Greenidge Generation Holdings Inc. (GREE) Q2 2015 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen, and welcome to the Support.com Second Quarter 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions]. As a reminder, this call maybe recorded. I would now like to introduce your host for today's conference Mr. Greg Wrenn, General Counsel. Please go ahead, sir.

Thank you, operator. Good afternoon, everyone. Joining me here today is Elizabeth Cholawsky, our President and Chief Executive Officer; and Roop Lakkaraju, our Chief Financial Officer and Chief Operating Officer. Before we begin, I would like to remind everyone that our remarks today will include forward-looking statements about our future financial results and other matters. There are a number of risks and uncertainties that could cause our actual results to differ materially from expectations. These risks are detailed in today’s press release and the reports we filed with the SEC, all of which can be found at the Investor Relations page of our website at www.support.com. I would also like to point out that we will present certain non-GAAP information on this call. All numbers presented today are non-GAAP unless otherwise stated. The reconciliation of GAAP to non-GAAP financial measures is included with today’s press release and also on our Investor Relations web page. The statements we’ll make in this conference call are based on information we know of as of today. And we assume no obligation to update any of these statements. With that, I’ll turn it over to our President and CEO, Elizabeth Cholawsky.

Thanks, Greg. Good afternoon everyone and welcome. I will start with some key financial results and then talk in more detail about what has happened during the quarter. Our revenue for the second quarter of 2015 was $20.6 million which was in line with our guidance of $20 million to $21 million. Our non-GAAP loss from continuing operations came in at $0.03 per share which was better than our guidance of a $0.05 to $0.08 loss per share. I am pleased with the operational efficiencies we drove in Q2 and Roop will discuss this in more details later in the call. I will be updating you on our achievements for services and Nexus. As you know we have been focused on growing and diversifying our services area. We are seeing results. Today we will discuss new wins with Staples and original service provider, contract extensions with both Suddenlink and Dish, expansion of Comcast, Xfinity Home program and becoming the chosen vendor for a major North American service provider. We have also made progress with Nexus in many areas. We have added customers, extended the product functionality and grown the pipeline from our direct sales efforts and our channel partners. I will give you details on all of these subjects later in the call. Let's start with our services program. I am excited to welcome Staples back as a customer of Support.com. We have entered a new agreement to provide Staples brand at technology support services that will be sold both online and in their stores nationwide. Our program with Staples was launched quickly and already can be found on service part within their stores. This is a national program and although the current program is smaller than the work we previously did with Staples we are delighted about reestablishing our relationship with this premier brand. Also during Q2 we competed in a request for proposal process for a service program with a major North American service provider. We were selected as their chosen partner. In this relationship we will support this partner's premium tech support subscribers. This program is a kin to our traditional premium tech support programs which tend to carry higher gross margin than our current corporate average. We are currently negotiating the final contract terms. As we look into 2016, this program will have the potential to be one of our top three services programs and contribute at multimillion dollar level to the topline. We also made progress with our existing clients in Q2 Suddenlink who became a customer in early 2014 continues to do well in growing their SMB subscriber base. This offering packages tech support with their broadband services. Now, certainly have signed multi-year contract extension with us continuing our relationship into 2018. The strong partnership with Suddenlink position us well for more opportunities with other regional service providers. In fact during Q2, we acquired a similar customer to Suddenlink, a regional service provider in the Caribbean, who will be bundling tech support services with their higher tier broadband offerings. We’re looking forward to supporting another partner as I use this proven successful model of bundling services with product to grow their business. And also pleased to report that our agreement with this has been expanded on two fronts. First, this has extended our agreement for two years. In addition, this has us to support expansion of their business into the home automation IoT market. Importantly, we will use our Nexus IoT capabilities to deliver this service. This is another example of brand name customers are allowing on Support.com for expertise and the emerging market of IoT. Turning to Comcast, as I mentioned in our Q1 call. Comcast have been undertaking efforts to improve their customers experience with wireless gateways. As a result, this is reducing the volume of calls we support. As expected during Q2, we began to see the effect of the wireless gateway improvement efforts. Based on our current understanding, we now expect to reduce call volume to continue and you’ll see this reflected in our guidance. As for Xfinity Home program it continues to grow. In fact most recently Comcast has expanded our service program to include the support of additional Internet of Things devices and to provide consulting services to help graph this broader programming. Our support of activities within IoT whether for Comcast or other customers. Again reinforces our leadership in the IoT area. Our relationship with Comcast, which is in it’s this year now strong. We continue to perform at or above the key metrics by which Comcast hold this accountable including achieving top mark for their voice of the customer metric. Looking ahead to Q4 2015 and fiscal year 2016, we expect Comcast to remain our largest services customer. I’m proud of my teams Q2 performance, we manage the changes in the Comcast wireless gateway program and improve Q1 services margins. At the same time, we may progress on diversifying our services customer base both