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| 8-K - DEMANDWARE, INC. 8-K - Demandware Inc | a50368227.htm |
Exhibit 99.1
Demandware Announces Second Quarter 2012 Financial Results
Strong Customer Growth and New Customer Launches Drive 47% Subscription Revenue Increase
Large Scale Retailers and Branded Manufacturers Continue to Embrace Demandware’s SaaS Solution
BURLINGTON, Mass.--(BUSINESS WIRE)--August 7, 2012--Demandware®, Inc., (NYSE: DWRE) a leader in on-demand ecommerce, today announced financial results for its second quarter ended June 30, 2012.
Second Quarter Highlights
- Total revenue for the second quarter was $18.4 million, a 43% year over year increase from $12.9 million in the second quarter of 2011
- Subscription revenue for the second quarter was $15.2 million, a 47% year over year increase from $10.4 million in the second quarter of 2011
- 124 live customers and 445 live sites at June 30, 2012
- Conducted Second Annual XChange Customer Conference
“Our positive business momentum continued into the second quarter of 2012,” stated Tom Ebling, Chief Executive Officer of Demandware. “We are very pleased that large, rapidly growing retailers, such as Finish Line, embraced our unique SaaS business model while well-established retailers and branded manufacturers, such as L’Oreal and Theory, continued to experience strong growth on the Demandware Commerce platform. We plan to continue to invest in sales and marketing and research and development to capitalize on the strong fundamentals of our business and the opportunity we see for ecommerce solutions in the cloud.”
- Demandware signed significant new customers during the quarter including Finish Line, Ethan Allen, Godiva, Picard Surgeles, the Apparel Group, Crabtree & Evelyn and London Drugs.
- Leading retailers such as Summit Sports, Medipolis and vineyard vines were among the companies that launched new initial sites on the Demandware Commerce platform during the second quarter.
- The company also experienced site expansion with its existing customers (such as Mothercare, Perry Ellis and Diane von Furstenberg) launching ecommerce sites in new geographies or for new brands.
“Our investments in sales and marketing continued to pay dividends during the quarter,” stated Scott Dussault, Demandware Chief Financial Officer. “With the execution of our land and expand strategy and with our key customer wins during the first half of 2012, many of which are large enterprise scale retailers and branded manufacturers, we are confident that the company is poised for growth in 2013 and beyond.”
Demandware’s loss from operations for the second quarter of 2012 was $5.1 million, as compared to a loss from operations of $1.3 million for the same period in 2011, reflecting the company's increased investments to support the growth of its business.
Demandware’s GAAP net loss for the second quarter of 2012 was $5.6 million, or $(0.19) per share attributable to common stockholders, as compared to a net loss of $1.2 million, or $(0.71) per share attributable to common shareholders, for the second quarter of 2011.
Non-GAAP net loss for the second quarter of 2012 was $3.4 million, or $(0.12) per share, as compared to non-GAAP net loss of $0.9 million, or $(0.24) per share, for the second quarter of 2011.(1)
(1)Non-GAAP results exclude expenses related to stock-based compensation and the accretion of redeemable preferred stock.
Quarterly Conference Call
To access the call at 8:30 a.m. EDT today, please dial (866) 356-3095 in the U.S. or +1 (617) 597-5391 internationally. The Passcode for the call is: 70910039. A live webcast of the call will also be available on the investor relations section of the company’s website. An audio replay will be available for one week following the conclusion of the call through August 14, 2012. The replay number is (888) 286-8010 in the U.S. or +1 (617) 801-6888 internationally. The Passcode for the replay is: 93763694. The replay will also be available as a webcast on Demandware’s Investor Relations Web site.
About Demandware
Demandware is a leading provider of software-as-a-service (SaaS) ecommerce solutions that enable companies to easily design, implement and manage their own customized ecommerce sites, including websites, mobile applications and other digital storefronts. Customers use our highly scalable and integrated Demandware Commerce platform to more easily launch and manage multiple ecommerce sites, initiate marketing campaigns more quickly, and improve ecommerce traffic. For more information about Demandware, visit www.demandware.com, call 888-553-9216 or email info@demandware.com.
Demandware is a registered trademark of Demandware, Inc.
