The 10-second takeaway
For the quarter ended Sep. 30 (Q3), ServiceSource International met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue increased significantly and GAAP loss per share grew. The non-GAAP profit was a surprise, as analysts had predicted a loss.
Margins dropped across the board.
ServiceSource International recorded revenue of $59.1 million. The seven analysts polled by S&P Capital IQ anticipated net sales of $58.8 million on the same basis. GAAP reported sales were 18% higher than the prior-year quarter's $50.1 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.02. The eight earnings estimates compiled by S&P Capital IQ predicted -$0.01 per share. GAAP EPS were -$0.05 for Q3 against -$0.04 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 41.5%, 250 basis points worse than the prior-year quarter. Operating margin was -5.7%, 50 basis points worse than the prior-year quarter. Net margin was -6.1%, 50 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $72.1 million. On the bottom line, the average EPS estimate is $0.04.
Next year's average estimate for revenue is $248.1 million. The average EPS estimate is $0.06.
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 20 members out of 31 rating the stock outperform, and 11 members rating it underperform. Among 12 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), four give ServiceSource International a green thumbs-up, and eight give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on ServiceSource International is outperform, with an average price target of $17.86.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.