SharpSpring : Reports Second Quarter 2021 Results

Strategic Acquisition by Clearlake Capital and Siris-Backed Constant Contact to Maximize Growth and Audience Engagement for Small Businesses

GAINESVILLE, FL - August 12, 2021 -SharpSpring, Inc. (NASDAQ: SHSP), a leading cloud-based revenue growth platform, reported financial results for the second quarter ended June 30, 2021.

Recent Operational Highlights

• Signed definitive agreement to be acquired by Clearlake Capital and Siris-backed Constant Contact, an established leader in online marketing. Under the terms of the agreement, Constant Contact will acquire all the outstanding common stock of SharpSpring for $17.10 per share in cash. The transaction is expected to close in the third quarter of 2021 subject to customary closing conditions including a SharpSpring stockholder approval.
• Appointed marketing technology leader Suaad Sait as President. Sait brings an extensive background leading product, engineering, and marketing at high-growth SaaS companies.
• Appointed senior finance executive and capital markets veteran Jason Costi to Board of Directors, who has also been named a member of the Company's Audit, Nominating and Corporate Governance Committees.

Second Quarter 2021 Key Performance Indicators (KPIs)

• Total monthly recurring revenue (MRR) from new customers in the second quarter of 2021 was approximately $100,000 compared to $159,000 in the second quarter of 2020 and $100,000 in the first quarter of 2021.
• New customer additions are expected to generate approximately $1.2 million in annual recurring revenue (ARR).
• Finished the quarter with approximately 1,900 agency customers, over 500 direct customers, and more than 10,000 total businesses across all SharpSpring sales and marketing platforms including SharpSpring Ads and legacy products.
• Average monthly logo attrition in the second quarter of 2021 improved to 2.4% compared to 4.31% in the second quarter of 2020.
• On a year-over-year basis, Q2 2021 net revenue retention was 92.5%, a decrease from 94.4% in Q1 2021.

Second Quarter 2021 Financial Results

• Total revenue increased 11% to a record $8.1 million from $7.3 million in the same year-ago period.
• Gross profit increased 13% to a record $1 million (76% of total revenue) from $­­5.4 million (74% of total revenue) in the same year-ago period.
• Net loss was $354,000, or $0.03 per share, compared to net loss of $970,000, or $0.08 per share, in the same year-ago period.
• Adjusted EBITDA loss (a non-GAAP metric reconciled below) totaled $2.1 million, compared to an adjusted EBITDA loss of $122,000 in the same year-ago period.
• Core net loss (a non-GAAP metric reconciled below) totaled $2.6 million or $0.20 per share, compared to core net loss of $381,000, or $0.03 per share, in the same year-ago period.
• At quarter-end, the Company had $25.2 million in cash, compared to $28.3 million at December 31, 2020.

Conference Call
Due to the Company's entry into the agreement and plan of merger previously announced on June 22, 2021, SharpSpring will only be issuing a press release and will not be conducting a conference call.

About SharpSpring, Inc.
SharpSpring, Inc. (NASDAQ: SHSP) is a rapidly growing, highly-rated, global and affordable revenue growth platform delivered via a cloud-based Software-as-a-Service (SaaS) solution. More than 10,000 businesses around the world rely on SharpSpring platforms to generate leads, improve conversions to sales, and drive higher returns on marketing investments. Known for its innovation, open architecture and free customer support, SharpSpring offers flexible contracts at a fraction of the price of competitors making it an easy choice for growing businesses and digital marketing agencies. Learn more at sharpspring.com.

Adjusted EBITDA, core net loss and core net loss per share are 'non-GAAP financial measures' presented as supplemental measures of the Company's performance. These metrics are not presented in accordance with United States generally accepted accounting principles, or GAAP. The Company believes these measures provide additional meaningful information in evaluating its performance over time. However, the measures have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of the Company's results as reported under GAAP. A reconciliation of net loss to these measures is included for your reference in the financial section of this earnings press release.

Important Cautions Regarding Forward-Looking Statements
The information posted in this release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify these statements by use of the words 'may,' 'will,' 'should,' 'plans,' 'explores,' 'expects,' 'anticipates,' 'continues,' 'estimates,' 'projects,' 'intends,' and similar expressions. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, but are not limited to, general economic and business conditions, effects of continued geopolitical unrest and regional conflicts, competition, changes in technology and methods of marketing, delays in completing new customer offerings, changes in customer order patterns, changes in customer offering mix, continued success in technological advances and delivering technological innovations, our ability to successfully utilize our cash to develop current and future products, delays due to issues with outsourced service providers, those events and factors described by us in Item 1. A 'Risk Factors' in our most recent Form 10-K, and other risks to which our Company is subject, and various other factors beyond the Company's control. Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.