Silver Spring Networks, Inc. (NYSE: SSNI) today announced
preliminary financial results for its fourth quarter and full year
ended December 31, 2016.
Fourth Quarter Financial Highlights (all comparisons made
are against the prior year period, unless otherwise stated):
GAAP results:
- Revenue was $66.3 million, versus
$199.2 million.
- Cost of revenue was $37.8 million, or
57.1% of revenue, versus $97.9 million or 49.1%.
- Operating expense was $41.9 million,
versus $35.6 million.
- Tax expense was $0.2 million. Other
income (expense) was ($0.2) million.
- Basic share count was 52.0 million. In
the case of a net income position, fully-diluted share count would
have been 54.4 million.
- Quarter-ending cash, cash equivalents,
and short-term investments was $118.3 million.
Non-GAAP metrics1:
- Billings were $77.7 million, up
4%.
- Cost of billings was $39.0 million or
50.2% of billings, versus $39.6 million or 52.9%.
- Non-GAAP operating expense was $35.3
million, versus $27.4 million.
“We enter 2017 in a strong position, with solid fourth quarter
results and several new international awards. In 2016, we achieved
record bookings, with major awards from Con Edison, Entergy and
Pacific Power, generated over $20.7 million in operating cash flow
for the year, and finished the year with more than 25.5 million
cumulative network endpoints delivered,” said Mike Bell, President
and Chief Executive Officer. “We are focused on ramping production
of our Gen5 platform for our major upcoming deployments, driving
international growth, and expanding our platform to additional
smart utility applications and new vertical markets within the
broader Internet of Important Things™ opportunity.”
Business Highlights (through February 21, 2017, unless
otherwise stated):
- Over 25.5 million cumulative network
endpoints delivered from inception through December 31, 2016,
up 11% from a year ago.
- Working with customers that
represent over 26 million incremental homes and businesses that
are piloting or deploying our technology in phases.
- Total backlog of $1.165 billion
as of December 31, 2016, up over 50% from the end of last
year.
- We congratulate AEP Ohio, which
recently received regulatory approval for its smart grid program
from the Public Utility Commission of Ohio (PUCO), to deploy our
multi-application IPv6 IoT network canopy and advanced metering
infrastructure to nearly 900,000 homes and businesses in its Ohio
service territory.
- Selected by CESC Limited of
India to deploy our multi-application IPv6 IoT platform to
connect approximately 237,000 homes and businesses in CESC’s
franchises in the cities of Kota and Bharatpur. Silver Spring
Networks will also deploy Operations Optimizer™ to these cities
through a SaaS model.
- Selected by Dubai Electricity and
Water Authority (DEWA) to deploy our multi-application IoT
network canopy across the Emirate of Dubai to securely and reliably
provide connectivity for various services, such as energy and
water.
- Selected by Oklahoma Gas &
Electric (OGE) to deploy our IPv6 IoT platform and
Streetlight.Vision control software to connect and manage up to
250,000 LED street lights within its Oklahoma service
territory.
- Expanded Starfish™ distribution
channel through a reseller alliance with Ameresco to assist
cities and other public lighting operators to deliver smart street
lighting programs and other IoT applications and services such as
smart water, traffic signals and distributed energy resources.
- Extended smart city reach through a
new go-to-market alliance with Panasonic Corporation of North
America to leverage our Starfish Internet of Things (IoT) platform
and Panasonic’s CityNOW portfolio to transform the street light
into a multi-use host for multiple smart and sustainable
applications.
Full Year 2016 Results (all comparisons made are against
the prior year period, unless otherwise stated)
GAAP Results:
- Revenue was $311.0 million, versus
$489.6 million.
- Cost of revenue was $172.8 million, or
55.6% of revenue, versus $263.8 million or 53.9%.
- Operating expense was $158.1 million,
versus $142.8 million.
- Tax expense was $2.4 million. Other
income (expense) was $0.7 million.
- Basic share count was 51.4 million. In
the case of a net income position, fully-diluted share count would
have been 53.7 million.
Non-GAAP Metrics:
- Billings were $294.6 million, up
4%.
- Cost of billings was $150.9 million or
51.2% of billings, versus $159.3 million or 56.5%.
- Non-GAAP operating expense was $130.2
million, versus $114.1 million.
Conference Call
Silver Spring Networks will host a conference call today at 2:00
pm PT (5:00 pm ET) to review its results for the fourth quarter and
full year ended December 31, 2016 and its outlook for the future.
