EXHIBIT 99.1
ServiceSource Reports Second Quarter 2011 Financial Results
- Reports record revenue in Q2 2011 of $48.5 million, up 28% from Q2 2010
- Adjusted EBITDA of $2.8 million, net loss of $0.02 per share, and non-GAAP net income of $0.01 per share
- Provides full-year 2011 revenue guidance up 25% over 2010
- Continues strong momentum expanding into adjacent vertical markets and delivering results for customers
SAN FRANCISCO, July 25, 2011 (GLOBE NEWSWIRE) -- ServiceSource (Nasdaq:SREV), a global leader in Service Revenue Management, today announced financial results for the quarter ended June 30, 2011.
"We delivered strong performance in the second quarter as a result of our relentless focus on driving results for our customers, advances in our cloud-based solutions and investments in sales and marketing designed to increase brand awareness and market demand," said Mike Smerklo, Chairman and CEO of ServiceSource. "Given the outstanding execution of the team around the globe, we posted 28% revenue growth over the second quarter of 2010, expanded our technology footprint and announced multiple new brand-name customers and engagements."
Revenue was $48.5 million in the second quarter of 2011, an increase of 28% compared to $38.0 million in the second quarter of 2010. Revenue growth was particularly strong in international regions, growing 220% in Asia Pacific and Japan and 44% in EMEA compared to the second quarter of 2010.
Net loss for the second quarter of 2011 was $1.1 million, or $0.02 per share, compared to net income of $1.5 million, or $0.03 per share, in the second quarter of 2010.
Non-GAAP net income for the second quarter of 2011 was $0.6 million, or $0.01 per diluted share. This compares to non-GAAP net income of $2.9 million in Q2 2010, or $0.05 per diluted share.
Adjusted EBITDA for the second quarter of 2011 was $2.8 million, compared to $6.0 million for the second quarter of 2010.
Adjusted EBITDA and non-GAAP net income are defined and reconciled to our GAAP net loss below.
"We continue to build momentum and gain greater visibility in our business, delivering strong top and bottom line results ahead of our prior guidance for the second quarter," said David Oppenheimer, Chief Financial Officer of ServiceSource. "We are particularly pleased to raise our revenue guidance for the full year, as it represents strong growth over 2010, which was a great year for our company."
Business Highlights:
- The company saw continued strong momentum landing new brand-name customers and expanding with existing customers. Examples of new customers in the quarter include first-time relationships with Siemens Enterprise Communications and FICO, as well as a new global enterprise relationship with a leading communications solutions company. In addition, ServiceSource signed multiple expansion agreements with existing customers, including Avaya and Intergraph.
- ServiceSource announced several proof points of successful relationships in markets outside of the traditional hardware and software space, such as a new enterprise engagement with Xactly, an emerging sales compensation management company in the SaaS industry, an expansion in North America with a leader in the industrial/HVAC efficiency market, and a 44 percentage point improvement in renewal rates for Roche in the healthcare technology vertical.
- ServiceSource also announced its Service Revenue Performance Suite™, an end-to-end suite of applications purpose-built for service revenue management and delivered via the cloud, designed to enable customers to drive more recurring revenue and gain better global visibility into their service renewals business.
- ServiceSource announced the expansion of its relationship with existing customer Riverbed Technology, the IT Performance Company. Building on successful deployments of the ServiceSource solution in EMEA and APJ, Riverbed selected the Service Revenue Performance Suite of cloud applications to support its renewals sales team in North America and to enable a consistent technology platform globally for managing recurring maintenance and support revenue.
Business Outlook
The Company provided the following commentary on its expected business outlook:
- Third quarter 2011: The Company forecasts revenue for the third quarter of 2011 to be in the range of $45 million to $46 million, adjusted EBITDA of approximately $0.5 million to $1.0 million, net loss of $4.5 million to $5.0 million, and non-GAAP net income per diluted share of approximately breakeven to a loss of one cent per share. Adjusted EBITDA and non-GAAP net income are defined and reconciled to GAAP net loss below. Non-GAAP earnings per share assumes a tax rate of 40% and 82 million fully-diluted shares outstanding.
