ChannelAdvisor 2018 Analyst Meeting

ChannelAdvisor

2018 Analyst MeetingApril 19, 2018

Safe Harbor Statement

This presentation contains "forward-looking" statements that are based on our management's beliefs and assumptions and on

information currently available to management. Forward-looking statements include information concerning our possible or

assumed future results of operations, revenue visibility, key metrics, business strategies, financing plans, operating model,

competitive position, industry environment, potential growth opportunities, potential market opportunities and the effects of

competition.

Forward-looking statements include all statements that are not historical facts and, in some cases, can be identified by terms such

as "anticipates,“ "believes," "could,” "seeks," "estimates," "intends," "may," "plans," "potential," "predicts," "projects," "should," "will,"

"would" or similar expressions and the negatives of those terms. Forward-looking statements involve known and unknown risks,

uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any

future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements

represent our management's beliefs and assumptions only as of the date of this presentation. You should read ChannelAdvisor’s

SEC filings, including the Risk Factors set forth therein, completely and with the understanding that our actual future results may be

materially different from what we expect. Except as required by law, we assume no obligation to update these forward-looking

statements publicly, or to update the reasons why actual results could differ materially from those anticipated in the forward-looking

statements, even if new information becomes available in the future. This presentation includes certain non-GAAP financial

measures as defined by SEC rules. We have provided a reconciliation of those measures to the most directly comparable GAAP

measures in our earnings releases available at www.sec.gov and under “SEC Filings” at http://ir.channeladvisor.com.

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Agenda

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Session Speaker Title

Introduction Mark Cook CFO

Welcome David Spitz CEO

Sales Update Paul Forte Chief Revenue Officer

Business Development Paul Colucci VP, Business Development

Global Services Beth Segovia VP, Global Services

Solutions Overview Mark Vandegrift VP, Product Management

Financial Review Mark Cook CFO

Q&A All speakers

4

Q1 2018 Preliminary Results1

In $millionsGuidance

Range

Preliminary

Results

Variance at

Midpoint

Revenue $29.4 – 29.8 $31.2 + $1.6

Adjusted

EBITDA

(0.7) – (0.3) 0.8 + $1.3

1See our press release for details and for required disclosures and reconciliations.

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Our Mission

To connect and optimize

the world’s commerce

Our Platform

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Our Customers

8

http://www.toolup.com/

http://www.toolup.com/

Our Market

9

Enterprise

Mid-Market

VSB

3%

We estimate 100k+ potential

customers and ~3% current

market share.

Our Evolution

10

Revenue & Revenue Growth (thousands)

Adjusted EBITDA(thousands)

2013 – 2017

• 16% Revenue CAGR

• Improved profitability

• Improved cash flow

• But … decelerating revenue growth

Our Evolution

11

2013 – 2014

• Significant & expanding losses against backdrop of decelerating revenue growth

• Analysis indicated that small customers drove majority of losses (high churn)

• Concluded that direct sales model yielded poor unit economics with <$15k ARR customers



Our Evolution

12

2015 – 2016

• Rationalized pricing, policies, and sales & marketing investment to better focus on larger customers with better unit economics

• Contraction in bookings due to resulting pipeline contraction

• Improved profitability, but at expense of further decelerating revenue growth



Our Evolution

13

2017

• Hired new sales leadership & upgraded talent

• Created strategic accounts team

• Created indirect sales team

• Opened new Denver sales office

• Expanded R&D investment

• Hired new services leader



Our Evolution

14

2017

• S&M changes yielded first increase in bookings since 2014, and best bookings year since 2014

• Quality and average deal size have increased

• Improved sales rep productivity

• Beginning to see contribution from indirect sales efforts

Bookings Growth


Our Evolution

15


2018 & Beyond

• We believe our market opportunity is large

• We intend to continue investing in growth

• We also believe we can begin driving margin improvement through gains in sales & marketing efficiency

Bookings Growth

Our Strategy

16

Innovation

Go To Market

Culture

• Channel Expansion

• Competitive Optimization

• Operational Efficiency

• Sales & Marketing Efficiency and Growth

• Indirect Sales

• Strategic Partnerships

• Land & Expand, New regions

• Passion for the customer & continuous innovation

• Curiosity & experimentation

• Service & respect for individual

Our Culture of Innovation – Expanding Marketplaces

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A key part of our

strategy is to expand

our customers’ reach

globally.

In the last year we’ve

added 17 new

marketplaces.

