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AVALARA SPENDS INTO MARKET Featured

Scott McFarlane, AvalaraAvalara more than doubled its loss for the second quarter ended September 30 as it spent to grow its market. The company’s revenue rose by 24.3 percent over last year’s corresponding period, but operating expenses were up 41.1 percent over a year earlier.

The Seattle, Wash.-based sales tax software company lost $24.1 million in the most recently ended quarter, compared to $10.3 million in red ink a year earlier. Revenue for the quarter was almost $70 million, up from $55.3 million last year. In the company’s first earnings webcast, CEO Scott McFarlane said the Supreme Court’s Wayfair decision and major regulatory change in other countries are driving interest in Avalara products.  “We are seeing increasing business activity,” he said. He noted 29 states have adopted economic nexus laws that require remote sellers to collect sales tax, following the Wayfair decision. These factors “are driving interest and customer conversations.” McFarlane said the mid-market remains the biggest sector for his company. But Avalara is also gaining notice from larger organizations. “Increasingly, enterprise companies are coming to us,” he said. Countries other than the United States represent an important area for growth.

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