ECOM - Earnings call transcript Q1 2020

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Q1 2020 ChannelAdvisor Earnings Conference call. [Operator Instructions] Please be advised that today’s conference is being recorded.

I would now like to hand the conference over to your host, Mr. Raiford Garrabrant, Director of Investor Relations. Please go ahead.

Raiford Garrabrant

to call welcome quarter the and XXXX. morning ChannelAdvisor’s for conference first Good Raiford Investor Director name Garrabrant, My is of Relations. Officer; Segovia, And with ChannelAdvisor’s Chief Chief Beth Spitz, are today Cornetta, Operating Financial ChannelAdvisor’s Officer. me on Chief the Executive call and ChannelAdvisor’s Rich David Officer;

performance issued second XXXX website quarter accessed press can well morning, XXXX. first we details on our outlook be Relations ir.channeladvisor.com. our press This at a This as section the with our release on quarter as the of Investor for release

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

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

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

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

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

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

may the we presentation this analyst the dynamics metrics Finally, provide greater comments incremental responses to may into usual our in Please future. insight to business quarterly be may or questions, additional at our our prepared that not to to or in results. or are we continue of detail our offer times that advised provide

me the his for David With call over turn prepared that, let to remarks.

David Spitz

and morning, We’d to like you team. the officially you, to welcome everyone, Good Raiford. thank

first as everyone during pandemic, unprecedented as well since these I’ll and our hope we’ve outlook. is seen to say my affected first In that out me COVID-XX. everyone hearts keep hear who’s to Let go I okay as been wants what our results this remarks doing brief, our end everyone quarter about by personally quarter times,

latter exceeding guidance in in of improve to closures improvement Year-on-year in a a revenue revenues acceleration March, results online. cash of first share of strong scalability pandemic-related business with the significant quarter, million, to and the well half Ongoing significantly variable quarters, compared our $X.X an flow. in shelter-at-home drove as quarter recent to Our significant $XX spending part as for controls strong the exceeding and as directives cost contributed by of profitability aided and year-on-year the retail model revenue driving our growth store consumer were quarter. our EBITDA million, guidance GMV, adjusted for of continued

my as and sheet crisis on comfort as balance flow gave shareholder the wrote I us XX. COVID-XX cash unfolded strong March in Our letter

temporary of the program our efforts early of health an spread to protect our March and to global travel in policy order late business continuity and support in From perspective, froze we operational coronavirus. a slow and February our work-from-home activated employees implemented community’s the

moment. customers or assistance will a to and that smoothly, in more work-from-home We team share to went transition Our operational help home. financial facing about we’ve Beth experienced working up special operational no and issues a very from to related client set distress,

much as to the communities. curve ahead we as moving prioritize our in behind that prepared are be were of and employees do approach the to will a a in so and as as safety necessary to anticipate model, of we as we virtual We and operate our I curve returning virtually in phased the offices, long we’ll

COVID-XX effected quarter our ways. first in two

positive the acceleration the by this, situation sales own side, operations. last its COVID-XX on or quarter. were March, the strong impact first revenue. I in value and on by On latter platform GMV gross in mentioned, merchandise quarter a estimate or as approximately as understandably weeks XX% which processed We drove this customers two saw of new prospects to disrupted variable rapidly the we our our the in of our in broad Offsetting the bookings distracted their developing half impacted

face customers We been financial who operations as department distress have traditional have retail physical like retailers shutdown. store their also

And likely so some to experience uptick as churn struggle we an to that in we’re customers these of recover. anticipate

record consumer however, of amount page As as really April, shattering got March the was we in huge GMV of to spending online turn during pandemic. a a things the an What April became acceleration shifted interesting.

to GMV In Day the $X GMV alone drove by in stimulus billion the marketplaces XXXX in we’ve season a XX% margin. in On seen. checks, known wide even our of receipt is to the compared Prime XX, month eclipsed peak direct the first Illustrating GMV than last government and fact, day stimulus, volumes, increase the All year-on-year XX% did we April otherwise of on April and selling on on U.S. of more we December in U.S. which the acceleration as exceeded in in quarter. marketplace the in increased a magnitude usually year. Amazon April year-on-year of we due deposits our

and at the hard of few really remained what extent continues levels this days is as long elevated to May say. in have well. to first How Volumes

stores sheltered reasonable to will On the maybe gradually subside. of most as expect are this even one brick-and-mortar hand It lifted. is that homeowners and some, reopened GMV

feel outbreaks the coronavirus. U.S. more people in we settings, think that I XX can’t there subsequent their reality for pandemic by million people in in weeks the the jobs especially be will store alone, take the last ignore to Although, many comfortable retail will And it have lost of if that few time globally. altered permanently and are

