Exhibit 99.1
Silver Spring Networks Reports First Quarter Financial Results
Redwood City, CA – May 6, 2014 – Silver Spring Networks, Inc. (NYSE: SSNI) today announced financial results for its first quarter of 2014.
Q1 2014 Results (all comparisons made are against the prior year period)
| • | Non-GAAP revenue was $71.8 million, down 3%. |
| • | GAAP revenue was $44.2 million, down 18%. |
| • | Non-GAAP gross margin was 30.0%, as compared with 29.2% a year ago. |
| • | GAAP gross margin was 25.9%, as compared with 18.9% a year ago. |
| • | Non-GAAP net loss was $9.0 million, as compared with $8.4 million a year ago. |
| • | GAAP net loss was $27.8 million, as compared with $64.4 million a year ago. GAAP net loss in the year ago quarter includes non-cash charges of $42.1 million in connection with our initial public offering. |
| • | Cash and investments of $140.5 million and no debt. |
“We made progress this quarter on our business model with strong growth in new solutions and Managed and SaaS,” said Scott Lang, Chairman, President, and Chief Executive Officer. “Despite the near-term timing delays of new customer awards, our innovative networking technology and expanding global market opportunity position us well for long term growth.”
Business Highlights (through May 6, 2014, unless otherwise stated)
| • | 18.7 million cumulative network endpoints delivered from inception through March 31, 2014, up 13% from a year ago. |
| • | Working with clients that represent an incremental 24 million homes and businesses that are piloting or deploying our technology in phases. |
| • | New solution non-GAAP revenue (distribution automation and demand side management) of $9.4M – up 74% year-over-year. |
| • | Managed and SaaS non-GAAP revenue of $10.0 million – up 19% year-over year. |
| • | Florida Power & Light to network 75,000 street lights – North America’s largest networked street light deployment. |
Conference Call
Silver Spring will host a conference call today at 1:30 pm PT (4:30 pm ET) to review its results for the first quarter ended March 31, 2014 and its outlook for the future. During the course of this call, Silver Spring 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.silverspringnet.com. A dial-in replay of the conference call will be available until May 20, 2014 and can be accessed at 877-660-6853 (domestic) or 201-612-7415 (international) passcode 13580613. An audio webcast replay of the conference call will be available for one year at http://ir.silverspringnet.com.
About Silver Spring Networks
Silver Spring Networks is a leading networking platform and solutions provider for smart energy networks. Silver Spring’s pioneering IPv6 networking platform, with over 18.5 million Silver Spring enabled devices delivered, is connecting utilities to homes and business throughout the world with the goal of achieving greater energy efficiency for the planet. Silver Spring’s innovative solutions enable utilities to gain operational efficiencies, improve grid reliability, and empower consumers to monitor and manage energy consumption. Silver Spring Networks’ customers include major utilities around the globe such as Baltimore Gas & Electric, CitiPower & Powercor, Commonwealth Edison, CPS Energy, Florida Power & Light, Jemena Electricity Networks Limited, Pacific Gas & Electric, Pepco Holdings, Progress Energy, and Singapore Power, among others. To learn more, please visit www.silverspringnet.com.
Non-GAAP and Other Financial Measures
Silver Spring believes that its results of operations under generally accepted accounting principles, or GAAP, when considered in isolation, may only provide limited insight into the performance of its business in any given period. As a result, Silver Spring manages its business, makes planning decisions, evaluates its performance and allocates resources by assessing non-GAAP measures such as non-GAAP revenue, cost of non-GAAP revenue, non-GAAP gross profit (loss), non-GAAP operating income (loss), non-GAAP net income (loss), non-GAAP earnings (loss) per share, and adjusted EBITDA, and total backlog, in addition to other financial measures presented in accordance with GAAP. Silver Spring believes that these non-GAAP and other financial measures offer valuable supplemental information regarding the performance of its business, and will help investors better understand the sales volumes, and gross margin and profitability trends, as well as the cash flow characteristics, of its business. The non-GAAP measures 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, gross profit (loss), operating loss, net loss, loss per share or any other performance measure derived in accordance with GAAP. Silver Spring 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.
Non-GAAP revenue 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. Non-GAAP revenue excludes amounts for undelivered products, services to be performed in the future, and amounts paid or payable to customers. Non-GAAP revenue is initially recorded as deferred revenue and is recognized as GAAP revenue when all revenue recognition criteria have been met under Silver Spring’s accounting policies as described in Silver Spring’s filings with the Securities and Exchange Commission. Silver Spring reconciles revenue to non-GAAP revenue by adding revenue to the change in deferred revenue in a given period.
