In a recent filing with the Securities and Exchange Commission (SEC), Digital River Inc. (DRIV) stated that it expects revenue growth to reach approximately 20% in 2011.
Digital River recently entered into several new customer agreements, which are expected to contribute to revenue in the fourth quarter of 2010 and 2011.
Last week, the company signed an agreement to manage the European online sales for Freecom, a Mitsubishi Kagaku Media company, which designs, manufactures and markets innovative desktop and mobile storage solutions, network attached storage devices, flash drives, DVD burners and professional tape drives.
Earlier, Digital River extended its e-commerce deal with Microsoft Corporation (MSFT) through October 31, 2013. The agreement was originally scheduled to end in June 2012.
As per the new agreement, Digital River will build, host and manage an e-commerce store for Microsoft that will support the sale and fulfillment of Microsoft and third party software as well as consumer electronics products to customers in the United States. In addition, Digital River might also maintain its role as a reseller of Microsoft products via Digital River’s existing online stores.
Digital River is on the look-out for new business in order to replace the loss of its prime customer – Symantec Corporation.
Symantec did not renew its e-commerce agreement with Digital River which ended on June 30, 2010. The loss will adversely impact the top line of Digital River as Symantec accounted for 21.5% of total revenues in 2009.
While Symantec has migrated a part of its business away from Digital River to its new e-commerce platform in certain geographic regions, it has not yet informed Digital River about the remainder of the migration program.
The stock price of Digital River got a huge blow crashing to a 52-week low of $21.83 in October 2009 after Symantec announced that it would not renew its agreement. However, the stock has recovered quite well in the last three months as management looks keen to maintain top-line growth.