0001169652FALSE00011696522022-11-072022-11-07
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
____________________________________________________
FORM 8-K
____________________________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 7, 2022
____________________________________________________
CHANNELADVISOR CORPORATION
(Exact name of registrant as specified in its charter)
____________________________________________________
| | | | | | | | | | | | | | |
| Delaware | | 001-35940 | | 56-2257867 |
| (State or other jurisdiction of incorporation) | | (Commission File Number) | | (IRS Employer Identification No.) |
3025 Carrington Mill Boulevard
Morrisville, NC 27560
(Address of principal executive offices, including zip code)
(919) 228-4700
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
____________________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Exchange Act:
| | | | | | | | |
| Title of each class | Trading Symbol | Name of each exchange on which registered |
| Common Stock, $0.001 par value | ECOM | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On November 7, 2022, ChannelAdvisor Corporation (the “Registrant”) issued a press release announcing its financial results for the quarter ended September 30, 2022. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated by reference herein.
In accordance with General Instruction B.2. of Form 8-K, the information in this Item 2.02, and Exhibit 99.1 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any of the Registrant's filings under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, whether made before or after the date hereof, regardless of any incorporation language in such a filing, except as expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| | | | | |
| Exhibit Number | Exhibit Description |
| 99.1 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document).* |
* Submitted electronically with this Report in accordance with the provisions of Regulation S-T
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| | | | | | | | | | | |
| | | CHANNELADVISOR CORPORATION |
| | | |
| | By: | /s/ Richard F. Cornetta |
| Date: | November 7, 2022 | | Richard F. Cornetta |
| | | Chief Financial Officer |
ChannelAdvisor Reports Third Quarter 2022 Results
Research Triangle Park, NC - November 7, 2022 - ChannelAdvisor Corporation (NYSE: ECOM), a leading provider of cloud-based e-commerce solutions that enable brands and retailers to increase global sales, today reported financial results for the quarter and nine months ended September 30, 2022.
Third Quarter 2022 Highlights
GAAP
• Total revenue was $43.5 million, which was within the guidance range announced in August 2022. However, revenue was negatively impacted by foreign currency exchange rate fluctuations during the quarter and year to date. If exchange rates had remained the same as were in effect for the previous quarter, which was the basis for the August guidance, total revenue would have been $44.2 million, which would have exceeded the high-end of our guidance range. If foreign currency exchange rates had remained the same as were in effect for the third quarter of the prior year, total revenue would have been $45.2 million.
• Subscription revenue increased 7% year-over-year, and would have been 12% before the impact from year-over-year changes in foreign currency exchange rates.
• Brands revenue increased 10% year-over-year, and would have been 16% before the impact from year-over-year changes in foreign currency exchange rates.
• Brands subscription revenue grew 11% year-over-year, and would have been 18% before the impact from year-over-year changes in foreign currency exchange rates, and represented 49% of total subscription revenue.
• Cash and cash equivalents were $88.1 million, an increase of $3.9 million since June 30, 2022.
Non-GAAP
•Adjusted EBITDA of $10.1 million and adjusted EBITDA margin of 23% exceeded the high-end of the guidance range.
•Free cash flow for the nine months ended September 30, 2022 of $16.2 million, or $0.53 per diluted share based on 30.8 million diluted weighted average shares outstanding.
Merger Agreement and Proposed Acquisition by CommerceHub
As announced on September 6, 2022, we have entered into a merger agreement with CommerceHub. Under the terms of the agreement, CommerceHub will acquire all outstanding shares of ChannelAdvisor common stock. ChannelAdvisor stockholders will receive $23.10 per share in cash, representing a premium of approximately 57% over the company's closing stock price on September 2, 2022. We have called a special meeting of our stockholders to be held on November 11, 2022 for the approval of the Merger Agreement. The closing of the merger is subject to approval of our stockholders and the satisfaction or waiver of a number of customary closing conditions.
Due to the company's pending transaction with CommerceHub, we will not be providing guidance for the fourth quarter or full fiscal year 2022. In addition, as is customary during the pendency of an acquisition, we will not be hosting a conference call in conjunction with this earnings release. For further details and discussion of our financial performance please refer to our quarterly report on Form 10-Q for the quarter ended September 30, 2022.