Cost of non-GAAP revenue represents the cost associated with products and services that have been delivered to the customer, excluding stock-based compensation and amortization of intangibles. 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 reconciles cost of revenue to non-GAAP cost of revenue by adding cost of revenue to the change in deferred cost of revenue, less stock-based compensation and amortization of intangibles included in cost of revenue, in a given period.
Non-GAAP gross profit (loss) is the difference between non-GAAP revenue and cost of non-GAAP revenue.
Non-GAAP operating income (loss) represents operating loss adjusted for non-GAAP revenue and cost of non-GAAP revenue and excludes expenses related to the amortization of intangible assets, legal settlements, and stock-based compensation.
Non-GAAP net income (loss) represents net loss adjusted for non-GAAP revenue and cost of non-GAAP revenue, and excludes expenses related to the amortization of intangible assets, legal settlements, stock-based compensation, changes in fair value of preferred stock warrant liabilities and embedded derivatives, and loss on extinguishment of promissory notes.
Non-GAAP earnings (loss) per share represents non-GAAP net loss divided by weighted average shares outstanding for the period.
Adjusted EBITDA is net income (loss) adjusted for changes in deferred revenue and deferred cost of revenue, other (income) expense, net, provision for income taxes, depreciation and amortization, stock-based compensation and certain other items management believes affect the comparability of operating results.
Total backlog represents future product and service billings that we expect to generate pursuant to contracts that we have entered into with our 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 future financial results. Statements including words such as “anticipate”, “believe”, “estimate” or “expect” and statements in the future tense are forward-looking statements. These forward-looking statements are preliminary estimates and expectations based on current information and are subject to business and economic risks and uncertainties that could cause actual events or actual future results to differ materially from the expectations set forth in the forward-looking statements. Important factors that could cause results to differ materially from the statements herein include: timing around customer decisions and deployment pace; dependence on a limited number of customers and key suppliers; general economic risks; specific economic risks in different geographies and among different industries; failure to maintain or increase renewals and increase business from existing customers; uncertainties around continued success in sales growth and market share gains; lengthy sales cycles with no assurances that a prospective customer will select Silver Spring’s 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’s 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’s management team; changes in strategy; technological changes that make Silver Spring’s products and services less competitive; competition, particularly from larger companies with more resources than Silver Spring; risks related to retention of management; international business uncertainties; the ability to acquire and integrate other businesses; and other risk factors set forth from time to time in Silver Spring’s 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 May 6, 2014. 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 financial results set forth in this press release are estimates based on information currently available to Silver Spring.
For additional information, please contact:
Tricia Gugler
Investor Relations
650-839-4504
tgugler@silverspringnet.com
Noel Hartzell
Global Communications
650-839-4184
nhartzell@silverspringnet.com
SILVER SPRING NETWORKS
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
| Three Months Ended March 31, |
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| 2014 | 2013 | |||||||
| Revenue: |
||||||||
| Product revenue |
$ | 28,227 | $ | 41,720 | ||||
| Service revenue |
16,002 | 11,983 | ||||||
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|
|
|
|
|||||
| Net revenue |
44,229 | 53,703 | ||||||
| Cost of revenue: |
||||||||
| Product cost of revenue |
17,915 | 25,743 | ||||||
| Service cost of revenue |
14,870 | 17,826 | ||||||
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|
|
|
|
|||||
| Total cost of revenue |
32,785 | 43,569 | ||||||
| Gross profit |
11,444 | 10,134 | ||||||
| Operating expenses: |
||||||||
| Research and development |
17,725 | 25,119 | ||||||
| Sales and marketing |
9,223 | 10,453 | ||||||
| General and administrative |
11,667 | 14,136 | ||||||
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|
|
|
|
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| Total operating expenses |
38,615 | 49,708 | ||||||
| Operating income (loss) |
(27,171 | ) | (39,574 | ) | ||||
| Other income (expense) |
||||||||
| Interest income (expense), net |
(37 | ) | (1,052 | ) | ||||
| Conversion of promissory notes and remeasurement of warrants and derivatives |
— | (23,676 | ) | |||||
|
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|
|
|
|||||
| Other income (expense), net |
(37 | ) | (24,728 | ) | ||||
| Income (loss) before provision for income taxes |
(27,208 | ) | (64,302 | ) | ||||
| Provision (benefit) for income taxes |
599 | 64 | ||||||
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|
|
|
|
|||||
| Net income (loss) |
(27,807 | ) | (64,366 | ) | ||||
| Deemed dividend to convertible preferred stockholders |
— | (105,000 | ) | |||||
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|
|
|
|
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| Net income (loss) attributable to common stockholders |
$ | (27,807 | ) | $ | (169,366 | ) | ||
| Net income (loss) per share |
||||||||
| Basic net income (loss) per share attributable to common stockholders |
$ | (0.58 | ) | $ | (16.18 | ) | ||
| Diluted net income (loss) per share attributable to common stockholders |
$ | (0.58 | ) | $ | (16.18 | ) | ||
| Weighted average number of shares used in computation |
||||||||
| Basic |
47,693 | 10,469 | ||||||
| Diluted |
47,693 | 10,469 | ||||||
Non-GAAP results (in thousands, except per share data)
The following tables reconcile the Company's net income (loss) and income (loss) per share as presented in its unaudited Condensed Consolidated Statements of Operations and prepared in accordance with GAAP to its non-GAAP net income (loss) and non-GAAP income (loss) per share.
