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Exhibit 99.1

 

LOGO

Silver Spring Networks Reports Second Quarter 2017 Financial Results

San Jose, CA – August 8, 2017 – 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.

 

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    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

 

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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

 

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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.

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     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       14
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

% 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
Cost of Revenue (a)
    Stock-based
Compensation
    Amortization of
Intangible 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  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    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

  $ 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
Cost of Revenue (a)
    Stock-based
Compensation
    Amortization of
Intangible 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  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    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

  $ 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
Cost of Revenue (a)
    Stock-based
Compensation
    Amortization of
Intangible 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  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    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

  $ 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
Cost of Revenue (a)
    Stock-based
Compensation
    Amortization of
Intangible 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  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    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

  $ 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