Digital River 2004 Annual Report Download - page 5

Digital River is here . . . helping our clients reach more customers
2004 was an extraordinary year at Digital River. We grew our annual revenue more than 52 percent and more
than doubled our GAAP net earnings. We demonstrated that our end-to-end e-commerce solution could help our
clients reach customers anywhere in the world – whether they speak French or Chinese or buy online in the Euro
or Yen. During the last year, our ability to manage the complexities associated with running global online
businesses earned us contracts with some of the industry’s largest players, including Circuit City Stores, Inc.,
CompUSA, Computer Associates International, Inc., eBay, Inc., Microsoft Corporation and others.
Our strong financial results were supported by other key business accomplishments. In 2004, we:
•Acquired element 5, the largest e-commerce outsourcer for software publishers in Europe, which
dramatically expanded our international footprint and client base;
•Rolled out strategic marketing services and ran programs worldwide to help clients attract and retain
new customers as well as increase market share for their online stores; and
•Significantly expanded our remote control technology to
provide clients more hands-on control over their businesses –
something that they have been asking for – while giving their
account specialists more time to help them expand revenue-
generating initiatives.
Digital River is here . . . demonstrating financial
strength and stability
For the full year ended December 31, 2004, Digital River reported
revenue of $154.1 million, a more than 52 percent increase from
$101.2 million in 2003. More than half of that increase can be
attributed to organic growth. GAAP net income totaled $35.3 million, or $0.96 per diluted share.
This compared to net income of $17.1 million, or $0.52 per diluted share, in 2003.
In addition during the second half of 2004, we took steps to further strengthen our balance sheet and
competitive positioning by raising $195 million through the issuance of 1.25 percent contingent convertible
senior notes. As a result of this offering and the cash generated from profitable operations, traditional balance
sheet leverage and stock option exercises, we exited 2004 with approximately $292 million in cash and
investments, a more than $160 million increase from December 31, 2003.
We believe our 2004 financial results speak to not only the tremendous scalability of our core business model, but
also our ability to deliver on our mission – to be the global leader in e-commerce outsourcing.
Digital River is here . . . emerging in global markets
In 2004, we strengthened our presence in European markets with the acquisition of element 5. We also put local
resources on the ground in the Asia Pacific Rim and launched fully localized e-commerce sites in Hong Kong,
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-Joel Ronning, CEO