ServiceSource Q2 earnings land just above Wall Street projections

Despite a net loss for the second quarter, ServiceSource still turned it out for non-GAAP earnings and revenue.
Written by Rachel King, Contributor

ServiceSource's second quarter might look like a mixed bag, but the company still beat Wall Street expectations nonetheless.

The service management solutions provider actually reported a net loss of $36.8 million, or 50 cents a share (statement).

But on a brighter note, non-GAAP earnings were 2 cents a share on a revenue of $59.7 million, an increase of 23 percent compared with $48.5 million in Q2 2011.
Wall Street was expecting ServiceSource to report earnings of 1 cent a share on revenue of $59.2 million.
CEO and chairman Mike Smerklo commented in prepared remarks:

Our team executed well during the second quarter, which contributed to revenue and profitability that exceeded the high-end of our guidance. We have made tremendous progress advancing our Avalon platform, which is our next-generation, cloud application suite for managing recurring revenue. We recently launched our first beta customer and are on track for a fall delivery of Avalon, which we believe will have significant impact on our industry and company.

For the outlook, ServiceSource is predicting a revenue between $57.5 and $59.5 million at the end of Q3 2012 non-GAAP net loss per share to be between breakeven to a loss of $0.02 per share.

For the year, ServiceSource projects a revenue of $246 to $249 million with earnings between 5 and 7 cents per share. Wall Street is expecting full year revenue of at least $248.0 million with earnings of 7 cents per share.

Q2 Highlights:

  • Added a new SaaS logo to its customer base, with the recent signing of Jive Software
  • Signed several new expansions including Hitachi Data Systems, Mitel, and Red Hat, among others
  • Launched its first Avalon beta customer, which is on track for General Availability in the second half of 2012
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