- Full year 2011: The Company forecasts 2011 revenue to be in the range of $190 million to $192 million, adjusted EBITDA to be in the range of $10.5 million to $11.5 million, net income to be in the range of $10.5 million to $11.5 million, and non-GAAP net income per diluted share to be in the range of $0.03 to $0.04. Non-GAAP earnings per share assumes a tax rate of 40% and 76 million fully-diluted shares outstanding.
Quarterly Conference Call
ServiceSource will discuss its quarterly results today via teleconference at 5:00 a.m. Pacific Time (8:00 a.m. Eastern Time). To access the call, please dial (877) 293-5486 or outside the U.S. (914) 495-8592, at least five minutes prior to the 5:00 a.m. PT start time. A live webcast of the call will also be available at http://ir.servicesource.com/events.cfm under the Events and Presentations menu. An audio replay will be available following the call by calling (855) 859-2056 or (404) 537-3406, with Conference ID 78104385. The replay will also be available on the Company's website at http://ir.servicesource.com.
About ServiceSource
ServiceSource is the global leader in service revenue management, partnering with technology-based companies to optimize maintenance, support and subscription revenue streams, while also improving customer relationships and loyalty. ServiceSource delivers these results via a cloud-based solution, combining its Service Revenue Performance Suite™ of applications with dedicated service sales teams, leveraging a proprietary Service Revenue Intelligence Platform™ of transaction data, benchmarks and best practices. ServiceSource offers its service revenue management solution on a unique pay-for-performance business model that enables a success-driven, shared-risk partnership. The Company is headquartered in San Francisco, and manages service revenue performance for customers across the globe in more than 35 languages.
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.
The ServiceSource logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=8933
Forward-Looking Statements
This press release contains forward-looking statements, including statements regarding ServiceSource's potential future financial results and momentum in our business. 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 those expressed or implied in our forward-looking statements. Those risks and uncertainties include, without limitation, changes in market conditions that impact our ability to generate service revenue on our customers' behalf; errors in estimates as to the service revenue we can generate for our customers; risks associated with material defects or errors in our software or the effect of data security breaches; our ability to adapt our solution to changes in the market or new competition; our ability to improve our customers' renewal rates, margins and profitability; our ability to increase our revenue and contribution margin over time from new and existing customers; the potential effect of mergers and acquisitions on our customer base; business strategies; technology development; protection of our intellectual property; investment and financing plans; liquidity; competitive position; the effects of competition; industry environment; and potential growth opportunities; 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 we assume no obligation to update these forward-looking statements.
The following tables reconcile (i) the business outlook net income (loss) to adjusted EBITDA; (ii) net income (loss) to non-GAAP net income; and (iii) the business outlook net income (loss) per share to non-GAAP diluted earnings per share for the third quarter and full fiscal year:
| ServiceSource International, Inc. |
