Quarterly Conference Call
ServiceSource will discuss its quarterly results and provide 2013 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. A live webcast of the call will also be available at http://ir.servicesource.com/events.cfm under the Events & Presentations menu. A replay of the webcast will also be available on the Company's website at http://ir.servicesource.com.
About ServiceSource International, Inc.
ServiceSource is the global leader in recurring revenue management. The world's most successful companies rely on us to maximize subscription, maintenance and support revenue, improve customer retention and increase business predictability and insight. ServiceSource delivers results with Renew OnDemand, the world's only cloud application built specifically to manage and grow recurring revenue, which can be combined with our industry-leading services.
With over a decade of experience focused exclusively in growing recurring revenue, our services and applications are based on proven best practices and global benchmarks. The company is headquartered in San Francisco, and has over $8 billion under management for customers in more than 150 countries and 40 languages.
ServiceSource, Renew OnDemand 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.
For more information on ServiceSource, visit http://www.servicesource.com. To connect with ServiceSource, visit us on Twitter, Facebook, LinkedIn and YouTube.
ServiceSource International, Inc. Condensed Consolidated Statements of Operations (In thousands, except per share amounts) (Unaudited) Three Months Ended Years Ended December 31, December 31, -------------------- -------------------- 2012 2011 2012 2011 --------- --------- --------- ---------Net revenue $ 67,345 $ 60,779 $ 243,703 $ 205,501Cost of revenue (1) 35,319 31,007 136,321 113,406 --------- --------- --------- ---------Gross profit 32,026 29,772 107,382 92,095 --------- --------- --------- ---------Operating expenses Sales and marketing (1) 15,767 13,856 56,925 48,520 Research and development (1) 5,960 3,423 19,255 13,073 General and administrative (1) 10,496 8,955 41,135 33,647 --------- --------- --------- ---------Total operating expenses 32,223 26,234 117,315 95,240 --------- --------- --------- ---------Loss from operations (197) 3,538 (9,933) (3,145)Interest expense (56) (51) (236) (503)Other income (expense), net (414) (65) (538) (624) --------- --------- --------- ---------Loss before income taxes (667) 3,422 (10,707) (4,272)Income tax provision (benefit) 518 1,769 32,107 (19,383) --------- --------- --------- ---------Net income (loss) $ (1,185) $ 1,653 $ (42,814) $ 15,111 ========= ========= ========= =========Net income (loss) per common share: Basic $ (0.02) $ 0.02 $ (0.58) $ 0.23 ========= ========= ========= ========= Diluted $ (0.02) $ 0.02 $ (0.58) $ 0.21 ========= ========= ========= =========Weighted-average shares used in computing net income (loss) per common share: Basic 75,090 71,602 74,270 66,656 ========= ========= ========= ========= Diluted 75,090 77,823 74,270 73,585 ========= ========= ========= =========(1) Includes stock-based compensation expense as follows: Three Months Ended Years Ended December 31, December 31, -------------------- -------------------- 2012 2011 2012 2011 --------- --------- --------- ---------Cost of revenue $ 722 $ 591 $ 2,772 $ 1,877Sales and marketing 2,310 1,475 8,146 4,456Research and development 425 303 1,880 1,167General and administrative 2,158 1,126 8,077 4,099 --------- --------- --------- ---------Total stock-based compensation $ 5,615 $ 3,495 $ 20,875 $ 11,599 --------- --------- --------- --------- ServiceSource International, Inc. Condensed Consolidated Balance Sheets (In thousands) (Unaudited) December 31, 2012 2011 --------- ---------AssetsCurrent assets: Cash and cash equivalents $ 76,568 $ 65,983 Short-term investments 32,874 42,882 Accounts receivable, net 65,238 54,095 Current portion of deferred income taxes 389 3,526 Prepaid expenses and other 5,178 7,945 --------- ---------Total current assets 180,247 174,431Property and equipment, net 34,513 26,840Deferred income taxes, net of current portion 2,321 30,238Other assets, net 1,057 1,118Goodwill 6,334 6,334 --------- ---------Total assets $ 224,472 $ 238,961 ========= =========Liabilities and Stockholders' EquityCurrent liabilities: Accounts payable $ 3,293 $ 8,617 Accrued taxes 1,056 924 Accrued compensation and benefits 15,738 21,749 Other accrued liabilities (including deferred revenue of $2,295 and $1,132 at December 31, 2012 and December 31, 2011, respectively) 10,403 7,639 Current portion of capital lease obligations 326 706 --------- ---------Total current liabilities 30,816 39,635Long-term liabilities 6,729 2,310 --------- ---------Total liabilities 37,545 41,945 --------- ---------Stockholders' equity: Common stock 8 7 Treasury stock (441) (441) Additional paid-in capital 210,650 177,796 Retained earnings (accumulated deficit) (23,398) 19,416 Accumulated other comprehensive income 108 238 --------- ---------Total stockholders' equity 186,927 197,016 --------- ---------Total liabilities and stockholders' equity $ 224,472 $ 238,961 --------- --------- ServiceSource International, Inc. Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Years Ended December 31, -------------------- 2012 2011 --------- ---------Cash flows from operating activitiesNet income (loss) $ (42,814) $ 15,111Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation and amortization 10,014 9,372 Loss on disposal of fixed assets - 46 Amortization of deferred financing costs 147 351 Accretion on premium on short-term investments 577 276 Deferred income taxes 31,682 (19,259) Stock-based compensation 20,875 11,599 Tax benefit from stock-based compensation (1,488) (2,835)Changes in operating assets and liabilities: Accounts receivable (10,714) (4,972) Prepaid expenses and other 4,067 (3,164) Accounts payable (2,477) 2,235 Accrued taxes (802) 2,064 Accrued compensation and benefits (5,290) 6,617 Accrued payables to customers - (30,640)* Other accrued liabilities 6,859 1,968 --------- ---------Net cash provided by (used in) operating activities 10,636 (11,231) --------- ---------Cash flows from investing activitiesAcquisition of property and equipment (19,986) (14,050)Purchases of short-term investments (64,000) (53,795)Sales of short-term investments 52,050 2,113Maturities of short-term investments 21,415 8,190 --------- ---------Net cash used in investing activities (10,521) (57,542) --------- ---------Cash flows from financing activitiesNet proceeds from issuance of common stock in initial public offering and follow-on offering - 110,753Proceeds from revolving credit facility - 23,424Repayment of revolving credit facility - (23,424)Repayments of long-term debt and capital leases (725) (16,252)Payments of deferred debt issuance costs (141) (200)Proceeds from common stock issuances 10,387 15,045Tax benefit from stock-based compensation 1,488 2,835 --------- ---------Net cash provided by financing activities 11,009 112,181 --------- ---------Net increase in cash and cash equivalents 11,124 43,408Effect of exchange rate changes on cash and cash equivalents (539) (77)Cash and cash equivalents at beginning of period 65,983 22,652 --------- ---------Cash and cash equivalents at end of period $ 76,568 $ 65,983 ========= =========* Activity in 2011 resulted from $18.1 million in payments to Oracle/Sun and the related settlement of accrued payables owed to Oracle/Sun and amounts owed to the Company by Oracle/Sun.
