(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||
(Address of principal executive offices) | (Zip Code) |
(Registrant’s telephone number, including area code) |
(Title of each class) | (Trading Symbol) | (Name of each exchange on which registered) |
Large accelerated filer | ☐ | ☒ | |
Non-accelerated filer | ☐ | Smaller reporting company | |
Emerging growth company |
Page | |
ServiceSource International, Inc. | |||||||
Consolidated Balance Sheets | |||||||
(in thousands, except per share amounts) | |||||||
(unaudited) | |||||||
September 30, 2019 | December 31, 2018 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | $ | |||||
Accounts receivable, net | |||||||
Prepaid expenses and other | |||||||
Total current assets | |||||||
Property and equipment, net | |||||||
Contract acquisition costs | |||||||
Right-of-use assets | |||||||
Goodwill | |||||||
Other assets | |||||||
Total assets | $ | $ | |||||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | $ | |||||
Accrued expenses | |||||||
Accrued compensation and benefits | |||||||
Operating lease liabilities | |||||||
Other current liabilities | |||||||
Total current liabilities | |||||||
Operating lease liabilities, net of current portion | |||||||
Other long-term liabilities | |||||||
Total liabilities | |||||||
Commitments and contingencies (Note 7) | |||||||
Stockholders’ equity: | |||||||
Preferred stock, $0.001 par value; 20,000 shares authorized and none issued and outstanding | |||||||
Common stock; $0.0001 par value; 1,000,000 shares authorized; 94,599 shares issued and 94,478 shares outstanding as of September 30, 2019; 92,895 shares issued and 92,774 shares outstanding as of December 31, 2018 | |||||||
Treasury stock | ( | ) | ( | ) | |||
Additional paid-in capital | |||||||
Accumulated deficit | ( | ) | ( | ) | |||
Accumulated other comprehensive income | |||||||
Total stockholders’ equity | |||||||
Total liabilities and stockholders’ equity | $ | $ |
ServiceSource International, Inc. | |||||||||||||||
Consolidated Statements of Operations | |||||||||||||||
(in thousands, except per share amounts) | |||||||||||||||
(unaudited) | |||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net revenue | $ | $ | $ | $ | |||||||||||
Cost of revenue | |||||||||||||||
Gross profit | |||||||||||||||
Operating expenses: | |||||||||||||||
Sales and marketing | |||||||||||||||
Research and development | |||||||||||||||
General and administrative | |||||||||||||||
Restructuring and other related costs | |||||||||||||||
Total operating expenses | |||||||||||||||
Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Interest and other expense, net | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Impairment loss on investment securities | ( | ) | |||||||||||||
Loss before income taxes | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Provision for income tax (expense) benefit | ( | ) | ( | ) | ( | ) | |||||||||
Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Net loss per common share | |||||||||||||||
Basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Weighted-average common shares outstanding: | |||||||||||||||
Basic and diluted |
ServiceSource International, Inc. | |||||||||||||||
Consolidated Statements of Comprehensive Loss | |||||||||||||||
(in thousands) | |||||||||||||||
(unaudited) | |||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Other comprehensive income (loss) | |||||||||||||||
Available for sale securities: | |||||||||||||||
Unrealized loss on short-term investments | ( | ) | ( | ) | |||||||||||
Reclassification adjustment for impairment loss included in net loss | |||||||||||||||
Net change in available for sale debt securities | ( | ) | |||||||||||||
Foreign currency translation adjustments | ( | ) | ( | ) | ( | ) | |||||||||
Other comprehensive income (loss) | ( | ) | ( | ) | |||||||||||
Comprehensive loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) |
ServiceSource International, Inc. | |||||||||||||||||||||||||||||
Consolidated Statements of Stockholders' Equity | |||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||
Common Stock | Treasury Shares/Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Total | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||
Balance at January 1, 2019 | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | $ | |||||||||||||||||
Net loss | — | — | — | — | — | ( | ) | — | ( | ) | |||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | |||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||
Issuance of common stock, restricted stock units | — | — | — | — | — | — | |||||||||||||||||||||||
Proceeds from the exercise of stock options and employee stock purchase plan | — | — | — | — | — | ||||||||||||||||||||||||
Balance at March 31, 2019 | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | $ | |||||||||||||||||
Net loss | — | — | — | — | — | ( | ) | — | ( | ) | |||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||
Issuance of common stock, restricted stock units | — | — | — | — | — | — | |||||||||||||||||||||||
Net cash paid for payroll taxes on restricted stock unit releases | — | — | — | — | ( | ) | — | — | ( | ) | |||||||||||||||||||
Balance at June 30, 2019 | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | $ | |||||||||||||||||
Net loss | — | — | — | — | — | ( | ) | — | ( | ) | |||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | |||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||
Issuance of common stock, restricted stock units | — | — | — | — | — | — | |||||||||||||||||||||||
Proceeds from the exercise of stock options and employee stock purchase plan | — | — | — | — | — | ||||||||||||||||||||||||
