UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~March 3031, ~~2017~~2018



¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission File Number 001-37840

COMMERCEHUB, INC.

(Exact name of Registrant as specified in its charter)



Delaware (State or other jurisdiction of incorporation or organization)	7372 (Primary Standard Industrial Classification code number)	81-1001640 (I.R.S. Employer Identification No.)

201 Fuller Road, 6th Floor, Albany, New York 12203

(Address of principal executive office, including zip code)

Registrant's telephone number, including area code: (518) 810-0700

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ýx No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ýx No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ox Accelerated filer o Non-accelerated filer ýo Smaller reporting company o Emerging growth company ýo

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ý ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No ýx

The number of outstanding shares of CommerceHub, Inc. common stock as of ~~October~~May 311, ~~2017~~2018 was:

		Series A		Series B		Series C
CommerceHub, Inc. common stock:		13,~~599~~614,~~729~~132		707,567		29,~~009~~350,~~530~~264

Table of Contents

TABLE OF CONTENTS

Part I. Financial Information
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets	1
Condensed Consolidated Statements of Comprehensive Income	2
Condensed Consolidated Statements of Cash Flows	3
Notes to Condensed Consolidated Financial Statements	4
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	1315
Item 3. Quantitative and Qualitative Disclosures About Market Risk	2221
Item 4. Controls and Procedures	2322
Part II. Other Information
Item 1. Legal Proceedings	2423
Item 1A. Risk Factors	2423
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	2423
Item 3. Defaults on Senior Securities	2423
Item 4. Mine Safety Disclosures	2423
Item 5. Other Information	2423
Item 6. Exhibits	2524
Signatures	2625

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

COMMERCEHUB, INC.

Condensed Consolidated Balance Sheets

(In thousands, except share data)

(Unaudited)

	September 30, 2017		December 31, 2016
	March 31, 2018		December 31, 2017
Assets
Current assets:
Cash and cash equivalents	$	833,438	$	619,~~471~~841
Accounts receivable, net of allowances of $1,000 and $200, respectively	12,526		18,109
Accounts receivable, net of allowances of $1,062 and $1,084, respectively	12,954		21,310
Prepaid income taxes	3,054		4,311
Prepaid expenses and other current assets	1,673		1,652
Prepaid expenses and other current assets	1,833		1,549
Total current assets	48,065		42,803
Total current assets	25,851		30,440
Capitalized software, net	2,273		2,850
Capitalized software, net	3,803		6,716
Deferred services costs	3,810		4,853
Deferred services costs	4,898		4,989
Deferred commissions costs	1,853		—
Property and equipment, net	6,~~701~~575		76,~~629~~066
Goodwill	21,410		21,410
Deferred income taxes	95,~~450~~687		75,~~714~~798
Other long-term assets	1,~~466~~166		1,~~122~~339
Total assets	$	7390,~~579~~839	$	8085,~~020~~119
Liabilities and Equity
Current liabilities:
Accounts payable and accrued expenses	$	27,~~770~~634	$	23,~~135~~360
Accrued payroll and related expenses	75,~~433~~610		79,~~435~~429
Income taxes payable	82,087		7962
Deferred revenue	5,~~603~~021		5,~~149~~339
Total current liabilities	1520,~~814~~352		1419,~~726~~090
Deferred revenue, long-term	89,~~375~~281		78,~~581~~272
Other long-term liabilities	2,~~201~~405		13,~~135~~210
Long-term debt	—		26,000
Total liabilities	32,038		30,572
Total liabilities	26,390		49,442
Equity:
Preferred stock, $0.01 par value. Authorized shares 50,000,000; 0 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively	—		—
Preferred stock, $0.01 par value. Authorized shares of 50,000,000; 0 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively	—		—
Series A common stock, $0.01 par value. Authorized shares 40,000,000; 13,599,743 and 13,536,502 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively	136		135
Series A common stock, $0.01 par value. Authorized shares 40,000,000; 13,614,132 and 13,599,641 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively	136		136
Series B common stock, $0.01 par value. Authorized shares 1,500,000; 707,567 and 711,992 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively	7		7
Series B common stock, $0.01 par value. Authorized shares 1,500,000; 707,567 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively	7		7
Series C common stock, $0.01 par value. Authorized shares 83,000,000; 29,009,558 and 28,672,805 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively	290		287
Series C common stock, $0.01 par value. Authorized shares 83,000,000; 29,350,264 and 29,171,981 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively	294		292
Additional paid-in capital	2635,~~817~~229		1631,~~904~~010
Accumulated other comprehensive income	2		—
Accumulated other comprehensive income (loss)	1		(1		)
Retained earnings	1923,~~937~~134		1323,~~245~~103
Total equity	4758,~~189~~801		3054,~~578~~547
Total liabilities and equity	$	7390,~~579~~839	$	8085,~~020~~119

See accompanying notes to these condensed consolidated financial statements

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COMMERCEHUB, INC.

Condensed Consolidated Statements of Comprehensive Income

(In thousands, except per share data)

(Unaudited)

Three Months EndedSeptember 30,

Nine Months EndedSeptember 30,

Three Months EndedMarch 31,

2017

2016

2017

2016

2018

2017

Revenue (Note 7)

24,614

22,478

74,390

67,671

Revenue

26,263

24,568

Cost of revenue

5,~~028~~044

5,~~737~~516

~~16,183~~

~~17,162~~

Gross profit

1921,~~586~~219

1619,~~741~~052

~~58,207~~

~~50,509~~

Operating expenses:

Research and development

6,~~434~~452

5,~~077~~915

~~18,745~~

~~13,391~~

Sales and marketing

2,~~432~~336

31,~~023~~931

~~6,750~~

~~9,024~~

General and administrative

711,~~402~~249

86,~~008~~939

~~21,286~~

~~23,207~~

Total operating expenses

1620,~~268~~037

1614,~~108~~785

~~46,781~~

~~45,622~~

Income from operations

31,~~318~~182

~~633~~4,267

~~11,426~~

~~4,887~~

Other (expense) income:

Interest expense

(~~148~~132

)

(~~361~~227

)

~~(604~~

)

~~(405~~

)

Interest income

—25

—

~~273~~

Total other (expense) income

(~~148~~107

)

(~~361~~227

)

~~(604~~

)

~~(132~~

)

Income before income taxes

31,~~170~~075

~~272~~4,040

~~10,822~~

~~4,755~~

Income tax expense (benefit)

1,182

(438

)

4,130

1,611

Income tax expense

886

1,581

Net income

~~1,988~~189

~~710~~2,459

~~6,692~~

~~3,144~~

Total comprehensive income

~~1,987~~191

~~710~~2,459

~~6,694~~

~~3,144~~

Earnings per share:

Basic

~~0.05~~—

0.0206

~~0.16~~

~~0.07~~

Diluted

~~0.04~~—

0.0206

~~0.15~~

~~0.07~~

Shares used in computing earnings per share:

Basic

43,~~286~~540

42,~~773~~977

~~43,141~~

~~42,773~~

Diluted

45,~~420~~762

4344,~~559~~670

~~45,081~~

~~43,559~~

See accompanying notes to these condensed consolidated financial statements

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COMMERCEHUB, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Nine Months EndedSeptember 30,
	Three Months EndedMarch 31,
	2017			2016
	2018			2017
Cash flows from operating activities:
Net income	$	~~6,692~~189		$	32,~~144~~459
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	61,~~278~~513			72,~~315~~094
Amortization of debt issuance costs	~~166~~55			5556
Share-based compensation expense	6,986			8,753
Share-based compensation	2,019			2,360
Deferred income taxes	~~(1,736~~163		)	~~17,015~~(642		)
Bad debt expense	~~931~~42			~~695~~404
Accrued interest income	—			(273		)
Impairment and loss on disposal of long-term assets	210			160
Change in operating assets and liabilities:
Accounts receivable	48,~~650~~313			5,~~667~~175
Prepaid expenses and other assets	~~(787~~96		)	(~~956~~243		)
Income taxes, net	1,~~258~~124			~~810~~3,676
Deferred costs	91(187		)	~~(201~~181		)
Deferred revenue	~~1,249~~(142		)	~~266~~334
Accounts payable and accrued expenses	13,~~399~~051			~~479~~337
Accrued payroll and related expenses	(4,549		)	~~416~~(2,620		)
Share-based compensation liability payments	—			(86,684		)
Net cash provided by operating activities	11,687			13,571
Parent receivables and payables, net	—			(9,112		)
Net cash provided by (used in) operating activities	27,383			(52,451		)
Cash flows from investing activities:
Purchases of property and equipment	(~~1,159~~71		)	(~~4,513~~692		)
Additions to capitalized software	(~~1,138~~222		)	(~~3,963~~631		)
Collection of note receivable - Parent	—			36,380
Net cash used in investing activities	(293		)	(1,323		)
Net cash (used in) provided by investing activities	(2,297		)	27,904
Cash flows from financing activities:
Borrowings on credit agreement	—			50,000
Payments on revolver	—			(16,000		)
Repayments on credit agreement	(26,000		)	(9,000		)
Cash received from exercise of stock options	1,514			1,324
Cash paid for debt issuance costs	—			(1,100		)
Cash received from employee stock purchase plan	878			—
Purchase of treasury stock	—			(3,600		)
Cash received from deferred stock units	25			—
Cash received from exercise of stock options	2,417			248
Cash paid for taxes on RSU issuances	(214		)	—
Cash received from employee stock purchase plan	464			—
Net cash provided by (used in) financing activities	2,203			(14,676		)
Borrowings on note payable - Parent	—			28,664
Currency effect on cash and cash equivalents	—			1
Payments on note payable - Parent	—			(28,664		)
Net increase (decrease) in cash and cash equivalents	13,597			(2,427		)
Contribution from Parent	—			6,000
Cash and cash equivalents, beginning of period	19,841			6,471
Dividends paid to Parent	—			(19,730		)
Cash and cash equivalents, end of period	$	33,438		$	4,044
Net cash (used in) provided by financing activities	(23,119		)	22,818
Currency effect on cash and cash equivalents	—			—
Net increase (decrease) in cash and cash equivalents	1,967			(1,729		)
Cash and cash equivalents, beginning of period	6,471			19,337
Cash and cash equivalents, end of period	$	8,438		$	17,608
Supplemental disclosure of non-cash investing and financing activities:
Contractual obligations for acquisition of capitalized software	$	—		$	58
Contractual obligations for acquisition of fixed assets	$	1,511		$	360
Contractual obligations for acquisition of fixed assets	$	360		$	—

See accompanying notes to these condensed consolidated financial statements

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COMMERCEHUB, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 1 - Description of Business

CommerceHub, Inc. (~~together with its subsidiaries,~~ "CommerceHub," the "Company," "us," "we" and "our") was founded in 1997 (then known as Commerce Technologies, Inc., ~~our predecessor entity~~("CTI")) and is headquartered in Albany, New York, with additional locations in Seattle, Washington and Hertford, England. We are a leading provider of cloud-based ecommerce fulfillment and marketing solutions ~~that integrate supply, demand and delivery~~ for large retailers, ~~and~~marketplaces, consumer brands, ~~manufacturers~~ and ~~distributors~~their ~~(collectively, "~~suppliers"). Our ~~end-to-end~~ solutions ~~are~~help ~~provided~~our ~~through~~customers ~~the~~implement ~~CommerceHub~~strategies ~~software~~to ~~platform,~~increase atheir ~~hub~~ecommerce ~~that~~revenues ~~streamlines integration~~ and ~~enables~~create ~~more~~meaningful ~~efficient~~operational ~~transactions~~efficiencies ~~among~~within ~~our~~their ~~retailer~~supply ~~and~~chains. ~~supplier~~Our customers ~~and~~use ~~their~~our ~~other~~cloud-based ~~trading~~software ~~partners,~~and ~~while~~service ~~also enabling them to access the online marketplaces~~capabilities, ~~search~~which ~~engines,~~are ~~social~~tailored ~~and~~for ~~product~~specific ~~advertising~~customer ~~and~~business ~~other~~rules ~~digital marketing channels where consumers browse~~ and ~~buy.~~processes, ~~Our~~to ~~solutions~~more ~~also~~effectively ~~help~~fulfill ~~our~~consumer ~~customers~~orders, ~~integrate~~generate ~~with~~consumer ~~the~~demand ~~third-party~~for ~~logistics~~their ~~providers,~~products ~~including fulfillment~~ and ~~delivery~~deliver ~~providers,~~those ~~that take purchased~~ products to ~~the consumer's doorstep~~consumers.

During November 2015, the board of directors of Liberty Interactive Corporation (subsequently renamed Qurate Retail, Inc.), our former parent company ("Liberty," "Qurate" or "Parent"), authorized a plan to distribute to the holders of Liberty's then-outstanding Series A and Series B Liberty Ventures common stock, shares of CommerceHub (the "Spin-Off"). At the time, CommerceHub was a newly formed Delaware corporation that, pursuant to an internal restructuring, effective July 21, 2016, became the parent of Commerce Technologies, LLC, a Delaware limited liability company that, as a result of the restructuring, is the successor to ~~Commerce Technologies, Inc. ("~~CTI"), the entity through which CommerceHub transacted prior to the Spin-Off. The Spin-Off was completed on July 22, 2016 and was effected as a pro rata dividend of shares of CommerceHub to the former holders of Series A and Series B Liberty Ventures common stock ~~of Liberty~~. The Internal Revenue Service (the "IRS") has completed its review of the Spin-Off and has notified Liberty that it agreed with the nontaxable characterization of the Spin-Off.

Following the Spin-Off, CommerceHub ~~now~~ operates as a stand-alone publicly traded company, and neither ~~Liberty~~Qurate nor CommerceHub has any stock ownership, beneficial or otherwise, in the other.

Recent Events

On March 5, 2018, CommerceHub entered into an Agreement and Plan of Merger (the "Merger Agreement") with Great Dane Parent, LLC, a Delaware limited liability company (“Parent”), and Great Dane Merger Sub, Inc., a Delaware corporation and a direct, wholly owned subsidiary of Parent (“Merger Sub”), pursuant to which Merger Sub will merge (the "Merger") with and into CommerceHub, with CommerceHub continuing as the surviving corporation and a wholly owned subsidiary of Parent. Parent and Merger Sub were formed by affiliates of GTCR LLC ("GTCR") and affiliates of Sycamore Partners Management, L.P. ("Sycamore") to facilitate the participation of investment funds advised by GTCR and Sycamore in the transaction. As a result of the Merger, each share of CommerceHub's Series A common stock, Series B common stock and Series C common stock issued and outstanding immediately prior to the effective time of the Merger (other than shares owned by Parent, Merger Sub or CommerceHub, and any shares of common stock held by any stockholder who is entitled to demand and properly demands appraisal of such shares in accordance with Section 262 of the General Corporation Law of the State of Delaware and who does not fail to perfect or otherwise effectively withdraw their demand or otherwise lose the right to appraisal), will be converted into the right to receive $22.75 in cash, without interest and less applicable withholding taxes. The closing of the Merger is expected to occur in the second quarter of fiscal year 2018, but we cannot predict the exact timing of the completion of the Merger or whether the Merger will be completed. The closing of the Merger remains subject to, among other things, the approval of the holders of a majority of the outstanding voting power of our Series A and Series B common stock, and the satisfaction or waiver of other customary closing conditions. If the Merger is consummated, our Series A and Series C common stock will cease to be traded on the Nasdaq, our Series B common stock will cease to be traded on the OTC Market, and we will no longer be a publicly traded company.

For the three months ended March 31, 2018, we incurred approximately $4.3 million in transaction costs in connection with the Merger, which are included in general and administrative expenses on the condensed consolidated statements of comprehensive income and $1.8 million of these costs were included in accounts payable and accrued expenses at March 31, 2018.

Note 2 - Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of CommerceHub and its subsidiaries. All intercompany accounts and transactions have been eliminated in the condensed consolidated financial statements, which have been prepared in conformity with U.S. generally accepted accounting principles ("GAAP") for interim financial information. Accordingly, these condensed consolidated financial statements do not include all of the information and notes required by GAAP. We have included all normal recurring adjustments we consider to be necessary to give a fair presentation of our financial position, results of comprehensive income and cash flows, and changes in equity for the interim periods shown. Operating results for these interim periods are not necessarily indicative of the results to be expected for the full year. The December 31, 2016 consolidated balance sheet data was derived from our audited consolidated financial statements at that date. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements contained within our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, which was filed with the Securities and Exchange Commission (the "SEC") on March 7, 2017 (the "2016 Annual Report").

Use of Estimates

Preparing these condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates and assumptions.

Segment and Geographic Information

Operating segments are components of our business for which discrete financial information is available and evaluated by the chief operating decision maker ("CODM") for purposes of allocating resources and evaluating financial performance. Our Chief Executive Officer, who is our CODM, reviews consolidated financial information results of the Company to allocate resources and evaluate performance. As such, the Company operates as a single segment.

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COMMERCEHUB, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

~~The~~periods ~~following~~shown. ~~table~~Operating ~~summarizes~~results ~~revenue~~for bythese ~~type:~~interim periods are not necessarily indicative of the results to be expected for the full year. Information presented in the December 31, 2017 consolidated balance sheet was derived from our audited consolidated financial statements at that date. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements contained within our Annual Report on Form 10-K for the fiscal year ended December 31, 2017, which was filed with the Securities and Exchange Commission (the "SEC") on March 1, 2018 (the "2017 Annual Report").

