ServiceSource Reports First Quarter 2021 Financial Results
Total Revenue of $45.0 million
GAAP Net Loss of $8.8 million; Non-GAAP Net Loss of $2.1 million
Adjusted EBITDA of negative $0.2 million
DENVER–(BUSINESS WIRE)–ServiceSource (NASDAQ: SREV), the customer journey experience company, today announced financial results for the three months ended March 31, 2021.
“The pandemic has reminded everyone of the value of personal connection and the importance of relationships that add value to our daily lives. Against this backdrop, we have strengthened ties with our clients and deepened their bonds with their customers. This alignment of market need with our business strategy positions us well to deliver on our objectives and we are pleased with our results through the first quarter of the year,†said Gary B. Moore, ServiceSource’s chairman and chief executive officer. “We have kept our clients present, relevant, and compelling with their customers through the power of human touch and the efficiency of digital engagement. And although uncertainty remains around the size and pace of the economic recovery, we have strengthened our business model and enhanced the value of our solutions to allow us to build upon our position as a strategic partner to leading brands across the world.â€
Key Financial Results – First Quarter 2021
- GAAP revenue was $45.0 million, compared with $50.1 million reported for Q1 2020.
- GAAP net loss was $8.8 million or $0.09 per diluted share, compared with GAAP net loss of $5.9 million or $0.06 per diluted share reported for Q1 2020.
- Non-GAAP net loss was $2.1 million or $0.02 per diluted share, compared with non-GAAP net loss of $1.8 million or $0.02 per diluted share reported for Q1 2020.
- Adjusted EBITDA, a non-GAAP financial measure, was negative $0.2 million, compared with positive $0.1 million reported for Q1 2020.
- Ended the quarter with $36.5 million of cash and cash equivalents and restricted cash and $15.0 million of 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 2021
- Secured a three-year global contract renewal with one of the Company’s largest software and cloud clients, representing an estimated total contract value in excess of $90 million over the expected term of the agreement.
- Successfully renewed or extended more than 95% of the contract value that was up for renewal during the quarter.
- Accelerated our go-to-market momentum with a 30% year-over-year increase in new bookings on a trailing twelve-month basis.
- Signed our first new client logo win of the year to support the accelerated transformation to a subscription-based renewals model for a leading data insights provider.
- Grew revenue with five of our top 10 clients on a trailing twelve-month basis.
“We continued to improve the fundamentals of the Company and had a good start to the year,†commented Chad Lyne, executive vice president and chief financial officer of ServiceSource. “Through our early visibility into the market dynamics and challenges our clients were facing, we were able to adapt and position the business accordingly in response to the anticipated revenue contraction. We are increasingly encouraged by our team’s stronger execution to win new contracts, renew existing scopes of work, and enhance our value with our clients. Although it’s early and more work remains to be done, we are confident our focus and efforts will allow us to deliver on our expectation to return to growth in the second half of the year.â€
Quarterly Conference Call
ServiceSource will discuss its first quarter 2021 results on April 29, 2021, via teleconference at 9:30 a.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: 6571544. 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. The related slide presentation and 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 financial management and our expectation to continue to invest in our strategic priorities and digital transformation initiatives. 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, the contraction in our revenue from one or more of our key clients – either in the ordinary course of business or as a result of macroeconomic conditions resulting from the COVID-19 pandemic – in each case resulting in churn, or our clients not expanding their relationships with us; economic or other adverse events or conditions affecting the technology industry, including as a result of the COVID-19 pandemic; 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) is a global outsourced go-to-market services provider that accelerates B2B digital sales and customer success transformation. Our expert sales professionals, data-powered insights and proven methodologies scale and reimagine customer journey experiences (CJX
) into profitable business outcomes. Backed by more than 20 years of experience, ServiceSource drives billions of dollars in client value annually, conducting commerce in 45 languages and 175 countries. To learn more about how we design, develop and manage CJX solutions that transform the agility, speed, efficiency and value of our clients’ growth initiatives, visit www.servicesource.com.
Trademarks
ServiceSource®, and any ServiceSource product or service names or logos above are trademarks of ServiceSource International, Inc. All other trademarks used herein belong to their respective owners.