Houzz, Walmart

Canada, Bonanza,

and many others

47

71

90

107

2015 2016 2017 Today

Our Culture of Innovation – Growing Dropship Network

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Announced

expansion into

drop-ship last

year

In just one year

have integrated

30+ retailers

Natural

complement to

marketplaces for

suppliers and

brands

Our Expanding Partnerships

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Our Culture

• Six-time winner of the Triangle Business

Journal’s Best Places to Work Award

• Three-time winner of the Bronze® Stevie

Award for Sales & Customer Service

• Named #1 Marketplace Management

Provider to the Internet Retailer Top 1000 for

Six Consecutive Years

• 2017 Women in Business Award

Investment Highlights

• Industry-leading, global e-commerce platform

• Trusted by over 2,8001 customers

• $9 billion in annual GMV1

• Broad exposure to e-commerce trends• Amazon and 100+ other marketplaces globally

• Brands shifting to digital in response to retail disruption

• China’s growing domination of e-commerce

• Logistics, a key beneficiary of e-commerce growth

• Emerging trends like voice commerce

• Emerging benefits from strategic partnerships

• Attractive unit economics

• 17+ year culture of innovating in dynamic industry

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1As of 12/31/2017

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What We Did Last Year

Program Overview

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Since We Last Met ...

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• Installed Impact Program globally

• Operating Rhythm, QBR, MEDDICC, pipeline program, deal review

• Created Sales Advisory Council

• Optimized GTM Coverage model and lead flow

• Created Indirect Channel and re-purposed Business Development

• Strengthened Sales Leadership Team

• New Managing Director for EMEA

• New North American Sales Leader

• New Global Business Development Leader

• New Director of Global Sales Operations

• New West/Strategic Sales Leader

• New SDR Director in US

• New China Lead

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2017 Results Summary

YoY Bookings Growth

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First time positive bookings growth in 3+ years ?

Bookings Increasing

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Sales Productivity Improving (Bookings/QBSR)

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2018 Plans and Priorities

2018 Plans and Priorities

• Hired New China Lead

• Hire New Global Enablement Leader

• Continue top-grade initiative

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• Create Enablement Center of Excellence

• Roll-out Global Enablement Plan

• Improve Sales Rep Productivity by 15%

• Execute Sales Advisory Council Initiatives

• Improved Customer Experience

• Sales Enablement

• Plan/execute an indirect sales model

• Execute Phase 2 Pipeline Program

• Plan/Execute 5-year growth plan

Mission

33

Develop and manage a network of strategic

partners that will enhance sales efforts,

grow GMV and accelerate revenue.

Enhance. Grow. Accelerate.

Organization

34

Business Development

SalesChannel

Sales/ResellersCorporate

DevelopmentPartner

ManagementCategory

Management

Areas of Focus

35

•Access ChannelAdvisor

•ChannelAdvisor Fulfillment Services

•Retail/Dropship Network

Sales Enhancement

•Partner Management

•Category Management

•Cross Border TradeGMV Growth

• Indirect Channel of Resellers

•Rev Share Agreements

•M&A

Revenue

Acceleration

Unique Value Proposition for Partners

WWITH CHANNELADVISOR?

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• Leading SaaS platform for e-commerce

• Over 350 Digital connections, including over 100 global Marketplaces

• Nearly 3,000 global clients

• Online retailers and branded manufacturers

• 150m SKUs at any given time

• $9bn in online sales

• 220m orders

• Global footprint with offices in Americas, EMEA, APAC

Why partner with ChannelAdvisor?

New Marketplaces

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Technology Business Partners: E-Commerce, Logistics & Fulfillment

A bit about me …

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• Results Driven, Passionate Customer Advocate

• Dual degreed engineer: Industrial, Manufacturing Systems

• 25 years in the IT Industry in PC Hardware & Services • Customer Service

• Global Execution

• Voice of Customer

• Track record for building organizations that deliver high Customer satisfaction

• Develop high performing teams through • Leadership

• Setting a High Bar

• CX Architect

• Account Management

• Technical Support

• Business Transformation

• Sales Operations & Enablement

• Supply Chain

• Sourcing Talent

• Managing Performance

• Coaching & Development

• Disciplined Approach

What I want us to achieve …

41

Customer First, Customer for Life

Understand the customer’s business, goals & needs

Understand how ChannelAdvisor fits into that strategy

Deliver to exceed the customer’s expectations

When we enable our customers to exploit the capabilities of ChannelAdvisor to meet their business goals and expectations, removing effort and friction from their experience and doing what’s right for them in every situation, our business will grow.

ChannelAdvisor Global Services

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• E-commerce Expert

& Business Coach

• Feature Education

• Next Best Action

Recommendations

• Initial Platform Setup

• Software Training

• On Demand Projects

for Ad Hoc Needs

• 6 Countries in 4 Languages

• 24/5 Days a Week

• 17 Years Experience

• Stevie Award Winners

SOFTWARE

IMPLEMENTATION

TECHNICAL

SUPPORT

ACCOUNT

MANAGEMENT

• Business Guidance

• Strategy Development

& Execution

• Visibility Enhancement

• Staff Augmentation

MANAGED

SERVICES

Opportunities

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ACCOUNT

MANAGEMENT

TIME TO VALUE

VOICE OF

CUSTOMER

SELF SERVICE

CLIENT SUCCESS

CONSISTENCY

Faster set up to engage marketplaces & kick start client revenue growth

Align roles, goal structure & customer coverage across regions

Enable customers with education and feature adoption

Expand relationships to grow revenue and drive renewal

Leverage customer feedback to continuously improve service delivery

2018 Priorities

44

Improve ‘Customer Centricity’

