Exhibit 99.1
Silver Spring Networks Reports Third Quarter 2017 Financial Results
San Jose, CA – November 8, 2017 – Silver Spring Networks, Inc. (NYSE: SSNI) today announced financial results for its third quarter ended September 30, 2017.
Third Quarter Financial Highlights (all comparisons made are against the prior year period, unless otherwise stated):
GAAP results:
| • | Revenue was $47.6 million, down 35.9% year-over-year. |
| • | Cost of revenue was $33.8 million, or 71.0% of revenue, versus $45.9 million or 61.9% in the third quarter of 2016. |
| • | Operating expense was $40.6 million, versus $42.5 million in the third quarter of 2016. |
| • | Net loss per diluted share was ($0.47), versus ($0.29) in the third quarter of last year. |
| • | Quarter-ending cash, cash equivalents, and short-term investments was $126.2 million versus $113.4 million in the third quarter of 2016. |
| • | Cash flow from operations was $7.5 million, versus $5.1 million in the third quarter of 2016. |
Non-GAAP metrics:
| • | Billings were $82.8 million, up 8.7% year-over-year. |
| • | Cost of billings was $43.1 million or 52.1% of billings, versus $34.4 million or 45.1% in the third quarter of 2016. |
| • | Non-GAAP operating expense was $34.9 million, which included approximately $3.3 million of transaction expenses related to the proposed acquisition of Silver Spring Networks by Itron, Inc. This compares to non-GAAP operating expense of $33.8 million in the third quarter of 2016. |
“We delivered solid billings growth, underlying profitability, and significant cash flow from operations,” said Mike Bell, President and Chief Executive Officer, Silver Spring Networks. “New customer deployments continue for both domestic and international projects as we ramp deliveries of our Gen5 platform.”
Silver Spring Networks will not conduct an earnings conference call due to the proposed acquisition of Silver Spring Networks by Itron, Inc.
Business Highlights (through November 8, 2017, unless otherwise stated):
| • | Silver Spring Networks has delivered more than 27.3 million cumulative network endpoints since inception through September 30, 2017, up 9% from a year ago. |
| • | Announced agreement with new technology and channel partner Acuity Brands, in which Acuity Brands’ field sales organization will deliver Silver Spring’s technology for smart street lights and smart city services as part of its turn-key offering for large-scale utility and city customers. |
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| • | Expanded smart metering ecosystem through an agreement with Genus Power Systems, in which Genus will integrate Silver Spring’s standards-based IPv6 network infrastructure cards into its meters for smart grid deployments across Asia including with CESC and Singapore Power. |
| • | Named a Visionary in the Gartner ‘Magic Quadrant for Managed M2M Services, Worldwide1,’ for the second consecutive year. |
| • | Received Frost & Sullivan’s Asia Pacific Smart Utility Platform Provider of the Year, for its smart grid initiatives in the region, for the second consecutive year. |
| 1 | Gartner, Inc., Magic Quadrant for Managed M2M Services, Worldwide, Eric Goodness, Leif-Olof Wallin, Aapo Markkanen, Godfrey Chua, 23 October 2017. Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. |
About Silver Spring Networks
Silver Spring Networks enables the Internet of Important Things™ by reliably and securely connecting things that matter. Cities, utilities, and companies on five continents use the company’s cost-effective, high-performance IoT network and data platform to operate more efficiently, get greener, and enable innovative services that can improve the lives of millions of people. With more than 27.3 million devices delivered, Silver Spring provides a proven standards-based platform safeguarded with military grade security. Silver Spring Networks’ customers include Baltimore Gas & Electric, CitiPower & Powercor, ComEd, Consolidated Edison, CPS Energy, Florida Power & Light, Pacific Gas & Electric, Pepco Holdings, and Singapore Power. Silver Spring has also deployed networks in Smart Cities including Copenhagen, Glasgow, Paris, Providence, and Stockholm. To learn more, visit www.ssni.com.
Non-GAAP and Other Financial Metrics
Silver Spring Networks supplements the results of operations presented in accordance with generally accepted accounting principles, or GAAP, with certain non-GAAP metrics. Silver Spring Networks manages its business, makes planning decisions, evaluates its performance and allocates resources by assessing non-GAAP and other financial metrics such as billings, cost of billings, non-GAAP operating expense, and total backlog. Silver Spring Networks believes that these non-GAAP and other financial metrics, when taken together with the corresponding GAAP financial measures, offer valuable supplemental information regarding the performance of its business, and will help investors better understand the sales volumes and profitability trends, as well as the cash flow characteristics, of its business. The non-GAAP metrics should not be considered in isolation from, are not a substitute for, and do not purport to be an alternative to, revenue, cost of revenue, operating expense, or any other performance measure derived in accordance with GAAP. Silver Spring Networks may consider whether other significant non-recurring items that arise in the future should also be excluded in calculating the non-GAAP financial measures it uses.