| Three Months Ended March 31, |
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| 2014 | 2013 | |||||||
| Net income (loss) |
$ | (27,807 | ) | $ | (64,366 | ) | ||
| Change in deferred revenue, net of foreign currency translation |
27,621 | 20,068 | ||||||
| Change in deferred cost of revenue, net of foreign currency translation |
(20,257 | ) | (15,423 | ) | ||||
| Amortization of intangibles in cost of revenue |
48 | 48 | ||||||
| Conversion of promissory notes and remeasurement of warrants and derivatives |
— | 23,676 | ||||||
| Convertible notes accretion / interest |
— | 935 | ||||||
| Stock-based compensation |
11,432 | 26,668 | ||||||
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|
|
|
|
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| Non-GAAP net income (loss) |
$ | (8,963 | ) | $ | (8,394 | ) | ||
| Non-GAAP income (loss) per share |
||||||||
| Basic |
$ | (0.19 | ) | $ | (0.80 | ) | ||
| Diluted |
$ | (0.19 | ) | $ | (0.80 | ) | ||
| Weighted average number of shares used in computation |
||||||||
| Basic |
47,693 | 10,469 | ||||||
| Diluted |
47,693 | 10,469 | ||||||
SILVER SPRING NETWORKS, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par values)
| March 31, 2014 |
December 31, 2013 (a) |
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| ASSETS |
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| Current assets: |
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| Cash and cash equivalents |
$ | 78,492 | $ | 82,596 | ||||
| Short-term investments |
62,003 | 63,256 | ||||||
| Accounts receivable |
61,423 | 69,724 | ||||||
| Inventory |
4,859 | 4,350 | ||||||
| Deferred cost of revenue |
33,875 | 37,460 | ||||||
| Prepaid expenses and other current assets |
5,920 | 4,758 | ||||||
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|
|
|
|
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| Total current assets |
246,572 | 262,144 | ||||||
| Property and equipment, net |
12,526 | 12,364 | ||||||
| Deferred cost of revenue, non-current |
262,614 | 238,663 | ||||||
| Deferred tax assets, non-current |
1,202 | 1,613 | ||||||
| Other long-term assets |
1,505 | 1,567 | ||||||
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|
|
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| TOTAL ASSETS |
$ | 524,419 | $ | 516,351 | ||||
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| LIABILITIES AND STOCKHOLDERS' DEFICIT |
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| Current liabilities: |
||||||||
| Accounts payable |
$ | 28,455 | $ | 31,317 | ||||
| Accrued liabilities |
21,784 | 21,282 | ||||||
| Deferred revenue |
96,038 | 111,293 | ||||||
| Current portion of capital lease obligations |
1,604 | 1,615 | ||||||
| Deferred tax liability |
1,176 | 1,176 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
149,057 | 166,683 | ||||||
| Deferred revenue, non-current |
456,290 | 413,360 | ||||||
| Other liabilities |
16,161 | 14,426 | ||||||
| Stockholders’ deficit: |
||||||||
| Preferred stock, $0.001 par value, 10,000 shares authorized and no shares issued or outstanding as of March 31, 2014 and December 31, 2013 |
— | — | ||||||
| Common stock and additional paid-in capital, $0.001 par value; 1,000,000 shares authorized, 48,194 and 47,384 shares issued and outstanding as of March 31, 2014 and December 31, 2013 |
547,916 | 539,013 | ||||||
| Accumulated other comprehensive income (loss) |
63 | 130 | ||||||
| Accumulated deficit |
(645,068 | ) | (617,261 | ) | ||||
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|
|
|||||
| Total stockholders’ deficit |
(97,089 | ) | (78,118 | ) | ||||
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|