by adding new customer logo and by expanding the nature of our services within our existing customer based. During Q2, we also may good progress with our SaaS offerings Nexus. We advance in many areas including increased adoption of the products by our current customers, the acquisition of new customers increased to market reach, the release of additional functionality in the product and further development of Nexus strategic initiatives. Nexus customers continue grow active users increased by 30%, average number of week recession another important metric grew at close to 70%, which shows that overtime customers acquiring increased value from Nexus. As I mentioned on previous call tracking customer usage is important and engage of realize value and product sickness. Seen our customers use to products more and more reinforces our belief the Nexus is delivering value in the market. Our go-to-market effort has expanded. In addition to our direct sales channel, we also have a productive partner program for Nexus. Within the partner program, the referral channel has produced its first do Nexus customers and there are more Nexus prospects and the pipeline as a result of referral. We also seeing continue demand from companies who want to become Nexus referral partners. With our latest referral partner being lean and D&L a consultancy for mobile virtual network operators. As you may remember from the last earnings call, we see the needs of the mobile virtual network operators has been particularly well met by the capabilities of Nexus and the MVNO market as a sizable and growing market opportunity. In Q2, we further extended Nexus capabilities with the release of our software development kit or SDK. The SDK provides the ability to incorporate Nexus capabilities natively into mobile apps. With the SDK, it's easy to embed Nexus help into an app allowing users to push one button and get directly to an agent or in the near future help themselves by running selected guided tabs. The SDK will be particularly important for our continued growth in the IoT market since almost all IoT platforms are controlled by a mobile app. For example, one customer who supports mobile devices has their own app residing on the mobile device which allows their end users to perform self-diagnosis before engaging with the live agent. Before using Nexus, if a user needed help, they have to enter in our actions within the app and engage with the agent via telephone call thus disrupting the user's experience. Now, with the Nexus SDK, the user is provided with contextual support where they are at the moment in the app and it creates continuity between the activity history of the user in the app and the information the agent has presented when they answer the request for support. Assistance is now given to the user wherever they are in the product journey, which is a different and necessary evolution of the old support mindset. It's great to see Nexus in the forefront of this evolution. Finally, I would like to talk briefly about our plans for expanding Nexus into the self service support market. Due to the changing dynamics of the support market, self service capabilities are important for any well rounded support offering. Demand for self service is growing rapidly as shown by [indiscernible] Research reporting that all types of self-service have increased substantially from 2012 to 2014, while phone interactions have remained stagnant. Almost half of the $1.3 billion support interaction optimization market is attributable to customer self-service. The Nexus solution for customer self-service takes the core value of the product guided paths which embody the best agent troubleshooting expertise and puts them directly in the hands of the end user. We're also building the capability into our self-service to escalate to an agent if you get stuck on a step in the guided paths. When the agent engages to offer help, they would know exactly where the user got into trouble and what else they've tried to resolve their issue. We feel that both the expert help available through guided paths and the ability to have an agent assisted self-service experience will further differentiate Nexus in the market. Customers and prospects are telling us that these capabilities have the potential to break through the chronic problems of low customer satisfaction and poor issue resolution that have dogged the success of self service offerings. Look for the release of Nexus self service capabilities by the end of the year. As you remember from Q1, our goal is to exit the year with Nexus annual recurring revenue of at least $1 million and between 1,300 and 1,700 agent licenses. Our teams have been laser focused and working hard towards these objectives. With the progress we were making on all Nexus fronts, we remain committed and optimistic that we will meet our year end goals for Nexus. Turning to the team we have in place, we recently announced the addition of Alex Poulos as Vice President of Marketing. Alex brings a 20 year pedigree as a marketing and business leader with the particular focus on SaaS. We also welcome our new Vice President and General Counsel, Michelle Johnson, a 15 year veteran of in-house Silicon Valley legal positions most recently as Managing Counsel at Oracle for the last seven years. Both Alex and Michelle bring unique skills to the team and I know they will have an immediate impact. And as you may have seen, our long serving Senior Vice President and General Counsel, Greg Wrenn will be leaving Support.com. These are scintillating introductions to our earnings call which I know you will all miss. Greg have made enumerable contributions to our company and it is with great sadness that we will say goodbye. Greg is relocating with a family to Seattle, Washington for personal family reasons and will be returning to private path practice. Before I close, I would like to remind you that we will be hosting an Investor Day in Redwood City, California on Thursday, September 10. During that day, you’ll be able to meet our senior executive team as well as hear directly from our customers and our partners. We will go into more depth on our services area and on Nexus including showcasing its features and functionality via product demos. I look forward to seeing many of you in person out here on the West Coast or via webcast for those you that cannot make it in person. Q2 was a dynamic quarter with some big news on new services programs and good progress on Nexus. We would now like to discuss our financials and for that let me turn the call over to Roop.

