Silver Spring Networks, Inc. (NYSE: SSNI) today announced
preliminary financial results for its second quarter ended June 30,
2017.
Second Quarter Financial Highlights (all comparisons made
are against the prior year period, unless otherwise stated):
GAAP results:
- Revenue was $261.6 million, up 114.5%
year-over-year.
- Cost of revenue was $205.0 million, or
78.4% of revenue, versus $57.4 million or 47.1% in the second
quarter of 2016.
- Operating expense was $38.3 million
including a $1.2 million restructuring charge, versus $37.8 million
in the second quarter of 2016.
- Net income per diluted share was $0.34,
versus $0.50 in the second quarter of last year.
- Quarter-ending cash, cash equivalents,
and short-term investments was $117.8 million versus $113.1 million
in the second quarter of 2016.
- Cash flow from operations was $3.0
million, versus $3.8 million in the second quarter of 2016.
Non-GAAP metrics:
- Billings were $78.7 million, up 9.6%
year-over-year.
- Cost of billings was $43.4 million or
55.2% of billings, versus $38.8 million or 54.0% in the second
quarter of 2016.
- Non-GAAP operating expense was $31.8
million, versus $31.5 million in the second quarter of 2016.
“In the second quarter, we delivered solid revenue, $3.0 million
in cash flow from operations, and 9.6% growth in billings,” said
Mike Bell, President and Chief Executive Officer, Silver Spring
Networks. “We are ramping our new customer programs, winning
additional smart utility and smart city awards, and driving our
technology into the broader Industrial Internet of Things
opportunity.”
Business Highlights (through August 8, 2017, unless
otherwise stated):
- Silver Spring Networks has delivered
more than 26.7 million cumulative network endpoints since
inception through June 30, 2017, up 9% from a year ago.
- Agreed to work with ESB Telecoms
Ltd to develop a national Internet of Things (IoT) network,
based on our Starfish™ standards-based Platform-as-a-Service
solution, across Ireland.
- Selected by Pepco Holdings, Inc.
(PHI) for a Distribution Automation deployment, an extension of
its existing smart grid investment, to further improve grid
reliability and operational efficiency with connectivity solutions
for intelligent grid devices throughout PHI’s service territory in
Delaware, Maryland, and Washington D.C.
- Expanded our Starfish
Platform-as-a-Service award in London, for an additional 28,000
street lights to be connected to new areas including the City of
London, and the Borough of Barking and Dagenham, through our
reseller agreement with urbancontrol.
- Progressing with the network canopy
installation for Dubai Electric & Water Authority (DEWA),
to cover the Emirate of Dubai with Silver Spring’s IPv6 IoT
communications platform. Silver Spring’s Gen5 technology will be
integrated into smart electric meter devices from Honeywell Elster,
which will be used to connect the first DEWA electric customers to
the canopy.
- The City of Chicago and our reseller
partner, Ameresco, have finalized the contract to connect more
than 250,000 street lights in what is believed to be the largest
city-led wireless street lighting project in the U.S.
- Expanded our relationship with
Jamaica Public Service Company (JPS) to connect up to 110,000
street lights on the island of Jamaica.
- Selected by Grant County Public
Utility District for an AMI deployment to connect approximately
47,000 homes and businesses in Central Washington and the Pacific
Northwest.
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 second quarter
ended June 30, 2017 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 September 26, 2017 and can be accessed at
877-660-6853 (domestic) or 201-612-7415 (international) passcode
13666523. 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 26.7 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.
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; our expected project with ESB Telecoms Ltd; 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, 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 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; the successful negotiation and
execution of definitive agreements related to our project with ESB
Telecoms, Ltd; 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 August 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. In addition, the
preliminary financial results set forth in this press release are
estimates based on information currently available to Silver
Spring.