Balance at September 30, 2019 | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | $ |
ServiceSource International, Inc. | |||||||||||||||||||||||||||||
Consolidated Statements of Stockholders' Equity | |||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||
Common Stock | Treasury Shares/Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Total | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||
Balance at December 31, 2017 | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
Cumulative effect of ASC 606 - initial adoption | — | — | — | — | — | — | |||||||||||||||||||||||
Adjusted balance at January 1, 2018 | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
Net loss | — | — | — | — | — | ( | ) | — | ( | ) | |||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | |||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||
Issuance of common stock, restricted stock units | — | — | — | — | — | — | |||||||||||||||||||||||
Proceeds from the exercise of stock options and employee stock purchase plan | — | — | — | — | — | ||||||||||||||||||||||||
Net cash paid for payroll taxes on restricted stock unit releases | — | — | — | — | ( | ) | — | — | ( | ) | |||||||||||||||||||
Balance at March 31, 2018 | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | $ | |||||||||||||||||
Net loss | — | — | — | — | — | ( | ) | — | ( | ) | |||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||
Issuance of common stock, restricted stock units | — | — | — | — | — | — | |||||||||||||||||||||||
Proceeds from the exercise of stock options and employee stock purchase plan | — | — | — | — | — | ||||||||||||||||||||||||
Net cash paid for payroll taxes on restricted stock unit releases | — | — | — | — | ( | ) | — | — | ( | ) | |||||||||||||||||||
Balance at June 30, 2018 | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | $ | |||||||||||||||||
Net loss | — | — | — | — | — | ( | ) | — | ( | ) | |||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||
Issuance of common stock, restricted stock units | — | — | — | — | — | ||||||||||||||||||||||||
Proceeds from the exercise of stock options and employee stock purchase plan | — | — | — | — | — | ||||||||||||||||||||||||
Net cash paid for payroll taxes on restricted stock unit releases | — | — | — | — | ( | ) | — | — | ( | ) | |||||||||||||||||||
Balance at September 30, 2018 | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | $ |
ServiceSource International, Inc. | |||||||
Consolidated Statements of Cash Flows | |||||||
(in thousands) | |||||||
(unaudited) | |||||||
For the Nine Months Ended September 30, | |||||||
2019 | 2018 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | ( | ) | $ | ( | ) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
Depreciation and amortization | |||||||
Amortization of debt discount and issuance costs | |||||||
Amortization of contract acquisition costs | |||||||
Amortization of premium on short-term investments | ( | ) | |||||
Amortization of right-of-use assets | |||||||
Stock-based compensation | |||||||
Restructuring and other related costs | |||||||
Impairment loss on investment securities | |||||||
Other | ( | ) | |||||
Net changes in operating assets and liabilities | |||||||
Accounts receivable, net | |||||||
Prepaid expenses and other assets | |||||||
Contract acquisition costs | ( | ) | ( | ) | |||
Accounts payable | ( | ) | ( | ) | |||
Accrued compensation and benefits | ( | ) | ( | ) | |||
Operating lease liabilities | ( | ) | |||||
Accrued expenses | ( | ) | |||||
Other liabilities | ( | ) | |||||
Net cash provided by operating activities | |||||||
Cash flows from investing activities: | |||||||
Acquisition of property and equipment | ( | ) | ( | ) | |||
Purchases of short-term investments | ( | ) | |||||
Sales of short-term investments | |||||||
Maturities of short-term investments | |||||||
Net cash (used in) provided by investing activities | ( | ) | |||||
Cash flows from financing activities: | |||||||
Repayment on finance lease obligations | ( | ) | ( | ) | |||
Repayment of convertible notes | ( | ) | |||||
Debt issuance costs | ( | ) | |||||
Proceeds from revolving line of credit | |||||||
Proceeds from issuance of common stock | |||||||
Payments related to minimum tax withholdings on restricted stock unit releases | ( | ) | ( | ) | |||
Net cash used in financing activities | ( | ) | ( | ) | |||
Effect of exchange rate changes on cash and cash equivalents and restricted cash | |||||||
Net change in cash and cash equivalents and restricted cash | ( | ) | |||||
Cash and cash equivalents and restricted cash, beginning of period | |||||||
Cash and cash equivalents and restricted cash, end of period | $ | $ | |||||
Supplemental disclosures of cash flow information: | |||||||
Cash paid for interest | $ | $ | |||||
Supplemental disclosures of non-cash activities: | |||||||
Acquisition of property and equipment accrued in accounts payable and accrued expenses | $ | $ | |||||
Increase in contract acquisition costs and benefit to accumulated deficit related to adoption of ASC 606 | $ | $ | |||||
Increase in prepaid expenses and other, other liabilities and benefit to accumulated deficit related to adoption of ASC 606 | $ | $ | |||||
Increase in operating lease liabilities related to the adoption of ASC 842 | $ | $ | — | ||||
Increase in right-of-use assets related to the adoption of ASC 842 | $ | $ | — | ||||
Decrease in prepaids and other assets related to the adoption of ASC 842 | $ | ( | ) | $ | — | ||
Decrease in other liabilities related to the adoption of ASC 842 | $ | ( | ) | $ | — |
September 30, 2019 | December 31, 2018 | ||||||
(in thousands) | |||||||
Finance lease obligations | $ | $ | |||||
