Financial Results Solid Performance Against Guidance Strong Traction with Inside Sales Reaffirms Full Year Guidance
DENVER, August 7, 2017 - ServiceSource® (Nasdaq: SREV), a global leader in outsourced customer success and revenue growth solutions, today announced financial results for the second quarter ended June 30, 2017.
“In Q2, ServiceSource delivered a solid quarter with improved execution throughout the business,” said Christopher M. Carrington, CEO of ServiceSource. “On the financial front, all key metrics were in or above our guidance. Operationally, our teams around the world performed well, delivering improved and more consistent results across our client base. And on the sales side, we had an impressive quarter, winning four new logos and seeing strong market uptake of our emerging capabilities and solutions around inside sales and customer success.”
GAAP revenue was $58.3 million in the second quarter, representing a 6.0% decrease from the $62.0 million delivered in the same period in the prior year.
For the second quarter of fiscal year 2017, GAAP net loss in the quarter was $13.1 million, or $0.15 per share, compared with GAAP net loss of $5.2 million, or $0.06 per share, for the same period last year. Non-GAAP net income in the quarter was $1.5 million compared with Non-GAAP net income of $1.1 million for the same period last year. Non-GAAP net income was $0.02 per basic and diluted share, compared with non-GAAP net income of $0.01 per basic and diluted share for the same period last year. Adjusted EBITDA was income of $4.7 million, compared with income of $2.9 million for the same period last year.
A reconciliation of GAAP to non-GAAP financial measures has been provided following the financial statement tables included in this press release.
For the third quarter of fiscal 2017, ServiceSource is providing the following guidance:
- Revenue of $55 million to $58 million
- GAAP gross margin of 27.9% to 31.3%; non-GAAP gross margin of 33.5% to 36.5%
- GAAP operating expenses of approximately $22 million to $23 million; non-GAAP operating expenses of $18 million to $19 million
- GAAP net loss of $8.4 million to $10.4 million; non-GAAP net income of breakeven to a profit of $2 million
For the fiscal 2017, ServiceSource is reaffirming its guidance:
- Revenue of $238 million to $243 million
- GAAP gross margin of 30% to 33%; non-GAAP gross margin of 36.5% to 38.5%
- GAAP operating expenses of $92 million to $96 million; non-GAAP operating expenses of $80 million to $84 million
- GAAP net loss of $35.2 million to $38.2 million; non-GAAP net income of $5 million to $7 million
- Adjusted EBITDA of $15 to $18 million
Please see the second quarter presentation on the Events and Presentations section of the Investor Relations web site (http://ir.servicesource.com/events) for a reconciliation between GAAP and non-GAAP measures in our guidance.
Quarterly Conference Call
ServiceSource will discuss its second quarter 2017 results and financial guidance today via teleconference at 1:30 p.m. Pacific 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: 51270070. In addition, a live webcast of the call will also be available on the Investor Relations section of the ServiceSource web site under Events & Presentations. A replay of the webcast will also be available on the Company's website at http://ir.servicesource.com.
This press release contains forward-looking statements, including statements regarding our expectations for financial and operational performance, whether our go-forward model 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 customer 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 customers; changes in market conditions that impact our ability to sell our solutions and/or generate service revenue on our customers' behalf; the possibility that our estimates of service revenue, opportunity under management, 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.
ServiceSource (NASDAQ: SREV) is a global leader in providing outsourced, performance-based revenue growth and customer success outcomes. ServiceSource’s Revenue-as-a-Service platform is designed to measurably accelerate customer ROI by helping companies to more efficiently and effectively find, convert, grow and retain their B2B customer relationships. Trusted by more than 65 global market leaders in the cloud/XaaS, software, technology hardware, healthcare & life sciences and industrial sectors, ServiceSource sells, manages or renews $9+ billion of revenue annually on behalf of its clients. By leveraging a robust technology suite, predictive data models and more than 3,000 revenue delivery professionals, only ServiceSource brings to market over 15 years of expertise and the ability to drive recurring revenue growth in 35 languages to more than 170 countries. To learn more, visit http://www.servicesource.com.