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☒
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Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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☐
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Delaware
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81-0578975
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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707 17th Street, 25th Floor
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Denver,
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Colorado
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80202
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Trading Symbol
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Name of each exchange on which registered
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Common Stock, $0.0001 Par Value
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SREV
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The Nasdaq Stock Market LLC
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Large accelerated filer
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☐
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Accelerated filer
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☒
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Non-accelerated filer
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☐
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Smaller reporting company
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☒
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Emerging growth company
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☐
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Page
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PART I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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Item 16.
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ITEM 1.
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BUSINESS
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•
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Consumerization of B2B commerce. In today’s hyper-connected digital economy, individuals have become accustomed to engaging with B2C brands through channels and interactions that are efficient, effective and effortless. These individuals are bringing their consumer expectations into the workplace, fundamentally reshaping how companies market, sell to and engage with their business customers. The majority of business buyers expect their B2B customer experiences to mirror their B2C encounters and are willing to award a greater share of wallet and higher loyalty to vendors who can meet these raised expectations. While factors such as price, quality and feature functionality remain important considerations, leading B2B companies recognize that durable competitive advantage is increasingly based on facilitating interactions that are proactive, predictive and personalized across all touchpoints of the customer journey. We believe more companies are turning to external specialists like ServiceSource to structure, deploy and operate integrated solutions and processes that can holistically address and serve the unique and heightened demands of this emerging consumerization trend.
|
•
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Deployment of customer-centric models that disrupt legacy go-to-market channels. Technology companies have relied for decades on a variety of third-party intermediaries to reach their mid-market customers. For many companies, 50% - 75% or more of their revenue has historically been attributed to indirect channels, including distributors, resellers, system integrators, and managed service providers, among others. These legacy routes to market are rapidly losing relevance due to the consumerization of IT, the growth of as-a-service offerings, the proliferation of cloud delivery and distribution models, and the rapid adoption of subscription and consumption-based billing plans. In light of these shifts and driven by a growing desire for greater customer insight and intimacy, more companies are deprioritizing investments away from these indirect channels, while assigning more focus to direct-to-consumer pathways. We believe these organizations are looking to strategic thought leaders such as ServiceSource who can help them reimagine their go-to-market strategies, accelerate their channel transformation initiatives, and design and manage new customer-centric operating models that will enable them to grow closer to their customers.
|
•
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Emergence of customer experience as a competitive differentiator. Increased global competition, lower barriers to entry and shortened product lifecycles are prompting technology companies to reassess their competitive advantage and reevaluate their core competencies. While areas such as intellectual property, engineering, research and development, and product development still remain core, successful forward-thinking organizations realize and appreciate the positive impact of a well-orchestrated customer experience on their revenue and profitability objectives. While these companies are attempting to allocate greater resources to build internal customer-facing capacity in areas including demand generation and conversion, account management, and customer success management, they are often encumbered by pre-existing organizational dynamics, departmental silos, and corporate inertia. We believe more companies will increasingly seek to partner with differentiated BPaaS providers like ServiceSource who can help them to more rapidly scale their customer experience initiatives with a value-driven and outcomes-based business case. Our clients choose us to help them drive greater customer engagement, trust, and loyalty given our integrated solution suite, demonstrable track record, proven process improvement methodology, global scale and infrastructure, and data expertise and insights.
|
•
|
Demand qualification. We serve as a seamless extension to our clients’ advertising, marketing, and digital demand generation activities. Through proactive customer interaction and leveraged with our data analytics expertise, our business development reps digitally engage with marketing-generated leads to evaluate and score their budget, authority, need, and timing to progress them through the funnel into sales-qualified and sales-accepted leads.
|
•
|
Demand conversion. We serve as a high velocity augmentation to our clients’ inside sales teams, allowing for enhanced coverage and increased conversion of their sales pipeline. Our sales development reps are extensively trained on our clients’ products, services, and features, and are experts at value- and persona-based selling. Through omnichannel media - including voice, chat, email, video, and social - our teams nurture leads, educate prospects, and conduct sales demos to convert qualified opportunities into confirmed orders and closed bookings for our clients.
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•
|
Account management. We serve as a natural complement to our clients’ installed-based account management sales motions. Our highly-skilled digital sales professionals develop, formulate, and implement account-based sales plans to identify and execute expansion selling opportunities, driving high margin incremental revenue for our clients through higher cloud consumption levels, upsell and cross-sell rates, multi-year conversions, and service and support attach rates.
|
•
|
Onboarding. Our onboarding experts engage and communicate with our clients’ new customers to ensure they are positioned for success from the first day of their relationship. We confirm subscriptions were successfully activated, downloads were successfully installed, assets and entitlements were successfully provisioned, and payments and credits were successfully applied. Where required, we further triage and support the coordination of our clients’ technical support and professional services resources to drive higher initial customer satisfaction and issue resolution outcomes.
|
•
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Adoption. Our adoption specialists are thoroughly trained and well-versed in the full range of features and functionality of our clients’ products, services and solutions. Leveraging telemetry from a variety of data feeds complemented with proactive real-time customer interaction, we ensure that our clients’ customers are appropriately educated, informed and empowered on how they can best achieve faster speed-to-value and return-on-investment for their subscription or purchase.
|
•
|
Renewals management. Our renewals representatives are equipped with our industry-leading high-performance sales methodology and complemented by best-in-class technology and processes to manage revenue that may be at risk of loss for our clients. Our systems and global teams cleanse, validate, enhance and supplement our clients’ CRM and ERP data in order to proactively configure, price, quote and sell customer contracts that are nearing expiration or cancellation. Through extensive integration with our clients’ internal systems, teams and processes, we deliver performance outcomes that allow our clients to recognize lower customer churn and attrition, enhanced contract renewal rates, and higher revenue retention metrics.
|
•
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Partner recruitment. Our partner recruitment specialists are dedicated to identifying, vetting, and recruiting new distributors, value-added resellers, resellers, system integrators, managed service providers, agents and related third parties to join our clients’ channel partner programs. Through intensive research and proactive outreach, we ensure that our clients have an opportunity to expand their partner organizations with firms that are best positioned to more effectively market, sell and support our clients’ offerings in their respective regions and territories.
|
•
|
Partner recruitment. Our partner recruitment specialists are dedicated to identifying, vetting, and recruiting new distributors, value-added resellers, resellers, system integrators, managed service providers, agents, and related third parties to join our clients’ channel partner programs. Through intensive research and proactive outreach, we ensure that our clients have an opportunity to expand their partner organizations with firms that are best positioned to more effectively market, sell, and support our clients’ offerings in their respective regions and territories.
|
•
|
Partner onboarding and enablement. Our partner onboarding specialists are thoroughly trained in the program design, tiering levels and criteria, and incentives available to partners through our clients’ channel programs. Through early engagement, intervention, and training, we promote greater program awareness, understanding, and focus for new partners, equipping them to achieve better early outcomes with our clients.
|
•
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Partner success management. Our partner success managers support our clients’ partners in developing and formulating quarterly and annual performance objectives, analyzing and forecasting sales and renewals pipelines, and identifying and resolving barriers to their success. Through ongoing engagement and interaction with our clients’ indirect partners, we proactively manage the relationships to ensure higher levels of success for our clients, the partners, and their mutual customers.
|
•
|
Sales performance analysis. We typically begin engagements with our prospective clients by conducting a SPA. Through our SPA process, we conduct in-depth executive interviews and data analysis to understand a client’s unique challenges and desired business outcomes, evaluate and benchmark their performance against those outcomes, analyze opportunities for improvement using proprietary analytical models, and deliver expertise and recommendations to drive an enhanced customer experience, improved operational KPIs, and targeted financial gains.
|
•
|
Business case, pricing and contract structuring. We use our reservoir of data, benchmarks, and best practices to estimate the critical components of the business case, to calculate our ability to improve our clients’ performance based on our extensive track record of execution for similar engagements, to scope and design an optimal delivery model, and to derive an appropriate value-based pricing structure and contractual arrangement.