| | | | |
| Business Outlook |
| Reconciliation of Net Income (Loss) to Adjusted EBITDA |
| (In thousands) |
| (Unaudited) |
| | | Three Months Ended
September 30, | Twelve Months Ended
December 31, |
| | | 2011 | 2011 |
| | | | |
| Net income (loss) range | | $(4,500) -- $(5,000) | $10,500 -- $11,500 |
| Income tax benefit | | (400) | (22,500) |
| Interest & other expense, net | | 100 | 1,250 |
| Depreciation | | 2,700 | 10,000 |
| EBITDA range | | $(2,100) -- $(2,600) | $(750) -- $250 |
| Stock-based compensation | | 3,100 | 11,250 |
| Adjusted EBITDA range | | $500 -- $1,000 | $10,500 -- $11,500 |
| | | | |
| Reconciliation of Net Income (Loss) to Non-GAAP Net Income (Loss) | | | |
| (Dollars in thousands) | | | |
| (Unaudited) | | | |
| | | | |
| GAAP net income (loss) | | $(4,500) -- $(5,000) | $10,500 -- $11,500 |
| Non-GAAP adjustments: | | | |
| Stock-based compensation | ( A ) | 3,100 | 11,250 |
| Amortization of internally-developed software | ( B ) | 1,250 | 4,500 |
| One-time tax benefit due to conversion to corporation | ( C ) | -- | (21,500) |
Income tax effect on non-GAAP adjustments and
impact of normalizing the effective income tax rate | ( D ) | (200) | (2,750) |
| Non-GAAP net income (loss) | | $(850) -- $(350) | $2,000 -- $3,000 |
| | | | |
| Reconciliation of Net Income (Loss) Per Share to Non-GAAP Diluted Net Income (Loss) Per Share | | | |
| (Unaudited) | | | |
| | | | |
| GAAP diluted net income (loss) per share | | $(0.06) | $0.14 -- $0.15 |
| Non-GAAP adjustments: | | | |
| Stock-based compensation | ( A ) | 0.04 | 0.15 |
| Amortization of internally-developed software | ( B ) | 0.02 | 0.06 |
| One-time tax benefit due to conversion to corporation | ( C ) | -- | (0.28) |
Income tax effect on non-GAAP adjustments and
impact of normalizing the effective income tax rate | ( D ) | (0.01) - 0.00 | (0.04) |
| Non-GAAP diluted net income (loss) per share | ( E ) | $(0.01) -- $0.00 | $0.03 -- $0.04 |
| | | | |
Shares used in calculating diluted net income per
share on a non-GAAP basis (in thousands) | | 81,700 | 75,700 |
| | | | |
| |
| Footnotes to GAAP to Non-GAAP Reconciliation |
| | | | |
(A) Stock-based compensation. Included in our GAAP presentation of cost of revenue and operating
expenses, stock-based compensation consists of expenses for stock options and awards and purchase
rights under our stock purchase plan. We exclude stock-based compensation expense from our non-
GAAP measures because some investors may view it as not reflective of our core operating
performance as it is a non-cash expense. |
| | | | |
(B) Amortization of internally-developed software. Included in our GAAP presentation of cost of revenue
and operating expenses, amortization of internally-developed software reflects amortization of expense
for certain software purchases and software developed or obtained for internal use and are non-cash in
nature. We exclude these expenses from our non-GAAP measures because we believe they are not
indicative of our core operating performance. |
| | | | |
(C) One-time tax benefit due to conversion to corporation. We elected to be treated as a corporation
under Subchapter C of Chapter 1 of the United States Internal Revenue Code, effective March 1,
2011, and therefore became subject to federal and state tax expense beginning March 1, 2011. As a
result of this tax election, we recorded a net deferred tax asset and a one-time non-cash tax benefit of
$21.4 million. We excluded the tax benefit because it is non-recurring and unique to this one time
event and is not indicative of our core operating performance. |
| | | | |
(D) Income tax effect on non-GAAP adjustments and impact of normalizing the effective income tax rate.
