[SUPPORT.COM LOGO OMITTED]
FOR IMMEDIATE RELEASE
---------------------
SUPPORT.COM EXCEEDS FOURTH QUARTER
AND YEAR-END FINANCIAL EXPECTATIONS
-- COMPANY INCREASES GUIDANCE FOR 1Q01, FULL-YEAR 2001 AND FULL-YEAR 2002 --
>> 4Q00 revenues increased 391% year-over-year and 47% sequentially over prior
quarter
>> Net Operating Loss per share of $0.20, 4 cents or 17% better than consensus
for the quarter
>> Significant momentum with large enterprise and service provider customers
>> Multi-language eSupport solutions further extended to global customers and
partners
REDWOOD CITY, CA, JANUARY 16, 2001 -- Support.com, Inc. (NASDAQ: SPRT), the
leading provider of support infrastructure software for digital businesses,
today announced financial results for its fourth quarter and year-ended December
31, 2000.
Support.com ended its first year as a public company with record growth,
improved operating results, and continued technology innovation.
The Company reported fourth quarter revenues of $7.9 million, an increase of
391% from $1.6 million reported in the comparable period a year ago and an
increase of 47% from $5.4 million reported in the third quarter 2000.
Support.com licenses its software through term and perpetual license agreements,
the majority of which are term licenses. Revenue for term licenses is recognized
monthly over the subscription period, which is typically 36 months. Both
deferred revenues and order backlog continued to grow, reaching record levels.
Revenue from software licenses for the fourth quarter of 2000 was $6.0 million,
a 396% increase over $1.2 million reported in the fourth quarter 1999 and a 52%
increase over the $4.0 million reported in the third quarter 2000. Revenue from
services for the fourth quarter 2000 was $1.9 million, a 376% increase over $0.4
million in the comparable year-ago period and an increase of 34% over the $1.4
million reported in the third quarter 2000.
For the full-year ended December 31, 2000, total revenue was $18.7 million, an
increase of 481% from the $3.2 million reported in the comparable period a year
ago. License revenue was $13.7 million, an increase of 420% over $2.6 million
reported in the comparable 1999 period. Revenue for services increased 767% to
$4.9 million, as compared to $0.6 million reported for the full year ended
December 31, 1999.
Net loss for the quarter excluding certain non-cash charges was $5.8 million or
$0.20 per share, beating the First Call consensus estimate of $0.24 per share.
During the corresponding quarter in fiscal 1999, the comparable net loss was
$3.9 million or $0.17 per share. Notably, fourth quarter results were a marked
improvement over the third quarter net loss of $6.7 million or $0.24 per share,
excluding certain non-cash charges. Net loss for the full-year 2000 excluding
certain non-cash charges was $24.9 million or $0.94 per share, compared to a net
loss of $9.7 million or $0.48 per share, excluding certain non-cash charges, for
the comparable 1999 period.
The Company reported fourth quarter cash, cash equivalent and short-term
investment balances of $51.5 million. Cash used for operations during the fourth
quarter 2000 was $3.8 million compared to $6.0 million reported in the previous
quarter. Deferred revenue grew by 30% to $12.1 million as of December 31, 2000.
- MORE -
<PAGE>
SUPPORT.COM REPORTS RECORD FOURTH QUARTER AND YEAR-END RESULTS
PAGE 2 OF 7
Radha Basu, President and Chief Executive Officer of Support.com stated, "This
has been a landmark year for our Company and the strongest quarter in our
history. We are very pleased with the progress made in carrying through on our
core initiatives of expanding our worldwide customer, channel and technology
footprint. By the end of fiscal year 2000, Support.com doubled its team, tripled
its customer base, quadrupled its revenues, and delivered cutting edge global
eSupport products."
RECENT HIGHLIGHTS
Support infrastructure software continues to be a priority in IT spending as
evidenced by the continued strong demand seen in the fourth quarter. The
company's performance highlights include:
- ADDED OVER 15 NEW CUSTOMERS, BRINGING THE TOTAL NUMBER TO OVER 90. Received
new and repeat orders from eBusinesses across industries, including Boeing,
IBM Personal Systems Group, Clorox, NCR, Comcast Cable Communications,
Netway, Samsung Electronics, CompuCom, among others.
- INCREASED CUSTOMER COVERAGE THROUGH DISTRIBUTION CHANNELS. Announced
strategic partnerships with GE Capital IT Solutions, Perot Systems, Entex
and Sitel. The Company also launched PartnerConnect, a new initiative
designed to provide system integrators, outsourcers and resellers reduced
sales cycles through collaborative information sharing and real-time
access.
