DENVER--(BUSINESS WIRE)--Aug 6, 2018--ServiceSource (NASDAQ: SREV), a global leader in outsourced inside sales, customer success and recurring revenue growth and retention solutions, today announced financial results for the three months ended June 30, 2018.

“ServiceSource had another solid quarter that exceeded our top and bottom line expectations, as our teams delivered impressive results for our clients and executed well against our strategic priorities,” said Christopher M. Carrington, CEO of ServiceSource. “We turned in revenue growth that showed strong sequential acceleration, secured more great new logos and valuable client expansions and added to our inside sales and customer success portfolio. Throughout the business, we are seeing continued positive momentum that reaffirms our outlook for the full-year.”

Key Financial Results

GAAP revenue for Q2 2018 was $61.1 million, an increase of 4.9%, compared with $58.3 million reported for Q2 2017. GAAP net loss for Q2 2018 was $8.9 million or $0.10 per diluted share, favorable compared with GAAP net loss of $13.1 million or $0.15 per diluted share reported for Q2 2017. Non-GAAP net income for Q2 2018 was $0.8 million or $0.01 per diluted share, compared with non-GAAP net income of $1.5 million or $0.02 per diluted share reported for Q2 2017. Adjusted EBITDA for Q2 2018 was $3.2 million, compared with $4.7 million reported for Q2 2017.

A reconciliation of GAAP to non-GAAP financial measures is provided following the Consolidated Financial Statement tables contained within this press release.

Key Business Highlights

Solid Q2 sales results with 19 transactions, including 16 expansions and three new logo wins. Strong uptake for the high growth solutions portfolio, with more than half of new sales transaction value generated from inside sales and customer success. Over 60% of revenue from clients with multi-year agreements. Nearly 50% year-over-year growth in team size across the Manila, Sofia, Kuala Lumpur and Okinawa locations. Key leadership addition with appointment of Denzil Samuels to the role of Chief Marketing and Growth Officer.

Third Quarter 2018 Outlook

For Q3 2018, ServiceSource is providing the following guidance:

Revenue of $60.0 million to $61.0 million. GAAP net loss per share of $0.03 to $0.04; non-GAAP net income per share of $0.01 to $0.02. Adjusted EBITDA of $3.5 million to $4.5 million.

Fiscal 2018 Outlook

ServiceSource is reaffirming the following full-year guidance metrics that are based on a number of assumptions that management believes are reasonable at the time of this earnings release:

Revenue of $246.0 million to $249.0 million. GAAP gross margin of 34.0% to 35.0%; non-GAAP gross margin of 36.5% to 37.5%. GAAP operating expenses of 37.9% to 38.7%; non-GAAP operating expenses of 32.0% to 32.5%. GAAP net loss of $18.8 million to $21.8 million; non-GAAP net income of $8.0 million to $10.0 million. GAAP net loss per share of $0.20 to $0.24; non-GAAP net income per share of $0.09 to $0.11. Adjusted EBITDA of $19.0 million to $22.0 million.

Please see the second quarter 2018 Earnings Call Deck on the Events and Presentations section of the Investor Relations website ( http://ir.servicesource.com/events ) for a reconciliation between GAAP and non-GAAP measures in our guidance.

Quarterly Conference Call

ServiceSource will discuss its second quarter 2018 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: 7659649. 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. 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, whether our go-forward model will produce anticipated benefits, and whether our improved execution and emerging capabilities will translate into desired results. 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 the contraction in our revenue from one or more of our key clients, in each case resulting in churn, 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; problems encountered by our clients in their business that may cause them to cancel or reduce their business with us; our ability to achieve our expected benefits from international expansion; economic or other adverse events or conditions affecting the technology industry; 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 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) helps the world’s leading brands grow closer to their customers. As a global leader in outsourced inside sales, customer success and recurring revenue growth and retention solutions, ServiceSource expands customer lifetime value by helping companies to more efficiently and effectively find, convert, grow and retain their B2B customer relationships. Trusted by global market leaders in the cloud/XaaS, software, technology hardware, medical device & diagnostic equipment and industrial IoT sectors, ServiceSource sells, manages or renews $9 billion of revenue annually on behalf of its clients. Leveraging a robust technology suite, predictive data models and more than 3,000 revenue delivery professionals speaking 45 languages, only ServiceSource brings to market nearly 20 years of expertise and the ability to drive recurring revenue growth to more than 170 countries. To learn more, visit http://www.servicesource.com.

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