Recessionary reported impacting consumer spending pressures have levels. started already

of best a that that of that we increase be seeing likely said, my increase as some is function the prove is will be in to guess normal. e-commerce this a catalyst spending, new and drives a GMV the consumer All share of pandemic step level at are to

to our quarter their pandemic tracking often This represents brands whose a with momentum accelerate April of report month initially the close is the is quarter weren’t to anyway. a almost the catalyst urgency. to causing been booked our roughly considering twice to April Turning rates close despite of at initiatives return of floor March as e-commerce by XX% normal channels forecasting one halted to digital sure to to a finished to what retail sales. tough starting of we by began that normal tough strong what it we trend. initiatives. been last levels. and in is to fast first of What I’m particularly has effectively the how many two that having After virtually close have and sense of pipeline, insofar the we’re companies at seeing start distribution We this true sales and were weeks expect to for a appear forecasted we pacing finish that month COVID rates happy be a

that rest that how several competing hard One are strong it’s So hard near and we revenue, will the but out May remainder June, us have term alone of drive, for is making the know to the to in XXXX variable and should forces of let tailwind forecast. GMV XXXX. which play

Another be the our for that stronger tailwind value digital should proposition especially is only accelerates, shift brands. as to

to and our lead impact contraction to certain ability to deep global customers On recover. like churn categories demand department hand, of the increased affect may sell consumer other retailers a store our as economic may and struggle

and value to skipping industry, beat. the strongly resonates were to those we holiday-like feel in and quantify factors world’s to predict that more to withdraw customers without than remainder and our sudden are We connect confident so of to the future are a we being ever. of All That year. the and able appropriate said, our commerce, our and help guidance more the prudent adapt e-commerce volumes the for ever it’s proposition mission difficult optimize than

Our business this the the resilient situation. to has think highly room the to the us I invest and given like Recession, several well Great positioned have in cycles, profitability current proven managed into long-term, including especially be business our to unprecedented for model believe innovation. and environment, our platform business through Having lean this balance and we’re sheet despite product

And turn it Beth. to with that, over I’ll

Beth Segovia

be that adding expected each everyone. safe David Thank you, like as I own well as this as situation morning can are would develops. and to my time you doing the of hope staying good start during by and

help to response manage through business COVID-XX in continuity activated designed program, mentioned, variety we a to our us David situations. of critical As business a plan

part customers our As communications the and partners have plan, decisions, we monitoring supporting ensuring team our managing business a situation, continue and of making able effectively. dedicated are to we that

globally distributed Our neither is office located is any or on dependent and operate. of physical platform cloud-based and to locations in our

disruption. any not have We experienced

return compliments effectively fact, as share employee enables time. to strategies business and productive This protect to clients operations. working numerous their to capability home remain to our this we from consider their to in-office had at eventual an operate on support have demonstrated ability critical we In us continue safety

We the resources we this situation and blogs are webpage are with develop Sharing time. incredibly their proud clients to how developed. pandemic. and success we news, to strategies enable actively working navigate created a as our at clients reactions our share to help recommendations with the to active Quickly,

to policy dependence topics guidance providing with are on changes. FBA We how to through keeping pace manage from marketplace ranging

ways stronger find are with in growth. some As can solutions to online stores, lower we contributing that enable work balance sales to brick-and-mortar

certain distress of experiencing We also in facing million approximately have date program and contractual $X customers initiated assist hardship in operational deferred form reduced relief for payment tiers. the to and a demonstrated customers financial or applied plans to

solutions this than significant retail are our smaller we ever as on current those challenges. situation, well given facing clients While relevant as dependent believe substantially physical stores more are

result, terminations and are we this disruption. a contractions period higher during anticipating As of

me about talk weeks. they is in GMV observed access six been Mike been last Many a following easily blog sharing events. the could given our for as how turned had Starting Officer, of Chief turn now GMV have week source has each you critical value late bit no Shapaker merchandise trends to current trending lockdown online Let gross growing to where we March, Marketing our consumers in-store. to on under longer updates items or

dates to accelerated apparel, a toilet issued elevated continued to has paper, U.S. across activity with GMV products in grocery in of overall range GMV grow April. late continued necessities athletic March initially of Driven spikes by of in mentioned, and related David purchases to checks. As government like stimulus remain and wider

growth months. saw appears board be our Amazon to the channels. for in April marketplace over prior across The We on growth accelerated three the

