CommerceHub Inc.

Overview Key strengths Key risks Strong tailwinds in e-commerce activity supports organic growth Small revenue scale and dependence on top five client accounts, which contribute 45% of revenue Integrated services on customer platforms result in high switching costs Exposure to consumer discretionary spending, which is influenced by the economic cycle High leverage and financial sponsor ownership For the year ended 2022, CommerceHub reported flat revenue growth as consumer spending trends began to slow in the second half of the year. More notably, in its fourth quarter (which accounts for about one-third of full-year revenues due to the holiday season), revenue declined 1% because of lower order volumes amid a lackluster holiday sales season. S&P Global economists forecast a slowdown in

...We lowered our revenue expectations amid a weaker economic environment and expected slowdown in consumer spending. For the year ended 2022, CommerceHub reported flat revenue growth as consumer spending trends began to slow in the second half of the year. More notably, in its fourth quarter (which accounts for about one-third of full-year revenues due to the holiday season), revenue declined 1% because of lower order volumes amid a lackluster holiday sales season. S&P Global economists forecast a slowdown in consumer spending to 1.2% in 2023 and 0.9% in 2024 down from 2.8% in 2022 and 8.3% in 2021. As macroeconomic conditions deteriorate, we expect CommerceHub's variable component of revenue that accounts for roughly 35% of its total...

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