SUNNYVALE, CA / ACCESSWIRE / August 6, 2020 / Support.com, Inc. (NASDAQ:SPRT), a full-spectrum leader in virtual call center services and direct-to-consumer technical support solutions, today reported unaudited financial results for its second quarter ended June 30, 2020.
Q2 2020 Financial Summary
For the second quarter of 2020, total revenue was $11.0 million, a decrease of $5.7 million or 34 percent compared to revenues of $16.7 million in the second quarter of 2019 and down $0.9 million or 8 percent compared to revenues of $11.9 million in the second quarter of 2020.
We recorded net income of $0.6 million or $0.03 per share in the second quarter of 2020 compared to net income of $0.7 million, or $0.03 per share, in the second quarter of 2019 and net income of $0.4 million, or $0.02 per share, in the first quarter of 2020.
Key changes in our net income included the following:
- Gross profit of $3.9 million in the second quarter of 2020 was relatively flat with the same period in 2019, but decreased by $0.4 million compared to the first quarter of 2020.
- Our gross profit margin increased by 11 percentage points to 35% compared with the same quarter of 2019 and remained relatively flat when compared to the first quarter of 2020. The increase over the prior year amounts reflects the reduction in recruiting and training costs and other variable components of the lower revenues as well as the other operating efficiencies.
- Operating expenses were $3.4 million in the second quarter of both 2020 and 2019 and were $0.5 million lower than the $3.9 million of operating expenses in the first quarter of 2020.
- The lower operating expenses in the second quarter of 2020 as compared with the prior quarter is due to lower marketing spending as well as lower public company related spending in general and administrative expenses.
Balance Sheet Information
At June 30, 2020, cash, cash equivalents and short-term investments were $29.7 million as compared with $43.2 million at June 30, 2019 and $26.4 million at December 31, 2019. The year-over-year decrease was primarily attributable to the previously discussed $10.0 million legal-settlement payment in the second quarter of 2019 and the $19.1 million special distribution to shareholders in the fourth quarter of 2019.
Total assets as of June 30, 2020 were $39.7 million and total shareholders’ equity was $34.2 million.
Support.com will not host a conference call discussing the Company’s second quarter results. For more information, please visit the Investor Relations section of the Support.com website at Support.com/about-us/investor-relations/.
Support.com, Inc. (NASDAQ: SPRT) is a full-spectrum leader in virtual call center services and direct-to-consumer and small business technical support solutions. With more than 20 years of providing high quality technical support services to consumers and small businesses through white-labeled partnerships or direct solutions, Support.com has the expertise, tools and software solutions to troubleshoot and maintain all the devices in the connected home and business. The company’s skilled U.S.-based live agents and rich self-support tools troubleshoot more than 10,000 technical support issues consumers and small businesses face on an ongoing basis. Support.com delivers high quality, turnkey technical support solutions and digital support experiences that enable customers to get the most out of their technology.
For more information, please visit www.support.com.
Support.com, Inc. is an Equal Opportunity Employer. For more information, visit http://www.support.com/about-us/careers.
© 2020 Support.com, Inc. All rights reserved. Support.com and the Support.com logo are trademarks or registered trademarks of Support.com, Inc. in the United States and other countries. All other marks are the property of their respective owners.