Walmart in year periods also also March some growth XXXX digit We than in more prior GMV to And compared year-on-year. on and seen April eBay, we and XXX% year-over-year XXXX growth to had growth on saw in double in which GMV early decline has returned incredible April.

long tail marketplaces others. and robust also year-over-year April, GMV generally Our in enjoying growth Newegg of Zalando, including

use pleased IR retailer our dietary right have surgeon a provided PureFormulas and to digital Top while long-term success front demand. demand Their products it clients from of products wellness and of is GMV on time. shared an particularly the and are predictive breaking consumers get support our capabilities experienced that organic working supplements channeladvisor.com. right marketplace the We foods, expert record story they to has a ChannelAdvisor’s to this health website services in growth. reported home of help analytics to from The with effectively One range available marketing period and forecast XXX our during at have uninterrupted to on client guidance it relied client,

positive to XP addition, while late abruptly advertisers levels Amazon, stabilization all spend adjusting in and environment. for channels ad marketing indicator XP spending mid recovery declined March, of current the ad clients. are another digital as in is our us to and across saw spend This in including we In April

current affecting Now let it’s environment a how we’ve to turn the business, few and technology me from through sharing highlights the quarter. talked that our past

financial their to product that in am And strong to us experience our strides act and significant in pleased enhancing pandemic. made As allowed the addition to face the in this mentioned, think has enable strategically of client to report innovation I David we’ve position success.

global We expansion VP Buy We a Interpark in solution. affiliates Spain in tracking by critical expanded always New marketplaces priority further and and Corte Korea, Australia hundreds of El Ingles Channel including Singapore, Zealand, to Where to France. our capability and sales new is for to our enabling added expansion, XX additional support adding us. in Netherlands retailers seven Amazon Kogan in

In Buy ship drop addition, XX advertisers. supporting Best and Americas we enabled additional XP across Facebook and added and five EMEA, including retailers, new the Asia Costco locales

In features to usability share of addition, examples. seller we delivered couple numerous a improve I’ll new and outcomes.

We advertisers releasing which advertising, continue both to day to budget. saving build parting Amazon hours bidding technology for automatically manage adjust day, during and the peak time optimization,

marketplace those listing to improved matter. errors sellers, resolution by error that reducing sales, notifications noise of focus all do enabling the we’ve not basically resolving on workflows eliminating truly that and impact For user errors

by product, are Finally, releasing to release achieved the best our to beta is feedback on approach a better, second base of designed update to market. client end final the milestone our Starter providing for the the ShipStation. to I’d good, beta regular like partner users progress major for at an share our successfully developing planned product We March toward Initial expand of general shape quarter our go-to-market customer which Edition acquisition. in addressable

with encouraged strategic are pleased very partner. the feedback interest date results achieved by this We early collaboration by and are and to and

the summarize, as for growth the and operations have solutions of online we the continue I’m a to need current and our To support given purchasing the market. our indicate company of reinforce trends how clients in environment. engaged in GMV proud challenges

to Our to to innovate engineering clients product teams arm continued and our have actively compete. further

and provide I’m to uncertainty, opportunity companies relevant about in us. While their optimistic front businesses in I deliver confident of growing the is e-commerce our there to solutions remain and ability

will that, who I’ll financial provide our a now With update on Rich? it to more Rich, pass detailed performance.