Billings represents amounts invoiced for products for which ownership, typically evidenced by title and risk of loss, has transferred or services that have been provided to the customer, and for which payment is expected to be made in accordance with normal payment terms. Billings excludes amounts for undelivered products, services to be performed in the future, and amounts paid or payable to customers. Billings are initially recorded as deferred revenue and are then recognized as revenue when all revenue recognition criteria has been met under Silver Spring Networks’ accounting policies as described in Silver Spring Networks’ filings with the Securities and Exchange Commission. Silver Spring Networks reconciles revenue to billings by adding revenue to the change in deferred revenue in a given period.
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Cost of billings represents the cost associated with products and services that have been delivered to the customer, excluding stock-based compensation, amortization of intangibles and acquisition-related charges. Cost of product shipments for which revenue is not recognized in the period incurred is recorded as deferred cost of revenue. Deferred cost of revenue is expensed in the statement of operations as cost of revenue when the corresponding revenue is recognized. Costs related to services are expensed in the period incurred. Silver Spring Networks reconciles cost of revenue to cost of billings by adding cost of revenue and the change in deferred cost of revenue, less stock-based compensation, amortization of intangibles and acquisition-related charges, included in cost of revenue in a given period.
Non-GAAP operating expense consists of research and development, sales and marketing, and general and administrative expenses, excluding amortization and impairment of intangible assets, stock-based compensation, acquisition-related charges, restructuring and legal settlements.
Total backlog represents future product and service billings that Silver Spring Networks expects to generate pursuant to contracts entered into with its utility customers and meter manufacturers. Total backlog includes order backlog, which represents future billings for open purchase orders and other firm commitments.
Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties. These forward-looking statements include statements regarding the Agreement and Plan of Merger dated September 17, 2017 with Itron, Inc. and Ivory Merger Sub, Inc., a wholly owned subsidiary of Itron, Inc., pursuant to which Silver Spring Networks would become a wholly-owned subsidiary of Itron, Inc. (the “Merger”), the momentum in Silver Spring Networks’ business; future growth and market opportunity; the scope and timing of future deployments; expected benefits from our products; future investment; future innovation; customer and market activity; and future financial results. Statements including words such as “anticipate”, “believe”, “estimate” or “expect” and statements in the future tense are forward-looking statements. These forward-looking statements are preliminary estimates and expectations based on current information and are subject to business and economic risks and uncertainties that could cause actual events or actual future results to differ materially from the expectations set forth in the forward-looking statements. Important factors that could cause results to differ materially from the statements herein include: timing of the Merger; Silver Spring Networks’ ability to solicit a sufficient number of proxies to approve the Merger; other conditions to the completion of the Merger; timing around customer decisions, deployment pace, and acceptances; changes in the type and mix of products and services sold; receipt by our customers and partners of required regulatory or other approvals; dependence on a limited number of customers, as well as our ability to achieve scale in our customers’ deployments; dependence on a limited number of key suppliers and our ability to obtain sufficient quantities of components from those suppliers; failure to realize cost savings and benefits of our restructuring plan; failure to manage our growth successfully or our operating expenses effectively; general economic risks; specific economic risks in different geographies and among different industries; failure to maintain or increase renewals and increase business from existing customers; uncertainties around continued success in sales growth and market share gains; the expansion of our target markets, including the IoT market; lengthy sales cycles with no assurances that a prospective customer will select Silver Spring Networks’ products and services; amounts included in backlog may not
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result in billings or revenue; adverse publicity about, or consumer or political opposition to, the smart grid; security breaches involving smart grid products or services; the ability to integrate technology into third-party devices and Silver Spring Networks’ relationship with third-party manufacturers; execution and customer adoption risks related to new product introductions and innovation; the ability to attract and retain personnel, including members of Silver Spring Networks’ management team; changes in strategy; technological changes that make Silver Spring Networks’ products and services less competitive; competition, particularly from larger companies with more resources than Silver Spring; international business uncertainties; the ability to acquire and integrate other businesses; and other risk factors set forth from time to time in Silver Spring Networks’ filings with the SEC, copies of which are available free of charge at the SEC’s website at www.sec.gov. All forward-looking statements in this press release reflect Silver Spring’s expectations as of November 8, 2017. Silver Spring undertakes no obligation, and expressly disclaims any obligation, to update any forward-looking statements in this press release in light of new information or future events.
