Welcome!

Microsoft Cloud Authors: Elizabeth White, Mihai Corbuleac, Pat Romanski, David Bermingham, Steven Mandel

News Feed Item

Demandware Announces Third Quarter 2012 Financial Results

Demandware®, Inc. (NYSE: DWRE), a leader in on-demand ecommerce, today announced financial results for its third quarter ended September 30, 2012.

Third Quarter Highlights

  • Total revenue for the third quarter was $18.7 million, a 39% year over year increase from $13.5 million in the third quarter of 2011
  • Subscription revenue for the third quarter was $16.3 million, a 45% year over year increase from $11.2 million in the third quarter of 2011
  • 137 live customers and 517 live sites at September 30, 2012
  • Order Center, Demandware’s order management application, implemented in production environment for an early adopter customer

“Our strong subscription revenue growth in the third quarter is further evidence that the Demandware Commerce platform empowers our customers to grow faster, innovate quicker and launch new eCommerce sites more rapidly,” stated Tom Ebling, Chief Executive Officer of Demandware. “We believe that our robust cloud-based eCommerce solution is the best alternative to meet the rigorous requirements of today’s fastest growing retailers and branded manufacturers. Our third quarter financial results demonstrate that our solution is helping customers meet these requirements enabling them to grow their eCommerce businesses. ”

  • Demandware signed significant new customers during the quarter including American Golf, Black Diamond, and Sunbeam Products (Jarden Consumer Solutions).
  • Browns Shoes, Oreck, Gianni Versace, Pier 1 Imports, Tamaris Shoes, and GORE BIKE WEAR® and GORE RUNNING WEAR® Apparel brands from W.L. Gore & Associates, Inc. were among the leading companies that launched new initial sites on the Demandware Commerce platform during the third quarter.
  • Existing customers like Butlers GmbH, Clarins, L’Oreal, New Balance, Reitmans, and Summit Sports launched new ecommerce sites for new geographies or for new brands on the Demandware Commerce platform.

“During the quarter, we continued to invest in expanding our global sales team, enhancing our brand awareness, and innovating our technology platform,” stated Scott Dussault, Demandware Chief Financial Officer. “We are confident that these investments will enable us to further deepen our penetration in the large, robust market for enterprise-class, cloud based eCommerce solutions.”

Demandware’s loss from operations for the third quarter of 2012 was $3.6 million, as compared to a loss from operations of $1.5 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 third quarter of 2012 was $3.5 million, or $(0.12) per share attributable to common stockholders, as compared to a net loss of $2.1 million, or $(0.80) per share attributable to common stockholders, for the third quarter of 2011.

Non-GAAP net loss for the third quarter of 2012 was $1.3 million, or $(0.04) per share, as compared to non-GAAP net loss of $1.8 million, or $(0.42) per share, for the third quarter of 2011. (1)

(1)Non-GAAP net loss excludes expenses related to stock-based compensation. Non-GAAP net loss per share excludes 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. today, please dial (866) 783-2140 in the U.S. or +1 (857) 350-1599 internationally. The Passcode for the call is: 23204485. 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 November 13, 2012. The replay number is (888) 286-8010 in the U.S. or +1 (617) 801-6888 internationally. The Passcode for the replay is: 17321753. The replay will also be available as a webcast on Demandware’s Investor Relations website.

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 [email protected].

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)
       
September 30, 2012 December 31, 2011
ASSETS
 
Current assets:
Cash and cash equivalents $ 71,886 $ 14,939
Short-term investments 37,021 -
Accounts receivable — net of allowance of doubtful accounts and credit memos 15,634 16,930
Prepaid expenses and other current assets   3,691     1,878  
Total current assets 128,232 33,747
 
PROPERTY AND EQUIPMENT — Net 8,925 6,404
OTHER ASSETS   1,010     2,735  
Total assets $ 138,167   $ 42,886  
 
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)
 
Current Liabilities:
Current portion of notes payable $ 3,403 $ 2,098
Accounts payable 2,650 1,884
Accrued expenses 8,538 7,023
Deferred revenue 17,322 13,960
Deferred rent   118     57  
Total current liabilities   32,031     25,022  
 
Long-term liabilities:
Deferred revenue 13,393 12,210
Notes payable 2,897 1,882
Deferred rent 1,004 682
Preferred stock warrant liability   -     107  
Total liabilities   49,325     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 296 45
Additional paid-in capital 168,506 -
Accumulated other comprehensive loss (48 ) (53 )
Accumulated deficit   (79,912 )   (84,612 )
Total stockholders’ equity (deficit)   88,842     (84,620 )
 
