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ChannelAdvisor's (ECOM) CEO David Spitz on Q2 2015 Results - Earnings Call Transcript


Good day, ladies and gentlemen, and welcome to the ChannelAdvisor's Second Quarter 2015 Earnings Conference Call. At this time, all participants are in listen-only mode. Later, we'll conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, this conference call is being recorded.

I'd like to introduce your host for today's conference, John Baule, CFO. Please go ahead, sir.

John Baule - Chief Financial Officer

Good afternoon and welcome to ChannelAdvisor's conference call for the second quarter of 2015. I'm John Baule, Chief Financial Officer of ChannelAdvisor. With me on the call today is David Spitz, ChannelAdvisor’s Chief Executive Officer.

After the market closed today, we issued a press release with details on our second quarter performance as well as our outlook for the third quarter and the full year 2015. This press release can be accessed on the Investor Relations' section of our website. In addition, this call is being recorded, and a replay will be available after the conclusion of the call.

During today's call, we will make statements related to our business that may be considered forward-looking under Federal Securities laws. These statements reflect our views only as of today and should not be considered representative of our views as of any subsequent date. We disclaim any obligation to update any forward-looking statements or outlook.

These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. These risks are summarized in the press release that we issued today. For a further discussion of the material risks and other important factors that could affect our actual results, please refer to those contained in our most recent Form 10-K as well as our other filings, which are available on the SEC website.

During the course of today's call, we will refer to certain non-GAAP financial measures including adjusted EBITDA, which excludes depreciation, amortization, income tax expense, interest, stock-based compensation expense and one-time severance and related costs. A reconciliation of all non-GAAP measures to the most comparable GAAP measure is included in our press release.

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

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

David Spitz - Chief Executive Officer

Thanks, John. Welcome, everyone, and thank you for joining our call today. Revenue in the second quarter was $24.2 million, an increase of 16% from a year ago or 19% on a constant currency basis, and was significantly above the high end of our expectations.

Our revenue upside combined with improved operational efficiency produced an adjusted EBITDA loss of $440,000, the smallest such loss we’ve had since becoming a public company, and exceeding the high end of our guidance by over $4.5 million and representing significant and rapid progress towards improving our cash flow and profitability. Our strategy to improve pricing and prospect qualification, to emphasize larger customers and brands with favorable economics, and to better align our staffing and expenses with revenue is showing early signs of success, and I am very pleased with this outcome.