SharpSpring Reports Record Second Quarter 2016 Results
GAINESVILLE, FL — August 9, 2016 – SharpSpring, Inc. (NASDAQ: SHSP), a global provider of cloud-based marketing technologies, reported financial results for the second quarter ended June 30, 2016.
Second Quarter 2016 Operational Highlights
- Secured 251 new SharpSpring customers, up 38% year-over-year, and finished the quarter with over 4,000 businesses using the flagship platform
- Divested the SMTP email relay business for $15.0 million, strengthening the company’s balance sheet and allowing for greater focus on the company’s higher-growth marketing automation platform
- Completed the migration of more than 12,000 legacy GraphicMail customers onto the company’s new SharpSpring Mail+ marketing automation platform
- Launched a cutting-edge landing page and blog builder to enhance its premium marketing automation offering
Second Quarter 2016 Financial Results
- Revenue increased 18% to $4.2 million from $3.6 million in the same year-ago period. The increase was driven by a 111% increase in revenue from the company’s SharpSpring marketing automation platform to a record $2.1 million or 50% of total revenue.
- Gross profit increased 8% to a record $2.9 million from $2.7 million in the second quarter of 2015.
- Net income totaled $9.1 million or $1.19 per share compared to a net loss of $1.9 million or $(0.32) per share in the second quarter of 2015. The improvement was primarily due to a gain on the sale of the company’s SMTP email relay business for $15.0 million in aggregate consideration, offset by increased tax expense associated with the gain.
- Adjusted EBITDA loss (a non-GAAP metric reconciled below) totaled $19,000, compared to adjusted EBITDA of $36,000 in the same year-ago period.
- Core net income (a non-GAAP metric reconciled below) totaled $79,000 or $0.01 core net income per share, an improvement from a core net loss of $20,000 in the same year-ago period.
- At quarter-end, cash totaled $15.3 million, compared to $3.2 million at the end of the prior quarter, primarily due to $14.0 million of cash received from the sale of the SMTP email relay business.
“Q2 marked another record quarter for SharpSpring,” said company CEO Rick Carlson. “Our performance reveals the increasing demand for our cost-efficient and easy-to-use marketing automation platform, as well as our ability to leverage our competitive advantages to rapidly expand our market share. In fact, revenue from our marketing automation platform hit a new record high of $2.1 million, reaching 50% of total revenue for the first time in our history.
“In addition to generating strong revenue and expanding our customer base, we made significant progress executing on our plan to increase our focus and resources on our core marketing automation platform. This was highlighted by our successful migration of GraphicMail customers onto the SharpSpring platform, as well as the divestiture of our email relay business unit for $15 million. Both milestones streamlined our operations, allowing us to focus more on marketing automation and more effectively leverage our price and product competitive advantages.
“Looking ahead, we believe we will be able to leverage our bolstered balance sheet, business model, and industry-leading platform to achieve our financial goals for 2016. This includes doubling our SharpSpring revenue and more than tripling the number of businesses using our SharpSpring platform.”
Discontinued Operations Presentation
Figures in the commentary above have not been adjusted to split out the operations of the company’s SMTP email relay business, which was sold on June 27, 2016 and treated as “discontinued operations” in the financial statements below. For more information, please refer to the reconciliation table presented below and the company’s upcoming 10-Q filing.
SharpSpring management will hold a conference call today (August 9, 2016) at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss these results.
Company CEO Rick Carlson and CFO Edward Lawton will host the call, followed by a question and answer period.
Date: Tuesday, August 9, 2016
Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)
U.S. dial-in number: 1-877-407-4018
International dial-in number: 1-201-689-8471
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios Group at 1-949-574-3860.
A replay of the conference call will be available after 7:30 p.m. Eastern time through August 30, 2016.
Toll-free replay number: 1-877-870-5176
International replay number: 1-858-384-5517
Replay ID: 13641528
Non-GAAP Financial Measures
Adjusted EBITDA, core net loss and core net loss per share are “non-GAAP financial measures” presented as supplemental measures of the company’s performance. These metrics are not presented in accordance with United States generally accepted accounting principles, or GAAP. The company believes these measures provide additional meaningful information in evaluating its performance over time. However, the measures have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of the company’s results as reported under GAAP. A reconciliation of net loss to these measures is included for your reference in the financial section of this earnings press release.
About SharpSpring, Inc.
SharpSpring, Inc. (SHSP) is a rapidly growing, global provider of cloud-based marketing automation solutions that enable businesses to improve lead generation and engagement to drive more sales. The company’s product lines, which include SharpSpring and SharpSpring Mail+, are known for their innovation, flexible architecture, ease of use, and cost-effectiveness — all backed by high-quality, multilingual customer support. Learn more at www.sharpspring.com and www.sharpspringmail.com.
Important Cautions Regarding Forward-Looking Statements
The information posted in this release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify these statements by use of the words “may,” “will,” “should,” “plans,” “explores,” “expects,” “anticipates,” “continues,” “estimates,” “projects,” “intends,” and similar expressions. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or anticipated. These risks and uncertainties include, but are not limited to, general economic and business conditions, effects of continued geopolitical unrest and regional conflicts, competition, changes in technology and methods of marketing, delays in completing new customer offerings, changes in customer order patterns, changes in customer offering mix, continued success in technological advances and delivering technological innovations, our ability to successfully utilize our cash to develop current and future products, delays due to issues with outsourced service providers, those events and factors described by us in Item 1.A “Risk Factors” in our most recent Form 10-K and other risks to which our Company is subject, and various other factors beyond the Company’s control.