SILVER SPRING NETWORKS, INC. UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except
per share data) Three Months Ended
Six Months Ended June 30, June 30, 2017
2016 2017 2016 Revenue: Product
$ 214,713 $ 69,917 $ 241,241 $ 102,769 Services 46,859
52,035 70,594 67,803
Total revenue 261,572 121,952 311,835
170,572 Cost of revenue: Product 186,491 41,439
202,518 57,419 Services 18,543 15,970
35,866 31,613
Total cost of revenue
205,034 57,409 238,384 89,032 Gross
profit 56,538 64,543 73,451 81,540
Operating expenses: Research and development 17,272 17,933
35,913 33,418 Sales and marketing 8,893 8,622 17,996 18,172 General
and administrative 10,881 11,239 23,147 22,085 Restructuring
1,207 — 1,254 39
Total
operating expenses 38,253 37,794
78,310 73,714
Operating income (loss) 18,285 26,749
(4,859 ) 7,826 Other income, net 9
333 552 774
Income
(loss) before income taxes 18,294 27,082
(4,307 ) 8,600 Benefit (provision) for income
taxes 332 (961 ) (238 ) (993 )
Net
income (loss) $ 18,626 $ 26,121
$ (4,545 ) $ 7,607
Net income (loss) per share:
Basic $ 0.35
$ 0.51 $ (0.09 ) $
0.15 Diluted $ 0.34 $
0.50 $ (0.09 ) $
0.14 Weighted average shares used to compute net
income (loss) per share: Basic 53,329 51,224
52,970 50,992 Diluted 54,174
52,766 52,970 52,492
SILVER SPRING NETWORKS, INC. UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS (in thousands)
June 30, December 31, 2017 2016
(a) ASSETS Current assets: Cash and cash equivalents $
51,133 $ 50,383 Short-term investments 66,712 67,876 Accounts
receivable 51,719 44,770 Inventory 5,288 8,040 Deferred cost of
revenue 32,846 194,769 Prepaid expenses and other current assets
11,361 12,536
Total current
assets 219,059 378,374 Property and equipment,
net 25,978 28,986 Goodwill and intangible assets 10,620 11,005
Deferred cost of revenue, non-current 36,906 26,639 Deferred tax
assets, non-current 496 481 Other long-term assets 2,575
1,643
Total assets $
295,634 $ 447,128
LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities:
Accounts payable $ 30,428 $ 26,785 Deferred revenue 96,916 292,260
Accrued and other liabilities 42,180 44,146
Total current liabilities 169,524
363,191 Deferred revenue, non-current 123,063 93,149 Other
liabilities 23,332 22,324
Total
liabilities 315,919 478,664
Total stockholders’ deficit (20,285
) (31,536 ) Total liabilities and
stockholders’ deficit $ 295,634 $
447,128 (a) Derived from audited consolidated
financial statements.
SILVER SPRING NETWORKS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(in thousands) Three Months Ended
Six Months Ended June 30, June 30,
2017 2016
2017 2016 OPERATING
ACTIVITIES Net income (loss) $ 18,626
$ 26,121 $ (4,545 ) $
7,607
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Deferred taxes 9 111 (16 ) 111 Depreciation and amortization 2,232
2,104 4,477 4,236 Stock-based compensation 7,032 7,041 13,689
13,941 Other non-cash adjustments 106 53 187 113 Changes in assets
and liabilities: Accounts receivable (3,419 ) (3,117 ) (6,979 ) 859
Inventory 234 1,591 2,752 2,061 Prepaid expenses and other assets
(3,162 ) (264 ) (3,642 ) 1,944 Landlord incentives related to lease
— 2,275 883 2,275 Deferred cost of revenue 159,618 17,040 151,617
8,236 Accounts payable 825 561 4,220 1,174 Customer deposits 68 (1
) 132 (6 ) Deferred revenue (183,036 ) (50,042 ) (165,364 ) (29,988
) Accrued and other liabilities 3,875 329
7,122 (5,031 )
Net cash provided by
operating activities 3,008
3,802 4,533 7,532
