Charleston software firm Benefitfocus releases earnings, lands $74.7M investment

Benefitfocus marked the opening of its new Customer Success Center on Feb. 17 on Daniel Island.

Benefitfocus continued with its strategy of building revenue and market share at the expense of profits in 2014.

The growing Charleston software company reported a net loss of $13.7 million for the fourth quarter, compared to a $8.3 million loss for the same period of 2013.

For the full year, the deficit more than doubled to $63.2 million.

Revenue, meanwhile, kept climbing. For the last three months of 2014, sales at Benefitfocus jumped 33 percent to $40.2 million. Full-year revenue increased by 31 percent to $137.4 million.

“Benefitfocus delivered a strong fourth quarter performance that capped a record year for the company,” CEO Shawn Jenkins said in a prepared statement.

Founded in 2000, the company has blossomed into a big high-technology employer in the Charleston region. It develops software products that employees use to compare, sign up for and manage their workplace benefits, such as medical coverage and life insurance. Its primary customers are large employers and insurance carriers.

The company went public by selling shares on the Nasdaq stock market in 2013. It recently celebrated the opening of a new customer service center at its Daniel Island campus, the first phase in a major expansion that could add as many as 1,200 tech jobs.

Jenkins said Benefitfocus plans to introduce new products this year to strengthen its market position.

“We also expect to continue leveraging the investments we made in 2014 and deliver improvements in profitability,” he said Tuesday.

Mercer, a big consulting firm that uses Benefitfocus technology to run its private benefits exchange, announced Tuesday that it is investing $74.7 million in the Charleston company’s stock for a 9.9 ownership stake. The Marsh & McLennan Cos. unit also said it has an option to increase its position over time.

Wall Street had closed for the day when Benefitfocus announced the earnings and the new investment. Its shares rose almost 8 percent Tuesday, or $1.70, to close at $22.97. In after-hours trading, Benefitfocus soared 31 percent, or $7, to $30.

Contact John McDermott at 937-5572.