Shares of ServiceSource (NASDAQ:SREV), a provider of outsourced inside sales and customer service solutions, are being obliterated today. The stock is down 46% as of 11:07 a.m. EDT on Friday after the company shared preliminary third-quarter results and revised its full-year guidance.
Here's an overview of the updated guidance:
- Third-quarter revenue is expected to be about $57 million. That's below its prior outlook for revenue of $60 million to $61 million. It's also below Wall Street's projection of $60.5 million.
- Full-year revenue is expected to land between $238 million and $240 million. For context, market watchers were expecting $248 million in revenue.
Here's the explanation that CEO Christopher Carrington shared with investors on the disappointing numbers:
While our forecasts for new logo ramps and install base growth were generally in line across our portfolio, as we closed the quarter we experienced unexpected churn and softer end-user demand at several clients. The impact of these factors offsets the positive progression we experienced across the remainder of our business and alters our view for the balance of the year.
In a separate release, ServiceSource also stated that it has hired Richard Walker, a member of the company's board, to take over the role of CFO starting in November.
Traders are responding to the weakness by taking the share price to the woodshed.
CEO Carrington did his best to tell the markets that the company is taking action to address its weaknesses:
We are implementing specific actions in response to these challenges and other catalysts give us reason for sustained optimism. In recent months we have attracted three new executive leaders to further advance the Company, we have signed 12 new logos year-to-date, client net promoter scores continue to improve, and we have a strong balance sheet and liquidity profile.
Management also stated that the company will provide additional details on its turnaround plan during its earnings call on Nov. 7. Bulls and bears alike will want to tune in to learn what's next for this beaten-down business.