(amounts in thousands)	Three Months EndedSeptember 30,				Nine Months EndedSeptember 30,
	2017		2016		2017		2016
Revenue:
Usage revenue	$	15,833	$	14,562	$	48,245	$	44,437
Subscription revenue	6,986		6,420		20,826		18,766
Set-up and professional services	1,795		1,496		5,319		4,468
Total revenue	$	24,614	$	22,478	$	74,390	$	67,671

Use of Estimates

WePreparing ~~generate~~these ~~nearly~~condensed ~~all~~consolidated offinancial ~~our~~statements ~~revenue~~ in ~~the~~conformity ~~United~~with ~~States~~GAAP requires management to make estimates and ~~Canada.~~assumptions ~~For~~that affect the ~~nine~~reported ~~months~~amounts ~~ended~~of ~~September 30,~~assets ~~2017~~ and ~~2016,~~liabilities ~~approximately~~at ~~96%~~the date of ~~our~~the ~~revenue~~condensed ~~was~~consolidated ~~generated~~financial ~~from~~statements ~~customers~~and ~~located~~the inreported ~~the~~amounts ~~United~~of ~~States.~~revenues ~~Substantially~~and ~~all~~expenses ofduring ~~our~~the ~~assets~~reporting ~~are~~periods. ~~located~~Actual ~~within~~results ~~the~~could ~~United~~differ ~~States~~from those estimates and assumptions.

Segment and Geographic Information

Operating segments are components of our business for which discrete financial information is available and evaluated by the chief operating decision maker ("CODM") for purposes of allocating resources and evaluating financial performance. Our Chief Executive Officer, who is our CODM, reviews the Company's consolidated financial information results to allocate resources and evaluate performance. As such, the Company operates as a single segment.

Revenue by type

The following table presents our revenues disaggregated by revenue type (in thousands):



	Three Months Ended March 31,
	2018		2017 (1)
Revenue:
Core Drop-Ship Revenue
Order fee revenue	$	13,443	$	12,038
Subscription and other platform revenue	9,064		8,451
Set-up and professional services revenue	1,789		1,725
Total core drop-ship revenue	24,296		22,214

Demand channel revenue	1,967		2,354
Total revenue	$	26,263	$	24,568

(1) We adopted Topic 606 (as defined in Note 3) as of January 1, 2018. Revenue for the three months ended March 31, 2017 is not adjusted and will continue to be reported in accordance with our historic accounting under Topic 605 (as defined in Note 4).

We generate nearly all of our revenue in the United States and Canada. For the three months ended March 31, 2018 and 2017, we generated approximately 96% of our Total Program Revenue (as defined in Note 7) from customers located in the United States. Substantially all of our assets are located within the United States.

Note 3 - Significant Accounting Policies

During the ~~nine~~three months ended ~~September~~March 3031, ~~2017~~2018, other than policies implemented in connection with the adoption of Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers ("Topic 606") as further described in Note 4 and Note 5 below, there were no material changes in our significant accounting policies. Please see Note 3 to our consolidated financial statements included in our ~~2016~~2017 Annual Report for additional information regarding our significant accounting policies.

Note 4 - Recent Accounting Pronouncements

~~In May 2014, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") No. 2014-09,~~ Revenue from Contracts with Customers (Topic 606) ("ASU No. 2014-09"). This standard is effective for fiscal years beginning after December 15, 2017, with two transition methods of adoption allowed, a full retrospective or modified retrospective. In May 2016, FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net). This update was to further clarify the implementation guidance on principal versus agent considerations in the previously issued ASU No. 2014-09. In April 2016, the FASB issued ASU No. 2016-10, Identifying Performance Obligations and Licensing, which clarifies implementation guidance on the identification of performance obligations and the licensing implementation guidance in ASU No. 2014-09. In May 2016, the FASB issued ASU No. 2016-12, Narrow-Scope Improvements and Practical Expedients, which clarifies the guidance on assessing collectability, presentation of sales taxes, non-cash consideration and completed contracts and contract modifications at transition. In December 2016, the FASB issued ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, which clarifies certain narrow aspects of ASU No. 2014-09.

WeIn ~~continue~~May to2014, ~~evaluate~~ the ~~impacts~~FASB ofissued ~~this~~Topic ~~new standard on our business processes~~606, ~~information~~which ~~technology~~supersedes ~~systems~~the ~~and~~revenue ~~associated~~recognition ~~internal~~standards ~~controls.~~in WeAccounting ~~have~~Standards ~~developed~~Codification an("ASC") ~~implementation plan to adopt this standard~~605, ~~and,~~Revenue asRecognition ~~part~~("Topic of605"). ~~this~~Topic ~~plan,~~606 werequires ~~continue~~entities to ~~assess~~recognize ~~the impacts this standard is expected to have on our financial statements and related disclosures, including the potential impacts to our usage, subscription and set-up and professional services~~ revenue. Wewhen ~~plan~~control ~~to adopt this standard using the modified retrospective transition method effective January 1, 2018. Although we are still evaluating the impact~~ of this standard, based on our initial assessment we do not believe our adoption of this standard will significantly impact our recognition of our usage and subscription revenues. However, we believe our adoption of this standard will impact our accounting for certain set-up and professional services revenues and the ~~periods~~promised ~~over~~goods ~~which~~or ~~these revenues and the related deferred~~ services ~~costs~~is ~~are~~transferred ~~recognized. Further, based on our initial assessment, we expect this standard will impact how we account for costs~~ to ~~acquire~~customers ain ~~contract.~~an Weamount ~~expect~~ that ~~applying~~reflects ~~this standard will result in~~ the ~~deferral~~consideration ~~of additional costs, primarily commission expenses~~ to ~~sales representatives,~~ which ~~we expect to recognize over~~ the ~~estimated~~entity ~~customer~~expects ~~life. Due~~ to ~~the~~be ~~preliminary~~entitled ~~nature~~in ofexchange ~~our~~for ~~assessments~~those togoods ~~date~~or ~~and subject to our planned ongoing evaluations, we are currently unable to estimate the overall impact this standard will have on our financial statements~~services.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) ("ASU No. 2016-02"). This topic provides that a lessee should recognize the assets and liabilities that arise from leases. ASU No. 2016-02 requires an entity to separate the lease components from the nonlease components in a contract. ASU No. 2016-02 is intended to improve financial reporting about lease transactions and is effective for fiscal years beginning after December 15, 2018. We are evaluating the impact this update will have on our financial statements.

In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting ("ASU No. 2016-09"), which is intended to improve the accounting for share-based payment transactions as part of the FASB's simplification initiative. ASU No. 2016-09 changed aspects of the accounting for share-based payment award transactions,

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COMMERCEHUB, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

~~including:~~Impact ~~(1) accounting for income taxes; (2) classification~~ of ~~excess~~Adopting ~~tax~~Topic benefits on the statement of cash flows; (3) forfeitures; (4) minimum statutory tax withholding requirements; and (5) classification of employee taxes paid on the statement of cash flows when an employer withholds shares for tax-withholding purposes. Further, under ASU No. 2016-09 the calculation for diluted shares under the treasury-stock method no longer includes the effect of excess tax deductions, resulting in a higher effect of dilutive shares. We adopted ASU No. 2016-09 in the first quarter of 2017, which did not have a significant impact on our financial statements.606

InOn ~~August~~January ~~2016~~1, ~~the FASB issued ASU No. 2016-15~~2018, ~~Classification~~ ofwe ~~Certain~~adopted ~~Cash Receipts and Cash Payments (~~Topic ~~230)~~606 ~~("ASU~~using ~~No.~~the ~~2016-15"),~~modified ~~which~~retrospective ~~addresses~~method ~~eight~~applied ~~specific~~to ~~cash~~those ~~flow~~contracts ~~matters~~which ~~with~~were ~~the~~not ~~objective~~completed as of ~~reducing~~January ~~diversity~~1, in2018. ~~practice~~Results infor ~~how~~reporting ~~certain~~periods ~~cash~~beginning ~~receipts~~after ~~and~~January ~~cash~~1, ~~payments~~2018 are ~~classified~~presented in ~~the~~accordance ~~statement~~with ofTopic ~~cash~~606, ~~flows.~~while ~~ASU~~prior ~~No.~~period ~~2016-15~~amounts isare ~~effective~~not ~~for~~adjusted ~~fiscal~~and ~~years~~continue ~~beginning~~to ~~after~~be ~~December~~reported ~~15,~~in ~~2017.~~accordance Wewith ~~are~~our ~~evaluating~~historic ~~the~~accounting ~~impact~~under ~~this~~Topic ~~update will have on our financial statements~~605.

InDeferred ~~November~~Revenue ~~2016, the FASB issued ASU No. 2016-18, Restricted Cash ("ASU No. 2016-18"), which requires that entities show the changes in the total of cash, cash equivalents~~ and ~~restricted~~Deferred ~~cash~~Services in the statement of cash flows. Transfers between cash, cash equivalents and restricted cash should not be presented as cash flow activities on the statement of cash flows. ASU No. 2016-18 is effective for fiscal years beginning after December 15, 2017. We do not expect the adoption of this standard will have a material impact on our financial statements.Costs

InOur ~~January~~contracts ~~2017,~~include a set-up fee that is charged to the ~~FASB~~customer ~~issued~~upon ~~ASU~~entering Nothe contract. ~~2017-04~~Under Topic 605, ~~Intangibles~~ the set-up ~~Goodwill~~fee was recognized as a separate deliverable and ~~Other~~deferred ~~(Topic~~over ~~350):~~the ~~Simplifying~~initial term of the ~~Test~~contract ~~for~~plus ~~Goodwill~~probable ~~Impairment~~renewal periods (the "~~ASU~~expected ~~No.~~customer ~~2017-04~~life"),. ~~which~~Under ~~removes~~Topic ~~Step~~606, 2the ofinitial ~~the~~setup ~~goodwill~~is ~~impairment~~not ~~test,~~determined ~~which~~to ~~requires~~be a ~~hypothetical~~separate ~~purchase~~performance ~~price~~obligation, ~~allocation.~~and Antherefore ~~impairment~~fees ~~charge~~received ~~will~~and ~~now~~costs ~~equal~~incurred ~~the~~are ~~amount~~capitalized byand ~~which~~deferred over the ~~reporting~~period ~~unit's~~of ~~carrying~~expected ~~value~~benefit, ~~exceeds~~which ~~its~~may ~~fair~~either ~~value.~~be ~~ASU~~the ~~No.~~initial ~~2017-04~~contract isterm ~~effective~~or ~~for~~the ~~fiscal~~expected ~~years~~customer ~~beginning after December 15~~life, ~~2019.~~depending Weon dowhether ~~not expect~~ the ~~adoption~~set-up offee ~~this~~represents ~~standard will have~~ a material ~~impact~~right on(as ~~our~~further ~~financial~~described ~~statements~~in Note 5).

InProfessional May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting ("ASU No. 2017-09"), which clarifies what constitutes a modification of a share-based payment award. ASU No. 2017-09 is effective for fiscal years beginning after December 15, 2017. We do not expect the adoption of this standard will have a material impact on our financial statements.Services

~~Note~~Under 5Topic -605, ~~Earnings~~fees ~~Per~~collected ~~Share~~for professional services, and the related costs of fulfilling these services, were deferred over the remaining expected customer life. Under Topic 606, these services are considered distinct performance obligations, and thus the revenue, and related costs of fulfilling these services, are recognized as these services are performed.

~~For~~Cost the three and nine months ended September 30, 2017 and 2016, basic earnings per common share is computed by dividing net income by the weighted average number of common shares outstanding during that period (excluding pre-Spin-Off periods in 2016). Diluted earnings per share gives effect to ~~all~~Obtain ~~dilutive potential shares attributable to outstanding stock options and restricted stock units during that period. The shares used in the calculation of diluted earnings per share exclude (~~a) ~~options~~Customer to purchase shares where the exercise price was greater than the average market price of common shares for the reporting period, using the treasury-stock method, and therefore the effect of the inclusion would be anti-dilutive and (b) awards with performance-based conditions where the performance criteria had not been met as of the reporting date. Contract

	Three Months EndedSeptember 30,				Nine Months EndedSeptember 30,
	2017		2016		2017		2016
Net income	$	1,988	$	710	$	6,692	$	3,144
Basic - weighted average shares outstanding	43,286		42,773		43,141		42,773
Effect of dilutive potential securities	2,134		786		1,940		786
Diluted - weighted average shares outstanding	45,420		43,559		45,081		43,559
Anti-dilutive securities	1,669		5,034		4,170		5,034

Historically, commissions associated with obtaining new revenue contracts were expensed as incurred. In connection with the adoption of Topic 606, we adopted ASC No. 340-40, which requires incremental costs of obtaining customer contracts to be capitalized and recognized over the period of expected benefit.

~~Note~~Cumulative 6Impact -on ~~Concentrations~~the ofCondensed ~~Significant~~Consolidated ~~Customers~~Balance ~~and Credit Risk~~Sheet

NoThe ~~single~~following ~~customer~~changes ~~accounted~~summarize ~~for~~the ~~more~~impact ~~than 10%~~ of ~~our~~adopting ~~total~~Topic ~~revenue in the nine months ended September 30~~606, ~~2017~~which orwas ~~2016.~~reflected ~~However,~~as ~~our~~a ~~revenue~~cumulative ~~model~~adjustment isto ~~primarily~~opening ~~based~~retained onearnings ~~retailer~~as ~~and~~of ~~supplier~~January ~~program~~1, ~~relationships whereby many revenue-generating supplier transactions conducted through our platform may be attributable to a single retailer ("Total Program~~ 2018:


•	a $1.9 million increase in deferred commissions costs that are directly attributable to obtaining a revenue contract and are now capitalized under Topic 606;


•	a $1.2 million net reduction in deferred service costs as a result of changes in the periods in which such deferred service costs are recognized;


•	a $0.8 million net increase in deferred revenue as a result of changes in the periods in which such deferred revenue is recognized; and


•	a $0.1 million increase in deferred income taxes as a result of the cumulative effects of the foregoing.

Impact on the Condensed Consolidated Financial Statements

Condensed Consolidated Statement of Comprehensive Income

For the three months ended March 31, 2018, the adoption of Topic 606, as compared to what we would have reported under Topic 605, did not have a material impact on any component of our statement of comprehensive income. The net impact of the adoption of Topic 606 was a $0.1 million increase in pre-tax income and net income, with no change to basic or diluted earnings per share.

Condensed Consolidated Balance Sheet

The following summarizes the changes to our condensed consolidated balance sheet as of March 31, 2018 as a result of the adoption of Topic 606, as compared to what we would have reported under Topic 605:


•	a $1.9 million increase in deferred commissions costs;


•	a $1.3 million net reduction in deferred service costs;


•	a $0.8 million net increase in deferred revenue; and


•	a $0.1 million increase in deferred income taxes.

For the three months ended March 31, 2018, we realized changes in the working capital accounts as described above, with no impact on our cash flows from operating activities.

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COMMERCEHUB, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

~~Revenue").~~Other ~~For~~Recent ~~the~~Accounting nine months ended September 30, 2017 and 2016, one customer's Total Program Revenue accounted for more than 10% of total revenue. No single customer represented more than 10% of accounts receivable at September 30, 2017.Pronouncements

~~Note~~In 7February 2016, the FASB issued ASU No. 2016-02, ~~Related~~Leases ~~Party~~(Topic ~~Transactions~~842) ("ASU No. 2016-02"). This topic provides that a lessee should recognize the assets and liabilities that arise from leases. ASU No. 2016-02 requires an entity to separate the lease components from the nonlease components in a contract. ASU No. 2016-02 is intended to improve financial reporting about lease transactions and is effective for fiscal years beginning after December 15, 2018. We are evaluating the impact this update will have on our financial statements.

~~Prior~~Note to5 ~~the Spin~~-~~Off,~~ ~~Liberty,~~Revenue ~~QVC,~~from ~~Inc.~~Contracts (“QVC”), which is a wholly owned subsidiary of Liberty, and other subsidiaries and equity investments of Liberty were related parties of CommerceHub for GAAP purposes and related persons of CommerceHub for purposes of Regulation S-K under the Securities Exchange Act of 1934, as amended. As a result, because this report includes pre-Spin-Off reporting periods in 2016, we have disclosed transactions with these entities. For the three and nine months ended September 30, 2017 and future periods that do not include pre-Spin-Off periods, based on current facts and circumstances, we do not believe Liberty, QVC or other subsidiaries or equity investments of Liberty are related parties or related persons of CommerceHub, but we will continue to monitor and evaluate these relationships and other potential relationships with related parties and/or related persons.Customers

~~Transactions~~We recognize revenue when, or as, we satisfy a performance obligation to a customer by transferring a promised service. Most of our contracts are for a stand-ready obligation to provide access to our platform during the contract term, whereby each monthly stand-ready obligation represents a series of distinct services that are substantially the same, as each promised service is delivered concurrently with ~~QVC~~all other services over the term of the contract with the same pattern of transfer to the customer. As such, the delivery of these services generally represents a single performance obligation. Customers do not have the contractual right to take possession of our solutions.

We ~~provide~~allocate ~~our~~the ~~solutions~~entire transaction price to ~~QVC~~the insingle performance obligation, with the ~~ordinary~~transaction ~~course~~price typically consisting of ~~business.~~a ~~For~~set-up fee for the ~~nine~~initial ~~months~~implementation ~~ended~~of ~~September 30,~~a ~~2016~~customer on our platform, ~~Total~~subscription ~~Program~~fees ~~Revenue~~for ~~with~~access ~~QVC~~to ~~accounted~~our ~~for~~platform, ~~approximately~~fees 7%charged ofto ~~total~~customers ~~revenue.~~based Weon ~~had~~the ~~accounts~~level ~~receivable~~of ~~due~~a ~~from~~customer's ~~QVC~~utilization of ~~approximately~~our ~~$784~~solutions ~~thousand~~and atother ~~December 31~~platform fees attributable to inventory management and third-party communication capabilities, ~~2016~~and a variable monthly fee that is based on the volume of customer orders processed.