For additional information, please contact:
Mark McKechnie
Investor Relations
669-770-4664
markm@ssni.com
Amy Nunnemacher
Global Communications
669-770-4183
pr@ssni.com
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SILVER SPRING NETWORKS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Revenue: |
||||||||||||||||
| Product |
$ | 26,612 | $ | 50,463 | $ | 267,853 | $ | 153,232 | ||||||||
| Services |
20,956 | 23,723 | 91,550 | 91,526 | ||||||||||||
|
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|
|
|
|
|
|
|
|||||||||
| Total revenue |
47,568 | 74,186 | 359,403 | 244,758 | ||||||||||||
| Cost of revenue: |
||||||||||||||||
| Product |
15,885 | 29,249 | 218,403 | 86,668 | ||||||||||||
| Services |
17,878 | 16,695 | 53,744 | 48,308 | ||||||||||||
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|||||||||
| Total cost of revenue |
33,763 | 45,944 | 272,147 | 134,976 | ||||||||||||
| Gross profit |
13,805 | 28,242 | 87,256 | 109,782 | ||||||||||||
| Operating expenses: |
||||||||||||||||
| Research and development |
15,971 | 18,165 | 51,884 | 51,583 | ||||||||||||
| Sales and marketing |
8,752 | 10,425 | 26,748 | 28,597 | ||||||||||||
| General and administrative |
15,828 | 11,667 | 38,975 | 33,752 | ||||||||||||
| Impairment of intangible assets |
— | 2,204 | — | 2,204 | ||||||||||||
| Restructuring |
35 | — | 1,289 | 39 | ||||||||||||
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|
|||||||||
| Total operating expenses |
40,586 | 42,461 | 118,896 | 116,175 | ||||||||||||
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|
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|
|||||||||
| Operating loss |
(26,781 | ) | (14,219 | ) | (31,640 | ) | (6,393 | ) | ||||||||
| Other income, net |
761 | 113 | 1,313 | 887 | ||||||||||||
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|
|
|
|||||||||
| Loss before income taxes |
(26,020 | ) | (14,106 | ) | (30,327 | ) | (5,506 | ) | ||||||||
| Benefit (provision) for income taxes |
793 | (1,143 | ) | 555 | (2,136 | ) | ||||||||||
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|
|||||||||
| Net loss |
$ | (25,227 | ) | $ | (15,249 | ) | $ | (29,772 | ) | $ | (7,642 | ) | ||||
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| Net loss per share: |
||||||||||||||||
| Basic |
$ | (0.47 | ) | $ | (0.29 | ) | $ | (0.56 | ) | $ | (0.15 | ) | ||||
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| Diluted |
$ | (0.47 | ) | $ | (0.29 | ) | $ | (0.56 | ) | $ | (0.15 | ) | ||||
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| Weighted average shares used to compute net loss per share: |
||||||||||||||||
| Basic |
53,829 | 51,743 | 53,260 | 51,244 | ||||||||||||
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| Diluted |
53,829 | 51,743 | 53,260 | 51,244 | ||||||||||||
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SILVER SPRING NETWORKS, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
| September 30, | December 31, | |||||||
| 2017 | 2016 (a) | |||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 58,865 | $ | 50,383 | ||||
| Short-term investments |
67,349 | 67,876 | ||||||
| Accounts receivable |
49,988 | 44,770 | ||||||
| Inventory |
6,064 | 8,040 | ||||||
| Deferred cost of revenue |
72,459 | 194,769 | ||||||
| Prepaid expenses and other current assets |
12,984 | 12,536 | ||||||
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|
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| Total current assets |
267,709 | 378,374 | ||||||
| Property and equipment, net |
26,395 | 28,986 | ||||||
| Goodwill and intangible assets |
10,428 | 11,005 | ||||||
| Deferred cost of revenue, non-current |
8,980 | 26,639 | ||||||
| Deferred tax assets, non-current |
525 | 481 | ||||||
| Other long-term assets |
2,483 | 1,643 | ||||||
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|
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| Total assets |
$ | 316,520 | $ | 447,128 | ||||
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| LIABILITIES AND STOCKHOLDERS’ DEFICIT |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 36,960 | $ | 26,785 | ||||
| Deferred revenue |
208,060 | 292,260 | ||||||
| Accrued and other liabilities |
37,598 | 44,146 | ||||||
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|
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| Total current liabilities |
282,618 | 363,191 | ||||||
| Deferred revenue, non-current |
47,451 | 93,149 | ||||||
| Other liabilities |
25,406 | 22,324 | ||||||
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|
|||||
| Total liabilities |