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•
|
Data integration, implementation and launch. Once we have entered into a contract with a client, we deploy our professional services to rapidly integrate our tools and platforms with our clients’ systems, while our data and ops services teams ensure that high velocity data feeds are appropriately configured, mapped, loaded, enabled, and enhanced. Our talent acquisition teams launch a highly selective recruiting and onboarding process, while our learning & development teams build and deliver a robust training curriculum and certification program.
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•
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Performance and execution. Following the implementation and ramp of an engagement, we leverage our reporting platform, data reservoir, and performance optimization tools to continuously monitor, measure, analyze, benchmark, and enhance the performance of our teams to ensure we are positioned to deliver against the business case and exceed our clients’ expectations.
|
•
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Client benchmarking and continuous improvement. Our extensive platform and the accumulation of 20 years of experience serve as the foundation for benchmarking our clients’ performance against internal parity rates, industry peers, and previous performance periods. We generally conduct monthly and quarterly business review meetings and host frequent executive steering reviews with our clients to assess our results, identify potential process gaps, determine opportunities for continuous improvement, and make recommendations that we believe will allow our clients and us to achieve higher levels of performance and efficiencies.
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•
|
Cloud and SaaS. In this segment, we serve companies who provide their solutions via public, private, or hybrid cloud delivery models, including SaaS, PaaS, and IaaS vendors. Within this market, customers and end-users typically purchase from our clients through a recurring subscription or a consumption-based utility billing model. Market research firm IDC estimates the total global market for cloud software was approximately $173 billion in 2019 with a forecasted 19% compound annual growth rate through 2023.
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•
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Software. Our clients in this segment include companies who primarily provide their software in an on premise environment, where our clients’ customers and end-users typically pay for a defined number of licenses or subscribers, as well as related software support, maintenance and service contracts. We have developed extensive expertise in a variety of software sub-sectors, supporting vendors of application and system software, collaboration software, CRM software, cyber-security software, open source operating system software, and virtualization software, among others. IDC estimates the total global market for software license and maintenance was approximately $314 billion in 2019 with a forecasted nominal growth rate through 2023, while the software subscription market was approximately $232 billion in 2019 with a forecasted 17% compound annual growth rate through 2023.
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•
|
Hardware. In this segment, we serve companies who provide IT hardware and related assets, including data center systems (servers, storage, gateways, and arrays), networking and communications equipment (switches, routers, access points, and appliances), and computing equipment and peripherals (workstations, PCs, thin-clients, and imaging devices), among others. Within this segment, our services are primarily directed at selling, renewing, and extending hardware maintenance and support contracts on our clients’ behalf. IDC estimates the total global market for hardware maintenance and support was approximately $36 billion in 2019 with a forecasted 2% compound annual growth rate through 2023.
|
•
|
Medical device and diagnostic equipment. Our clients in this segment include companies who provide products, software and services to the healthcare and medical field, including vendors of radiology and diagnostic imaging equipment, surgical and laboratory instruments, and healthcare IT software, among others. Market research firm Fortune Business Insights estimates the total global medical device market was approximately $426 billion in 2018 with a forecasted 5% compound annual growth rate through 2025.
|
•
|
Industrial IoT. In this segment, we serve companies who provide hardware, sensors, software and related services to monitor and automate smart and connected devices for manufacturing environments, process control applications, and energy and utility customers, among others. Research firm IoT Analytics estimates the total global market for industrial IoT applications was approximately $87 billion 2019 with a forecasted 37% compound annual growth rate through 2023.
|
•
|
Employee health and wellbeing. We believe a loyal and productive workforce requires a holistic approach to caring for the whole self, and we provide a variety of programs and benefits to support the physical, mental, emotional and spiritual health and wellbeing of our employees. In 2019, we joined the ranks of other forward-thinking companies to offer 12 weeks of paid parental (maternal and paternal) leave to our U.S. employees, providing important support for our employees as they strive to care for, bond with and welcome new family members and integrate family life with work life.
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•
|
Inclusion and diversity. We believe high-performing organizations are defined by policies and practices that encourage and celebrate an inclusive and diverse workforce. In 2019, we advanced our gender equality initiative with women representing approximately half of our total employee base and approximately one-third of our leadership ranks, up from less than 20% in the prior year.
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•
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Community engagement and involvement. We are active and involved members in the communities in which our employees live and work, and we promote a culture of volunteering and giving back. Through our paid volunteer time off program, our employees collectively volunteered more than 13,000 hours supporting a variety of charitable causes and organizations in their communities during 2019.
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•
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20 year track record of innovation and market leadership;
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•
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B2B technology industry domain expertise;
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•
|
ability to drive client success and value;
|
•
|
scope and completeness of our solution;
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•
|
robust global delivery footprint and infrastructure
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•
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extensive geographic and language coverage model;
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•
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outcomes-based, pay-for-performance pricing;
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•
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data-driven insights, best practices and benchmarks;
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•
|
speed and agility;
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•
|
experience and quality of our leadership team;
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•
|
reputation and referenceable client base; and
|
•
|
size and financial stability of our operations.
|
ITEM 1A.
|
RISK FACTORS
|
•
|
authorizing blank check preferred stock, which could be issued by our board of directors without stockholder approval, with voting, liquidation, dividend and other rights superior to our common stock;
|
•
|
limiting the liability of, and providing indemnification to, our directors and officers;
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•
|
limiting the ability of our stockholders to call and bring business before special meetings and to take action by written consent in lieu of a meeting;
|
•
|
requiring advance notice of stockholder proposals for business to be conducted at meetings of our stockholders and for nominations of candidates for election to our board of directors;
|
•
|
controlling the procedures for the conduct and scheduling of stockholder meetings;
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•
|
providing the board of directors with the express power to postpone previously scheduled annual meetings and to cancel previously scheduled special meetings;
|
•
|
limiting the determination of the number of directors on our board and the filling of vacancies or newly created seats on the board to our board of directors then in office; and
|
•
|
providing that directors may be removed by stockholders only for cause.
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS
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ITEM 2.
|
PROPERTIES
|
ITEM 3.
|
LEGAL PROCEEDINGS
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
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ITEM 6.
|
SELECTED FINANCIAL DATA
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ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
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GAAP revenue was $216.1 million, compared with $238.3 million reported for the year ended December 31, 2018.
|
•
|
GAAP net loss was $18.7 million or $0.20 per diluted share, compared with GAAP net loss of $24.9 million or $0.27 per diluted share reported for the year ended December 31, 2018.
|
•
|
Adjusted EBITDA was $4.2 million compared with $14.2 million reported for the year ended December 31, 2018. See “Non-GAAP Financial Measurements” for a reconciliation of Adjusted EBITDA from net loss.
|
•
|
Ended the year with $29.4 million of cash and cash equivalents and restricted cash and no borrowings under the Company’s $40.0 million Revolver.
|
|
For the Year Ended December 31,
|
|
|
|
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|||||||||||||||
|
2019
|
|
2018
|
|
|
|
|
|||||||||||||
|
Amount
|
|
% of Net Revenue
|
|
Amount
|
|
% of Net Revenue
|
|
$ Change
|
|
% Change
|
|||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|||||||||
Net revenue
|
$
|
216,135
|
|
|
100
|
%
|
|
$
|
238,340
|
|
|
100
|
%
|
|
$
|
(22,205
|
)
|
|
(9
|
)%
|
Cost of revenue
|
153,155
|
|
|
71
|
%
|
|
164,693
|
|
|
69
|
%
|
|
(11,538
|
)
|
|
(7
|
)%
|
|||
Gross profit
|
$
|
62,980
|
|
|
29
|
%
|
|
$
|
73,647
|
|
|
31
|
%
|
|
$
|
(10,667
|
)
|
|
(14
|
)%
|
•
|
$9.5 million decrease in employee related costs driven by reduction in headcount, lower revenue attainment and lower travel and entertainment expenditures;
|
•
|
$3.7 million decrease in depreciation and amortization expense primarily due to internally developed software fully amortized as of July 2018; and
|
•
|
$0.6 million decrease in professional service fees; partially offset by
|
•
|
$2.2 million increase in information technology support and facilities costs.
