact implied are to growth period. like revenue

anticipated $X reflects higher-than-planned mentioned of million of cost $X.X is as EBITDA our Sarbanes-Oxley million. to and adjusted and to related Our earlier be implementation the range in

Now in this to growth of year representing million guidance revenue the full year-over-year X.X%. XXXX range results $XXX.X of to X.X% of $XXX.X for million, the of in

adjusted Now the million X% our to margin expected guidance. for at the million adjusted EBITDA to $X of of be million, is EBITDA $X.X of representing $X.X midpoint midpoint

growth comparables ASC our muted we indicative You forecasting that normal of of will the and head other from earlier. revenue ASC widened the guidance, by growth It's future contract an of released making the earlier. for to call Under fixed 'XX in revenue QX Last, range from reflecting XXXX we've but deferred difficult. variable release the to as I'd necessarily tonight we that not variable recognize completion may contracts. believe under as our for of like clear certain impacts factors revenue and year-over-year our we've XXX, be of growth as into rate XXXX rates also to our is required recording is introduction some example remainder XXXX to mentioned life, XXXX. comparables amounts note described difficulty factors be not the of example, such for interestingly related amounts a not XXX, for described limited year-over-year deferred developed

by may to contracts, impacted example, from be as time-to-time. this Buy an Where Our

As With insight our described We XXXX questions. around. about in unaided and enhancement us we'd and place, we partnerships, to product shipping toward of driving it expanded additional manufacturing that, in development our operator, QX initiatives toward the lot from coupled after our strategic all historical support for support shipping, exciting channels and with future. strategy make optimistic logistics is look 'XX providing our call business is solutions, from to in like of investment, growing which brands marketing now practice, capabilities, efforts, more resulting of digital we improvements a customer our retention, advertising the including open to Amazon of ranging of have investments

Operator

Instructions] [Operator & comes first from question MacDonald Ryan Company. Needham Our of

Ryan MacDonald

opportunity at an deeper you look with opportunity, or or you kind greater I you're a is opportunity trends drop here? here analysis sell was of moving and opportunities usage a these of logistics seeing as the sort to really of little analysis, I bit brands the perspective looking thought interesting interesting as can some first as it in go of a adoption guess, sort you did well perspective? off, solutions a an the the just I from brands, layer shipping additional to you when within -- and And at there the that customer sort of in guess forward.

David Spitz

ago, for first decade think maybe a solutions. retailers is I a of looking in brands cycle interesting of me a and us to life bit they're within right? little they opportunity What's of product land-and-expand what's terms generally adoption, ecommerce the about interesting a is they're sets. there's so So remind variety in earlier

it's to at, look retailers other multi-brand geographies, brand a and for brand and and you us to there's example, with other if it's Where company common to room brands. if handful company with one a expand a and of a Buy, So if multiple brands very other to of it's maybe a handful geographies retailers, start with see

the and But a then opens ship see for digital significantly Where with with that. frequently content third-party as help example, commercial us and do arrangement So with from other really them, an to selling, there things the Marketplaces opportunity can process. have cases with working you a cycle. on like programs, that's of brands them that leverage drop we've procurement have how we are or that's partner at them, already Amazon first-party brands through marketing, sell a various They sales fairly on and sort example, to of a And number of or to once grow they relationship substantial seen as them Amazon that from overtime. working if a or have have door you like a to expand, we a for advertising on with go opportunity that expand imagine, because fairly Buy, lot there, you

that the on bit brand little applicable. Not that cycle. going they e-commerce all on a going products depends where life it velocity are is maturation, So the their to are through be

a we to yet disruption, the continues a brands they're that thing due just have. if tend retention Where to why well still because strategically end that example, distance you and stronger brands not that's and and For higher customers other may revenue be be, as they and between I'll us. ready that the as per be stacking imagine, together, we to point to strategic for doing it's of think think the segment for stable think it's direct-to-consumer, and at not do out Buy retailers is to we brands compress They to customer most and shrink brands the customer rates. consumers tend but can as opportunities, The with digital such day, we important last resellers average we enjoy tend

Ryan MacDonald

I in little Can follow-up. some it fourth as here? and and I the you quick into more going like there. it guidance into of explain a China? just sounded of Are deeper execution sales quarter around And eBay. of then I guess on expecting And execution It there. like what's XQ was more seemed perspective? to that little also It little guess, a specific. you then the there's digging on, a we head bit go commentary a expectations the in alleviate Was guess weakness bit

