Digital River 2003 Annual Report Download - page 4

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2
2003: Another Year of Firsts
Last year was another year of “firsts” for Digital River. From a financial point of view, we continued to grow, exceeding
$100 million of revenue for the first time in the ten-year history of this company. More importantly, we enjoyed our first full
year of profitability.
But the firsts didn’t stop there. Several operational and strategic milestones were achieved last year. In 2003, we:
• Rolled out our first client sites in the Asian and Pacific Rim marketplace;
•Opened our first international data center just outside London;
• Fully integrated the enterprise software license management and subscriptions tools into our platform;
•Completed and integrated seven acquisitions; and
•Included the increasingly important try-before-you-buy sales model into the Digital River Sales Network.
2003 Financial Results
For the year, Digital River reported revenues of $101.2 million, an increase of more than 30 percent from 2002. Net income
totaled $17.1 million, or $0.52 per diluted share, as compared to a net loss of $0.5 million, or $0.02 per basic share, in 2002.
Additionally, in the third quarter we took steps to enhance our competitive positioning by strengthening our balance sheet
through a $44 million secondary common stock offering. As a result, we exited 2003 with approximately $132 million in
cash and investments, and increased our working capital nearly six-fold over the course of the year.
Our year-over-year financial performance also was supported by some key metrics:
• We increased revenue per employee by nearly 32 percent;
• Reported a more than 200 basis point improvement in gross margins; and
• Improved our net income margins to nearly 17 percent, from a net loss of one percent in 2002.
We believe that these financial results indicate a well-managed business. They can be attributed to the scalability of the
world-class platform that we have created and the e-marketing expertise we have acquired over the past 10 years. They
reflect the quality of our seasoned team of professionals and our ability to successfully perform against a set of key
growth initiatives.
Joel Ronning, CEO
Photo: Marc Norberg