ServiceSource Reports Third Quarter 2016 Financial Results

Revenue growth increases to 5% year over year Gross margins increase by almost 6 percentage points, year over year Highest adjusted EBITDA in seven quarters

SAN FRANCISCO, November 8, 2016 - ServiceSource® (Nasdaq: SREV), the global leader in customer success and revenue lifecycle management solutions, today announced financial results for the third quarter ended September 30, 2016.

“In the third quarter we further accelerated the trajectory of the business, with sustained improvements across all key financial metrics,” said Christopher M. Carrington, CEO of ServiceSource. “On a non-GAAP basis, year-over-year revenue growth increased to 5.0%, gross profit margins expanded nearly 600 basis points, and adjusted EBITDA improved materially to $4.1 million. Thanks to the great work of our teams around the world, our client relationships are stronger than ever. We continue to take on expanded scope across our accounts that makes us an even more mission-critical partner delivering the customer and revenue growth outcomes they need in the emerging outcome economy.”

GAAP revenue was $62.5 million in the third quarter, representing a 5.2% increase from the $59.4 million delivered in same the period in the prior year. Non-GAAP revenue was $62.5 million, reflecting a 5.0% increase from the same period in the prior year.

For the third quarter of fiscal year 2016, GAAP net loss in the quarter was $9.3 million, or $0.11 per share, compared with GAAP net loss of $10.9 million, or $0.13 per share, for the same period last year. Non-GAAP net income in the quarter was $1.3 million compared with Non-GAAP net loss of $2.1 million for the same period last year. Non-GAAP net income was $0.02 per basic and diluted share, compared with non-GAAP net loss of $0.02 per basic and diluted share for the same period last year. Adjusted EBITDA was $4.1 million, compared with a loss of $1.3 million for the same period last year.

A reconciliation of GAAP to non-GAAP financial measures has been provided in the financial statement tables included in this press release.

Quarterly Conference Call

ServiceSource will discuss its third quarter 2016 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: 98687907. 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.

Forward-Looking Statements

This press release contains forward-looking statements, including statements regarding our expectations for financial and operational performance. 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 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; our ability to achieve our expected benefits from international expansion; 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 and registration statements 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 we assume no obligation to update these forward-looking statements.

About ServiceSource

ServiceSource (NASDAQ: SREV) provides the world's leading B2B companies with expert, technology-enabled solutions and best-practice processes proven to grow and retain revenue from existing customers. With a holistic approach to the entire revenue lifecycle, ServiceSource solutions help companies drive customer adoption, expansion and renewal. Only ServiceSource brings to market more than 17 years of exclusive focus on customer success and revenue growth, global deployments across 40 languages and 200 countries, and a powerful, purpose-built Revenue Lifecycle Management technology platform. For more information, go to www.servicesource.com.