Good day, ladies and gentlemen, and welcome to the Support.com Fourth Quarter 2014 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, today’s call is being recorded. I would like to introduce your host for today’s conference, Mr. Greg Wrenn, General Counsel. Sir, you may begin.

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 file with the SEC, all of which can be found through 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 to our fourth quarter and fiscal year-end 2014 earnings conference call. Today, I’m pleased to report our financial results for the fourth quarter of 2014, with revenue coming in at $22 million, which was within our revenue guidance of $21 million to $22.5 million. Non-GAAP loss from continuing operations for the quarter came in at $0.02 per share, also within our guidance of a loss of $0.02 to breakeven. For the full year revenue was $83 million and non-GAAP net income from continuing operations was $1.1 million or $0.02 per share. 2014 was a transformative year for Support.com. We entered the year managing a major business model shift in our contractual relationship with Comcast, planning the release of a nascent fast product into the Support market and navigating changes on the leadership team. We exited the year in a strong position in each of these areas. We now have more extensive relationships with Comcast and a number of our services partners. We have also seen growth in Comcast as well as other programs. Q3 saw Nexus validated in the market and wanted an increased investment in its go-to-market. Executive leadership has come together as a team lending existing deep knowledge of Support.com with new experience of SaaS markets and products development. We are a far more capable company today than when I joined in May of last year. As I’ve related in our other earnings calls our strategy is to balance our growing services programs with the world class SaaS offering for the Support market. We worked diligently in 2014 to execute on this strategy while maintaining a solid business profile and measured investment. We’ve made major steps to expand the external presence and reach of Support.com. We are gaining traction with Nexus…

Thank you, Elizabeth. Total non-GAAP revenue for Q4 was $22 million compared to 24.9 million in Q4 2013 and $22.2 million in Q3 2014. As a reminder, in Q4 2013, we incurred a contra-revenue charge of 394,000, related to the issuance of a warrant to Comcast upon achievement of certain performance milestones. Services revenue for the quarter was $20.6 million compared to $22.7 million in Q4 2013 and $20.8 million in Q3 2014. Sequentially, revenue decreased slightly due to the higher revenue in the prior year from additional Comcast service hours beyond their committed forecast as we have discussed on our prior earnings call. Software and other revenue declined year-over-year to $1.3 million in Q4 2014, from $2.2 billion in Q4 2013, and was comparable to Q3 2014 of $1.4 million. The year-over-year decline is due to our previously discussed decision to discontinue unprofitable advertising arrangements for our end-user software products. The Q4 2014 revenue mix was 94% services and 6% software, compared to 91% and 9% in Q4 2013 and 94% and 6% in Q3 2014. Total non-GAAP revenue for the full year was $83 million compared to $88.9 million in 2013. In Q4 and for the full year of 2014 both Comcast and Office Depot contributed more than 10% of total revenue. Overall, non-GAAP gross margin for Q4 was 22%, compared to 44% in Q4 2013 and 27% in Q3 2014. In Q4, non-GAAP service gross margin was 17% compared to 40% in Q4 2013, and 24% in Q3 2014. As Elizabeth noted in her comments, during the quarter Comcast decided to expand our Xfinity Home program. On receiving this notification we needed to invest in additional agent and support staff to support the program’s expansion. As a result, this impacted our Q4 services gross margins, looking ahead…

Thanks, Roop. As the result show 2014 was a transformative year and we are in a strong position for 2015. Now I would like to turn the call over the operator for your questions, operator?

[Operator Instructions]. Our first question comes from Mike Latimore with Northland Capital Management. Your line is open.

Hi there, this is Jim Fitzgerald standing in for Mike Latimore, so you mentioned that you had two 10% customers in the quarter Office Depot and Comcast, I was wondering if you could break those out specifically what specific percentages was both were?

Sure Jim, Comcast was approximately 67% and Office Depot was 15% for the quarter.

Okay, great. And you also mentioned that you renewed the master service agreement Comcast, but I think I missed the timeframe when that happened could you repeat when you renewed that agreement?

Yeah, it was renewed in the fourth quarter, I mean it had a term date of December 31 and it’s been renewed into the subsequent 2015 year.

Okay. So now with that renewal does the mean pricing remain the same or did you get some changes there?

Yeah, as you know Comcast is a significant customers for us our contracts with Comcast are filed with the SEC and you can see the terms and conditions there, but effectively there was no significant changes in the terms as it rolls forward.

Okay, great. And then as Comcast given you guys a forecast about one quarter out are you getting some better visibility there?

No Comcast approach to managing their business continues to be the same, it’s a committed forecast that we did on a periodic basis.

Sure okay. And then my last question here are you guys seeing any revenues from small business or the home alarm program of Comcast and those revenues combined or they making up like a material percent of revenue yet?

Well as you know we don’t give customer by customer specific information, but let me breakdown a couple of your comments or your question just a little bit. We obviously have revenue from the Xfinity Home program for Comcast, which is bundled within our overall Comcast revenue. So that takes care of that piece of it. In terms of small businesses and other things, we have referral program that’s SCC direct that we do have a nice customer base for and we continue to support that and it’s doing well. We also as we discussed in our prepared comments we support regional MSO that supports the SMB market and through them they obviously have small businesses within their portfolio that we support from an end support standpoint.

Fair, okay. Thank you.

You’re welcome, Jim.

Thank you. Our next question comes from Stan Berenshteyn with Sidoti & Company. Your line is open.

Good afternoon, thank you for taking my questions.

Sure.

Sure. Hi Stan.

