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Jive Software Yet to Turn In a Profitable Year

Posted on Tuesday, Feb 18th 2014

According to an IDC report on the enterprise social software segment published last year, the industry is projected to grow 22% annually over the period 2012 to 2017 to $2.7 billion. The market was pegged to be worth $1 billion in 2012. The report estimates IBM to be the leader in the segment with 14.2% market, followed by Jive’s market share of 10.2%. But despite being a strong player in the market, Jive Software (Nasdaq: JIVE) is finding it difficult to turn profitable.

Jive’s Financials

Jive’s fourth quarter revenues grew 21% over the year to $39.3 million with billings growing 16% to $53.1 million. Losses for the quarter widened from $0.14 per share a year ago to $0.16 per share. The market was looking for revenues of $39.2 million with a loss of $0.16 per share.

By segment, product revenues grew 25% over the year to $35.8 million. Professional Services revenues, however, declined from $3.9 million a year ago to $3.5 million for the quarter. International efforts have been delivering strong results as well. The U.S. accounted for 77% of their revenues and the remaining 23% came from international markets.

The increased losses were attributed to the continuing spend on Research and Development and Sales and Marketing efforts. During the quarter, R&D spend went up 21% to $14.4 million and sales expenses grew 33% to $25.9 million.

Jive ended the year with revenues growing 28% to $145.8 million. Product revenues increased 31% to $131.5 million during the year and short term billings grew 23% to $170.5 million. Net loss widened from $0.43 per share a year ago to $0.55 per share for the year. Their customer adoption continues to increase and during the year with total customer base growing 21% over the year to 876 organizations.

For the current quarter, Jive projected revenues of $40 million-$41 million with a loss of $0.11-$0.13 per share. They expect to end the year with revenues of $170 million-$175 million and a net loss of $0.39-$0.46 per share.  The Street was projecting current quarter revenues at $41.3 million with a loss of $0.12 per share and they expected Jive to end the year with revenues of $176 million and a $0.46 loss per share.

Jive’s Product Focus

Jive continued to drive the improvement in their Cloud based offering. They began the shipment of Jive 7 Cloud during the quarter. They call this release their most innovative product platform ever and it comes with features such as a Social Directory that helps with talent sourcing to help find experts within the organization, a real-time messaging app and the ability to sync with Google Drive. As part of their mobile efforts, the release also comes with a Universal App that brings all these features to the iPad and iPhone versions.

While Jive may be improving their product offerings, the stock market isn’t too pleased with them. Their streak of losses does not seem to be ending soon as their outlook for the current year also ended with losses. Early last week, the stock touched a 52-week low at $7.11. It has recovered marginally since then and is trading at $7.63 with a market capitalization of $528.29 million. It was at a 52-week high of $18.48 in July last year.


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