This adjusts the provision for income taxes to reflect the effect of the non-GAAP items (A) - (C) on
non-GAAP net income and adjusts the income tax rate to a normalized effective tax rate of 40%. |
| | | | |
| (E) For this per share reconciliation, diluted shares were used for the above calculation. |
| |
| ServiceSource International, Inc. |
| Condensed Consolidated Statements of Operations |
| (In thousands, except per share amounts) |
| (Unaudited) |
| | Three Months Ended
June 30, | Six Months Ended
June 30, |
| | 2011 | 2010 | 2011 | 2010 |
| | | | | |
| Net revenue | $ 48,512 | $ 37,976 | $ 94,634 | $ 70,152 |
| Cost of revenue (1) | 28,229 | 21,175 | 54,365 | 41,946 |
| Gross profit | 20,283 | 16,801 | 40,269 | 28,206 |
| Operating expenses | | | | |
| Sales and marketing (1) | 11,418 | 8,340 | 22,523 | 15,944 |
| Research and development (1) | 3,390 | 1,490 | 6,103 | 2,508 |
| General and administrative (1) | 7,870 | 4,392 | 15,723 | 8,362 |
| | | | | |
| Total operating expenses | 22,678 | 14,222 | 44,349 | 26,814 |
| Income (loss) from operations | (2,395) | 2,579 | (4,080) | 1,392 |
| Interest expense | (51) | (304) | (384) | (615) |
| Other (expense) income, net | (385) | 168 | (910) | 73 |
| Income (loss) before provision (benefit) for income taxes | (2,831) | 2,443 | (5,374) | 850 |
| Income tax (benefit) provision | (1,697) | 926 | (21,656) | 1,103 |
| Net income (loss) | $ (1,134) | $ 1,517 | $ 16,282 | $ (253) |
| | | | | |
| Net income (loss) per common share: | | | | |
| Basic | $ (0.02) | $ 0.03 | $ 0.26 | $ (0.00) |
| Diluted | $ (0.02) | $ 0.03 | $ 0.24 | $ (0.00) |
| | | | | |
Weighted-average shares used in computing net income
(loss) per common share: | | | | |
| Basic | 67,607 | 57,376 | 62,714 | 57,131 |
| Diluted | 67,607 | 58,709 | 69,275 | 57,131 |
| | | | | |
| | | | | |
| (1) Includes stock-based compensation expense as follows: |
| |
| | Three Months Ended
June 30, | Six Months Ended
June 30, |
| | 2011 | 2010 | 2011 | 2010 |
| Cost of revenue | $ 447 | $ 299 | $ 816 | $ 573 |
| Sales and marketing | 948 | 742 | 1,869 | 1,445 |
| Research and development | 269 | 144 | 537 | 293 |
| General and administrative | 1,023 | 733 | 1,911 | 1,578 |
| Total stock-based compensation | $ 2,687 | $ 1,918 | $ 5,133 | $ 3,889 |
| |
| |
| ServiceSource International, Inc. |
| Condensed Consolidated Balance Sheets |
| (In thousands) |
| (Unaudited) |
| | June 30,
2011 | December 31,
2010 |
| Assets | | |
| Current assets: | | |
| Cash and cash equivalents | $ 31,371 | $ 22,652 |
| Short-term investments | 42,066 | -- |
| Accounts receivable, net | 45,115 | 49,237 |
| Advances to customers | -- | 18 |
| Current portion of deferred income taxes | 5,712 | 1,155 |
| Prepaid expenses and other | 4,299 | 3,326 |
| Total current assets | 128,563 | 76,388 |
| Property and equipment, net | 21,228 | 19,418 |
| Goodwill | 6,334 | 6,334 |
| Deferred debt issuance costs, net | 176 | 273 |
| Deferred income taxes, net of current portion | 29,375 | 3,780 |
| Other assets, net | 1,721 | 1,910 |
| Total assets | $ 187,397 | $ 108,103 |
| | | |
| Liabilities and Stockholders' / Members' Equity | | |
| Current liabilities: | | |
| Accounts payable | $ 5,093 | $ 3,710 |
| Accrued taxes | 3,554 | 2,233 |
| Accrued compensation and benefits | 15,220 | 11,816 |
| Accrued payables to customers | -- | 30,640 |
| Other accrued liabilities | 6,914 | 7,575 |
| Current portion of long-term debt | 641 | 2,279 |
| Total current liabilities | 31,422 | 58,253 |
| Long-term debt, net of current portion | 995 | 14,939 |
| Other long-term liabilities | 1,569 | 1,027 |
| Total liabilities | 33,986 | 74,219 |
| | | |
| Stockholders' / members' equity: | | |
| Common shares | -- | 34,161 |
| Common stock | 7 | -- |
| Treasury shares / stock | (441) | (441) |
| Additional paid-in capital | 132,472 | -- |
| Retained earnings | 20,588 | -- |
| Accumulated other comprehensive income | 785 | 164 |