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|
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| TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT |
$ | 524,419 | $ | 516,351 | ||||
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|
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| (a) | Derived from audited consolidated financial statements |
SILVER SPRING NETWORKS
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands)
| Three Months Ended March 31, |
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| 2014 | 2013 | |||||||
| OPERATING ACTIVITIES |
||||||||
| Net income (loss) |
$ | (27,807 | ) | $ | (64,366 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
| Depreciation and amortization |
1,466 | 1,677 | ||||||
| Stock-based compensation |
11,432 | 26,668 | ||||||
| Conversion of promissory notes and remeasurement of warrants and derivatives |
— | 23,676 | ||||||
| Other non-cash adjustments |
630 | 980 | ||||||
| Changes in assets and liabilities: |
||||||||
| Accounts receivable |
8,301 | 6,539 | ||||||
| Inventory |
(596 | ) | (4,564 | ) | ||||
| Prepaid expenses and other current assets |
(1,158 | ) | (1,121 | ) | ||||
| Deferred cost of revenue |
(20,366 | ) | (15,410 | ) | ||||
| Other long-term assets |
14 | 2,322 | ||||||
| Accounts payable |
(3,124 | ) | (1,637 | ) | ||||
| Accrued liabilities |
(1,908 | ) | (1,887 | ) | ||||
| Customer deposits |
107 | (241 | ) | |||||
| Deferred revenue |
27,675 | 20,121 | ||||||
| Other liabilities |
2,074 | (1,670 | ) | |||||
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| Net cash provided by (used in) operating activities |
(3,260 | ) | (8,913 | ) | ||||
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|
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| INVESTING ACTIVITIES |
||||||||
| Proceeds from sales and maturity of short-term investments |
18,466 | — | ||||||
| Purchase of short-term investments |
(17,354 | ) | — | |||||
| Purchases of property and equipment |
(1,742 | ) | (1,323 | ) | ||||
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|
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| Net cash provided by (used in) investing activities |
(630 | ) | (1,323 | ) | ||||
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|
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| FINANCING ACTIVITIES |
||||||||
| Payment upon termination of preferred stock warrants of a related party |
— | (12,000 | ) | |||||
| Proceeds from initial public offering, net of offering costs |
— | 86,238 | ||||||
| Proceeds from private placement of common stock with a related party |
— | 12,000 | ||||||
| Payments on capital lease obligations |
(356 | ) | (453 | ) | ||||
| Proceeds from issuance of common stock, net of repurchases |
4,555 | 14 | ||||||
| Taxes paid related to net share settlement of equity awards |
(4,413 | ) | (5,855 | ) | ||||
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|
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|
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| Net cash provided by (used in) financing activities |
(214 | ) | 79,944 | |||||
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|
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| Net increase in cash and cash equivalents |
(4,104 | ) | 69,708 | |||||
| Cash and cash equivalents – beginning of period |
82,596 | 72,646 | ||||||
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|
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| Cash and cash equivalents – end of period |
$ | 78,492 | $ | 142,354 | ||||
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SILVER SPRING NETWORKS, INC.