|
|
For the Year Ended December 31,
|
|
|
|
|
|||||||||||||||
|
2019
|
|
2018
|
|
|
|
|
|||||||||||||
|
Amount
|
|
% of Net Revenue
|
|
Amount
|
|
% of Net Revenue
|
|
$ Change
|
|
% Change
|
|||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Sales and marketing
|
$
|
30,009
|
|
|
14
|
%
|
|
$
|
35,600
|
|
|
15
|
%
|
|
$
|
(5,591
|
)
|
|
(16
|
)%
|
Research and development
|
4,848
|
|
|
2
|
%
|
|
6,436
|
|
|
3
|
%
|
|
(1,588
|
)
|
|
(25
|
)%
|
|||
General and administrative
|
43,208
|
|
|
20
|
%
|
|
47,288
|
|
|
20
|
%
|
|
(4,080
|
)
|
|
(9
|
)%
|
|||
Restructuring and other related costs
|
1,929
|
|
|
1
|
%
|
|
209
|
|
|
—
|
%
|
|
1,720
|
|
|
*
|
|
|||
Total operating expenses
|
$
|
79,994
|
|
|
37
|
%
|
|
$
|
89,533
|
|
|
38
|
%
|
|
$
|
(9,539
|
)
|
|
(11
|
)%
|
•
|
$3.3 million decrease in employee related costs primarily due to changes in executive management and decreases in temporary labor, recruiting costs and travel and entertainment expenditures, partially offset by an increase in bonus expense;
|
•
|
$2.5 million decrease in legal reserves; and
|
•
|
$1.3 million decrease in professional service fees; partially offset by
|
•
|
$2.2 million increase in information technology support costs; and
|
•
|
$0.6 million increase in depreciation and amortization expense.
|
|
For the Year Ended December 31,
|
|
|
|
|
|||||||||||||||
|
2019
|
|
2018
|
|
|
|
|
|||||||||||||
|
Amount
|
|
% of Net Revenue
|
|
Amount
|
|
% of Net Revenue
|
|
$ Change
|
|
% Change
|
|||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|||||||||
Interest expense
|
$
|
(388
|
)
|
|
—
|
%
|
|
$
|
(7,396
|
)
|
|
(3
|
)%
|
|
$
|
7,008
|
|
|
(95
|
)%
|
Other (expense) income, net
|
$
|
(838
|
)
|
|
—
|
%
|
|
$
|
805
|
|
|
—
|
%
|
|
$
|
(1,643
|
)
|
|
*
|
|
Impairment loss on investment securities
|
$
|
—
|
|
|
—
|
%
|
|
$
|
(1,958
|
)
|
|
(1
|
)%
|
|
$
|
1,958
|
|
|
(100
|
)%
|
|
For the Year Ended December 31,
|
|
|
|
|
||||||||||||||
|
2019
|
|
2018
|
|
|
|
|
||||||||||||
|
Amount
|
|
% of Net Revenue
|
|
Amount
|
|
% of Net Revenue
|
|
$ Change
|
|
% Change
|
||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||
Provision for income tax expense
|
$
|
(443
|
)
|
|
—
|
%
|
|
$
|
(450
|
)
|
|
—
|
%
|
|
$
|
7
|
|
|
(2)%
|
|
For the Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
|
||||
|
(in thousands)
|
||||||
Net loss
|
$
|
(18,683
|
)
|
|
$
|
(24,885
|
)
|
Provision for income tax expense
|
443
|
|
|
450
|
|
||
Interest and other expense, net
|
1,226
|
|
|
6,591
|
|
||
Depreciation and amortization
|
13,449
|
|
|
16,495
|
|
||
EBITDA
|
(3,565
|
)
|
|
(1,349
|
)
|
||
Stock-based compensation
|
5,162
|
|
|
9,601
|
|
||
Amortization of contract acquisition asset costs - ASC 606 initial adoption
|
976
|
|
|
1,529
|
|
||
Restructuring and other related costs
|
1,929
|
|
|
209
|
|
||
Impairment loss on investment securities
|
—
|
|
|
1,958
|
|
||
Litigation reserve
|
(256
|
)
|
|
2,250
|
|
||
Adjusted EBITDA
|
$
|
4,246
|
|
|
$
|
14,198
|
|
|
For the Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
|
||||
|
(in thousands)
|
||||||
Net cash provided by operating activities
|
$
|
12,445
|
|
|
$
|
3,717
|
|
Net cash (used in) provided by investing activities
|
(10,106
|
)
|
|
122,076
|
|
||
Net cash used in financing activities
|
(859
|
)
|
|
(150,639
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents and restricted cash
|
124
|
|
|
(8
|
)
|
||
Net change in cash and cash equivalents and restricted cash
|
$
|
1,604
|
|
|
$
|
(24,854
|
)
|
|
For the Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
|
||||
|
(in thousands)
|
||||||
Purchased intangible asset amortization
|
$
|
—
|
|
|
$
|
85
|
|
Internally developed software amortization
|
5,802
|
|
|
8,629
|
|
||
Property and equipment depreciation
|
7,647
|
|
|
7,781
|
|
||
Total depreciation and amortization
|
$
|
13,449
|
|
|
$
|
16,495
|
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
27,089
|
|
|
$
|
26,535
|
|
Accounts receivable, net
|
41,754
|
|
|
54,284
|
|
||
Prepaid expenses and other
|
7,296
|
|
|
5,653
|
|
||
Total current assets
|
76,139
|
|
|
86,472
|
|
||
|
|
|
|
||||
Property and equipment, net
|
36,149
|
|
|
36,593
|
|
||
Right-of-use assets
|
36,396
|
|
|
—
|
|
||
Contract acquisition costs
|
1,602
|
|
|
2,660
|
|
||
Goodwill
|
6,334
|
|
|
6,334
|
|
||
Other assets
|
4,844
|
|
|
4,521
|
|
||
Total assets
|
$
|
161,464
|
|
|
$
|
136,580
|
|
|
|
|
|
||||
Liabilities and Stockholders’ Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
4,392
|
|
|
$
|
2,424
|
|
Accrued expenses
|
3,366
|
|
|
3,380
|
|
||
Accrued compensation and benefits
|
16,700
|
|
|
15,509
|
|
||
Operating lease liabilities
|
9,652
|
|
|
—
|
|
||
Other current liabilities
|
2,218
|
|
|
6,894
|
|
||
Total current liabilities
|
36,328
|
|
|
28,207
|
|
||
|
|
|
|
||||
Operating lease liabilities, net of current portion
|
33,716
|
|
|
—
|
|
||
Other long-term liabilities
|
2,983
|
|
|
6,540
|
|
||
Total liabilities
|
73,027
|
|
|
34,747
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 12)
|
|
|
|
|
|
||
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.001 par value; 20,000 shares authorized and none issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock; $0.0001 par value; 1,000,000 shares authorized; 94,972 shares issued and 94,851 shares outstanding as of December 31, 2019; 92,895 shares issued and 92,774 shares outstanding as of December 31, 2018
|
9
|
|
|
9
|
|
||
Treasury stock
|
(441
|
)
|
|
(441
|
)
|
||
Additional paid-in capital
|
374,525
|
|
|
369,246
|
|
||
Accumulated deficit
|
(286,066
|
)
|
|
(267,383
|
)
|
||
Accumulated other comprehensive income
|
410
|
|
|
402
|
|
||
Total stockholders’ equity
|
88,437
|
|
|
101,833
|
|
||
Total liabilities and stockholders’ equity