Total Liabilities, Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) $ 138,167   $ 42,886  
 
 

Demandware, Inc.
Condensed Consolidated Statements of Operations
(unaudited; in thousands, except per share data)
             
Three Months Ended Nine Months Ended
September 30, September 30,

2012

2011

2012

2011

Revenue:
Subscription $ 16,250 $ 11,220 $ 45,061 $ 30,902
Services   2,456     2,255     8,095     7,029  
Total revenue   18,706     13,475     53,156     37,931  
 
Cost of revenue:
Subscription 3,501 2,473 9,407 6,842
Services   2,990     2,958     8,598     7,655  
Total cost of revenue   6,491     5,431     18,005     14,497  
 
Gross profit 12,215 8,044 35,151 23,434
 
Operating expenses:
Sales and marketing 8,496 5,082 24,402 14,385
Research and development 3,935 2,934 11,490 8,345
General and administrative   3,350     1,526     9,751     4,498  
Total operating expenses   15,781     9,542     45,643     27,228  
 
Loss from operations   (3,566 )   (1,498 )   (10,492 )   (3,794 )
 
Other income (expense) :
Interest income 50 2 97 7
Interest expense (109 ) (79 ) (263 ) (198 )
Other income (expense)   193     (391 )   (455 )   178  
 
Other income (expense) — net   134     (468 )   (621 )   (13 )
Loss before income taxes (3,432 ) (1,966 ) (11,113 ) (3,807 )
Income Tax Expense   39     125     235     180  
 
Net Loss $ (3,471 ) $ (2,091 ) $ (11,348 ) $ (3,987 )
Accretion of redeemable convertible preferred stock   -     (1,318 )   (1,172 )   (3,956 )
 
Net loss attributable to common stockholders $ (3,471 ) $ (3,409 ) $ (12,520 ) $ (7,943 )
 
Net loss per share attributable to common stockholders,
basic and diluted $ (0.12 ) $ (0.80 ) $ (0.57 ) $ (2.20 )
Weighted average common shares outstanding,
basic and diluted   29,200     4,273     22,158     3,617  
 
 

Demandware, Inc.
Stock Based Compensation Expense
(unaudited, in thousands)
             
 
Three Months Ended Nine Months Ended
September 30, September 30,

2012

2011

2012

2011

 
Cost of subscription revenue $ 57 $ 5 $ 119 $ 16
Cost of services revenue 233 22 492 71
Sales and marketing 559 65 1,236 175
Research and development 484 33

 

1,035 455
General and administration   856   158   1,920   426
 
$ 2,189 $ 283 $ 4,802 $ 1,143
 
 

Demandware, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited, in thousands)
           
Three Months Ended Nine Months Ended
September 30, September 30,

2012

2011

2012

2011

 
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (3,471 ) $ (2,091 ) $ (11,348 ) $ (3,987 )
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization 892 719 2,432 2,119
(Gain) loss on disposal of property and equipment (3 ) - (3 ) 86
Re-measurement of preferred stock warrant liability - (2 ) 426 (5 )
Stock-based compensation 2,189 283 4,802 1,143
Deferred rent expense 144 44 382 311
Other non-cash reconciling items 65 10 93 94
Changes in operating assets and liabilities:
Accounts receivable (1,039 ) (1,112 ) 1,296 (1,087 )
Prepaid expenses and other current assets (385 ) (52 ) (1,259 ) (271 )
Other long-term assets 78 (89 ) 182 (89 )
Accounts payable (134 ) 325 733 (63 )
Accrued expenses 1,167 1,174 1,442 2,108
Deferred revenue   134     378     4,545     (211 )
Net cash (used in) provided by operating activities   (363 )   (413 )   3,723     148  
 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (503 ) (304 ) (3,659 ) (3,239 )
Purchase of marketable securities (21,258 ) - (46,577 ) -
Sale and maturity of marketable securities 9,499 - 9,499 -
Proceeds from sale of property and equipment - - - 26
(Increase) decrease in restricted cash and other assets   (3 )   2     (168 )   (41 )
 
Net cash used in investing activities   (12,265 )   (302 )   (40,905 )   (3,254 )
 