UNAUDITED RECONCILIATION OF NET REVENUE BETWEEN GAAP AND NON-GAAP
(in thousands, except percentages)
| Q1 | Q2 | Q3 | Q4 | Q1 | YoY% | |||||||||||||||||||
| CY13 | CY13 | CY13 | CY13 | CY14 | Change | |||||||||||||||||||
| TYPE |
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| GAAP net revenue |
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| Product net revenue |
$ | 41,720 | $ | 47,996 | $ | 56,650 | $ | 77,944 | $ | 28,227 | –32 | % | ||||||||||||
| Service net revenue |
||||||||||||||||||||||||
| Managed services and SaaS |
4,559 | 37,508 | 9,835 | 8,159 | 7,797 | 71 | % | |||||||||||||||||
| Professional services |
7,424 | 18,006 | 5,996 | 11,061 | 8,205 | 11 | % | |||||||||||||||||
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| Total service net revenue |
$ | 11,983 | $ | 55,514 | $ | 15,831 | $ | 19,220 | $ | 16,002 | 34 | % | ||||||||||||
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| Total GAAP net revenue |
$ | 53,703 | $ | 103,510 | $ | 72,481 | $ | 97,164 | $ | 44,229 | –18 | % | ||||||||||||
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| % Product |
78 | % | 46 | % | 78 | % | 80 | % | 64 | % | ||||||||||||||
| % Service |
22 | % | 54 | % | 22 | % | 20 | % | 36 | % | ||||||||||||||
| Change in deferred net revenue |
||||||||||||||||||||||||
| Change in deferred product revenue |
$ | 14,702 | $ | 17,905 | $ | 16,017 | $ | (7,054 | ) | $ | 24,006 | |||||||||||||
| Change in deferred service revenue |
||||||||||||||||||||||||
| Managed services and SaaS |
3,825 | (28,245 | ) | 16 | 1,000 | 2,219 | ||||||||||||||||||
| Professional services |
1,541 | (6,719 | ) | 5,702 | (1,462 | ) | 1,396 | |||||||||||||||||
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| Total change in deferred service revenue |
$ | 5,366 | $ | (34,964 | ) | $ | 5,718 | $ | (462 | ) | $ | 3,615 | ||||||||||||
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| Total change in deferred revenue |
$ | 20,068 | $ | (17,059 | ) | $ | 21,735 | $ | (7,516 | ) | $ | 27,621 | ||||||||||||
| Non-GAAP revenue |
||||||||||||||||||||||||
| Product net revenue |
$ | 56,422 | $ | 65,901 | $ | 72,667 | $ | 70,890 | $ | 52,233 | –7 | % | ||||||||||||
| Service net revenue |
||||||||||||||||||||||||
| Managed services and SaaS |
8,384 | 9,263 | 9,851 | 9,159 | 10,016 | 19 | % | |||||||||||||||||
| Professional services |
8,965 | 11,287 | 11,698 | 9,599 | 9,601 | 7 | % | |||||||||||||||||
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| Total service net revenue |
$ | 17,349 | $ | 20,550 | $ | 21,549 | $ | 18,758 | $ | 19,617 | 13 | % | ||||||||||||
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| Total non-GAAP net revenue |
$ | 73,771 | $ | 86,451 | $ | 94,216 | $ | 89,648 | $ | 71,850 | –3 | % | ||||||||||||
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| % Product |
76 | % | 76 | % | 77 | % | 79 | % | 73 | % | ||||||||||||||
| % Service |
24 | % | 24 | % | 23 | % | 21 | % | 27 | % | ||||||||||||||
| SOLUTION |
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| GAAP net revenue |
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| Advanced metering infrastructure |
$ | 45,149 | $ | 97,598 | $ | 66,774 | $ | 91,842 | $ | 40,023 | –11 | % | ||||||||||||
| New solutions |
8,554 | 5,912 | 5,707 | 5,322 | 4,206 | –51 | % | |||||||||||||||||
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| Total GAAP net revenue |
$ | 53,703 | $ | 103,510 | $ | 72,481 | $ | 97,164 | $ | 44,229 | –18 | % | ||||||||||||
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| % Advanced metering infrastructure |
84 | % | 94 | % | 92 | % | 95 | % | 90 | % | ||||||||||||||
| % New solutions |
16 | % | 6 | % | 8 | % | 5 | % | 10 | % | ||||||||||||||
| Change in deferred net revenue |
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| Advanced metering infrastructure |
$ | 23,219 | $ | (21,380 | ) | $ | 19,244 | $ | (9,532 | ) | $ | 22,422 | ||||||||||||
| New solutions |
(3,151 | ) | 4,321 | 2,491 | 2,016 | 5,199 | ||||||||||||||||||
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| Total change in deferred net revenue |
$ | 20,068 | $ | (17,059 | ) | $ | 21,735 | $ | (7,516 | ) | $ | 27,621 | ||||||||||||
| Non-GAAP net revenue |
||||||||||||||||||||||||
