Digital River Announces Second Quarter 2010 Financial Results
MINNEAPOLIS – July 28, 2010 – Digital River, Inc. (NASDAQ: DRIV), a leading provider of global e-commerce solutions, reports its second quarter financial results.
Second Quarter Ended June 30, 2010
GAAP Results
Second quarter revenue totaled $81.8 million, compared to $96.6 million during the same period in 2009.
Second quarter GAAP net loss was $2.5 million, or $0.07 per share. This compared to GAAP net income of $11.8 million, or $0.31 per diluted share, in the
second quarter of 2009. These results, which were better than management’s second quarter guidance for a net loss of $0.12 per share, reflect a one-time
restructuring charge of approximately $2 million, primarily related to a reduction in workforce.
Non-GAAP Results
Second quarter non-GAAP net income was $3.0 million, or $0.08 per diluted share. This compared to non-GAAP net income of $15.8 million, or $0.42 per diluted
share, in the second quarter of 2009. These results exceeded management’s second quarter earnings guidance of $0.05 per diluted share.
Non-GAAP net income is computed by starting with GAAP pre-tax income (loss) as reported on the company’s statement of operations, then adding back
amortization of acquisition-related intangibles, stock-based compensation expense and one-time restructuring costs, to calculate non-GAAP pre-tax income.
This amount is then taxed at 27 percent to arrive at non-GAAP net income. This amount is then divided by fully-diluted GAAP shares outstanding to derive non
-GAAP diluted net income per share. To provide further clarity, a detailed reconciliation on the comparability of the GAAP and non-GAAP data has been
provided in table form following the financial statements accompanying this release.
"In the second quarter, we continued to close new business with industry leading brands and expanded our partnerships with some strategic clients," said
Joel Ronning, Digital River’s CEO. "Looking into the back half of 2010 and beyond, we remain encouraged by our growing opportunities in the software,
consumer electronics and games markets and expect to enter 2011 with an even stronger growth profile."
2010 Third Quarter Guidance
Forward-looking guidance for the quarter ending September 30, 2010, is as follows:
- Total revenue of approximately $77.6 million;
- GAAP net loss per share of about $0.02, assuming a 6 percent tax rate; and
- Non-GAAP diluted net income per share of $0.13, assuming a 27 percent tax rate.
Digital River will hold a conference call today at 4:45 p.m. EDT to discuss second quarter financial results. A live webcast of Digital River’s earnings
conference call can be accessed at http://www.digitalriver.com/investorrelations/.
Alternatively, a live broadcast of the call may be heard by using conference ID # 86713298 and dialing (877) 303-3145 inside the United States or Canada, or
by calling +1 (408) 427-3861 from international locations. A webcast replay of the call will be archived on Digital River’s corporate website.
Access the Q2 2010 Financial Tables.
About Digital River, Inc.
Digital River, Inc., a leading provider of global e-commerce solutions, builds and manages online businesses for software and game publishers, consumer
electronics manufacturers, distributors, online retailers and affiliates. Its multi-channel e-commerce solution, which supports both direct and indirect
sales, is designed to help companies of all sizes maximize online revenues as well as reduce the costs and risks of running an e-commerce operation. The
company’s comprehensive platform offers site development and hosting, order management, fraud management, export controls, tax management, physical and
digital product fulfillment, multi-lingual customer service, advanced reporting and strategic marketing services.
Founded in 1994, Digital River is headquartered in Minneapolis with offices across the U.S., Asia, Europe and South America. For more details about
Digital River, visit the corporate website or call +1 952-253-1234.
Forward-looking Statement
This press release contains forward-looking statements, including statements regarding the company’s anticipated future growth, including future financial
performance, as well as statements containing the words “anticipates,” “believes,” “plans,” “will,” or “expects” and similar words. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, or performance or achievements of the
company, to differ materially from those expressed or implied by such forward-looking statements. Such factors include, among others: the company’s operating
history and variability of operating results; competition in the e-commerce market; challenges associated with international expansion; our ability to manage
costs in light of the loss of a major customer; the variability of foreign exchange rates; our ability to successfully manage our business while undertaking
significant internal investments; and other risk factors referenced in the company’s public filings with the Securities and Exchange Commission, including
the Annual Report on Form 10-K for the year ended Dec. 31, 2009. The financial information contained in this release should be read in conjunction with the
consolidated financial statements and notes thereto included in Digital River’s most recent report on Form 10-K as it may be amended from time-to-time.
The forward-looking statements regarding third quarter 2010 reflect Digital River’s expectations as of July 28, 2010. Results may be materially affected
by many factors, such as changes in global conditions in the financial services markets and consumer spending, fluctuations in foreign currency rates, the
rate of growth of online commerce and the Internet, progress with key partners and other factors. The guidance assumes, among other things, that there are no
changes to stock-based compensation expense and anticipated tax rates. Readers are cautioned not to place undue reliance on forward-looking statements, which
reflect management's analysis only as of the date hereof. The company undertakes no obligation to update these forward-looking statements to reflect events
or circumstances that may arise after the date hereof.
Digital River is a registered trademark of Digital River, Inc. All other company and product names are trademarks, registrations or copyrights of their
respective owners.
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