Demandware Earnings: Here’s Why Investors are Ambivalent Now

Demandware Inc (NYSE:DWRE) had a loss and met Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company.

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Demandware Inc Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased to $-0.13 in the quarter versus EPS of $-0.23 in the year-earlier quarter.

Revenue: Rose 27.41% to $20.5 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: reported adjusted EPS loss of $0.13 per share. By that measure, the company missed the mean analyst estimate of $-0.13. It beat the average revenue estimate of $19.87 million.

Quoting Management: “2013 is off to a fantastic start for Demandware,” stated Tom Ebling, Chief Executive Officer, Demandware. “The power of our cloud solution is resonating loudly with larger enterprise-scale retailers and brands across vertical markets. As the pace of change in retail accelerates, companies are increasingly looking for alternatives to the inflexibility of traditional ecommerce solutions. This was demonstrated in the first quarter not only by our large customer wins, like Jo-Ann Stores and Avenue Stores, but also in the strength of our pipeline. Retailers recognize that the best alternative to drive innovation and deliver omni-channel experiences in their mission-critical digital commerce operations is found in the cloud and we are their only viable alternative as the leading enterprise-class, digital commerce cloud solution in the market.”

Key Stats (on next page)…

Revenue decreased 22.11% from $26.32 million in the previous quarter. EPS decreased to $-0.13 in the quarter versus EPS of $0.17 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a loss of $0.08 to a loss $0.16. For the current year, the average estimate has moved down from a loss of $0.07 to a loss of $0.36 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)