Eighth Straight Quarter of Record Results Driven by Continued Sales and Marketing Execution and Introduction of Enhanced Customer Retention and Expansion Efforts
GAINESVILLE, FL – May 9, 2019 – SharpSpring, Inc. (NASDAQ: SHSP), a leading cloud-based marketing automation platform, reported financial results for the first quarter ended March 31, 2019.
First Quarter 2019 Operational Highlights
- Added a Q1 record 327 new SharpSpring customers, who selected the platform to generate leads, convert more leads to sales and measure the ROI of their marketing campaigns.
- Finished the quarter with 1,804 agency customers and over 7,700 businesses using the SharpSpring Marketing Automation platform.
- Significantly increased available growth capital through successful equity offering in March, resulting in net proceeds of $10.7 million after full exercise of overallotment.
- Recognized by TrustRadius as a “Top Rated Marketing Automation Software” for the second consecutive year
First Quarter 2019 Financial Results
- SharpSpring Marketing Automation revenues grew 29% to a record $5.3 million from $4.1 million in the same year-ago period.
- Total revenue (which includes legacy products) increased 27% to a record $5.3 million from $4.2 million in the same year-ago period.
- Gross profit increased 36% to $3.8 million (71% of total revenue) from $2.8 million (67% of total revenue) in the same year-ago period.
- Net loss was $2.9 million, or $0.33 per share, compared to net loss of $2.1 million, or $0.24 per share, in the first quarter of 2018.
- Adjusted EBITDA loss (a non-GAAP metric reconciled below) totaled $1.8 million, compared to an adjusted EBITDA loss of $1.7 million in the same year-ago period.
- Core net loss (a non-GAAP metric reconciled below) totaled $2.1 million, or $0.23 per share, compared to core net loss of $1.7 million, or $0.20 per share, in the same year-ago period.
- At quarter-end, the company had $17.8 million in cash, compared to $9.3 million at December 31, 2018.
“The first quarter was a record start to the year, and we’re in a great spot to continue our growth trajectory throughout 2019,” said SharpSpring CEO Rick Carlson. “Considering our typical seasonality during this period, we still increased our new customer win rate by nearly 50% over the first quarter of 2018, bringing us to over 1,800 agency clients and well over 7,700 businesses now using SharpSpring to improve their sales and marketing efforts, drive new leads, and help their business thrive.”
“Operationally, we continue to improve how we manage the entire customer lifecycle, placing a greater level of importance on successful onboarding and providing high-touch account management to ensure that all customers maximize their success on our platform. In addition to the ongoing enhancements we’ve made to our product, we’re also working diligently to introduce certain paid features in the second half of the year that will make SharpSpring more powerful than ever. Going forward, we’re continuing to focus our efforts both on winning new customers at an increasing rate and reducing both logo and net revenue attrition. Put together, we believe this dual emphasis will ultimately support quicker return on investment in the near term and create expansion revenues down the road.”
On May 9, 2019, SharpSpring entered into an agreement with SHSP Holdings, LLC (“SHSP Holdings”), for the conversion and retirement of the $8 million unsecured convertible promissory note issued and announced by SharpSpring in March of 2018. Under the terms of the agreement, total shares to be issued to SHSP Holdings are 1,241,635. This amount is 119,732 shares less than the fully allotted amount, which was previously expected to be issued upon the optional early conversion of the note by the Company, or the previously scheduled maturity of the note in March 2023. Total settled principal and interest will equal $9,312,258.
SharpSpring management will hold a conference call today, May 9, 2019 at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss these results.
Company CEO Rick Carlson and CFO Brad Stanczak will host the call, followed by a question and answer period.
U.S. dial-in number: 877-407-9124.
International number: 201-689-8584.
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 Gateway Investor Relations at 949-574-3860.
The conference call will be broadcast live and available for replay here and via the investor relations section of the company’s website at investors.sharpspring.com.
A replay of the conference call will be available after 7:30 p.m. Eastern time on the same day through May 23, 2019.
Toll-free replay number: 877-481-4010.
International replay number: 919-882-2331.
Replay ID: 46945
About SharpSpring, Inc.
SharpSpring, Inc. (NASDAQ: SHSP) is a rapidly growing, highly-rated global provider of affordable marketing automation delivered via a cloud-based Software-as-a Service (SaaS) platform. Thousands of businesses around the world rely on SharpSpring to generate leads, improve conversions to sales, and drive higher returns on marketing investments. Known for its innovation, open architecture and free customer support, SharpSpring offers flexible monthly contracts at a fraction of the price of competitors making it an easy choice for growing businesses and digital marketing agencies. Learn more at www.sharpspring.com.
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.
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 are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements 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. Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.