| Advanced metering infrastructure |
$ | 68,368 | $ | 76,218 | $ | 86,018 | $ | 82,310 | $ | 62,445 | –9 | % | ||||||||||||
| New solutions |
5,403 | 10,233 | 8,198 | 7,338 | 9,405 | 74 | % | |||||||||||||||||
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| Total Non-GAAP net revenue |
$ | 73,771 | $ | 86,451 | $ | 94,216 | $ | 89,648 | $ | 71,850 | –3 | % | ||||||||||||
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| % Advanced metering infrastructure |
93 | % | 88 | % | 91 | % | 92 | % | 87 | % | ||||||||||||||
| % New solutions |
7 | % | 12 | % | 9 | % | 8 | % | 13 | % | ||||||||||||||
| GEOGRAPHY |
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| GAAP net revenue |
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| United States |
$ | 50,747 | $ | 94,516 | $ | 68,562 | $ | 71,602 | $ | 21,843 | –57 | % | ||||||||||||
| International |
2,956 | 8,994 | 3,919 | 25,562 | 22,386 | 657 | % | |||||||||||||||||
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| Total GAAP net revenue |
$ | 53,703 | $ | 103,510 | $ | 72,481 | $ | 97,164 | $ | 44,229 | –18 | % | ||||||||||||
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| % United States |
94 | % | 91 | % | 95 | % | 74 | % | 49 | % | ||||||||||||||
| % International |
6 | % | 9 | % | 5 | % | 26 | % | 51 | % | ||||||||||||||
| Change in deferred net revenue |
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| United States |
$ | 8,839 | $ | (21,032 | ) | $ | 15,289 | $ | 1,369 | $ | 41,256 | |||||||||||||
| International |
11,229 | 3,973 | 6,446 | (8,885 | ) | (13,635 | ) | |||||||||||||||||
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| Total change in deferred net revenue |
$ | 20,068 | $ | (17,059 | ) | $ | 21,735 | $ | (7,516 | ) | $ | 27,621 | ||||||||||||
| Non-GAAP net revenue |
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| United States |
$ | 59,586 | $ | 73,484 | $ | 83,851 | $ | 72,971 | $ | 63,099 | 6 | % | ||||||||||||
| International |
14,185 | 12,967 | 10,365 | 16,677 | 8,751 | –38 | % | |||||||||||||||||
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| Total non-GAAP net revenue |
$ | 73,771 | $ | 86,451 | $ | 94,216 | $ | 89,648 | $ | 71,850 | –3 | % | ||||||||||||
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| % United States |
81 | % | 85 | % | 89 | % | 81 | % | 88 | % | ||||||||||||||
| % International |
19 | % | 15 | % | 11 | % | 19 | % | 12 | % | ||||||||||||||
8
SILVER SPRING NETWORKS, INC.
UNAUDITED SUPPLEMENTAL FINANCIAL INFORMATION
(in thousands, except percentages and headcount)
| CASH FLOW DATA |
|
Q1 CY13 |
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Q2 CY13 |
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Q3 CY13 |
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Q4 CY13 |
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Q1 CY14 |
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YoY% Change |
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| Operating cash flow |
$ | (8,913 | ) | $ | (14,048 | ) | $ | 21,131 | $ | 1,844 | $ | (3,260 | ) | 63 | % | |||||||||
| Operating cash flow – TTM |
(19,847 | ) | (19,158 | ) | 12,172 | 14 | 5,667 | 129 | % | |||||||||||||||
| BALANCE SHEET DATA |
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| Cash, cash equivalents and short-term investments |
$ | 142,354 | 124,970 | 143,431 | 145,852 | $ | 140,495 | –1 | % | |||||||||||||||
| Deferred net revenue |
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| End of quarter |
528,176 | 510,722 | 532,546 | 524,653 | 552,328 | |||||||||||||||||||
| Less: Beginning of quarter |
(508,056 | ) | (528,176 | ) | (510,722 | ) | (532,546 | ) | (524,653 | ) | ||||||||||||||
| Foreign currency translation adjustment |
(52 | ) | 395 | (89 | ) | 377 | (54 | ) | ||||||||||||||||
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| Change in deferred net revenue, net of foreign currency translation |
$ | 20,068 | $ | (17,059 | ) | $ | 21,735 | $ | (7,516 | ) | $ | 27,621 | ||||||||||||
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| Deferred cost of revenue |
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| End of quarter |
$ | 260,572 | 268,236 | 275,101 | 276,123 | $ | 296,489 | |||||||||||||||||
| Less: Beginning of quarter |