|
$
|
161,464
|
|
|
$
|
136,580
|
|
|
For the Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Net revenue
|
$
|
216,135
|
|
|
$
|
238,340
|
|
Cost of revenue
|
153,155
|
|
|
164,693
|
|
||
Gross profit
|
62,980
|
|
|
73,647
|
|
||
Operating expenses:
|
|
|
|
||||
Sales and marketing
|
30,009
|
|
|
35,600
|
|
||
Research and development
|
4,848
|
|
|
6,436
|
|
||
General and administrative
|
43,208
|
|
|
47,288
|
|
||
Restructuring and other related costs
|
1,929
|
|
|
209
|
|
||
Total operating expenses
|
79,994
|
|
|
89,533
|
|
||
Loss from operations
|
(17,014
|
)
|
|
(15,886
|
)
|
||
Interest and other expense, net
|
(1,226
|
)
|
|
(6,591
|
)
|
||
Impairment loss on investment securities
|
—
|
|
|
(1,958
|
)
|
||
Loss before provision for income taxes
|
(18,240
|
)
|
|
(24,435
|
)
|
||
Provision for income tax expense
|
(443
|
)
|
|
(450
|
)
|
||
Net loss
|
$
|
(18,683
|
)
|
|
$
|
(24,885
|
)
|
Net loss per common share:
|
|
|
|
||||
Basic and diluted
|
$
|
(0.20
|
)
|
|
$
|
(0.27
|
)
|
Weighted-average common shares outstanding:
|
|
|
|
||||
Basic and diluted
|
93,882
|
|
|
91,636
|
|
|
For the Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Net loss
|
$
|
(18,683
|
)
|
|
$
|
(24,885
|
)
|
Other comprehensive income
|
|
|
|
||||
Available for sale securities:
|
|
|
|
||||
Unrealized loss on short-term investments
|
—
|
|
|
(705
|
)
|
||
Reclassification adjustment for impairment loss included in net loss
|
—
|
|
|
1,958
|
|
||
Net change in available for sale debt securities
|
—
|
|
|
1,253
|
|
||
Foreign currency translation adjustments
|
8
|
|
|
(253
|
)
|
||
Other comprehensive income
|
8
|
|
|
1,000
|
|
||
Comprehensive loss
|
$
|
(18,675
|
)
|
|
$
|
(23,885
|
)
|
|
Common Stock
|
|
Treasury Shares/Stock
|
|
Additional Paid-in Capital
|
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive (Loss) Income
|
|
Total
|
||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|||||||||||||||||||||
Balance at December 31, 2017
|
90,380
|
|
|
$
|
8
|
|
|
(121
|
)
|
|
$
|
(441
|
)
|
|
$
|
359,347
|
|
|
$
|
(246,207
|
)
|
|
$
|
(598
|
)
|
|
$
|
112,109
|
|
Cumulative effect of ASC 606 - initial adoption
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,709
|
|
|
—
|
|
|
3,709
|
|
||||||
Adjusted balance at January 1, 2018
|
90,380
|
|
|
$
|
8
|
|
|
(121
|
)
|
|
$
|
(441
|
)
|
|
$
|
359,347
|
|
|
$
|
(242,498
|
)
|
|
$
|
(598
|
)
|
|
$
|
115,818
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,885
|
)
|
|
—
|
|
|
(24,885
|
)
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,000
|
|
|
1,000
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,924
|
|
|
—
|
|
|
—
|
|
|
9,924
|
|
||||||
Issuance of common stock, restricted stock units
|
2,242
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Proceeds from the exercise of stock options and employee stock purchase plan
|
273
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
759
|
|
|
—
|
|
|
—
|
|
|
759
|
|
||||||
Net cash paid for payroll taxes on restricted stock unit releases
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(784
|
)
|
|
—
|
|
|
—
|
|
|
(784
|
)
|
||||||
Balance at December 31, 2018
|
92,895
|
|
|
$
|
9
|
|
|
(121
|
)
|
|
$
|
(441
|
)
|
|
$
|
369,246
|
|
|
$
|
(267,383
|
)
|
|
$
|
402
|
|
|
$
|
101,833
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,683
|
)
|
|
—
|
|
|
(18,683
|
)
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
8
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,238
|
|
|
—
|
|
|
—
|
|
|
5,238
|
|
||||||
Issuance of common stock, restricted stock units
|
1,814
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Proceeds from the exercise of stock options and employee stock purchase plan
|
263
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
223
|
|
|
—
|
|
|
—
|
|
|
223
|
|
||||||
Net cash paid for payroll taxes on restricted stock unit releases
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(182
|
)
|
|
—
|
|
|
—
|
|
|
(182
|
)
|
||||||
Balance at December 31, 2019
|
94,972
|
|
|
$
|
9
|
|
|
(121
|
)
|
|
$
|
(441
|
)
|
|
$
|
374,525
|
|
|
$
|
(286,066
|
)
|
|
$
|
410
|
|
|
$
|
88,437
|
|
|
For the Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(18,683
|
)
|
|
$
|
(24,885
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
13,449
|
|
|
16,495
|
|
||
Amortization of debt discount and issuance costs
|
73
|
|
|
5,868
|
|
||
Amortization of contract acquisition costs
|
1,504
|
|
|
1,770
|
|
||
Amortization of premium on short-term investments
|
—
|
|
|
(1,204
|
)
|
||
Amortization of right-of-use assets
|
9,715
|
|
|
—
|
|
||
Stock-based compensation
|
5,162
|
|
|
9,601
|
|
||
Restructuring and other related costs
|
1,866
|
|
|
458
|
|
||
Impairment loss on investment securities
|
—
|
|
|
1,958
|
|
||
Other
|
(241
|
)
|
|
107
|
|
||
Net changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable, net
|
12,449
|
|
|
1,724
|
|
||
Prepaid expenses and other assets
|
(1,558
|
)
|
|
(150
|
)
|
||
Contract acquisition costs
|
(442
|
)
|
|
(1,085
|
)
|
||
Accounts payable
|
2,441
|
|
|
(2,406
|
)
|
||
Accrued compensation and benefits
|
(646
|
)
|
|
(3,542
|
)
|
||
Operating lease liabilities
|
(8,678
|
)
|
|
—
|
|
||
Accrued expenses
|
(102
|
)
|
|
(3,730
|
)
|
||
Other liabilities
|
(3,864
|
)
|
|
2,738
|
|
||
Net cash provided by operating activities
|
12,445
|
|
|
3,717
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Acquisition of property and equipment
|
(10,106
|
)
|
|
(15,604
|
)
|
||
Purchases of short-term investments
|
—
|
|
|
(480
|
)
|
||
Sales of short-term investments
|
—
|
|
|
133,920
|
|
||
Maturities of short-term investments
|
—
|
|
|
4,240
|
|
||
Net cash (used in) provided by investing activities
|
(10,106
|
)
|
|
122,076
|
|
||
Cash flows from financing activities:
|
|
|
|
||||
Repayment on finance lease obligations
|
(900
|
)
|
|
(413
|
)
|
||
Repayment of convertible notes
|
—
|
|
|
(150,000
|
)
|
||
Debt issuance costs
|
—
|
|
|
(201
|
)
|
||
Proceeds from revolving line of credit
|
—
|
|
|
32,000
|
|
||
Repayment of revolving line of credit
|
—
|
|
|
(32,000
|
)
|
||
Proceeds from issuance of common stock
|
223
|
|
|
759
|
|
||
Payments related to minimum tax withholdings on restricted stock unit releases
|
(182
|
)
|
|
(784
|
)
|
||
Net cash used in financing activities
|
(859
|
)
|
|
(150,639
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents and restricted cash
|
124
|
|
|
(8
|
)
|
||
Net change in cash and cash equivalents and restricted cash
|
1,604
|
|
|
(24,854
|
)
|
||
Cash and cash equivalents and restricted cash, beginning of period
|
27,779
|
|
|
52,633
|
|
||
Cash and cash equivalents and restricted cash, end of period
|
$
|
29,383
|
|
|
$
|
27,779
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
||||
Cash paid for interest
|
$
|
264
|
|
|
$
|
2,408
|
|
Income taxes paid, net
|
$
|
166
|
|
|
$
|
394
|
|
Supplemental disclosures of non-cash activities:
|
|
|
|
||||
Acquisition of property and equipment accrued in accounts payable and accrued expenses
|
$
|
8
|
|
|
$
|
506
|
|
Right-of-use-assets obtained in exchange for new lease liabilities
|
$
|
20,038
|
|
|
$
|
—
|
|
Increase in contract acquisition costs and benefit to accumulated deficit related to adoption of ASC 606
|
$
|
—
|
|
|
$
|
3,346
|
|
Increase in prepaid expenses and other, other liabilities and benefit to accumulated deficit related to adoption of ASC 606
|
$
|
—
|
|
|
$
|
363
|
|
Increase in operating lease liabilities related to the adoption of ASC 842
|
$
|
32,104
|
|
|
$
|
—
|
|
Increase in right-of-use assets related to the adoption of ASC 842
|
$
|
29,526
|
|
|
$
|
—
|
|
Decrease in prepaids and other assets related to the adoption of ASC 842
|
$
|
(749
|
)
|
|
$
|
—
|
|
Decrease in other liabilities related to the adoption of ASC 842
|
$
|
(3,327
|
)
|
|
$
|
—
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
|
||||
|
(in thousands)
|
||||||
Level 1:
|
|
|
|
||||
Cash
|
$
|
9,142
|
|
|
$
|
10,658
|
|
Money market mutual funds
|
17,947
|
|
|
15,877
|
|
||
Cash and cash equivalents
|
$
|
27,089
|
|
|
$
|
26,535
|
|
|
|
|
|
||||
Restricted cash
|
$
|
2,294
|
|
|
$
|
1,244
|
|
|
|
|
December 31,
|
||||||
|
Depreciable Life
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
|
||||
|
|
|
(in thousands)
|
||||||
Computers and equipment
|
2 - 5 years
|
|
$
|
18,707
|
|
|
$
|
20,213
|
|
Software(1)
|
3 - 7 years
|
|
63,557
|
|
|
58,962
|
|
||
Furniture and fixtures
|
7 years
|
|
10,041
|
|
|
9,674
|
|
||
Leasehold improvements
|
Lesser of estimated useful life or life of lease
|
|
18,395
|
|
|
20,237
|
|
||
Finance leases
|
|
|
3,480
|
|
|
—
|
|
||
Property and equipment
|
|
|
114,180
|
|
|
109,086
|
|
||
Less: accumulated depreciation and amortization
|
|
|
(78,031
|
)
|
|
(72,493
|
)
|
||
Property and equipment, net
|
|
|
$
|
36,149
|
|
|
$
|
36,593
|
|
Balance as of January 1, 2018
|
$
|
16,414
|
|
Capitalized costs
|
11,094
|
|
|
Amortization expense
|
(8,629
|
)
|
|
Balance as of December 31, 2018
|
$
|
18,879
|
|
Capitalized costs
|
6,340
|
|
|
Amortization expense
|
(5,802
|
)
|
|
Balance as of December 31, 2019
|
$
|
19,417
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
|
||||
|
(in thousands)
|
||||||
NALA
|
$
|
28,283
|
|
|
$
|
26,046
|
|
APJ
|
6,580
|
|
|
8,772
|
|
||
EMEA
|
1,286
|
|
|
1,775
|
|
||
Property and equipment, net
|
$
|
36,149
|
|
|
$
|
36,593
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
|
||||
|
(in thousands)
|
||||||
Finance lease obligations
|
$
|
952
|
|
|
$
|
954
|
|
Contract liability
|
842
|
|
|
873
|
|
||
Other liabilities
|
240
|
|
|
198
|
|
||
ESPP
|
184
|
|
|
384
|
|
||
Legal reserve
|
—
|
|
|
3,750
|
|
||
Deferred rent
|
—
|
|
|
735
|
|
||
Total
|
$
|
2,218
|
|
|
$
|
6,894
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
|
||||
|
(in thousands)
|
||||||
AROs
|
$
|
1,430
|
|
|
$
|
1,368
|
|
Finance lease obligations
|
671
|
|
|
1,510
|
|
||
Accrued restructuring costs
|
471
|
|
|
716
|
|
||
Deferred tax liability
|
283
|
|
|
268
|
|
||
Other accrued costs
|
128
|
|
|
105
|
|
||
Deferred rent
|
—
|
|
|
2,573
|
|
||
Total
|
$
|
2,983
|
|
|
$
|
6,540
|
|
|
For the Year Ended December 31, 2019
|
||
|
|
||
|
(in thousands)
|
||
Operating lease cost
|
$
|
12,000
|
|
|
|
||
Finance lease cost:
|
|
||
Amortization of leased assets
|
709
|
|
|
Interest on lease liabilities
|
163
|
|
|
Total finance lease cost
|
872
|
|
|
|
|
||
Sublease income
|
(2,166
|
)
|
|
Net lease cost
|
$
|
10,706
|
|
|
December 31, 2019
|
||
|
(in thousands)
|
||
Operating leases:
|
|
||
ROU assets
|
$
|
36,396
|
|
|
|
||
Operating lease liabilities
|
$
|
9,652
|
|
Operating lease liabilities, net of current portion
|
33,716
|
|
|
Total operating lease liabilities
|
$
|
43,368
|
|
|
|
||
Finance leases:
|
|
||
Property and equipment
|
$
|
3,480
|
|
Accumulated depreciation
|
(1,823
|
)
|
|
Property and equipment, net
|
$
|
1,657
|
|
|
|
||
Other current liabilities
|
$
|
952
|
|
Other long-term liabilities
|
671
|
|
|
Total finance lease liabilities
|
$
|
1,623
|
|
|
December 31, 2019
|
|
Weighted-average remaining lease term (in years):
|
|
|
Operating lease
|
5.9
|
|
Finance lease
|
1.8
|
|
Weighted-average discount rate:
|
|
|
Operating lease
|
6.4
|
%
|
Finance lease
|
8.0
|
%
|
|
Operating Leases
|
|
Operating Subleases
|
|
Finance Leases
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(in thousands)
|
||||||||||||||
2020
|
$
|
12,041
|
|
|
$
|
(2,554
|
)
|
|
$
|
1,040
|
|
|
$
|
10,527
|
|
2021
|
12,027
|
|
|
(2,631
|
)
|
|
633
|
|
|
10,029
|
|
||||
2022
|
