Amber Road Growing Without Profits

According to the US Department of Commerce, US companies had imported $2.3 trillion of goods and exported $1.5 trillion of goods in 2012. Another report points out that China is now the world’s largest trading economy, with exports of nearly $2.1 trillion. Recently listed Amber Road (NYSE: AMBR) is using cloud-based solutions to help companies conduct international trade with ease.

Amber Road’s Offerings
Rutherford, New Jersey-based Amber Road was founded in 1990 to deliver cloud-based global trade management solutions. Their products help automate the processes involved in global import and export of goods while ensuring that companies comply with country-specific trade regulations. Their platform integrates enterprise software with trade content from government agencies and transportation providers to deliver a global supply chain network that is able to connect their customers with trading partners, suppliers, freight forwarders, customs brokers, and transportation carriers. The solutions are offered as a cloud-based software-as-a-service model that they are able to scale up and customize to a customer’s requirements for trading across 125 countries.

To cater to the vast diversity among country rules for trade and customer requirements, Amber Road’s services are built on a proprietary technology architecture that is able to separate customer-specific configurations from each deployment and lets them maintain a single version of the software across deployments. The solution helps their customers achieve faster and more predictable delivery times, reduced in-transit inventories, and trading costs.

Amber Road’s Financials
Amber Road’s platform is well recognized across the industry. They have more than 460 customers worldwide including General Electric, Monsanto, Sherwin Williams, Tyco International, Walmart, and Weatherford International. Amber Road earns revenues through a subscription-based model for their platform and fees for professional services provided to their customers.

Revenues have grown from $37.6 million in 2011 to $52.5 million in 2013. Over the same period, professional service revenues have grown from $8.75 million to $13.67 million and subscription service revenues have grown from $28.83 million to $38.87 million. Amber Road is yet to turn profitable and reported net losses of $4.6 million in 2011 and $19.25 million in 2013. Over the same period, adjusted EBITDA has improved from a loss of $1.23 million in 2011 to $1.67 million in 2013.

For the recently ended quarter, Amber Road saw revenues grow 29% over the year to $15 million. Subscription revenues grew 20% to $10.5 million and professional service revenues rose 57% to $4.5 million. Non-GAAP adjusted loss per share reduced marginally from $0.07 a year ago to $0.06. The Street was looking for revenues of $13.61 million with a loss of $0.41 per share.

For the current quarter, the company projected revenues of $15.1 million-$15.4 million with a net loss of $0.13-$0.14 per share. The Street was projecting revenues of $15.05 million and a $0.13 loss per share. Amber Road projected the year’s revenues at $62.2 million-$63 million with a net loss of $0.32-$0.35 compared with the Street’s projections of $61.15 million with a loss of $0.56 per share.

Earlier this March, Amber Road went public and raised $96 million by selling 6.52 million shares at $13 each on the NYSE. Their stock is trading at $16.10 with a market capitalization of $405.88 million. It touched a high of $17.90 soon after listing.