- EXPANDED SUPPORT INFRASTRUCTURE SOLUTIONS FOR INTERNET SERVICE PROVIDERS
(ISPS). Responding to the escalating needs of the service provider market,
two new products were introduced to help service providers accelerate
broadband deployment and expand their service offerings. The Company also
announced the addition of RCN and Comcast Cable Communications to its
growing list of global broadband customers, which includes Excite@Home,
Globo Cabo and StarHub Internet.
- TWO PATENTS ISSUED FOR SMARTISSUE(TM) AND DNA PROBE(TM) TECHNology.
SmartIssue(TM) technology automatically collects personalized information
about the user, the system and the problem, and intelligently connects
users to the support tools, personnel and communication channels that best
resolve the support request. The patent related to the DNA Probe(TM) is our
second patent regarding this technology which automatically identifies the
characteristics of each users' software applications and operating systems
components and tracks them over time. The Company now has three patents and
six pending.
- CONTINUED TO EXPAND GLOBAL PRODUCT SUITE TO LEVERAGE FIRST-TO-MARKET
ADVANTAGE. Introduced Portuguese and two versions of Chinese languages to
its Version 4 product suite. The Company's comprehensive eSupport solutions
are now available in nine (French, German, Spanish, English, Portuguese,
Korean, Simplified Chinese, Traditional Chinese, and Japanese) languages,
making Support.com the first and only company to deliver multi-language
solutions that address the eSupport infrastructure needs of global
businesses.
- STRENGTHENED ITS INTERNATIONAL DISTRIBUTION CHANNELS AND MANAGEMENT
ORGANIZATION. Recent examples of channel sell-through include Toshiba
through Sykes Enterprises, Elsevier through IP Globalnet, and Samsung
Electronics through Samsung SDS. Tony Rodoni, previously vice president of
Marketing, was appointed president and general manager of European
Operations and will be based in the company's London headquarters.
The Company also announced today, the appointment of Bruce Mowery to head up its
worldwide marketing organization. He brings more than 20 years of technology
marketing experience to his position, including almost 10 years at Apple
Computer. Mowery will focus on stimulating market demand, while further
establishing Support.com as the preferred brand for eSupport infrastructure.
<PAGE>
SUPPORT.COM REPORTS RECORD FOURTH QUARTER AND YEAR-END RESULTS
PAGE 3 OF 7
GUIDANCE
Based on the Company's strong performance to date and the current market
environment, the Company raised near and longer-term revenue and profitability
targets. For Q1 2001, the Company provided guidance for revenue in the range of
$8.5 to $8.7 million, which is approximately 9% higher than the current
consensus estimate of $7.9 million. As a result, guidance for Q1 2001 net loss
per share, excluding certain non-cash charges, is in the range of $0.18 to
$0.19. For 2001, revenue guidance was increased by 9% to a range of $43 to $45
million. For 2002, revenue guidance was increased by 10% to a range of $73 to
$77 million. The Company expects to reach cash flow break-even in the first
quarter 2002 and earnings break-even, excluding certain non-cash charges, in the
third quarter 2002.
Basu stated, "In 2000, Support.com has exceeded its operational and financial
benchmarks. Additionally, we are advancing both cash flow break-even and
profitability one quarter ahead of consensus estimates. This is truly a
testament to our market leadership, excellent customer momentum, product demand,
strong management team and great execution."
Support.com will be hosting an earnings release conference call today at 5:00
p.m. (EST). Interested parties may participate in a listen-only mode via a
real-time web cast by visiting the Company web site (WWW.SUPPORT.COM). A replay
of the call will be available for thirty days on the Web site for those unable
to listen today.
ABOUT SUPPORT.COM
Support.com (Nasdaq: SPRT) is the leading provider of support infrastructure
software essential for digital business. Corporate enterprises and service
providers select Support.com because its unique software platform allows
businesses to automate and personalize the support they provide to their
customers, partners and employees. With the growing reliance on digital
processes to drive business operations and growth, we believe companies face a
tremendous burden: the fundamental need to better support users, systems and
processes. Support.com customers have successfully deployed the Company's
infrastructure throughout a range of Intranet and Extranet-based environments.