Thanks, Elizabeth. Total revenue for Q2 was 20.6 million compared to 20.2 million in Q2 2014 and 23.2 million in Q1 2015. Services revenue for the quarter was 19.3 million compared to 18.7 million in Q2 of 2014 and 21.9 million in Q1 of 2015. Services revenue increased year-over-year due to higher revenue from Comcast, primarily driven by the growth in Xfinity Home program. The sequential decrease from Q1 2015 is primarily due to the traditional seasonality with Office Depot and the impact of Comcast wireless gateway customer experience improvement efforts which as expected reduced our productive hours. Software and other revenue was 1.3 million in Q2 2015, 1.4 million in Q2 2014 and 1.3 million in Q1 2015. The Q2 2015 revenue mix was 94% services and 6% software, which is fairly consistent with Q2 2014 of 93% services and 7% software and Q1 2015 of 94% services and 6% software. In Q2, both Comcast and Office Depot contributed more than 10% of total revenue. Overall, non-GAAP gross margin for Q2 was 23% compared to 28% in Q2 2014 and 20% in Q1 2015. In Q2, non-GAAP services gross margin was 18% compared to 24% in Q2 2014 and 16% in Q1 2015. The sequential improvement from Q1 2015 to Q2 2015 is primarily due to increased productivity in our contact center operations from Comcast, Xfinity Home and wireless gateway programs. Non-GAAP software gross margin was 90% in Q2 2015, 84% in Q2 2014 and 89% in Q1 2015. Total non-GAAP operating expenses in Q2 2015 came in at 6.4 million an increase from 5.1 million in Q2 2014 and 6.1 million in Q1 2015. The year-over-year and sequential increase is the result of our previously stated plans to make incremental investment in go-to-market capabilities and in Nexus development. On a non-GAAP basis, loss from continuing operations for Q2 was 1.6 million or $0.03 per share. This was $0.02 better than our non-GAAP EPS guidance range of a loss of $0.05 to $0.08 due to the increased productivity in our contact center operations and prudent management of our operating expenses even while investing in go-to-market capabilities and in Nexus product development. On a GAAP basis, loss from continuing operations includes a one-time non-cash goodwill impairment charge of 14.2 million and an associated tax benefit of 1.3 million. During Q2, we identified a goodwill impairment charge based on various qualitative factors which included among others the continuing decline in the company's market capitalization resulting in an excess the book value of the company's net assets compared to the estimated value of these as of June 30, 2015. This was a non-cash charge that does not affect our revenue, cash flow or business operations. We do not anticipate incurring meaningful federal or state income taxes for the foreseeable future as a result of our net operating loss carry forwards. However, to the extent that we have future taxable income, the company will be subject to alternative minimum taxes in certain tax paying jurisdictions. Turning now to the balance sheet, total cash, cash equivalents and investments were 71.8 million at June 30, 2015 compared to 73 million at March 31, 2015. DSOs for the quarter were 58 days as compared to 60 days in the prior quarter. At June 30, less than 1% of our outstanding receivables were greater than 90 days old. Deferred revenue was 2.3 million at June 30 compared to 2.6 million at March 31. Total headcount at June 30, 2015 was 1,990 consisting of 220 corporate employees and 1,770 work from home technicians. This compares to the March 31 headcount of 2,317 consisting of 212 corporate employees and 2,105 work from home technicians. In addition to our work from home technicians, we use contract labor in our operations. Turning to guidance. For the third quarter of 2015, we expect our revenue range to be between 17 million to 18.5 million. Our guidance reflects the anticipated impact of customer experience improvement efforts within the wireless gateway program. For Q3, we expect that revenue mix of 93% services and 7% software. We expect the overall non-GAAP gross margin to be in the low 20s as a result of investing in new program launches that will be occurring in the second half of 2015. As you recall, when launching new services programs we typically invest ahead of revenue. Therefore, we will be investing throughout Q3 and in Q4 and we expect to see revenue from these new programs starting later in Q4. We expect our non-GAAP software gross margin to be approximately 88% and non-GAAP operating expenses to increase sequentially by approximately 5% to 8% as we continue to invest in go-to-market capabilities and in Nexus development. Based on the foregoing, our outlook for Q3 non-GAAP results from continuing operations is a loss of $0.05 per share to $0.07 per share. It's important to note that our services and end user software areas provide positive gross profit dollars. These positive gross profit dollars are being invested in our go-to-market initiatives and in our Nexus product development. As we've previously discussed, our quarterly non-GAAP results are generally indicative of a cash usage or cash generation excluding capital expenditures which have not been significant historically. However, during Q3, we do expect to incur between 2.5 million to 3 million of non-recurring capital expenditures related to certain leasehold improvements and data center equipment purchases. In summary, Q2 saw solid execution within our contact center operations, we continue to see our end user software deliver strong margins that deliver positive cash flow and we saw Nexus gaining momentum. All are maintaining a healthy cash balance which is necessary as we continue to execute on our strategy. With that, I'd like to turn the call back to Elizabeth.

