Digital River 2009 Annual Report Download - page 4

Dear Shareholders: From site design and e-marketing
to order management, online payments and customer service,
during the past 15 years, Digital River has established itself
as an industry leader. 100 percent invested in e-commerce.
And 100 percent invested in the success of our clients.
As we celebrate this 15-year milestone, we have seen the
Internet grow from an interesting idea to a strategic channel
for growing a global business. Today, we handle more online
orders in a week than we did the entire year of 1998 when
we went public. We are managing online businesses – both
large and small – for thousands of companies in more than
200 countries. Our business has expanded considerably beyond
the U.S. software market, where we began, to include new
opportunities in markets such as consumer electronics, and
high-growth geographies like Asia and Latin America.
While our business has grown significantly and the e-commerce
landscape has changed tremendously, we have not moved
off our central mission, which is to be the world’s leading
provider of global e-commerce solutions. This consistent
focus continues to serve us well – driving us to aggressively
expand our e-commerce capabilities and deliver the highest
quality online experience for our clients and their customers.
With the organization fully aligned around this strategy,
I am pleased to report we emerged from 2009 in an even
stronger leadership position. We accomplished this while
navigating through the uncertainties of a global recession,
which began in 2008, and the news that our largest client
was not renewing their contract with us. I believe our
ability to execute is a true testament to the deep resolve
of our company and the strength of our value proposition.
Accelerating our growth.
We closed 2009 with record fourth quarter revenue, generating
$105 million dollars. And for the first time since the recession
began, we started seeing top-line, year-over-year growth rates
in line with 2007 and 2008 organic growth rates.
For the full year ended December 31, 2009, total revenue
was $404 million and our GAAP net income totaled $50
million or $1.32 per share. We ended the year with a very
strong balance sheet and substantial liquidity, holding
approximately $528 million dollars in cash and investments.
Progress: Diversifying into complementary markets.
In 2009, we proved that we had the e-commerce
infrastructure and expertise to successfully diversify across
multiple markets. To support our expansion strategy,
we increased the size of our sales force by about 40 percent,
adding seasoned professionals in key markets. We grew our
core software business, closing new accounts and helping
existing clients build new revenue streams. At the same time,
we won new business in consumer electronics and games,
two new vertical markets that we have been aggressively
pursuing over the past several years. Today, we count among
our clients some of the most respected and recognized
brands on the Internet, including Microsoft, Citrix, Electronic
Arts, Kodak, Pentax, RIM, Samsung, THQ, UbiSoft and
Western Digital – just to name a few. With more consumer