REDWOOD CITY, Calif.--(BUSINESS WIRE)--Silver Spring Networks, Inc. (NYSE:SSNI) today announced financial results for its third quarter ended September 30, 2015.
Third Quarter Results (all comparisons made are against the prior year period, unless otherwise stated)
- Non-GAAP revenue $74.7 million, up 5%.
- GAAP revenue $69.5 million, up 148%.
- Non-GAAP gross margin 44%, up 13 points.
- GAAP gross margin 47%, up 42 points.
- Non-GAAP net income $4.9 million versus a net loss of ($7.0) million.
- GAAP net loss ($0.6) million versus ($37.3) million.
- Non-GAAP earnings per share $0.10 versus ($0.14) loss per share.
- GAAP loss per share ($0.01) versus ($0.77) loss per share.
- $121.9 million net cash and short-term investments balance, on $4.3 million in cash flow from operations.
“We had another great quarter, expanding our footprint by delivering over 800,000 endpoints, achieving record gross margins, and generating solid cash flow,” said Scott Lang, Executive Chairman. “Our third quarter results demonstrate the strength of our business model and the leadership position we have built over the past decade.”
“I am excited to join Silver Spring Networks,” said Mike Bell, President and CEO. My first few months as CEO have reinforced my view of the strength of Silver Spring’s technology platform, business model and established leadership position at some of the world’s leading utilities and most iconic cities. I see significant potential for continued innovation and growth in our core smart grid and smart city markets, and longer term look to leverage our technology and platform into the broader Internet of Things opportunity.”
Business Highlights (through November 3, 2015, unless otherwise stated):
- Delivered record 44% non-GAAP gross margin performance in the third quarter, due to growth, favorable product mix and manufacturing efficiencies.
- Selected by Halifax, Nova Scotia Canada, to deploy our smart street light solution to network and control 43,000 LED luminaires over its 400,000 residents and over 12,000 square mile geographic area.
- Expanded smart cities opportunity through an agreement with Acuity Brands, to jointly develop an intelligent lighting platform for utilities, cities and large campus operators.
- Consumers Energy of Michigan launched its innovative consumer engagement and energy efficiency program, offering advanced capabilities to nearly 3 million residential electric and natural gas customers, on Silver Spring’s CustomerIQ Suite.
- AusNet Services successfully connected their first installations of Silver Spring-powered advanced metering just 5 months after contract signing.
- Unveiled several new innovative products, including SLV6, our next generation smart city control and management platform with more than 100 new features to expand support for smart city deployments and create more value for existing street light networks, and Operations Optimizer, the next generation of the flagship solution from Detectent that supports AMI Operations, Grid Operations, Revenue Assurance and Customer Programs.
- 22.3 million cumulative network endpoints delivered from inception through September 30, 2015, up 13% from a year ago.
Conference Call
Silver Spring will host a conference call today at 1:15 pm PT (4:15 pm ET) to review its results for the Third quarter ended September 30, 2015 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 November 23, 2015 and can be accessed at 877-660-6853 (domestic) or 201-612-7415 (international) passcode 13622294. 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 22.3 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, recurring non-GAAP revenue, recurring non-GAAP revenue per endpoint, cost of non-GAAP revenue, non-GAAP gross profit (loss), non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP net income (loss), non-GAAP income (loss) per share, 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), gross margin, operating loss, net income (loss), net income (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 then recognized as revenue when all revenue recognition criteria has 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.
Recurring non-GAAP revenue is non-GAAP revenue from managed services and SaaS, as well as customer support and other service offerings. Recurring non-GAAP revenue is primarily recurring in nature and includes managed services, hosting and software maintenance, and support fees, as well as one-time managed services and SaaS set up fees. Customer support and other services are provided to customers outside of managed services and SaaS offerings, and are also recurring in nature. Silver Spring reconciles recurring GAAP revenue to recurring non-GAAP revenue by adding revenue to the change in deferred revenue in a given period.
Recurring non-GAAP revenue per endpoint represents a trailing twelve-month recurring non-GAAP revenue per cumulative endpoint shipped from inception to date.
Cost of non-GAAP revenue 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 reconciles cost of revenue to cost of non-GAAP revenue 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 gross profit (loss) is the difference between non-GAAP revenue and cost of non-GAAP revenue. Non-GAAP gross margin is non-GAAP gross profit (loss) as a percentage of non-GAAP revenue.