Non-GAAP Financial Measures
This press release contains the following non-GAAP financial measures: adjusted EBITDA and adjusted EBITDA margin and free cash flow and free cash flow per diluted share. We also may provide information regarding non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP income from operations and non-GAAP operating margin. Adjusted EBITDA and adjusted EBITDA margin exclude depreciation, amortization, income tax expense, net interest (income) expense, and stock-based compensation expense. For 2022 only, adjusted EBITDA excludes merger-related costs, lease abandonment and related costs and headquarters relocation costs. For 2021 only, adjusted EBITDA excludes the change in fair value of acquisition-related contingent consideration (which increased GAAP operating income). Adjusted EBITDA margin is equal to adjusted EBITDA divided by GAAP revenue. Free cash flow is cash flow from operations, reduced by purchases of property and equipment and payment of capitalized software development costs. Non-GAAP gross profit, non-GAAP gross margin and non-GAAP operating expenses exclude stock-based compensation expense and the other items excluded from adjusted EBITDA described above, as applicable. Non-GAAP gross margin is equal to non-GAAP gross profit divided by GAAP revenue. Non-GAAP operating margin is equal to non-GAAP income from operations divided by GAAP revenue.
ChannelAdvisor believes that these non-GAAP financial measures provide useful information to management and investors relating to ChannelAdvisor’s financial condition and results of operations. The company’s management uses these non-GAAP measures to compare the company’s performance to that of prior periods for trend analyses, and for budgeting and planning purposes. The company 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 the company’s financial measures with other software companies, many of which present similar non-GAAP financial measures to investors, and that it allows for greater transparency with respect to key metrics used by management in its financial and operational decision-making.
Management does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses that are required by GAAP to be recorded in the company’s financial statements. In order to compensate for these limitations, management presents non-GAAP financial measures together with GAAP results. Non-GAAP measures should be considered in addition to results and guidance prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. Reconciliation tables of the most comparable GAAP financial measures to the non-GAAP financial measures used in this press release are included with the financial tables at the end of this release. ChannelAdvisor urges investors to review the reconciliation and not to rely on any single financial measure to evaluate the company’s business. In addition, other companies, including companies in our industry, may calculate similarly named non-GAAP measures differently than we do, which limits their usefulness in comparing our financial results with theirs.
About ChannelAdvisor
ChannelAdvisor (NYSE: ECOM) is a leading multichannel commerce platform whose mission is to connect and optimize the world’s commerce. For over two decades, ChannelAdvisor has helped brands and retailers worldwide improve their online performance by expanding sales channels, connecting with consumers across the entire buying cycle, optimizing their operations for peak performance, and providing actionable analytics to improve competitiveness. Thousands of customers depend on ChannelAdvisor to securely power their e-commerce operations on channels such as Amazon, eBay, Facebook, Google, Walmart, and hundreds more. For more information, visit www.channeladvisor.com.
Cautionary Language Concerning Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements
regarding our proposed acquisition by CommerceHub. These forward-looking statements are made as of the date of this release and are based on current expectations, estimates, forecasts and projections, as well as the current beliefs and assumptions of management. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond ChannelAdvisor’s control. ChannelAdvisor’s actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, our ability to consummate the proposed transaction with CommerceHub in a timely manner or at all and potential delays in consummating the proposed transaction; the satisfaction or waiver of closing conditions to the consummation of the proposed transaction with CommerceHub, including with respect to the approval of our stockholders; and the other risks detailed in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, as well as other documents that may be filed by the company from time to time with the Securities and Exchange Commission. These documents are available on the ‘SEC Filings’ section of the Investor Relations page of our website at http://ir.channeladvisor.com. In particular, the following factors, among others, could cause results to differ materially from those expressed or implied by such forward-looking statements: the impact of the COVID-19 pandemic on global economic conditions and on our revenues and financial performance; our reliance for a significant portion of our revenue on sales by our customers on the Amazon and eBay marketplaces and through advertisements on Google; our ability to respond to rapid changes in channel technologies or requirements; our ability to compete successfully against current and future competitors, which could include the channels themselves; our reliance in part on a pricing model under which a portion of the subscription fees we receive from customers is variable, based upon the amount of transaction volume that those customers process through our platform; our reliance on non-redundant data centers and cloud computing providers to deliver our SaaS solutions; the potential that the e-commerce market does not grow, or grows more slowly than we expect, particularly on the channels that our solutions support; challenges and risks associated with our international operations; our ability to align our expenses with revenue; and risks related to security or privacy breaches. The forward-looking statements included in this press release represent ChannelAdvisor’s views as of the date of this press release. ChannelAdvisor undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Accordingly, these forward-looking statements should not be relied upon as representing ChannelAdvisor’s views as of any date subsequent to the date of this press release.