In ending this call, I would like to leave you with some food for thought. We've all seen in the past month that Support.com has been ascribed a very low enterprise value, with our stock trading at or just above cash. We believe that the market is not properly valuing our our company and its assets. Our fundamental business is sound with profitable name brand services programs and many other assets that Roop has mentioned. We've progressed on the goals that I've discussed with you over the last five quarters, including service program diversification, creation of a product company and growth of the SaaS offering. We have a bright future as a premier SaaS and services company in the growing support market. As we're able to better educate our constituents about these facts and our vision and execute on our plans, I believe that we will all be appropriately rewarded. Now, I'll turn the call over to the operator for your questions.

Thank you. [Operator Instructions] Our first question comes from the line of Chad Bennett of Craig Hallum. Your line is open.

So just on Comcast, can you give us a sense or as a percentage of revenue where they are today? Obviously, you gave Q3 guidance, so I guess we only have one quarter left in the year, but where you would think they would exit the year, and whether or not you think Comcast revenue is still a headwind into '16?

Yes, so you had a number of different things in there Chad, that I trying and hit them one by one. In terms of Comcast, we see them continuing to make positive strides on their customer experience improvement efforts and obviously that's reflected in our Q3 guidance here. We do believe as we look forward even with those continuing efforts and the traction that they're gaining there that they will be our largest customer in Q4 and into 2016. It's hard for us to predict exactly where they're going to land. We still get the forecast and that we manage the program by, but we're trying to give as much understanding as we have based on our conversations with them and as they continue to make strides in their efforts.

So on the new partners or the expanded relationships that you announced for example, Staples, I know Staples has been around for a long time. It's never really taken off. What's kind of changed with this program and what -- I guess the main question is, are the efforts we're putting in to expanded partnerships and new partnerships on the services side of the business, ever going to actually -- I mean none of these relationships -- so, are they ever going to turn into real partner programs?