Non-GAAP operating income (loss) represents operating income (loss) adjusted for non-GAAP revenue and cost of non-GAAP revenue and excludes expenses related to the amortization of intangible assets, stock-based compensation, acquisition-related charges, restructuring and legal settlements. Non-GAAP operating margin is non-GAAP operating income (loss) as a percentage of non-GAAP revenue.
Non-GAAP net income (loss) represents net income (loss) adjusted for changes in deferred revenue and deferred cost of revenue, and excludes expenses related to the amortization of intangible assets, stock-based compensation, acquisition-related charges, income tax benefit related to acquisitions, restructuring and legal settlements.
Non-GAAP income (loss) per share represents non-GAAP net income (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, (benefit) provision for income taxes, depreciation and amortization, stock-based compensation, acquisition-related charges, restructuring, legal settlements and certain other items management believes affect the comparability of operating results.
Total backlog represents future product and service billings that Silver Spring 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 deployments; future innovation; 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; receipt by our customers of required regulatory approvals; dependence on a limited number of customers and key suppliers; general economic risks; specific economic risks in different geographies and among different industries; failure to maintain or increase renewals and increase business from existing customers; uncertainties around continued success in sales growth and market share gains; 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, including our new fifth generation networking platform and products; 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; 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 November 3, 2015. 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.
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SILVER SPRING NETWORKS |
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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
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(In thousands, except per share data) |
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| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Revenue: | ||||||||||||||||
| Product revenue | $ | 50,093 | $ | 16,321 | $ | 209,839 | $ | 69,299 | ||||||||
| Service revenue | 19,412 | 11,720 | 80,473 | 44,578 | ||||||||||||
| Net revenue | 69,505 | 28,041 | 290,312 | 113,877 | ||||||||||||
| Cost of revenue: | ||||||||||||||||
| Product cost of revenue | 21,377 | 10,791 | 118,527 | 42,120 | ||||||||||||
| Service cost of revenue | 15,141 | 15,947 | 47,387 | 45,598 | ||||||||||||
| Total cost of revenue | 36,518 | 26,738 | 165,914 | 87,718 | ||||||||||||
| Gross profit | 32,987 | 1,303 | 124,398 | 26,159 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 15,837 | 16,986 | 47,581 | 52,053 | ||||||||||||
| Sales and marketing | 7,900 | 10,248 | 26,109 | 28,325 | ||||||||||||
| General and administrative | 9,305 | 9,601 | 31,889 | 33,156 | ||||||||||||
| Restructuring | 339 | 1,888 | 1,611 | 1,888 | ||||||||||||
| Total operating expenses | 33,381 | 38,723 | 107,190 | 115,422 | ||||||||||||
| Operating (loss) income | (394 | ) | (37,420 | ) | 17,208 | (89,263 | ) | |||||||||
| Other (expense) income, net | (99 | ) | 7 | 263 | 55 | |||||||||||
| (Loss) income before income taxes | (493 | ) | (37,413 | ) | 17,471 | (89,208 | ) | |||||||||
| (Provision) benefit for income taxes | (129 | ) | 140 | 637 | (463 | ) | ||||||||||
| Net (loss) income | $ | (622 | ) | $ | (37,273 | ) | $ | 18,108 | $ | (89,671 | ) | |||||
| Net (loss) income per share: | ||||||||||||||||
