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From Unicorn to Unicorpse: Jive Software Beats Estimates

Posted on Friday, Aug 5th 2016

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According to a ReportsnReports research report, the global enterprise social software market is projected to grow 11.3% annually from $4.77 billion in 2014 to $8.14 billion in 2019. However, ever since it went public in December 2011, enterprise social software provider Jive Software (NASDAQ: JIVE) has seen its valuation dwindle from $1.5 billion to around $300 million and its status has been degraded from a Billion Dollar Unicorn to a unicorpse*.

Jive Software’s Financials

During the second quarter, revenue grew 5% to $51 million. GAAP net loss for the second quarter was $6.7 million, compared to a net loss of $9.3 million last year. Non-GAAP net income for the second quarter was $1.9 million or $0.02 per share, compared to a non-GAAP net loss of $2.6 million or loss of $0.03 per share a year ago. Analysts expected earnings of $0.01 per share on revenue of $49.8 million.

GAAP gross profit for the second quarter was $33.7 million, an increase of 11% year-over-year, and GAAP gross margin was 66%. As of June 30, 2016, Jive had cash and cash equivalents and marketable securities of $108.7 million, compared to $112.7 million as of December 31, 2015.

By segment, product revenue grew 5% to $46.5 million and professional services revenue was $4.5 million, which was flat on a year-over-year basis.

For the third quarter, Jive Software expects total revenue in the range of $49 million to $50 million. Non GAAP income is expected to be $1.5 million to $2 million or $0.02 per share to $0.03 per share. Analysts expect Q3 revenue of $47.41 million.

Jive Software’s Improved Products

During the second quarter, Jive announced the latest release of its cloud-based Interactive Intranet and Customer Community solutions that make work more visible, searchable, and memorable from any device. It allows companies to tap into their biggest asset—corporate memory—wherever and whenever needed. As a unified WorkHub, Jive captures, measures, and influences all digital interactions within and outside of an organization. New capabilities include innovative personal analytics to drive faster and more informed decisions; intelligent profiles that streamline access to an organization’s knowledge base; and enhanced integration that infuses social monitoring functionality throughout a digital workplace.

Jive Software achieved new customer wins in the quarter with the Cleveland Clinic Foundation, Huawei Technologies Deutschland GmbH, the National Institutes of Health, Regus Plc, Snow Software, Thornton Tomasetti, Inc., University of Virginia, Vaco, Inc., Veterinary Growth Partners, Vicinity Centres, and VimpelCom Eurasia, among others.

Jive has been struggling in the face of increased competition from the likes of Microsoft’s Yammer and Salesforce.com’s Chatter. It is not just the bigger players, but there are also several other startups like Atlassian’s HipChat competing with Jive. Atlassian is one of the very few unicorns that recently had a very successful IPO. It owes its success to a lean sales model, focus on existing customers and product development, profitability, and revenues rather than on raising funds at unsustainable valuations.

Jive Software, on the other hand, struggled with profitability issues, which saw its valuation tumble. Now that it has achieved non GAAP profitability, it remains to be seen if the market rewards it.

Jive’s stock is trading at $3.95 with a market capitalization of $302 million. Its 52-week range is $2.84 to $5.21. It has recently received consensus recommendation of Hold.

* The term Unicorpse was first coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.

Photo credit: A Syn/Flickr.com.

This segment is a part in the series : From Unicorn to Unicorpse

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