355,475 | 478,664 | ||||||
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|
|||||
| Total stockholders’ deficit |
(38,955 | ) | (31,536 | ) | ||||
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| Total liabilities and stockholders’ deficit |
$ | 316,520 | $ | 447,128 | ||||
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| (a) | Derived from audited consolidated financial statements. |
SILVER SPRING NETWORKS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| OPERATING ACTIVITIES |
||||||||||||||||
| Net loss |
$ | (25,227 | ) | $ | (15,249 | ) | $ | (29,772 | ) | $ | (7,642 | ) | ||||
| Adjustments to reconcile net loss to net cash provided by operating activities: |
||||||||||||||||
| Deferred taxes |
(29 | ) | (17 | ) | (45 | ) | 94 | |||||||||
| Impairment of intangible assets |
— | 2,204 | — | 2,204 | ||||||||||||
| Depreciation and amortization |
2,189 | 2,096 | 6,666 | 6,332 | ||||||||||||
| Stock-based compensation |
7,569 | 7,898 | 21,258 | 21,839 | ||||||||||||
| Other non-cash adjustments |
82 | 659 | 269 | 772 | ||||||||||||
| Changes in assets and liabilities: |
||||||||||||||||
| Accounts receivable |
1,738 | 1,967 | (5,241 | ) | 2,826 | |||||||||||
| Inventory |
(772 | ) | (2,811 | ) | 1,980 | (750 | ) | |||||||||
| Prepaid expenses and other assets |
(1,519 | ) | 1,013 | (5,161 | ) | 2,957 | ||||||||||
| Landlord incentives related to lease |
— | 4,513 | 883 | 6,788 | ||||||||||||
| Deferred cost of revenue |
(11,495 | ) | 9,359 | 140,122 | 17,595 | |||||||||||
| Accounts payable |
5,799 | (10,082 | ) | 10,019 | (8,908 | ) | ||||||||||
| Customer deposits |
(90 | ) | 1,037 | 42 | 1,031 | |||||||||||
| Deferred revenue |
35,197 | 1,927 | (130,167 | ) | (28,061 | ) | ||||||||||
| Accrued and other liabilities |
(5,935 | ) | 631 | 1,187 | (4,400 | ) | ||||||||||
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| Net cash provided by operating activities |
7,507 | 5,145 | 12,040 | 12,677 | ||||||||||||
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| INVESTING ACTIVITIES |
||||||||||||||||
| Proceeds from sales of available-for-sale investments |
3,999 | 16,273 | 6,548 | 39,217 | ||||||||||||
| Proceeds from maturities of available-for-sale investments |
— | 8,720 | 5,200 | 10,970 | ||||||||||||
| Purchases of available-for-sale investments |
(4,670 | ) | (45,401 | ) | (11,382 | ) | (56,355 | ) | ||||||||
| Purchases of property and equipment |
(741 | ) | (6,125 | ) | (2,491 | ) | (23,369 | ) | ||||||||
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| Net cash used for investing activities |
(1,412 | ) | (26,533 | ) | (2,125 | ) | (29,537 | ) | ||||||||
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| FINANCING ACTIVITIES |
||||||||||||||||
| Payments on capital lease obligations |
— | — | — | (285 | ) | |||||||||||
| Proceeds from issuance of common stock |
2,673 | 2,010 | 5,484 | 4,238 | ||||||||||||
| Taxes paid related to net share settlement of equity awards |
(1,092 | ) | (549 | ) | (7,040 | ) | (4,169 | ) | ||||||||
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| Net cash provided by (used for) financing activities |
1,581 | 1,461 | (1,556 | ) | (216 | ) | ||||||||||
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| Effect of exchange rate changes on cash and cash equivalents |
56 | (4 | ) | 123 | (140 | ) | ||||||||||
| Net increase (decrease) in cash and cash equivalents |
7,732 | (19,931 | ) | 8,482 | (17,216 | ) | ||||||||||
| Cash and cash equivalents - beginning of period |
51,133 | 67,979 | 50,383 | 65,264 | ||||||||||||
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| Cash and cash equivalents - end of period |
$ | 58,865 | $ | 48,048 | $ | 58,865 | $ | 48,048 | ||||||||
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SILVER SPRING NETWORKS, INC.
UNAUDITED RECONCILIATION OF REVENUE BETWEEN GAAP AND NON-GAAP (QUARTERLY)
(in thousands, except percentages)
| Q3 2016 |
Q4 2016 |
Q1 2017 |
Q2 2017 |
Q3 2017 |
YoY% Change |
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| REVENUE AND BILLINGS BY TYPE |
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| Revenue: |
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| Product |
$ | 50,463 | $ | 40,386 | $ | 26,528 | $ | 214,713 | $ | 26,612 | -47 | % | ||||||||||||
| Services |
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| Managed services and SaaS |
14,090 | 15,581 | 14,101 | 27,350 | 14,053 | 0 | % | |||||||||||||||||
| Professional services |
9,633 | 10,283 | 9,634 | 19,509 | 6,903 | -28 | % | |||||||||||||||||