###
Investor Contact:
Raiford Garrabrant
ChannelAdvisor Corporation
raiford.garrabrant@channeladvisor.com
919-228-4817
Media Contact:
Caroline Riddle
ChannelAdvisor Corporation
caroline.riddle@channeladvisor.com
919-439-8026
ChannelAdvisor Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
| | | | | | | | | | | |
| September 30, 2022 | | December 31, 2021 |
| | (unaudited) | | |
| Assets | | | |
| Current assets: | | | |
| Cash and cash equivalents | $ | 88,115 | | | $ | 100,567 | |
| Accounts receivable, net of allowance of $241 and $279 as of September 30, 2022 and December 31, 2021, respectively | 25,675 | | | 28,886 | |
| Prepaid expenses and other current assets | 14,823 | | | 15,497 | |
| Total current assets | 128,613 | | | 144,950 | |
| Operating lease right of use assets | 5,172 | | | 2,856 | |
| Property and equipment, net of accumulated depreciation of $24,096 and $23,096 as of September 30, 2022 and December 31, 2021, respectively | 9,212 | | | 7,682 | |
| Goodwill | 28,209 | | | 30,042 | |
| Intangible assets, net | 2,292 | | | 3,079 | |
| Deferred contract costs, net of current portion | 18,648 | | | 17,951 | |
| Long-term deferred tax assets, net | 28,368 | | | 32,616 | |
| Other assets | 618 | | | 796 | |
| Total assets | $ | 221,132 | | | $ | 239,972 | |
| Liabilities and stockholders' equity | | | |
| Current liabilities: | | | |
| Accounts payable | $ | 1,057 | | | $ | 1,457 | |
| Accrued expenses | 14,631 | | | 12,644 | |
| Deferred revenue | 28,727 | | | 29,942 | |
| Other current liabilities | 1,633 | | | 4,831 | |
| Total current liabilities | 46,048 | | | 48,874 | |
| Long-term operating leases, net of current portion | 4,787 | | | 1,182 | |
| Other long-term liabilities | 1,069 | | | 1,718 | |
| Total liabilities | 51,904 | | | 51,774 | |
| Commitments and contingencies | | | |
| Stockholders' equity: | | | |
| Preferred stock, $0.001 par value, 5,000,000 shares authorized, no shares issued and outstanding as of September 30, 2022 and December 31, 2021 | — | | | — | |
| Common stock, $0.001 par value, 100,000,000 shares authorized, 28,915,564 and 30,188,595 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively | 29 | | | 30 | |
| Additional paid-in capital | 282,716 | | | 300,875 | |
| Accumulated other comprehensive loss | (6,609) | | | (2,237) | |
| Accumulated deficit | (106,908) | | | (110,470) | |
| Total stockholders' equity | 169,228 | | | 188,198 | |
| Total liabilities and stockholders' equity | $ | 221,132 | | | $ | 239,972 | |
ChannelAdvisor Corporation and Subsidiaries
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except share and per share data)
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
| | 2022 | | 2021 | | 2022 | | 2021 |
| Revenue | $ | 43,490 | | | $ | 41,575 | | | $ | 128,589 | | | $ | 122,284 | |
| Cost of revenue (1) (2) | 10,273 | | | 10,100 | | | 31,062 | | | 28,041 | |
| Gross profit | 33,217 | | | 31,475 | | | 97,527 | | | 94,243 | |
| Operating expenses (1) (2): | | | | | | | |
| Sales and marketing | 16,143 | | | 15,482 | | | 48,245 | | | 45,273 | |
| Research and development | 5,389 | | | 5,364 | | | 16,192 | | | 16,799 | |
| General and administrative | 9,984 | | | 7,075 | | | 24,654 | | | 18,792 | |