8,546
|
|
|
(2,538
|
)
|
|
64
|
|
|
6,072
|
|
||||
2023
|
3,575
|
|
|
(623
|
)
|
|
—
|
|
|
2,952
|
|
||||
2024
|
2,637
|
|
|
—
|
|
|
—
|
|
|
2,637
|
|
||||
Thereafter
|
13,716
|
|
|
—
|
|
|
—
|
|
|
13,716
|
|
||||
Total lease payments
|
52,542
|
|
|
(8,346
|
)
|
|
1,737
|
|
|
45,933
|
|
||||
Less: interest
|
(9,078
|
)
|
|
—
|
|
|
(114
|
)
|
|
(9,192
|
)
|
||||
Less: tenant improvements reimbursement(1)
|
(96
|
)
|
|
—
|
|
|
—
|
|
|
(96
|
)
|
||||
Total
|
$
|
43,368
|
|
|
$
|
(8,346
|
)
|
|
$
|
1,623
|
|
|
$
|
36,645
|
|
|
For the Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
|
||||
|
(in thousands)
|
||||||
Selling services
|
$
|
213,897
|
|
|
$
|
234,391
|
|
Professional services
|
2,238
|
|
|
3,949
|
|
||
Total revenue
|
$
|
216,135
|
|
|
$
|
238,340
|
|
|
For the Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
|
||||
|
(in thousands)
|
||||||
NALA
|
$
|
125,660
|
|
|
$
|
143,147
|
|
EMEA
|
55,801
|
|
|
60,600
|
|
||
APJ
|
34,674
|
|
|
34,593
|
|
||
Total revenue
|
$
|
216,135
|
|
|
$
|
238,340
|
|
|
For the Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
|
||||
|
(in thousands)
|
||||||
Variable consideration
|
$
|
146,192
|
|
|
$
|
161,129
|
|
Fixed consideration
|
69,943
|
|
|
77,211
|
|
||
Total revenue
|
$
|
216,135
|
|
|
$
|
238,340
|
|
2018
|
$
|
1,529
|
|
2019
|
976
|
|
|
2020
|
578
|
|
|
2021
|
232
|
|
|
2022
|
31
|
|
|
Thereafter
|
—
|
|
|
Total
|
$
|
3,346
|
|
Balance as of January 1, 2018
|
$
|
—
|
|
Capitalized costs
|
1,083
|
|
|
Amortization expense
|
(241
|
)
|
|
Balance as of December 31, 2018
|
$
|
842
|
|
Capitalized costs
|
447
|
|
|
Amortization expense
|
(528
|
)
|
|
Balance as of December 31, 2019(1)
|
$
|
761
|
|
|
For the Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
|
||||
|
(in thousands)
|
||||||
Cost of revenue
|
$
|
538
|
|
|
$
|
1,056
|
|
Sales and marketing
|
1,772
|
|
|
3,131
|
|
||
Research and development
|
41
|
|
|
180
|
|
||
General and administrative
|
2,811
|
|
|
5,234
|
|
||
Total stock-based compensation
|
$
|
5,162
|
|
|
$
|
9,601
|
|
|
For the Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Expected term (in years)
|
5.0
|
|
|
5.0
|
|
||
Expected volatility
|
55% - 59%
|
|
|
52% - 58%
|
|
||
Risk-free interest rate
|
1.39% - 2.57%
|
|
|
2.69% - 2.92%
|
|
||
Expected dividend yield
|
—
|
%
|
|
—
|
%
|
||
Weighted-average grant date fair value
|
$
|
0.47
|
|
|
$
|
0.68
|
|
|
For the Year Ended December 31,
|
||||
|
2019
|
|
2018
|
||
Expected term (in years)
|
0.5 - 1.0
|
|
|
0.5 - 1.0
|
|
Expected volatility
|
39% - 97%
|
|
|
39% - 55%
|
|
Risk-free interest rate
|
1.67% - 2.47%
|
|
|
1.79% - 2.37%
|
|
Expected dividend yield
|
—
|
%
|
|
—
|
%
|
|
Shares
|
|
Weighted-Average Exercise Price
|
|
Weighted-Average Remaining Contractual Life (Years)
|
|
Intrinsic Value
|
|||||
|
(in thousands)
|
|
|
|
|
|
(in thousands)
|
|||||
Outstanding as of December 31, 2018
|
7,516
|
|
|
$
|
3.34
|
|
|
|
|
|
||
Granted
|
575
|
|
|
$
|
0.95
|
|
|
|
|
|
||
Exercised
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||
Expired and/or forfeited
|
(3,945
|
)
|
|
$
|
4.22
|
|
|
|
|
|
||
Outstanding as of December 31, 2019
|
4,146
|
|
|
$
|
2.16
|
|
|
8.04
|
|
$
|
1,580
|
|
Exercisable as of December 31, 2019
|
1,858
|
|
|
$
|
3.28
|
|
|
6.83
|
|
$
|
412
|
|
|
For the Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
|
||||
|
(in thousands)
|
||||||
Fair value of options vested
|
$
|
865
|
|
|
$
|
1,810
|
|
Intrinsic value of options exercised
|
$
|
—
|
|
|
$
|
32
|
|
|
Units
|
|
Weighted-Average Grant Date Fair Value
|
||
|
(in thousands)
|
|
|
||
Non-vested as of December 31, 2018
|
5,669
|
|
$
|
3.29
|
|
Granted
|
2,938
|
|
$
|
0.93
|
|
Vested(1)
|
(1,938)
|
|
$
|
3.28
|
|
Forfeited
|
(1,364)
|
|
$
|
3.56
|
|
Non-vested as of December 31, 2019
|
5,305
|
|
$
|
1.92
|
|
|
For the Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
|
||||
|
(in thousands)
|
||||||
Fair value of RSUs and PSUs vested
|
$
|
2,076
|
|
|
$
|
8,626
|
|
|
Severance and Other Employee Costs
|
|
Lease Termination Costs
|
|
Total
|
||||||
|
|
|
|
|
|
||||||
|
(in thousands)
|
||||||||||
Balance as of January 1, 2019
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restructuring and other related costs
|
1,806
|
|
|
123
|
|
|
1,929
|
|
|||
Cash paid
|
(1,624
|
)
|
|
(123
|
)
|
|
(1,747
|
)
|
|||
Balance as of December 31, 2019
|
$
|
182
|
|
|
$
|
—
|
|
|
$
|
182
|
|
|
Severance and Other Employee Costs
|
|
Lease and Other Contract Termination Costs
|
|
Asset Impairments
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(in thousands)
|
||||||||||||||
Balance as of January 1, 2017
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restructuring and other related costs
|
3,483
|
|
|
2,939
|
|
|
886
|
|
|
7,308
|
|
||||
Cash paid
|
(3,060
|
)
|
|
(1,185
|
)
|
|
—
|
|
|
(4,245
|
)
|
||||
Change in estimates and non-cash charges
|
—
|
|
|
—
|
|
|
(886
|
)
|
|
(886
|
)
|
||||
Acceleration of stock-based compensation expense in additional paid-in capital
|
(352
|
)
|
|
—
|
|
|
—
|
|
|
(352
|
)
|
||||
Balance as of December 31, 2017
|
71
|
|
|
1,754
|
|
|
—
|
|
|
1,825
|
|
||||
Restructuring and other related costs
|
120
|
|
|
89
|
|
|
—
|
|
|
209
|
|
||||
Cash paid
|
(188
|
)
|
|
(1,133
|
)
|
|
—
|
|
|
(1,321
|
)
|
||||
Change in estimates and non-cash charges
|
(3
|
)
|
|
252
|
|
|
—
|
|
|
249
|
|
||||
Balance as of December 31, 2018
|
—
|
|
|
962
|
|
|
—
|
|
|
962
|
|
||||
Cash paid
|
—
|
|
|
(183
|
)
|
|
—
|
|
|
(183
|
)
|
||||
Change in estimates and non-cash charges
|
—
|
|
|
(63
|
)
|
|
—
|
|
|
(63
|
)
|
||||
Balance as of December 31, 2019
|
$
|
—
|
|
|
$
|
716
|
|
|
$
|
—
|
|
|
$
|
716
|
|
|
For the Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
|
||||
|
(in thousands)
|
||||||
U.S.