| Basic | $ | (0.01 | ) | $ | (0.77 | ) | $ | 0.36 | $ | (1.86 | ) | |||||
| Diluted | $ | (0.01 | ) | $ | (0.77 | ) | $ | 0.35 | $ | (1.86 | ) | |||||
| Weighted average shares used to compute net (loss) income per share: | ||||||||||||||||
| Basic | 50,188 | 48,551 | 49,789 | 48,189 | ||||||||||||
| Diluted | 50,188 | 48,551 | 51,257 | 48,189 | ||||||||||||
| Reconciliation of GAAP to Non-GAAP results (in thousands, except per share data) | ||||||||||||||||
| The following tables reconcile the Company's net (loss) income and net (loss) income 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 net income (loss) per share. | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Net (loss) income | $ | (622 | ) | $ | (37,273 | ) | $ | 18,108 | $ | (89,671 | ) | |||||
| Change in deferred revenue, net of foreign currency translation | 5,192 | 42,847 | (83,376 | ) | 92,465 | |||||||||||
| Change in deferred cost of revenue, net of foreign currency translation | (6,712 | ) | (25,244 | ) | 40,292 | (62,302 | ) | |||||||||
| Amortization of intangibles | 421 | 299 | 1,252 | 395 | ||||||||||||
| Stock-based compensation | 5,853 | 10,476 | 21,537 | 31,470 | ||||||||||||
| Acquisition-related charges | 559 | — | 2,045 | — | ||||||||||||
| Income tax benefit related to Detectent acquisition | (114 | ) | — | (1,128 | ) | — | ||||||||||
| Restructuring | 339 | 1,888 | 1,611 | 1,888 | ||||||||||||
| Legal settlements | — | — | — | (100 | ) | |||||||||||
| Non-GAAP net income (loss) | $ | 4,916 | $ | (7,007 | ) | $ | 341 | $ | (25,855 | ) | ||||||
| Non-GAAP net income (loss) per share: | ||||||||||||||||
| Basic | $ | 0.10 | $ | (0.14 | ) | $ | 0.01 | $ | (0.54 | ) | ||||||
| Diluted | $ | 0.10 | $ | (0.14 | ) | $ | 0.01 | $ | (0.54 | ) | ||||||
| Weighted average shares used to compute Non-GAAP net income (loss) per share: | ||||||||||||||||
| Basic | 50,188 | 48,551 | 49,789 | 48,189 | ||||||||||||
| Diluted | 51,713 | 48,551 | 51,257 | 48,189 | ||||||||||||
| SILVER SPRING NETWORKS, INC. | ||||||||
| UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (In thousands) | ||||||||
| September 30, | December 31, | |||||||
| 2015 | 2014 (a | ) | ||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 63,455 | $ | 60,457 | ||||
| Short-term investments | 58,460 | 60,339 | ||||||
| Accounts receivable | 44,125 | 54,740 | ||||||
| Inventory | 3,761 | 6,722 | ||||||
| Deferred cost of revenue | 196,602 | 29,585 | ||||||
| Deferred tax assets | 357 | 5,278 | ||||||
| Prepaid expenses and other current assets | 9,596 | 5,146 | ||||||
| Total current assets | 376,356 | 222,267 | ||||||
| Property and equipment, net | 12,326 | 12,860 | ||||||
| Goodwill and intangible assets | 14,885 | 8,221 | ||||||
| Deferred cost of revenue, non-current | 96,128 | 303,445 | ||||||
| Deferred tax assets, non-current | 25,033 | 354 | ||||||
| Other long-term assets | 5,088 | 1,047 | ||||||
| Total assets | $ | 529,816 | $ | 548,194 | ||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 28,083 | $ | 27,530 | ||||
| Deferred revenue | 320,241 | 91,688 | ||||||
| Deferred tax liability | 24,879 | 249 | ||||||
| Accrued and other liabilities | 34,257 | 24,421 | ||||||
| Total current liabilities | 407,460 | 143,888 | ||||||
| Deferred revenue, non-current | 205,759 | 517,905 | ||||||
| Deferred tax liability, non-current | — | 5,146 | ||||||
| Other liabilities | 15,850 | 15,074 | ||||||
| Total liabilities | 629,069 | 682,013 | ||||||
| Total stockholders’ deficit | (99,253 | ) | (133,819 | ) | ||||
| Total liabilities and stockholders’ deficit | $ | 529,816 | $ | 548,194 | ||||
| (a) Derived from audited consolidated financial statements | ||||||||
| SILVER SPRING NETWORKS | ||||||||||||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW | ||||||||||||||||
| (In thousands) | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| OPERATING ACTIVITIES | ||||||||||||||||