I guess I just want to get a better understanding, so the agent headcount growth is that really been driven stemming from Comcast is that being driven primarily by the Xfinity program or is it by Comcast as a whole?

Well Stan as you know we don’t give program level information whether it’s margins or headcount, overall we have we anticipate growth in our services areas and obviously that’s inclusive of Comcast and other services programs. Specifically in the prepared comments that we provided, as I indicated Xfinity Home was expanded in the quarter and as such for that expansion we did have to bring on additional agents and support staff as I had indicated and so a portion of that is obviously as for the Xfinity Home program.

I see and the headcount number for agents that you listed that includes the onboarding for this quarter?

That includes overall for all of our services programs.

Okay. And can you give us some color on what’s driving operating expenses going forward? Is that really going to be a focus on sales, R&D or a combination thereof?

The combination, as Elizabeth has indicated we are seeing traction, we're getting validation and we continue to invest commensurate with that traction in both product and sales capabilities.

Okay. And you’ve mentioned that you’ve hired the VP of Product and Engineering, subsequently has there been any change strategic or to the product that you’re planning on implementing?

No we’ve got Nexus in the market today, as I said several times it’s really validating in the SIO space and that’s a big space to taking concur so we’re still laser focused on the Nexus product, as a SaaS and having that be really vital part of Support.com.

Okay. And also regarding the BPO clients under Nexus, it seems to me that without Nexus they maybe be more of a competitor to that and now it’s somebody you can sell through is this kind of like a new really good opportunity for additional BPO clients in the space?

That’s an interesting way to look at it Stan. We are selling to companies that you could have formally thought of as competitors in the services space, but there is lots of different markets out there and there is lots of opportunities to cover. So an interesting thing about getting Nexus into the market is the synergy that we’re seeing between services and products. So conversations can start out with the services program and they can quickly morph into a discussion of how our technology can help that customer and vice versa we have been talking to some Nexus prospects and they discover that we’ve got world class premium technical support and that conversation will turn into a services program discussion and then often it will be both. What that means for us is that our go-to-market spend is getting leveraged in both areas, which is a great way to run the business.

Great. And lastly can you maybe touch based a bit more on the Staples and Office Depot acquisition Office Depot have you had at all any discussion with Staples has there been any color that you kind of garnered from what that might be for you guys in terms of an impact?

No we only know what’s reported in the press about the acquisition and we haven’t had any specific discussion, but as you know Office Depot is certainly one of our very large and close customers. And historically we’ve also done business with Staples. So we have good relationships with both companies and just look to see what happens we think it will be beyond this year, but that’s only based on what we see is the pace of the large transactions in the marketplace like this.

Great, thank you so much.

Thanks, Stan.

Thank you. Our next question comes from Joe [indiscernible] with Craig Hallum. Your line is open.

Hi, good afternoon, on here for Chad. Thanks for taking the question. Firstly, you’ve talked about the Nexus platform being a pretty broadly up and you’re seeing customer used cases from a wide variety of I don’t know if you want to call it verticals. I guess would you say that you are surprised by maybe the uptake in any of the verticals is there anything there that you’re seeing maybe used cases that you didn’t planned for are you seen better uptake in maybe a certain used case or certain vertical than you would have planned anything there?

We’re seeing a lot of interesting incoming demand that’s really outside of our focus target market. So right now just to reminder everybody we’re focused on companies with complex technical support and we’re targeting 50 to 1000 fee service organization. So we’re staying pretty focused in talking to those companies even though we’re getting incoming inquiries from outside of that. In terms of the used cases, certainly our heritage is technical support used case, so we really expected the product to resonate there and it is. But some of the other ones particularly onboarding I talked about Mural on the last call and they’re using Nexus to consistently and efficiently onboard customers that are moving their operations to the cloud. I think that’s probably one of the used cases that is more prevalent that I would have predicted earlier and it’s particularly also important in the IOT space we’re seeing a lot of companies that understand with adoption of new consumer devices that are all connected in the combination of technology with what’s formally just piece of hardware. They’re getting the customer to understand how to use it out of the box. It’s just a way to ensure success in the long run. So I think that’s probably the one used case it’s not a surprise that it’s there, but I think I am little interested and pleased that it’s so ubiquitous.

Great. And then I guess it’s maybe a little too early to response from this, but the new customers obviously kind a grabbing that base spending. Are your customer base as much as possible obviously a big focus, but as of right now do you see any of kind of the early stage customers that you could see becoming a 10% partner a 10% customer or maybe two three years down the road or do none of them look like they’re maybe going to scale to that?

Yeah we’re not going to comment on how big or any of these programs can grow to. And if and when that happens we’ll certainly let you know.

Fair. And then one last one from me starting your M&A strategy or I guess high level what’s your appetite for M&A and if you were to go after M&A activity I mean would you be more likely to pursue like kind of a technology tuck-in or would you be looking to kind of a customer based plan to grab it type acquisition I guess what your - what are your high level thoughts?

Our focus is to really accelerate the progress on our strategy and our strategy is to get a SaaS offering out in the market and grow it really quickly. So M&A is definitely a key way to accelerate the growth of the SaaS product. You see that the market segments here in that gives you some idea of the kinds of things that we’ve been interesting in expanding Nexus into in adjacent areas and we’re certainly looking to see if a buy versus a build decision make sense for us. Down to the level of customer base versus technology tuck-in I think it really is a combination of what we see and how the individual segments within SIO and the associated areas play out.

Okay, that will be all from me. Thank you.

Okay, thank you.

Thank you. This concludes our Q&A session. I would like to turn the call back to Elizabeth Cholawsky for closing remarks.

Thank you, operator. Thanks everybody for being on the call today.