~~Transactions~~We ~~with~~recognize ~~Liberty~~revenue over time, because the customer simultaneously receives and consumes the benefits from delivery of our services. We use output methods, the volume of orders processed and the passage of time, to measure our progress towards satisfying our performance obligation. Order fees and other platform revenue represent variable consideration that meets the allocation exception for variable consideration as they are specific to the month that the usage occurs. Subscription revenue is also recognized monthly, as each month represents the proportion of our committed stand-ready obligation that has been fulfilled to date. Our set-up fees are evaluated to determine whether they represent a material right in relation to the total contract transaction price. If the set-up fee does not represent a material right to the customer contract, it is deferred and recognized over the initial contract term, which typically ranges from 2 to 5 years. If the set-up fee represents a material right, it is considered a separate performance obligation and is deferred and recognized over the expected customer life. We make judgments to determine whether a set-up fee represents a material right to the customer contract. For certain contracts, we take a portfolio approach to assess whether the set-up fee represents a material right.

In ~~previous~~determining ~~periods~~the expected customer life, we ~~had~~consider ~~outstanding~~our ahistorical ~~promissory~~experience ~~note~~with ascustomer acontract ~~lender~~renewals, tothe ~~Liberty,~~type ~~presented~~of ascustomer, ~~note~~the ~~receivable—Parent~~size onof the ~~consolidated~~customer ~~balance~~and ~~sheets.~~the ~~This~~period ~~note~~over ~~carried~~which anthe ~~interest~~customer ~~rate~~is ~~based~~expected onto ~~one-year~~benefit ~~LIBOR~~from ~~plus~~the ~~100~~applicable ~~basis~~offerings, ~~points.~~in Inaddition to the ~~nine~~expected ~~months~~life ~~ended~~of ~~September 30,~~our ~~2016,~~internally wedeveloped ~~earned~~software. ~~interest~~As of March 31, ~~$273~~2018, ~~thousand~~our onexpected ~~this~~customer ~~promissory~~life ~~note.~~ranged ~~During~~from ~~the~~1 ~~second~~to ~~quarter~~10 ~~of 2016~~years, ~~Liberty~~reflecting ~~fully~~a ~~repaid~~shorter ~~the~~life ~~$36.4~~for ~~million~~smaller ~~outstanding~~customers ~~under~~and ~~this~~a ~~promissory~~longer ~~note,~~life ~~including~~for ~~accumulated~~our ~~interest~~largest ofretailer $2customers.~~4 million.~~

~~During~~Certain ~~June~~of ~~2016,~~our wecontracts ~~entered~~contain ~~into~~elements aof ~~funding~~variable ~~arrangement~~consideration, ~~with~~for ~~Liberty~~example ~~pursuant~~usage tofees abased ~~previously~~on ~~established~~annual ~~intercompany~~order ~~funding agreement~~volumes. ~~Under~~The ~~this~~variable ~~arrangement,~~consideration ~~Liberty~~for ~~agreed~~these contracts is allocated to ~~loan~~each usdistinct ~~$28.7~~month ~~million,~~in atthe ~~current~~series ~~market~~within ~~interest~~the ~~rates,~~contract soas wethe ~~could~~monthly ~~fulfill~~services ~~our~~are ~~obligations~~delivered ~~under~~to the ~~predecessor~~customer. ~~plan~~We toconstrain the ~~CommerceHub,~~estimates ~~Inc.~~of ~~Legacy~~variable ~~Stock~~consideration ~~Appreciation~~such ~~Rights~~that ~~Plan~~it ~~and~~is ~~our~~probable ~~related~~that ~~liquidity~~a ~~program~~significant reversal of previously recognized revenue will not occur throughout the life of the contract. In ~~July~~making ~~2016~~these assessments, we ~~fully~~consider ~~repaid~~the ~~amounts~~likelihood ~~outstanding~~and ~~pursuant~~magnitude toof ~~this~~a ~~arrangement,~~potential ~~including~~reversal ~~accumulated~~of ~~interest,~~revenue. Due to ~~Liberty~~the ~~using~~uncertainty ~~borrowings~~relating ~~under~~to ~~our~~future ~~credit~~order ~~facility~~volume, ~~and~~these ~~the~~amounts ~~funding~~may ~~agreement~~be ~~between~~constrained usto ~~and~~the ~~Liberty~~lowest ~~was~~per ~~terminated~~usage asfee ofexpected ~~the~~over ~~completion~~a ofcontract ~~the Spin-Off~~term.

InWe ~~July~~also ~~2016,~~offer inprofessional ~~conjunction~~services ~~with~~for ~~the~~certain ~~Spin~~customer-~~Off,~~requested weenhancements ~~collected~~and ~~amounts~~other ~~due~~customer ~~from~~requests. ~~Liberty~~Generally, ~~for~~these ~~federal~~professional ~~tax~~services ~~benefits~~are ~~of $8.5~~governed ~~million~~by ~~and~~separate ~~fully~~contract ~~repaid~~addenda ~~amounts~~that ~~due~~have ~~for~~terms ~~state taxes paid~~ of ~~$1.3~~ ~~million.~~less ~~Further,~~than ~~we received~~ a ~~contribution~~year ~~from~~and ~~Liberty of $6.0 million to compensate~~ the ~~Company~~fees ~~for~~are ~~the~~hourly ~~dilution~~or ~~associated with Parent equity awards, we paid a dividend of $18~~fixed.9 ~~million to~~These ~~the~~services ~~holders~~are ofconsidered ~~CTI~~separate ~~common~~performance ~~stock~~obligations, ~~including Parent,~~ as athe ~~return~~customer oncan ~~investment,~~benefit ~~and~~from wethem ~~paid~~in anconjunction ~~additional dividend~~with oftheir ~~$0.9~~access ~~million~~ to ~~Parent,~~our asplatform and the ~~holder~~professional ofservices ~~CTI~~are ~~preferred~~distinct ~~shares.~~within ~~Amounts~~the ~~owed~~context ~~to Liberty~~ of ~~$33~~the ~~thousand~~contract. atWe ~~December~~recognize ~~31,~~professional ~~2016~~services ~~are~~revenue ~~included~~as ~~in accounts payable and accrued expenses within~~ the ~~condensed~~applicable ~~consolidated~~services ~~balance~~are ~~sheet~~performed.

~~Note~~Reimbursements 8of out-of-pocket ~~Capitalized~~expenses ~~Software~~are ~~Costs~~recorded as revenue and cost of revenue in the condensed consolidated statements of comprehensive income.

	September 30, 2017			December 31, 2016
Capitalized software costs	$	32,077		$	32,506
Less accumulated amortization	(28,274		)	(25,790		)
Capitalized software costs, net	$	3,803		$	6,716

Costs to Obtain and Fulfill a Contract

InWe ~~connection~~defer ~~with~~certain ~~our~~commissions ~~2017~~that ~~restructuring~~are ~~plan~~directly ~~(Note~~associated ~~13),~~with itobtaining ~~was~~customer ~~determined~~contracts. ~~that~~These ~~certain~~costs ~~capitalized~~of ~~software~~obtaining ~~projects~~a ~~would~~contract noare ~~longer~~included bein ~~pursued,~~deferred ~~and~~commissions ascosts aon ~~result,~~the wecondensed ~~recorded~~consolidated anbalance ~~impairment~~sheets. ~~charge~~We ofmake ~~$191~~judgments ~~thousand,~~in ~~which~~determining isthe ~~included~~commissions inthat ~~cost~~are oftruly ~~revenue~~incremental into ~~the~~obtaining ~~condensed~~a ~~consolidated~~new ~~statements~~customer ofcontract; ~~comprehensive~~these ~~income.~~typically include

Amortization expense related to capitalized software costs is included in cost of revenue and was approximately $3.9 million and $3.8 million for the nine months ended September 30, 2017 and 2016, respectively.

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COMMERCEHUB, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Remainder of 2017	$	993
2018	2,286
2019	468
2020	56
	$	3,803

commissions incurred upfront upon signing a new customer contract. Commissions that are attributable to the ongoing performance of the contract are expensed as incurred. Deferred commissions costs are amortized on a straight-line basis over the expected customer life. For the three months ended March 31, 2018, we recognized $0.1 million in deferred commissions costs, which is included in sales and marketing expense within the condensed consolidated statements of comprehensive income. We periodically review these deferred commissions costs for impairment to the extent events or circumstances indicate these costs may be impaired. For the three months ended March 31, 2018, there were no impairments of deferred commissions costs.

~~Note~~We 9defer direct payroll, payroll-related ~~Share~~costs and third-~~Based~~party ~~Awards~~consulting costs incurred for the set-up and integration of new customers on our platform. These costs of fulfilling a contract are included in deferred services costs on the condensed consolidated balance sheets. We recognize deferred services costs over the same period as the related revenue, which is either the initial contract term or expected customer life, depending on whether we determine the set-up fee represents a material right. For the three months ended March 31, 2018, we recognized $0.5 million of deferred services costs, which is included in cost of revenue within the condensed consolidated statements of comprehensive income. We periodically review these deferred services costs for impairment to the extent events or circumstances indicate these costs may be impaired. For the three months ended March 31, 2018, impairments of deferred services costs were not material.

WeContract grant equity incentive awards to certain of our employees (including our executive officers), directors and consultants. Following the Spin-Off, all of the awards we have granted have been stock options and restricted stock units ("RSUs") relating to shares of our Series C common stock. Some of these awards contain service-based vesting conditions (typically annual vesting over four years), and some of these awards contain both service- and milestone-based vesting conditions.Balances

WeContract ~~estimate~~assets ~~the~~are ~~fair~~comprised ~~value~~ of ~~the~~professional ~~stock~~services ~~options~~performed ~~granted~~but ~~using~~not ~~the~~billed ~~Black-Scholes~~as ~~pricing model. In valuing share-based awards, significant judgment is required in determining the fair value~~ of ~~our share price,~~ the ~~expected~~reporting ~~volatility of common stock~~date, ~~and~~which ~~the~~are ~~expected~~not ~~term~~material ~~individuals~~to ~~will~~any ~~hold~~period. ~~their~~Contract ~~share-based~~liabilities ~~awards~~are ~~prior~~comprised ~~to exercise. With the assistance~~ of ~~an independent third~~set-~~party~~up ~~advisory~~fees ~~firm,~~that ~~for~~are ~~awards~~billed ~~granted during the three months ended March 31, 2016, we estimated share~~up-~~price~~front ~~based~~but ondeferred ~~an internal valuation using income-~~ and ~~market-based~~recognized ~~approaches. For~~over the ~~three~~contract ~~months~~term ~~ended June 30,~~or ~~2016,~~expected ~~the~~customer ~~estimated share-price input was based on the market value of CommerceHub's Series C common stock traded immediately following the Spin-Off. In connection with the Spin-Off~~life, ~~the awards outstanding were modified,~~ and ~~their~~are ~~respective~~reported ~~fair~~within ~~values~~deferred ~~were~~revenue ~~updated at the Spin-Off. The share-price input at the Spin-Off was based~~ on the ~~closing~~condensed ~~share~~consolidated ~~price~~balance ~~the first trading day following the Spin-Off~~sheets. ~~For awards granted subsequent to the Spin-Off, the share-price input is based on the closing price of our Series C common stock on the date of grant.~~

The following table sets forth changes in contract liabilities for the three months ended March 31, 2018 (in thousands):

	Three Months EndedSeptember 30,						Nine Months EndedSeptember 30,
Balance at January 1, 2018	$	14,407
	2017			2016			2017		2016
Increased due to cash received for set-up fees	1,680
Cost of revenue	$	100		$	(49	)	$	299	$	(207	)
Decrease due to recognition of set-up fees over the period of expected benefit	(1,785		)
Research and development	286			584			1,387		1,697
Balance at March 31, 2018	$	14,302
Sales and marketing	113			103			548		704
General and administrative	1,510			1,555			4,752		6,559
	$	2,009		$	2,193		$	6,986	$	8,753

~~Prior~~Revenue torecognized during the ~~Spin-Off,~~three ~~awards~~months ~~outstanding~~ended ~~were liability-based awards as they could be settled in cash~~March 31, ~~and~~2018 ~~they~~from ~~were~~performance ~~marked-to-market~~obligations ~~each~~satisfied ~~reporting~~or ~~period~~partially ~~based~~satisfied onin anprevious ~~internal valuation as described above. For~~ periods ~~following~~was ~~the Spin-Off, all awards are equity-based awards and are~~ not ~~marked-to-market~~material. ~~The~~Contract ~~mark-to-market~~modifications ~~adjustments~~entered oninto ~~awards~~ during the ~~2016~~three ~~pre-Spin-Off periods generally resulted in higher share-based compensation expense in the nine~~ months ended ~~September 30~~March 31, ~~2016,~~2018 asdid ~~compared~~not tohave ~~the~~a ~~same~~material ~~period~~impact inon ~~2017, in which~~ our ~~awards~~contract ~~are~~assets noor ~~longer~~deferred ~~marked-to-market~~revenues.

~~CommerceHub~~Transaction ~~Share-Based~~Price ~~Award~~Allocated ~~Plans~~to Future Performance Obligations

InThe ~~connection~~aggregate ~~with~~transaction ~~the~~price ~~Spin-Off,~~allocated ~~all~~to ofunsatisfied ~~the~~performance ~~outstanding~~obligations ~~CTI~~primarily ~~stock~~includes ~~appreciation~~deferred ~~rights~~revenue ~~and~~from ~~stock~~set-up ~~options~~fees ~~were~~discussed ~~converted~~above ~~into~~as ~~new~~well ~~option~~as ~~awards~~fixed tosubscription ~~purchase~~and ~~shares~~other ofplatform ~~our~~fees ~~Series~~for Cthe ~~common~~remainder ~~stock,~~of ~~which~~their ~~were~~respective ~~issued~~customer ~~under the CommerceHub~~contracts, ~~Inc.~~but ~~Legacy~~excludes ~~Stock~~order ~~Appreciation~~fee ~~Rights~~revenue ~~Plan~~ and ~~the~~certain ~~CommerceHub,~~other ~~Inc.~~platform ~~Legacy Stock Option Plan (together~~revenue, ~~the~~which ~~"Legacy~~are ~~Plans"),~~variable ~~respectively.~~based ~~The~~on ~~Legacy Plans govern~~ the ~~terms~~volume ~~and conditions~~ of ~~these~~usage ~~new~~and ~~option~~activity ~~awards~~on ~~but~~our ~~will not be used to make any further grants~~platform.

Use of Practical Expedients

We have applied the following practical expedients permitted under Topic 606:


•	For contracts that were modified before the effective date of Topic 606, we reflected the aggregate effect of all modifications when identifying performance obligations and allocating transaction price in accordance with practical expedient ASC 606-10-65-1-(f)-4.

•

In certain instances, we accounted for contracts using a portfolio approach, a practical expedient permissible under the standard. The determination of when the use of the portfolio approach is appropriate requires management judgment based on consideration of all of the facts and circumstances. We used a portfolio approach when we determined that the effect of accounting for a group of contracts or group of performance obligations would not differ materially from considering each contract or performance obligation separately. This determination requires that we use estimates and assumptions that reflect the size and composition of the portfolio.

Note 6 - Earnings Per Share

For the three months ended March 31, 2018 and 2017, basic earnings per common share is computed by dividing net income by the weighted average number of common shares outstanding during that period.

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COMMERCEHUB, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

InDiluted ~~connection~~earnings ~~with~~per ~~the~~share ~~Spin-Off,~~gives weeffect ~~also~~to ~~adopted~~all ~~the~~dilutive ~~CommerceHub,~~potential ~~Inc.~~shares ~~2016~~attributable ~~Omnibus~~to ~~Incentive~~outstanding ~~Plan~~share-based ~~(as~~awards ~~amended,~~during ~~amended~~the ~~and~~applicable ~~restated~~period. orThe ~~otherwise~~shares ~~modified~~used ~~from~~in ~~time to time,~~ the ~~“Omnibus~~calculation ~~Plan”),~~of ~~which~~diluted isearnings ~~the~~per ~~incentive~~share ~~plan~~exclude weoptions ~~use~~to ~~for~~purchase ~~all~~shares ~~new~~where ~~equity grants following~~ the ~~Spin-Off.~~exercise Onprice ~~January~~was 1,greater ~~2017,~~than the ~~number~~average market price of ~~shares~~such ~~available~~share for ~~issuance under~~ the ~~Omnibus Plan was increased by 2~~period,~~146,064~~ ~~shares,~~awards orwhere ~~5% of~~ the ~~outstanding~~effect ~~shares~~ of ~~our~~their ~~common~~inclusion ~~stock~~would onhave ~~December~~an ~~31,~~anti-dilutive ~~2016~~effect, toand ~~15,346,064~~awards ~~shares.~~with Onperformance-based ~~June~~conditions ~~16,~~where ~~2017, our public stockholders approved~~ the ~~Second~~performance ~~Amended~~criteria ~~and~~had ~~Restated~~not ~~Omnibus~~been ~~Plan~~met atas ~~our~~of ~~2017~~the ~~Annual~~reporting ~~Meeting of Stockholders~~date.

The following table sets forth net income and the basic and diluted shares used to calculate earnings per share (in thousands):

In addition, also in connection with the Spin-Off, we adopted an Employee Stock Purchase Plan (the “ESPP”), which provides employees with the opportunity to invest a portion of their annual eligible compensation to purchase shares of our Series C common stock at a purchase price equal to 85% of the lower of (a) the fair market value of our Series C common stock at the beginning of the applicable six-month offering period, and (b) the fair market value of our Series C common stock at the end of the applicable six-month offering period. The first offering period under the ESPP began on January 1, 2017. For the nine months ended September 30, 2017, we recorded approximately $244 thousand of share-based compensation expense associated with the ESPP.