Connect with ServiceSource:
http://www.facebook.com/ServiceSource
http://twitter.com/servicesource
http://www.linkedin.com/company/servicesource
http://www.youtube.com/user/ServiceSourceMKTG
|
ServiceSource International, Inc. |
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|
Condensed Consolidated Statements of Operations |
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|
(in thousands, except per share amounts) |
|||||||||
|
(unaudited) |
|||||||||
|
 |
 |
||||||||
|
 |
For the Three Months Ended March 31, |
||||||||
|
 |
2021 |
 |
 |
2020 |
 |
||||
|
Net revenue |
$ |
45,023 |
 |
 |
 |
$ |
50,114 |
 |
 |
|
Cost of revenue(1) |
34,067 |
 |
 |
 |
35,560 |
 |
 |
||
|
Gross profit |
10,956 |
 |
 |
 |
14,554 |
 |
 |
||
|
Operating expenses: |
 |
 |
 |
||||||
|
Sales and marketing(1) |
4,030 |
 |
 |
 |
7,268 |
 |
 |
||
|
Research and development(1) |
1,160 |
 |
 |
 |
1,181 |
 |
 |
||
|
General and administrative(1) |
12,190 |
 |
 |
 |
10,688 |
 |
 |
||
|
Restructuring and other related costs |
920 |
 |
 |
 |
467 |
 |
 |
||
|
Total operating expenses |
18,300 |
 |
 |
 |
19,604 |
 |
 |
||
|
Loss from operations |
(7,344 |
) |
 |
 |
(5,050 |
) |
 |
||
|
Interest and other expense, net |
(1,160 |
) |
 |
 |
(874 |
) |
 |
||
|
Loss before provision for income taxes |
(8,504 |
) |
 |
 |
(5,924 |
) |
 |
||
|
Provision for income tax expense |
(331 |
) |
 |
 |
(18 |
) |
 |
||
|
Net loss |
$ |
(8,835 |
) |
 |
 |
$ |
(5,942 |
) |
 |
|
Net loss per share, basic and diluted |
$ |
(0.09 |
) |
 |
 |
$ |
(0.06 |
) |
 |
|
Weighted-average common shares outstanding, basic and diluted |
97,234 |
 |
 |
 |
94,968 |
 |
 |
||
|
 |
 |
 |
 |
||||||
|
(1) Reported amounts include stock-based compensation expense as follows: |
 |
 |
|||||||
|
 |
For the Three Months Ended March 31, |
||||||||
|
 |
2021 |
 |
 |
2020 |
 |
||||
|
Cost of revenue |
$ |
130 |
 |
 |
 |
$ |
45 |
 |
 |
|
Sales and marketing |
191 |
 |
 |
 |
377 |
 |
 |
||
|
Research and development |
15 |
 |
 |
 |
18 |
 |
 |
||
|
General and administrative |
2,139 |
 |
 |
 |
605 |
 |
 |
||
|
Total stock-based compensation |
$ |
2,475 |
 |
 |
 |
$ |
1,045 |
 |
 |
|
ServiceSource International, Inc. |
||||||||||||||||||||||||
|
Condensed Consolidated Balance Sheets |
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|
(in thousands) |
||||||||||||||||||||||||
|
(unaudited) |
||||||||||||||||||||||||
|
 |
 |
|||||||||||||||||||||||
|
 |
March 31, 2021 |
 |
December 31, 2020 |
|||||||||||||||||||||
|
Assets |
 |
 |
 |
|||||||||||||||||||||
|
Current assets: |
 |
 |
 |
|||||||||||||||||||||
|
Cash and cash equivalents |
$ |
34,171 |
 |
 |
 |
$ |
34,006 |
 |
 |
|||||||||||||||
|
Accounts receivable, net |
34,578 |
 |
 |
 |
38,890 |
 |
 |
|||||||||||||||||
|
Prepaid expenses and other |
10,876 |
 |
 |
 |
9,275 |
 |
 |
|||||||||||||||||
|
Total current assets |
79,625 |
 |
 |
 |
82,171 |
 |
 |
|||||||||||||||||
|
 |
 |
 |
 |
|||||||||||||||||||||
|
Property and equipment, net |
26,998 |
 |
 |
 |
29,948 |
 |
 |
|||||||||||||||||
|
ROU assets |
27,515 |
 |
 |
 |
29,798 |
 |
 |
|||||||||||||||||
|
Contract acquisition costs |
757 |
 |
 |
 |
872 |
 |
 |
|||||||||||||||||
|
Goodwill |
6,334 |
 |
 |
 |
6,334 |
 |
 |
|||||||||||||||||
|
Other assets |
3,580 |
 |
 |
 |
3,490 |
 |
 |
|||||||||||||||||
|
Total assets |
$ |
144,809 |
 |
 |
 |
$ |
152,613 |
 |
 |
|||||||||||||||
|
 |
 |
 |
 |
|||||||||||||||||||||
|
Liabilities and Stockholders’ Equity |
 |
 |
 |
|||||||||||||||||||||
|
Current liabilities: |
 |
 |
 |
|||||||||||||||||||||
|
Accounts payable |
$ |
5,151 |
 |
 |
 |
$ |
1,204 |
 |
 |
|||||||||||||||
|
Accrued expenses |
2,728 |
 |
 |
 |
3,217 |
 |
 |
|||||||||||||||||
|
Accrued compensation and benefits |
15,313 |
 |
 |
 |
18,342 |
 |
 |
|||||||||||||||||
|
Revolver |
15,000 |
 |
 |
 |
15,000 |
 |
 |
|||||||||||||||||
|
Operating lease liabilities |
10,365 |
 |
 |
 |
10,797 |
 |
 |
|||||||||||||||||
|
Other current liabilities |
827 |
 |
 |
 |
1,209 |
 |
 |
|||||||||||||||||
|
Total current liabilities |
49,384 |
 |
 |
 |
49,769 |
 |
 |
|||||||||||||||||
|
 |
 |
 |
 |
|||||||||||||||||||||
|
Operating lease liabilities, net of current portion |
23,739 |
 |
 |
 |
25,975 |
 |
 |
|||||||||||||||||
|
Other long-term liabilities |
2,302 |
 |
 |
 |
1,593 |
 |
 |
|||||||||||||||||
|
Total liabilities |
75,425 |
 |
 |
 |
77,337 |
 |
 |
|||||||||||||||||
|
 |
 |
 |
 |
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|
Stockholders’ equity: |
 |
 |
 |
|||||||||||||||||||||
|
Preferred stock |
— |
 |
 |
 |
— |
 |
 |
|||||||||||||||||
|
Common stock |
10 |
 |
 |
 |
10 |
 |
 |
|||||||||||||||||
|
Treasury stock |
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