INVESTING ACTIVITIES Proceeds from sales of
available-for-sale investments 2,549 18,111 2,549 22,944 Proceeds
from maturities of available-for-sale investments 4,200 1,250 5,200
2,250 Purchases of available-for-sale investments (6,212 ) (7,515 )
(6,712 ) (10,954 ) Purchases of property and equipment (673
) (12,759 ) (1,750 ) (17,244 )
Net cash
used for investing activities (136 )
(913 ) (713 )
(3,004 ) FINANCING ACTIVITIES Payments
on capital lease obligations — (141 ) — (285 ) Proceeds from
issuance of common stock 265 340 2,811 2,228 Taxes paid related to
net share settlement of equity awards (1,402 ) (3,286
) (5,948 ) (3,620 )
Net cash used for financing
activities (1,137 ) (3,087
) (3,137 ) (1,677
)
Effect of exchange rate changes on cash
and cash equivalents
123
(234
)
67
(136
)
Net increase (decrease) in cash and cash equivalents
1,858 (432 ) 750 2,715 Cash and
cash equivalents - beginning of period 49,275
68,411 50,383 65,264
Cash and
cash equivalents - end of period $ 51,133
$ 67,979 $ 51,133
$ 67,979 SILVER SPRING NETWORKS,
INC. UNAUDITED RECONCILIATION OF REVENUE BETWEEN GAAP AND
NON-GAAP (QUARTERLY) (in thousands, except percentages)
Q2 Q3 Q4
Q1 Q2 YoY%
REVENUE AND
BILLINGS BY TYPE
2016 2016
2016 2017 2017
Change
Revenue:
Product $ 69,917 $ 50,463 $ 40,386 $ 26,528 $ 214,713 207 %
Services Managed services and SaaS 24,570 14,090 15,581 14,101
27,350 11 % Professional services 27,465 9,633
10,283 9,634 19,509
-29 % Total services 52,035 23,723
25,864 23,735 46,859
-10 %
Total revenue $ 121,952
$ 74,186 $ 66,250
$ 50,263 $ 261,572 114 %
% Product 57 % 68 % 61 % 53 % 82 % % Services 43 % 32 % 39 % 47 %
18 %
Change in
deferred revenue:
Product $ (23,804 ) $ (568 ) $ 7,155 $ 16,102 $ (165,071 ) Services
Managed services and SaaS (9,650 ) 1,641 1,427 1,802 (11,298 )
Professional services (16,652 ) 885
2,867 (215 ) (6,454 ) Total services
(26,302 ) 2,526 4,294 1,587
(17,752 ) Total change in deferred revenue $ (50,106
) $ 1,958 $ 11,449 $ 17,689 $ (182,823 )
Billings
Product $ 46,113 $ 49,895 $ 47,541 $ 42,630 $ 49,642 8 % Services
Managed services and SaaS 14,920 15,731 17,008 15,903 16,052 8 %
Professional services 10,813 10,518
13,150 9,419 13,055 21 %
Total services 25,733 26,249
30,158 25,322 29,107 13 %
Total Billings $ 71,846 $
76,144 $ 77,699 $
67,952 $ 78,749 10 % % Product
64 % 66 % 61 % 63 % 63 % % Services 36 % 34 % 39 % 37 % 37 %
REVENUE AND
BILLINGS BY SOLUTION
Revenue:
Advanced metering infrastructure $ 105,181 $ 66,203 $ 57,148 $
41,072 $ 254,433 142 % New solutions 16,771
7,983 9,102 9,191 7,139
-57 %
Total revenue $ 121,952
$ 74,186 $ 66,250
$ 50,263 $ 261,572 114 %
% Advanced metering infrastructure 86 % 89 % 86 % 82 % 97 % % New
solutions 14 % 11 % 14 % 18 % 3 %
Change in
deferred revenue
Advanced metering infrastructure $ (45,184 ) $ (2,078 ) $ 2,531 $
12,607 $ (188,584 ) New solutions (4,922 ) 4,036
8,918 5,082 5,761
Total change in deferred revenue $ (50,106 ) $ 1,958 $ 11,449 $
17,689 $ (182,823 )
Billings
Advanced metering infrastructure $ 59,997 $ 64,125 $ 59,679 $
53,679 $ 65,849 10 % New solutions 11,849
12,019 18,020 14,273
12,900 9 %
Total Billings $
71,846 $ 76,144 $
77,699 $ 67,952 $
78,749 10 % % Advanced metering infrastructure 84 %
84 % 77 % 79 % 84 % % New solutions 16 % 16 % 23 % 21 % 16 %
REVENUE AND
BILLINGS BY GEOGRAPHY
Revenue:
United States $ 118,539 $ 43,381 $ 53,087 $ 46,331 $ 257,957 118 %
International 3,413 30,805
13,163 3,932 3,615 6 %
Total
revenue $ 121,952 $ 74,186
$ 66,250 $ 50,263