Contract liability | |||||||
Other liabilities | |||||||
Legal reserve | |||||||
Employee stock purchase plan withholdings | |||||||
Deferred rent | — | ||||||
Total | $ | $ |
September 30, 2019 | December 31, 2018 | ||||||
(in thousands) | |||||||
Asset retirement obligations | $ | $ | |||||
Finance lease obligations | |||||||
Accrued restructuring costs | |||||||
Deferred tax liability | |||||||
Other accrued costs | |||||||
Deferred rent | — | ||||||
Total | $ | $ |
For the Three Months Ended September 30, 2019 | For the Nine Months Ended September 30, 2019 | ||||||
(in thousands) | |||||||
Operating lease cost | $ | $ | |||||
Finance lease cost: | |||||||
Amortization of leased assets | |||||||
Interest on lease liabilities | |||||||
Total finance lease cost | |||||||
Sublease income | ( | ) | ( | ) | |||
Net lease cost | $ | $ |
September 30, 2019 | |||
(in thousands) | |||
Operating leases: | |||
Right-of-use assets | $ | ||
Operating lease liabilities | $ | ||
Operating lease liabilities, net of current portion | |||
Total operating lease liabilities | $ | ||
Finance leases: | |||
Property and equipment | $ | ||
Accumulated depreciation | ( | ) | |
Property and equipment, net | $ | ||
Other current liabilities | $ | ||
Other long-term liabilities | |||
Total finance lease liabilities | $ |
September 30, 2019 | ||
Weighted-average remaining lease term (in years): | ||
Operating lease | ||
Finance lease | ||
Weighted-average discount rate: | ||
Operating lease | % | |
Finance lease | % |
Operating Leases | Operating Sublease | Finance Leases | |||||||||
(in thousands) | |||||||||||
Remainder of 2019 | $ | $ | ( | ) | $ | ||||||
2020 | ( | ) | |||||||||
2021 | ( | ) | |||||||||
2022 | ( | ) | |||||||||
2023 | ( | ) | |||||||||
Thereafter | |||||||||||
Total lease payments | ( | ) | |||||||||
Less: interest | ( | ) | — | ( | ) | ||||||
Less: tenant improvements reimbursement | ( | ) | — | ||||||||
Total | $ | $ | ( | ) | $ |
September 30, 2019 | |||
(in thousands) | |||
Remainder of 2019 | $ | ||
2020 | |||
2021 | |||
2022 | |||
2023 | |||
Thereafter | |||
Total | $ |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(in thousands) | |||||||||||||||
Professional services | $ | $ | $ | $ | |||||||||||
Selling services | |||||||||||||||
Total revenue | $ | $ | $ | $ |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(in thousands) | |||||||||||||||
APJ | $ | $ | $ | $ | |||||||||||
EMEA | |||||||||||||||
NALA | |||||||||||||||
Total revenue | $ | $ | $ | $ |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(in thousands) | |||||||||||||||
Fixed consideration | $ | $ | $ | $ | |||||||||||
Variable consideration | |||||||||||||||
Total revenue | $ | $ | $ | $ |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(in thousands) | |||||||||||||||
Cost of revenue | $ | $ | $ | $ | |||||||||||
Sales and marketing | |||||||||||||||
Research and development | |||||||||||||||
General and administrative | |||||||||||||||
Total stock-based compensation | $ | $ | $ | $ |
Shares | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Life (Years) | Intrinsic Value | |||||||||
(in thousands) | (in thousands) | |||||||||||
Outstanding as of December 31, 2018 | $ | $ | — | |||||||||
Granted | $ | |||||||||||
Expired and/or forfeited | ( | ) | $ | |||||||||
Outstanding as of September 30, 2019 | $ | $ | ||||||||||
Exercisable as of September 30, 2019 | $ | $ |
Units | Weighted-Average Grant Date Fair Value | |||||
(in thousands) | ||||||
Non-vested as of December 31, 2018 | $ | |||||
Granted | $ | |||||
Vested(1) | ( | ) | $ | |||
Forfeited | ( | ) | $ | |||
Non-vested as of September 30, 2019 | $ |
Severance and Other Employee Costs | Lease Termination Costs | Total | |||||||||
(in thousands) | |||||||||||
Balance as of January 1, 2019 | $ | $ | $ | ||||||||
Restructuring and other related costs | |||||||||||
Cash paid | ( | ) | ( | ) | ( | ) | |||||
Balance as of September 30, 2019 | $ | $ | $ |
Severance and Other Employee Costs | Lease and Other Contract Termination Costs | Asset Impairments | Total | ||||||||||||
(in thousands) | |||||||||||||||
Balance as of January 1, 2017 | $ | $ | $ | $ | |||||||||||
Restructuring and other related costs | |||||||||||||||
Cash paid | ( | ) | ( | ) | ( | ) | |||||||||
Change in estimates and non-cash charges | ( | ) | ( | ) | |||||||||||
Acceleration of stock-based compensation expense in additional paid-in capital | ( | ) | ( | ) | |||||||||||
Balance as of December 31, 2017 | |||||||||||||||
Restructuring and other related costs | |||||||||||||||
Cash paid | ( | ) | ( | ) | ( | ) | |||||||||
Change in estimates and non-cash charges | ( | ) | |||||||||||||
Balance as of December 31, 2018 | |||||||||||||||
Cash paid | ( | ) | ( | ) | |||||||||||
Change in estimates and non-cash charges | ( | ) | ( | ) | |||||||||||
Balance as of September 30, 2019 | $ | $ | $ | $ |
• | GAAP revenue was $53.4 million compared with $57.2 million reported for the same period in 2018. |
• | GAAP net loss was $4.4 million or $0.05 per diluted share, compared with GAAP net loss of $6.6 million or $0.07 per diluted share reported for the same period in 2018. |
• | Adjusted EBITDA was $1.1 million compared with Adjusted EBITDA of $3.1 million reported for the same period in 2018. See “Non-GAAP Financial Measurements” below for a reconciliation of Adjusted EBITDA from "Net loss." |
• | Ended the quarter with $25.4 million of cash and cash equivalents and restricted cash and no borrowings under the Company’s $40.0 million revolving line of credit. |
For the Three Months Ended September 30, | ||||||||||||||||||||
2019 | 2018 | |||||||||||||||||||
