During this week’s webcast for earnings for the first quarter ended March 31, revenue was roughly “on par,” for customers producing increased revenue and those with declining revenue, CEO Scott McFarlane said during the online session. “We did not see an increase in gross revenue churn in March,” McFarlane said. There were strong new sales in January and February with the crisis hitting March and April activity. However, CFO Ross Tennenbaum said that in April there was “some improvement on the bookings side” which continued this month. Avalara lost $15.3 million for the most recently ended quarter, an increase of 47.1 percent from a $10.4 million loss reported a year earlier. Revenue rose to $111.4 million, an increase of 31.2 percent from nearly $84 million in last year’s corresponding period. The crisis has produced interest in the company’s webinars whose attendance hit a record high recently. McFarlane said Avalara expects the biggest impact of the pandemic will be during the current quarter with an improvement for Q3 and improving even more in the last three months of 2020. The move to remote work has driven strong interest from marketplaces and ecommerce-based businesses. Cost-controls have included slowing hiring, which Tennenbaum said is monitored weekly. However, he noted Avalara is continuing to make “investments in product and engineering.” Tennenbaum said some customers have asked for extended payments terms. There has been an “elongation in days sales outstanding”, but the amount is “nothing too concerning,” he said. Customers have shown “more interest in cash relief” than in pricing discounts, he continued. He expects such requests will increase.Last modified on Friday, 08 May 2020
AVALARA: CLIENTS UP AND DOWN BALANCE Featured
Avalara reduced its outlook for revenue for 2020 by 2 percent to 3 percent from the previous forecast because of the impact of the COVID-19 virus. But so far, the company says them impact on customers is roughly even between those spending more and those less for its indirect tax services.