	Three Months Ended March 31,
	2018		2017
Net income	$	189	$	2,459

Basic - weighted average shares outstanding	43,540		42,977
Weighted average effect of dilutive potential securities	2,222		1,693
Diluted - weighted average shares outstanding	45,762		44,670

Anti-dilutive securities	247		4,585

~~The~~Note ~~fair~~7 ~~value~~- ofConcentrations ~~ESPP shares is estimated based on the market price~~ of ~~our~~Significant ~~Series C~~Customers ~~common stock at the beginning of each offering period~~ and ~~the~~Credit ~~Black-Scholes option pricing model with the following assumptions:~~Risk

Volatility	41.2	%
Term (in years)	0.5
Risk-free interest rate	1.2	%
Dividend yield	—	%

No single customer accounted for more than 10% of our total revenue in any of the three months ended March 31, 2018 or 2017. However, our revenue model is primarily based on retailer and supplier program relationships whereby many revenue-generating supplier transactions conducted through our platform may be attributable to a single retailer ("Total Program Revenue"). For the three months ended March 31, 2018, there were seven customers with Total Program Revenue that accounted for more than 5% each of total revenue, two of which had Total Program Revenue that accounted for between 10% and 15% of our total revenue.

~~Also~~No insingle ~~connection~~customer ~~with~~represented ~~the~~more ~~Spin-Off,~~than ~~holders~~10% of ~~option~~accounts ~~awards,~~receivable ~~RSUs~~at ~~and restricted stock awards ("RSAs") relating to Liberty's Liberty Ventures common stock received CommerceHub options~~March 31, ~~RSUs and RSAs, respectively, pursuant to the CommerceHub, Inc~~2018. Transitional Stock Adjustment Plan (the “Transitional Plan”). The Transitional Plan, which is administered for the benefit of Liberty employees and consultants, governs the terms and conditions of these new awards but will not be used to make any further grants.

~~The~~Note ~~following~~8 ~~table summarizes the share~~-~~based~~ ~~award~~Capitalized ~~activity of options to purchase shares of our common stock for the nine months ended September 30, 2017:~~Software

	CommerceHub Employee Plans						Liberty Employee Plans
	Omnibus Plan			Legacy Plans			Transitional Plan
	Series C			Series C			Series C			Series A
Outstanding at January 1, 2017	193,998			5,580,109			1,006,043			329,188
Granted	353,420			—			—			—
Exercised	(1,363		)	(133,057		)	(125,220		)	(61,248		)
Forfeited	(100,006		)	(224,847		)	(3,558		)	(1,785		)
Outstanding at September 30, 2017	446,049			5,222,205			877,265			266,155
Weighted average exercise price	$	15.88		$	12.95		$	9.42		$	7.90
Weighted average remaining contractual life (in years)	9.3			7.4			3.7			3.2
Aggregate intrinsic value (in thousands)	$	2,442		$	43,869		$	10,467		$	3,887
Exercisable at September 30, 2017	12,956			2,354,222			471,830			203,577
Weighted average exercise price	$	14.90		$	9.24		$	7.22		$	6.43
Weighted average remaining contractual life (in years)	7.6			5.9			2.9			2.5
Aggregate intrinsic value (in thousands)	$	84		$	28,508		$	6,667		$	3,266

Capitalized software, net consisted of the following (in thousands):

The weighted average grant-date fair value of options granted during the nine months ended September 30, 2017 was $7.19. As of September 30, 2017, unrecognized compensation cost related to options to purchase shares of our Series C common stock under the Omnibus Plan and Legacy Plans was approximately $13.3 million and is expected to be recognized over a weighted average remaining vesting period of approximately 2.9 years. There is no unrecognized compensation cost related to options under the Transitional Plan because they are held by employees of Liberty and any related compensation expense is incurred by Liberty.



	March 31, 2018			December 31, 2017
Capitalized software costs	$	31,458		$	31,650
Less accumulated amortization	(29,185		)	(28,800		)
Capitalized software costs, net	$	2,273		$	2,850

Amortization expense related to capitalized software is included in cost of revenue and was approximately $0.8 million and $1.3 million for the three months ended March 31, 2018 and 2017, respectively.

Future amortization expense of existing capitalized software as of March 31, 2018 is expected to be as follows for the years ending December 31, (in thousands):



Remainder of 2018	$	1,560
2019	549
2020	158
2021	6
	$	2,273

Note 9 - Share-Based Awards

We grant equity incentive awards to certain of our employees (including our executive officers), directors and consultants. Following the Spin-Off, the awards we have granted have primarily been stock options and restricted stock units

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COMMERCEHUB, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

("RSUs") relating to shares of our Series C common stock under the CommerceHub, Inc. 2016 Omnibus Incentive Plan (as amended, amended and restated or otherwise modified from time to time, the “Omnibus Plan”). Most of these awards contain service-based vesting conditions (typically annual vesting over four years), and some of these awards contain both service- and milestone-based vesting conditions. We also grant deferred stock units ("DSUs") in respect of our Series C common stock to our non-employee directors under the Omnibus Plan and the CommerceHub, Inc. Non-Employee Director Deferred Compensation Plan (the "Deferred Compensation Plan").

We estimate the fair value of the stock options granted using the Black-Scholes pricing model. In valuing share-based awards, significant judgment is required in determining the fair value of our share price, the expected volatility of common stock, and the expected term individuals will hold their share-based awards prior to exercise.

Included in the condensed consolidated statements of comprehensive income are the following amounts of share-based compensation, net of estimated forfeitures, for the three months ended March 31 (amounts in thousands):



	2018		2017
Cost of revenue	$	104	$	110
Research and development	237		571
Sales and marketing	283		135
General and administrative	1,395		1,544
	$	2,019	$	2,360

CommerceHub Share-Based Award Plans

In connection with the Spin-Off, all of the outstanding CTI stock appreciation rights and stock options were converted into new option awards to purchase shares of our Series C common stock, which were issued under the CommerceHub, Inc. Legacy Stock Appreciation Rights Plan and the CommerceHub, Inc. Legacy Stock Option Plan (together, the "Legacy Plans"), respectively. The Legacy Plans govern the terms and conditions of these converted option awards but are not used to make any further grants.

In connection with the Spin-Off, we also adopted the Omnibus Plan, which is the incentive plan we use for all new equity grants following the Spin-Off. On January 1, 2018, the number of shares available for issuance under the Omnibus Plan was increased by 2,173,960 shares, or 5% of the outstanding shares of our common stock on December 31, 2017, to 17,520,024 shares.

In connection with the Spin-Off, we also adopted the CommerceHub, Inc. 2016 Employee Stock Purchase Plan (as amended, amended and restated or otherwise modified from time to time, the “ESPP”), which provided employees with the opportunity to invest a portion of their annual eligible compensation to purchase shares of our Series C common stock at a purchase price equal to 85% of the lower of (a) the fair market value of our Series C common stock at the beginning of the applicable six-month offering period, and (b) the fair market value of our Series C common stock at the end of the applicable six-month offering period. On January 1, 2018, the number of shares available for issuance under the ESPP increased by 434,792, or 1% of the outstanding shares of our common stock on December 31, 2017, to 1,764,004 shares. During the three months ended March 31, 2018, employees purchased 54,443 shares of Series C common stock under the ESPP and total cash received from ESPP purchases was $878 thousand, which includes an additional purchase of $467 thousand on March 26, 2018 when, pursuant to the Merger Agreement, the ESPP was terminated.

In connection with the Spin-Off, holders of option awards, RSUs and restricted stock awards ("RSAs") relating to Qurate's then-outstanding Liberty Ventures common stock received CommerceHub options, RSUs and RSAs, respectively, pursuant to the CommerceHub, Inc. Transitional Stock Adjustment Plan (the “Transitional Plan”). The Transitional Plan, which is administered for the benefit of Qurate employees and consultants, governs the terms and conditions of these new awards but is not used to make any further grants.

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Notes to Condensed Consolidated Financial Statements

(Unaudited)

The following table summarizes the share-based award activity of options to purchase shares of our common stock for the three months ended March 31, 2018:



	CommerceHub Employee Plans						Qurate Employee Plans
	Omnibus Plan			Legacy Plans			Transitional Plan
	Series C			Series C			Series C			Series A
Outstanding at January 1, 2018	325,092			4,920,221			866,265			266,155
Granted	—			—			—			—
Exercised	—			(85,861		)	(19,659		)	(14,836		)
Forfeited	(6,181		)	(5,454		)	—			—
Outstanding at March 31, 2018	318,911			4,828,906			846,606			251,319
Weighted average exercise price	$	16.00		$	12.79		$	9.52		$	7.96
Weighted average remaining contractual life (in years)	8.8			6.9			3.2			2.8
Aggregate intrinsic value (in thousands)	$	2,069		$	46,825		$	10,984		$	3,636
Exercisable at March 31, 2018	74,972			2,590,252			454,148			195,255
Weighted average exercise price	$	15.64		$	9.86		$	7.41		$	6.61
Weighted average remaining contractual life (in years)	8.4			5.7			2.4			2.1
Aggregate intrinsic value (in thousands)	$	513		$	32,703		$	6,850		$	3,083

As of March 31, 2018, unrecognized compensation cost attributable to options to purchase shares of our Series C common stock under the Omnibus Plan and the Legacy Plans was approximately $1.3 million and $8.9 million, respectively, and is expected to be recognized over a weighted average remaining vesting periods of approximately 2.9 years and 2.4 years, respectively. There is no unrecognized compensation cost related to options under the Transitional Plan because they are held by employees of Qurate, and any related compensation expense is incurred by Qurate.

RSU Activity Under the Omnibus Plan (Series C)

The following table summarizes the share-based award activity offor RSUs relating to our Series C common stock granted under the Omnibus Plan for the ~~nine~~three months ended ~~September~~March 3031, ~~2017~~2018:

	Number ofawards		Weighted averagegrant-date fair value
Outstanding at January 1, 2017	505,831		$	14.35
Outstanding at January 1, 2018	543,495		$	16.15
Granted	~~414~~328,~~134~~418		$	1722.0352
Vested	(4728,~~106~~450	)	$	1416.3330
Forfeited	(~~178~~30,~~367~~941	)	$	1416.8983
Outstanding at September 30, 2017	694,492		$	15.75
Outstanding at March 31, 2018	812,522		$	18.82

As(1) Includes ~~of September 30~~42,058 ~~2017,~~DSUs ~~unrecognized~~relating ~~compensation~~to ~~cost~~our ~~related~~Series toC ~~RSUs~~common ~~relating~~stock issued to ~~shares~~our ofnon-employee ~~our~~directors. ~~Series~~These CDSUs ~~common~~are ~~stock~~vested, ~~was~~but ~~approximately~~the ~~$7.0~~underlying ~~million~~shares ~~and~~of isSeries ~~expected~~C tocommon bestock ~~recognized~~will ~~over~~not abe ~~weighted~~issued ~~average~~until ~~remaining~~they ~~vesting~~are ~~period~~delivered ofpursuant ~~approximately~~to ~~3.0~~the ~~years.~~Deferred Compensation Plan.

~~RSA~~As ~~and~~of ~~RSU~~March 31, ~~Activity~~2018, ~~Under~~unrecognized ~~the~~compensation ~~Transitional~~cost ~~Plan~~attributable ~~(Series~~to ARSUs ~~and~~relating to shares of our Series C) common stock was approximately $8.3 million and is expected to be recognized over a weighted average remaining vesting period of approximately 3.4 years.

~~Share-based~~RSU ~~award activity for RSUs~~ and ~~RSAs~~RSA ~~relating~~Activity toUnder ~~our Series A and Series C common stock issued under~~ the Transitional Plan ~~for~~(Series ~~the~~A ~~nine months ended September 30, 2017 was not material. There is no unrecognized compensation cost related to these awards because they are held by employees of Liberty~~ and ~~any~~Series ~~related compensation expense is incurred by Liberty.~~ C)

Share-based award activity for RSUs and RSAs relating to our Series A and Series C common stock issued under the Transitional Plan for the three months ended March 31, 2018 was not material. There is no unrecognized compensation cost related to these awards because they are held by employees of Qurate and any related compensation expense is incurred by Qurate.

Options and RSA Activity Under the Transitional Plan (Series B)

~~Share~~There was no share-based award activity for options to purchase ~~and~~or RSAs relating to our Series B common stock issued under the Transitional Plan for the ~~nine~~ three months ended ~~September~~ 30March 31, ~~2017 was not material~~2018. There is no unrecognized compensation cost ~~related to these awards because they are held by an employee of Liberty and any related compensation expense is incurred by Liberty.~~

~~Note 10 - Income Taxes~~ 11

Our expense from income taxes for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items.

During the three months ended September 30, 2017, our effective tax rate of 37% was higher than the U.S. Federal income tax rate of 35% primarily due to state and local income tax, net of Federal income tax benefits, offset by the Federal research credit. During the three months ended September 30, 2016, we recorded an income tax benefit of $0.4 million on pre-tax income of $0.3 million. The benefit recorded, despite the pre-tax income, was primarily from the Federal research credit, which created both a discrete benefit from finalizing 2015 tax returns during the quarter and a benefit from a favorable adjustment to the estimated 2016 annual effective rate.

During the nine months ended September 30, 2017, our effective tax rate of 38% was higher than the U.S. Federal income tax rate of 35%, primarily due to state and local income tax, net of Federal income tax benefits, offset by the Federal research credit. During the nine months ended September 30, 2016, our effective tax rate of 34% was lower than the 35% Federal income tax rate, primarily due to the Federal research credit, partially offset by state and local income taxes, net of Federal income tax benefits.

There were no uncertain tax positions as of September 30, 2017 or December 31, 2016.

Note 11 - Long-Term Debt

On June 28, 2016, we entered into a credit agreement governing a $125.0 million revolving credit facility, which expires on June 28, 2021. At September 30, 2017, we had no borrowings and no letters of credit outstanding under the facility, and our available borrowings under the facility were $125.0 million. The fair value of the debt under our credit facility, which holds a floating interest rate of a short duration and is based on Level 2 valuation inputs, approximates the carrying value when a balance is outstanding.

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COMMERCEHUB, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

~~The~~related ~~interest rate applicable~~ to ~~our~~these ~~initial~~awards ~~borrowings~~because isthey ~~LIBOR~~are ~~plus~~held aby ~~yield of 1.75%. Interest on the revolving credit facility is based on a base rate or Eurodollar rate plus~~ an ~~applicable~~employee ~~margin~~of ~~that increases as our total leverage ratio increases~~Qurate, ~~with the base rate margin ranging from 0.75% to 1.25%~~ and ~~the~~any ~~Eurodollar~~related ~~rate~~compensation ~~margin~~expense ~~ranging~~is ~~from~~incurred ~~1.75%~~by ~~to 2~~Qurate.~~25%. The revolving credit facility also carries a commitment fee on the unused portion that increases as our total leverage ratio increases, ranging from 0.25% to 0.50% per annum.~~

~~Borrowings~~Note ~~under~~10 ~~the~~- ~~revolving~~Income ~~credit~~Taxes facility are collateralized by substantially all of our assets. The credit agreement contains covenants and restrictions which, among other things, require the maintenance of certain financial ratios, including a total leverage ratio and an interest coverage ratio, and restrict dividend payments and the incurrence of certain indebtedness and other activities, including acquisitions and dispositions. We were in compliance with these covenants and restrictions as of September 30, 2017.

Our income tax expense or benefit for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items. On December 22, 2017, the U.S. Tax Cuts and Jobs Act (the "Tax Act") was enacted, introducing significant changes to U.S. tax law. Effective in 2018, the Tax Act reduces our Federal income tax rate from 35% to 21%, among other changes.

For the three months ended March 31, 2018, our effective tax rate of 82% was higher than the 21% Federal income tax rate, primarily due to $2.9 million of non-deductible transaction-related costs incurred in connection with the Merger (as further discussed in Note 1). In addition, our 2018 effective tax rate was higher due to state and local income taxes, net of Federal income tax benefits, offset by excess deductions on share-based award issuances.

For the three months ended March 31, 2017, our effective tax rate of 39% was higher than the 35% Federal income tax rate, primarily due to state and local income tax, net of Federal income tax benefits, offset by the Federal research credit.

There were no uncertain tax positions as of March 31, 2018 or December 31, 2017.

Note 11 - Long-Term Debt

On June 28, 2016, we entered into a credit agreement governing a $125.0 million revolving credit facility, which expires on June 28, 2021. At March 31, 2018, we had no borrowings and no letters of credit outstanding under the facility, and our available borrowings under the facility were $125.0 million. The fair value of our debt under the credit facility, which holds a floating interest rate of a short duration and is based on Level 2 valuation inputs, approximates the carrying value when a balance is outstanding.

Interest on the revolving credit facility is based on a base rate or Eurodollar rate plus an applicable margin that increases as our total leverage ratio increases, with the base rate margin ranging from 0.75% to 1.25% and the Eurodollar rate margin ranging from 1.75% to 2.25%. The revolving credit facility also carries a commitment fee on the unused portion that increases as our total leverage ratio increases, ranging from 0.25% to 0.50% per annum. In conjunction with entering into this credit facility, we incurred charges totaling $1.1 million. These charges are included in other long-term assets on the condensed consolidated balance sheets and are recognized over the term of the credit facility.

Borrowings under the credit facility are collateralized by substantially all of our assets. The credit agreement contains covenants and restrictions which, among other things, require the maintenance of certain financial ratios, including a total leverage ratio and an interest coverage ratio, and restrict dividend payments and the incurrence of certain indebtedness and other activities, including acquisitions and dispositions. We were in compliance with these covenants and restrictions as of March 31, 2018.