Amount | % of Net Revenue | Amount | % of Net Revenue | $ Change | % Change | |||||||||||||||
(in thousands) | (in thousands) | (in thousands) | ||||||||||||||||||
Net revenue | $ | 53,395 | 100 | % | $ | 57,173 | 100 | % | $ | (3,778 | ) | (7 | )% | |||||||
Cost of revenue | 37,871 | 71 | % | 39,949 | 70 | % | (2,078 | ) | (5 | )% | ||||||||||
Gross profit | $ | 15,524 | 29 | % | $ | 17,224 | 30 | % | $ | (1,700 | ) | (10 | )% |
For the Three Months Ended September 30, | ||||||||||||||||||||
2019 | 2018 | |||||||||||||||||||
Amount | % of Net Revenue | Amount | % of Net Revenue | $ Change | % Change | |||||||||||||||
(in thousands) | (in thousands) | (in thousands) | ||||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Sales and marketing | $ | 7,499 | 14 | % | $ | 8,622 | 15 | % | $ | (1,123 | ) | (13 | )% | |||||||
Research and development | 1,165 | 2 | % | 1,395 | 2 | % | (230 | ) | (16 | )% | ||||||||||
General and administrative | 10,129 | 19 | % | 12,907 | 23 | % | (2,778 | ) | (22 | )% | ||||||||||
Restructuring and other related costs | 630 | 1 | % | — | — | % | 630 | 100 | % | |||||||||||
Total operating expenses | $ | 19,423 | 36 | % | $ | 22,924 | 40 | % | $ | (3,501 | ) | (15 | )% |
• | $2.5 million decrease in legal reserves; |
• | $0.8 million decrease in employee related costs primarily due to changes in executive management, lower travel and entertainment expenditures and lower recruiting costs; and |
• | $0.3 million decrease in professional fees; partially offset by |
• | $0.7 million increase in information technology support costs. |
For the Three Months Ended September 30, | ||||||||||||||||||||
2019 | 2018 | |||||||||||||||||||
Amount | % of Net Revenue | Amount | % of Net Revenue | $ Change | % Change | |||||||||||||||
(in thousands) | (in thousands) | (in thousands) | ||||||||||||||||||
Interest expense | $ | (91 | ) | — | % | $ | (1,173 | ) | (2 | )% | $ | 1,082 | (92 | )% | ||||||
Other (expense) income, net | $ | (328 | ) | (1 | )% | $ | 115 | — | % | $ | (443 | ) | * |
For the Three Months Ended September 30, | |||||||||||||||||||
2019 | 2018 | ||||||||||||||||||
Amount | % of Net Revenue | Amount | % of Net Revenue | $ Change | % Change | ||||||||||||||
(in thousands) | (in thousands) | (in thousands) | |||||||||||||||||
Provision for income tax (expense) benefit | $ | (119 | ) | — | % | $ | 133 | — | % | $ | (252 | ) | * |
For the Nine Months Ended September 30, | ||||||||||||||||||||
2019 | 2018 | |||||||||||||||||||
Amount | % of Net Revenue | Amount | % of Net Revenue | $ Change | % Change | |||||||||||||||
(in thousands) | (in thousands) | (in thousands) | ||||||||||||||||||
Net revenue | $ | 161,264 | 100 | % | $ | 176,869 | 100 | % | $ | (15,605 | ) | (9 | )% | |||||||
Cost of revenue | 115,696 | 72 | % | 124,136 | 70 | % | (8,440 | ) | (7 | )% | ||||||||||
Gross profit | $ | 45,568 | 28 | % | $ | 52,733 | 30 | % | $ | (7,165 | ) | (14 | )% |
• | $5.9 million decrease in employee related costs driven by lower revenue attainment, reduction in headcount and lower travel and entertainment expenditures; |
• | $4.1 million decrease in depreciation and amortization expense primarily due to internally developed software fully amortized as of July 2018; and |
• | $0.6 million decrease in professional service fees; partially offset by |
• | $2.1 million increase in information technology support and facilities costs. |
For the Nine Months Ended September 30, | ||||||||||||||||||||
2019 | 2018 | |||||||||||||||||||
Amount | % of Net Revenue | Amount | % of Net Revenue | $ Change | % Change | |||||||||||||||
(in thousands) | (in thousands) | (in thousands) | ||||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Sales and marketing | $ | 22,934 | 14 | % | $ | 27,112 | 15 | % | $ | (4,178 | ) | (15 | )% | |||||||
Research and development | 3,702 | 2 | % | 4,691 | 3 | % | (989 | ) | (21 | )% | ||||||||||
General and administrative | 32,081 | 20 | % | 38,953 | 22 | % | (6,872 | ) | (18 | )% | ||||||||||
Restructuring and other related costs | 1,836 | 1 | % | 209 | — | % | 1,627 | * | ||||||||||||
Total operating expenses | $ | 60,553 | 38 | % | $ | 70,965 | 40 | % | $ | (10,412 | ) | (15 | )% |
• | $5.4 million decrease in employee related costs primarily due to changes in executive management, decrease in bonus expense due to lower revenue attainment and decreases in temporary labor, recruiting costs and travel and entertainment expenditures; |
• | $2.5 million decrease in legal reserves; and |
• | $1.2 million decrease in professional service fees; partially offset by |
• | $1.5 million increase in information technology support costs; and |
• | $0.8 million increase in depreciation and amortization expense. |
For the Nine Months Ended September 30, | ||||||||||||||||||||
2019 | 2018 | |||||||||||||||||||
Amount | % of Net Revenue | Amount | % of Net Revenue | $ Change | % Change | |||||||||||||||
(in thousands) | (in thousands) | (in thousands) | ||||||||||||||||||
Interest expense | $ | (303 | ) | — | % | $ | (7,301 | ) | (4 | )% | $ | 6,998 | (96 | )% | ||||||
Other (expense) income, net | $ | (664 | ) | — | % | $ | 621 | — | % | $ | (1,285 | ) | * | |||||||
Impairment loss on investment securities | $ | — | — | % | $ | (1,958 | ) | (1 | )% | $ | 1,958 | (100 | )% |
For the Nine Months Ended September 30, | ||||||||||||||||||||
2019 | 2018 | |||||||||||||||||||
Amount | % of Net Revenue | Amount | % of Net Revenue | $ Change | % Change | |||||||||||||||
(in thousands) | (in thousands) | (in thousands) | ||||||||||||||||||
Provision for income tax expense | $ | (239 | ) | — | % | $ | (294 | ) | — | % | $ | 55 | (19 | )% |
For the Nine Months Ended September 30, | |||||||
