News

ServiceSource Reports First Quarter 2019 Financial Results

Total Revenue of $55.5 million

GAAP Net Loss of $5.7 million; Non-GAAP Net Loss of $1.1 million

Adjusted EBITDA of $1.0 million

DENVER, May 8, 2019 – ServiceSource (NASDAQ: SREV), the digital customer journey experience company, today announced financial results for the three months ended March 31, 2019.

“We made solid progress on multiple fronts in the first quarter, with disciplined execution on our digital transformation strategy which is setting the foundation to deliver on our long-term roadmap,” said Gary B. Moore, Chairman and CEO of ServiceSource. “Our larger installed base clients grew with us year-over-year, we had a healthy level of renewals and new business wins – including an eight-figure expansion and a multi-million dollar new logo win – and we were able to exceed our expectations for profitability and cashflow while also making meaningful and required growth-oriented investments throughout the business.”

Key Financial Results – First Quarter 2019

  • GAAP revenue was $55.5 million, compared with $58.6 million reported for Q1 2018.
  • GAAP net loss was $5.7 million or $0.06 per diluted share, compared with GAAP net loss of $11.7 million or $0.13 per diluted share reported for Q1 2018.
  • Non-GAAP net loss was $1.1 million or $0.01 per diluted share, compared with non-GAAP net loss of $0.5 million or $0.01 per diluted share reported for Q1 2018.
  • Adjusted EBITDA was $1.0 million, compared with $1.6 million reported for Q1 2018.
  • Ended the quarter with $27.1 million of cash and cash equivalents and restricted cash and no borrowings under the Company’s $40.0 million revolving line of credit.

A reconciliation of GAAP to non-GAAP financial measures is provided following the Condensed Consolidated Financial Statement tables contained within this press release.

Key Business Highlights – First Quarter 2019

  • Expanded revenue with seven of the top 10 clients in Q1 2019, with cumulative trailing twelve month revenue growth of 6.9% across the top 10.
  • Successfully renewed and extended more than 90% of the value that was up for renewal during the quarter.
  • Won multiple new lines of business with a global leader in the cloud infrastructure-as-a-service market, representing in excess of $10 million of expected annualized revenue once fully ramped for a top five client.
  • Signed a three-year, multi-million dollar new logo win for a leading global information services company.
  • Realigned and rationalized approximately 200 roles to create internal investment capacity for higher ROI initiatives and activities throughout the year.

“We closed Q1 with a debt-free balance sheet, a healthy cash profile, and strong alignment throughout the organization on the actions that we expect to drive shareholder value,” said Richard G. Walker, CFO of ServiceSource. “While we see encouraging indicators that we are on the right path, our teams remain vigilant and focused on a broad set of initiatives that underpin our transformation objectives over a multi-quarter horizon. Given our performance in Q1, our current visibility into the balance of the year, and the targeted platform, data and people investments we will continue to make, we affirm our full-year 2019 expectation of approximately breakeven Adjusted EBITDA on a range of approximately 3-5% lower revenue year-over-year.”

Quarterly Conference Call

ServiceSource will discuss its first quarter 2019 results today via teleconference at 4:30 p.m. Eastern Time. To access the call within the U.S., please dial (877) 293-5486, or outside the U.S. (914) 495-8592, at least five minutes prior to the start time. Conference ID number: 2949158. In addition, a live webcast of the call will also be available on the Investor Relations section of the ServiceSource website under Events and Presentations. A replay of the webcast will also be available on the Company’s website at http://ir.servicesource.com.

Forward-Looking Statements

This press release contains forward-looking statements, including statements regarding our expectations for financial and operational performance, whether our digital transformation strategy will produce anticipated benefits, and whether our improved execution and emerging capabilities will translate into desired results. These forward-looking statements are based on our current assumptions and beliefs, and involve risks and uncertainties that could cause our results to differ materially from our forward-looking statements. Those risks and uncertainties include: a decline in client renewals, the loss of one or more of our key clients or the contraction in our revenue from one or more of our key clients, in each case resulting in churn, or our clients not expanding their relationships with us; the risk of problems implementing our technologies or that our technologies will not meet client expectations; that the market for our solution is underdeveloped and may not grow; errors in estimates as to the renewal rate improvements and/or service revenue we can generate for our clients; changes in market conditions that impact our ability to sell our solutions and/or generate service revenue on our clients’ behalf; the possibility that our estimates of service revenue, contract value, bookings, and other metrics may prove inaccurate; our ability to keep customer data and other confidential information secure; our ability to adapt our solution to changes in the market or new competition; problems encountered by our clients in their business that may cause them to cancel or reduce their business with us; our ability to achieve our expected benefits from international expansion; economic or other adverse events or conditions affecting the technology industry; our ability to protect our intellectual property rights; the risk of claims that our offerings infringe the intellectual property rights of others; and other risks and uncertainties described more fully in our periodic reports filed with the Securities and Exchange Commission, which can be obtained online at the Commission’s website at http://www.sec.gov. All forward-looking statements in this press release are based on information currently available to us, and except as may be legally required we assume no obligation to update these forward-looking statements.

About ServiceSource

ServiceSource International, Inc. (NASDAQ: SREV) brings the world’s greatest brands closer to their customers through digitally-enabled solutions and data-driven insights that personalize and power the moments that matter. Backed by 20 years of experience, an industry-leading technology platform, a robust global footprint and a powerful suite of solutions that enhance every touchpoint along the Customer Journey Experience (CJX), we deliver impactful revenue growth for global market leaders. Operating out of eight countries with more than 3,000 sales delivery professionals speaking 45 languages, ServiceSource drives billions of dollars in client value annually. To learn more about how we help our clients more effectively find, convert, nurture, grow and retain their customers, visit www.servicesource.com.