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| Total services |
23,723 | 25,864 | 23,735 | 46,859 | 20,956 | -12 | % | |||||||||||||||||
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| Total revenue |
$ | 74,186 | $ | 66,250 | $ | 50,263 | $ | 261,572 | $ | 47,568 | -36 | % | ||||||||||||
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| % Product |
68 | % | 61 | % | 53 | % | 82 | % | 56 | % | ||||||||||||||
| % Services |
32 | % | 39 | % | 47 | % | 18 | % | 44 | % | ||||||||||||||
| Change in deferred revenue: |
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| Product |
$ | (568 | ) | $ | 7,155 | $ | 16,102 | $ | (165,071 | ) | $ | 22,062 | ||||||||||||
| Services |
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| Managed services and SaaS |
1,641 | 1,427 | 1,802 | (11,298 | ) | 3,266 | ||||||||||||||||||
| Professional services |
885 | 2,867 | (215 | ) | (6,454 | ) | 9,898 | |||||||||||||||||
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| Total services |
2,526 | 4,294 | 1,587 | (17,752 | ) | 13,164 | ||||||||||||||||||
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| Total change in deferred revenue |
$ | 1,958 | $ | 11,449 | $ | 17,689 | $ | (182,823 | ) | $ | 35,226 | |||||||||||||
| Billings |
||||||||||||||||||||||||
| Product |
$ | 49,895 | $ | 47,541 | $ | 42,630 | $ | 49,642 | $ | 48,674 | -2 | % | ||||||||||||
| Services |
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| Managed services and SaaS |
15,731 | 17,008 | 15,903 | 16,052 | 17,319 | 10 | % | |||||||||||||||||
| Professional services |
10,518 | 13,150 | 9,419 | 13,055 | 16,801 | 60 | % | |||||||||||||||||
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| Total services |
26,249 | 30,158 | 25,322 | 29,107 | 34,120 | 30 | % | |||||||||||||||||
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| Total Billings |
$ | 76,144 | $ | 77,699 | $ | 67,952 | $ | 78,749 | $ | 82,794 | 9 | % | ||||||||||||
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| % Product |
66 | % | 61 | % | 63 | % | 63 | % | 59 | % | ||||||||||||||
| % Services |
34 | % | 39 | % | 37 | % | 37 | % | 41 | % | ||||||||||||||
| REVENUE AND BILLINGS BY SOLUTION |
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| Revenue: |
||||||||||||||||||||||||
| Advanced metering infrastructure |
$ | 66,203 | $ | 57,148 | $ | 41,072 | $ | 254,433 | $ | 39,907 | -40 | % | ||||||||||||
| New solutions |
7,983 | 9,102 | 9,191 | 7,139 | 7,661 | -4 | % | |||||||||||||||||
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| Total revenue |
$ | 74,186 | $ | 66,250 | $ | 50,263 | $ | 261,572 | $ | 47,568 | -36 | % | ||||||||||||
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| % Advanced metering infrastructure |
89 | % | 86 | % | 82 | % | 97 | % | 84 | % | ||||||||||||||
| % New solutions |
11 | % | 14 | % | 18 | % | 3 | % | 16 | % | ||||||||||||||
| Change in deferred revenue |
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| Advanced metering infrastructure |
$ | (2,078 | ) | $ | 2,531 | $ | 12,607 | $ | (188,584 | ) | $ | 29,623 | ||||||||||||
| New solutions |
4,036 | 8,918 | 5,082 | 5,761 | 5,603 | |||||||||||||||||||
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| Total change in deferred revenue |
$ | 1,958 | $ | 11,449 | $ | 17,689 | $ | (182,823 | ) | $ | 35,226 | |||||||||||||
| Billings |
||||||||||||||||||||||||
| Advanced metering infrastructure |
$ | 64,125 | $ | 59,679 | $ | 53,679 | $ | 65,849 | $ | 69,530 | 8 | % | ||||||||||||
| New solutions |
12,019 | 18,020 | 14,273 | 12,900 | 13,264 | 10 | % | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total Billings |
$ | 76,144 | $ | 77,699 | $ | 67,952 | $ | 78,749 | $ | 82,794 | 9 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| % Advanced metering infrastructure |
84 | % | 77 | % | 79 | % | 84 | % | 84 | % | ||||||||||||||
| % New solutions |
16 | % | 23 | % | 21 | % | 16 | % | 16 | % | ||||||||||||||
| REVENUE AND BILLINGS BY GEOGRAPHY |
||||||||||||||||||||||||
| Revenue: |
||||||||||||||||||||||||
| United States |
$ | 43,381 | $ | 53,087 | $ | 46,331 | $ | 257,957 | $ | 42,767 | -1 | % | ||||||||||||
| International |
30,805 | 13,163 | 3,932 | 3,615 | 4,801 | -84 | % | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total revenue |
$ | 74,186 | $ | 66,250 | $ | 50,263 | $ | 261,572 | $ | 47,568 | -36 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| % United States |
58 | % | 80 | % | 92 | % | 99 | % | 90 | % | ||||||||||||||
| % International |
42 | % | 20 | % | 8 | % | 1 | % | 10 | % | ||||||||||||||
| Change in deferred revenue |