Yes so, maybe just to start -- I will start and Elizabeth you jump in please. Staples, Chad, was a 10% customer in past year as I think in 2010, 2011 even 2012; where they were a 10% customer. We can't say that they're going to be a 10% customer now. However, what we are very happy with is the fact that they've reengaged with us even though this initial program maybe small. And we think that that -- we continue to talk to them about other potential opportunities and we also think that that's a favorable thing as it relates to the Office Depot side of things and any potential transaction that may or may not occur there. With all that said and as we've indicated in our prepared remarks, even though we're still in negotiations with the service provider that we mentioned in our comments, we did also mention that we do anticipate or believe that they can be a top-three customer as we move forward. With all that said, it does take time for the subscription type programs to ramp. And as we've indicated we're investing for those ramps here in the second half of this year and we'll see that gain towards full ramp into 2016. Elizabeth?

That was great, that was great Roop.

Our next question comes from the line of Mike Latimore of Northland Capital Markets. Your line is open.

This is Jim Fitzgerald standing for Mike Latimore. So it sounds like the new SaaS initiative is ramping pretty well. How do you guys use a personnel you have there, do you feel like you have any other key hires you have to make or you guys are pretty set as far as personnel?

Yes, I have been building out the team since I got here, little over a year ago now, and I feel like we’ve got a really strong bench, because I’ve really focused on adding executives that have knowledge in the product space and can really execute with the strategy that we’ve got. And as you heard on our call, we just added our new VP of Marketing, Alex Poulos and we also have Michelle Johnson, who has joined us as Vice President and General Council. So I think that pretty rounds out the executive team for the time being and I think we are good to go.

Okay. Great and then you guys might have might have mentioned this on comment but when wil that new Staples service start and is that across all stores. And then certainly kind of a third part, so it's kind of a long question, but is the pricing similar in the Staple service as what we see in other retail situations, other retail customers?

Yes, I think the pricing, you can say it's similar to other retail situation. It is a national program, and we’ve had a small part of it actually launched already here in the third quarter, and the other aspects that will launch here in very near term.

And do you guys have any essence of the call volume and the agents that maybe needed to support that relationship?

We are still working through exactly what that volume maybe. It's a subscription in incident based type of program similar to other premium tech support programs we’ve had historically and similar to what we’ve had with them previously, specifically. So it's hard to say we’re still kind of doing that business planning and then trying to understand what that looks like as we move forward, which is part of the investments we’re making.

Great and then last question from me. What appear to be the best channels so far for Nexus?

Yes, first and foremost that channel is the direct sales channel. And I think that's true of any new product to the market as you need all that knowledge coming back directly into the product development and product management team. So we get that going on. And I think mentioned last call or the call before that we focused in the first half for the year building up that team. So we’ve got that up and running and certainly that's the one that's most productive. If I look at the alliance and partnership program that's a little earlier on than our direct channel, but I’m pleased that's so quickly really, I think we announced that in February, March of this year. And very quickly we’ve got partners that have joined the program that are starting to actually give us new customers for Nexus. So that one will take a longer time to ramp up, but generally a channel partner for SaaS product there for a couple of years, becomes more and more important which is why I wanted to started early.

Our next question comes from the line of Nick Farewell with Arbor Group Your line is open.

I just wanted to follow-up on your cash flow comments or at least in your initial projections for the third quarter. I want to make sure that I understand them correctly. If I look at first and second quarter, you basically burned $2 million, if I did it correctly, from operations. Going into the third quarter, I believe if I have done my math correctly, you are talking about roughly losing about 3 million, on an operating basis based on your guidance and spending another $2.5 to $3 million on CapEx, am I accurate in that interpretation?

Yes, Nick this is Roop. It's good to hear from you. Yes, I think the way you’ve just summarized that, it's the right way to put it together. And just remember our guidance range $0.05 to $0.07; so just doing it approximately 54 million shares, you can kind of do the math there. Yes, just little more than 2.5 million to $0.07, call it more like 2.8, 3.8 million if you look from a non-GAAP perspective, but otherwise it's head-on.

So something like a burn of 6 million. And again I’m not holding to the number I’m looking at is an approximate placeholder?