2019 | 2018 | ||||||
(in thousands) | |||||||
Net cash provided by operating activities | $ | 7,238 | $ | 5,285 | |||
Net cash (used in) provided by investing activities | (9,243 | ) | 125,196 | ||||
Net cash used in financing activities | (462 | ) | (118,477 | ) | |||
Effect of exchange rate changes on cash and cash equivalents and restricted cash | 125 | 134 | |||||
Net change in cash and cash equivalents and restricted cash | $ | (2,342 | ) | $ | 12,138 |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(in thousands) | |||||||||||||||
Purchased intangible asset amortization | $ | — | $ | — | $ | — | $ | 85 | |||||||
Internally developed software amortization | 1,524 | 1,680 | 4,190 | 7,556 | |||||||||||
Property and equipment depreciation | 1,640 | 1,974 | 5,968 | 5,757 | |||||||||||
Total depreciation and amortization | $ | 3,164 | $ | 3,654 | $ | 10,158 | $ | 13,398 |
Total | Less than 1 year | 1- 3 years | 4- 5 years | More than 5 years | |||||||||||||||
(in thousands) | |||||||||||||||||||
Finance lease obligations | $ | 1,855 | $ | 962 | $ | 893 | $ | — | $ | — | |||||||||
Operating lease obligations | 43,879 | 8,020 | 18,845 | 5,049 | 11,965 | ||||||||||||||
Operating sublease income | (8,970 | ) | (2,535 | ) | (5,301 | ) | (1,134 | ) | — | ||||||||||
Service contracts | 35,043 | 8,427 | 24,557 | 2,059 | — | ||||||||||||||
Restructuring and other related costs | 1,220 | 688 | 491 | 41 | — | ||||||||||||||
Total(1) | $ | 73,027 | $ | 15,562 | $ | 39,485 | $ | 6,015 | $ | 11,965 |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(in thousands) | |||||||||||||||
Net loss | $ | (4,437 | ) | $ | (6,625 | ) | $ | (16,191 | ) | $ | (27,164 | ) | |||
Provision for income tax expense (benefit) | 119 | (133 | ) | 239 | 294 | ||||||||||
Interest and other expense, net | 419 | 1,058 | 967 | 6,680 | |||||||||||
Depreciation and amortization | 3,164 | 3,654 | 10,158 | 13,398 | |||||||||||
EBITDA | (735 | ) | (2,046 | ) | (4,827 | ) | (6,792 | ) | |||||||
Stock-based compensation | 1,179 | 2,495 | 3,985 | 9,033 | |||||||||||
Amortization of contract acquisition asset costs - ASC 606 initial adoption | 277 | 367 | 789 | 1,213 | |||||||||||
Restructuring and other related costs | 630 | — | 1,836 | 209 | |||||||||||
Impairment loss on investment securities | — | — | — | 1,958 | |||||||||||
Litigation reserve | (256 | ) | 2,250 | (256 | ) | 2,250 | |||||||||
Adjusted EBITDA | $ | 1,095 | $ | 3,066 | $ | 1,527 | $ | 7,871 |
Exhibit Number | Description of Document | |
10.1* | ||
10.2* | ||
31.1* | ||
31.2* | ||
32.1* | ||
32.2* | ||
101.SCH* | XBRL Taxonomy Extension Schema Document. | |
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document. | |
101.LAB* | XBRL Taxonomy Extension Label Linkbase Document. | |
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document. |
SERVICESOURCE INTERNATIONAL, INC. (Registrant) | |||
Date: | October 29, 2019 | By: | /s/ RICHARD G. WALKER |
Richard G. Walker Chief Financial Officer (Principal Financial and Accounting Officer) |
I. | NOTICE OF GRANT |
II. | AGREEMENT |
I. | NOTICE OF GRANT OF RESTRICTED STOCK UNIT |
II. | AGREEMENT |
1. | I have reviewed this quarterly report on Form 10-Q of ServiceSource International, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting. |
Date: | October 29, 2019 | By: | /s/ GARY B. MOORE |
Name: Gary B. Moore | |||
Title: Chief Executive Officer (Principal Executive Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of ServiceSource International, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting. |
Date: | October 29, 2019 | By: | /s/ RICHARD G. WALKER |
Name: Richard G. Walker | |||
Title: Chief Financial Officer (Principal Financial and Accounting Officer) |
Date: | October 29, 2019 | By: | /s/ GARY B. MOORE |
Name: Gary B. Moore | |||
Title: Chief Executive Officer (Principal Executive Officer) |
Date: | October 29, 2019 | By: | /s/ RICHARD G. WALKER |
Name: Richard G. Walker | |||
Title: Chief Financial Officer (Principal Financial and Accounting Officer) |
Leases - Maturity of Lease Liabilities (Details) $ in Thousands |
Sep. 30, 2019
USD ($)
|
---|---|
Operating Leases | |
Remainder of 2019 | $ 2,249 |
2020 | 12,009 |
2021 | 11,900 |
2022 | 8,467 |
2023 | 3,532 |
Thereafter | 16,029 |
Total lease payments | 54,186 |
Less: interest | (9,426) |
Less: tenant improvements reimbursement | (881) |
Total | 43,879 |
Operating Sublease | |
Remainder of 2019 | (624) |
2020 | (2,554) |
2021 | (2,631) |
2022 | (2,538) |
2023 | (623) |
Thereafter | 0 |
Total | (8,970) |
Finance Leases | |
Remainder of 2019 | 268 |
2020 | 1,040 |
2021 | 633 |
2022 | 64 |
2023 | 0 |
Thereafter | 0 |
Total lease payments | 2,005 |
Less: interest | (150) |
Less: tenant improvements reimbursement | 0 |
Total | $ 1,855 |
Leases - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Lessee, Lease, Description [Line Items] | ||||
Rent expense | $ 3,100 | $ 8,900 | ||
Sublease income | $ 602 | $ 500 | $ 1,538 | $ 1,100 |
Minimum | ||||
Lessee, Lease, Description [Line Items] | ||||
Option to extend, term (in years) | 1 year | 1 year | ||
Option to terminate, term (in years) | 1 year | |||
Maximum | ||||
Lessee, Lease, Description [Line Items] | ||||
Option to extend, term (in years) | 7 years | 7 years | ||
Option to terminate, term (in years) | 8 years |
Summary of Significant Accounting Policies (Policies) |
9 Months Ended |
---|---|