| Total operating expenses | 31,516 | | | 27,921 | | | 89,091 | | | 80,864 | |
| Income from operations | 1,701 | | | 3,554 | | | 8,436 | | | 13,379 | |
| Other income (expense): | | | | | | | |
| Interest income (expense) | 234 | | | (30) | | | 251 | | | (96) | |
| Other income (expense) | 5 | | | (29) | | | 5 | | | (164) | |
| Total other income (expense) | 239 | | | (59) | | | 256 | | | (260) | |
| Income before income taxes | 1,940 | | | 3,495 | | | 8,692 | | | 13,119 | |
| Income tax expense (benefit) | 2,039 | | | (34) | | | 5,130 | | | (427) | |
| Net (loss) income | $ | (99) | | | $ | 3,529 | | | $ | 3,562 | | | $ | 13,546 | |
| Net (loss) income per share: | | | | | | | |
| Basic | $ | — | | | $ | 0.12 | | | $ | 0.12 | | | $ | 0.46 | |
| Diluted | $ | — | | | $ | 0.11 | | | $ | 0.12 | | | $ | 0.43 | |
| Weighted average common shares outstanding: | | | | | | | |
| Basic | 28,815,362 | | | 29,931,173 | | | 29,674,219 | | | 29,665,439 | |
| Diluted | 29,955,554 | | | 31,474,314 | | | 30,793,498 | | | 31,295,737 | |
| | | | | | | |
| (1) Includes stock-based compensation as follows: | | | | | | | |
| Cost of revenue | $ | 252 | | | $ | 169 | | | $ | 748 | | | $ | 665 | |
| Sales and marketing | 1,060 | | | 928 | | | 2,707 | | | 2,744 | |
| Research and development | 591 | | | 567 | | | 1,628 | | | 1,869 | |
| General and administrative | 1,476 | | | 1,451 | | | 4,902 | | | 4,461 | |
| $ | 3,379 | | | $ | 3,115 | | | $ | 9,985 | | | $ | 9,739 | |
| | | | | | | |
| (2) Includes depreciation and amortization as follows: | | | | | | | |
| Cost of revenue | $ | 1,186 | | | $ | 1,100 | | | $ | 3,500 | | | $ | 3,409 | |
| Sales and marketing | 76 | | | 85 | | | 221 | | | 356 | |
| Research and development | 30 | | | 32 | | | 93 | | | 139 | |
| General and administrative | 205 | | | 368 | | | 647 | | | 1,160 | |
| $ | 1,497 | | | $ | 1,585 | | | $ | 4,461 | | | $ | 5,064 | |
ChannelAdvisor Corporation and Subsidiaries
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
| | | | | | | | | | | |
| | Nine Months Ended September 30, |
| | 2022 | | 2021 |
| Cash flows from operating activities | | | |
| Net income | $ | 3,562 | | | $ | 13,546 | |
| Adjustments to reconcile net income to cash and cash equivalents provided by operating activities: | | | |
| Depreciation and amortization | 4,461 | | | 5,064 | |
| Bad debt expense (recovery) | 260 | | | (99) | |
| Stock-based compensation expense | 9,985 | | | 9,739 | |
| Deferred income taxes | 3,726 | | | (875) | |
| Other items, net | (1,229) | | | (1,982) | |
| Changes in assets and liabilities: | | | |
| Accounts receivable | 1,510 | | | (583) | |
| Prepaid expenses and other assets | 842 | | | 79 | |
| Deferred contract costs | (2,345) | | | (4,884) | |
| Accounts payable and accrued expenses | 1,152 | | | 86 | |
| Deferred revenue | 47 | | | 6,388 | |
| Cash and cash equivalents provided by operating activities | 21,971 | | | 26,479 | |
| Cash flows from investing activities | | | |
| Purchases of property and equipment | (2,871) | | | (1,125) | |
| Payment of software development costs | (2,890) | | | (2,577) | |
| Cash and cash equivalents used in investing activities | (5,761) | | | (3,702) | |
| Cash flows from financing activities | | | |
| Repayment of finance leases | (8) | | | (12) | |