Forward-looking Statements
This release contains forward-looking statements, including statements regarding Demandware's future financial performance, market growth, the demand for Demandware's solutions, and general business conditions. Any forward-looking statements contained in this press release are based upon Demandware's historical performance and its current plans, estimates and expectations and are not a representation that such plans, estimates, or expectations will be achieved. These forward-looking statements represent Demandware's expectations as of the date of this press release. Subsequent events may cause these expectations to change, and Demandware disclaims any obligation to update the forward-looking statements in the future. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, our ability to attract new customers; the extent to which customers renew their contracts for our solution; the seasonality of our business; our ability to manage our growth; the continued growth of the market for on-demand software; the timing and success of solutions offered by our competitors; unpredictable macro-economic conditions; the loss of any of our key employees; the length of the sales and implementation cycles for our solutions; increased demands on our infrastructure and costs associated with operating as a public company; failure to protect our intellectual property; changes in current tax or accounting rules; and other risk and uncertainties. Further information on potential factors that could affect actual results is included in Demandware’s reports filed with the SEC.
Non-GAAP Financial Measures
Demandware has provided in this release financial information that has not been prepared in accordance with GAAP. This information includes non-GAAP net loss and non-GAAP net loss per share. Demandware uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to GAAP measures, in evaluating Demandware’s ongoing operational performance. Demandware believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing its financial measures with other companies in Demandware's industry, many of which present similar non-GAAP financial measures to investors. Non-GAAP net loss and non-GAAP net loss per share exclude expenses related to stock-based compensation and the accretion of redeemable preferred. These amounts are often difficult to predict and often excluded by other companies to help investors understand the operational performance of their business. Non-GAAP financial measures that the Company uses may differ from measures that other companies may use. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measure. A reconciliation of GAAP to the non-GAAP financial measures has been provided in the tables included as part of this press release.
| Demandware, Inc. | ||||||||||
| Condensed Consolidated Balance Sheets | ||||||||||
| (unaudited, in thousands) | ||||||||||
| June 30, 2012 | December 31, 2011 | |||||||||
| ASSETS | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 84,737 | $ | 14,939 | ||||||
| Investments in marketable securities | 25,305 | - | ||||||||
| Accounts receivable — net of allowance of doubtful accounts and credit memos | 14,595 | 16,930 | ||||||||
| Prepaid expenses and other current assets | 3,299 | 1,878 | ||||||||
| Total current assets | 127,936 | 33,747 | ||||||||
| PROPERTY AND EQUIPMENT — Net | 9,326 | 6,404 | ||||||||
| OTHER ASSETS | 1,090 | 2,735 | ||||||||
| Total assets | $ | 138,352 | $ | 42,886 | ||||||
| LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||||
| Current Liabilities: | ||||||||||
| Current portion of notes payable | $ | 3,672 | $ | 2,098 | ||||||
| Accounts payable | 2,740 | 1,884 | ||||||||
| Accrued expenses | 7,492 | 7,023 | ||||||||
| Deferred revenue | 17,502 | 13,960 | ||||||||
| Deferred rent | 109 | 57 | ||||||||
| Total current liabilities | 31,515 | 25,022 | ||||||||
| Long-term liabilities: | ||||||||||
| Deferred revenue | 13,079 | 12,210 | ||||||||
| Notes payable | 3,425 | 1,882 | ||||||||
| Deferred rent | 868 | 682 | ||||||||
| Preferred stock warrant liability | - | 107 | ||||||||
| Total liabilities | 48,887 | 39,903 | ||||||||