| Total stockholders' / members' equity | 153,411 | 33,884 |
| Total liabilities and stockholders' / members' equity | $ 187,397 | $ 108,103 |
| |
| |
| ServiceSource International, Inc. |
| Condensed Consolidated Statements of Cash Flows |
| (In thousands) |
| (Unaudited) |
| | | |
| | Six Months Ended
June 30, |
| | 2011 | 2010 |
| Cash flows from operating activities | | |
| Net income (loss) | $ 16,282 | $ (253) |
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities: | | |
| Depreciation and amortization | 4,488 | 2,903 |
| Amortization of deferred financing costs | 298 | 72 |
| Accretion of premium on short-lived investments | 14 | -- |
| Deferred income taxes | (22,715) | (1,553) |
| Stock-based compensation | 5,136 | 3,889 |
| Loss on disposal of fixed assets | 46 | -- |
| Changes in operating assets and liabilities: | | |
| Accounts receivable | 4,122 | (7,194) |
| Advances to customers | 18 | 696 |
| Prepaid expenses and other | (1,958) | (91) |
| Accounts payable | 1,108 | 351 |
| Accrued taxes | 1,321 | 934 |
| Accrued compensation and benefits | 3,404 | 2,365 |
| Accrued payables to customers | (30,644) | 10,600 |
| Other accrued liabilities | 1,128 | 2,267 |
| Net cash (used in) provided by operating activities | (17,952) | 14,986 |
| | | |
| Cash flows from investing activities | | |
| Acquisition of property and equipment | (6,288) | (4,039) |
| Purchases of available-for-sale investments, net | (42,273) | -- |
| Cash used in investing activities | (48,561) | (4,039) |
| | | |
| Cash flows from financing activities | | |
| Net proceeds from issuance of common stock in initial public offering | 88,015 | -- |
| Proceeds from revolving credit facility | 23,424 | -- |
| Repayment of revolving credit facility | (23,424) | -- |
| Repayments on long-term debt | (15,582) | (768) |
| Payments of deferred debt issuance costs | (200) | (149) |
| Cash distributions to members | -- | (2,517) |
| Proceeds from option exercises | 2,247 | 352 |
| Repurchases of common stock | -- | (315) |
| Net cash provided by (used in) financing activities | 74,480 | (3,397) |
| | | |
| Net increase in cash and cash equivalents | 7,967 | 7,550 |
| Effect of exchange rate changes on cash | 752 | (474) |
| Cash and cash equivalents at beginning of period | 22,652 | 13,169 |
| Cash and cash equivalents at end of period | $ 31,371 | $ 20,245 |
Use of Non-GAAP Financial Measures
To supplement its financial statements presented in accordance with generally accepted accounting principles, or GAAP, ServiceSource also provides investors with non-GAAP net income (loss) per share and Adjusted EBITDA. A reconciliation of these non-GAAP financial measures to the closest GAAP financial measure is presented in the financial tables below under the heading, "GAAP to Non-GAAP Reconciliation."
ServiceSource believes that the non-GAAP financial information provided in this release can assist investors in understanding and assessing its on-going core operations and prospects for the future and provides an additional tool for investors to use in comparing ServiceSource's financial results with other companies, many of which present similar non-GAAP financial measures to investors. The non-GAAP financial information is also presented because it is the basis upon which our management assesses our financial performance.
Non-GAAP net income per share consists of net income (loss) plus stock-based compensation, amortization of internally-developed software and applicable adjustments for a one-time tax benefit related to the conversion of ServiceSource from a limited liability corporation to a Delaware corporation. Stock-based compensation expenses are expected to vary depending on the number of new grants issued, changes in the company's stock price, stock market volatility, expected option lives and risk-free rates of return, all of which are difficult to estimate.