(245,163 | ) | (260,572 | ) | (268,236 | ) | (275,101 | ) | (276,123 | ) | ||||||||||||||
| Foreign currency translation adjustment |
14 | 99 | (23 | ) | (11 | ) | (109 | ) | ||||||||||||||||
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| Change in deferred cost of revenue, net of foreign currency translation |
$ | 15,423 | $ | 7,763 | $ | 6,842 | $ | 1,011 | $ | 20,257 | ||||||||||||||
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| STOCK-BASED COMPENSATION |
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| Cost of goods sold |
$ | 6,724 | $ | 2,531 | $ | 1,376 | $ | 1,644 | $ | 2,692 | –60 | % | ||||||||||||
| Research and development |
9,544 | 3,607 | 1,905 | 2,277 | 3,155 | –67 | % | |||||||||||||||||
| Sales and marketing |
3,346 | 1,526 | 950 | 1,238 | 2,045 | –39 | % | |||||||||||||||||
| General and administrative |
7,054 | 3,181 | 2,759 | 2,842 | 3,540 | –50 | % | |||||||||||||||||
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| Total |
$ | 26,668 | $ | 10,845 | $ | 6,990 | $ | 8,001 | $ | 11,432 | –57 | % | ||||||||||||
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| EMPLOYEES |
572 | 589 | 608 | 602 | 617 | 8 | % | |||||||||||||||||
| HOMES & BUSINESSES |
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| Cumulative network endpoints delivered* |
16,507 | 17,008 | 17,509 | 18,184 | 18,710 | 13 | % |
| * | Endpoints refer to communication modules in electric meters |
SILVER SPRING NETWORKS
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data and percentages)
| QUARTERLY RECONCILIATION OF RESULTS |
|
Q1 CY13 |
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Q2 CY13 |
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Q3 CY13 |
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Q4 CY13 |
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Q1 CY14 |
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YOY % Change |
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| Net revenue |
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| GAAP net revenue |
$ | 53,703 | $ | 103,510 | $ | 72,481 | $ | 97,164 | $ | 44,229 | –18 | % | ||||||||||||
| Change in deferred revenue, net of foreign currency translation |
20,068 | (17,059 | ) | 21,735 | (7,516 | ) | 27,621 | |||||||||||||||||
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| Non-GAAP net revenue |
$ | 73,771 | $ | 86,451 | $ | 94,216 | $ | 89,648 | $ | 71,850 | –3 | % | ||||||||||||
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| Gross profit |
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| GAAP gross profit |
$ | 10,134 | $ | 48,250 | $ | 23,226 | $ | 33,744 | $ | 11,444 | 13 | % | ||||||||||||
| Change in deferred revenue, net of foreign currency translation |
20,068 | (17,059 | ) | 21,735 | (7,516 | ) | 27,621 | |||||||||||||||||
| Change in deferred cost of revenue, net of foreign currency translation |
(15,423 | ) | (7,763 | ) | (6,842 | ) | (1,011 | ) | (20,257 | ) | ||||||||||||||
| Amortization of intangibles in cost of revenue |
48 | 48 | 48 | 48 | 48 | |||||||||||||||||||
| Stock-based compensation |
6,724 | 2,531 | 1,376 | 1,644 | 2,692 | |||||||||||||||||||
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| Non-GAAP gross profit |
$ | 21,551 | $ | 26,007 | $ | 39,543 | $ | 26,909 | $ | 21,548 | 0 | % | ||||||||||||
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| GAAP gross margin % (as a % of GAAP net revenue) |
19 | % | 47 | % | 32 | % | 35 | % | 26 | % | ||||||||||||||
| Non-GAAP gross margin % (as a % of non-GAAP net revenue) |
29 | % | 30 | % | 42 | % | 30 | % | 30 | % | ||||||||||||||
| Operating income (loss) |
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| GAAP operating income (loss) |
$ | (39,574 | ) | $ | 9,982 | $ | (12,115 | ) | $ | (48 | ) | $ | (27,171 | ) | 31 | % | ||||||||
| Change in deferred revenue, net of foreign currency translation |
20,068 | (17,059 | ) | 21,735 | (7,516 | ) | 27,621 | |||||||||||||||||
| Change in deferred cost of revenue, net of foreign currency translation |
(15,423 | ) | (7,763 | ) | (6,842 | ) | (1,011 | ) | (20,257 | ) | ||||||||||||||
| Amortization of intangibles in cost of revenue |
48 | 48 | 48 | 48 | 48 | |||||||||||||||||||
| Stock-based compensation |
26,668 | 10,845 | 6,990 | 8,001 | 11,432 | |||||||||||||||||||
