demandwareDemandware likes to boast that it enables the world’s premier retailers to move faster and grow faster in the changing face of retail. But in the past 12 months, the company's stock has grown just as furiously.

Shares of Demandware — a provider of cloud-based e-commerce solutions used by retailers and brands — nearly tripled in the past year. Recently trading at $75.30, the stock earlier this month hit a new all-time high at $82.23 after getting a bump from a strong fourth quarter earnings report, with subscription revenue advancing 46 percent.

What it Offers

Demandware delivers a set of enterprise-class merchandising applications via its cloud platform. With the company’s solutions, customers are able to easily design, quickly implement and totally manage their own customized e-commerce sites — including websites, mobile applications and digital storefronts.

An alternative, maintaining an in-house solution behind a firewall, can be pricey and inefficient. Some of the drawbacks include a lack of scalability, the inability to fully customize and no real upgrade cycle.

Demandware, which targets potential customers with annual online sales ranging from as little as $2 million at the low end to more than $300 million, has a total addressable pool of roughly 3,500 companies in North America and 2,500 across Europe.

As of the end of 2013, Demandware had 204 customers live on its platform, a 35 percent increase from the year-ago level (and up from 184 customers at the end of the third quarter), with 820 live sites (up 42 percent year over year).

About 70 percent of Demandware’s revenue growth can be attributed to new customer additions. This rip and replace “re-platforming” is a key driver, as enterprises increasingly realize it’s often easier and cheaper to move digital commerce applications to the cloud.

Steady Revenue Growth Ahead

With a string of new customer acquisitions last year, Demandware is on track for continued strong revenue growth both this year and next. Since implementations take some time (usually six months), customers added late in 2013 that go live on the platform throughout this year will begin to meaningfully contribute to revenue in 2015. There are currently 36 customers in the implementation stage.