David Spitz

Yes.

cause of And has. faster So in some that improve terms a yes, we sales in in execution, did that leadership earlier than China, the something thought we've it would disruption changes year. had

has that area and tariffs an to not of is as a going I'm that as impact so a theoretical like necessarily to And result opine underperformed, or that. anything

region think export e-commerce that essentially I primarily while It it's in really market isolated. think specific side internal said hard issues. largest isolate I the And think well on is export execution important we that, are -- region. we And us. But a having an the world. us for in to the But it's strategic of it's think causes. to we that, it's perform for think we

it's execution coming the quarters. related, anticipate in improving we and think sales it's something I

really to As do we comment We We certainly to immediate relates our eBay, eBay QX. that saw quarter in in it change did we be already anticipate the that. impact QX this don't view terms not muted a that that of QX, what to revenue performance we over I growth future. of GMV have with in that the looking point in in make But the out of anticipate any delivered. reason have the beyond at we

about So as can imagine, that's, are you QX. our into already factored thoughts

Operator

Davidson. Elliot from comes D.A. of question next Alper Our

Elliot Alper

Day, So recently with Wayfair's big Customer anything, more Day, rolling the out X-day if these Amazon Way X-day are of the and more efficacy your on thoughts Prime to sales, sales Overstock's ChannelAdvisor? events, implications Day, companies what those

David Spitz

very think customer can I consumers, acquisition obviously be effective an and they're popular they I with channel. think

sales, if for the a that think a consumer if time of done maybe I that, It example, or obviously drives more things think acquisition GMV personal look a it's Day, Prime up Prime, to first purchase hasn't view the itself. for sign is those or get these my Overstock, behind is customer before. the but and customer, great for that rationale Wayfair a great sites to for I lot for to Amazon it's strategic it on get you Prime example, from at perspective, it's tool

promo and it time Marketplaces a I view relationship for those essentially to longer-term the So are attract that primarily a hopefully, We customers first code customers. view using with develop to our holidays customers. to or difficult these role in but me, for our be is to can forecast. preparing really excuse of these be these supportive promotions -- for is this important, also as Frequently as

that platform one Demand Forecaster. rolled is out things of on we've the So, for example, our

analytics part about to suite, it's what from how our much intelligent of allows and to and likely inventory cetera, to forecast the customers those. purchase, it is and more et reserve of decisions make anticipation So in demand

excess miss imagine, a lot of you're careful, can't of inventory. demand, to as and with really under-invest, be sales, if you've otherwise, got a be going can to and So right? days You those be you to you're spiky overinvest, you can with going lot a

is So happen But possible. our help in as the capture it's beyond these customers now, to this and just continue things much that, to think part we're see of we to -- go role demand got going as really I landscape our it's as forward.

Operator

of from William comes Matt question Pfau Blair. next And

Matt Pfau

like you that I correctly, wanted more to the to on to And discuss XX%. take it side. First, the was goals brand heard I XX% something if

customers? focusing continued customers? from do that new of business How and So Does mean as on what retail mix? adding you Does looks that just business churn involve wondering an get sort like. perspective, that to operational brands that only of

David Spitz

question. so Matt, Yes. great

So strategic as business. I said, pillars our one optimize is of to core our

as retail stopping business, in a $XXX what really we're mentioned, have resellers, investment million our that. a of in not and do, business XX% And so is, and we roughly really important we which I important that's part and

for us. sell. to going are that's important really, Those We important to are really segment really a -- continue

when that in increasing we XX likely space, say each look winning direct think, and see as a an is as we it of years, brands and of five to by look And the them years, I out think lose very importance for towards to the more and exactly opposed but consumer. is accrue I about think at to we just general, proportion what pretty right think this to continues right? brand digital now. in just brands almost could e-commerce, the proportion, and of what hard in I out in it's we brands disruption e-commerce flatten mean next to space share day, disruption we of e-commerce, well and retailers Retail of going lot years of together. certainly we as number see Because the it's resellers. more the of doing closer retail But going draw end the

customer to our focus help, our product segment. and from offer where help in sure services on of brands all perspective, the continuing is sales equipped the that our areas to -- the focus that positioning focus investments need team So continuing brands products with and what make is that to to and to means

to and our strategic sure to customers. that brands sell things towards really We're market to the in on existing focused a continue just the as that to going doing customer we're are So we're make going segment. biased

