8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.   20549

FORM 8-K

Current Report
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report: July 16, 2003

DIGITAL RIVER, INC.

(Exact Name Of Registrant As Specified In Its Charter)

	Delaware	000-24643	41-1901640
	(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
9625 West 76th Street, Suite 150, Eden Prairie, Minnesota   55344
(Address of principal executive offices)  (Zip Code)
(Registrant’s telephone number, including area code): (952) 253-1234

Item 5.  Other Events.

On July 16, 2003, Digital River, Inc., a Delaware corporation (“Digital River”), issued a press release announcing its financial results for the fiscal quarter ended June 30, 2003 and certain other information.  A copy of this press release is attached as Exhibit 99.1 hereto.

On July 16, 2003, Digital River also issued a press release announcing an e-commerce agreement with Macromedia, Inc. A copy of this press release is attached as Exhibit 99.2 hereto.

Exhibit 99.1 contains certain non-GAAP financial measures. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. To supplement our consolidated financial statements presented in accordance with GAAP, Digital River uses non-GAAP measures of net income and earnings per share, which are adjusted from results based on GAAP to exclude certain expenses. We believe that these non-GAAP measures provide useful information to both management and investors by excluding certain expenses that may not be indicative of our core operating results. In addition, because we have historically reported certain non-GAAP results to investors, we believe the inclusion of non-GAAP results provides consistency in our financial reporting. These measures should be considered in addition to results prepared in accordance with GAAP, but are not a substitute for or superior to GAAP results. These non-GAAP measures included in the attached press release have been reconciled to the nearest GAAP measure. As used herein, “GAAP” refers to accounting principles generally accepted in the United States.

Item 7.  Financial Statements and Exhibits.

(c)  Exhibits

99.1.  Press release dated July 16, 2003 containing financial information for Digital River, Inc. for the quarter ended June 30, 2003 and certain other information.

99.2.  Press release dated July 16, 2003 announcing an e-commerce agreement between Digital River, Inc. and Macromedia, Inc.

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SIGNATURE

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 hereunto duly authorized.

	DIGITAL RIVER, INC.
	By:	/s/ Carter D. Hicks
		Name:  Carter D. Hicks
		Title:  Chief Financial Officer
Date:  July 16, 2003

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Exhibit Index

Exhibit No.	Description
99.1	Press release dated July 16, 2003 containing financial information for Digital River, Inc. for the quarter ended June 30, 2003.
99.2	Press release dated July 16, 2003 announcing an e-commerce agreement between Digital River, Inc. and Macromedia, Inc.

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EX-99.1

Exhibit 99.1

Investor Contact:	Media Contact:
Al Galgano	Gerri Dyrek
Vice President of Investor Relations	Senior Public Relations Manager
Digital River, Inc.	Digital River, Inc.
952-253-1234	952-253-1234
investorrelations@digitalriver.com	publicrelations@digitalriver.com

DIGITAL RIVER ANNOUNCES 27 PERCENT YEAR-TO-DATE REVENUE INCREASE IN Q2

Company Records GAAP Earnings Per Share of $0.09

MINNEAPOLIS, MN, July 16, 2003 — Digital River, Inc. (NASDAQ: DRIV), a leading global e-commerce outsource provider, today reported revenue of $22.8 million for the quarter ended June 30, 2003. This represents a year-over-year increase of 18 percent from revenue of $19.3 million in the second quarter of 2002.

On a GAAP basis, net income for the second quarter 2003 was $2.8 million, or $0.09 per share on a dilutive basis, compared to a net loss of $348,000, or $0.01 per basic share in the second quarter of 2002. Net income for the second quarter 2003, prior to the amortization of acquisition-related expenses, was $4.0 million, or $0.13 per share, on a dilutive basis. This compares to net income, on a similar basis, of $1.3 million, or $0.05 per share, in the second quarter of last year.

For the six months ended June 30, 2003, revenue totaled $47.4 million, a 27 percent increase from $37.4 million in the same period last year. On a GAAP basis, through June 30th, net income totaled $6.8 million, or $0.22 per share on a dilutive basis, as compared to a net loss of $3.9 million, or $0.15 per basic share, in the prior year.  For the first six months of this year, net income, prior to the amortization of acquisition-related expenses was $9.3 million, or $0.30 per share on a dilutive basis. This compares to a net loss, on a similar basis, of $678,000, or $0.03 per basic share, for the first six months of 2002.

Segmented Results

The Software Services segment generated $18.7 million in revenue in the second quarter, a nearly 24 percent improvement from revenue of $15.1 million in the second quarter of 2002.  The E-Business Services segment generated $4.1 million in revenue in the second quarter. This performance was relatively flat to revenue of $4.2 million in the second quarter of 2002.

As previously announced, Digital River will report its detailed financial results for the fiscal second quarter after the close of regular market trading on Wednesday, July 23, 2003.  The Company will host a conference call at 4:45 P.M. Eastern Daylight Time (EDT) on July 23, 2003, to discuss its second quarter results and give guidance for the third quarter of 2003.  The call will feature remarks by Joel Ronning, chief executive officer, Carter Hicks, chief financial officer and Jay Kerutis, president of software and digital commerce services.

