Company Achieves Ninth Consecutive Record Topline Performance, Introduces First of New Premium Features Designed to Generate Expansion Revenues and Improved Customer Lifetime Values
GAINESVILLE, FL – August 6, 2019 SharpSpring, Inc. (NASDAQ: SHSP), a leading cloud-based marketing automation platform, reported financial results for the second quarter ended June 30, 2019.
Second Quarter 2019 and Recent Operational Highlights
- Added 290 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 1,854 agency customers and over 8,000 businesses using the SharpSpring Marketing Automation platform.
- Released Sales Optimizer, a first-of-its-kind suite of tools that allows users to control the quality and cadence of the entire sales process, leading to more closed deals and increased revenue.
- Recognized with three major industry awards, including “Top Rated All-in-One Marketing Tool for 2019” and “2019 Most Revolutionary Software Award” from TrustRadius and “Top Marketing Resource Management Software” from G2 Crowd.
- Joined the Russell® 3000 Index, effective July 1, 2019.
Second Quarter 2019 Financial Results
- SharpSpring Marketing Automation revenues grew 26% to a record $5.5 million from $4.3 million in the same year-ago period.
- Total revenue (which includes legacy products) increased 24% to a record $5.5 million from $4.4 million in the same year-ago period.
- Gross profit increased 33% to $3.9 million (71% of total revenue) from $2.9 million (66% of total revenue) in the same year-ago period.
- Net loss was $4.2 million, or $0.41 per share, compared to net loss of $2.5 million, or $0.29 per share, in the second quarter of 2018. Current year net loss includes a one-time, non-cash charge of $2.2 million related to the settlement of convertible debt.
- Adjusted EBITDA loss (a non-GAAP metric reconciled below) totaled $1.7 million, compared to an adjusted EBITDA loss of $1.5 million in the same year-ago period.
- Core net loss (a non-GAAP metric reconciled below) totaled $1.9 million, or $0.19 per share, compared to core net loss of $1.7 million, or $0.21 per share, in the same year-ago period.
- At quarter-end, the company had $16.0 million in cash, compared to $9.3 million at December 31, 2018.
“In the second quarter we put together our ninth consecutive record revenue performance and continued to make considerable progress on our product roadmap and long-term retention initiatives,” said SharpSpring CEO Rick Carlson. “After adding another nearly 300 total customers in the quarter, we now have over 1,850 agency partners and over 8,000 businesses on our platform, which translated into a 24% topline increase to $5.5 million. Early in Q2 we also made the strategic decision to switch incoming direct customers to annual subscriptions, which delayed certain deal-closings in the near-term, but should generate substantial improvements in retention and lifetime value as we attract a higher quality of customer and deliver a better onboarding and account management experience for new cohorts.
“Additionally, with the new premium offerings we’ve recently released, including our Sales Optimizer, as well as additional products slated for the second half of the year, we have significant opportunities within new and existing customers to make our products more essential to their operations while also generating meaningful expansion revenues. Looking ahead, we remain confident in our ability to continue winning new business and continue to focus on ensuring that we’re built for long-term growth. Put together, SharpSpring has effectively positioned itself to continue taking an increasing share of the marketing automation industry.”
SharpSpring management will hold a conference call today, August 6, 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.
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.
A replay of the conference call will be available after 7:30 p.m. Eastern time on the same day through August 20, 2019.
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.