ServiceSource (SREV) Reports In-Line Q4 EPS, Revenues Beat

ServiceSource (NASDAQ: SREV) reported Q4 EPS of $0.02, in-line with the analyst estimate of $0.02. Revenue for the quarter came in at $51.1 million versus the consensus estimate of $43.85 million.

Key Financial Results – Fourth Quarter 2020

• GAAP revenue was $51.1 million, compared with $54.9 million reported for Q4 2019.
• GAAP net loss was $1.7 million or $0.02 per diluted share, compared with GAAP net loss of $2.5 million or $0.03 per diluted share reported for Q4 2019.
• Non-GAAP net income was $2.3 million or $0.02 per diluted share, compared with non-GAAP net income of $0.6 million or $0.01 per diluted share reported for Q4 2019.
• Adjusted EBITDA, a non-GAAP financial measure, was $4.8 million, compared with $2.7 million reported for Q4 2019.

“Throughout the disruption and uncertainty of 2020, market-leading technology companies relied on ServiceSource to preserve the value of their existing customer relationships and enhance the return on their go-to-market investments. Customer success and renewals became board-level priorities, while digitally-enabled, virtual selling became the dominant form of B2B customer acquisition and engagement,” said Gary B. Moore, ServiceSource’s chairman and chief executive officer. “In the fourth quarter and over the course of the year, we delivered for our clients through a prolonged period of constrained technology industry spend in nearly every sector. Against this backdrop, we grew closer to the world-class brands we serve and improved the health of our partnerships. We fully committed to a virtual first operating model that will define how and where we deliver our solutions going forward. And importantly, we demonstrated the strength and resilience of our people and our business with solid operating and financial results.”

“We executed well throughout 2020 and finished the year strong,” commented Chad Lyne, executive vice president and chief financial officer of ServiceSource. “Despite a challenging operating environment and some client-specific headwinds from the global pandemic, we expanded non-GAAP gross profit margins by 130 basis points and generated higher Adjusted EBITDA year-over-year. The investments we made in our client relationships, go-to-market teams, technology infrastructure, and virtual first operating model position us well for success in a market with attractive growth potential. With a solid balance sheet, ample liquidity, disciplined financial management, and strong operating fundamentals, we are confident in our ability to execute our long-term strategy to build value for our stockholders.”

Business Outlook for Full-Year 2021

There are encouraging signs that the pace of economic activity and global technology spend will accelerate over the course of 2021. However, there remains a high degree of uncertainty regarding the timing of the recovery and how it may impact ServiceSource’s clients, as well as the mid-market and small-to-midsize businesses that ServiceSource supports on behalf of its clients. Due to these factors, the Company will not be issuing guidance for fiscal 2021 at this time. Management will provide forward-looking contextual commentary during the earnings call and webcast that will accompany this release.

For earnings history and earnings-related data on ServiceSource (SREV) click here.

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