|
$
|
(9,877
|
)
|
|
$
|
(25,298
|
)
|
International
|
(8,363
|
)
|
|
863
|
|
||
Loss before provision for income taxes
|
$
|
(18,240
|
)
|
|
$
|
(24,435
|
)
|
|
For the Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
|
||||
|
(in thousands)
|
||||||
Current:
|
|
|
|
||||
Federal
|
$
|
181
|
|
|
$
|
309
|
|
Foreign
|
189
|
|
|
70
|
|
||
State and local
|
58
|
|
|
38
|
|
||
Total current income tax provision
|
428
|
|
|
417
|
|
||
Deferred:
|
|
|
|
||||
Federal
|
65
|
|
|
(82
|
)
|
||
Foreign
|
(6
|
)
|
|
85
|
|
||
State and local
|
(44
|
)
|
|
30
|
|
||
Total deferred income tax provision
|
15
|
|
|
33
|
|
||
Income tax provision
|
$
|
443
|
|
|
$
|
450
|
|
|
For the Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
|
||||
|
(in thousands)
|
||||||
U.S. income tax at federal statutory rate
|
$
|
(3,830
|
)
|
|
$
|
(5,131
|
)
|
State income taxes, net of federal benefit
|
238
|
|
|
(857
|
)
|
||
Section 956 inclusion
|
—
|
|
|
191
|
|
||
Share-based compensation
|
2,241
|
|
|
610
|
|
||
Foreign tax rate differential
|
374
|
|
|
(212
|
)
|
||
Permanent differences
|
403
|
|
|
265
|
|
||
Tax credits
|
(136
|
)
|
|
(80
|
)
|
||
Valuation allowance
|
1,128
|
|
|
4,203
|
|
||
Other, net
|
25
|
|
|
1,461
|
|
||
Income tax provision
|
$
|
443
|
|
|
$
|
450
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
|
|
|
||||
|
(in thousands)
|
||||||
Deferred tax assets:
|
|
|
|
||||
Accrued liabilities
|
$
|
6,576
|
|
|
$
|
4,841
|
|
Share-based compensation
|
879
|
|
|
2,887
|
|
||
Net operating loss carryforwards
|
81,533
|
|
|
71,797
|
|
||
Tax credits
|
7,410
|
|
|
7,400
|
|
||
Amortization of tax intangibles
|
525
|
|
|
981
|
|
||
Interest
|
123
|
|
|
827
|
|
||
Total deferred tax assets
|
97,046
|
|
|
88,733
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Property and equipment
|
(5,037
|
)
|
|
(3,086
|
)
|
||
ROU assets
|
(4,631
|
)
|
|
—
|
|
||
Other, net
|
(583
|
)
|
|
(119
|
)
|
||
Total deferred tax liabilities
|
(10,251
|
)
|
|
(3,205
|
)
|
||
Net deferred tax assets
|
86,795
|
|
|
85,528
|
|
||
Less: Valuation allowance
|
(87,078
|
)
|
|
(85,796
|
)
|
||
Net deferred tax liabilities
|
$
|
(283
|
)
|
|
$
|
(268
|
)
|
|
2019
|
|
2018
|
||||
|
|
|
|
||||
|
(in thousands)
|
||||||
Beginning balance
|
$
|
944
|
|
|
$
|
932
|
|
Additions based on tax positions related to the current year
|
20
|
|
|
12
|
|
||
Ending balance
|
$
|
964
|
|
|
$
|
944
|
|
2020
|
$
|
10,923
|
|
2021
|
9,840
|
|
|
2022
|
8,836
|
|
|
2023
|
7,416
|
|
|
2024
|
821
|
|
|
Total
|
$
|
37,836
|
|
|
For the Quarter Ended,
|
||||||||||||||||||||||||||||||
|
Dec. 31, 2019
|
|
Sep. 30, 2019
|
|
Jun. 30, 2019
|
|
Mar. 31, 2019
|
|
Dec. 31, 2018
|
|
Sep. 30, 2018
|
|
Jun. 30, 2018
|
|
Mar. 31, 2018
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
(in thousands, except per share amounts)
|
||||||||||||||||||||||||||||||
Net revenue
|
$
|
54,871
|
|
|
$
|
53,395
|
|
|
$
|
52,358
|
|
|
$
|
55,511
|
|
|
$
|
61,471
|
|
|
$
|
57,173
|
|
|
$
|
61,111
|
|
|
$
|
58,585
|
|
Gross profit
|
$
|
17,412
|
|
|
$
|
15,524
|
|
|
$
|
14,009
|
|
|
$
|
16,035
|
|
|
$
|
20,914
|
|
|
$
|
17,224
|
|
|
$
|
18,648
|
|
|
$
|
16,861
|
|
(Loss) income from operations
|
$
|
(2,029
|
)
|
|
$
|
(3,899
|
)
|
|
$
|
(5,869
|
)
|
|
$
|
(5,217
|
)
|
|
$
|
2,346
|
|
|
$
|
(5,700
|
)
|
|
$
|
(5,697
|
)
|
|
$
|
(6,835
|
)
|
Net (loss) income
|
$
|
(2,492
|
)
|
|
$
|
(4,437
|
)
|
|
$
|
(6,035
|
)
|
|
$
|
(5,719
|
)
|
|
$
|
2,279
|
|
|
$
|
(6,625
|
)
|
|
$
|
(8,887
|
)
|
|
$
|
(11,652
|
)
|
Net (loss) income per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic and diluted
|
$
|
(0.03
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
0.03
|
|
|
$
|
(0.07
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
(0.13
|
)
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
ITEM 16.
|
FORM 10-K SUMMARY
|
Abbreviations or acronyms
|
Definition
|
2011 Plan
|
2011 Equity Incentive Plan
|
2020 Proxy Statement
|
Proxy statement for our 2020 annual meeting of stockholders
|
Act
|
Tax Cuts and Jobs Act
|
APJ
|
Asia Pacific-Japan
|
ARO
|
Asset retirement obligation
|
ASC 606
|
Accounting Standards Codification Topic 606, Revenue from Contracts with Customers
|
ASC 740
|
Accounting Standards Codification Topic 740, Income Taxes
|
ASC 842
|
Accounting Standards Codification Topic 842, Leases
|
ASU
|
Accounting Standards Update
|
ASU 2018-15
|
Accounting Standards Update 2018-15 - Cloud Computing Implementation Costs
|
AWS
|
Amazon Web Services
|
B2B
|
Business-to-business
|
B2C
|
Business-to-consumer
|
BPaaS
|
Business Process-as-a-Service
|
CEO
|
Chief Executive Officer
|
CFO
|
Chief Financial Officer
|
CJX
|
Customer journey experience
|
CRM
|
Customer relationship management
|
COSO
|
Committee of Sponsoring Organizations of the Treadway Commission
|
E&P
|
Earnings and profits
|
EMEA
|
Europe, Middle East and Africa
|
ERP
|
Enterprise resource planning
|
ESPP
|
2011 Employee Stock Purchase Plan
|
Exchange Act
|
Securities Exchange Act of 1934, as amended
|
FASB
|
Financial Accounting Standards Board
|
GAAP
|
United States Generally Accepted Accounting Principles
|
GDPR
|
General Data Protection Regulation
|
GILTI
|
Global Intangible Low-taxed Income
|
IaaS
|
Infrastructure-as-a-service
|
IoT
|
Internet of things
|
IRS
|
Internal Revenue Service
|
NALA
|
North America and Latin America
|
Notes
|
Senior convertible notes
|
PaaS
|
Platform-as-a-service
|
PSU
|
Performance-based restricted stock unit
|
Revolver
|
Senior secured revolving line of credit
|
ROU
|
Right-of-use
|
RSU
|
Restricted stock unit
|
SaaS
|
Software-as-a-service
|
SAB 118
|
Staff Accounting Bulletin No. 118
|
SEC
|
Securities and Exchange Commission
|
SPA
|
Sales performance analysis
|
SSP
|
Stand-alone selling price
|
U.S.
|
United States
|
|
|
|
|
|
|
Incorporated by Reference Herein
|
||||
Exhibit
Number
|
|
Exhibit Description
|
|
Filed or Furnished
Herewith
|
|
Exhibit
|
|
Form/File No.
|
|
Filing Date
|
3.1
|
|
|
|
|
|
3.1
|
|
Form 10-Q
(No. 001-35108)
|
|
August 6,
2018
|
3.2
|
|
|
|
|
|
3.2
|
|
Form 8-K
(No. 001-35108)
|
|
March 31, 2016
|
4.1
|
|
|
|
|
|
4.1
|
|
Form S-1/A
(No. 333-171271)
|
|
February 25,
2011
|
4.2
|
|
|
|
|
|
4.3
|
|
Form S-1/A
(No. 333-171271)
|
|
March 11,
2011
|
4.3
|
|
|
|
X
|
|
|
|
|
|
|
10.1+
|
|
|
|
|
|
10.1
|
|
Form S-1
(No. 333-171271)
|
|
December 20,
2010
|
10.2+
|
|
|
|
|
|
4.4
|
|
Form S-8
(No. 333-173116)
|
|
March 28,
2011
|
10.3+
|
|
|
|
|
|
10.1
|
|
Form 8-K
(No. 001-35108)
|
|
February 10,
2012
|
10.4+
|
|
|
|
|
|
10.1
|
|
Form 10-Q
(No. 001-35108)
|
|
October 29, 2019
|
10.5+
|
|
|
|
|
|
10.2
|
|
Form 10-Q
(No. 001-35108)
|
|
October 29, 2019
|
10.6+
|
|
|
|
|
|
4.5
|
|
Form S-8
(No. 333-173116)
|
|
March 28,
2011
|
10.7+
|
|
|
|
|
|
10.1
|
|
Form 8-K
(No. 001-35108)
|
|
January 28, 2019
|
10.8+
|
|
|
|
|
|
10.1
|
|
Form 8-K
(No. 001-35108)
|
|
October 18, 2018
|
10.9+
|
|
|
|
|
|
10.1
|
|
Form 8-K
(No. 001-35108)
|
|
November 13, 2018
|
|
|
|
|
|
|
Incorporated by Reference Herein
|
||||
Exhibit
Number |
|
Exhibit Description
|
|
Filed or Furnished
Herewith |
|
Exhibit
|
|
Form/File No.