Rich Cornetta

good Great everyone. Thank Beth. update, you morning and

tremendous for these First, unprecedented I’d during like team their finance circumstances. to recognize and thank our efforts

of array reacted were swiftly to internal is well strong in related which a we COVID-XX our Fortunately, assist businesses The all true U.S. procedures. execute well-documented. and to impacts with programs need. pandemic close policies The testament an prepared has are the to deliverables, on controls, quarter global government of

Given as and we subscription form any of recurring the we business our loans, based did form U.S. in a of are ample relief nor government-backed on flows, Program. Payroll liquidity, on, cash positive such substantially model not dependent pursue the revenues, Protection

intend do certain deferral benefit incentives as interest free payments we jurisdictions. certain However, of multiple and from such tax penalty to in

consistent historical non-GAAP comments with first will practices, Please bear quarter be performance. expenses discuss in So let’s mind a my our basis. regarding on

the for Our our both with financial and the quarter revenue the EBITDA strong first above XXXX end were adjusted results high of quarter. guidance ranges for

the over extremely are not months. pleased current only trailing previous We during quarter, but also the with our XX profitability

We also to a compared prior flow substantial year strong achieved cash improvement another quarter period. with free of the

the our this Given will we throughout continue the as focus current important to cash position ever is attention cash where and king, is environment managing on our year. as

X% Now operations. up and at up let’s $XX look XXXX, Total basis on our excluding results. was a take a constant quarter closer first revenue for X% these up nearly X% the year-over-year, currency million China

XX total months from change. the presented Please revenue brand’s internal first adjusted the compared prior by basis. for which ago year XX% during year the and had at XXXX this for quarter the we for XX, ended our we to the revenue clarified revenue of type, trailing XX% results and for definition note, Brand’s period, at period. been of on a increased look XX the up month represented year-over-year customers our XX% customer March Looking period

brands revenue as in overall to per part strategic better a higher customer higher continued customers our as mentioned We of growth rates expansions, because the pleased we retention. rate goals have this and compared towards longer-term are higher retail well which brands, with shift as is average generally past, have of

has down the and over revenue the comes for been XX focus for total ended generally which the the As are Retailer have of prior represented illustrated, brands this XX% is year few revenue pandemic for XXXX channels, last more better digital the our period, positioned resilient when XX% period. years. XX, it months to also a to us March from shift they strategic why

X% the First was ago an to representing $XX.X period. subscription year of revenue increase compared million, quarter

First XXXX, quarter seen year first where revenue variable year-over-year period. $X.X variable of quarter an revenue the from representing we’ve growth. X% increase ago QX This was million, was the since

QX of in transaction representing first first driven from since the attribute investments revenue the in strategic over From A March was two portion GMV organization from beat our yet perspective, U.S. partner from the the increased not volume, performance, especially does the revenue we’ve in quarter U.S. sales our growth last from as the variable quarters. the revenue, revenue described. well meaningful elevated end We this X% U.S. revenue and reflect of by variable as David resulting a geographic towards the quarter, but growth performance XXXX. brands quarter made as it revenue primarily

new Many to substantially still prior These ramp include XXXX. and XX.X%. to compared their in across improved and representing Adjusted XXXX a in reported reps revenue the are line to EBITDA quarter. the increase excluding increased for expense hired half the that EBITDA period, the of $X.X results. our improvements sales we’ve training of to quarter International we second results the items $X.X to million in results basis productivity during the adjusted U.S. in X%, year margin contributing start anticipate progressing all China point million through

period. which $XX expenses GAAP significant adjusted our March and EBITDA The of highlighting ended the XX commitment in to capital investments loss and $X.X at result and for reorganization and our enable net manage experienced for was income income profitable XXXX, compared improvement quarter year ability reallocating top million, in a aimed cost net drive in trailing of a million growth to continued growth. Further, make in and our growth, period the strengthen in international operations. revenue Similarly, to our return $X ongoing in discipline at direct XXXX strong the coming XX U.S. totaled services net to prior month support further and adjusted improvement sales, was July line a the to million GAAP EBITDA

$X.X finished of sheet. flow the We from during and balance prior Free the the $XX.X the quarter, quarter substantial to results. up the Turning a for million million, strong improvement with was million were quarter. cash $X.X $X Cash equivalents marking cash period. year million

each to through are and as quarter the pleased week current position I’m remained that Given environment, cash April the our strong have cash carefully first during and we economic managing well. collections report

outlook. our let’s discuss Now short and long-term

simply As guidance annual EBITDA transaction and David we mentioned, by April, backdrop, this pandemic. uncertain we or spending are driving performance, our will an outlook continue to especially how caused may level will cannot adjusted which COVID-XX withdrawing the GMV global predict uncertain our volumes and extent long in against benefit revenue of to due economic affect growth in the revenue the improved variable March – revenues, Despite what consumer which GMV globally. and

as In customer we financial associated with possible addition, mentioned, and quarter, disruption the confront anticipate the first challenges the in churn towards David contractions increases operational and certain customers we as end saw and of sales pandemic.