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying interim unaudited Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information. Accordingly, these financial statements do not include all the information required by GAAP for annual financial statements. The unaudited Consolidated Balance Sheet as of December 31, 2018 has been derived from the Company’s audited annual Consolidated Financial Statements included in our annual report on Form 10-K for the year ended December 31, 2018 filed with the Securities and Exchange Commission on February 28, 2019. In the opinion of management, these Consolidated Financial Statements reflect all adjustments, including normal recurring adjustments, management considers necessary for a fair presentation of the Company’s financial position, operating results, and cash flows for the interim periods presented. These Consolidated Financial Statements and accompanying notes should be read in conjunction with our audited Consolidated Financial Statements and the notes thereto for the year ended December 31, 2018, included in our annual report on Form 10-K. Interim results are not necessarily indicative of results for the entire year. |
Principles of Consolidation | Principles of Consolidation The accompanying unaudited interim Consolidated Financial Statements include the accounts of ServiceSource International, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
|
Use of Estimates | Use of Estimates The preparation of the Consolidated Financial Statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amount of net revenue and expenses during the reporting period. The Company’s significant accounting judgments and estimates include, but are not limited to: revenue recognition, the valuation and recognition of stock-based compensation, the recognition and measurement of current and deferred income tax assets and liabilities and uncertain tax positions, the provision for bad debts and impairment of goodwill and long-lived assets. The Company bases its estimates and judgments on historical experience and on various assumptions that it believes are reasonable under the circumstances. However, future events are subject to change and estimates and judgments routinely require adjustment. Actual results and outcomes may differ from our estimates. |
Reclassifications | Reclassifications Certain items on the Consolidated Statements of Cash Flows for the nine months ended September 30, 2018 have been reclassified to conform to the current year presentation. These reclassifications did not affect the Company's Consolidated Balance Sheet as of December 31, 2018 or the Company's Consolidated Statements of Operations, Consolidated Statements of Comprehensive Loss or Consolidated Statements of Stockholders' Equity for the nine months ended September 30, 2018. |
New Accounting Standards Issued but Not yet Adopted and New Accounting Standards Adopted | New Accounting Standards Issued but Not yet Adopted Financial Instruments - Credit Losses In June 2016, the Financial Accounting Standard Board ("FASB") issued an Accounting Standard Update ("ASU") that amends the measurement of credit losses on financial instruments and requires measurement and recognition of expected versus incurred credit losses for financial assets held. In November 2018, the FASB issued an update to this ASU clarifying receivables arising from operating leases are accounted for using the lease guidance in Accounting Standards Codification Topic 842 Leases ("ASC 842"), and not as financial instruments. This ASU is effective for annual periods and interim periods for those annual periods beginning after December 15, 2019, with early adoption permitted. This standard will apply to the Company's accounts receivables and contract assets. Based on our current analysis the Company does not expect the adoption to have a material impact on its Consolidated Financial Statements as credit losses associated from trade receivables have historically been insignificant. The Company will adopt this standard effective January 1, 2020. New Accounting Standards Adopted Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires the recognition of assets and liabilities arising from lease transactions on the balance sheet and requires significant additional disclosures about the amount, timing, and uncertainty of cash flows from leases. Substantially all leases, including current operating leases, will be recognized by lessees on their balance sheet as a lease asset for its right to use the underlying asset and a lease liability for the corresponding lease obligation. The standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. ASU 2016-02 initially required entities to adopt the standard using a modified retrospective transition method. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842) Targeted Improvements, which provide transition practical expedients allowing companies to adopt the new standard with a cumulative effect adjustment as of the beginning of the year of adoption with prior year comparative financial information and disclosures remaining as previously reported. The Company adopted this standard effective January 1, 2019 and elected the package of practical expedients, accounting for leases with contractual terms less than 12 months as short-term leases and the transition relief option to apply legacy GAAP to periods prior to the standard’s effective date. Upon initial adoption of the standard, the Company recorded a $29.5 million right-of-use asset ("ROU") and a $32.1 million operating lease liability to the Consolidated Balance Sheets as of January 1, 2019. Cloud Computing Implementation Costs In August 2018, the FASB issued ASU 2018-15, cloud computing implementation costs, that provides guidance on the accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. The standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The accounting for the service element of a hosting arrangement that is a service contract is not affected by the new standard. This ASU is effective for annual periods and interim periods for those annual periods beginning after December 15, 2019, with early adoption permitted. The Company early adopted this standard effective January 1, 2019 and the effects of this standard were applied prospectively to eligible costs incurred on or after January 1, 2019. The adoption of this standard did not have a material impact on the Company’s Consolidated Financial Statements. |
