GAINESVILLE, FL – November 8, 2016 – SharpSpring, Inc. (NASDAQ: SHSP), a global provider of cloud-based marketing technologies, reported financial results for the third quarter ended September 30, 2016.
Third Quarter 2016 Operational Highlights
- Secured 244 new SharpSpring customers, up 30% year-over-year, and finished the quarter with 1,050 agency customers and over 4,750 businesses using the flagship platform.
- Announced an integration with PieSync, which extends the SharpSpring platform by providing users with two-way contact syncing with dozens of cloud-based apps.
- Hired Andrew Dod as Chief Marketing Officer to increase growth by focusing on lead generation and deployment of new marketing initiatives.
- Added dynamic content functionality, which allows users to build pages and emails that adapt to visitors’ profiles, to the growing list of features available in SharpSpring.
- Expanded into a new headquarters in Gainesville, FL and executed a plan to close the Company’s South African office to further align and unify the organization.
Third Quarter 2016 Financial Results from Continuing Operations
- Revenue increased 26% to $3.0 million from $2.4 million in the same year-ago period, driven by strong growth from our flagship marketing automation solution which increased 101% to $2.5 million during the third quarter of 2016.
- Gross profit increased 6% to $1.7 million from $1.6 million in the third quarter of 2015.
- Net loss from continuing operations totaled $1.2 million or $(0.15) per share compared to a net loss of $1.6 million or $(0.24) per share in the third quarter of 2015.
- Adjusted EBITDA loss (a non-GAAP metric reconciled below) totaled $1.0 million, compared to adjusted EBITDA loss of $0.8 million in the same year-ago period.
- Core net loss (a non-GAAP metric reconciled below) totaled $0.7 million or ($0.08) per share, which compared to core net loss of $0.7 million or ($0.10) per share, in the same year-ago period.
- At quarter-end, cash totaled $11.6 million, compared to $15.3 million at the end of the prior quarter, reflecting $2.6 million of cash paid for taxes during Q3 related to the gain on the sale of the SMTP email relay business during Q2.
“I am pleased with our performance in the quarter and excited about the future for SharpSpring,” said company CEO Rick Carlson. “We are happy to report record revenues for our core SharpSpring product which grew 101% from last year. New customer wins for our flagship product nearly eclipsed our record set last quarter, even with several transformational corporate events going on during Q3’s sales cycle.
“On the operational side, Q3 was a continuation of the work we started in Q2 to refocus our operations and strategic direction on our high growth marketing automation platform. After the sale of our SMTP email relay product and the completion of the migration of our GraphicMail customers to SharpSpring Mail+ in late Q2, we closed our 50-person office in Cape Town, South Africa which had previously been GraphicMail’s principal office. The Cape Town office closure allows us to increase the continuity of our operations by centralizing the hiring of new employees at our Gainesville, Florida headquarters. That hiring has begun, and will be ongoing through Q4 as we meet the staffing demands of our rapidly growing business. Once complete, these final transformational activities will allow us to execute our growth strategies for SharpSpring with our teams’ 100% focus and effort in 2017.
“Through all this, the fundamentals of our business have remained constant – we continue to offer a leading marketing automation platform to agencies and small or mid-sized businesses at a fraction of the price of HubSpot and our other major competitors. We are well positioned to benefit from the increasing adoption of marketing automation solutions and the increase in use of agencies to solve their clients’ complex digital marketing needs. We remain confident in the long-term growth and success of our platform and achieving our goals to more than double the revenue of our flagship product in 2016.”
SharpSpring management will hold a conference call today (November 8, 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, November 8, 2016
Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)
U.S. dial-in number: 877-407-4018
International number: 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 949-574-3860.
A replay of the conference call will be available after 7:30 p.m. Eastern time on the same day through November 29, 2016.
Toll-free replay number: 844-512-2921
International replay number: 412-317-6671
Replay ID: 13648383
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.
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 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 Form 10-Q and other risks to which our Company is subject, and various other factors beyond the Company’s control.