| Net (loss) income | $ | (622 | ) | $ | (37,273 | ) | $ | 18,108 | $ | (89,671 | ) | |||||
| Adjustments to reconcile net (loss) income | ||||||||||||||||
| to net cash provided by (used in) operating activities: | ||||||||||||||||
| Deferred taxes | 172 | 11 | (935 | ) | 917 | |||||||||||
| Depreciation and amortization | 1,990 | 1,771 | 5,892 | 4,704 | ||||||||||||
| Stock-based compensation | 5,853 | 10,476 | 21,537 | 31,470 | ||||||||||||
| Other non-cash adjustments | 230 | 386 | 354 | 511 | ||||||||||||
| Changes in assets and liabilities: | ||||||||||||||||
| Accounts receivable | (2,568 | ) | (9,791 | ) | 11,073 | 1,795 | ||||||||||
| Inventory | 810 | 56 | 3,043 | (161 | ) | |||||||||||
| Prepaid expenses and other assets | (1,396 | ) | 924 | (4,192 | ) | (2,590 | ) | |||||||||
| Contingent consideration related to | ||||||||||||||||
| Detectent acquisition held in escrow | — | — | (4,000 | ) | — | |||||||||||
| Deferred cost of revenue | (6,686 | ) | (25,175 | ) | 40,308 | (62,510 | ) | |||||||||
| Accounts payable | 2,239 | 237 | (131 | ) | (3,165 | ) | ||||||||||
| Customer deposits | (1,307 | ) | (71 | ) | 151 | 33 | ||||||||||
| Deferred revenue | 4,841 | 42,310 | (84,190 | ) | 92,413 | |||||||||||
| Accrued and other liabilities | 716 | 405 | 6,412 | 3,865 | ||||||||||||
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Net cash provided by (used in) operating activities |
4,272 | (15,734 | ) | 13,430 | (22,389 | ) | ||||||||||
| INVESTING ACTIVITIES | ||||||||||||||||
| Payments for business acquisition, | ||||||||||||||||
| net of cash and cash equivalents acquired | — | — | (7,098 | ) | (8,750 | ) | ||||||||||
| Proceeds from sales of available-for-sale investments | 4,086 | 7,151 | 11,486 | 42,459 | ||||||||||||
| Proceeds from maturities of available-for-sale investments | 1,500 | — | 9,250 | 6,750 | ||||||||||||
| Purchases of available-for-sale investments | (7,287 | ) | (7,120 | ) | (18,910 | ) | (46,621 | ) | ||||||||
| Purchases of property and equipment | (1,617 | ) | (524 | ) | (3,529 | ) | (4,222 | ) | ||||||||
| Net cash used in investing activities | (3,318 | ) | (493 | ) | (8,801 | ) | (10,384 | ) | ||||||||
| FINANCING ACTIVITIES | ||||||||||||||||
| Payments on capital lease obligations | (238 | ) | (397 | ) | (994 | ) | (1,145 | ) | ||||||||
| Proceeds from issuance of common stock, net of repurchases | 1,619 | 2,099 | 3,655 | 6,846 | ||||||||||||
| Taxes paid related to net share settlement of equity awards | (456 | ) | (147 | ) | (3,968 | ) | (5,410 | ) | ||||||||
| Net cash provided by (used in) financing activities | 925 | 1,555 | (1,307 | ) | 291 | |||||||||||
| Effect of exchange rate changes on cash and cash equivalents | (184 | ) | — | (324 | ) | — | ||||||||||
| Net increase (decrease) in cash and cash equivalents | 1,695 | (14,672 | ) | 2,998 | (32,482 | ) | ||||||||||
| Cash and cash equivalents - beginning of period | 61,760 | 64,786 | 60,457 | 82,596 | ||||||||||||
| Cash and cash equivalents - end of period | $ | 63,455 | $ | 50,114 | $ | 63,455 | $ | 50,114 | ||||||||
| SILVER SPRING NETWORKS, INC. | ||||||||||||||||||||||||
| UNAUDITED RECONCILIATION OF NET REVENUE BETWEEN GAAP AND NON-GAAP | ||||||||||||||||||||||||
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(in thousands, except percentages) |
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| Q3 | Q4 | Q1 | Q2 | Q3 | YoY% | |||||||||||||||||||
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TYPE |
2014 | 2014 | 2015 | 2015 | 2015 | Change | ||||||||||||||||||
| GAAP net revenue: | ||||||||||||||||||||||||
| Product net revenue | $ | 16,321 | $ | 60,034 | $ | 105,035 | $ | 54,711 | $ | 50,093 | 207 | % | ||||||||||||
| Service net revenue | ||||||||||||||||||||||||
| Managed services and SaaS (a) | 7,546 | 10,569 | 12,974 | 10,608 | 11,223 | 49 | % | |||||||||||||||||