Leases | Leases At the inception of a contract, the Company determines whether the contract is or contains a lease. ROU assets represent the Company's right to use an underlying asset over the lease term and lease liabilities represent our remaining payment obligation under the lease. ROU assets and liabilities are recognized upon the lease commencement based on the present value of lease payments over the lease term. ROU assets are adjusted for any prepaid or accrued lease payments and unamortized lease incentives or initial direct costs. As most of the Company's leases do not provide an implicit rate, the Company uses an incremental borrowing rate, the variable interest rate on the revolving line of credit (the “Revolver”), and other information available at the lease commencement in determining the present value of lease payments. The Company's lease terms include options to extend or terminate the lease when it is reasonably certain it will exercise the option. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Lease expense and sublease income is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are accounted for separately. |
Other Current and Long-Term Liabilities |
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Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Current and Long-Term Liabilities | Other Current and Long-Term Liabilities Other current liabilities were comprised of the following:
Other long-term liabilities were comprised of the following:
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Revenues, Contract Asset and Liability Balances and Contract Acquisition Costs |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues, Contract Asset and Liability Balances and Contract Acquisition Costs | Revenues, Contract Asset and Liability Balances and Contract Acquisition Costs The following tables present the disaggregation of revenue from contracts with our clients: Revenue by Performance Obligation
Revenue by Geography
Revenue by Contract Pricing
Contract Balances Once the Company obtains a client contract, the timing of satisfying performance obligations and the receipt of client consideration can be different and will give rise to contract assets and contract liabilities. As of September 30, 2019 and December 31, 2018, the contract asset balance totaled $0.1 million and $0.2 million, respectively, and the contract liability balance totaled $0.3 million and $0.9 million, respectively. Contract assets and contract liabilities are reflected in "Prepaid expenses and other", "Other assets" and "Other current liabilities" in the Consolidated Balance Sheets. Transaction Price Allocated to Remaining Performance Obligations The Company maintains contracts with fixed consideration that are generally with long-standing client relationships and typically renew annually. Assuming none of the Company’s current contracts with fixed consideration are renewed, we estimate receiving approximately $56.0 million in future selling services fixed consideration as of September 30, 2019. Professional services revenues from fixed consideration are based on proportional performance which is typically concluded within 90 days of contract execution. The Company typically bills professional services upfront upon obtaining a client contract. As of September 30, 2019, we estimate $1.0 million in professional services fixed consideration revenue to be recognized through the remainder of 2019. Contract Acquisition Costs Certain commissions paid to the Company's sales team upon obtaining a client contract are incremental and recoverable, and capitalized as contract acquisition costs. Under the transition guidance, the Company recorded a $3.3 million contract acquisition asset and corresponding offset to the opening accumulated deficit balance related to previously expensed sales commissions. The Company expensed $1.5 million of the $3.3 million of contract acquisition asset during 2018 and will expense the remainder of the asset over the next five years as follows: $0.1 million remaining in 2019, $0.6 million in 2020 and $0.3 million in 2021 and beyond. The Company recorded $0.3 million and $0.8 million, respectively, in amortization expense for the three and nine months ended September 30, 2019 and $0.3 million and $1.2 million, respectively, of amortization for the three and nine months ended September 30, 2018 related to amounts capitalized upon the adoption of ASC 606. Subsequent to the adoption of ASC 606, the Company capitalized an additional $0.3 million and $1.1 million as of September 30, 2019 and December 31, 2018, respectively, of sales commissions as contract acquisition costs related to contracts obtained during the period. The Company recorded amortization expense of $0.1 million and $0.5 million, respectively, for the three and nine months ended September 30, 2019 and $0.1 million for the three and nine months ended September 30, 2018 related to the amounts capitalized. As of September 30, 2019, the weighted-average remaining amortization period related to these capitalized costs was approximately 2.4 years. Impairment recognized on contract costs was insignificant for the three and nine months ended September 30, 2019 and 2018. Applying the practical expedient for amortization periods one year or less, the Company recognizes any incremental costs of obtaining contracts as expense when the cost is incurred. These costs are included in "Sales and marketing" in the Consolidated Statements of Operations. |