| Series A redeemable convertible preferred stock | - | 14,976 | ||||||||
| Series B redeemable convertible preferred stock | - | 18,158 | ||||||||
| Series C redeemable convertible preferred stock | - | 27,884 | ||||||||
| Series D redeemable convertible preferred stock | - | 26,585 | ||||||||
| Total redeemable convertible preferred stock | - | 87,603 | ||||||||
| Stockholders' equity (deficit): | ||||||||||
| Common stock | 291 | 45 | ||||||||
| Additional paid-in capital | 165,695 | - | ||||||||
| Accumulated other comprehensive loss |
(80 |
) | (53 | ) | ||||||
| Accumulated deficit |
(76,441 |
) | (84,612 | ) | ||||||
|
|
||||||||||
| Total stockholders’ equity (deficit) | 89,465 | (84,620 | ) | |||||||
|
Total Liabilities, Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) |
$ | 138,352 | $ | 42,886 | ||||||
| Demandware, Inc. | ||||||||||||||||||||
| Condensed Consolidated Statements of Operations | ||||||||||||||||||||
| (unaudited, in thousands) | ||||||||||||||||||||
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||||||
|
2012 |
2011 |
2012 |
2011 |
|||||||||||||||||
| Revenue: | ||||||||||||||||||||
| Subscription | $ | 15,198 | $ | 10,358 | $ | 28,811 | $ | 19,682 | ||||||||||||
| Services | 3,162 | 2,494 | 5,639 | 4,774 | ||||||||||||||||
| Total revenue | 18,360 | 12,852 | 34,450 | 24,456 | ||||||||||||||||
| Cost of revenue: | ||||||||||||||||||||
| Subscription | 3,040 | 2,308 | 5,906 | 4,369 | ||||||||||||||||
| Services | 3,055 | 2,392 | 5,608 | 4,697 | ||||||||||||||||
| Total cost of revenue | 6,095 | 4,700 | 11,514 | 9,066 | ||||||||||||||||
| Gross profit | 12,265 | 8,152 | 22,936 | 15,390 | ||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Sales and marketing | 9,568 | 4,771 | 15,906 | 9,303 | ||||||||||||||||
| Research and development | 4,084 | 2,934 | 7,555 | 5,411 | ||||||||||||||||
| General and administrative | 3,696 | 1,702 | 6,401 | 2,972 | ||||||||||||||||
| Total operating expenses | 17,348 | 9,407 | 29,862 | 17,686 | ||||||||||||||||
| Loss from operations | (5,083 | ) | (1,255 | ) | (6,926 | ) | (2,296 | ) | ||||||||||||
| Other (expense) income: | ||||||||||||||||||||
| Interest income | 46 | 3 | 47 | 5 | ||||||||||||||||
| Interest expense | (79 | ) | (57 | ) | (153 | ) | (119 | ) | ||||||||||||
| Other (expense) income | (447 | ) | 156 | (649 | ) | 569 | ||||||||||||||
| Other (expense) income — net | (480 | ) | 102 | (755 | ) | 455 | ||||||||||||||
| Loss before income taxes | (5,563 | ) | (1,153 | ) | (7,681 | ) | (1,841 | ) | ||||||||||||
| Income Tax Expense | 70 | 26 | 196 | 55 | ||||||||||||||||
| Net Loss | $ | (5,633 | ) | $ | (1,179 | ) | $ | (7,877 | ) | $ | (1,896 | ) | ||||||||
| Accretion of redeemable preferred stock | - | (1,319 | ) | (1,172 | ) | (2,638 | ) | |||||||||||||
| Net loss attributable to common stockholders | $ | (5,633 | ) | $ | (2,498 | ) | $ | (9,049 | ) | $ | (4,534 | ) | ||||||||
|
|
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|
Net loss per share attributable to common stockholders, |
$ | (0.19 | ) | $ | (0.71 | ) | $ | (0.49 | ) | $ | (1.38 | ) | ||||||||
|
|
||||||||||||||||||||
|
Weighted average common shares outstanding, basic and |
29,068 | 3,496 | 18,598 | 3,285 | ||||||||||||||||
| Demandware, Inc. | ||||||||||||||||
| Stock Based Compensation Expense | ||||||||||||||||
| (unaudited, in thousands) | ||||||||||||||||
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
|
2012 |
2011 |
2012 |
2011 |
|||||||||||||
| Cost of subscription revenue | $ | 56 | $ | 5 | $ | 62 | $ | 10 | ||||||||
|
Cost of services revenue |
230 | 21 | 259 | 51 | ||||||||||||
| Sales and marketing | 589 | 54 | 678 | 109 | ||||||||||||
| Research and development | 505 | 95 | 550 | 422 | ||||||||||||
| General and administration | 854 | 150 | 1,064 | 268 | ||||||||||||
| $ | 2,234 | $ | 325 | $ | 2,613 | $ | 860 | |||||||||
| Demandware, Inc. | ||||||||||||||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||||||||||||||
| (unaudited, in thousands) | ||||||||||||||||||||
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||||||
|
2012 |
2011 |
2012 |
2011 |
|||||||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||||||
