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Support.com Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 8, 2012 04:35PM

Support.com Inc. (SPRT) filed Quarterly Report for the period ended 2012-06-30. Support.com, Inc. has a market cap of $145 million; its shares were traded at around $2.93 with and P/S ratio of 2.7. Support.com, Inc. had an annual average earning growth of 1.1% over the past 5 years.



Highlight of Business Operations:

Services revenue consists primarily of fees for technology services. We provide these services remotely, generally using work-from-home Personal Technology Experts and contractors who utilize our proprietary technology to deliver the services. Services revenue for the three months ended June 30, 2012 increased by $5.3 million from the same period in 2011. The increase was due to growth in our channel programs, primarily expansion of the Comcast program. For the three months ended June 30, 2012, services revenue generated from our channel partnerships was $12.8 million compared to $7.7 million for the same period in 2011. Direct services revenue was $1.0 million for the three months ended June 30, 2012 compared to $0.8 million for the same period in 2011. Services revenue for the six months ended June 30, 2012 increased by $9.9 million from the same period in 2011. The increase was due to growth in our channel programs, primarily expansion of the Comcast program. For the six months ended June 30, 2012, services revenue generated from our channel partnerships was $25.7 million compared to $16.2 million for the same period in 2011. For the six months ended June 30, 2012, direct services revenue was $1.8 million compared to $1.4 million for the same period in 2011.

Software and other revenue is comprised primarily of fees for software products provided through direct consumer downloads and, to a lesser extent, through the sale of this software via channel partners. Software and other revenue for the three months ended June 30, 2012 decreased by $1.4 million from the same period in 2011 due to changes in the online advertising markets in which we participate. For the three months ended June 30, 2012 and 2011, software revenue generated from our channel partnerships remained relatively consistent at $1.4 million while software revenue from direct sales was $2.1 million for the three months ended June 30, 2012, compared to $3.7 million from the same period in 2011. Software and other revenue for the six months ended June 30, 2012 decreased by $1.5 million compared to same period in 2011 due to changes in the online advertising markets in which we participate. For the six months ended June 30, 2012, software and other revenue generated from our channel partnerships was $2.9 million compared to $2.3 million from the same period in 2011 while software revenue from direct sales was $4.5 million compared to $6.6 million for the same period in 2011.

Sales and marketing. Sales and marketing expense consists primarily of compensation costs, including salaries and sales commissions for sales agents and business development, program management and marketing personnel, as well as expenses for lead generation and promotional activities, including public relations, advertising and marketing. The decrease of $0.6 million in sales and marketing expense for the three month ended June 30, 2012 compared to the same period in 2011 resulted from a decrease of $1.2 million from lower marketing expense offset by an increase of $0.6 million due to the addition of sales agents required to support certain channel programs prior to the reduction in sales agent workforce completed by the end of the second quarter of 2012. The increase of $0.8 million in sales and marketing expense for the six months ended June 30, 2012 compared to the same period in 2011 primarily resulted from an increase of $2.1 million from higher personnel and related expenses, primarily associated with the addition of sales agents required to support our programs, offset by a decrease of $1.5 million from lower marketing expense associated with lower software revenue.

Net cash used in operating activities was $3.5 million and $2.5 million for the six months ended June 30, 2012 and 2011, respectively. Net cash used in operating activities for the six months ended June 30, 2012 resulted primarily from a net loss of $7.0 million, offset by non-cash items of $3.4 million, which primarily included depreciation, amortization of premiums and discounts on marketable securities, stock-based compensation expense and amortization of intangible assets and other. Net cash used in operating activities for the six months ended June 30, 2011 resulted primarily from a net loss of $7.2 million, offset by an increase of deferred revenue of $1.1 million, and non-cash items of $3.2 million, which primarily included depreciation, amortization of premiums and discounts on marketable securities, stock-based compensation expenses and amortization of intangible assets and other.

Net cash provided by (used in) investing activities was $1.0 million and $(8.9) million for the six months ended June 30, 2012 and 2011, respectively. Net cash provided by investing activities for the six months ended June 30, 2012 was primarily due to sales and maturities of $26.6 million of investments offset by the purchases of $23.9 million of investments, $1.3 million for acquisition of RightHand IT Corporation and $318,000 for purchases of property and equipment. Net cash used in investing activities for the six months ended June 30, 2011 was primarily due to the purchases of $34.3 million of investments offset by sales and maturities of $33.9 million of investments, $8.4 million for acquisition of SUPERAntiSpyware and $183,000 for purchases of property and equipment.

Read the The complete Report



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