During the course of this call, Silver Spring Networks may also
disclose material developments affecting its business and/or
financial performance. Listeners may access the conference call
live at 877-407-0832 (U.S.) or 201-689-8433 (International) or via
webcast at http://ir.ssni.com. A dial-in replay of the conference
call will be available until April 11, 2017 and can be accessed at
877-660-6853 (domestic) or 201-612-7415 (international) passcode
13653868. An audio webcast replay of the conference call will be
available for one year at http://ir.ssni.com.
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 25.5 million devices delivered, Silver Spring Networks
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 Networks 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.
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 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 around customer
decisions and deployment pace; receipt by our customers of required
regulatory approvals; dependence on a limited number of customers
and key suppliers; 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 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,
including our fifth generation networking platform and products;
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 February 21,
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.
In addition, the preliminary financial results set forth in this
press release are estimates based on information currently
available to Silver Spring.
1 For this and future earnings reports, Silver Spring Networks
will no longer report certain non-GAAP financial metrics, including
gross profit on billings, gross margin on billings, and non-GAAP
operating income (loss). Silver Spring Networks will continue to
report billings, cost of billings, and non-GAAP operating expense.
Silver Spring Networks will also provide additional GAAP measures
used internally by management to adjust GAAP measures in order to
assess its business performance, which can also be used by
investors to derive metrics comparable to previously reported
non-GAAP metrics. For more information, please refer to the
conference call Silver Spring Networks hosted on February 13, 2017,
a replay of which is available on our website at
http://ir.ssni.com.
SILVER SPRING NETWORKS, INC.
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31, 2016 2015
2016 2015 Revenue: Product $ 40,386 $ 143,202 $
193,618 $ 353,041 Services 25,864 56,045
117,390 136,518
Total revenue
66,250 199,247 311,008 489,559
Cost of revenue: Product 19,915 83,903 106,583 202,430 Services
17,918 13,999 66,226
61,386
Total cost of revenue 37,833
97,902 172,809 263,816 Gross profit
28,417 101,345 138,199 225,743
Operating expenses: Research and development 19,090 13,714 70,673
61,295 Sales and marketing 10,809 7,343 39,406 33,452 General and
administrative 12,049 14,483 45,801 46,372 Impairment of intangible
assets — — 2,204 — Restructuring — 60
39 1,671
Total operating
expenses 41,948 35,600
158,123 142,790
Operating (loss) income (13,531 )
65,745 (19,924 ) 82,953 Other (expense)
income, net (217 ) (159 ) 670
104
(Loss) income before income taxes (13,748
) 65,586 (19,254 ) 83,057
Provision for income taxes (239 ) (3,708 )
(2,375 ) (3,071 )
Net (loss) income $
(13,987 ) $ 61,878 $
(21,629 ) $ 79,986 Net (loss)
income per share:
Basic $ (0.27 )
$ 1.23 $ (0.42 ) $
1.60 Diluted $ (0.27 )
$ 1.19 $ (0.42 ) $
1.55 Weighted average shares used to compute net
(loss) income per share: Basic 52,039 50,481
51,444 49,963 Diluted
52,039 52,167 51,444
51,524
SILVER SPRING NETWORKS, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (in
thousands) December 31, December
31, 2016 2015 (a) ASSETS Current assets:
Cash and cash equivalents $ 50,383 $ 65,264 Short-term investments
67,876 59,181 Accounts receivable 44,770 47,813 Inventory 8,040
4,545 Deferred cost of revenue 194,769 196,868 Prepaid expenses and
other current assets 12,536 10,835
Total current assets 378,374 384,506 Property
and equipment, net 28,986 14,106 Goodwill and intangible assets
11,005 14,390 Deferred cost of revenue, non-current 26,639 38,882
Deferred tax assets, non-current 481 1,069 Other long-term assets
1,643 4,772
Total assets
$ 447,128 $ 457,725
LIABILITIES AND STOCKHOLDERS' DEFICIT Current
liabilities: Accounts payable $ 26,785 $ 30,623 Deferred revenue
292,260 305,471 Accrued and other liabilities 44,146
42,751
Total current liabilities
363,191 378,845 Deferred revenue, non-current 93,149
96,342 Other liabilities, non-current 22,324
16,403
Total liabilities 478,664
491,590 Total stockholders’ deficit
(31,536 ) (33,865 )
Total liabilities and stockholders’ deficit $
447,128 $ 457,725 (a)
Derived from audited consolidated financial statements.