| Net loss | $ | (5,634 | ) | $ | (1,179 | ) | $ | (7,877 | ) | $ | (1,896 | ) | ||||||||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||||||||||
| Depreciation and amortization | 790 | 706 | 1,540 | 1,400 | ||||||||||||||||
| Loss on disposal of property and equipment | - | 86 | - | 86 | ||||||||||||||||
| Re-measurement of preferred stock warrant liability | - | (1 | ) | 426 | (3 | ) | ||||||||||||||
| Provision for credit memos | 69 | - | 33 | - | ||||||||||||||||
| Stock-based compensation | 2,234 | 325 | 2,613 | 860 | ||||||||||||||||
| Deferred rent expense | 242 | 125 | 238 | 267 | ||||||||||||||||
| Other non-cash reconciling items | 20 | 80 | 28 | 84 | ||||||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||||||||
| Accounts receivable | 1,140 | (1,443 | ) | 2,302 | 25 | |||||||||||||||
| Prepaid expenses and other current assets | 199 | (179 | ) | (874 | ) | (219 | ) | |||||||||||||
| Other long term assets | 104 | 41 | 104 | - | ||||||||||||||||
| Accounts payable | (94 | ) | (281 | ) | 867 | (388 | ) | |||||||||||||
| Accrued expenses | 1,932 | 961 | 275 | 934 | ||||||||||||||||
| Deferred revenue | 1,715 | (273 | ) | 4,411 | (589 | ) | ||||||||||||||
| Net cash provided by (used in) operating activities | 2,717 | (1,032 | ) | 4,086 | 561 | |||||||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||||||
| Purchase of property and equipment | (1,618 | ) | (2,692 | ) | (3,156 | ) | (2,935 | ) | ||||||||||||
| Purchase of marketable securities | (25,319 | ) | - | (25,319 | ) | - | ||||||||||||||
| Proceeds from sale of property and equipment | - | 26 | - | 26 | ||||||||||||||||
| Increase in restricted cash and other assets | (165 | ) | (43 | ) | (165 | ) | (43 | ) | ||||||||||||
| Net cash used in investing activities | (27,102 | ) | (2,709 | ) | (28,640 | ) | (2,952 | ) | ||||||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||||||
|
Proceeds from initial public offering, net of underwriting
discounts and |
- | - | 94,116 | - | ||||||||||||||||
| Proceeds from exercise of stock options | 33 | 727 | 403 | 1,212 | ||||||||||||||||
| Deferred offering costs | (676 | ) | - | (1,465 | ) | - | ||||||||||||||
| Proceeds from issuance of notes payable | 1,294 | 2,369 | 2,600 | 2,369 | ||||||||||||||||
| Payments of note payable | (697 | ) | (388 | ) | (1,265 | ) | (748 | ) | ||||||||||||
| Net cash (used in) provided by financing activities | (46 | ) | 2,708 | 94,389 | 2,833 | |||||||||||||||
| EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS | (84 | ) | 21 | (37 | ) | 102 | ||||||||||||||
| (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (24,515 | ) | (1,012 | ) | 69,798 | 544 | ||||||||||||||
| CASH AND CASH EQUIVALENTS — Beginning of period | 109,252 | 18,704 | 14,939 | 17,148 | ||||||||||||||||
| CASH AND CASH EQUIVALENTS — End of period | $ | 84,737 | $ | 17,692 | $ | 84,737 | $ | 17,692 | ||||||||||||
| Demandware, Inc. | ||||||||||||||||||||
| Calculation of Non-GAAP Operating Loss, Non-GAAP Net Loss, and Non-GAAP Net Loss Per Share | ||||||||||||||||||||
| (Unaudited; in thousands, except per share data) | ||||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||
|
2012 |
2011 |
2012 |
2011 |
|||||||||||||||||
| Operating loss: | ||||||||||||||||||||
| GAAP operating loss | $ | (5,083 | ) | $ | (1,255 | ) | $ | (6,926 | ) | $ | (2,296 | ) | ||||||||
| Add back: | ||||||||||||||||||||
| Stock-based compensation | 2,234 | 325 | 2,613 | 860 | ||||||||||||||||
| Total non-GAAP operating loss | (2,849 | ) | (930 | ) | (4,313 | ) | (1,436 | ) | ||||||||||||
| Net loss: | ||||||||||||||||||||
| GAAP net loss | $ | (5,633 | ) | $ | (1,179 | ) | $ | (7,877 | ) | $ | (1,896 | ) | ||||||||
| Add back: | ||||||||||||||||||||
| Stock-based compensation | 2,234 | 325 | 2,613 | 860 | ||||||||||||||||
| Total non-GAAP net loss | (3,399 | ) | (854 | ) | (5,264 | ) | (1,036 | ) | ||||||||||||
| Non-GAAP net loss per share: | ||||||||||||||||||||
| Basic & Diluted | $ | (0.12 | ) | $ | (0.24 | ) | $ | (0.28 | ) | $ | (0.32 | ) | ||||||||
CONTACT:
Demandware
Erica Smith, 781-425-1222
Director Investor
Relations
esmith@demandware.com