Support.com 2007 Annual Report Download - page 19

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We have not been profitable and may not achieve profitability in future periods.
We were not profitable in 2007. In addition, we intend to make significant investments in support of our business in 2008 and we expect to continue to
sustain losses in 2008 and possibly subsequent periods. If we fail to achieve revenue growth as a result of these additional investments or if such revenue growth
does not result in our achieving profitability, the market price of our common stock will likely decline. A sustained period of losses would also result in an
increased usage of cash to fund our operating activities and a corresponding reduction in our cash balance.
Our quarterly results have in the past, and may in the future, fluctuate significantly.
Our quarterly revenue and operating results have in the past and may in the future fluctuate from quarter to quarter. As a result, we believe that
quarter-to-quarter and year-to-year comparisons of our revenue and operating results are not necessarily meaningful, and that these comparisons may not be
accurate indicators of future performance.
Several factors that have contributed or may in the future contribute to fluctuations in our operating results include:
•
demand for our software and services;
•
our collaboration with premium technology support partners including retailers, and the timing and success of these partners' introduction
and sale of our products;
•
size and timing of customer orders and our ability to recognize revenue in a given quarter;
•
our ability to increase the efficiency and capacity of our customer support agents;
•
our reliance on a small number of customers for a substantial portion of our revenue;
•
the price and mix of products and services we or our competitors offer;
•
the mix of products and services that generate up-front revenue as opposed to revenue over a period of time;
•
our ability to attract and retain customers;
•
our ability to adapt to our customers' needs in a market space defined by frequent technological change;
•
the rate of expansion of our new consumer offerings and our investments therein;
•
the amount and timing of operating costs and capital expenditures in our business;
•
seasonal trends resulting from corporate spending patterns;
•
the exercise of judgment by our management in making accounting decisions in accordance with our accounting policies
•
potential losses on marketable securities, foreign exchange exposures on contracts, or other losses from financial instruments we may hold
that are exposed to market risk; and
•
general economic conditions and their effect on our operations.
Over the last three years, we have licensed our enterprise software predominately on a perpetual basis in which we recognize the license revenue up front,
assuming all criteria for revenue recognition have been met. As a result of our current perpetual licensing model for the enterprise business, we have become
dependent on a few customer contracts with up-front license revenue for a substantial portion of our revenue in any one quarter. In addition, a significant portion
of our total revenue each quarter comes from a number of orders received in the last month of a quarter. In previous quarters,
15
Source: SUPPORTSOFT INC, 10-K, March 13, 2008