$ 261,572 114 % % United States 97 % 58 % 80 %
92 % 99 % % International 3 % 42 % 20 % 8 % 1 %
Change in
deferred revenue
United States $ (57,666 ) $ 21,085 $ 8,880 $ 11,621 $ (189,243 )
International 7,560 (19,127 ) 2,569
6,068 6,420 Total change in
deferred revenue $ (50,106 ) $ 1,958 $ 11,449 $ 17,689 $ (182,823 )
Billings
United States $ 60,873 $ 64,466 $ 61,967 $ 57,952 $ 68,714 13 %
International 10,973 11,678
15,732 10,000 10,035 -9 %
Total Billings $ 71,846 $
76,144 $ 77,699 $
67,952 $ 78,749 10 % % United
States 85 % 85 % 80 % 85 % 87 % % International 15 % 15 % 20 % 15 %
13 %
SILVER SPRING NETWORKS, INC. UNAUDITED
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (QUARTERLY) (in
thousands) Three Months Ended June 30,
2017 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 $ 186,491 $ (159,588 ) $ (461 ) $ (80 ) $ - $
26,362 Services Managed services and SaaS 9,619 - (668 ) - - 8,951
Professional services 8,924 - (792 )
- 1 8,133 Total services $
18,543 $ - $ (1,460 ) $ - $ 1 $ 17,084
Total Cost of Revenue / Cost of Billings $
205,034
$
(159,588
)
$ (1,921 ) $ (80 )
$ 1 $ 43,446
OperatingExpenses
Stock-basedCompensation
Amortization ofIntangible
Assets
Restructuring
&Litigation
Acquisition-Related
Costs
Non-GAAPOperatingExpenses
Operating Expenses / Non-GAAP Operating Expenses: Research
and development $ 17,272 $ (2,134 ) $ - $ - $ 1 $ 15,139 Sales and
marketing 8,893 (657 ) (104 ) - (2 ) 8,130 General and
administrative 10,881 (2,320 ) (8 ) - - 8,553 Restructuring
1,207 - - (1,207 ) -
-
Total Operating Expenses / Non-GAAP Operating
Expenses $ 38,253 $ (5,111 )
$ (112 ) $ (1,207 )
$ (1 ) $ 31,822
Three Months Ended June 30, 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 $ 41,439 $ (16,992 ) $ (415 ) $ (195 ) $ - $ 23,837
Services Managed services and SaaS 8,900 - (606 ) - - 8,294
Professional services 7,070 - (368 )
- (16 ) 6,686 Total services $ 15,970 $
- $ (974 ) $ - $ (16 ) $ 14,980
Total Cost of
Revenue / Cost of Billings $ 57,409 $
(16,992 ) $ (1,389 ) $
(195 ) $ (16 ) $
38,817
OperatingExpenses
Stock-basedCompensation
Amortization ofIntangible
Assets
Restructuring
&Litigation
Acquisition-Related
Costs
Non-GAAPOperatingExpenses
Operating Expenses / Non-GAAP Operating Expenses: Research
and development $ 17,933 $ (2,241 ) $ - $ - $ (310 ) $ 15,382 Sales
and marketing 8,622 (726 ) (172 ) - (66 ) 7,658 General and
administrative 11,239 (2,685 ) (8 ) - (118 ) 8,428 Restructuring
- - - - -
-
Total Operating Expenses / Non-GAAP Operating
Expenses $ 37,794 $ (5,652 )
$ (180 ) $ - $
(494 ) $ 31,468
(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)
Six Months Ended June 30, 2017 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 $ 202,518 $ (151,630 ) $ (901 ) $ (159 ) $ -
$ 49,828 Services Managed services and SaaS 19,460 - (1,358 ) - 12
18,114 Professional services 16,406 -
(1,468 ) - (3 ) 14,935 Total services $
35,866 $ - $ (2,826 ) $ - $ 9 $ 33,049
Total Cost of Revenue / Cost of Billings $
238,384 $ (151,630 ) $
(3,727 ) $ (159 ) $
9 $ 82,877
OperatingExpenses
Stock-basedCompensation
Amortization ofIntangible
Assets
Restructuring
&Litigation
Acquisition-Related
Costs
Non-GAAPOperatingExpenses
Operating Expenses / Non-GAAP Operating Expenses: Research
and development $ 35,913 $ (4,192 ) $ - $ - $ (45 ) $ 31,676 Sales
and marketing 17,996 (1,163 ) (210 ) - (11 ) 16,612 General and
administrative 23,147 (4,607 ) (16 ) - (19 ) 18,505 Restructuring
1,254 - - (1,254 )
- -