Note 12 - Commitments and Contingencies

Legal Proceedings

~~From~~On ~~time~~April to27, ~~time~~2018, wea ~~may~~putative ~~become~~class ~~involved~~action incomplaint ~~various~~was ~~lawsuits~~filed ~~and~~by ~~legal~~a ~~proceedings~~purported ~~which~~stockholder ~~arise~~of CommerceHub in the ~~ordinary~~United ~~course~~States District Court for the Northern District of ~~business~~New York: Gordon v. WeCommerceHub, ~~are~~Inc., ~~currently~~et ~~not~~al., ~~aware~~Case No. 1:18-cv-00512-FJS-DJS. The complaint names as defendants CommerceHub and members of ~~any~~the ~~such~~CommerceHub ~~legal~~board ~~proceedings~~of ordirectors. The complaint asserts claims ~~that~~under weSections ~~believe~~14(a) ~~will~~and ~~have~~20(a) of the Securities Exchange Act of 1934 and rules and regulations promulgated thereunder, ~~individually~~and oralleges that CommerceHub and the members of the CommerceHub board of directors caused a proxy statement that allegedly omitted material information to be filed in connection with the ~~aggregate~~Merger, which allegedly rendered the proxy statement false and misleading. Among other relief, the complaint seeks a declaration certifying a class, an injunction to prevent CommerceHub from holding its May 18, 2018 special meeting of stockholders to vote on the Merger Agreement and from consummating the Merger unless and until CommerceHub discloses the material ~~adverse~~information ~~effect~~allegedly omitted from the proxy statement, unspecified damages, and unspecified costs, expenses and attorneys’ fees. CommerceHub denies any liability and believes that it has substantial defenses and that this lawsuit is without merit. However, in order to eliminate the burden, expense and uncertainties resulting from the pending litigation and without admitting any wrongdoing or that these supplemental disclosures are material or required to be made, on ~~our~~May 7, ~~business~~2018, ~~prospects~~CommerceHub agreed to supplement the disclosures in the proxy statement with additional information concerning certain non-disclosure agreements entered into by various bidders, the prior relationships between CommerceHub’s financial ~~condition~~advisor with respect to the Merger, ~~results~~Evercore ofGroup ~~operations~~L.L.C., and~~/or~~ ~~cash~~GTCR, ~~flows~~and CommerceHub’s financial forecasts. Consequently, plaintiff requested to withdraw the motion for

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COMMERCEHUB, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

preliminary injunction stating that the supplemental disclosures mooted the claims raised in the complaint. The district court granted the request to withdraw and cancelled a previously scheduled hearing on the motion.

From time to time, we may become involved in other lawsuits and legal proceedings which arise in the ordinary course of business. We are currently not aware of any such legal proceedings or claims that we believe will have, individually or in the aggregate, a material adverse effect on our business, prospects, financial condition, results of operations and/or cash flows.

Leases

~~During~~The ~~the~~Company ~~first~~leases ~~quarter~~its ofcorporate ~~2017,~~offices weand ~~entered~~primary ~~into~~operations afacility ~~new~~under an operating lease ~~for~~arrangement ~~office~~that ~~space~~expires in ~~Seattle,~~March ~~Washington and~~2022, atwith ~~the~~renewal ~~same~~provisions ~~time,~~that ~~entered~~allow ~~into~~the aCompany ~~sub-lease~~to ofextend ~~our~~the ~~existing~~lease ~~space~~through inMarch ~~Seattle~~2028. We ~~vacated~~also ~~our~~lease ~~previous~~ office ~~and~~facilities ~~moved into the new office space~~ in ~~the~~Seattle, ~~second~~Washington ~~quarter~~and ofshared ~~2017~~office and, asexecutive aoffice ~~result,~~facilities ~~recognized~~in ~~an impairment charge equal to the fair value of the unrecovered payments for the remainder of the lease~~Hertford, ~~which was not material~~England.

Total rent expense for our office space for the three months ended March 31, 2018 and 2017 was $0.4 million and $0.5 million, respectively. Future minimum lease payments due under operating lease arrangements contain rent increases over the term of the lease. Rent expense on these operating leases is recognized over the term of the lease on a straight-line basis. The excess of rent expense over future minimum lease payments due totaled $2.24 million and $12.15 million at ~~September~~March 3031, ~~2017~~2018 and December 31, ~~2016~~2017, respectively, and ~~are~~is included in other long-term liabilities on the condensed consolidated balance sheets.

At ~~September~~March 3031, ~~2017~~2018, ~~future~~contractual minimum payments under operating leases, ~~net of expected collections under our sub-lease,~~ were as follows (in thousands):

Remainder of 2017	$	480
Remainder of 2018	$	1,991
2018	2,032
2019	2,201
2019	1,581
2020	2,183
2020	1,563
2021	2,139
2021	1,597
2022	362
	$	7,253
Total minimum lease payments (1)	$	8,876

(1) Total minimum payments under our operating leases exclude $2.3 million in rental income from sub-tenants, consisting of approximately $0.5 million for the remainder of 2018, and approximately $0.6 million due in each of the respective years ending December 31, 2019 through 2021.

Note 13 - Restructuring

In September 2017, we commenced a plan to consolidate our software development team and certain other corporate activities into our Albany, NY headquarters to more effectively support the ongoing growth of our business by streamlining and centralizing operations (the "~~2017~~ restructuring plan"). The ~~2017~~ restructuring plan included the immediate reduction of certain positions in our Seattle, WA office, the retention of certain Seattle-based engineers for a transition period, the gradual replacement of many of those positions in Albany, and the long-term presence of a Seattle-based account services team dedicated to brands and marketplace customers.

InDuring ~~connection with~~ the ~~2017~~three ~~restructuring plan, we recognized charges for termination benefits during the nine~~ months ended ~~September~~March 31, 302018, ~~2017. The~~we ~~2017~~incurred restructuring ~~plan~~charges ~~also~~within ~~includes~~the ~~retention~~condensed ~~benefits~~consolidated ~~for~~statements ~~employees~~of ~~who~~comprehensive ~~stay with the Company~~income, ~~which~~including ~~will~~termination ~~be earned~~ and ~~paid~~retention ~~out~~benefits ~~based~~as onwell ~~time-based~~as ~~milestones,~~payroll ~~with~~and ~~the~~related ~~last~~costs ~~payments~~for ~~expected~~redundant topositions ~~occur~~as inwe ~~January~~transition ~~2019. As~~our asoftware ~~result,~~development ~~the~~team ~~expenses~~and ~~related~~certain toother ~~these~~corporate ~~retention~~activities ~~incentives~~into ~~will~~our beAlbany, ~~recorded~~NY ~~ratably~~headquarters, ~~over~~as ~~each~~follows ~~employee’s~~(amounts ~~applicable~~in ~~retention period.~~thousands):

As of September 30, 2017, we estimate that the total expenses associated with the 2017 restructuring plan will be between $5.0 million and $6.0 million, which includes future expenses expected to be incurred from termination and retention



Cost of revenue	$	149
Research and development	1,175
Sales and marketing	—
General and administrative	18
Total	$	1,342

11As of March 31, 2018, we estimate the remaining expenses associated with the restructuring plan to be approximately $2.8 million, which we expect to recognize throughout the remainder of 2018. This estimate includes future expenses expected to be incurred from termination and retention benefits accrued over the retention period, as well as payroll and related costs for redundant positions as we transition our software development team and certain other corporate activities into our Albany, NY

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COMMERCEHUB, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

~~benefits~~headquarters. ~~accrued~~This ~~over~~estimate ~~the retention period, which we expect to run through early 2019, but which~~ does not take into account actual and expected cost savings from reduced headcount associated with the ~~2017~~ restructuring plan. During the nine months ended September 30, 2017, we incurred $1.1 million in restructuring charges within the condensed consolidated statements of comprehensive income as follows (amounts in thousands):

	Nine Months Ended September 30, 2017
	Cost of Revenue		Research and Development		Sales and Marketing		General and Administrative		Total Restructuring Expenses
Termination & retention benefits	$	49	$	426	$	368	$	42	$	885
Impairment of capitalized software	191		—		—		—		191
Total restructuring expenses	$	240	$	426	$	368	$	42	$	1,076

The table below sets forth our restructuring liability during the three months ended March 31, 2018 (in thousands):

The table below sets forth our restructuring liability during the nine months ended September 30, 2017 (in thousands):



	Total Restructuring Liability
Balance at January 1, 2018	$	1,276
Restructuring charges	1,342
Cash payouts	(1,478		)
Balance at March 31, 2018	$	1,140

	Total Restructuring Liability
Balance at January 1, 2017	$	—
Restructuring charges	885
Non-cash adjustments	—
Cash payouts	—
Balance at September 30, 2017	$	885

Our total restructuring liability of $1.1 million consists of accruals for termination and retention benefits, which we expect will be paid within the next 12 months, and is included in accounts payable and accrued expenses within the condensed consolidated balance sheets.

Our total restructuring liability of $0.9 million consists of accruals for termination and retention benefits. We expect a portion of these benefits will be paid within the next 12 months, and they are included in accounts payable and accrued expenses within the condensed consolidated balance sheets. The remaining portion of these benefits, which we expect to fully pay by the first quarter of 2019, is included in other long-term liabilities within the condensed consolidated balance sheets.14

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis provides information concerning our results of operations and financial condition. This discussion should be read in conjunction with our accompanying condensed consolidated financial statements and the notes thereto.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about future business strategies, ~~market conditions and potential,~~ future financial ~~prospects~~performance, cost savings, market conditions and potential, future growth of ecommerce, customer growth and performance, ~~future~~sales ~~expenses~~channel expansion, ~~financial~~international ~~performance~~expansion, the Merger (as defined below), including the expected timetable for its completion, and other matters that are not historical facts. In particular, statements under this Item 2 "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Item 3 "Quantitative and Qualitative Disclosures About Market Risk" contain forward-looking statements. These statements involve ~~many~~ risks, uncertainties, estimates and ~~uncertainties~~assumptions, many of which are beyond our control, that could cause actual results to differ materially from those expressed or implied in such statements., Inincluding, ~~addition~~without tolimitation, market acceptance and performance of our products and services, competitive issues, general market conditions, shareholder approval of the Merger Agreement (as defined below), regulatory matters and changes in law affecting our business, and the risk factors described in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2016~~2017, which was filed with the Securities and Exchange Commission (the "SEC") on March 71, ~~2017~~2018 (the "~~2016~~2017 Annual Report") under the heading "Risk Factors,." ~~the~~Further, ~~following~~we ~~list~~operate ~~includes~~in ~~some~~a ~~but~~very ~~not~~competitive ~~all~~and ofrapidly ~~the~~changing ~~factors~~environment, ~~that~~and ~~could~~new ~~cause~~risks ~~actual~~emerge ~~results~~from time to ~~differ~~time. ~~materially~~It ~~from~~is ~~those~~not ~~expressed~~possible for our management to predict all potential risks or ~~implied~~assess intheir ~~forward-looking~~potential ~~statements:~~effects on our business.

• consolidation or simplification of the ecommerce industry;

• failure to compete successfully against current or future competitors;

• the loss, poor performance or financial difficulty of a customer;

• our ability to respond rapidly to changes in the ecommerce market;

• retailer demand for drop-ship solutions;

• conditions in the global economy;

• our ability to maintain and scale our technical infrastructure;

• our ability to avoid and/or effectively manage cybersecurity incidents;

• service failures or interruptions;

• obligations imposed on providers of software-as-a-service solutions, and the continued acceptance of such solutions;

• the seasonality of our and our customers' businesses;

• the success of our strategic relationships with third parties;

• our ability to attract and retain key personnel;

• risks associated with acquiring or investing in other companies;

• risks associated with international expansion;

• our ability to navigate complex domestic and foreign laws and regulations, including laws and regulations relating to ecommerce, privacy, data protection, data security, data retention, consumer protection, anti-trust, advertising, intellectual property, manufacturing, taxes, including sales and local taxes, value-added taxes, border adjustment taxes and other taxes, anti-bribery and anti-corruption, and economic or other trade prohibitions or sanctions; and

• our ability to protect our intellectual property.

Forward-looking statements set forth herein speak only as of the date of this Quarterly Report on Form 10-Q, and we expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any such statement contained herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. Where, in any forward-looking statement, we express an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the expectation or belief will result or be achieved or accomplished. There can be no assurance that any expectation or belief expressed in a forward-looking statement will occur, and you should not place undue reliance on any forward-looking statements.

As used herein, "CommerceHub," "we," "us," "our," the "Company" and similar terms include CommerceHub, Inc. together with its subsidiaries, unless the context indicates otherwise.

Available Information

Our website is located at www.commercehub.com, and our Investor Relations website is located at ir.commercehub.com. Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and amendments thereto filed or furnished with the SEC pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are available through our Investor Relations website, free of charge, after we file them with the SEC. We also provide a link to the section of the SEC's website at www.sec.gov that has all of the reports and other information that we file or furnish with the SEC. You may read and copy any materials we file or furnish with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. You can get information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

13In addition to the reports and other information we file and furnish with the SEC, investors and others should note that we use and intend to continue using our Investor Relations website, located at ir.commercehub.com, as a means of disclosing material non-public information, including material financial and operating information, to the investment community and for complying with our disclosure obligations under Regulation FD of the Exchange Act. We webcast, via our Investor Relations website, our earnings calls and certain other events we participate in or host with members of the investment community. Our Investor Relations website also provides notifications of news and/or announcements regarding our financial performance, including SEC filings, investor events, press and earnings releases and other information we may post on our Investor Relations website from time to time. In addition, we use social media and our blog (located at www.commercehub.com/blog) to communicate with the public about our Company, and it is possible that information we post on social media or our blog could be deemed to be material. Accordingly, in addition to following our SEC filings, press releases and public conference calls and webcasts, investors should monitor and review closely the information we post on our Investor Relations website, the social media channels listed on our Investor Relations website and our blog.

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the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. You can get information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

In addition to the reports and other information we file and furnish with the SEC, investors and others should note that we use and intend to continue using our Investor Relations website, located at ir.commercehub.com, as a means of disclosing material non-public information, including material financial and operating information, to the investment community and for complying with our disclosure obligations under Regulation FD of the Exchange Act. We webcast via our Investor Relations website our earnings calls and certain other events we participate in or host with members of the investment community. Our Investor Relations website also provides notifications of news and/or announcements regarding our financial performance, including SEC filings, investor events, press and earnings releases and other information we may post on our Investor Relations website from time to time. In addition, we use social media and our blog (located at www.commercehub.com/blog) to communicate with the public about our Company, and it is possible that information we post on social media or our blog could be deemed to be material. Accordingly, in addition to following our SEC filings, press releases and public conference calls and webcasts, investors should monitor and review closely the information we post on our Investor Relations website, the social media channels listed on our Investor Relations website and our blog.

The contents of the websites and other channels referred to above are not incorporated into this filing. Further, our references to the URLs for these websites are intended to be inactive textual references only.

~~Overview~~15

We are a leading provider of cloud-based ecommerce fulfillment and marketing solutions that integrate supply, demand and delivery for large retailers and consumer brands, manufacturers and distributors (collectively, "suppliers"). Our end-to-end solutions are provided through the CommerceHub software platform, a hub that streamlines integration and enables more efficient transactions among our retailer and supplier customers and their other trading partners, while also enabling them to access the online marketplaces, search engines, social and product advertising and other digital marketing channels (collectively, "demand channels") where consumers browse and buy. Our solutions also help our customers integrate with the third-party logistics ("3PL") providers, including fulfillment and delivery providers, that take purchased products to the consumer’s doorstep.

The U.S. Department of Commerce reported that ecommerce in the United States grew 15% in 2016 as consumers continued to shift their spending into online channels. A large number of companies, our customers included, are evolving their strategies to aggressively compete for consumer orders within the rapidly evolving ecommerce marketplace. The companies that are successfully adapting to this competitive environment tend to grow their online sales at or above the overall market rate. In contrast, sales grow slower, or decline, within companies that fail to keep up with consumer preferences or are challenged with burdensome cost structures or other financial difficulties. Our customer base represents a sample of the overall retail market and includes both companies challenged by this transition to ecommerce, including customers that have, in certain cases in the last twelve months, filed for bankruptcy, and stronger retailers that are successfully adapting as retail shifts into the online channel.

Over 11,000 customers and trading partners have access to our platform every day to conduct business with each other, including processing orders and invoices, exchanging product information and other electronic documents and tracking their customers’ buying experience from order through fulfillment and delivery. Collectively, our customers and the other trading partners on our platform comprise a vibrant network of retailers, brands and other suppliers, demand channels and other trading partners that constitute a critical mass of many of the largest and most influential companies in North American ecommerce. This critical mass has helped us achieve a meaningful network effect, attracting new supplier customers to our large network of retailers and demand channels, and attracting new retailer and demand channel customers to our network of thousands of suppliers, enabling us to grow our business with a comparatively low cost of customer acquisition.

Our solutions unite supply, demand and delivery and provide our customers with a single platform to source and market the products consumers desire and to have those products delivered more rapidly to the consumers' doorsteps. Specifically, we provide our customers with the following solutions:

Supply Solutions. Our "Supply Solutions" enable retailers and online marketplaces to expand their product offerings, without the economic and logistical limitations and risks typically associated with buying, storing and shipping physical inventory, by leveraging our network of over 11,000 drop-ship-capable suppliers and other marketplace sellers that receive orders from demand channels and ship products directly to consumers.

Demand Solutions. Our "Demand Solutions" give retailers and suppliers greater access to consumer demand through access and product listing management capabilities for some of the largest and most important sales channels in North America, including major retailers, online marketplaces, such as Amazon, eBay, Walmart Marketplace and Jet.com, and other demand channels, including social and product advertising.

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Delivery Solutions. Our "Delivery Solutions" facilitate rapid, cost-efficient, on-time delivery with greater control of, and visibility into, the consumer experience through more efficient use of 3PL providers, including national, regional, local and specialty delivery providers. For example, our SmartShipping solution enables retailers to automatically adjust carrier service levels to meet consumer delivery promise dates in the most cost-effective manner available based on the location of the inventory and the consumer. To help reduce delivery times, our network of 3PL partners helps retailers and other sellers distribute inventory to strategic locations that are closer to a wider distribution of their customers, enabling them to meet their customers' delivery expectations while reducing the delivery costs associated with doing so.Overview

We are a leading provider of cloud-based ecommerce fulfillment and marketing solutions for large retailers, marketplaces, consumer brands and their suppliers. Our solutions help our customers implement strategies to increase their ecommerce revenues and create meaningful operational efficiencies within their supply chains. Our customers use our cloud-based software and service capabilities, which are tailored for specific customer business rules and processes, to more effectively fulfill consumer orders, generate consumer demand for their products and deliver those products to consumers.