SILVER SPRING NETWORKS, INC. UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOW (in thousands)
Three Months Ended Twelve
Months Ended December 31, December 31,
2016 2015 2016 2015 OPERATING
ACTIVITIES Net (loss) income $ (13,987
) $ 61,878 $ (21,629 )
$ 79,986
Adjustments to reconcile net (loss) income
to net cash provided by operating activities:
Deferred taxes 520 (557 ) 614 (1,492 ) Impairment of intangible
assets — — 2,204 — Depreciation and amortization 2,291 1,930 8,623
7,822 Tax benefit from shared-based award activity 83 153 83 153
Excess tax benefit from share-based payment awards (83 ) (153 ) (83
) (153 ) Stock-based compensation 7,970 4,942 29,809 26,479 Other
non-cash adjustments 114 412 886 766 Changes in assets and
liabilities: Accounts receivable 316 (3,675 ) 3,142 7,398 Inventory
(2,740 ) (853 ) (3,490 ) 2,190 Prepaid expenses and other assets
(622 ) (936 ) 2,335 (5,128 ) Landlord incentives related to lease —
— 6,788 —
Contingent consideration related to
Detectent acquisition held in escrow
— — — (4,000 ) Deferred cost of revenue (3,174 ) 56,978 14,421
97,286 Accounts payable 4,425 3,232 (4,483 ) 3,101 Customer
deposits (970 ) (599 ) 61 (448 ) Deferred revenue 11,480 (124,115 )
(16,581 ) (208,305 ) Accrued and other liabilities 2,462
7,620 (1,938 ) 14,032
Net cash provided by operating activities
8,085 6,257 20,762
19,687 INVESTING
ACTIVITIES
Payments for business acquisition, net of
cash and cash equivalents acquired
— — — (7,098 ) Proceeds from sales of available-for-sale
investments 2,000 4,204 41,217 15,690 Proceeds from maturities of
available-for-sale investments — — 10,970 9,250 Purchases of
available-for-sale investments (4,940 ) (5,270 ) (61,295 ) (24,180
) Purchases of property and equipment (1,447 ) (1,821
) (24,816 ) (5,350 )
Net cash (used in) investing
activities (4,387 ) (2,887
) (33,924 ) (11,688
) FINANCING ACTIVITIES Payments on capital
lease obligations — (169 ) (285 ) (1,163 ) Proceeds from issuance
of common stock 281 139 4,519 3,794 Excess tax benefit from
share-based payment awards 83 153 83 153 Taxes paid related to net
share settlement of equity awards (1,756 ) (1,820 )
(5,925 ) (5,788 )
Net cash (used in) financing
activities (1,392 ) (1,697
) (1,608 ) (3,004
) Effect of exchange rate changes on cash and cash
equivalents 29 136 (111 ) (188 )
Net increase (decrease)
in cash and cash equivalents 2,335 1,809
(14,881 ) 4,807 Cash and cash equivalents -
beginning of period 48,048 63,455
65,264 60,457
Cash and cash
equivalents - end of period $ 50,383
$ 65,264 $ 50,383
$ 65,264 SILVER SPRING NETWORKS,
INC. UNAUDITED RECONCILIATION OF REVENUE BETWEEN GAAP AND
NON-GAAP (QUARTERLY) (in thousands, except percentages)
Q4 Q1
Q2 Q3 Q4 YoY%
REVENUE AND
BILLINGS BY TYPE
2015 2016 2016 2016 2016
Change
Revenue:
Product $ 143,202 $ 32,852 $ 69,917 $ 50,463 $ 40,386 -72 %
Services Managed services and SaaS 37,142 11,068 24,570 14,090
15,581 -58 % Professional services 18,903
4,700 27,465 9,633 10,283
-46 % Total services 56,045 15,768
52,035 23,723 25,864
-54 %
Total revenue $ 199,247
$ 48,620 $ 121,952
$ 74,186 $ 66,250 -67 % %
Product 72 % 68 % 57 % 68 % 61 % % Services 28 % 32 % 43 % 32 % 39
%
Change in
deferred revenue:
Product $ (95,194 ) $ 12,883 $ (23,804 ) $ (568 ) $ 7,155 Services
