August 6, 2013, 3:44 PM

E-commerce tech vendor Demandware posts a 26% jump in Q2 revenue

Its new clients include 1-800-Contacts, Johnston & Murphy and Wet Seal.

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Demandware Inc., which sells Internet-hosted e-commerce software, reported a 26.4% increase in revenue for the second quarter, to $23.21 million from $18.36 million a year earlier, the company said today.

“Enterprise scale retailers and brands are increasingly moving digital commerce to the cloud, choosing Demandware’s proven solution to power omnichannel operations, to expand globally and to roll out multi-brand strategies,” CEO Tom Ebling says. “To capitalize on this opportunity, we remain intensely focused on capturing market share.”

Demandware provides its technology through a software-as-a-service, or SaaS, model, under which clients rent the technology on a subscription basis and access it through a web browser. That saves them the expense of installing software on their own network hardware.

The company also reported for the quarter ended June 30:

● Subscription revenue increased approximately 36.8% year over year to $20.80 million from $15.20 million;

● Services revenue declined 24.1% to $2.40 million from $3.16 million a year earlier;

● Excluding Q2 2012 combined subscription and services revenue of $1.9 million from former client Neckermann GmbH, a company that filed for bankruptcy last fall, total revenue grew 41.0% year over year to $23.21 million from $16.46 million;

● 162 customers were on live e-commerce sites, up 30.6% from 124 a year earlier;

● A total of 667 live e-commerce sites were operated by clients, up nearly 50% from 445 a year earlier.

● Other new customers included Hickory Farms, Sleepy’s and WE Europe B.V.

For the first half of the year, Demandware reported:

● A 26.9% increase in total revenue to $43.72 million from $34.45 million in the year-earlier period;

● A 37.8% increase in subscription revenue to $39.71 million from $28.81 million in the year-earlier period;

● A 28.9% drop in services revenue to $4.01 million from $5.64 million in the year-earlier period.

Demandware has 22 clients listed in Internet Retailer’s 2013 Top 500 Guide and eight in the Second 500 Guide.


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