Matthew Pfau

difference help I broke an seeing understand just perhaps with can between bit driving within I because, mix more customers, numbers obviously, to alone retention. drive improvement there are better maybe on expect you as shift ex out, the existing that then retailers, hit a what's I improved the you And guess, the to shift, But, us retention. brands wanted And little you granularity and would mix some well? that

David Spitz

Yes.

you're I So right. think

of the customers just in is general. things be like stable tend one that think to brands more about we I they

as that. so shift expect from would benefit would retention I mix that that continues, And

of I do this operationalized, the really, this reach platform year, over that the account big cadence the reaching management organizations thing quarters, or seen we've that customer and targeted using a a is couple is adoption have services number feature think, about to programs the whether tracking determine last a our I customers, not, all talked we it's out the and of in capabilities out. can of very usage to if of so and

back that. targeted Repricer things around QX, was campaign a training very them like to were our capability not using reaching the things content with I was one of think we the in Algorithmic out fullest for did, who extent, and So, customers example, with it

our kinds need a has it's focused just operationalizing it's And help. team deliberate more think effort getting really certain I customers is for I making down. customers. that think, done cadence of of good difference of the And targeted that So kinds and think much that on and, a I the that a job

Operator

from comes Gearhart next question Our from Analysis. First Dave

is line open. Your

DaveGearhart

perspective did being your quarter, Amazon you QX marketplaces, growth rates in talk Last quick. the for with a QX. directional growth similar largest about from to Real

GMV in four was years. year-over-year clarify, then you if last QX? And highest could wondering broke it out to at you quarter, similar think XX% growth, a level Just I eBay

question. what how much that's is wondering Just it a my first down have seeing. from And I follow-up. you're

David Spitz

say did commentary, in quarterly I Yes, handy, to deceleration points, and consistent a which see it the David with Dave, of is and something than that those that continues couple on more that growth say probably grow magnitude intended as Amazon well. fairly I not don't that GMV levels necessarily provide at to I eBay. my rates on can a saw. I'll back eBay here we this is was would have it's that basis. is strong What we We reflect

do numbers, Although still to of growth meaningfully I that we're line reported eBay providing think decelerating continue customers GMV. stronger a which we see the in in highlights value than eBay's our even

Dave Gearhart

that bit very about the lastly, then just is headwinds, about can, pipeline? you of And a the can the you robust. just that, record and talk pipeline China pipeline little outside about wondering a Considering talk you it In past, talked being at directionally. if where

David Spitz

about improvement our about of as go and good And year-to-date we've growth feel the through I'm bookings on look next into as incremental we we'll year. at bookings X%. see mentioned fourth if results the I it Yes. call, optimistic seen pipeline. think quarter our cautiously growth, you out I peel that you I of our China

So to We I China, and good notwithstanding sales back pretty China we're that track. on sure need just think get we think pipeline shape. I perspective, a from make in

Operator

Monika Garg comes question of from Capital KeyBanc Our [Operator Markets. next Instructions]

Jason Celino

customers? kind This maybe that Jason from, to Can for talk wanted of works the of on the of kind early you hearing and I early about today. is about partnership. kind how you're Monika ask DHL from feedback

David Spitz

David. is this Jason, Yes.

do them, integrations maintaining fulfillment it's of can the those for essentially is in to not technical fact, and integrations around really around marketplaces to this where the a after pockets think, the a So in and number I built up number, built And customers pull became, some out orders world either. disparate several as unique the of all you at or and dozen probably imagine, competency various their situation. replacing you the bit custom DHL, various years, of can customers core in a request organization as help over they've little and had not a the depth imagine, them. -- years, frankly, logistics those unwieldy

longer those, through with having DHL are then ChannelAdvisor's in maintaining ChannelAdvisor, to So down no custom those those partnership system. customers and we integrations, with integrations so of about that basically all up is orders ended pulling and essentially DHL worry replaced

where just good one space. folks it's others just different that There's example example. partnerships. things we're see But logistics a in space are are -- things of it's really, the we in of a natural lot really different the to So on really and and carriers at to one that the logistics going complement

Operator

back for turn over the call closing At Mr. David this time, to remarks. I'd like to Spitz

David Spitz

you please a online. We shop everyone Thank Absolutely. productive to speak has hope you. Thank you, soon. We'll and season, holiday everyone.

Operator

Ladies for conference. in and you participation thank today's gentlemen, your

You a wonderful day. Have disconnect. may

ChannelAdvisor (ECOM) 12 Nov 182018 Q3 Earnings call transcript