That's right and again, yes 2.5 to 3 of it is associate with non-recurring capital expenditures for expansion equipment refresh for our data center operations and then some leasehold improvements that we needed to do for regulatory.

Right, and that's the having had the opportunity visit the Redwood City facility, I'm curious does that suggest even though your headcount is up slightly with corporate that you're going to have additional headcount that you need to support and you're expanding your footprint or just building it out?

I don’t think you should read into anything other than our office is here are updated and there is some refresh that we need to do and just general aesthetics to make for a good environment especially here in the Valley.

So if you take the third quarter guidance, can you provide us some sense of what the fourth quarter burn rate would've might approximately?

It's really hard at this point in time. That's why we only gave one quarter guidance and as we've always done that. And part of it is due to some of the churns in Comcast and that the forecast that we received which are short in nature. So it really is hard to try and provide an extrapolation into the fourth quarter of what does guidance look like or what does revenue look like, these sort of things.

Let me ask maybe slightly differently then, if you look at over the next year and for planning purposes presumably you at least try to understand what '16 might look like with the whole company and specifically Comcast. Is there a natter in your outlook through '16 or '17 with respect to your Comcast absolute numbers, not relative?

In our prepared remarks we've indicated that we expect or believe that Comcast will continue to be our largest customer and I think that's probably one aspect to hang your hat on. And then of course we've got some new programs that would be ramping here in the second half of the year. And we continue to have a good pipeline of new prospects or potential prospects on services and obviously the Nexus side of the business as well, and so all of those will contribute towards the financial makeup of 2016. And the other thing to remind everyone is these new services programs do have gross margins that are above our corporate average and I think about it as kind of north of 25 points, that's what we're targeting, which overtime along with Nexus and yet having SaaS margins, will start to allow our gross margins to climb as we move forward.

Thank you, and just one additional question. When I look at the first and second quarter services volume going from 22 to in essence 19 or declining 2 million sequentially and your gross profit was the same obviously suggesting enhanced gross profit margins. Can you -- what accounts for that? Is it purely productivity? Is it mix? What are the factors? And to what degree it's estimated?

As a matter of fact, there's mix in there. And remember, in the fourth quarter and in the first quarter, we've indicated that we were investing in XFINITY Home ramps and these sorts of things. We've now seen some of that ramp as we've commented in our discussion here today. So we've got higher productivity as well as the mix aspect, so both of those contribute to the overall margin profile from a quarter-to-quarter perspective.

Would you expect that to continue at least going into the third quarter?

Well we continuously strive and drive towards operational efficiencies. I think we purposefully called out with these new wins that we have investments that we'll need to make ahead of revenue and so they will put some downward pressure on our margins as historically has been the case when we're ramping especially subscription or incident based programs or premium technical support type programs and that's the case here for the second half of the year.

So that means instead of the second quarter's 18% it may be closer to first quarter '16 just as a rough approximation?

Yes, we've given the guidance right margin profile if you will and I think that that's a good way to think about our profile for Q3.

[Operator Instructions] Our next question comes from the line of Kyle Packer [ph], Private Investor. Your line is open.

You guys talked during the phone, mainly about the market under valuating the enterprise and what conversation you guys have had internally about redeploying excess capital?

I mean it something that on a regular basis, the management team and the Board evaluate in terms of the best use of our capital and cash in particular obviously. As you can see and as we’ve commented on, we continue to invest both in services as well as Nexus and we believe that Nexus has place in the marketplace and solves some business need or addresses some business need and we feel along with the Board that the best use of capital is to invest that back into the business and the company overall and that’s what we’re doing.

Even with aggressive, what I would say will be aggressive deployment plans for capital. You still have what appear to be a lot of excess?

I guess it’s a judgment call and again as we invest and we’re in a nascent time with Nexus, it’s just launched really in the fourth quarter of 2014. We’ve got product development efforts that we are working through and go-to-market capabilities that are being built. And the other aspect is that we have indicated that when opportunities arise related to acquisitions that we want to be in a position to take advantage of that. And technology companies many times utilize acquisitions to help support product development and as well as expansion in market places.

Our next question comes from the line of Arthur Winston of Pilot Advisors. Your line is open.