Total Operating Expenses / Non-GAAP Operating
Expenses $ 78,310 $ (9,962 )
$ (226 ) $ (1,254 )
$ (75 ) $ 66,793
Six Months Ended June 30, 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 $ 57,419 $ (8,324 ) $ (767 ) $ (364 ) $ - $ 47,964 Services
Managed services and SaaS 17,532 - (1,001 ) - - 16,531 Professional
services 14,081 - (949 ) -
(31 ) 13,101 Total services $ 31,613 $ -
$ (1,950 ) $ - $ (31 ) $ 29,632
Total Cost of
Revenue / Cost of Billings $ 89,032 $
(8,324 ) $ (2,717 ) $
(364 ) $ (31 ) $
77,596
OperatingExpenses
Stock-basedCompensation
Amortization ofIntangible
Assets
Restructuring
&Litigation
Acquisition-Related
Costs
Non-GAAPOperatingExpenses
Operating Expenses / Non-GAAP Operating Expenses: Research
and development $ 33,418 $ (4,267 ) $ - $ - $ (621 ) $ 28,530 Sales
and marketing 18,172 (1,557 ) (415 ) - (131 ) 16,069 General and
administrative 22,085 (5,400 ) (17 ) - (243 ) 16,425 Restructuring
39 - - (39 ) -
-
Total Operating Expenses / Non-GAAP Operating
Expenses $ 73,714 $ (11,224
) $ (432 ) $ (39 )
$ (995 ) $ 61,024
(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)
Q2 Q3 Q4 Q1
Q2 YoY% SUPPLEMENTAL FINANCIAL DATA
2016 2016 2016 2017 2017
Change STOCK-BASED COMPENSATION Cost of goods
sold $ 1,389 $ 2,082 $ 1,945 $ 1,806 $ 1,921 38 % Research and
development 2,241 2,593 2,450 2,058 2,134 -5 % Sales and marketing
726 943 1,152 506 657 -10 % General and administrative 2,685
2,280 2,423 2,287 2,320 -14 %
TOTAL
STOCK-BASED COMPENSATION $ 7,041 $ 7,898 $ 7,970 $ 6,657 $
7,032 0 %
CASH FLOW DATA Operating cash flow $ 3,802
$ 5,145 $ 8,085 $ 1,525 $ 3,008 -21 % Operating cash flow -
trailing twelve months 18,061 18,934 20,762 18,557 17,763 -2 %
BALANCE SHEET DATA Cash, cash equivalents and
short-term investments $ 113,064 $ 113,358 $ 118,259 $ 116,620 $
117,845 4 %
OTHER INFORMATION HOMES
& BUSINESSES Network endpoints delivered during quarter*
747 569 564 511 670 -10 % Cumulative network endpoints delivered*
24,399 24,968 25,532 26,043 26,713 9 % *Endpoints refer to
communication modules in electric meters
EMPLOYEES
708 709 702 704 646 -9 %
SILVER SPRING NETWORKS, INC.
UNAUDITED SUPPLEMENTAL TRENDED GAAP FINANCIAL DATA (in
thousands) Q2 Q3
Q4 Q1 Q2 2016
2016 2016
2017 2017 Gross
profit $ 64,543 $ 28,242 $
28,417 $ 16,913 $ 56,538
Other GAAP
financial data related to gross profit:
Change in deferred revenue, net of foreign currency translation
(50,106 ) 1,958 11,449 17,689 (182,823 ) Change in deferred cost of
revenue, net of foreign currency translation 16,992 9,404 (3,177 )
(7,958 ) 159,588 Amortization of intangible assets 195 79 79 79 80
Stock-based compensation 1,389 2,082 1,945 1,806 1,921
Acquisition-related charges 16 15 15 (8 ) (1 )
Operating
expenses $ 37,794 $ 42,461 $
41,948 $ 40,057 $ 38,253
Other GAAP
financial data included in operating expenses:
Amortization of intangible assets 180 114 113 114 112 Stock-based
compensation 5,652 5,816 6,025 4,851 5,111 Acquisition-related
charges 494 493 494 74 1 Impairment of intangible assets — 2,204 —
— — Restructuring — — — 47 1,207
Other statement of
operations line items Other income, net $ 333 $ 113 $ (217 ) $
543 $ 9 (Provision) benefit for income taxes (961 ) (1,143 ) (239 )
(570 ) 332
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Silver Spring Networks, Inc.Mark McKechnie, 669-770-4664Investor
Relationsmarkm@ssni.comorAmy Nunnemacher, 669-770-4183Global
Communicationspr@ssni.com
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