| Proceeds from exercise of stock options | 700 | | | 4,237 | |
| Repurchase and retirement of common stock | (25,000) | | | — | |
| Payment of statutory tax withholding related to net-share settlement of restricted stock units | (3,392) | | | (1,363) | |
| Cash and cash equivalents (used in) provided by financing activities | (27,700) | | | 2,862 | |
| Effect of currency exchange rate changes on cash and cash equivalents | (962) | | | (165) | |
| Net (decrease) increase in cash and cash equivalents | (12,452) | | | 25,474 | |
| Cash and cash equivalents, beginning of period | 100,567 | | | 71,545 | |
| Cash and cash equivalents, end of period | $ | 88,115 | | | $ | 97,019 | |
| | | | | | | | | | | | | | | | | | | | | | | |
Reconciliation of GAAP Gross Profit and GAAP Gross Margin to Non-GAAP Gross Profit and Non-GAAP Gross Margin |
| (unaudited; dollars in thousands) |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| 2022 | | 2021 | | 2022 | | 2021 |
| Revenue | $ | 43,490 | | | $ | 41,575 | | | $ | 128,589 | | | $ | 122,284 | |
| | | | | | | |
| Gross profit (GAAP) | $ | 33,217 | | | $ | 31,475 | | | $ | 97,527 | | | $ | 94,243 | |
| Plus: Stock-based compensation expense included within cost of revenue | 252 | | | 169 | | | 748 | | | 665 | |
| Gross profit (Non-GAAP) | $ | 33,469 | | | $ | 31,644 | | | $ | 98,275 | | | $ | 94,908 | |
| Gross margin (GAAP) | 76 | % | | 76 | % | | 76 | % | | 77 | % |
| Gross margin (Non-GAAP) | 77 | % | | 76 | % | | 76 | % | | 78 | % |
| | | | | | | | | | | | | | | | | | | | | | | |
| Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses |
| (unaudited; in thousands) |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| 2022 | | 2021 | | 2022 | | 2021 |
| Operating expenses (GAAP) | $ | 31,516 | | | $ | 27,921 | | | $ | 89,091 | | | $ | 80,864 | |
| Less: Stock-based compensation expense included within operating expenses | 3,127 | | | 2,946 | | | 9,237 | | | 9,074 | |
| Less: Transaction costs in connection with CommerceHub merger included within operating expenses | 3,249 | | | — | | | 3,249 | | | — | |
| Less: Lease abandonment and related costs included within operating expenses | 179 | | | — | | | 467 | | | — | |
| Less: Headquarters relocation costs included within operating expenses | 76 | | | — | | | 76 | | | — | |
| Plus: Contingent consideration fair value adjustment included within operating expenses | — | | | — | | | — | | | (1,313) | |
| Operating expenses (Non-GAAP) | $ | 24,885 | | | $ | 24,975 | | | $ | 76,062 | | | $ | 73,103 | |
| | | | | | | | | | | | | | | | | | | | | | | |
Reconciliation of GAAP Income from Operations and GAAP Operating Margin to Non-GAAP Income from Operations and Non-GAAP Operating Margin |
| (unaudited; dollars in thousands) |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| 2022 | | 2021 | | 2022 | | 2021 |
| Revenue | $ | 43,490 | | | $ | 41,575 | | | $ | 128,589 | | | $ | 122,284 | |
| | | | | | | |
| Income from operations (GAAP) | $ | 1,701 | | | $ | 3,554 | | | $ | 8,436 | | | $ | 13,379 | |
| Plus: Stock-based compensation expense | 3,379 | | | 3,115 | | | 9,985 | | | 9,739 | |
| Plus: Transaction costs in connection with CommerceHub merger | 3,249 | | | — | | | 3,249 | | | — | |