Fortune 1000 companies using Support.com's software include corporate
enterprises like GE, Cisco, Delta, Fidelity, and Boeing, plus service providers
and OEMs like IBM, Sony and Excite@Home. A recognized technology leader,
Support.com has received three patents for its DNA Probe(TM) and SmartIssue(TM)
technologies. Additionally, it has six patents pending. Support.com's
headquarters are in Redwood City, California, with offices in major financial
markets around the world.
THIS PRESS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS INCLUDING STATEMENTS
WITHIN THE MEANING OF THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995 SUCH AS STATEMENTS RELATED TO FUTURE REVENUE,
LOSS, AND BREAK-EVEN GUIDANCE. THESE STATEMENTS ARE NOT GUARANTEES OF FUTURE
RESULTS AND INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS
THAT MAY CAUSE ACTUAL RESULTS TO BE MATERIALLY DIFFERENT FROM THE RESULTS
EXPRESSED OR IMPLIED BY THESE STATEMENTS, INCLUDING BUT NOT LIMITED TO: THE
COMPANY'S LIMITED OPERATING HISTORY, COMPETITION FROM OTHER VENDORS, LACK OF
MARKET ACCEPTANCE OF NEW PRODUCTS, CONTINUED ACCEPTANCE OF TERM DEALS, LACK OF
RENEWALS OF TERM DEALS, ABILITY TO ATTRACT AND RETAIN QUALIFIED EMPLOYEES,
INABILITY TO EXPAND OPERATIONS TO SUPPORT INCREASED GROWTH, ACTIVITIES BY
SUPPORT.COM AND OTHERS REGARDING PROTECTION OF INTELLECTUAL PROPERTY RIGHTS, AND
ECONOMIC DOWNTURNS IN EITHER DOMESTIC OR FOREIGN MARKETS. A FULLER DISCUSSION OF
THE RISKS AND UNCERTAINTIES THAT COULD AFFECT SUPPORT.COM ARE SET FORTH IN THE
RISK FACTORS SECTION OF SUPPORT.COM'S REGISTRATION STATEMENT ON FORM S-1 AND THE
QUARTERLY REPORT ON FORM 10-Q ON FILE WITH THE SECURITIES AND EXCHANGE
COMMISSION. ALL FORWARD-LOOKING STATEMENTS INCLUDED IN THIS RELEASE ARE BASED
UPON INFORMATION KNOWN TO SUPPORT.COM AS OF THE DATE OF THIS RELEASE, AND
SUPPORT.COM ASSUMES NO OBLIGATION TO UPDATE ANY SUCH FORWARD-LOOKING STATEMENTS.
Support.com, SmartIssue and DNA Probe are trademarks of Support.com, Inc. in the
U.S. and other countries. All other product, trademark, company or service names
mentioned herein are the property of their respective owners.
<PAGE>
SUPPORT.COM REPORTS RECORD FOURTH QUARTER AND YEAR-END RESULTS
PAGE 4 OF 7
FOR INVESTOR AND MEDIA RELATIONS INQUIRIES:
Sonali Sen Chris Fullam
Director, Investor Relations Investor Relations for Support.com
650/556-8539 212/299-3956
[email protected] [email protected]
<PAGE>
SUPPORT.COM REPORTS RECORD FOURTH QUARTER AND YEAR-END RESULTS
PAGE 5 OF 7
<TABLE>
SUPPORT.COM, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
EXCLUDING AMORTIZATION OF PURCHASED TECHNOLOGY, DEFERRED STOCK COMPENSATION
AND ACCRETION ON REDEEMABLE CONVERTIBLE PREFERRED STOCK
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS; UNAUDITED)
<CAPTION>
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
------------ ------------
1999 2000 1999 2000
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES:
License fees $ 1,212 $ 6,010 $ 2,642 $ 13,732
Services 390 1,857 569 4,934
------- ------- ------- --------
TOTAL REVENUES 1,602 7,867 3,211 18,666
COSTS AND EXPENSES:
Cost of license fees 1 209 4 1,405
Cost of services 524 1,952 965 5,910
Research and development 847 3,549 2,348 10,913
Sales and marketing 3,343 7,367 7,924 22,754
General and administrative 873 1,495 1,845 4,325
------- ------- ------- --------
TOTAL COSTS AND EXPENSES 5,588 14,572 13,086 45,307
LOSS FROM OPERATIONS (3,986) (6,705) (9,875) (26,641)
Interest income (expense) and other income, net 102 900 170 1,718
------- ------- ------- --------
NET LOSS (3,884) (5,805) (9,705) (24,923)
------- ------- ------- --------
Net loss per share $ (0.17) $ (0.20) $ (0.48) $ (0.94)
------- ------- ------- --------
Weighted average shares used in
share calculation 22,298 29,754 20,137 26,486
------ ------ ------ ------
</TABLE>
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The above pro forma amounts for the quarter and year ended December 31, 1999 and
2000 have been adjusted to eliminate the amortization of purchased intangibles
and deferred stock-based compensation and a deemed preferred stock dividend.