On March 5, 2018, we entered into an Agreement and Plan of Merger (the "Merger Agreement") with Great Dane Parent, LLC, a Delaware limited liability company (“Parent”), and Great Dane Merger Sub, Inc., a Delaware corporation and a direct, wholly owned subsidiary of Parent (“Merger Sub”), pursuant to which Merger Sub will merge (the "Merger") with and into CommerceHub, with CommerceHub continuing as the surviving corporation and a wholly owned subsidiary of Parent. Parent and Merger Sub were formed by affiliates of GTCR LLC ("GTCR") and affiliates of Sycamore Partners Management, L.P. ("Sycamore") to facilitate the participation of investment funds advised by GTCR and Sycamore in the transaction. As a result of the Merger, each share of CommerceHub's Series A common stock, Series B common stock and Series C common stock issued and outstanding immediately prior to the effective time of the Merger (other than shares owned by Parent, Merger Sub or CommerceHub, and any shares of common stock held by any stockholder who is entitled to demand and properly demands appraisal of such shares in accordance with Section 262 of the General Corporation Law of the State of Delaware and who does not fail to perfect or otherwise effectively withdraw their demand or otherwise lose the right to appraisal), will be converted into the right to receive $22.75 in cash, without interest and less applicable withholding taxes. The closing of the Merger is expected to occur in the second quarter of fiscal year 2018, but we cannot predict the exact timing of the completion of the Merger or whether the Merger will be completed. The closing of the Merger remains subject to, among other things, the approval of the holders of a majority of the outstanding voting power of our Series A and Series B common stock, and the satisfaction or waiver of other customary closing conditions. If the Merger is consummated, our Series A and Series C common stock will cease to be traded on the Nasdaq, our Series B common stock will cease to be traded on the OTC Market, and we will no longer be a publicly traded company.

Key Financial Metrics

~~Usage~~ Revenue

~~Usage~~Our revenue ~~is generated~~ primarily ~~from~~consists of fees charged to retailers, brands and their suppliers utilizing our CommerceHub for ~~their~~Retailers and CommerceHub for Brands offerings, including use of our ~~platform~~drop-ship toand ~~conduct~~demand ~~business~~channel ~~with~~solutions. ~~their~~Our ~~trading~~“core ~~partners.~~drop-ship ~~These~~revenue” ~~usage~~includes order fees, ~~are~~subscription ~~primarily~~and ~~influenced~~other byplatform ~~the~~fees ~~volume~~and ofset-up ~~customer~~and ~~orders~~professional ~~that~~services ~~are~~fees ~~processed~~attributable ~~through~~to our ~~platform~~drop-ship ~~using our Supply Solutions~~solutions. ~~Usage~~Our revenue also consists of fees ~~for~~charged ~~activity related~~ to ~~Demand~~consumer ~~Solutions~~brands, ~~Delivery Solutions~~distributors, ~~inventory~~retailers ~~management, third-party communication~~ and ~~variable~~other ~~fees~~marketplace ~~related~~sellers tousing ~~the amount of online sales~~ our ~~customers~~demand ~~achieve~~channel onand ~~our~~related ~~platform~~solutions, ~~and~~which ~~solutions~~we ~~that~~refer ~~are~~to ~~above~~as ~~minimum~~"demand ~~volume~~channel ~~requirements~~revenue."

~~Total~~Order ~~usage~~Fee revenue grows as the overall volume of orders for goods purchased online through our retailer customers and other supported demand channels increases, as new trading partners are added to the platform and as current trading partners connect and create additional relationships with other trading partners. We track and measure total usage revenue because it measures customer activity on our platform.Revenue

~~Subscription~~Order ~~Revenue~~fee revenue is attributable to fees charged to retailers and suppliers based on the volume of consumer orders processed through our platform using our drop-ship solutions. Order fee revenue grows as the overall volume of goods purchased online through our retailer customers increases. We track and measure order fee revenue because it corresponds to our customers' drop-ship activity on our platform.

ASubscription ~~customer's subscription fee is based on several factors, including the number~~ and ~~type~~Other ofPlatform trading partners that a customer is connected to through our platform, the number and type of demand channels a customer accesses through our platform and the adoption of certain available feature upgrades that further enhance the functionality of our platform. Subscription fees are charged on a stand-alone basis or in association with a minimum usage level required to be maintained by a customer in connection with our Demand Solutions.Revenue

~~Total~~Subscription and other platform revenue is primarily attributable to subscription fees charged to retailers and suppliers for the use of our drop-ship solutions. Subscription revenue grows as new ~~trading partner~~ customers join the platform, ~~as those trading partners~~ connect to and create new relationships with other trading partners, adopt new features and asupgrades, and ramp up their activity on the platform. Subscription and other platform revenue also includes other drop-ship platform fees for activity related to our ~~customers~~delivery-related ~~adopt~~solutions, ~~new~~inventory ~~features~~management, third-party communication capabilities and ~~upgrades~~other ~~that~~platform weactivities ~~make~~related ~~available~~to ecommerce relationships. We track and measure ~~total~~subscription ~~recurring~~and ~~subscription~~other platform revenue because it ~~indicates~~provides insight into the size and scope of our platform in terms of ~~the~~ total ~~number of~~ trading partner customers, ~~and~~ relationships among those customers, and the ~~scope~~extent of their engagement with usour ~~in terms of their adoption of available feature upgrades~~platform.

Set-upUp and Professional Services Revenue

Set-up ~~fees~~and ~~include~~professional ~~on-boarding~~ services revenue includes fees for the configuration, ~~program~~design and ~~design~~set-up of a customer's ~~access~~onboarding to our platform. ~~During~~and aother ~~retailer's~~services ~~subscription~~that ~~term,~~ we provide ~~professional~~to new and existing customers, including highly targeted services tothat ~~enhance~~are ~~the~~focused ~~retailer's~~on ~~benefit~~helping ~~from~~our customers to more quickly adopt our drop-ship solutions and maximize their utility. We track and measure set-up and professional services revenue as ~~they~~it ~~provide~~is an indication of new trading partner connections, ~~and~~ enhancements to existing customer connections and the extent of customers' engagement with our platform's capabilities.

~~Domestic vs. Foreign Revenue Streams~~16

WeTable ~~generate nearly all~~ of our revenue in North America (United States and Canada). For the nine months ended September 30, 2017 and 2016, approximately 96% of our revenue was generated from customers located in the United States.Contents

Demand Channel Revenue

Demand channel revenue includes set-up, professional services, subscription fees and order fees related to the volume of online sales and orders that retailers, sellers and brands achieve using our demand channel solutions. We track and measure demand channel revenue because it represents our customers' engagement and success with our demand channel solutions.

Seasonality

The ecommerce marketplace is affected by ~~seasonality~~the ~~trends~~same ~~that~~seasonality ~~are~~as ~~similar to those applicable to~~ the traditional brick-and-mortar ~~market~~marketplace, and many of our customers typically realize a significant portion of their sales in the fourth quarter of each calendar year. Historically, the percentage of our annual revenue has been relatively uniform over the first three quarters of the year with approximately 33% to 34% of our annual revenue being generated in the fourth quarter.

Management's Use of Non-GAAP Measures

In addition to reporting financial measures calculated in accordance with U.S. generally accepted accounting principles ("GAAP"), we provide Adjusted EBITDA (as defined below), a non-GAAP financial measure that management considers in reviewing our financial performance because we feel it is a relevant measure of the overall efficiency of our business model. Adjusted EBITDA is not a substitute for, or superior to, and should be considered only in addition to, net income calculated in accordance with GAAP. Adjusted EBITDA is subject to inherent limitations and excludes significant expenses and income that are required by GAAP to be recorded in our consolidated financial statements. Certain of these adjustments are based on estimates and assumptions of management and do not purport to reflect actual historical results. In addition, our computation of Adjusted EBITDA may not be comparable to other similarly titled measures computed by other companies, because all companies do not calculate these measures in the same fashion.

We define “Adjusted EBITDA” as net income or loss plus interest expense, income tax expense, depreciation of property and equipment, amortization of capitalized software costs and intangible assets, share-based compensation, restructuring charges and Merger-related charges, less interest income and income tax benefit. Adjusted EBITDA excludes restructuring and merger-related charges, the elimination of which does not result in a reduction of operating expenses necessary to conduct our business. By excluding these charges, we believe Adjusted EBITDA provides supplemental information that enables us and investors to better analyze our operating performance and the sustainability of our results and to compare our performance on a more consistent basis from period to period.

Other Metrics

Cost of Revenue

Cost of revenue primarily consists of personnel costs, including salaries, bonuses, payroll taxes, benefits, share-based compensation ~~expenses~~expense and facility cost and overhead allocations for our teams supporting customer service, application support, customer set-up and professional services, and performance marketing. We capitalize the cost of acquired software, qualifying payroll and payroll-related costs incurred in developing and enhancing our solutions and related product offerings, such as internal tools used by our operations teams. Amortization expense related to these costs are included in cost of revenue. Additionally, facility costs for our data centers, communication service charges and depreciation expense related to computer equipment directly associated with generating revenue are captured in cost of revenue.

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facility costs for our data centers, communication service charges and depreciation expense related to computer equipment directly associated with generating revenue are captured in cost of revenue.

Research and Development Expenses

Research and development expenses consist of personnel costs, including salaries, bonuses, payroll taxes, and benefits, net of amounts capitalized as developed software, share-based compensation ~~expenses~~expense and facility cost and overhead allocations for employees engaged in the design, development, testing and maintenance of our solutions. Also included are fees paid to third-party firms who assist in the development of our product solutions, net of amounts capitalized as developed software.

Sales and Marketing Expenses

Sales and marketing expenses consist of personnel ~~costs~~expenses, including salaries, commissions, bonuses, payroll taxes, benefits, share-based compensation ~~expenses~~expense and facility cost and overhead allocations for sales, client management and marketing employees. Other expenses associated with sales and marketing include expenses incurred related to corporate marketing, including brand awareness and trade shows. Much of our marketing effort is focused on thought leadership, as our marketing team engages with media and other industry influencers to publish and present on topics relevant to ~~CommerceHub's~~our solutions in trade publications and relevant industry conferences. Our client management expenses are attributable to our personnel and programs intended to oversee and develop comprehensive relationships with our customers and to provide strategic account management and coordination of cross-selling opportunities.

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General and Administrative Expenses

General and administrative expenses consist primarily of personnel costs, including salaries, bonuses, payroll taxes, benefits, share-based compensation ~~expenses~~expense and facility cost and overhead allocations for our corporate functions, including executive leadership, finance, legal, information technology, and human resources, as well as professional ~~services~~service and other fees related to legal, tax and finance. Also, included are costs attributable to credit card processing and bad debt expense ~~are included in general and administrative expense~~.

Other Income and Expense

Other income and expense includes interest income from our promissory note receivable due from Liberty Interactive Corporation, our former parent company ("Liberty"), and interest expense under our credit facility and our promissory note payable due to Liberty for the 2016 and 2017 periods, respectively.

Management's Use of Non-GAAP Measures

In addition to reporting financial measures calculated in accordance with U.S. generally accepted accounting principles ("GAAP"), we provide Adjusted EBITDA, a non-GAAP financial measure that management considers in reviewing our financial performance because we feel it is a relevant measure of the overall efficiency of our business model. Adjusted EBITDA is not a substitute for, or superior to, and should be considered only in addition to, net income calculated in accordance with GAAP. It is subject to inherent limitations and excludes significant expenses and income that are required by GAAP to be recorded in our consolidated financial statements. Certain of these adjustments are based on estimates and assumptions of management and do not purport to reflect actual historical results. In addition, our computation of Adjusted EBITDA may not be comparable to other similarly titled measures computed by other companies, because all companies do not calculate these measures in the same fashion.

We define “Adjusted EBITDA” as net income or loss plus interest expense, income tax expense, depreciation of property and equipment, amortization of capitalized software costs and intangible assets, share-based compensation expense, and restructuring charges, less interest income and income tax benefit. Adjusted EBITDA excludes restructuring charges, the elimination of which does not result in a reduction of operating expenses necessary to conduct our business. By excluding these charges, we believe Adjusted EBITDA provides supplemental information that enables us and investors to better analyze our operating performance and the sustainability of our results and to compare our performance on a more consistent basis from period to period.

Recent Accounting Pronouncements

~~Information~~On ~~regarding~~January ~~recent~~1, ~~accounting~~2018, ~~pronouncements~~we isadopted ~~included~~ASU No. 2014-09, Revenue from Contracts with Customers ("Topic 606") using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under ASC 605, Revenue Recognition ("Topic 605"). Refer to Note 4 to ~~our~~the accompanying condensed consolidated financial statements ~~included~~for ~~elsewhere~~a indescription ~~this~~of ~~Quarterly~~the ~~Report~~impacts Topic 606 had on ~~Form~~our ~~10-Q~~results of operations and financial condition for the three months ended March 31, 2018.

Information regarding other recent accounting pronouncements is included in Note 4 to the accompanying condensed consolidated financial statements.

Critical Accounting Policies

~~Preparation~~The preparation of our condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Please see the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" within the 2017 Annual Report, which describes the critical accounting policies used in preparation of the consolidated financial statements. On an ongoing basis, we evaluate the critical accounting policies used to prepare our condensed consolidated financial statements. Other than the policies implemented in connection with the adoption of Topic 606, as further described in Note 4 and Note 5 to the accompanying condensed consolidated financial statements, there have been no material changes in these aforementioned critical accounting policies.

16Results of Operations for the Three Months ended March 31, 2018 and March 31, 2017

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Discussion and Analysis of Financial Condition and Results of Operations" within our 2016 Annual Report, which describes the significant accounting policies used in preparation of the consolidated financial statements. On an ongoing basis, we evaluate the critical accounting policies used to prepare our condensed consolidated financial statements. There have been no material changes in these critical accounting policies.

Results of Operations for the Three Months Ended September 30, 2017 and September 30, 2016

Revenue:

(amounts in thousands)	Three Months Ended March 31,	~~Three Months EndedSeptember 30,~~					Change	~~Change~~
		2017			2016			$			%
	2018			2017 (1)			$			%
Revenue:
Usage revenue		$	15,833		$	14,562		$	1,271		9	%
Core Drop-Ship Revenue
Subscription revenue		6,986			6,420			566			9	%
Order fee revenue	$	13,443		$	12,038		$	1,405		12	%
Set-up and professional services		1,795			1,496			299			20	%
Subscription and other platform revenue	9,064			8,451			613			7	%
Total revenue		$	24,614		$	22,478		$	2,136		10	%
Set-up and professional services revenue	1,789			1,725			64			4	%
Total core drop-ship revenue	24,296			22,214			2,082			9	%
Demand channel revenue	1,967			2,354			(387		)	(16	)%
Total revenue	$	26,263		$	24,568		$	1,695		7	%

~~Our~~Order fee revenue ~~increased~~represented 1051% and 49% of our total revenue for the three months ended ~~September~~March 3031, 2018 and 2017, asrespectively. ~~compared~~The toincrease ~~the~~in ~~same~~our ~~period~~order infee ~~the~~revenue ~~prior~~was ~~year.~~primarily ~~Our~~driven ~~revenue~~by ~~from~~a ~~our~~13% ~~core~~increase ~~drop-ship~~in ~~solutions,~~the ~~which~~volume ~~excludes~~of ~~all~~customer ~~revenue~~orders ~~attributable~~processed tothrough our ~~demand~~platform, ~~channel~~mainly ~~solutions,~~from ~~increased~~existing bycustomers. ~~12%~~This ~~for~~increase ~~the~~in ~~three~~our ~~months~~order ~~ended~~fee ~~September 30,~~revenue ~~2017~~is asinclusive ~~compared~~of a five percentage-point headwind due to the ~~same~~termination ~~period~~of ina ~~the~~retailer ~~prior~~customer ~~year~~whose contract ended in December 2017.

~~Usage~~Subscription and other platform revenue represented 6435% and 6534% of our total revenue for the three months ended ~~September~~March 3031, ~~2017~~2018 and ~~2016~~2017, respectively., ~~Our~~and ~~usage~~is ~~revenue~~primarily ~~from~~attributable ~~our~~to ~~core~~subscription fees charged to retailers and suppliers for the use of our drop-ship solutions. ~~increased~~The byincrease ~~11%~~in our subscription fees for the three months ended ~~September~~March 3031, ~~2017~~2018, as compared to the same period in ~~the~~2017, ~~prior year. This increase~~ was primarily driven by an increase in the ~~volume~~number of retailer and supplier selling relationships on our platform, which was primarily attributable to a 9% increase in our total customer ~~orders~~count. The increase in other platform fees for the three months ended March 31, ~~mainly~~2018, ~~from~~as ~~existing~~compared ~~customers~~to 2017, is attributable to an increase in the volume of transactions processed through our platform., mainly from existing customers.

~~Subscription~~Set-up and professional services revenue represented 287% ~~and 29%~~ of our total revenue for each of the three months ended ~~September~~March 3031, ~~2017~~2018 and ~~2016, respectively~~2017. The increase in our ~~subscription~~set-up and professional services revenue for the three months ended ~~September~~March 3031, 2017, as compared to the same period in the prior year, was driven by an increase in the number of retailer and supplier selling relationships on our platform, primarily due to an increase in our total customer count.

Revenue generated from set-up and professional services represented 7% of our total revenue for the three months ended September 30, 2017 and 2016. The increase in our set-up and professional services revenue for the three months ended September 30, 2017, as compared to the same period in the prior year, was driven by an increase in the number of retailer and supplier selling relationships on our platform, primarily due to an increase in our total customer count, as well as the acceleration of deferred revenue in connection with the termination of customers from our platform, primarily due to bankruptcies.