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from initial public offering, net of underwriting discounts and commissions - - 94,116 -
Proceeds from exercise of stock options 627 356 1,030 1,568
Deferred offering costs (96 ) (1,089 ) (1,561 ) (1,089 )
Proceeds from issuance of notes payable 157 201 2,757 2,570
Payments of note payable   (954 )   (568 )   (2,219 )   (1,316 )
 
Net cash (used in) provided by financing activities   (266 )   (1,100 )   94,123     1,733  
 
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS   43     (104 )   6     (2 )
 
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (12,851 ) (1,919 ) 56,947 (1,375 )
 
CASH AND CASH EQUIVALENTS — Beginning of period   84,737     17,692     14,939     17,148  
 
CASH AND CASH EQUIVALENTS — End of period $ 71,886   $ 15,773   $ 71,886   $ 15,773  
 
 

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 Nine Months Ended
September 30, September 30,

2012

2011

2012

2011

Operating loss:
GAAP operating loss $ (3,566 ) $ (1,498 ) $ (10,492 ) $ (3,794 )
Add back:
Stock-based compensation   2,189     283     4,802     1,143  
Total non-GAAP operating loss (1,377 ) (1,215 ) (5,690 ) (2,651 )
 
Net loss:
GAAP net loss $ (3,471 ) $ (2,091 ) $ (11,348 ) $ (3,987 )
Add back:
Stock-based compensation   2,189     283     4,802     1,143  
Total non-GAAP net loss (1,282 ) (1,808 ) (6,546 ) (2,844 )
 
Non-GAAP net loss per share:
Basic & Diluted $ (0.04 ) $ (0.42 ) $ (0.30 ) $ (0.79 )