Additionally, included in the weighted average shares used in share calculation
is the pro forma effect of the automatic conversion of the Company's convertible
preferred stock into shares of common stock, effective upon the closing of the
Company's initial public offering, as if such conversion occurred at the
beginning of each period presented.
<PAGE>
SUPPORT.COM REPORTS RECORD FOURTH QUARTER AND YEAR-END RESULTS
PAGE 6 OF 7
<TABLE>
SUPPORT.COM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS; UNAUDITED)
<CAPTION>
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
------------ ------------
1999 2000 1999 2000
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES:
LICENSE FEES $ 1,212 $ 6,010 $ 2,642 $ 13,732
Services 390 1,857 569 4,934
------- ------- -------- --------
TOTAL REVENUES 1,602 7,867 3,211 18,666
COSTS AND EXPENSES:
Cost of license fees 1 209 4 1,405
Cost of services 524 1,952 965 5,910
Amortization of purchased technology and other
intangibles -- 1,064 -- 1,158
Research and development 847 3,549 2,348 10,913
Sales and marketing 3,343 7,367 7,924 22,754
General and administrative 873 1,495 1,845 4,325
Amortization of deferred stock compensation 2,111 1,572 3,809 10,787
------- ------- -------- --------
TOTAL COSTS AND EXPENSES 7,699 17,208 16,895 57,252
LOSS FROM OPERATIONS (6,097) (9,341) (13,684) (38,586)
Interest income (expense) and other income, net 102 900 170 1,718
------- ------- -------- --------
NET LOSS (5,995) (8,441) (13,514) (36,868)
Accretion on redeemable convertible preferred stock (412) -- (1,072) (885)
------- ------- -------- --------
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS $(6,407) $(8,441) $(14,586) (37,753)
------- ------- --------- --------
Basic and diluted net loss per share $ (0.95) $ (0.28) $ (2.20) $ (2.09)
------- ------- -------- --------
Shares used in computing basic and
diluted net loss per share 6,741 29,754 6,643 18,102
------- ------- -------- --------
Pro forma basic and diluted net loss
per share $ (1.39)
--------
Shares used in computing pro forma
basic and diluted net loss per share 26,486
--------
</TABLE>
<PAGE>
SUPPORT.COM REPORTS RECORD FOURTH QUARTER AND YEAR-END RESULTS
PAGE 7 OF 7
<TABLE>
SUPPORT.COM, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<CAPTION>
DECEMBER 31, DECEMBER 31,
1999 2000
---- ----
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash, cash equivalents and short term investments $ 12,489 $ 51,513
Accounts receivable, net 3,450 7,872
Other current assets 618 3,255
-------- --------
TOTAL CURRENT ASSETS 6,557 62,640
Property and equipment, net 881 2,420
Other assets 254 5,512
-------- --------
TOTAL ASSETS $ 17,692 $ 70,572
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY (NET CAPITAL DEFICIENCY)
Current liabilities:
Accounts payable and accrued compensation $ 1,678 $ 3,207
Other accrued liabilities 494 5,094
Notes payable, current portion 921 --
Capital lease obligations, current portion 274 620
Deferred revenue 3,072 12,107
-------- --------
TOTAL CURRENT LIABILITIES 6,439 21,028
Notes payable, net of current portion 1,478 --
Capital lease obligations, net of current portion 799 1,221
Other long term liabilities -- 2,164
Commitments
Redeemable convertible preferred stock 21,449 --
STOCKHOLDERS' EQUITY (NET CAPITAL DEFICIENCY):
Convertible preferred stock 1 --
Common stock 1 3
Additional paid-in capital 20,016 108,558
Notes receivable from stockholders (1,450) (2,051)
Deferred stock compensation (14,777) (7,219)
Accumulated deficit (16,264) (53,132)
-------- --------
Stockholders' equity (net capital deficiency) (12,473) 46,159
-------- --------
Total liabilities and stockholders' equity
(net capital deficiency) $ 17,692 $ 70,572
======== ========
</TABLE>