It seems like your major program Comcast will be down approximately 2 million or so in this current third quarter. I’m wondering what part of your Comcast business is not this program and what part of the Comcast business is what we’re losing out on?

We’ve got two primary programs with Comcast. It’s a wireless gateway and the Xfinity Home. We don’t breakout specifically on a program-by-program level. What we have indicated is that the wireless gateway is the larger program, then Xfinity Home, however as indicated by our 8-Ks within the quarter and even in prior quarter, we have some expansion with Xfinity Home, which we’re very happy with and I think speaks to the strength of our overall Comcast relationship and especially our relationships with the Xfinity Home business unit. With all that said; the customer experience improvement efforts of Comcast are across their entire business if you will, and we follow them for their efforts around that. And with all that said we’re focused on execution with them. And we are one of their top vendors from an operational metric standpoint and as indicated in our prepared remarks we received the highest marks for the voice of customer metric. So we’ve got a very strong relationship with Comcast overall.

Could you give some idea what your revenue growth was either in the second quarter or will be in third quarter excluding this one program. In other words if you've never heard to this one program would your revenues be growing?

I mean, again we don’t provide forward-looking guidance on customer concentration. I’m Sorry?

Take the second quarter without any forward-looking guidance.

As it relates to non-Comcast revenue, and did it grow?

Not, in the one program, the good part of the Comcast plus everything else.

The good part of a Comcast; I mean Comcast overall, I’m sorry, maybe I misunderstanding your question.

Well these two programs there. One is being cut back and right we saw, and the rest of the Comcast is allegedly increasing. Correct?

Yes.

So if you had that one -- if you get the one program, are we growing?

Again, we’re not going to breakout program-by-program.

At the end of the year, you got to break it out, you have no choice.

Actually what we’re required to do is, provide those greater than 10%, which we do disclose, which is Office Depot and Comcast. Beyond that we haven’t historically talked about it on a program-by-program level, and at this point in time we do not intend to do so either.

Is the company growing?

I mean we have Nexus that is growing, right?

Right.

We have new programs that we have just won that will be ramping. So we have new services areas that are coming online in the second half as we have indicated in our prepared remarks.

Our next question comes from line of Steve Barger, Private Investor. Your line is open. Q - Steve Barger Hi. Thanks for taking my question. I guess just going back to that comment about the market undervaluing the business. Just broadly speaking, do you think it's undervalued because you have clear line of sight on the investments you are making and generating higher revenue? You think the trends in the base business lead you to see a return to positive cash flow generation? Where is the disconnect?

So here's how I look at it. So the big dynamic that was talked about -- or a dynamic over the last two quarters has been what's happening with wireless gateway. But if you look at what we measure kind of a growth in long-term, goodness of the company on, there is a lot of progress we have made and I talked about it in the call today. On top of that our initiatives, both diversification of the programs and the growing new premium technology support programs as well as Nexus have a higher margin than what we are seeing for the last couple of three or four quarters at Support.com. So if you put all those things together and you look at the trajectory for the execution of our strategy in the medium to longer term and you have got a business that is very well positioned to be a premier service in SaaS business. So I look at all that and then I look as being value of the cash and I do think there is a disconnect; as I said as we go out and educate more and really talk about this more and can talk about more of the diversification, I am helping with that education in the market and executing quarter-over-quarter, will change how we are being valued.

Understood, and I hear what you are saying about wanting to invest in the business first with the cash. But if the management team you have in place and the operational initiatives you have undertaken truly mark an operational bottom, there will never be a better time to buy the stock. And if you really want to reward shareholders that might be an excellent way just to use a part of that cash balance to really help out the people who've been with you for a long period of time.

We have talked I think earlier on this call a little bit about what our feeling is and our current point of view on cash usage and what the best use of cash is right now. So we continue to evaluate that, but for right now the consensus of the executive team with the board is that is investing in the strategy and investing in our business is going to give the return to our shareholders.

I am showing no further questions in the queue. I would like to turn the call back over to Elizabeth Cholawsky, CEO, for any further remarks.

Thanks everyone for the time you took today to listen to the call. And I hope to see many of you in September at [indiscernible] City. Bye for today.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program. You may all disconnect. Everyone, have a wonderful day.