Up 78% Since June, Is Support.com, Inc. (SPRT)’s Rally Supportable?

It’s been a bit more than a month now since my fellow Fool Seth Jayson related how online tech support com pany Support.com, Inc. (NASDAQ:SPRT) trounced Wall Street’s expectations in its Q4 earnings report. Since then, we’ve been waiting for full specifics on just how good a quarter Support had, in the form of its Form 10-K filing with the SEC.

Support.com, Inc. (NASDAQ:SPRT)While waiting, I had the opportunity to talk with CEO Josh Pickus to get some details on how business is going. Now the 10-K has arrived, giving us the rest of the story. So here’s the rundown:

Facts and figures
On the surface, Support.com looks chancy. GAAP profits ran negative last year. However, things are starting to improve.

The company has notched back-to-back GAAP-profitable quarters. It’s expected to turn full-year profitable this year. With free cash flow firmly positive for the year ($1.5 million) and revenues on a tear (total revenues up 34%, services revenues up 55%), while cost of services rose only 22%, Support is on track to achieve this goal in 2013. Longer term, analysts have the company pegged for 20% annual earnings growth.

Support.com, Inc. (NASDAQ:SPRT)’s income statement strength is mirrored on its balance sheet, which shows $56.4 million in cash, equivalents, and short term investments, against negligible long-term debt. Pickus points out that his firm needs to keep a cash cushion of about $20 million to fund operations and assure customers of its financial strength, but that still leaves a lot of dry powder with which to fuel explosive growth.