Managed services and SaaS (22,896 ) 1,820 (9,650 ) 1,641 1,427
Professional services (6,169 ) 5,591
(16,652 ) 885 2,867 Total services
(29,065 ) 7,411 (26,302 ) 2,526
4,294 Total change in deferred revenue $
(124,259 ) $ 20,294 $ (50,106 ) $ 1,958 $ 11,449
Billings
Product $ 48,008 $ 45,735 $ 46,113 $ 49,895 $ 47,541 -1 % Services
Managed services and SaaS 14,246 12,888 14,920 15,731 17,008 19 %
Professional services 12,734 10,291
10,813 10,518 13,150 3 %
Total services 26,980 23,179
25,733 26,249 30,158 12 %
Total Billings $ 74,988 $
68,914 $ 71,846 $
76,144 $ 77,699 4 % % Product 64
% 66 % 64 % 66 % 61 % % Services 36 % 34 % 36 % 34 % 39 %
REVENUE AND
BILLINGS BY SOLUTION
Revenue:
Advanced metering infrastructure $ 181,892 $ 40,514 $ 105,181 $
66,203 $ 57,148 -69 % New solutions 17,355
8,106 16,771 7,983 9,102
-48 %
Total revenue $ 199,247
$ 48,620 $ 121,952
$ 74,186 $ 66,250 -67 % %
Advanced metering infrastructure 91 % 83 % 86 % 89 % 86 % % New
solutions 9 % 17 % 14 % 11 % 14 %
Change in
deferred revenue
Advanced metering infrastructure $ (123,525 ) $ 16,957 $ (45,184 )
$ (2,078 ) $ 2,528 New solutions (734 ) 3,337
(4,922 ) 4,036 8,921 Total
change in deferred revenue $ (124,259 ) $ 20,294 $ (50,106 ) $
1,958 $ 11,449
Billings
Advanced metering infrastructure $ 58,367 $ 57,471 $ 59,997 $
64,125 $ 59,676 2 % New solutions 16,621
11,443 11,849 12,019
18,023 8 %
Total Billings $
74,988 $ 68,914 $
71,846 $ 76,144 $
77,699 4 % % Advanced metering infrastructure 78 % 83
% 84 % 84 % 77 % % New solutions 22 % 17 % 16 % 16 % 23 %
REVENUE AND
BILLINGS BY GEOGRAPHY
Revenue:
United States $ 177,896 $ 45,222 $ 118,539 $ 43,381 $ 53,087 -70 %
International 21,351 3,398 3,413
30,805 13,163 -38 %
Total
revenue $ 199,247 $ 48,620
$ 121,952 $ 74,186
$ 66,250 -67 % % United States 89 % 93 % 97 %
58 % 80 % % International 11 % 7 % 3 % 42 % 20 %
Change in
deferred revenue
United States $ (116,859 ) $ 8,468 $ (57,666 ) $ 21,085 $ 8,880
International (7,400 ) 11,826 7,560
(19,127 ) 2,569 Total change in
deferred revenue $ (124,259 ) $ 20,294 $ (50,106 ) $ 1,958 $ 11,449
Billings
United States $ 61,037 $ 53,690 $ 60,873 $ 64,466 $ 61,967 2 %
International 13,951 15,224
10,973 11,678 15,732 13 %
Total Billings $ 74,988 $
68,914 $ 71,846 $
76,144 $ 77,699 4 % % United
States 81 % 78 % 85 % 85 % 80 % % International 19 % 22 % 15 % 15 %
20 %
SILVER SPRING NETWORKS, INC. UNAUDITED
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (QUARTERLY) (in
thousands) Three
Months Ended December 31, 2016 Cost of Revenue
Change in DeferredCost of
Revenue (a)
Stock-basedCompensation
Amortization ofIntangible
Assets
Acquisition-Related
Costs
Cost of Billings Cost of Revenue / Cost of Billings:
Product $ 19,915 $ 3,177 $ (455 ) $ (79 ) $ - $ 22,558 Services
Managed services and SaaS 9,762 - (680 ) - - 9,082 Professional
services 8,156 - (810 ) -
(15 ) 7,331 Total services $ 17,918 $ - $
(1,490 ) $ - $ (15 ) $ 16,413
Total Cost of Revenue /
Cost of Billings $ 37,833 $ 3,177
$ (1,945 ) $ (79 )
$ (15 ) $ 38,971
OperatingExpenses
Stock-basedCompensation
Amortization andImpairment
ofIntangible Assets
Restructuring
&Litigation
Acquisition-Related
Costs
Non-GAAPOperatingExpenses
Operating Expenses / Non-GAAP Operating Expenses:
Research and development $ 19,090 $ (2,450 ) $ - $ - $ (311 ) $
16,329 Sales and marketing 10,809 (1,152 ) (105 ) - (66 ) 9,486
General and administrative 12,049 (2,423 ) (8 ) - (117 ) 9,501
Impairment of intangible assets - - - - - - Restructuring -
- - - -
-
Total Operating Expenses / Non-GAAP Operating
Expenses $ 41,948 $ (6,025 )
$ (113 ) $ - $
(494 ) $ 35,316
Three Months Ended December 31, 2015 Cost of Revenue
Change in DeferredCost of
Revenue (a)
Stock-basedCompensation
Amortization ofIntangible
Assets
Acquisition-Related
Costs
Cost of Billings
Cost of Revenue / Cost of Billings: Product $ 83,903 $
(56,982 ) $ (250 ) $ (259 ) $ - $ 26,412 Services Managed services
and SaaS 7,592 - (271 ) - - 7,321 Professional services
6,407 - (485 ) - (15 )
5,907 Total services $ 13,999 $ - $ (756 ) $ -
$ (15 ) $ 13,228
Total Cost of Revenue / Cost of Billings
$ 97,902 $ (56,982 ) $
(1,006 ) $ (259 ) $
(15 ) $ 39,640
OperatingExpenses
Stock-basedCompensation
Amortization andImpairment
ofIntangible Assets
Restructuring
&Litigation
Acquisition-Related
Costs
Non-GAAPOperatingExpenses
Operating Expenses / Non-GAAP Operating Expenses: Research
and development $ 13,714 $ (1,277 ) $ - $ - $ (311 ) $ 12,126 Sales
and marketing 7,343 (665 )
(155 ) - (64 ) 6,459 General and administrative 14,483 (1,994 ) (8
) (3,595 ) (116 ) 8,770 Impairment of intangible assets - - - - - -
Restructuring 60 - - (60
) - -
Total Operating Expenses / Non-GAAP
Operating Expenses $ 35,600 $
(3,936 ) $ (163 ) $
(3,655 ) $ (491 ) $
27,355
(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)
Twelve Months Ended December 31, 2016 Cost of
Revenue
Change in DeferredCost of
Revenue (a)
Stock-basedCompensation
Amortization ofIntangible
Assets
Acquisition-Related
Costs
Cost of Billings Cost of Revenue / Cost of Billings:
Product $ 106,583 $ (14,551 ) $ (1,737 ) $ (522 ) $ - $ 89,773
Services Managed services and SaaS 36,772 - (2,415 ) - - 34,357
Professional services 29,454 - (2,592 )
- (61 ) 26,801 Total services $ 66,226
$ - $ (5,007 ) $ - $ (61 ) $ 61,158
Total Cost of
Revenue / Cost of Billings $ 172,809 $
(14,551 ) $ (6,744 ) $
(522 ) $ (61 ) $
150,931
OperatingExpenses
Stock-basedCompensation
Amortization andImpairment
ofIntangible Assets
Restructuring
&Litigation
Acquisition-Related
Costs
Non-GAAPOperatingExpenses
Operating Expenses / Non-GAAP Operating Expenses: Research
and development $ 70,673 $ (9,309 ) $ - $ - $ (1,243 ) $ 60,121
Sales and marketing 39,406 (3,652 ) (626 ) - (262 ) 34,866 General
and administrative 45,801 (10,104 ) (33 ) - (477 ) 35,187
Impairment of intangible assets 2,204 - (2,204 ) - - -
Restructuring 39 - - (39
) - -
Total Operating Expenses / Non-GAAP
Operating Expenses $ 158,123 $
(23,065 ) $ (2,863 ) $
(39 ) $ (1,982 ) $
130,174 Twelve Months Ended December
31, 2015 Cost of Revenue
Change in DeferredCost of
Revenue (a)
Stock-basedCompensation
Amortization ofIntangible
Assets
Acquisition-Related
Costs
Cost of Billings Cost of Revenue / Cost of Billings:
Product $ 202,430 $ (97,274 ) $ (1,288 ) $ (1,041 ) $ - $ 102,827
Services Managed services and SaaS 31,663 - (2,037 ) - - 29,626
Professional services 29,723 - (2,810 )
- (100 ) 26,813 Total services $ 61,386
$ - $ (4,847 ) $ - $ (100 ) $ 56,439