trends For to GMV too the than is performance, second usual. revenues but the we limited GMV trends elevated quarter remained financial far. on expected as it based of some April thus are have May encouraging And visibility described. have strong XXXX, we’ve more our

for elevated quarter. but in hope as trends Based it what translate higher very the May GMV on off progresses levels to assumptions we remains quarter second whether than June. to it forecast GMV and performance. throughout floor guidance continue such, our these revenue million a the that still trends second results revenue continue pre-pandemic, saw to we if taper somewhat how EBITDA As that It million quarter, compare see will the And to adjusted note difficult $X revenues our remains is GMV were of an to the floor are of important second quarter current throughout XXXX. issuing QX $XX.X we seasonal guidance that could for and may variable

alone, proven expenses help continue market, proposition successfully, on over of brings shows we certain have These manage proven effects beyond ability decisions as the in we also visibility, have travel, while we the identified revenue drive to of other savings discipline. from especially and related have events, increasing pandemic to and in confident the drive have certain operate profitability closing, expenses strict help more we This spending. remain of the Simply in platform can working and Despite cost can opportunities elimination we past cancel dependency value we to cost from limited continued discretionary the in from through that long-term. experience our home. light XXXX the facilities improvement In the will e-commerce.

pass some for now will back the to final remarks. call I David

David Spitz

our Thanks, right right and fortunate for handling the Rich. I’m relevant to with visibility such proud few know months at that is our of though relates in professionalism this strong limited, focus our intact on incredible e-commerce. time than ever. last it we’re as team place more a during pandemic and And We to the customers. be is the near-term mission

like operator, to with to that now the questions. And we’d open call

Operator

MacDonald you. from comes from Ryan first [Operator question Thank Your Needham. Instructions]

Ryan MacDonald

to Yes. particularly questions particularly March Thanks Beth a congrats comparison trends taking interesting. in the David, particular sharing regarding the Good and here. thought and GMV morning, stimulus nice data the in around my for was for Amazon, April. updates on day through thanks David, the I point quarter and Rich.

cancellations As here the here, Thanks. reduce you’re you can payments had this customers in talk what supporting at reducing on interim? via of customer looking churn and impact the deferred or and current about far contract thus environment that’s perhaps contract sort

David Spitz

Yes.

I some program retail implemented think, whether distress, because early it store or were some was knew especially facing that a customers the one, closures number we pandemic, our it’s in we of work to try make we them was what thing do supportive as as sure to you. have and being were possible. the that it that view to right with was And our

well been received. it’s think I

bit early what little impact necessarily probably to on is it’s churn. think too the say I a

by it’s customer. think customer be going to I

their ChannelAdvisor. issues far shut may were Some then to fulfillment their existential customers reach have just need facilities. broader if that example, some little beyond a down, due operations of And for shutdown time bit more

But think think I point. bit say little I peak the this of a early at past it’s we’re that. to So

And people seeing we’re the are middle the think track. the to again. and spread that of of holiday it’s spring, I categories course, in most we most of operationalized essentially a

at point, majority behind vast So of think is the this it I us.

Ryan MacDonald

in of as a bookings then And you great Can see new mix what great. in of perspective seeing brands of strength follow-up, bookings? surprising new a terms as back about pockets the Thanks. talk to geographic you bounce April. looked are from it’s into in That’s you’re as percent May? the you’ve a those are of And any bookings seeing general April and in these early

David Spitz

majority for for particularly would with is I virtually was brands, say April, in brands. new Yes. In April, bookings, the interesting. which all of customers is it Europe

that it’s before, we’ve brands cycle if that as cycle. through I life but late to, a think, early having the to them. a path present and to retailers, for for major accelerated it to because probably five everybody brands. of and digital just really your really action call evaluate been have source of is traditional a been doing for call, many close this there has frankly, revenue very transformation to digital those of are right? real what years And that type up think And we’ve goes in I into at one the distribution when least that there wakes wakeup zero, you’re channel are some Obviously, means the So and are consumer life still some talked are of about brands years,

Ryan MacDonald

the color. Thanks for Great.

