Support.com 2009 Annual Report Download - page 31

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Table of Contents
Services revenue consists primarily of fees for technology services provided either through our channel partners or directly via our website
www.support.com. Services revenue was $16.8 million for the year ended December 31, 2009 compared to $6.5 million for the year ended December 31, 2008
and $1.0 million for the year ended December 31, 2007. We launched the Consumer business in 2007. The increase in revenue between 2007 and 2008 was the
result of full-year operations of the Consumer business, as well as national roll-out of one of our leading channel partnerships. The significant increase in revenue
in 2009 over 2008 reflects increased demand for our services from our channel partners. We expect services revenue to continue to grow in 2010 as a result of
expansion of existing programs, developing new partnerships with additional channel partners, and growing our direct business.
Software and other revenue was comprised primarily of fees for software tools and utilities provided through direct consumer downloads and, to a lesser
extent, through the sale of this software via channel partners. Software and other revenue was $725,000 for the year ended December 31, 2009, $343,000 for the
year ended December 31, 2008 and $56,000 for the year ended December 31, 2007. Our 2007 revenue represents partial-year results of distribution partnerships.
The growth in software revenue from 2007 to 2008 represents full-year results of these distribution partnerships. The increase in software and other revenue from
2008 to 2009 reflects our addition of the Sammsoft family of products acquired in our purchase of substantially all of the assets of Xeriton, Inc. in December of
2009. We expect our software and other revenue to grow in 2010 as we sell these products over a full year.
Revenue Mix
The components of revenue by type, expressed as a percentage of total revenue were:
Year Ended
December 31,
2009 2008 2007
Services revenue 96% 95% 95%
Software and other revenue 4 5 5
Total revenue 100% 100% 100%
We expect that services revenue will continue to comprise a substantial majority of our total revenue but that software and other revenue will represent a
growing percentage of our total revenue over the next year.
For the years ended December 31, 2009 and 2008, one customer, Customer A, accounted for 82% and 81% of our total revenue, respectively. Over the
course of 2009, the percentage of revenue attributable to Customer A has decreased each quarter. We expect the percent of revenue attributable to Customer A to
decline further in 2010 as we expand our service channel partnerships and grow our software business. Revenue from customers outside the United States
accounted for approximately 2% and 8% of our total revenue in 2009 and 2008, respectively. One customer, Customer B, accounted for 34% of our total revenue
in 2007. Revenue from customers outside the United States accounted for approximately 14% in 2007.
Cost of Revenue
($ in thousands)
2009
% Change
2008 to 2009 2008
% Change
2007 to 2008 2007
Cost of services $ 16,620 61% $ 10,307 133% $ 4,415
Cost of software and other 59 100% — — —
Total cost of revenues $ 16,679 62% $ 10,307 133% $ 4,415
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Source: Support.com, Inc., 10-K, March 12, 2010 Powered by Morningstar® Document Research℠