Total Cost of
Revenue / Cost of Billings $ 263,816 $
(97,274 ) $ (6,135 ) $
(1,041 ) $ (100 ) $
159,266
OperatingExpenses
Stock-basedCompensation
Amortization andImpairment
ofIntangible Assets
Restructuring
&Litigation
Acquisition-Related
Costs
Non-GAAPOperatingExpenses
Operating Expenses / Non-GAAP Operating Expenses: Research
and development $ 61,295 $ (8,060 ) $ - $ - $ (451 ) $ 52,784 Sales
and marketing 33,452 (4,105 ) (601 ) - (87 ) 28,659 General and
administrative 46,372 (8,179 ) (32 ) (3,595 ) (1,913 ) 32,653
Impairment of intangible assets - - - - - - Restructuring
1,671 - - (1,671 ) -
-
Total Operating Expenses / Non-GAAP Operating
Expenses $ 142,790 $ (20,344
) $ (633 ) $ (5,266
) $ (2,451 ) $ 114,096
(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)
Q4 Q1
Q2 Q3 Q4 YoY% SUPPLEMENTAL FINANCIAL
DATA 2015 2016 2016 2016
2016 Change STOCK-BASED COMPENSATION
Cost of goods sold $ 1,006 $ 1,328 $ 1,389 $ 2,082 $ 1,945 93 %
Research and development 1,277 2,025 2,241 2,593 2,450 92 % Sales
and marketing 665 831 726 943 1,152 73 % General and administrative
1,994 2,716 2,685 2,280 2,423 22
%
TOTAL STOCK-BASED COMPENSATION $ 4,942 $ 6,900 $ 7,041 $
7,898 $ 7,970 61 %
CASH FLOW DATA Operating cash flow
$ 6,257 $ 3,730 $ 3,802 $ 5,145 $ 8,085 29 % Operating cash flow -
trailing twelve months 19,687 23,872 18,061 18,934 20,762 5 %
BALANCE SHEET DATA Cash, cash equivalents and
short-term investments $ 124,445 $ 125,369 $ 113,064 $ 113,358 $
118,259 -5 %
OTHER INFORMATION HOMES
& BUSINESSES Network endpoints delivered during quarter*
633 698 747 569 564 -11 % Cumulative network endpoints delivered*
22,954 23,652 24,399 24,968 25,532 11 % *Endpoints refer to
communication modules in electric meters
EMPLOYEES
652 673 708 709 702 8 %
SILVER SPRING NETWORKS, INC.
UNAUDITED SUPPLEMENTAL TRENDED GAAP FINANCIAL DATA (in
thousands) Q4
Q1 Q2 Q3 Q4 2015 2016
2016 2016 2016 Gross profit
$ 101,345 $ 16,997 $
64,543 $ 28,242 $ 28,417
Other GAAP
financial data related to gross profit:
Change in deferred revenue, net of foreign currency translation
(124,259 ) 20,294 (50,106 ) 1,958 11,449 Change in deferred cost of
revenue, net of foreign currency translation 56,982 (8,668 ) 16,992
9,404 (3,177 ) Amortization of intangible assets 259 169 195 79 79
Stock-based compensation 1,006 1,328 1,389 2,082 1,945
Acquisition-related charges 15 15 16 15 15
Operating
expenses $ 35,600 $ 35,920 $
37,794 $ 42,461 $ 41,948
Other GAAP
financial data included in operating expenses:
Amortization of intangible assets 163 252 180 114 113 Stock-based
compensation 3,936 5,572 5,652 5,816 6,025 Acquisition-related
charges 491 501 494 493 494 Impairment of intangible assets — — —
2,204 — Restructuring 60 39 — — — Legal settlements 3,595 — — — —
Other statement of operations line items Other
(expense) income, net $ (159 ) $ 441 $ 333 $ 113 $ (217 ) Provision
for income taxes (3,708 ) (32 ) (961 ) (1,143 ) (239 )
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170221006565/en/
Silver Spring Networks, Inc.Mark McKechnie, 669-770-4664Investor
Relationsmarkm@ssni.comorAmy Nunnemacher, 669-770-4183Global
Communicationspr@ssni.com
SILVER SPRING NETWORKS INC (NYSE:SSNI)
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