David Spitz

Thanks, Ryan.

Operator

Pfau William Matt Blair. from comes question from next Your

Matt Pfau

ChannelAdvisor their Maybe And Hey, is customers, on haven’t of you seen guys. any pipeline presence. to my Thanks out of the as on and capacity wanted been? a influx out guess checking ask little your board? or signings. a that about getting thing at job quarter. to idea just I for as Or terms I customer new they has taking of the why try side new sort on the to more of huge that surprised customers new questions in digital build nice least I’m it

David Spitz

is this David. Ryan, Yes.

an seen have we sure. uptick think I for

remember, XXX have days is our You XXX brand. for typically as and long XX to as sales customers mid-tier days cycle to for

part, would for on in is pandemic, for of beef types I But particular. the I prior retailers still, even I that that this their remarked e-commerce say brands pipeline. So initiatives. response, to wake-up the whole call, just in up And that, the a has influx think, been this for most certain as need

be a over to our tailwind typical customer this expect would of in new It’s sales terms time. early acquisition just I So in cycle.

Matt Pfau

it. with there’s And your categories the pipeline great of shifting have penetration Got been upticks. in category? haven’t retailers maybe by in e-commerce a also huge historically seen types seen brands or shift that you of online Have some mix that had in penetration correlating

David Spitz

I Yes, so. think

practically is think maybe categories call I it this in. call, right, – this category, when when I I to wakeup applies much say really every a even as we historically haven’t done

way some been of that been in retail. in terms hasn’t hasn’t category traditional affected any really e-commerce there So particular

applicability we��ll that continue solutions expect to market. broaden to of this I So the see the our

Matt Pfau

And it. just Rich. then Got for one one last

about On Or a sort expenses there of quarter, year, first good out the the quarter of rest modeling of anything use in are the the out as we year? the the unique may the onetime that the bit about sort of preferred going throughout is these in forward? expenses that’s think sort mean, of I baselines rest to

Rich Cornetta

in want depend that have reversals on QX with for performance compensation don’t that essentially also to did QX may contributed have we some in EBITDA savings the We’ve strong primarily some employee during of some the year. a attrition onetime of had QX. we the So things, rest reversals maybe couple primarily expense to

events would I say would So onetime mostly in some expense reversals QX. that be

travel, to a areas rest year. are savings the with few of cost that we regards into of result pandemic. the the additional some identified have I out as forecast for like We and our things a that, called factoring shows events,

Matt Pfau

for guys. Got it. taking Thanks my questions,

David Spitz

Thanks, Matt.

Operator

Cummins from Riley from comes FBR. Zach B. next Your question

Zach Cummins

for the And that Hi. about thanks move Good sales explore you to in force the new you’re from Rich the about and brought overall given seeing you, you my taking demand near XXXX? brands that and end question. just guess to initiatives morning, thinking of David, that’s uptick sales new to on I trajectory coming just the Beth. online. now, the of the looking feeling How are reps capacity right

David Spitz

I Zach, feel really good about David. our this is sales capacity.

Our – the some. biggest we We’ve the which in gap added and last in particular year. gap closed the had where was U.S.,

are a hired Obviously, early the capacity And into think folks good of standpoint. so we ramping position a the on their are XXXX, in end we very curve. still of XXXX from the and part that I towards

expect into capacity half. them second to would standpoint, really think turn shape. the So we’re But I I we from contributing in start bookings as an meaningfully to good outright

Zach Cummins

Got noted risk any you what or sort there potential of just given impacts your then what given customer pandemic. an of helpful. the just us potential impacts And your even it. uptick quantify the just is overall base pandemic? That’s give a GMV of or some of some you Can of risk portion in the churn, you portion is feel generally, of idea of from the like from at

