May 8, 2012, 4:32 PM

Demandware’s revenue jumps 39% in Q1

The e-commerce software provider posts its first results since its IPO.

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E-commerce platform provider Demandware Inc. today reported that revenue in the first quarter ended March 31 hit $16.1 million, up approximately 39% from $11.6 million for the same period last year.  The results are the first quarterly financials Demandware has reported since going public in March.

Demandware Inc., whose software drives the sites of 15 retailers in the 2012 Internet Retailer Top 500 Guide, says it raised $91.4 million from its initial public offering; that amount does not include underwriting expenses.

Demandware sells a software-as-a-service, or SaaS, e-commerce platform to retailers, who pay a minimum monthly rate along with fees based on their online sales. Subscription revenue in the first quarter reached $13.6 million, up 46.2% from $9.3 million from the first quarter of 2011.

“We grew our subscription revenue by adding new customers on the platform and through our existing customers expanding their business by growing their initial site or by launching new sites in new geographies or with new brands,” says chief financial officer Scott Dussault.

Most of the company’s growth has been in North America and Europe, he says. And it is expansion—specifically, new sales and marketing hires in Europe—that contributed to a 52% increase in operating expenses, he says, to $12.5 million in the first quarter from $8.2 million in the same period last year. The number of employees based in Europe stands at 97, up from 62 in the same period last year. Globally, Demandware has about 250 employees.

For the first quarter ended March 31, Demandware also reported:

• A net loss of $2.2 million, compared with a net loss of $717,000 for the same period last year.

• 110 clients and 402 sites using its software. New customers this quarter include Pacific Sunwear of California Inc., No. 265 in the Top 500 Guide; Ecco; Oreck; and TaylorMade.

Demandware says that while European catalog and web retailer Neckermann Gruppe, No. 18 in the Internet Retailer Top 400 Europe, remains its largest customer, the retailer, which is based in Frankfurt, Germany, accounted for 12% of Demandware’s Q1 revenue, down from 16% for the same period last year.

Among the features Demandware added this quarter were an integration with the Pinterest social network and new inventory and order management services, says CEO Tom Ebling.

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