SSNI
$12.62
Silver Spring Networks Inc
($.12)
(.94%)
Earnings Details
2nd Quarter June 2017
Tuesday, August 08, 2017 4:10:01 PM
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Summary

Silver Spring Networks Inc (SSNI) Recent Earnings

Silver Spring Networks Inc (SSNI) reported a 2nd Quarter June 2017 loss of $0.07 per share on revenue of $261.6 million. The consensus estimate was a loss of $0.16 per share on revenue of $69.1 million. Revenue grew 114.5% on a year-over-year basis.

Silver Spring Networks Inc provides networking platform and solutions that enable utilities to transform the power grid infrastructure into the smart grid. The Company operates in United States, Australia and rest of world.

Results
Reported Earnings
($0.07)
Earnings Whisper
-
Consensus Estimate
($0.16)
Reported Revenue
$261.6 Mil
Revenue Estimate
$69.1 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Silver Spring Networks Reports Second Quarter 2017 Financial Results

Silver Spring Networks, Inc. (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(TM) 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(TM) 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 Deferred
Stock-based
Amortization of
Acquisition-
Cost of Billings
Cost of Revenue (a)
Compensation
Intangible Assets
Related Costs
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
Operating
Stock-based
Amortization of
Restructuring &
Acquisition-
Non-GAAP
Expenses
Compensation
Intangible Assets
Litigation
Related Costs
Operating
Expenses
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 Deferred
Stock-based
Amortization of
Acquisition-
Cost of Billings
Cost of Revenue (a)
Compensation
Intangible Assets
Related Costs
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
Operating
Stock-based
Amortization of
Restructuring &
Acquisition-
Non-GAAP
Expenses
Compensation
Intangible Assets
Litigation
Related Costs
Operating
Expenses
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 Deferred
Stock-based
Amortization of
Acquisition-
Cost of Billings
Cost of Revenue (a)
Compensation
Intangible Assets
Related Costs
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
Operating
Stock-based
Amortization of
Restructuring &
Acquisition-
Non-GAAP
Expenses
Compensation
Intangible Assets
Litigation
Related Costs
Operating
Expenses
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 Deferred
Stock-based
Amortization of
Acquisition-
Cost of Billings
Cost of Revenue (a)
Compensation
Intangible Assets
Related Costs
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
Operating
Stock-based
Amortization of
Restructuring &
Acquisition-
Non-GAAP
Expenses
Compensation
Intangible Assets
Litigation
Related Costs
Operating
Expenses
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
16,992
9,404
(3,177 )
(7,958 )
159,588
translation
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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SOURCE: Silver Spring Networks, Inc.

Silver Spring Networks, Inc.
Mark McKechnie, 669-770-4664
Investor Relations
markm@ssni.com
or
Amy Nunnemacher, 669-770-4183
Global Communications
pr@ssni.com