||||||||||||||||||||||||
| United States |
$ | 21,085 | $ | 8,880 | $ | 11,621 | $ | (189,243 | ) | $ | 15,691 | |||||||||||||
| International |
(19,127 | ) | 2,569 | 6,068 | 6,420 | 19,535 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total change in deferred revenue |
$ | 1,958 | $ | 11,449 | $ | 17,689 | $ | (182,823 | ) | $ | 35,226 | |||||||||||||
| Billings |
||||||||||||||||||||||||
| United States |
$ | 64,466 | $ | 61,967 | $ | 57,952 | $ | 68,714 | $ | 58,458 | -9 | % | ||||||||||||
| International |
11,678 | 15,732 | 10,000 | 10,035 | 24,336 | 108 | % | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total Billings |
$ | 76,144 | $ | 77,699 | $ | 67,952 | $ | 78,749 | $ | 82,794 | 9 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| % United States |
85 | % | 80 | % | 85 | % | 87 | % | 71 | % | ||||||||||||||
| % International |
15 | % | 20 | % | 15 | % | 13 | % | 29 | % | ||||||||||||||
SILVER SPRING NETWORKS, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP MEASURES (QUARTERLY)
(in thousands)
| Three Months Ended September 30, 2017 | ||||||||||||||||||||||||
| Cost of Revenue | Change in Deferred Cost of Revenue (a) |
Stock-based Compensation |
Amortization of Intangible Assets |
Acquisition- Related Costs |
Cost of Billings | |||||||||||||||||||
| Cost of Revenue / Cost of Billings: |
||||||||||||||||||||||||
| Product |
$ | 15,885 | $ | 11,473 | $ | (508 | ) | $ | (78 | ) | $ | — | $ | 26,772 | ||||||||||
| Services |
||||||||||||||||||||||||
| Managed services and SaaS |
9,439 | — | (679 | ) | — | — | 8,760 | |||||||||||||||||
| Professional services |
8,439 | — | (847 | ) | — | — | 7,592 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total services |
$ | 17,878 | $ | — | $ | (1,526 | ) | $ | — | $ | — | $ | 16,352 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total Cost of Revenue / Cost of Billings |
$ | 33,763 | $ | 11,473 | $ | (2,034 | ) | $ | (78 | ) | $ | — | $ | 43,124 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Operating Expenses |
Stock-based Compensation |
Amortization and Impairment of Intangible Assets |
Restructuring & Litigation |
Acquisition- Related Costs |
Non-GAAP Operating Expenses |
|||||||||||||||||||
| Operating Expenses / Non-GAAP Operating Expenses: |
||||||||||||||||||||||||
| Research and development |
$ | 15,971 | $ | (2,344 | ) | $ | — | $ | — | $ | — | $ | 13,627 | |||||||||||
| Sales and marketing |
8,752 | (703 | ) | (105 | ) | — | — | 7,944 | ||||||||||||||||
| General and administrative |
15,828 | (2,488 | ) | (9 | ) | — | — | 13,331 | ||||||||||||||||
| Impairment of intangible assets |
— | — | — | — | — | — | ||||||||||||||||||
| Restructuring |
35 | — | — | (35 | ) | — | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total Operating Expenses / Non-GAAP Operating Expenses |
$ | 40,586 | $ | (5,535 | ) | $ | (114 | ) | $ | (35 | ) | $ | — | $ | 34,902 | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Three Months Ended September 30, 2016 | ||||||||||||||||||||||||
| Cost of Revenue | Change in Deferred Cost of Revenue (a) |
Stock-based Compensation |
Amortization of Intangible Assets |
Acquisition- Related Costs |
Cost of Billings | |||||||||||||||||||
| Cost of Revenue / Cost of Billings: |
||||||||||||||||||||||||
| Product |
$ | 29,249 | $ | (9,404 | ) | $ | (515 | ) | $ | (79 | ) | $ | — | $ | 19,251 | |||||||||
| Services |
||||||||||||||||||||||||
| Managed services and SaaS |
9,478 | — | (719 | ) | — | (15 | ) | 8,744 | ||||||||||||||||
| Professional services |
7,217 | — | (848 | ) | — | — | 6,369 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total services |
$ | 16,695 | $ | — | $ | (1,567 | ) | $ | — | $ | (15 | ) | $ | 15,113 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total Cost of Revenue / Cost of Billings |
$ | 45,944 | $ | (9,404 | ) | $ | (2,082 | ) | $ | (79 | ) | $ | (15 | ) | $ | 34,364 | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Operating Expenses |
Stock-based Compensation |
Amortization and Impairment of Intangible Assets |
Restructuring & Litigation |
Acquisition- Related Costs |
Non-GAAP Operating Expenses |
|||||||||||||||||||
| Operating Expenses / Non-GAAP Operating Expenses: |
||||||||||||||||||||||||
| Research and development |
$ | 18,165 | $ | (2,592 | ) | $ | — | $ | — | $ | (311 | ) | $ | 15,262 | ||||||||||
| Sales and marketing |
10,425 | (943 | ) | (106 | ) | — | (65 | ) | 9,311 | |||||||||||||||
| General and administrative |
11,667 | (2,281 | ) | (8 | ) | — | (117 | ) | 9,261 | |||||||||||||||
| Impairment of intangible assets |