|
|
Filing Date
|
10.10+
|
|
|
|
|
|
10.1
|
|
Form 8-K
(No. 001-35108)
|
|
August 2, 2018
|
21.1
|
|
|
|
X
|
|
|
|
|
|
|
23.1
|
|
|
|
X
|
|
|
|
|
|
|
24.1
|
|
|
|
X
|
|
|
|
|
|
|
31.1
|
|
|
|
X
|
|
|
|
|
|
|
31.2
|
|
|
|
X
|
|
|
|
|
|
|
32.1*
|
|
|
|
X
|
|
|
|
|
|
|
32.2*
|
|
|
|
X
|
|
|
|
|
|
|
101.INS
|
|
Inline XBRL Instance Document
|
|
|
|
|
|
|
|
|
101.SCH
|
|
Inline XBRL Taxonomy Extension Schema
|
|
|
|
|
|
|
|
|
101.CAL
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase
|
|
|
|
|
|
|
|
|
101.DEF
|
|
Inline XBRL Taxonomy Extension Definition Linkbase
|
|
|
|
|
|
|
|
|
101.LAB
|
|
Inline XBRL Taxonomy Extension Label Linkbase
|
|
|
|
|
|
|
|
|
101.PRE
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase
|
|
|
|
|
|
|
|
|
104
|
|
Cover Page Interactive Data File, formatted in Inline XBRL (included in Exhibit 101)
|
|
|
|
|
|
|
|
|
+
|
|
Management contract or compensatory plan or arrangement.
|
*
|
|
In accordance with Item 601(b)(32)(ii) of Regulation S-K, the certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Annual Report on Form 10-K and will not be deemed “filed” for purposes of Section 18 of the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filings under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.
|
|
|
|
SERVICESOURCE INTERNATIONAL, INC.
|
|
|
|
|
|
|
Dated:
|
February 19, 2020
|
|
By:
|
/s/ GARY B. MOORE
|
|
|
|
|
Gary B. Moore
|
|
|
|
|
Chief Executive Officer and Director (Principal Executive Officer)
|
Date
|
|
Signature
|
|
Title
|
February 19, 2020
|
|
/s/ GARY B. MOORE
|
|
Chief Executive Officer and Director (Principal Executive Officer)
|
|
|
Gary B. Moore
|
|
|
|
|
|
||
February 19, 2020
|
|
/s/ RICHARD G. WALKER
|
|
Chief Financial Officer and Director (Principal Financial and Accounting Officer)
|
|
|
Richard G. Walker
|
|
|
|
|
|
|
|
February 19, 2020
|
|
/s/ ROBERT G. ASHE
|
|
Director
|
|
|
Robert G. Ashe
|
|
|
|
|
|
|
|
February 19, 2020
|
|
/s/ BRUCE W. DUNLEVIE
|
|
Director
|
|
|
Bruce W. Dunlevie
|
|
|
|
|
|
||
February 19, 2020
|
|
/s/ JOHN R. FERRON
|
|
Director
|
|
|
John R. Ferron
|
|
|
|
|
|
||
February 19, 2020
|
|
/s/ JOHN R. HARRIS
|
|
Director
|
|
|
John R. Harris
|
|
|
|
|
|
|
|
February 19, 2020
|
|
/s/ THOMAS F. MENDOZA
|
|
Director
|
|
|
Thomas F. Mendoza
|
|
|
●
|
1,000,000,000 shares are designated as common stock; and
|
●
|
20,000,000 shares are designated as preferred stock.
|
●
|
The transaction is approved by our Board of Directors prior to the date the interested stockholder obtained such status;
|
●
|
Upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, calculated as provided under Section 203; or
|
●
|
At or subsequent to the date of the transaction, the business combination is approved by our Board of Directors and authorized at an annual or special meeting of our stockholders, and not by written consent, by the affirmative vote of at least two-thirds of the outstanding voting stock which is not owned by the interested stockholder.
|
SUBSIDIARIES
|
|
STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION
|
ServiceSource International, Inc.
|
|
Delaware
|
ServiceSource Delaware, Inc.
|
|
Delaware
|
ServiceSource Europe, Ltd.
|
|
Ireland
|
SSI Europe UK Limited
|
|
United Kingdom
|
ServiceSource International Singapore Pte. Ltd.
|
|
Singapore
|
ServiceSource International Malaysia SDN. BHD.
|
|
Malaysia
|
ServiceSource International Japan G.K.
|
|
Japan
|
ServiceSource International Philippines, Inc.
|
|
Philippines
|
ServiceSource International Bulgaria EOOD
|
|
Bulgaria
|
(1)
|
Registration Statement (Form S-8 No. 333-173116) pertaining to the:
|
•
|
ServiceSource International, Inc. 2011 Equity Incentive Plan
|
•
|
ServiceSource International, Inc. 2011 Employee Stock Purchase Plan
|
•
|
ServiceSource International, LLC 2008 Share Option Plan
|
•
|
ServiceSource International, LLC 2004 Omnibus Share Plan
|
(2)
|
Registration Statement (Form S-8 No. 333-181104) pertaining to the:
|
•
|
ServiceSource International, Inc. 2011 Equity Incentive Plan
|
•
|
ServiceSource International, Inc. 2011 Employee Stock Purchase Plan
|
(3)
|
Registration Statement (Form S-8 No. 333-188652) pertaining to the:
|
•
|
ServiceSource International, Inc. 2011 Equity Incentive Plan
|
•
|
ServiceSource International, Inc. 2011 Employee Stock Purchase Plan
|
(4)
|
Registration Statement (Form S-8 No. 333-194440) pertaining to the:
|
•
|
ServiceSource International, Inc. 2011 Equity Incentive Plan
|
•
|
ServiceSource International, Inc. 2011 Employee Stock Purchase Plan
|
(5)
|
Registration Statement (Form S-8 No. 333-202809) pertaining to the:
|
•
|
ServiceSource International, Inc. 2011 Equity Incentive Plan
|
•
|
ServiceSource International, Inc. 2011 Employee Stock Purchase Plan
|
(6)
|
Registration Statement (Form S-8 No. 333-210014) pertaining to the:
|
•
|
ServiceSource International, Inc. 2011 Equity Incentive Plan
|
•
|
ServiceSource International, Inc. 2011 Employee Stock Purchase Plan
|
(7)
|
Registration Statement (Form S-8 No. 333-216472) pertaining to the:
|
•
|
ServiceSource International, Inc. 2011 Equity Incentive Plan
|
•
|
ServiceSource International, Inc. 2011 Employee Stock Purchase Plan
|
(8)
|
Registration Statement (Form S-8 No. 333-223413) pertaining to the:
|
•
|
ServiceSource International, Inc. 2011 Equity Incentive Plan
|
•
|
ServiceSource International, Inc. 2011 Employee Stock Purchase Plan
|
1.
|
I have reviewed this annual report on Form 10-K of ServiceSource International, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.
|
Dated:
|
February 19, 2020
|
|
By:
|
|
/s/ GARY B. MOORE
|
|
|
|
|
|
Gary B. Moore
|
|
|
|
|
|
Chief Executive Officer and Director
(Principal Executive Officer)
|
1.
|
I have reviewed this annual report on Form 10-K of ServiceSource International, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.
|
Dated:
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February 19, 2020
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By:
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/s/ RICHARD G. WALKER
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Richard G. Walker
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Chief Financial Officer and Director
(Principal Financial and Accounting Officer)
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Dated:
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February 19, 2020
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By:
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/s/ GARY B. MOORE
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Gary B. Moore
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Chief Executive Officer and Director
(Principal Executive Officer) |
Dated:
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February 19, 2020
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By:
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/s/ RICHARD G. WALKER
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Richard G. Walker
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Chief Financial Officer and Director
(Principal Financial and Accounting Officer) |