To access the call, please dial 877-422-0170, or listen to the webcast at http://drhome.digitalriver.com/livehtml/newsite/dr_invest_000.html.  Please go to the investor page to access the call and install any necessary audio software.

About Digital River, Inc.

Digital River, Inc., a global leader in e-commerce outsourcing, builds and manages online businesses for nearly 34,000 companies worldwide. Its comprehensive e-commerce solution and world-class infrastructure are designed to help companies of all sizes quickly maximize online revenues as well as cut the costs and reduce the risks associated with running an e-commerce operation. Digital River’s international e-commerce services include site development and hosting, order management, fraud prevention, site merchandising, reporting and analytics, product fulfillment, e-marketing and multi-lingual customer service. Digital River’s clients include 3M, ACT!, Autodesk, H&R Block, Major League Baseball Advanced Media, Motorola, Novell, Staples.com and Symantec.

Founded in 1994, Digital River is headquartered in Minneapolis with offices throughout the United States and in Europe. For more details about Digital River, visit the corporate Web site at www.digitalriver.com or call 952-253-1234.

Digital River is a registered trademark of Digital River, Inc. All other company and product names are trademarks, registrations or copyrights of their respective owners.

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Digital River, Inc.

Pro Forma Reconciliations

Unaudited, in thousands, except per share amounts

	Three months ended June 30,					Six months ended June 30,
	2003		2002			2003		2002
Pro Forma Financial Reconciliations:
Net earnings (loss) per GAAP	$	2,767	$	(348	)	$	6,789	$	(3,878	)
Add back amortization of acquisition related costs	1,246		1,651			2,467		3,200
Pro Forma earnings	$	4,013	$	1,303		$	9,256	$	(678	)
Pro Forma net earnings per share	$	0.13	$	0.05		$	0.30	$	(0.03	)
Pro Forma weighted average shares outstanding	31,790		27,855			31,101		26,569

EX-99.2

Exhibit 99.2

Investor Contact:	Media Contact:
Al Galgano	Gerri Dyrek
Vice President of Investor Relations	Senior Public Relations Manager
Digital River, Inc.	Digital River, Inc.
952-253-1234	952-253-1234
investorrelations@digitalriver.com	publicrelations@digitalriver.com

DIGITAL RIVER TO LAUNCH NEW ONLINE STORES FOR MACROMEDIA

MINNEAPOLIS — July 16, 2003—Digital River, Inc. (NASDAQ: DRIV), a global leader in e-commerce outsourcing, today announced that it signed an expanded e-commerce agreement with Macromedia. Based on the agreement, Digital River will expand Macromedia’s e-commerce operation by launching new online stores to support Macromedia’s domestic, international and education customers, as well as its training partners. Available later this year, Macromedia’s online stores will be accessible through www.macromedia.com. In addition to hosting and building the sites, Digital River will provide order management, digital product fulfillment, international payment options and fraud prevention.

“Macromedia is committed to delivering a leading commerce experience for our diverse customer base,” said Tom Hale, senior vice president, Macromedia. “Digital River’s e-commerce outsourcing platform and services offer us the breadth and depth we need to address the wide range of purchasing requirements and preferences that exist across our global customer base.”

The new e-commerce sites will be designed to cater to business and consumer audiences. The initiative will include the launch of an e-commerce site with single-user and volume-license pricing for K-12 educational institutions, an international consumer online store featuring localized currencies, and an e-commerce site with secure logins for Macromedia’s training partners. The sites will offer convenient 24X7 channels for purchasing the company’s design and development software, services, and training and educational materials.

“Macromedia’s plan to leverage the full power and flexibility of its online channels to expand its market presence, streamline its business processes and maximize its revenue opportunities is an excellent path to online success,” said Jay Kerutis, Digital River’s president of software and digital commerce services. “We are excited to expand Macromedia’s e-commerce operations using our full suite of e-commerce services to create added value for its customers as well as the company.”

About Digital River, Inc.

Digital River, Inc., a global leader in e-commerce outsourcing, builds and manages online businesses for nearly 34,000 companies worldwide. Its comprehensive e-commerce solution and world-class infrastructure are designed to help companies of all sizes quickly maximize online revenues as well as cut the costs and reduce the risks associated with running an e-commerce operation. Digital River’s international e-commerce services include site development and hosting, order management, fraud prevention, site merchandising, reporting and analytics, product fulfillment, e-marketing and multi-lingual customer service. Digital River’s clients include Symantec, Motorola, 3M, Major League Baseball Advanced Media, H&R Block, Novell, Autodesk, ACT! and Staples.com.

Founded in 1994, Digital River is headquartered in Minneapolis with offices throughout the United States and in Europe. For more details about Digital River, visit the corporate Web site at www.digitalriver.com or call 952-253-1234.

Digital River is a registered trademark of Digital River, Inc. All other company and product names are trademarks, registrations or copyrights of their respective owners.

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