Support.com Inc. (SPRT, Financial) filed Quarterly Report for the period ended 2009-03-31.
SupportSoft Inc. formerly known as Support.com is the world's leading provider of support automation software. SupportSoft's patented software platform allows businesses to automate and personalize the support they provide to their customers partners and employees helping them reduce costs and drive user satisfaction through problem resolution. Support.com Inc. has a market cap of $105.4 million; its shares were traded at around $2.28 with and P/S ratio of 2.2.
Our total revenue for the three months ended March 31, 2009 was $10.6 million. Our total revenue decreased in the first quarter of 2009 by $1.1 million, or 9% from the same quarter of 2008 as a result of decreases in our Enterprise segment.
Revenue from our Consumer segment was $3.6 million and $0.7 million for the three months ended March 31, 2009 and 2008, respectively. Consumer revenue was comprised primarily of fees for technology support services provided through channel partners and, to a lesser extent, directly to consumers through support.com. We also license certain of our consumer software products to partners on a per-use basis. Our Consumer Business was in its early stages of revenue generation in the first quarter of 2008 and revenues in the three month period ended March 31, 2008 were significantly smaller than in the same period in 2009. The increase in consumer revenue from 2008 to 2009 was due to increased services demand from consumer partners, primarily from one customer. It is difficult to predict the timing of revenue from the Consumer segment because it is dependent on the signing of new partners and from the pilot to the full scale programs for those partners. Upon the conclusion of the sale of our Enterprise Business, we expect this customer to account for a greater percentage of total company revenue.
Revenue from our Enterprise segment was $6.9 million and $10.9 million for the three months ended March 31, 2009 and 2008, respectively. Within this segment license revenue was $807,000, maintenance revenue was $3.7 million and services revenue was $2.4 million for the three months ended March 31, 2009. For the three months ended March 31, 2008, license revenue was $3.0 million, maintenance revenue was $4.0 million and services revenue was $3.9 million.
Services revenue. Services revenue is primarily comprised of revenue from professional services, such as consulting, training and fees for hosting services. Services revenue is generally recognized as the services are performed. Our services revenue may fluctuate from period to period depending on the overall demand for our consulting services and level of consulting activity with major customers. In the first quarter of 2009, services revenue decreased $1.5 million from the same quarter of 2008, which was due primarily to decreased services demand, particularly from one customer whose services revenue decreased to $543,000 in the first quarter of 2009 from $989,000 in the first quarter of 2008. We expect services revenue to be lower in 2009 than in 2008 primarily due to the global macroeconomic environment and decisions by customers not to pursue special projects.
Cost of license. Cost of license fees consists primarily of third-party royalty fees under license arrangements for technology embedded in or resold with our products. Cost of license fees increased to $110,000 in the three months ended March 31, 2009 from $51,000 in the three months ended March 31, 2008, primarily due to the cost of licensing a new software product. Cost of license fees were less than 1% of total revenue for the three months ended March 31, 2009 and 2008.
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SupportSoft Inc. formerly known as Support.com is the world's leading provider of support automation software. SupportSoft's patented software platform allows businesses to automate and personalize the support they provide to their customers partners and employees helping them reduce costs and drive user satisfaction through problem resolution. Support.com Inc. has a market cap of $105.4 million; its shares were traded at around $2.28 with and P/S ratio of 2.2.
Highlight of Business Operations:
In the fourth quarter of 2008 and the first and second quarters of 2009, we implemented certain reductions in workforce and closed certain facilities worldwide in order to reduce our ongoing cost structure. The recorded restructuring charge for the fourth quarter of 2008 was $1.9 million, of which $690,000 was related to the Enterprise segment, $670,000 was related to the Consumer segment and $525,000 was related to the Corporate segment. For the first quarter of 2009, the restructuring charge was $896,000, which was primarily related to the Enterprise segment. For the second quarter of 2009, we expect to record a restructuring charge of approximately $400,000, primarily related to the Consumer segment. For further information, see Notes 6 and 7 of our Notes to Condensed Consolidated Financial Statements.Our total revenue for the three months ended March 31, 2009 was $10.6 million. Our total revenue decreased in the first quarter of 2009 by $1.1 million, or 9% from the same quarter of 2008 as a result of decreases in our Enterprise segment.
Revenue from our Consumer segment was $3.6 million and $0.7 million for the three months ended March 31, 2009 and 2008, respectively. Consumer revenue was comprised primarily of fees for technology support services provided through channel partners and, to a lesser extent, directly to consumers through support.com. We also license certain of our consumer software products to partners on a per-use basis. Our Consumer Business was in its early stages of revenue generation in the first quarter of 2008 and revenues in the three month period ended March 31, 2008 were significantly smaller than in the same period in 2009. The increase in consumer revenue from 2008 to 2009 was due to increased services demand from consumer partners, primarily from one customer. It is difficult to predict the timing of revenue from the Consumer segment because it is dependent on the signing of new partners and from the pilot to the full scale programs for those partners. Upon the conclusion of the sale of our Enterprise Business, we expect this customer to account for a greater percentage of total company revenue.
Revenue from our Enterprise segment was $6.9 million and $10.9 million for the three months ended March 31, 2009 and 2008, respectively. Within this segment license revenue was $807,000, maintenance revenue was $3.7 million and services revenue was $2.4 million for the three months ended March 31, 2009. For the three months ended March 31, 2008, license revenue was $3.0 million, maintenance revenue was $4.0 million and services revenue was $3.9 million.
Services revenue. Services revenue is primarily comprised of revenue from professional services, such as consulting, training and fees for hosting services. Services revenue is generally recognized as the services are performed. Our services revenue may fluctuate from period to period depending on the overall demand for our consulting services and level of consulting activity with major customers. In the first quarter of 2009, services revenue decreased $1.5 million from the same quarter of 2008, which was due primarily to decreased services demand, particularly from one customer whose services revenue decreased to $543,000 in the first quarter of 2009 from $989,000 in the first quarter of 2008. We expect services revenue to be lower in 2009 than in 2008 primarily due to the global macroeconomic environment and decisions by customers not to pursue special projects.
Cost of license. Cost of license fees consists primarily of third-party royalty fees under license arrangements for technology embedded in or resold with our products. Cost of license fees increased to $110,000 in the three months ended March 31, 2009 from $51,000 in the three months ended March 31, 2008, primarily due to the cost of licensing a new software product. Cost of license fees were less than 1% of total revenue for the three months ended March 31, 2009 and 2008.
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