Faster set up and revenue growth focus

Voice of Customer program

Consistent quality standards

Enable Self Service Customers

Education + Account Manager to recommend next best action(s)

Improve platform usability

Feature adoption

Empower Account Management

Develop advisory and sales skills

Strengthen the Organization

Hire new leaders in critical roles

Build a results driven culture

Reaching Customers is Complex and Competitive

46

PAST:The path to purchase was

uncluttered: Manufacturer,

Distributor, Retailer,

Consumer

NOW:The path to purchase is much more

complex; with multiple purchase

points between Manufacturer and

Consumer: Marketplaces, 3PL Direct,

Brand D2C, Distributor Direct,

Retailer, eCommerce, Brand Stores,

and More

ChannelAdvisor Solution Benefits

47

Facilitating Collaboration Between Brands and Retailers

Creating Efficient Operations and Smarter Automation

Providing Valuable Analytics

Improving Visibility and Competitiveness

Expanding Shopper Reach

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49

Marketplaces Retail Programs

WebstoresAds

Expanding Shopper Reach – Hybrid Model

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51

Improving Visibility and

Competitiveness

Improving Visibility and Competitiveness - Content

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Improving Visibility and Competitiveness - Pricing

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Improving Visibility and Competitiveness - Pricing

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Improving Visibility and Competitiveness - Advertising

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Improving Visibility and Competitiveness - Advertising

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Creating Efficient Operations

and Smarter Automation

XML CSV

TXT XLS

Creating Efficient Operations & Smarter Automation

58

TransformationEnhancement

ValidationSyndication

Creating Efficient Operations & Smarter Automation

59

Channel Order

Order Routing

Order Consolidation

Multiple DCs

Drop Ship Automation

Label Printing

Pick Lists

Packing Slips

Barcode Scanning

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Facilitating Collaboration

Between Brands and Retailers

Facilitating Collaboration Between Brands and Retailers

61Copyright 2018 ChannelAdvisor

Wh

ere

to

Bu

y

BUY

ONLINEBUY LOCAL

Shopping list to retailer’s cart

Deep links to online retailers

Locations basedon product carriage

Local retailers with mapping services

Facilitating Collaboration – Buy Online + Buy Local

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ChannelAdvisor Solutions

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Who is ChannelAdvisor?

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Retail & Manufacturing

customers worldwide

Global transactionsGlobal employees

focused on e-commerce

The Industry's Most Complete Solution to Help Grow Your E-Commerce Business

100+ channels supported worldwide

68

Q1 2018 Preliminary Results1

In $millionsGuidance

Range

Preliminary

Results

Variance at

Midpoint

Revenue $29.4 – 29.8 $31.2 + $1.6

Adjusted

EBITDA

(0.7) – (0.3) 0.8 + $1.3


2017 Highlights

69

Gross Merchandise Value (GMV)

21% 5 Yr CAGR

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Annual Revenue

18% 5 Yr CAGR

71

Seasonality


Our seasonality is driven by our variable revenue

Q118 Results are Preliminary1

Variable Revenue

73


Our seasonality is driven by our variable revenue with Q4 the

strongest due to holiday sales

Q118 Results are Preliminary1

Revenue by Product

74

Customer Metrics

Reduction of over 400

Decline of $4.0m

75

Customer Metrics


Decline of $4.0m

76

Customer Metrics


Decline of $4.0m

+ 180 customers

+ $7.2m

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Customer Metrics


Decline of $4.0m

+ 180 customers

+ $7.2m

Decline of $4.0m

+ $6.0m

+ 80 customers

78

Customer Metrics


Decline of $4.0m

Increase of over $16 million from Dec 31, 2014

Increase of ~90 customers from Dec 31, 2014

+ 180 customers

+ $7.2m

+ $6.0m

+ 80 customers

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LTV:CAC Ratio

Began constriction of smaller <$15k

customer

80

Investment Highlights

• Industry-leading, global e-commerce platform

• Trusted by over 2,8001 customers

• $9 billion in annual GMV1

• Broad exposure to e-commerce trends• Amazon and 100+ other marketplaces globally

• Brands shifting to digital in response to retail disruption

• China’s growing domination of e-commerce

• Logistics, a key beneficiary of e-commerce growth

• Emerging trends like voice commerce

• Emerging benefits from strategic partnerships

• Attractive unit economics

• 17+ year culture of innovating in dynamic industry

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1As of 12/31/2017

Key Investment Highlights

82Copyright 2018 ChannelAdvisor | Confidential

2018 & Beyond

• We believe our market opportunity is large

• We intend to continue investing in growth

• We also believe we can begin driving margin improvement through gains in sales & marketing efficiency

ChannelAdvisor 2018 Analyst Meeting

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