2,204 | — | (2,204 | ) | — | — | — | |||||||||||||||||
| Restructuring |
— | — | — | — | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total Operating Expenses / Non-GAAP Operating Expenses |
$ | 42,461 | $ | (5,816 | ) | $ | (2,318 | ) | $ | — | $ | (493 | ) | $ | 33,834 | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| (a) | Amounts presented net of foreign currency translation. |
SILVER SPRING NETWORKS, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP MEASURES (YEAR TO DATE)
(in thousands)
| Nine Months Ended September 30, 2017 | ||||||||||||||||||||||||
| Cost of Revenue | Change in Deferred Cost of Revenue (a) |
Stock-based Compensation |
Amortization of Intangible Assets |
Acquisition- Related Costs |
Cost of Billings | |||||||||||||||||||
| Cost of Revenue / Cost of Billings: |
||||||||||||||||||||||||
| Product |
$ | 218,403 | $ | (140,157 | ) | $ | (1,409 | ) | $ | (237 | ) | $ | — | $ | 76,600 | |||||||||
| Services |
||||||||||||||||||||||||
| Managed services and SaaS |
28,899 | — | (2,037 | ) | — | 12 | 26,874 | |||||||||||||||||
| Professional services |
24,845 | — | (2,315 | ) | — | (3 | ) | 22,527 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total services |
$ | 53,744 | $ | — | $ | (4,352 | ) | $ | — | $ | 9 | $ | 49,401 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total Cost of Revenue / Cost of Billings |
$ | 272,147 | $ | (140,157 | ) | $ | (5,761 | ) | $ | (237 | ) | $ | 9 | $ | 126,001 | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Operating Expenses |
Stock-based Compensation |
Amortization of Intangible Assets |
Restructuring & Litigation |
Acquisition- Related Costs |
Non-GAAP Operating Expenses |
|||||||||||||||||||
| Operating Expenses / Non-GAAP Operating Expenses: |
||||||||||||||||||||||||
| Research and development |
$ | 51,884 | $ | (6,536 | ) | $ | — | $ | — | $ | (45 | ) | $ | 45,303 | ||||||||||
| Sales and marketing |
26,748 | (1,866 | ) | (315 | ) | — | (11 | ) | 24,556 | |||||||||||||||
| General and administrative |
38,975 | (7,095 | ) | (25 | ) | — | (19 | ) | 31,836 | |||||||||||||||
| Impairment of intangible assets |
— | — | — | — | — | — | ||||||||||||||||||
| Restructuring |
1,289 | — | — | (1,289 | ) | — | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total Operating Expenses / Non-GAAP Operating Expenses |
$ | 118,896 | $ | (15,497 | ) | $ | (340 | ) | $ | (1,289 | ) | $ | (75 | ) | $ | 101,695 | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Nine Months Ended September 30, 2016 | ||||||||||||||||||||||||
| Cost of Revenue | Change in Deferred Cost of Revenue (a) |
Stock-based Compensation |
Amortization of Intangible Assets |
Acquisition- Related Costs |
Cost of Billings | |||||||||||||||||||
| Cost of Revenue / Cost of Billings: |
||||||||||||||||||||||||
| Product |
$ | 86,668 | $ | (17,728 | ) | $ | (1,282 | ) | $ | (443 | ) | $ | — | $ | 67,215 | |||||||||
| Services |
||||||||||||||||||||||||
| Managed services and SaaS |
27,010 | — | (1,689 | ) | — | (46 | ) | 25,275 | ||||||||||||||||
| Professional services |
21,298 | — | (1,828 | ) | — | — | 19,470 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total services |
$ | 48,308 | $ | — | $ | (3,517 | ) | $ | — | $ | (46 | ) | $ | 44,745 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total Cost of Revenue / Cost of Billings |
$ | 134,976 | $ | (17,728 | ) | $ | (4,799 | ) | $ | (443 | ) | $ | (46 | ) | $ | 111,960 | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Operating Expenses |
Stock-based Compensation |
Amortization and Impairment of Intangible Assets |
Restructuring & Litigation |
Acquisition- Related Costs |
Non-GAAP Operating Expenses |
|||||||||||||||||||
| Operating Expenses / Non-GAAP Operating Expenses: |
||||||||||||||||||||||||
| Research and development |
$ | 51,583 | $ | (6,859 | ) | $ | — | $ | — | $ | (932 | ) | $ | 43,792 | ||||||||||
| Sales and marketing |
28,597 | (2,500 | ) | (521 | ) | — | (196 | ) | 25,380 | |||||||||||||||
| General and administrative |
33,752 | (7,681 | ) | (25 | ) | — | (360 | ) | 25,686 | |||||||||||||||
| Impairment of intangible assets |
2,204 | — | (2,204 | ) | — | — | — | |||||||||||||||||
| Restructuring |
39 | — | — | (39 | ) | — | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total Operating Expenses / Non-GAAP Operating Expenses |
$ | 116,175 | $ | (17,040 | ) | $ | (2,750 | ) | $ | (39 | ) | $ | (1,488 | ) | $ | 94,858 | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| (a) | Amounts presented net of foreign currency translation. |
SILVER SPRING NETWORKS, INC.