EBITDA consists of net income (loss) plus depreciation and amortization, interest expense, other expenses, net, and income tax expense and a deduction for income tax benefit. Adjusted EBITDA consists of EBITDA plus non-cash, stock-based compensation expense. In evaluating Adjusted EBITDA, you should be aware that in the future we will incur expenses similar to the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these expenses or any unusual or non-recurring items.
These non-GAAP measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP in the United States.
The following table provides a reconciliation of net income (loss) to Adjusted EBITDA:
| ServiceSource International, Inc. |
| Reconciliation of Net Income (Loss) to Adjusted EBITDA |
| (In thousands) |
| (Unaudited) |
| | | | | |
| | Three Months Ended
June 30, | Six Months Ended
June 30, |
| | 2011 | 2010 | 2011 | 2010 |
| Net income (loss) | $ (1,134) | $ 1,517 | $ 16,282 | $ (253) |
| Income tax (benefit) provision | (1,697) | 926 | (21,656) | 1,103 |
| Interest expense | 51 | 304 | 384 | 615 |
| Other expense (income), net | 385 | (168) | 910 | (73) |
| Depreciation | 2,543 | 1,532 | 4,488 | 2,903 |
| EBITDA | 148 | 4,111 | 408 | 4,295 |
| Stock-based compensation | 2,687 | 1,918 | 5,133 | 3,889 |
| Adjusted EBITDA | $ 2,835 | $ 6,029 | $ 5,541 | $ 8,184 |
| |
| |
| ServiceSource International, Inc. |
| GAAP to non-GAAP Reconciliation |
| (Dollars in thousands, except per share data) |
| (Unaudited) |
| | | | | | |
| | | Three Months Ended
June 30, | Six Months Ended
June 30, |
| | | 2011 | 2010 | 2011 | 2010 |
| Gross Margin | | | | | |
| GAAP gross margin | | $ 20,283 | $ 16,801 | $ 40,269 | $ 28,206 |
| Non-GAAP adjustments: | | | | | |
| Stock-based compensation | ( A ) | 447 | 299 | 816 | 573 |
| Amortization of internally-developed software | ( B ) | 463 | 306 | 807 | 585 |
| Non-GAAP gross margin | | $ 21,193 | $ 17,406 | $ 41,892 | $ 29,364 |
| | | | | | |
| Gross Profit % | | | | | |
| GAAP gross margin | | 42% | 44% | 43% | 40% |
| Non-GAAP adjustments: | | | | | |
| Stock-based compensation | ( A ) | 1% | 1% | 2% | 1% |
| Amortization of internally-developed software | ( B ) | 1% | 1% | 1% | 1% |
| Non-GAAP gross margin % | | 44% | 46% | 45% | 42% |
| | | | | | |
| Operating expenses | | | | | |
| GAAP operating expenses | | $ 22,678 | $ 14,222 | $ 44,349 | $ 26,814 |
| Stock-based compensation | ( A ) | (2,240) | (1,619) | (4,317) | (3,316) |
| Amortization of internally-developed software | ( B ) | (715) | (245) | (1,133) | (461) |
| Non-GAAP operating expenses | | $ 19,723 | $ 12,358 | $ 38,899 | $ 23,037 |
| | | | | | |
| Net Income (Loss) | | | | | |
| GAAP net income (loss) | | $ (1,134) | $ 1,517 | $ 16,282 | $ (253) |
| Non-GAAP adjustments: | | | | | |
| Stock-based compensation | ( A ) | 2,687 | 1,918 | 5,133 | 3,889 |
| Amortization of internally-developed software | ( B ) | 1,178 | 551 | 1,940 | 1,046 |
| One-time tax benefit due to conversion to corporation | ( C ) | -- | -- | (21,417) | -- |
Income tax effect on non-GAAP adjustments and
impact of normalizing the effective income tax rate | ( D ) | (2,111) | (1,039) | (919) | (1,211) |
| Non-GAAP net income | | $ 620 | $ 2,947 | $ 1,019 | $ 3,471 |
| | | | | | |
| | | | | | |
| Net Income (Loss) Per Share | | | | | |
| GAAP diluted net income (loss) per share | | $ (0.02) | $ 0.03 | $ 0.24 | $ (0.00) |
