ServiceSource (SREV) saw its loss widen to $8.50 million, or $0.10 a share for the quarter ended Dec. 31, 2016. In the previous year period, the company reported a loss of $6.02 million, or $0.07 a share. On an adjusted basis, net profit for the quarter was $1.74 million, when compared with $0.29 million in the last year period. Revenue during the quarter grew 5.69 percent to $68.65 million from $64.96 million in the previous year period. Gross margin for the quarter expanded 12 basis points over the previous year period to 38.09 percent. Operating margin for the quarter stood at negative 3.16 percent as compared to a negative 5.75 percent for the previous year period.
Operating loss for the quarter was $2.17 million, compared with an operating loss of $3.74 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $5.67 million compared with $2.26 million in the prior year period. At the same time, adjusted EBITDA margin improved 478 basis points in the quarter to 8.26 percent from 3.48 percent in the last year period.
"Our investments in 2016 in our people, platforms, and global Revenue Delivery Centers improved the results we delivered for our clients and helped us win 12 new logos last year. As we accelerate our digital transformation in 2017, we believe our solutions around customer success, inside sales, channel management, and renewals will drive even deeper value for new and existing clients. While we were strengthening our foundation with these investments, we also drove a 3 percentage point improvement to gross margin for the second year in a row and increased adjusted EBITDA by $11.5 million," said Christopher M. Carrington, chief executive officer of ServiceSource. “The foundation we built this past year will serve us well moving forward as we expand our offerings to help clients find, convert, grow, and retain revenue at all points along their customers’ journey."
For financial year 2017, ServiceSource forecasts revenue to be in the range of $248 million to $258 million. The company projects net loss to be in the range of $35.50 million to $39.50 million. It company expects adjusted net income to be in the range of $2 million to $5 million.
For the first-quarter 2017, ServiceSource forecasts revenue to be in the range of $55 million to $58 million. The company projects net loss to be in the range of $11.50 million to $14.50 million and adjusted net loss to be in the range of $1.50 million to $3.50 million.
Operating cash flow improves significantly
ServiceSource has generated cash of $4.54 million from operating activities during the year, up 26.11 percent or $0.94 million, when compared with the last year. The company has spent $29 million cash to meet investing activities during the year as against cash outgo of $25.19 million in the last year.
Cash flow from financing activities was $0.94 million for the year, down 72 percent or $2.41 million, when compared with the last year.
Cash and cash equivalents stood at $47.69 million as on Dec. 31, 2016, down 34.07 percent or $24.64 million from $72.33 million on Dec. 31, 2015.
Working capital declines
ServiceSource has witnessed a decline in the working capital over the last year. It stood at $218.58 million as at Dec. 31, 2016, down 7.55 percent or $17.85 million from $236.43 million on Dec. 31, 2015. Current ratio was at 6.77 as on Dec. 31, 2016, down from 7.37 on Dec. 31, 2015.
Days sales outstanding went up to 42 days for the quarter compared with 40 days for the same period last year.
At the same time, days payable outstanding was almost stable at 2 days for the quarter, when compared with the previous year period.
Debt moves up
ServiceSource has witnessed an increase in total debt over the last one year. It stood at $134.89 million as on Dec. 31, 2016, up 6.84 percent or $8.64 million from $126.25 million on Dec. 31, 2015. Servicesource International has witnessed an increase in long-term debt over the last one year. It stood at $134.89 million as on Dec. 31, 2016, up 6.84 percent or $8.64 million from $126.25 million on Dec. 31, 2015. Total debt was 44.07 percent of total assets as on Dec. 31, 2016, compared with 39.50 percent on Dec. 31, 2015. Debt to equity ratio was at 1.06 as on Dec. 31, 2016, up from 0.84 as on Dec. 31, 2015. Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: [email protected]