UNAUDITED SUPPLEMENTAL FINANCIAL DATA AND OTHER INFORMATION
(in thousands, except percentages and headcount)
| Q3 | Q4 | Q1 | Q2 | Q3 | YoY% | |||||||||||||||||||
| 2016 | 2016 | 2017 | 2017 | 2017 | Change | |||||||||||||||||||
| SUPPLEMENTAL FINANCIAL DATA |
||||||||||||||||||||||||
| STOCK-BASED COMPENSATION |
||||||||||||||||||||||||
| Cost of goods sold |
$ | 2,082 | $ | 1,945 | $ | 1,806 | $ | 1,921 | $ | 2,034 | -2 | % | ||||||||||||
| Research and development |
2,593 | 2,450 | 2,058 | 2,134 | 2,344 | -10 | % | |||||||||||||||||
| Sales and marketing |
943 | 1,152 | 506 | 657 | 703 | -25 | % | |||||||||||||||||
| General and administrative |
2,280 | 2,423 | 2,287 | 2,320 | 2,488 | 9 | % | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| TOTAL STOCK-BASED COMPENSATION |
$ | 7,898 | $ | 7,970 | $ | 6,657 | $ | 7,032 | $ | 7,569 | -4 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| CASH FLOW DATA |
||||||||||||||||||||||||
| Operating cash flow |
$ | 5,145 | $ | 8,085 | $ | 1,525 | $ | 3,008 | $ | 7,507 | 46 | % | ||||||||||||
| Operating cash flow - trailing twelve months |
18,934 | 20,762 | 18,557 | 17,763 | 20,125 | 6 | % | |||||||||||||||||
| BALANCE SHEET DATA |
||||||||||||||||||||||||
| Cash, cash equivalents and short-term investments |
$ | 113,358 | $ | 118,259 | $ | 116,620 | $ | 117,845 | $ | 126,214 | 11 | % | ||||||||||||
| OTHER INFORMATION |
||||||||||||||||||||||||
| HOMES & BUSINESSES |
||||||||||||||||||||||||
| Network endpoints delivered during quarter* |
569 | 564 | 511 | 670 | 604 | 6 | % | |||||||||||||||||
| Cumulative network endpoints delivered* |
24,968 | 25,532 | 26,043 | 26,713 | 27,317 | 9 | % | |||||||||||||||||
| *Endpoints refer to communication modules in electric meters |
||||||||||||||||||||||||
| EMPLOYEES |
709 | 702 | 704 | 646 | 647 | -9 | % | |||||||||||||||||
SILVER SPRING NETWORKS, INC.
UNAUDITED SUPPLEMENTAL TRENDED GAAP FINANCIAL DATA
(in thousands)
| Q3 | Q4 | Q1 | Q2 | Q3 | ||||||||||||||||
| 2016 | 2016 | 2017 | 2017 | 2017 | ||||||||||||||||
| Gross profit |
$ | 28,242 | $ | 28,417 | $ | 16,913 | $ | 56,538 | $ | 13,805 | ||||||||||
| Other GAAP financial data related to gross profit: |
||||||||||||||||||||
| Change in deferred revenue, net of foreign currency translation |
1,958 | 11,449 | 17,689 | (182,823 | ) | 35,226 | ||||||||||||||
| Change in deferred cost of revenue, net of foreign currency translation |
9,404 | (3,177 | ) | (7,958 | ) | 159,588 | (11,473 | ) | ||||||||||||
| Amortization of intangible assets |
79 | 79 | 79 | 80 | 78 | |||||||||||||||
| Stock-based compensation |
2,082 | 1,945 | 1,806 | 1,921 | 2,034 | |||||||||||||||
| Acquisition-related charges |
15 | 15 | (8 | ) | (1 | ) | — | |||||||||||||
| Operating expenses |
$ | 42,461 | $ | 41,948 | $ | 40,057 | $ | 38,253 | $ | 40,586 | ||||||||||
| Other GAAP financial data included in operating expenses: |
||||||||||||||||||||
| Amortization of intangible assets |
114 | 113 | 114 | 112 | 114 | |||||||||||||||
| Stock-based compensation |
5,816 | 6,025 | 4,851 | 5,111 | 5,535 | |||||||||||||||
| Acquisition-related charges |
493 | 494 | 74 | 1 | — | |||||||||||||||
| Impairment of intangible assets |
2,204 | — | — | — | — | |||||||||||||||
| Restructuring |
— | — | 47 | 1,207 | 35 | |||||||||||||||
| Other statement of operations line items |
||||||||||||||||||||
| Other income (expense), net |
$ | 113 | $ | (217 | ) | $ | 543 | $ | 9 | $ | 761 | |||||||||
| (Provision) benefit for income taxes |
(1,143 | ) | (239 | ) | (570 | ) | 332 | 793 | ||||||||||||