Income Taxes (Details) - USD ($) $ in Millions |
Sep. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Income Tax Disclosure [Abstract] | ||
Unrecognized tax benefits | $ 1.0 | $ 0.9 |
Revenues, Contract Asset and Liability Balances and Contract Acquisition Costs (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue From Contracts with Clients | The following tables present the disaggregation of revenue from contracts with our clients: Revenue by Performance Obligation
Revenue by Geography
Revenue by Contract Pricing
|
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands |
Sep. 30, 2019 |
Jan. 01, 2019 |
Dec. 31, 2018 |
---|---|---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Right-of-use assets | $ 38,519 | $ 0 | |
Operating lease liability | $ 43,879 | ||
ASU 2016-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Right-of-use assets | $ 29,500 | ||
Operating lease liability | $ 32,100 |
Restructuring and Other Related Costs - Narrative (Details) $ in Thousands |
1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|---|
May 31, 2017
location
|
Sep. 30, 2019
USD ($)
|
Sep. 30, 2018
USD ($)
|
Sep. 30, 2019
USD ($)
|
Sep. 30, 2018
USD ($)
|
Dec. 31, 2018
USD ($)
|
Dec. 31, 2017
USD ($)
|
|
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring charges | $ 600 | $ 200 | $ 1,800 | $ 200 | |||
Number of locations where reduction of headcount and office spaces took place (location) | location | 4 | ||||||
February 2019 Restructuring Effort | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring charges | $ 1,836 | ||||||
May 2017 Restructuring Effort | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring charges | $ 209 | $ 7,308 |
Commitments and Contingencies (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||
Future Minimum Payments Under Non-cancelable Service Contract Commitments | Future minimum payments under non-cancelable service contract commitments were as follows:
|
The Company (Details) |
9 Months Ended |
---|---|
Sep. 30, 2019
language
| |
Accounting Policies [Abstract] | |
Number of languages (more than) | 45 |
Years of operating experience | 20 years |
Commitments and Contingencies - Narrative (Details) $ in Thousands |
Aug. 23, 2016
plaintiff
|
Sep. 30, 2019
USD ($)
facility
debt_instrument
|
Dec. 31, 2018
USD ($)
|
---|---|---|---|
Operating Leased Assets [Line Items] | |||
Number of leased facilities | facility | 2 | ||
Number of letters of credit | debt_instrument | 2 | ||
Loss contingency accrual | $ 192 | $ 3,750 | |
Sarah Patton, et al v. ServiceSource Delaware, Inc | Pending Litigation | |||
Operating Leased Assets [Line Items] | |||
Number of plaintiffs | plaintiff | 3 | ||
Money market mutual funds | Letter of Credit | |||
Operating Leased Assets [Line Items] | |||
Letters of credit | 2,300 | ||
Restricted cash | $ 2,300 |
Leases - Supplemental Income Statement Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Leases [Abstract] | ||||
Operating lease cost | $ 2,897 | $ 8,894 | ||
Finance lease cost: | ||||
Amortization of leased assets | 164 | 486 | ||
Interest on lease liabilities | 41 | 127 | ||
Total finance lease cost | 205 | 613 | ||
Sublease income | (602) | $ (500) | (1,538) | $ (1,100) |
Net lease cost | $ 2,500 | $ 7,969 |
Fair Value of Financial Instruments |
9 Months Ended |
---|---|
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company follows a three-tier fair value hierarchy, which is described in detail in the Company's Annual Report on Form 10-K for the year ended December 31, 2018. There were no transfers between levels during the nine months ended September 30, 2019 and 2018. Cash equivalents consist of highly liquid investments with original maturities of three months or less at the time of purchase. Cash and cash equivalents are classified within Level 1. Short-term investments consist of readily marketable debt securities with a remaining maturity of more than three months from the time of purchase. The Company liquidated its investment securities during the first half of 2018 to repay the $150.0 million convertible notes that matured August 1, 2018. Based on the Company’s decision to sell these investment securities, an other-than-temporary impairment occurred and a $2.0 million impairment loss was recorded in the Consolidated Statements of Operations for the nine months ended September 30, 2018. The Company recognized realized gains from the sale of available-for-sale securities of $0.03 million and losses of $0.2 million from the sale of available-for-sale securities for the nine months ended September 30, 2018. No realized gains or losses were recognized for the three months ended September 30, 2018. Gains and losses on available-for-sale securities are recorded in "Interest and other expense, net" in the Consolidated Statements of Operations. The Company had restricted cash in "Other assets" in the Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018 of $2.3 million and $1.2 million, respectively. Restricted cash is classified within Level 1. |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Sep. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 94,599,000 | 92,895,000 |
Common stock, shares outstanding (in shares) | 94,478,000 | 92,774,000 |
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