| Legal settlements |
— | — | — | 250 | — | |||||||||||||||||||
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| Non-GAAP operating income (loss) |
$ | (8,213 | ) | $ | (3,947 | ) | $ | 9,816 | $ | (276 | ) | $ | (8,327 | ) | –1 | % | ||||||||
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| GAAP operating margin % (as a % of GAAP revenue) |
–74 | % | 10 | % | –17 | % | 0 | % | –61 | % | ||||||||||||||
| Non-GAAP operating margin % (as a % of non-GAAP net revenue) |
–11 | % | –5 | % | 10 | % | 0 | % | –12 | % | ||||||||||||||
| Adjusted EBITDA |
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| GAAP net income (loss) |
$ | (64,366 | ) | $ | 9,470 | $ | (12,269 | ) | $ | 358 | $ | (27,807 | ) | 57 | % | |||||||||
| Change in deferred revenue, net of foreign currency translation |
20,068 | (17,059 | ) | 21,735 | (7,516 | ) | 27,621 | |||||||||||||||||
| Change in deferred cost of revenue, net of foreign currency translation |
(15,423 | ) | (7,763 | ) | (6,842 | ) | (1,011 | ) | (20,257 | ) | ||||||||||||||
| Other (income) expense, net |
24,728 | 184 | 54 | (138 | ) | 37 | ||||||||||||||||||
| Provision for income taxes |
64 | 328 | 100 | (268 | ) | 599 | ||||||||||||||||||
| Depreciation and amortization |
1,677 | 1,689 | 1,624 | 1,656 | 1,466 | |||||||||||||||||||
| Stock-based compensation |
26,668 | 10,845 | 6,990 | 8,001 | 11,432 | |||||||||||||||||||
| Legal settlements |
— | — | — | 250 | — | |||||||||||||||||||
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| Adjusted EBITDA |
$ | (6,584 | ) | $ | (2,306 | ) | $ | 11,392 | $ | 1,332 | $ | (6,909 | ) | –5 | % | |||||||||
| Net income (loss) |
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| GAAP net income (loss) |
$ | (64,366 | ) | $ | 9,470 | $ | (12,269 | ) | $ | 358 | $ | (27,807 | ) | 57 | % | |||||||||
| Change in deferred revenue, net of foreign currency translation |
20,068 | (17,059 | ) | 21,735 | (7,516 | ) | 27,621 | |||||||||||||||||
| Change in deferred cost of revenue, net of foreign currency translation |
(15,423 | ) | (7,763 | ) | (6,842 | ) | (1,011 | ) | (20,257 | ) | ||||||||||||||
| Amortization of intangibles in cost of revenue |
48 | 48 | 48 | 48 | 48 | |||||||||||||||||||
| Convertible notes accretion / interest |
935 | — | — | — | — | |||||||||||||||||||
| Conversion of promissory notes and remeasurement of warrants and derivatives |
23,676 | — | — | — | — | |||||||||||||||||||
| Stock-based compensation |
26,668 | 10,845 | 6,990 | 8,001 | 11,432 | |||||||||||||||||||
| Legal settlements |
— | — | — | 250 | — | |||||||||||||||||||
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| Non-GAAP net income (loss) |
$ | (8,394 | ) | $ | (4,459 | ) | $ | 9,662 | $ | 130 | $ | (8,963 | ) | –7 | % | |||||||||
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| GAAP net margin % (as a % of GAAP revenue) |
–120 | % | 9 | % | –17 | % | 0 | % | –63 | % | ||||||||||||||
| Non-GAAP net margin % (as a % of non-GAAP net revenue) |
–11 | % | –5 | % | 10 | % | 0 | % | –12 | % | ||||||||||||||
| GAAP income (loss) per share |
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| Basic |
$ | (16.18 | )* | $ | 0.20 | $ | (0.26 | ) | $ | 0.01 | $ | (0.58 | ) | |||||||||||
| Diluted |
$ | (16.18 | )* | $ | 0.19 | $ | (0.26 | ) | $ | 0.01 | $ | (0.58 | ) | |||||||||||
| Weighted average number of shares used in computation |
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| Basic |
10,469 | 46,599 | 46,729 | 47,198 | 47,693 | |||||||||||||||||||
| Diluted |
10,469 | 48,995 | 46,729 | 49,603 | 47,693 | |||||||||||||||||||
| * GAAP income (loss) per share is based on net loss attributable to common stockholders |
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| Non-GAAP income (loss) per share |
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| Basic |
$ | (0.80 | ) | $ | (0.10 | ) | $ | 0.21 | $ | 0.00 | $ | (0.19 | ) | |||||||||||
| Diluted |
$ | (0.80 | ) | $ | (0.10 | ) | $ | 0.19 | $ | 0.00 | $ | (0.19 | ) | |||||||||||
| Weighted average number of shares used in computation |
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| Basic |
10,469 | 46,599 | 46,729 | 47,198 | 47,693 | |||||||||||||||||||
| Diluted |
10,469 | 46,599 | 49,620 | 49,603 | 47,693 |
10