Jive Reaches Milestone Posting First Quarterly Profit
As you may recall, when Jive Software, the provider of communication and collaboration solutions for enterprises, announced its financial results for 2015 with a loss of $34.9 million, CEO Elisa Steele made the pledge to become profitable by the conclusion of 2016. The company finally recorded its first profit as a public company for the fourth quarter by posting a profit of $0.07 Earnings per Share for the quarter. The results exceeded Wall Street expectations, beating the analyst consensus estimate by $0.04. Although it is not considered a great margin, it is still an important milestone for the vendor. The company also recorded revenue of $51.70 million in the period, whereas analysts made an estimation of $50.00 million.
During the earning calls on Q4 2016 results, Jive Software's CEO Elisa Steele said: “Looking back over the past two years our team has consistently worked to transform Jive into a business that would sustain more predictable results and ultimately drive growth. In May of 2016, we made key strategic changes, restructured the company and committed to a focused strategy. We’re also then pleased with the positive reaction from the industry and our customers regarding our plan and commitments. We ended 2016 in a stronger position than when we began 12 months earlier. We stabilized the business and are vigorously building the foundation for future growth.”
What’s Next for Jive?
The company disclosed its go-to-market strategy. The Jive team is planning to prioritize their Interactive Intranet Solution as they see an opportunity for intranet replacement in the market. To that point, large and midsize enterprise companies will be on their radar. Additionally, Steele believes that they can provide a value proposition for lines of business in verticals such as human resources, corporate communication, healthcare related companies and federal government organization by tailoring their solutions.
Another on-going project she unveiled during the earning calls is that they are in the process of securing their federal risk and authorization program or FedRAMP certification. For those who are not familiar with FedRAMP, it is a government-wide program that provides a standardized approach for assessing and monitoring the security of cloud products and services. FedRAMP supports the adoption of cloud computing services and applications among federal agencies. Further, she elaborated on the progress of the project: “We received sponsorship from an existing federal customer and we believe this important certification will be a meaningful avenue to drive new federal and regulated industry business over time. In addition, we continue to build our market leadership in external communities as we promote and support our popular customer engagement solution. In 2017, we will step up our efforts to cross-sell this industry leading solution into our installed base.” The company is expecting to complete the certification process later this year and believes that expanding their presence with additional governmental agencies will result in generating more revenue streams.
Jive has been positioning cloud deployment as the centerpiece of its future growth strategy. Therefore, it has been making strategic investments in order to beef up their cloud capabilities. One of those efforts was moving their cloud infrastructure to Amazon Web Services (AWS). Elisa Steele said: “The change will enable an even more rapid pace of innovation and improve overall service for our customers and their employees, partners, and customers all in a seamless experience as never before. This will also set the stage for increased cloud adoption over time.” As a result, it seems like all these are paying off as the primary driving factor behind this milestone that the company finally hit in the fourth quarter was its cloud offerings. With the regard to cloud adoption, Jive confirmed that about 40% of all new business activity and 83% of new logo business were related to cloud adoption in the fourth quarter.
Jive’s significant growth has also been recognized by important industry analyst reports in the fourth quarter as well. Forrester, for instance, named Jive as a Leader in The Forrester Wave, Enterprise Collaboration Q4 2016 report. Jive received the highest possible score for innovation in market approach thanks to its enhancements to Jive’s Collaboration Hub in 2016. The report cited that Jive has evolved from a destination to a hub for access to corporate knowledge.
When it comes to new customer retention, the company added many big names to its database, including Canadian Imperial Bank of Commerce, Carlson Wagonlit Travel, Dialog Semiconductor, Elementis Global, Massage Envy Franchising, New Era Cap Company, the Seattle Mariners, and the State Compensation Insurance Fund.
Last March when CEO Elisa Steele was announcing Jive’s financial results for 2015 at the annual event, she also made an eyebrow-raising comment by saying that she doesn’t see Facebook at Work as a competitor. Hot on the heels of the annual event, CMS-Connected had reached out to her to elaborate her comment. Here is what she had to say and Scott Liewehr’s controversial comment:
Although Jive has been innovating especially in analytics, search, personalization, mobile, extensibility, and UX, its analytics capabilities still need some improvements compared to the other solutions’ advanced features in the space. However, its move to AWS cloud infrastructure was another major milestone and will enable the company to innovate more and faster at a lower cost this year. According to Forrester, 80% of Jive's net new deals are about internal communications, but Jive sees this trend changing. Therefore, the company has been making serious investments into the specific business processes. Nevertheless, hitting a milestone demonstrates that the enterprise communication and collaboration solutions provider is up-and-coming and heading to the right direction.