Cost of Revenue and Gross Profit:

(amounts in thousands)	Three Months EndedSeptember 30,						Change
	2017			2016			$			%
Cost of revenue	$	5,028		$	5,737		$	(709	)		(12	)%
Gross profit	$	19,586		$	16,741		$	2,845			17	%
Gross profit %	80		%	74		%	6		%

Cost of revenue decreased for the three months ended September 30, 2017, as compared to the same period in the prior year, due to a $0.6 million decrease in personnel expense, attributable to lower headcount, and a $0.2 million decrease in intangible asset amortization. The decrease was partially offset by $0.2 million of restructuring charges incurred in connection with our 2017 restructuring plan, as further described in Note 13 to the accompanying condensed consolidated financial statements.

Gross profit increased for the three months ended September 30, 2017, as compared to the same period in the prior year, primarily due to increased profit as we continue to leverage our existing platform and personnel while increasing revenues.

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Operating Expenses:

(amounts in thousands)	Three Months EndedSeptember 30,				Change
	2017		2016		$			%
Operating expenses:
Research and development	$	6,434	$	5,077	$	1,357		27	%
Sales and marketing	2,432		3,023		(591		)	(20	)%
General and administrative	7,402		8,008		(606		)	(8	)%
Total operating expenses	$	16,268	$	16,108	$	160		1	%

Research and development expenses. Research and development expenses increased for the three months ended September 30, 2017, as compared to the same period in the prior year, due to an increase in personnel costs of $1.0 million, of which $0.3 million was attributable to a reduction in the amount of capitalizable software development projects, with the remaining $0.7 million increase primarily due to the expansion of our development teams, net of costs deferred in connection with the integration of customers onto our platform. Further, research and development expenses increased due to $0.4 million of restructuring charges incurred in connection with our 2017 restructuring plan.

Sales and marketing expenses. Sales and marketing expenses decreased for the three months ended September 30, 2017, as compared to the same period in the prior year, primarily due a $1.1 million decrease in commission expense, attributable to a lower headcount on our sales team. The decrease was partially offset by a $0.2 million increase in consulting expense and $0.4 million of restructuring charges incurred in connection with our 2017 restructuring plan.

General and administrative expenses. General and administrative expenses decreased for the three months ended September 30, 2017, as compared to the same period in the prior year, due to a $0.3 million decrease in personnel costs, attributable to higher termination charges in 2016, resulting from executive turnover, and a $0.3 million decrease in intangible asset amortization.

Other Expense and Income:

(amounts in thousands)	Three Months EndedSeptember 30,						Change
	2017			2016			$		%
Other (expense) income:
Interest expense	$	(148	)	$	(361	)	$	213	(59	)%
Interest income	—			—			—		—	%
Total other (expense) income	$	(148	)	$	(361	)	$	213	(59	)%

Other expense decreased in the three months ended September 30, 2017, as compared to the same period in the prior year, due to a decrease in interest expense incurred, primarily driven by a reduction in the borrowings outstanding under our revolving credit facility.

Income Taxes:

(amounts in thousands)	Three Months EndedSeptember 30,						Change
	2017			2016			$		%
Income tax expense (benefit)	$	1,182		$	(438	)	$	1,620	nm
Effective tax rate	37		%	(161		)%	nm

During the three months ended September 30, 2017, our effective tax rate was higher than the U.S. Federal income tax rate of 35%, primarily due to state and local income tax, net of Federal income tax benefits, offset by the Federal research credit. During the three months ended September 30, 2016, we recorded an income tax benefit of $0.4 million on pre-tax income of $0.3 million. The benefit recorded, despite the pre-tax income, was primarily from the Federal research credit, which created both a discrete benefit from finalizing 2015 tax returns during the quarter and a benefit from a favorable adjustment to the estimated 2016 annual effective rate.

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~~Adjusted~~2018, ~~EBITDA:~~as compared to the same period in 2017, was driven by an increase in the number of retailer and supplier selling relationships on our platform, which was primarily attributable to a 9% increase in our total customer count.

(amounts in thousands)	Three Months EndedSeptember 30,					Change
	2017		2016			$			%
Adjusted EBITDA:
Net income	$	1,988	$	710		$	1,278		180	%
Interest expense	148		361			(213		)	(59	)%
Income tax expense (benefit)	1,182		(438		)	1,620			nm
Depreciation and amortization	2,002		2,453			(451		)	(18	)%
Share-based compensation expense	2,009		2,193			(184		)	(8	)%
Restructuring charges (1)	1,076		—			1,076			100	%
Adjusted EBITDA	$	8,405	$	5,279		$	3,126		59	%

Demand channel revenue represented 7% and 10% of our total revenue for the three months ended March 31, 2018 and 2017, respectively. The decrease in our demand channel revenue for the three months ended March 31, 2018, as compared to the same period in 2017, was primarily driven by a decrease in the volume of online demand channel sales and orders processed through our platform, attributable to customer attrition.

(1) Restructuring charges include termination and retention benefits and the impairment of certain capitalized software projects in connection with our 2017 restructuring plan described in Note 13 to the accompanying condensed consolidated financial statements.

Adjusted EBITDA for the three months ended September 30, 2017 increased, as compared to the same period in the prior year, primarily due to increased operating profit on higher revenue as we continue to leverage our existing platform and personnel.

During the third quarter, we commenced our 2017 restructuring plan to consolidate our software development and other corporate activities into our Albany, NY headquarters to more effectively support the ongoing growth of our business by streamlining and centralizing operations. As of September 30, 2017, we estimate that the total expenses associated with this restructuring will be between $5.0 million and $6.0 million, which includes future expenses expected to be incurred from termination and retention benefits accrued over the retention period, which we expect to run through early 2019, but excludes actual and expected cost savings associated with the restructuring. Depending on the pace and magnitude of re-hiring in our Albany office, as of September 30, 2017 we estimate this restructuring will result in a net reduction in personnel and facilities costs beginning in the fourth quarter of 2017, which will gradually increase throughout 2018 and 2019 to an estimated $2.0 million to $5.0 million per year.

Results of Operations for the Nine Months Ended September 30, 2017 and September 30, 2016

Revenue:

(amounts in thousands)	Nine Months EndedSeptember 30,				Change
	2017		2016		$		%
Revenue:
Usage revenue	$	48,245	$	44,437	$	3,808	9	%
Subscription revenue	20,826		18,766		2,060		11	%
Set-up and professional	5,319		4,468		851		19	%
Total revenue	$	74,390	$	67,671	$	6,719	10	%

Our revenue increased 10% for the nine months ended September 30, 2017, as compared to the same period in the prior year. Our revenue from our core drop-ship solutions increased by 14% for the nine months ended September 30, 2017, as compared to the same period in the prior year.

Usage revenue represented 65% and 66% of our total revenue for the nine months ended September 30, 2017 and 2016, respectively. Our usage revenue from our core drop-ship solutions increased by 14% for the nine months ended September 30, 2017, as compared to the same period in the prior year. The increase in our usage revenue was primarily driven by an increase in the volume of customer orders, primarily from existing customers, processed through our platform.

Subscription revenue represented 28% of our total revenue for the nine months ended September 30, 2017 and 2016. The increase in our subscription revenue for the nine months ended September 30, 2017, as compared to the same period in the prior year, was driven by an increase in the number of retailer and supplier selling relationships on our platform, primarily due to an increase in our total customer count.

Revenue generated from set-up and professional services represented 7% of our total revenue for the nine months ended September 30, 2017 and 2016. The increase in our set-up and professional services revenues for the nine months ended

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September 30, 2017, as compared to the same period in the prior year, was driven by an increase in the number of retailer and supplier selling relationships on our platform, primarily due to an increase in our total customer count, as well as the acceleration of deferred revenue in connection with the termination of customers from our platform, primarily due to bankruptcies.

Cost of Revenue and Gross Profit:

(amounts in thousands)	~~Nine~~Three Months ~~EndedSeptember~~EndedMarch 3031,						Change
	2017			2016			$				%
	2018			2017			$			%
Cost of revenue	$	165,~~183~~044		$	175,~~162~~516		$	(~~979~~472	)		(69	)%
Gross profit	$	5821,~~207~~219		$	5019,~~509~~052		$	72,~~698~~167			1511	%
Gross profit %	78		%	75		%	3		%
Gross margin	81		%	78		%	3		%

~~Cost~~The decrease in cost of revenue ~~decreased~~for in the ~~nine~~three months ended ~~September~~March 3031, ~~2017~~2018, as compared to the same period in the prior year, due to a $1.1 million reduction in personnel costs attributable to lower headcount and a $0.6 million decrease in intangible asset amortization. The decrease was partially offset by $0.2 million of restructuring charges incurred in connection with our 2017 ~~restructuring plan~~, ~~and~~ was ~~further~~primarily ~~offset~~driven by a $0.5 million ~~increase~~reduction in ~~share-based~~amortization ~~compensation~~ expense, ~~primarily~~related ~~due~~ to ~~mark-to-market~~capitalized ~~adjustments~~software ofcosts, ~~liability-based~~as ~~awards~~we inchanged ~~2016,~~and ~~which~~further ~~resulted~~refined inour amethodologies ~~net~~and ~~reduction~~processes into ~~expense~~estimate in the ~~nine~~portion ~~months~~of ~~ended~~software ~~September~~development ~~30,~~eligible ~~2016, as compared~~ to ~~equity-based~~be ~~awards~~capitalized in ~~2017, which are not marked-to-market~~2016.

Gross profit increased for the ~~nine~~three months ended ~~September~~March 3031, ~~2017~~2018, as compared to the same period in ~~2016~~2017, primarily due to increased profit as we ~~continue~~create to leverage through our ~~existing~~scalable platform and existing personnel while increasing revenues.

Operating Expenses:

(amounts in thousands)	~~Nine~~Three Months ~~EndedSeptember~~EndedMarch 3031,				Change
	2017		2016		$			%
	2018		2017		$			%
Operating expenses:
Research and development	$	186,~~745~~452	$	135,~~391~~915	$	~~5,354~~537		409	%
Sales and marketing	62,~~750~~336		91,~~024~~931		~~(2,274~~405		)	~~(25~~21	)%
General and administrative	2111,~~286~~249		236,~~207~~939		(14,~~921~~310		)	(862	)%
Total operating expenses	$	4620,~~781~~037	$	4514,~~622~~785	$	15,~~159~~252		336	%

Research and development expenses. Research and development expenses increased due to a $51.52 million ~~increase in personnel costs,~~ of ~~which~~restructuring ~~$2.9~~charges ~~million was attributable to a reduction~~ in ~~the~~connection ~~amount~~with ofour ~~capitalizable~~restructuring ~~software~~plan ~~development~~(as ~~projects,~~further ~~with~~discussed ~~the~~in ~~remaining~~Note ~~$2.6~~13 ~~million increase attributable~~ to the ~~expansion~~accompanying ofcondensed ~~our~~consolidated ~~development~~financial ~~teams~~statements), ~~net~~which ofdid ~~costs~~not ~~deferred~~occur in ~~connection with~~ the ~~integration~~three ofmonths ~~customers~~ended ~~onto~~March 31, ~~our platform. During 2016~~2017, ~~we changed~~ and ~~further~~a ~~refined~~$0.4 ~~our~~million ~~methodologies~~reduction ~~and~~in ~~processes to estimate~~ the ~~portion~~amount of software development ~~eligible~~projects ~~to be~~ capitalized. ~~In addition, we incurred $0.4 million of restructuring charges~~ in ~~connection with our 2017 restructuring plan~~2018. ~~The~~ This increase was partially offset by a $01.32 million ~~decrease~~reduction in ~~share-based~~personnel ~~compensation~~costs, ~~expense~~primarily ~~due~~attributable to ~~the~~savings ~~mark-to-market~~from ~~adjustment~~our ofrestructuring ~~liability-based~~plan ~~awards in 2016, which resulted in higher expense in the nine months ended September 30, 2016,~~ as ~~compared~~discussed ~~to equity-based awards in 2017, which are not marked-to-market~~below.

Sales and marketing expenses. Sales and marketing expenses ~~decreased~~increased ~~due~~for tothe athree ~~$2.2~~months ~~million~~ended ~~decrease~~March in31, ~~commissions~~2018, ~~expense~~as ~~and~~compared ato ~~$0.4~~the ~~million~~same ~~decrease~~period in ~~personnel costs~~2017, indue ~~each case attributable~~ to ~~lower~~a ~~headcount on our sales team. The decrease was partially offset by~~ $0.43 million ofincrease ~~restructuring~~in ~~charges~~commissions ~~incurred~~expense, indriven ~~connection~~by ~~with~~increased ~~our~~headcount ~~2017~~of ~~restructuring~~our ~~plan.~~sales team.

General and administrative expenses. General and administrative expenses ~~decreased~~increased primarily due to a $04.84 million ~~decrease~~increase in ~~intangible~~professional ~~asset~~services ~~amortization, a $0.5 million decrease in personnel~~ costs, ~~driven~~primarily byattributable ~~higher termination charges in 2016, resulting from executive turnover, and a $1.8 million reduction in share-based compensation expense due~~ to the mark-to-market adjustment of liability-based awards in 2016, which resulted in higher expense in the nine months ended September 30, 2016 as compared to the equity-based awards in 2017, which are not marked-to-marketMerger. ~~The~~This ~~decrease~~increase was partially offset by a $0.94 million ~~increase~~decrease in ~~professional services costs, primarily attributable to becoming a public company, and a $0.2 million increase in~~ bad debt expense, due, in large part, to customer bankruptcies in 2017.

20Other Expenses and Income:



(amounts in thousands)	Three Months Ended March 31,						Change
	2018			2017			$		%
Other (expense) income:
Interest expense	$	(132	)	$	(227	)	$	95	(42	)%
Interest income	25			—			25		100	%
Total other (expense) income	$	(107	)	$	(227	)	$	120	(53	)%

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Other ~~Expense~~expense ~~and~~decreased ~~Income:~~primarily due to decreased interest expense, including commitment fees, incurred in connection with borrowings outstanding under our revolving credit facility combined with interest earned on cash invested in money market deposit accounts, which were not in place until late 2017.

(amounts in thousands)	Nine Months EndedSeptember 30,						Change
	2017			2016			$			%
Other (expense) income:
Interest expense	$	(604	)	$	(405	)	$	(199	)	49	%
Interest income	—			273			(273		)	(100	)%
Total other (expense) income	$	(604	)	$	(132	)	$	(472	)	nm

Other expense increased due to increased interest expense incurred on borrowings outstanding under our revolving credit facility and our promissory note due to Liberty, coupled with a decrease in interest earned under our promissory note receivable due from Liberty, which was fully repaid in June 2016, resulting in no interest earned in 2017.

Income Taxes:

(amounts in thousands)	~~Nine~~Three Months ~~EndedSeptember~~EndedMarch 3031,						Change
	2017			2016			$			%
	2018			2017			$			%
Income tax expense	$	~~4,130~~886		$	1,~~611~~581		$	~~2,519~~(695	)	~~156~~(44	)%
Effective tax rate	3882		%	3439		%	443		%

For ~~During~~ the ~~nine~~three months ended ~~September~~March 3031, ~~2017~~2018, our effective tax rate of 82% was higher than the ~~U.S.~~21% Federal income tax rate ~~of 35%~~, primarily due to ~~state~~$2.9 ~~and~~million ~~local income tax, net~~ of ~~Federal~~non-deductible ~~income~~transaction-related ~~tax~~costs ~~benefits,~~incurred ~~offset~~in byconnection with the ~~Federal research credit~~Merger. ~~During~~In ~~the nine months ended September 30~~addition, ~~2016,~~ our 2018 effective tax rate was ~~lower~~higher ~~than~~due ~~the~~to ~~35%~~state ~~Federal~~and local income ~~tax rate~~taxes, ~~primarily~~net ~~from~~of ~~the~~ Federal ~~research~~income ~~credits~~tax benefits, ~~partially~~ offset by ~~state~~excess ~~and~~deductions ~~local~~on ~~income~~share-based ~~tax,~~award ~~net of Federal income tax benefits~~issuances.

~~Adjusted~~For ~~EBITDA:~~the three months ended March 31, 2017, our effective tax rate of 39% was higher than the 35% Federal income tax rate, primarily due to state and local income tax, net of Federal income tax benefits, offset by the Federal research credit.

(amounts in thousands)	Nine Months EndedSeptember 30,				Change
	2017		2016		$			%
Adjusted EBITDA:
Net income	$	6,692	$	3,144	$	3,548		113	%
Depreciation and amortization	6,278		7,315		(1,037		)	(14	)%
Interest expense	604		132		472			nm
Income tax expense	4,130		1,611		2,519			156	%
Share-based compensation expense	6,986		8,753		(1,767		)	(20	)%
Restructuring charges (1)	1,076		—		1,076			100	%
Adjusted EBITDA	$	25,766	$	20,955	$	4,811		23	%

Net Income and Adjusted EBITDA:

~~(1)~~Net Restructuring charges include termination and retention benefits and the impairment of certain capitalized software projects in connection with our 2017 restructuring plan described in Note 13 to the accompanying condensed consolidated financial statements. Income

~~Adjusted~~Net ~~EBITDA~~income for the ~~nine~~three months ended ~~September~~March 3031, ~~2017~~2018 ~~increased~~decreased, as compared to ~~the same period in the prior year~~2017, primarily due to ~~increased operating profit on higher revenue as we continue to leverage our platform and personnel. This increase was partially offset by~~ a $24.94 million ~~reduction~~increase in ~~the amount of software development costs capitalized, net of related amortization, increased ongoing~~ professional services costs ~~of $0.9 million~~, primarily attributable to ~~becoming~~the aMerger. ~~public~~This ~~company,~~decrease ~~and~~was ~~increased~~partially ~~bad~~offset ~~debt~~by ~~expense~~a of $01.27 million, ~~due~~increase in ~~large~~revenue, ~~part~~while toleveraging ~~customer~~our ~~bankruptcies~~scalable inplatform ~~2017.~~and existing personnel.