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
Increasing IoT connectivity is forcing enterprises to find elegant solutions to organize and visualize all incoming data from these connected devices with re-configurable dashboard widgets to effectively allow rapid decision-making for everything from immediate actions in tactical situations to strategic analysis and reporting. In his session at 18th Cloud Expo, Shikhir Singh, Senior Developer Relations Manager at Sencha, will discuss how to create HTML5 dashboards that interact with IoT devic...
Artificial Intelligence has the potential to massively disrupt IoT. In his session at 18th Cloud Expo, AJ Abdallat, CEO of Beyond AI, will discuss what the five main drivers are in Artificial Intelligence that could shape the future of the Internet of Things. AJ Abdallat is CEO of Beyond AI. He has over 20 years of management experience in the fields of artificial intelligence, sensors, instruments, devices and software for telecommunications, life sciences, environmental monitoring, process...
You think you know what’s in your data. But do you? Most organizations are now aware of the business intelligence represented by their data. Data science stands to take this to a level you never thought of – literally. The techniques of data science, when used with the capabilities of Big Data technologies, can make connections you had not yet imagined, helping you discover new insights and ask new questions of your data. In his session at @ThingsExpo, Sarbjit Sarkaria, data science team lead ...
SYS-CON Events announced today that Ericsson has been named “Gold Sponsor” of SYS-CON's @ThingsExpo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. Ericsson is a world leader in the rapidly changing environment of communications technology – providing equipment, software and services to enable transformation through mobility. Some 40 percent of global mobile traffic runs through networks we have supplied. More than 1 billion subscribers around the world re...
We're entering the post-smartphone era, where wearable gadgets from watches and fitness bands to glasses and health aids will power the next technological revolution. With mass adoption of wearable devices comes a new data ecosystem that must be protected. Wearables open new pathways that facilitate the tracking, sharing and storing of consumers’ personal health, location and daily activity data. Consumers have some idea of the data these devices capture, but most don’t realize how revealing and...
We’ve worked with dozens of early adopters across numerous industries and will debunk common misperceptions, which starts with understanding that many of the connected products we’ll use over the next 5 years are already products, they’re just not yet connected. With an IoT product, time-in-market provides much more essential feedback than ever before. Innovation comes from what you do with the data that the connected product provides in order to enhance the customer experience and optimize busi...
In his session at @ThingsExpo, Chris Klein, CEO and Co-founder of Rachio, will discuss next generation communities that are using IoT to create more sustainable, intelligent communities. One example is Sterling Ranch, a 10,000 home development that – with the help of Siemens – will integrate IoT technology into the community to provide residents with energy and water savings as well as intelligent security. Everything from stop lights to sprinkler systems to building infrastructures will run ef...
Manufacturers are embracing the Industrial Internet the same way consumers are leveraging Fitbits – to improve overall health and wellness. Both can provide consistent measurement, visibility, and suggest performance improvements customized to help reach goals. Fitbit users can view real-time data and make adjustments to increase their activity. In his session at @ThingsExpo, Mark Bernardo Professional Services Leader, Americas, at GE Digital, will discuss how leveraging the Industrial Interne...
The increasing popularity of the Internet of Things necessitates that our physical and cognitive relationship with wearable technology will change rapidly in the near future. This advent means logging has become a thing of the past. Before, it was on us to track our own data, but now that data is automatically available. What does this mean for mHealth and the "connected" body? In her session at @ThingsExpo, Lisa Calkins, CEO and co-founder of Amadeus Consulting, will discuss the impact of wea...
Whether your IoT service is connecting cars, homes, appliances, wearable, cameras or other devices, one question hangs in the balance – how do you actually make money from this service? The ability to turn your IoT service into profit requires the ability to create a monetization strategy that is flexible, scalable and working for you in real-time. It must be a transparent, smoothly implemented strategy that all stakeholders – from customers to the board – will be able to understand and comprehe...
The demand for organizations to expand their infrastructure to multiple IT environments like the cloud, on-premise, mobile, bring your own device (BYOD) and the Internet of Things (IoT) continues to grow. As this hybrid infrastructure increases, the challenge to monitor the security of these systems increases in volume and complexity. In his session at 18th Cloud Expo, Stephen Coty, Chief Security Evangelist at Alert Logic, will show how properly configured and managed security architecture can...
A critical component of any IoT project is the back-end systems that capture data from remote IoT devices and structure it in a way to answer useful questions. Traditional data warehouse and analytical systems are mature technologies that can be used to handle large data sets, but they are not well suited to many IoT-scale products and the need for real-time insights. At Fuze, we have developed a backend platform as part of our mobility-oriented cloud service that uses Big Data-based approache...
SYS-CON Events announced today that Peak 10, Inc., a national IT infrastructure and cloud services provider, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Peak 10 provides reliable, tailored data center and network services, cloud and managed services. Its solutions are designed to scale and adapt to customers’ changing business needs, enabling them to lower costs, improve performance and focus inter...
The IoTs will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform. In his session at @ThingsExpo, Craig Sproule, CEO of Metavine, will demonstrate how to move beyond today's coding paradigm and share the must-have mindsets for removing complexity from the development proc...
trust and privacy in their ecosystem. Assurance and protection of device identity, secure data encryption and authentication are the key security challenges organizations are trying to address when integrating IoT devices. This holds true for IoT applications in a wide range of industries, for example, healthcare, consumer devices, and manufacturing. In his session at @ThingsExpo, Lancen LaChance, vice president of product management, IoT solutions at GlobalSign, will teach IoT developers how t...
There is an ever-growing explosion of new devices that are connected to the Internet using “cloud” solutions. This rapid growth is creating a massive new demand for efficient access to data. And it’s not just about connecting to that data anymore. This new demand is bringing new issues and challenges and it is important for companies to scale for the coming growth. And with that scaling comes the need for greater security, gathering and data analysis, storage, connectivity and, of course, the...
So, you bought into the current machine learning craze and went on to collect millions/billions of records from this promising new data source. Now, what do you do with them? Too often, the abundance of data quickly turns into an abundance of problems. How do you extract that "magic essence" from your data without falling into the common pitfalls? In her session at @ThingsExpo, Natalia Ponomareva, Software Engineer at Google, will provide tips on how to be successful in large scale machine lear...
Digital payments using wearable devices such as smart watches, fitness trackers, and payment wristbands are an increasing area of focus for industry participants, and consumer acceptance from early trials and deployments has encouraged some of the biggest names in technology and banking to continue their push to drive growth in this nascent market. Wearable payment systems may utilize near field communication (NFC), radio frequency identification (RFID), or quick response (QR) codes and barcodes...
The IETF draft standard for M2M certificates is a security solution specifically designed for the demanding needs of IoT/M2M applications. In his session at @ThingsExpo, Brian Romansky, VP of Strategic Technology at TrustPoint Innovation, will explain how M2M certificates can efficiently enable confidentiality, integrity, and authenticity on highly constrained devices.
You deployed your app with the Bluemix PaaS and it's gaining some serious traction, so it's time to make some tweaks. Did you design your application in a way that it can scale in the cloud? Were you even thinking about the cloud when you built the app? If not, chances are your app is going to break. Check out this webcast to learn various techniques for designing applications that will scale successfully in Bluemix, for the confidence you need to take your apps to the next level and beyond.