| Non-GAAP adjustments: | | | | | |
| Stock-based compensation | ( A ) | 0.04 | 0.03 | 0.07 | 0.07 |
| Amortization of internally-developed software | ( B ) | 0.02 | 0.01 | 0.03 | 0.02 |
| One-time tax benefit due to conversion to corporation | ( C ) | -- | -- | (0.31) | -- |
Income tax effect on non-GAAP adjustments and
impact of normalizing the effective income tax rate | ( D ) | (0.03) | (0.02) | (0.01) | (0.02) |
| Non-GAAP diluted net income per share | | $ 0.01 | $ 0.05 | $ 0.01 | $ 0.06 |
| | | | | | |
Shares used in calculating diluted net income per
share on a non-GAAP basis | | 75,476 | 58,709 | 69,275 | 58,907 |
| | | | | | |
| | | | | | |
| Footnotes to GAAP to Non-GAAP Reconciliation | | | | | |
| | | | | | |
(A) Stock-based compensation. Included in our GAAP presentation of cost of revenue and operating expenses, stock-
based compensation consists of expenses for stock options and awards and purchase rights under our stock
purchase plan. We exclude stock-based compensation expense from our non-GAAP measures because some
investors may view it as not reflective of our core operating performance as it is a non-cash expense. |
| | | | | | |
(B) Amortization of internally-developed software. Included in our GAAP presentation of cost of revenue and
operating expenses, amortization of internally-developed software reflects amortization of expense for certain
software purchases and software developed or obtained for internal use and are non-cash in nature. We exclude
these expenses from our non-GAAP measures because we believe they are not indicative of our core operating
performance. |
| | | | | | |
(C) One-time tax benefit due to conversion to corporation. We elected to be treated as a corporation under Subchapter
C of Chapter 1 of the United States Internal Revenue Code, effective March 1, 2011, and therefore became subject to
federal and state tax expense beginning March 1, 2011. As a result of this tax election, we recorded a net deferred tax
asset and a one-time non-cash tax benefit of $21.4 million. We excluded the tax benefit because it is non-recurring
and unique to this one time event and is not indicative of our core operating performance. |
| | | | | | |
(D) Income tax effect on non-GAAP adjustments and impact of normalizing the effective income tax rate. This adjusts
the provision for income taxes to reflect the effect of the non-GAAP items (A) - (C) on non-GAAP net income and
adjusts the income tax rate to a normalized effective tax rate of 40%. |
| |
| |
| ServiceSource International, Inc. | | | | |
| Revenue by Segment | | | | |
| (In thousands) | | | | |
| (Unaudited) | | | | |
| | | | | |
| | Three Months Ended June 30, |
| | 2011 | 2010 |
| | $ | % of Revenue | $ | % of Revenue |
| NALA | $ 28,686 | 59% | $ 26,304 | 69% |
| EMEA | 14,254 | 29% | 9,931 | 26% |
| APJ | 5,572 | 12% | 1,741 | 5% |
| | $ 48,512 | 100% | $ 37,976 | 100% |
| | | | | |
| | | | | |
| | Six Months Ended June 30, |
| | 2011 | 2010 |
| | $ | % of Revenue | $ | % of Revenue |
| NALA | $ 56,432 | 60% | $ 46,527 | 66% |
| EMEA | 29,247 | 31% | 20,797 | 30% |
| APJ | 8,955 | 9% | 2,828 | 4% |
| | $ 94,634 | 100% | $ 70,152 | 100% |
CONTACT: The Blueshirt Group
Investor Relations
Todd Friedman
todd@blueshirtgroup.com
Stacie Bosinoff
stacie@blueshirtgroup.com
415-217-7721