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Why ServiceSource International Is Imploding Today

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What happened

Shares of ServiceSource (NASDAQ: SREV), a provider of outsourced inside sales and customer service solutions, are being obliterated today. The stock is down 46% as of 11:07 a.m. EDT on Friday after the company shared preliminary third-quarter results and revised its full-year guidance.

So what

Here's an overview of the updated guidance:

  • Third-quarter revenue is expected to be about $57 million. That's below its prior outlook for revenue of $60 million to $61 million. It's also below Wall Street's projection of $60.5 million.
  • Full-year revenue is expected to land between $238 million and $240 million. For context, market watchers were expecting $248 million in revenue.

Here's the explanation that CEO Christopher Carrington shared with investors on the disappointing numbers:

In a separate release, ServiceSource also stated that it has hired Richard Walker, a member of the company's board, to take over the role of CFO starting in November.

Traders are responding to the weakness by taking the share price to the woodshed.

Now what

CEO Carrington did his best to tell the markets that the company is taking action to address its weaknesses:

Management also stated that the company will provide additional details on its turnaround plan during its earnings call on Nov. 7. Bulls and bears alike will want to tune in to learn what's next for this beaten-down business.

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Brian Feroldi has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.