David Spitz

point are we We risk for would it I’ll as think for very, don’t we have know we that opposed know incremental how you, concentration. there those revenue I a example, very doing – to substantial I or And a just have as numbers. all characterize I have, And to mall-based Yes, the guys Zach. – of percentage huge couple of low story retailers. overall. are

mid-single for think top revenue XX our for customers us. digits I account

making the for revenue opposed a step turning folks customer do difficulty amount So have function that one these we’re I But as point. of why and us. really some may would a as that’s But it incremental that characterize we there’s corner, the increase. expect of drives material to no

Zach Cummins

be of half. advertising that mean, then worse kind the during the part QX? half know there, trends, QX the some expense potentially how in pressure side final least me here seeing of of the getting second here I on I the and Google at especially is it. in it, there’s are first on been Got here first and then for And then question Amazon you in could those of year

David Spitz

really it Yes, interesting. was

cliff you And prior from the to pretty of crisis the saw engulfed quickly, So into right? hoarding us, everybody mode. budgets in halting bottom it sort March, became that we weeks. would spend March click costs was because that and freezing whole of – the could even And this see things everybody went when everybody where looking and sure the of the I in recovery spending. like edge say attractive. we more drop significantly was, middle just over ad And and really was think tell as even really started cash two substantially not rebounded So like I

been of went days took April, stabilization we’ve advantage that this seen here up some enterprising a of of trends into those and so data, across batch in as And and pulled situation. May, a then So yesterday, is more in few channels. through the we’ve and the customers of I latest

edges So of month. an kind of initial going March, got it the middle in rush of the was feels And rebound for at in as we into relatively like there May. we’re normal the quick a April end to levels

Zach Cummins

and questions best again Thanks for helpful. That’s my of taking going forward. it. luck Got

David Spitz

Thanks, Zach.

Operator

comes Colin question from next Baird. Sebastian from Your

Colin Sebastian

morning. there Thanks is Hope safe and and healthy. good everyone

off, essential the with and with Amazon to some First logistics just to products. well-publicized Obviously, shifting Marketplaces. David, issues has respect

if can ChannelAdvisor about I’m happening Thank in is since you. if could fulfillment you’re Wondering Edition. seeing a seen in as dynamic behind points certainly well demand of services, that with assume of you launch hearing the merchants So curious that’s this environment. you any secondly, from others, this between that’s if ShipStation way more partnership your frequently scenes? pain Walmart we’re as the strength that you’ve to the as maybe then increase on merchants the value I talk proposition the Starter and strategic And of is something fulfillment that and shift you the really one eBay demonstrate key for enable platforms and current

David Spitz

Yes. and have right? so holiday but Colin, a customers. much basically neat manage they interesting, of surprise channels spring. really other of the I I that. is handle third-party in appreciate the think on themselves only season And I had Amazon, it’s not been think, in Yes, We fulfillment to behalf compared that relatively here

bit So me, to operational up to and their but with a that it able little to fact to and a been a manage they’ve just surprise be honest, raw testament through frankly, is, of the holiday disruption, their spin execution. effectively

what done. impressive So it’s I they’ve been actually think pretty

But absolutely. yes,

tend value need larger are I They don’t think it use to often use actually customer our who FBA fulfilled. it does seller to need to speak our be proposition. shipments to of or don’t customers Most necessarily exclusively.

And really on so as just continues we And in and fire double as of digits. to commented also was saw impact the a less an Walmart, Walmart – in her made well. bit little perform eBay on customers. absolutely, our Beth is section, But

fulfilling stock, automatically having customers channels things allows think, are out across been, therefore, so And they who, I good. and that and sell again, customers flexibility platform go for mostly of seamlessly list and has in to themselves, really and have a delist as multiple especially our

just looking channel channels, they’re maybe stock, giving to We XXX consumers maybe some and different really was people obviously, those so looking, the stock of something opportunity of out things. And gave or are in flexibility Amazon reach for we wherever right? was three like of the whatever support Marketplaces, people out

So many this being like I Walmart shopped so think things and online on first an advantage end for have Walmart probably because store. up pickup people experienced time for the in will

think I for them. will function this a be step So

route effect. I our that that confusion definitively fulfillment, bit really allowed fact still different in product to orders demand. we As it in maybe different in relates say some to centers a around key in have fulfillment given who couple think that centers and Most our it’s was do to at there ability came system to different early customers had change lockdown spoke – cycle for, the states to or know a different stay distribution the step states orchestration least function category But centers sales fulfillment in I open, e-commerce little orders witnessing one really where but to a a were of one order I just is to that.