Safe Harbor Statement
This announcement contains forward-looking statements (including within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended) concerning Support.com. These statements include, but are not limited to, statements that address our expected future business and financial performance and other statements identified by words such as “will”, “expect”, “believe”, “anticipate”, “estimate”, “should”, “intend”, “plan”, “potential”, “predict” “project”, “aim”, and similar words, phrases or expressions. These forward-looking statements are based on current expectations and beliefs of the management of Support.com, as well as assumptions made by, and information currently available to, such management, current market trends and market conditions and involve risks and uncertainties, many of which are outside the Company’s and management’s control, and which may cause actual results to differ materially from those contained in forward-looking statements. Accordingly, you should not place undue reliance on such statements. Forward-looking statements include, but are not limited to, all statements relating to expected financial performance (including without limitation statements involving growth and projections of revenue, margin, profitability, income (loss) from continuing operations, income (loss) per share from continuing operations, cash usage or generation, cash balance as of any future date, capital structure and other financial items); the plans and objectives of management for future operations, customer relationships, products, services or investments; personnel matters; and future performance in economic and other terms. Such forward-looking statements are based on current expectations that involve a number of uncertainties and risks that may cause actual events or results to differ materially from those indicated by such forward-looking statements, including, among others, our ability to retain and grow major programs, our ability to expand and diversify our customer base, our ability to maintain and grow revenue, any acquisitions we may make, including integrating acquired companies with our existing businesses and our ability to achieve the benefits, growth prospects and synergies expected by such acquisitions, our ability to successfully develop new products and services, our ability to manage our workforce, our ability to operate in markets that are subject to extensive regulations, such as support for home security systems, our ability to control expenses and achieve desired margins, our ability to maintain or improve gross margin, our dependence on a small number of customers and partners, our ability to attract, train and retain talented employees, potential intellectual property, class action or other litigation, fluctuations in government laws and regulations, our ability to utilize and realize the value of our net operating loss carryforwards and how they could be substantially limited or permanently impaired, given our current market capitalization and cash position, our ability to execute the cost reduction program involving the planned actions on the expected schedule, our ability to achieve the cost savings expected in connection with the cost reduction plan, the ultimate effect of any such cost reductions on our financial results, any expenses or reputational damage associated with resolving customer warranty and/or indemnification claims; and our ability to manage the effects of the cost reduction plan on our workforce and other operations. Many of the foregoing risks and uncertainties are, and will be, exacerbated by the COVID-19 pandemic and any worsening of the global business and economic environment as a result. Our filings with the SEC, which may be obtained for free at the SEC’s website at http://www.sec.gov, discuss some of the important risk factors that may affect our business, results of operations and financial condition. Actual results may vary from the estimates provided. We undertake no intent or obligation to publicly update or revise any of the estimates and other forward-looking statements made in this announcement, whether as a result of new information, future events or otherwise, except as required by law.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands) (unaudited)
|June 30, 2020 (1)||December 31, 2019 (2)|
|Cash, cash equivalents and short-term investments||$ 29,694||$ 26,414|
|Accounts receivable, net||7,249||9,398|
|Prepaid expenses and other current assets||583||728|
|Total current assets||37,526||36,540|
|Property and equipment, net||1,218||533|
|Intangible assets, net||250||250|
|Total assets||$ 39,742||$ 38,040|
|Liabilities and Stockholders’ Equity|
|Accounts payable and accrued compensation||$ 2,904||$ 1,887|
|Other accrued liabilities||821||1,001|
|Short-term deferred revenue||1,026||1,193|
|Total current liabilities||4,751||4,081|
|Other long-term liabilities||779||792|
|Accumulated other comprehensive loss||(2,565)||(2,380)|
|Total stockholders’ equity||34,212||33,167|
|Total liabilities and stockholders’ equity||$ 39,742||$ 38,040|
Note 2: Derived from audited consolidated financial statements for the year ended December 31, 2019.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts) (unaudited)
|Three Months Ended||Six Months Ended|
|June 30, 2020 (1)||March 31, 2020||June 30, 2019||June 30, 2020||June 30, 2019|
|Services||$ 10,606||$ 11,511||$ 15,508||$ 22,117||$ 32,372|
|Software and other||428||438||1,188||866||2,388|
|Cost of revenue:|
|Cost of services||7,136||7,685||12,686||14,821||26,484|
|Cost of software and other||36||29||38||65||92|
|Total cost of revenue||7,172||7,714||12,724||14,886||26,576|
|Engineering and IT||968||1,040||915||2,008||1,664|
|Sales and marketing||517||813||438||1,330||830|
|General and administrative||1,904||2,053||2,090||3,957||3,986|
|Total operating expenses||3,389||3,906||3,443||7,295||6,480|
|Income from operations||473||329||529||802||1,704|
|interest income and other, net||173||84||255||257||551|
|Income before income taxes||646||413||784||1,059||2,255|
|Income tax provision||29||49||131||78||159|
|Net income||$ 617||$ 364||$ 653||$ 981||$ 2,096|
|Net earnings per share|
|Basic||$ 0.03||$ 0.02||$ 0.03||$ 0.05||$ 0.11|
|Diluted||$ 0.03||$ 0.02||$ 0.03||$ 0.05||$ 0.11|
|Shares used in computing per share amounts|
SOURCE: Support.com, Inc.