~~The~~Net ~~primary~~income ~~driver~~for of the ~~reduction~~three inmonths ~~share-based~~ended ~~compensation~~March ~~expense~~31, 2018 was ~~the~~inclusive ~~mark-to-market~~of $1.3 ~~adjustment~~million of onrestructuring ~~liability-based~~charges ~~awards~~associated ~~outstanding~~with inour ~~2016~~restructuring plan, ~~primarily~~including ~~generated~~termination byand ~~the~~retention ~~change~~benefits inas ~~underlying~~well ~~share~~as ~~value,~~payroll and related costs for ~~each~~redundant ~~period,~~positions as ~~further~~we ~~described~~transition inour ~~Note~~software 9development team and certain other corporate activities into our Albany, NY headquarters. These charges were offset by approximately $1.0 million of payroll and related savings from permanent headcount reductions, reduced cost of positions transitioned to ~~the~~our ~~accompanying~~corporate ~~condensed~~headquarters, ~~consolidated~~and ~~financial~~open ~~statements~~positions transitioning to our corporate headquarters.

21Adjusted EBITDA



(amounts in thousands)	Three Months Ended March 31,				Change
	2018		2017		$			%
Net Income and Adjusted EBITDA:
Net income	$	189	$	2,459	$	(2,270	)	(92	)%
Interest expense, net	107		227		(120		)	(53	)%
Income tax expense	886		1,581		(695		)	(44	)%
Depreciation and amortization	1,513		2,094		(581		)	(28	)%
Share-based compensation	2,019		2,360		(341		)	(14	)%
Restructuring charges (1)	1,342		—		1,342			100	%
Merger-related charges (2)	4,303		—		4,303			100	%
Adjusted EBITDA	$	10,359	$	8,721	$	1,638		19	%


(1)	Restructuring charges include termination and retention benefits in connection with our restructuring plan described in Note 13 to the accompanying condensed consolidated financial statements.


(2)	Merger-related charges include professional services costs incurred in connection with the Merger.

Adjusted EBITDA for the three months ended March 31, 2018 increased, as compared to the same period in 2017, due to increased operating profit on higher revenue as we continued to leverage our scalable platform and existing personnel. This increase was also attributable to a $0.7 million reduction in personnel costs, and a $0.4 million reduction in bad debt expense, due in large part to customer bankruptcies in 2017.

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Liquidity and Capital Resources

(amounts in thousands)	~~Nine~~Three Months ~~EndedSeptember~~EndedMarch 3031,						Change
	2017			2016			$			%
	2018			2017			$			%
Net cash provided by (used in):
Operating activities	$	2711,~~383~~687		$	~~(52~~13,~~451~~571	)	$	79(1,~~834~~884	)	(~~152~~14	)%
Investing activities	(~~2,297~~293		)	27(1,~~904~~323		)	~~(30~~1,~~201~~030		)	(~~108~~78	)%
Financing activities	$	~~(23~~2,~~119~~203	)	$	22(14,~~818~~676	)	$	~~(45~~16,~~937~~879	)	(~~201~~115	)%

Historically, the cash we generate from operations has been sufficient to fund our working capital requirements and capital expenditures. AtSubstantially ~~September~~all of our cash and cash equivalents are held within the United States. Cash generated internationally is used for our international working capital needs. At 30March 31, ~~2017~~2018, we had $833.4 million of cash and cash equivalents, no borrowings under our revolving credit facility and available borrowings under the facility of $125.0 million. Our cash is invested in money market deposit accounts that are currently providing only a minimal return. Historically, we have not entered into investments other than our recent use of money market deposit accounts, but we may do so in the future. Effective in 2018, assuming a similar tax and business structure, we anticipate a reduction in income taxes paid and accrued as a result of the U.S. Tax Cuts and Jobs Act, which reduces our Federal income tax rate from 35% to 21%. We expect that cash from operations and available borrowings under our revolving credit facility will be sufficient to meet our cash flow requirements for the foreseeable future.

Cash ~~Flows~~Flow from Operating Activities

The ~~increase~~decrease in cash flows from operating activities for the ~~nine~~three months ended ~~September~~ 30March 31, ~~2017~~2018, as compared to the same period in ~~the prior year~~2017, was primarily attributable to the elimination of $86.7 million of cash payments in the prior period for the settlement of share-based awards, which no longer occur following the modification of our share-based incentive plans in connection with the Spin-Off. The increase was further driven by a $32.53 million reduction ~~improvement~~ in net income and a $100.5 million net ~~increase~~decrease in non-cash ~~flows~~expenses ~~generated~~(primarily ~~from~~bad ~~other~~debt ~~working capital related accounts~~expense, ~~largely~~depreciation asand aamortization ~~result~~and ofshare-based ~~a reduction in cash outflows associated with our net payables due to our former parent company~~compensation). The ~~increase~~decrease was partially offset by a $200.9 million net ~~decrease~~increase in ~~non-~~cash ~~expenses~~flows ~~(primarily~~generated ~~deferred~~from ~~income~~other ~~taxes,~~working ~~share-based~~capital ~~compensation,~~related ~~depreciation and amortization)~~accounts.

Cash ~~Flows~~Flow from Investing Activities

The decrease in net cash ~~flows~~used ~~from~~in investing activities for the ~~nine~~three months ended ~~September~~ 30March 31, ~~2017~~2018, as compared to the same period in ~~the prior year~~2017, was ~~primarily~~driven ~~attributable to a $36.4 million reduction in cash inflows from collections on our note receivable due from Liberty in 2016. This decrease was partially offset~~ by a $30.46 million reduction in cash outflows for property and equipment purchases, ~~primarily attributable to 2016 leasehold improvements~~ and ~~outfitting of our new corporate headquarters, which did not recur in 2017, and~~ a $20.84 million decrease in our capitalization of internally developed software~~, due to the reduction in software development costs eligible to be capitalized as described above~~.

Cash ~~Flows~~Flow from Financing Activities

The ~~decrease~~increase in cash flows from financing activities for the three ~~nine~~ months ended ~~September~~ 30March 31, ~~2017~~2018, as compared to the same period in ~~the prior year~~2017, was ~~driven~~primarily byattributable to a $1716.0 million ~~increase~~reduction in repayments under our credit facility ~~and a $32.7 million reduction in net cash inflows in connection with the Spin-Off~~, which ~~were~~was ~~attributable~~fully torepaid ~~various~~during ~~financing~~2017 ~~activities involving Liberty~~ and ~~other pre-Spin-Off shareholders. The decrease was partially offset by~~ a $20.69 million increase in net cash ~~received~~inflows from the exercise of stock options, ~~and~~ employee stock purchases, ~~and~~under athe ~~$1.1~~ESPP, ~~million~~taxes ~~reduction~~on inRSU ~~cash~~issuances ~~outflows~~and ~~for~~the ~~debt~~ issuance ~~costs~~of ~~incurred~~deferred instock ~~connection with our credit facility~~units.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are exposed to market risk in the normal course of business due to our ongoing investing and ~~financing~~financial activities and the conduct of operations in different foreign countries. Market risk refers to the risk of loss arising from adverse changes in stock prices, interest rates and foreign currency exchange rates. The risk of loss can be assessed from the perspective of adverse changes in fair values, cash flows and future earnings.

We are exposed to changes in interest rates primarily as a result of borrowings we may make under our revolving credit facility ~~used to maintain liquidity and to fund business operations~~. The amount of our long-term debt is expected to vary as a result of future funding requirements, cash generation, market conditions and other factors. We have not entered into any interest rate swap arrangements to manage our exposure to interest rate risk, although we may do so in the future if and when we deem appropriate. InWe ~~performing~~performed a sensitivity analysis on our exposure to interest rate risk as of March 31, 2018, and we do not believe a 1.00% increase or decrease in interest rate would have a material impact on our interest expense, primarily because we had no long-term debt at that date.

Although not significant, we have revenue, expenses, assets and liabilities that are denominated in currencies other than the U.S. dollar, including the British pound sterling and the Canadian dollar. As we expand internationally, our results of operations and cash flows will continue to be impacted by foreign currency fluctuations. We have not used any forward contracts or currency borrowings to hedge our exposure to foreign currency exchange risk, although we may do so in the future.

2221

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Item 4. Controls and Procedures

AsEvaluation we are an emerging growth company and a newly public company, we have not prepared a formal management’s report on internal control over financial reporting, as would otherwise be required by Section 404 of ~~the~~Disclosure ~~Sarbanes-Oxley~~Controls Act of 2002, nor have we engaged an independent registered public accounting firm to perform an audit of our internal control over financial reporting as of any balance sheet date in our condensed consolidated financial statements. Our compliance with Section 404 of the Sarbanes-Oxley Act will first be subject to management’s assessment regarding internal control over financial reporting in connection with the filing of our Annual Report on Form 10-K for the fiscal year ending December 31, 2017 (the "2017 Annual Report"), and we will not be required to have an independent registered public accounting firm attest to the effectiveness of our internal control over financial reporting until the filing of our first Annual Report on Form 10-K after we lose emerging growth company status, which will be the 2017 Annual Report. Accordingly, this Quarterly Report on Form 10-Q does not include a report of management’s assessment regarding internal control over financial reporting due to a transition period established by rules of the SEC for newly public companies.Procedures

InOur ~~accordance with Rules 13a-15 and 15d-15 under the Exchange Act~~management, ~~we carried out an evaluation, under the supervision and~~ with the participation of ~~management, including~~ our Chief Executive Officer and ~~our~~ Chief Financial Officer, ofevaluated the effectiveness of our disclosure controls and procedures aspursuant ofto ~~the~~Rule ~~end~~13a-15 ~~of the period covered by this report. Based on that evaluation, these executives concluded that our disclosure controls~~ and ~~procedures~~15d-15 ~~were not effective as of September 30, 2017 to provide reasonable assurance that all information required to be disclosed in its reports filed or submitted~~ under the Exchange Act ~~is recorded~~, ~~processed,~~as ~~summarized~~of ~~and reported within~~ the ~~time~~end ~~periods~~of ~~specified in~~ the ~~SEC's~~period ~~rules~~covered ~~and~~by ~~forms,~~this asQuarterly ~~further~~Report ~~described~~on ~~below~~Form 10-Q.

~~Remediation~~Based ~~Plan~~on this ~~for~~evaluation, ~~Material~~our ~~Weakness~~Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2018, our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information we are required to disclose in ~~Internal~~reports ~~Control~~that ~~over~~we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial ~~Reporting~~Officer, as appropriate, to allow timely decisions regarding required disclosure.

WeLimitations ~~have~~on ~~identified~~Effectiveness ~~a material weakness in our internal control over financial reporting relating to the processes and controls to properly identify and account for transactions~~ of aDisclosure ~~complex~~Controls and non-routine nature. We hired our Chief Financial Officer and a new Chief Accounting Officer in June and May 2016, respectively. Together, these officers developed and began executing a plan to remediate the material weakness, which included hiring additional personnel with SEC reporting and technical accounting experience and creating tax and internal audit functions.Procedures

In ~~addition~~designing ~~to these organizational changes, we implemented new policies~~ and ~~processes,~~evaluating ~~including formalizing our delegation of authority, defining processes to document~~ the ~~accounting~~disclosure ~~for non-routine or complex transactions, enhancing account reconciliation~~ controls, and ~~expanding~~procedures, ~~the~~management ~~use~~recognizes ofthat ~~our~~any ~~financial~~controls ~~systems used for accounting~~ and ~~financial~~procedures ~~reporting. We also have completed our process to review~~ and ~~document our~~ internal ~~controls~~control over financial reporting, ~~and~~no ~~will~~matter ~~continue~~how ~~our~~well ~~testing~~designed ofand ~~controls~~operated, incan ~~conjunction~~provide ~~with~~only ~~management’s~~reasonable ~~assessment~~assurance ~~regarding~~of ~~internal~~achieving ~~control~~the ~~over~~desired ~~financial~~control ~~reporting~~objectives inand ~~connection~~preventing ~~with~~and ~~the~~detecting ~~filing of our 2017 Annual Report~~misstatements.

In May 2017, our former Chief Accounting Officer was promoted to the role of Chief Commercial Officer and relinquished his duties as the Company’s principal accounting officer. Our Chief Financial Officer assumed the additional role of principal accounting officer and will continue to execute on our plan to remediate our material weakness as described above.

We are working to remediate the material weakness as quickly and efficiently as possible and expect that the material weakness will be remediated by the end of 2017. This expected timing incorporates management's continued efforts to strengthen process and policies, as well as the necessary steps required to perform a management assessment as discussed above. Notwithstanding the material weakness described above, our management has concluded that the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q present fairly, in all material respects, our financial position, results of operations and cash flows in conformity with generally accepted accounting principles.

Changes in Internal Control over Financial Reporting

~~Other~~There ~~than~~were ~~the items noted above,~~ no changes ~~occurred~~ in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended ~~September~~March 3031, ~~2017~~2018 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

~~From~~On ~~time~~April to27, ~~time~~2018, wea ~~may~~putative ~~become~~class ~~involved~~action incomplaint ~~various~~was ~~lawsuits~~filed ~~and~~by ~~legal~~a ~~proceedings~~purported ~~which~~stockholder ~~arise~~of CommerceHub in the ~~ordinary~~United ~~course~~States District Court for the Northern District of ~~business~~New York: Gordon v. WeCommerceHub, ~~are~~Inc., ~~currently~~et ~~not~~al., ~~aware~~Case No. 1:18-cv-00512-FJS-DJS. The complaint names as defendants CommerceHub and members of ~~any~~the ~~such~~CommerceHub ~~legal~~board ~~proceedings~~of ordirectors. The complaint asserts claims ~~that~~under weSections ~~believe~~14(a) ~~will~~and ~~have~~20(a) of the Securities Exchange Act of 1934 and rules and regulations promulgated thereunder, ~~individually~~and oralleges that CommerceHub and the members of the CommerceHub board of directors caused a proxy statement that allegedly omitted material information to be filed in connection with the ~~aggregate~~Merger, which allegedly rendered the proxy statement false and misleading. Among other relief, the complaint seeks a declaration certifying a class, an injunction to prevent CommerceHub from holding its May 18, 2018 special meeting of stockholders to vote on the Merger Agreement and from consummating the Merger unless and until CommerceHub discloses the material ~~adverse~~information ~~effect~~allegedly omitted from the proxy statement, unspecified damages, and unspecified costs, expenses and attorneys’ fees. CommerceHub denies any liability and believes that it has substantial defenses and that this lawsuit is without merit. However, in order to eliminate the burden, expense and uncertainties resulting from the pending litigation and without admitting any wrongdoing or that these supplemental disclosures are material or required to be made, on ~~our~~May 7, ~~business~~2018, CommerceHub agreed to supplement the disclosures in the proxy statement with additional information concerning certain non-disclosure agreements entered into by various bidders, the prior relationships between CommerceHub’s financial ~~condition~~advisor orwith ~~operating~~respect ~~results~~to the Merger, Evercore Group L.L.C., and GTCR, and CommerceHub’s financial forecasts. Consequently, plaintiff requested to withdraw the motion for preliminary injunction stating that the supplemental disclosures mooted the claims raised in the complaint. The district court granted the request to withdraw and cancelled a previously scheduled hearing on the motion.

Item 1A. Risk Factors

There have been no material changes in our risk factors from those disclosed under the heading “Risk Factors” in our ~~2016~~2017 Annual Report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults on Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

None.

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Item 6. Exhibits

Listed below are the exhibits that are filed as a part of this Report (according to the number assigned to them in Item 601 of Regulation S-K):

ExhibitNumber	Exhibit Description
Ex. 2.1	Agreement and Plan of Merger, dated as of March 5, 2018, by and among Great Dane Parent, LLC, Great Dane Merger Sub, Inc. and CommerceHub, Inc. (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K (File No. 001-37840), as filed on March 9, 2018 (the “8-K”)).
Ex. 10.1	Voting Agreement, dated as of March 5, 2018, by and among Great Dane Parent, LLC, CommerceHub, Inc. and Malone CHUB 2017 Charitable Remainder Unitrust (incorporated by reference to Exhibit 10.1 to the 8-K).
Ex. 31.1	Certification pursuant to Rule 13a-14(a) or 15d-14 under the Securities Exchange Act of 1934.*
Ex. 31.2	Certification pursuant to Rule 13a-14(a) or 15d-14 under the Securities Exchange Act of 1934.*
Ex. 32.1	Certification of Chief Executive Officer pursuant to Title 18, United States Code, Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
Ex. 32.2	Certification of Chief Financial Officer pursuant to Title 18, United States Code, Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
Ex. 101.INS	XBRL Instance Document*
Ex. 101.SCH	XBRL Taxonomy Extension Schema Document*
Ex. 101.CAL	XBRL Taxonomy Calculation Linkbase Document*
Ex. 101.LAB	XBRL Taxonomy Label Linkbase Document*
Ex. 101.PRE	XBRL Taxonomy Presentation Linkbase Document*
Ex. 101.DEF	XBRL Taxonomy Definition Document*

~~_______________________~~______________________

* Filed herewith.

** Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		COMMERCEHUB, INC.
		(Registrant)
Date:	~~November~~May 8, ~~2017~~2018	/ S / FRANCIS POORE
		Francis PoorePresident and Chief Executive Officer (Principal Executive Officer)
Date:	~~November~~May 8, ~~2017~~2018	/ S / ~~MARK~~MICHAEL ~~GREENQUIST~~TRIMARCHI
		Mark GreenquistChief Financial Officer(Principal Financial and Accounting Officer)
		Michael TrimarchiChief Financial Officer, Chief Commercial Officer and Treasurer(Principal Financial and Accounting Officer)

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Filing Compare · CommerceHub, Inc.