orders continue that, will expect And that So positive. I do has think for being been us. able really I to dynamically, route to be differentiator a

then around And Starter. was ShipStation last your question and

we’ve see get into initial feedback. full the beta on set really to launching that. that that market Beth period and go entered it our mentioned, QX, with anticipate customers of And we exciting pretty with It’s a during ShipStation. As to

force the while feedback early, it addressable lower allows platform in commerce, direct over had obviously, to here our a not customers. our customers that there’s time. point only still us expand But where so critical do thing go-to-market a through also price market but getting, lot to still away So at is market, for larger without by and last model migrate over efficient of very, from very but up we’ve our years, that a the then us sales those a but move to few beta from customers reaching smaller serve help to

Colin Sebastian

you. Thank Great.

David Spitz

Thanks, Colin.

Operator

next question D.A. of Thomas line comes Forte from Your from the Davidson.

Thomas Forte

Great. Thanks for question. taking my

an questions. observation then first, and two So

is observation to on platform of the category e-commerce outbreak. the data the shift So had your illustrative the buy been amazing, has very during you’ve

you thank So for that.

your categories? as do second, range penetration Second, multiple the for then on apparel. with recently, acceleration What home, you I what of think brand in in, the And are specific to be these near-term of to range reopening? on see as XX% stickiness ChannelAdvisor XX% stores online with success you the the ASICS. looks categories, say, such online implications the penetration highlighted versus the across which that

David Spitz

putting appreciate Tom, out there. I of question. a we’ve – a lot great the been commentary

sixth In category around fact, data trends. just last night, we released dump of our

captures waves of doing it, as them had some it’s we to worth you stimulus is, happening. this your fascinating big helpful and chance as to the to So question. been a our also day little it’s on say other watch And a and patterns lot customers it’s the But be trends. of penetration been try it sort to hard see point. can what’s point that that But because help that’s if buying have on. a to understand bit to and of reading at going we’ve been it To how durable

sales. mentioned, necessarily what seeing to are function is expect what As out levels we’re holiday right I now. think in going step I e-commerce essentially be a to stay don’t it to at increase turn I

a a surprise a reopen, think But back stores is family do think not. to environment. not that members all traditional me. ready people I in few back I to into even probably speak people I I go think would to think different I them, to some to and be you think have they are a or store some are retail rush a ask are. rush to as probably And And

landscape. alter permanently And so I the think this will sort of

more to in-store is who lot maybe shop primarily in realize, who other are I spend have really this convenient grocery. think portion to and and home delivery services there start result. a online higher offline grocery online essence, come could more, be is a been, their or that of This to of online, and wow, like still forced shopping keep online thing applies have the people that like shopping, they a of other pickup, as buy things, pickup things

think it that into the is all at settles. there I it I current say. And kind But to is, spending. the where do it of of this. up expect levels exactly going know it hard where ends won’t will don’t I dust was in higher it holiday be when than So be

good. As for ChannelAdvisor, it relates implications the it’s to I think

the digital, number They’re blip a that look I think plans, think, for and I we’re in breadth digital pull dramatically what good only companies. to that all we’ve a exactly kind scalability fact and solutions. who’s the for the for. robust should been trusted, more accounts. people. scale for with able I I that our offer, is work you holiday who’s very spring, surprise a – want think for to forward That’s of shift to their looking we of more of the our it as of able it’s lost very enterprise-grade they to accelerating companies season customers be very, mean, transformation the – that the sense depth a we is when partner large partner who’s and And of global, scale on technology shouldn’t kind to rapidly without got in

shifting So think, can benefit over time, online, more spend I ChannelAdvisor. only

Thomas Forte

you. Thank well. Stay Great.

David Spitz

you, Thank Tom, too. you

Operator

to will closing remarks. at for And I this now I’m turn showing no further it management questions time. back

Raiford Garrabrant

support and forward speaking you your We today. appreciate look again everyone, you, us to with soon. joining for Thank

Operator

please this today’s and at conclude ask thank you disconnect time. participation. We Ladies We does you your for gentlemen, conference. this that

ChannelAdvisor (ECOM) 9 May 202020 Q1 Earnings call transcript