| Plus: Lease abandonment and related costs | 179 | | | — | | | 467 | | | — | |
| Plus: Headquarters relocation costs | 76 | | | — | | | 76 | | | — | |
| Less: Contingent consideration fair value adjustment | — | | | — | | | — | | | (1,313) | |
| Income from operations (Non-GAAP) | $ | 8,584 | | | $ | 6,669 | | | $ | 22,213 | | | $ | 21,805 | |
| Operating margin (GAAP) | 4 | % | | 9 | % | | 7 | % | | 11 | % |
| Operating margin (Non-GAAP) | 20 | % | | 16 | % | | 17 | % | | 18 | % |
| | | | | | | | | | | | | | | | | | | | | | | |
| Reconciliation of GAAP Net (Loss) Income to Non-GAAP Net Income |
| (unaudited; in thousands) |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| 2022 | | 2021 | | 2022 | | 2021 |
| Net (loss) income (GAAP) | $ | (99) | | | $ | 3,529 | | | $ | 3,562 | | | $ | 13,546 | |
| Plus: Stock-based compensation expense | 3,379 | | | 3,115 | | | 9,985 | | | 9,739 | |
| Plus: Transaction costs in connection with CommerceHub merger | 3,249 | | | — | | | 3,249 | | | — | |
| Plus: Lease abandonment and related costs | 179 | | | — | | | 467 | | | — | |
| Plus: Headquarters relocation costs | 76 | | | — | | | 76 | | | — | |
| Less: Contingent consideration fair value adjustment | — | | | — | | | — | | | (1,313) | |
| Net income (Non-GAAP) | $ | 6,784 | | | $ | 6,644 | | | $ | 17,339 | | | $ | 21,972 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Reconciliation of GAAP Net (Loss) Income to Adjusted EBITDA and Adjusted EBITDA Margin |
| (unaudited; in thousands) |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| 2022 | | 2021 | | 2022 | | 2021 |
| Net (loss) income (GAAP) | $ | (99) | | | $ | 3,529 | | | $ | 3,562 | | | $ | 13,546 | |
| Adjustments: | | | | | | | |
| Interest (income) expense | (234) | | | 30 | | | (251) | | | 96 | |
| Income tax expense (benefit) | 2,039 | | | (34) | | | 5,130 | | | (427) | |
| Depreciation and amortization expense | 1,497 | | | 1,585 | | | 4,461 | | | 5,064 | |
| Total adjustments | 3,302 | | | 1,581 | | | 9,340 | | | 4,733 | |
| EBITDA | 3,203 | | | 5,110 | | | 12,902 | | | 18,279 | |
| Stock-based compensation expense | 3,379 | | | 3,115 | | | 9,985 | | | 9,739 | |
| Transaction costs in connection with CommerceHub merger | 3,249 | | | — | | | 3,249 | | | — | |
| Lease abandonment and related costs | 179 | | | — | | | 467 | | | — | |
| Headquarters relocation costs | 76 | | | — | | | 76 | | | — | |
| Contingent consideration fair value adjustment | — | | | — | | | — | | | (1,313) | |
| Adjusted EBITDA (Non-GAAP) | $ | 10,086 | | | $ | 8,225 | | | $ | 26,679 | | | $ | 26,705 | |
| | | | | | | |
| Revenue (GAAP) | $ | 43,490 | | | $ | 41,575 | | | $ | 128,589 | | | $ | 122,284 | |
| Adjusted EBITDA margin (Non-GAAP) | 23 | % | | 20 | % | | 21 | % | | 22 | % |
| | | | | | | | | | | | | | | |
| Free Cash Flow Reconciliation |
| (unaudited; in thousands except share and per share data) |
| | | Nine Months Ended September 30, |
| | | | | 2022 | | 2021 |
| Cash and cash equivalents provided by operating activities (GAAP) | | | | | $ | 21,971 | | | $ | 26,479 | |
| Less: Purchases of property and equipment | | | | | (2,871) | | | (1,125) | |
| Less: Payment of capitalized software development costs | | | | | (2,890) | | | (2,577) | |
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