| Professional services (a) | 4,174 | 6,808 | 25,631 | 11,848 | 8,189 | 96 | % | |||||||||||||||||
| Total service net revenue | 11,720 | 17,377 | 38,605 | 22,456 | 19,412 | 66 | % | |||||||||||||||||
| Total GAAP net revenue | $ | 28,041 | $ | 77,411 | $ | 143,640 | $ | 77,167 | $ | 69,505 | 148 | % | ||||||||||||
| % Product | 58 | % | 78 | % | 73 | % | 71 | % | 72 | % | ||||||||||||||
| % Service | 42 | % | 22 | % | 27 | % | 29 | % | 28 | % | ||||||||||||||
| Change in deferred net revenue: | ||||||||||||||||||||||||
| Change in deferred product revenue | $ | 33,238 | $ | (9,991 | ) | $ | (64,034 | ) | $ | (10,015 | ) | $ | 1,785 | |||||||||||
| Change in deferred service revenue: | ||||||||||||||||||||||||
| Managed services and SaaS | 3,960 | 984 | (419 | ) | 2,387 | 1,397 | ||||||||||||||||||
| Professional services | 5,649 | 1,962 | (16,088 | ) | (399 | ) | 2,010 | |||||||||||||||||
| Total change in deferred service revenue | 9,609 | 2,946 | (16,507 | ) | 1,988 | 3,407 | ||||||||||||||||||
| Total change in deferred revenue | $ | 42,847 | $ | (7,045 | ) | $ | (80,541 | ) | $ | (8,027 | ) | $ | 5,192 | |||||||||||
| Non-GAAP revenue: | ||||||||||||||||||||||||
| Product net revenue | 49,559 | 50,043 | 41,001 | 44,696 | 51,878 | 5 | % | |||||||||||||||||
| Service net revenue: | ||||||||||||||||||||||||
| Managed services and SaaS (a) | 11,506 | 11,553 | 12,555 | 12,995 | 12,620 | 10 | % | |||||||||||||||||
| Professional services (a) | 9,823 | 8,770 | 9,543 | 11,449 | 10,199 | 4 | % | |||||||||||||||||
| Total service net revenue | 21,329 | 20,323 | 22,098 | 24,444 | 22,819 | 7 | % | |||||||||||||||||
| Total non-GAAP net revenue | $ | 70,888 | $ | 70,366 | $ | 63,099 | $ | 69,140 | $ | 74,697 | 5 | % | ||||||||||||
| % Product | 70 | % | 71 | % | 65 | % | 65 | % | 69 | % | ||||||||||||||
| % Service | 30 | % | 29 | % | 35 | % | 35 | % | 31 | % | ||||||||||||||
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RECURRING REVENUE PER ENDPOINT |
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| Recurring GAAP revenue (TTM) (a) | $ | 32,987 | $ | 35,220 | $ | 39,673 | $ | 41,697 | $ | 45,374 | ||||||||||||||
| Changes in deferred revenue, net of foreign currency translations | 9,688 | 9,284 | 6,851 | 6,912 | 4,349 | |||||||||||||||||||
| Recurring non-GAAP revenue (TTM) (a) | $ | 42,675 | $ | 44,504 | $ | 46,524 | $ | 48,609 | $ | 49,723 | ||||||||||||||
| Cumulative network endpoints delivered | 19,714 | 20,266 | 20,814 | 21,506 | 22,321 | |||||||||||||||||||
| Recurring GAAP revenue per endpoint delivered (a) | $ | 1.67 | $ | 1.74 | $ | 1.91 | $ | 1.94 | $ | 2.03 | 21 | % | ||||||||||||
| Recurring non-GAAP revenue per endpoint delivered (a) | $ | 2.16 | $ | 2.20 | $ | 2.24 | $ | 2.26 | $ | 2.23 | 3 | % | ||||||||||||
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SOLUTION |
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| GAAP net revenue | ||||||||||||||||||||||||
| Advanced metering infrastructure | $ | 21,417 | $ | 72,456 | $ | 112,865 | $ | 66,907 | $ | 60,149 | 181 | % | ||||||||||||
| New solutions | 6,624 | 4,955 | 30,775 | 10,260 | 9,356 | 41 | % | |||||||||||||||||
| Total GAAP net revenue | $ | 28,041 | $ | 77,411 | $ | 143,640 | $ | 77,167 | $ | 69,505 | 148 | % | ||||||||||||
| % Advanced metering infrastructure | 76 | % | 94 | % | 79 | % | 87 | % | 87 | % | ||||||||||||||
| % New solutions | 24 | % | 6 | % | 21 | % | 13 | % | 13 | % | ||||||||||||||
| Change in deferred net revenue | ||||||||||||||||||||||||
| Advanced metering infrastructure | $ | 39,828 | $ | (12,441 | ) | $ | (64,828 | ) | $ | (10,976 | ) | $ | 3,586 | |||||||||||
| New solutions | 3,019 | 5,396 | (15,713 | ) | 2,949 | 1,606 | ||||||||||||||||||
| Total change in deferred net revenue | $ | 42,847 | $ | (7,045 | ) | $ | (80,541 | ) | $ | (8,027 | ) | $ | 5,192 | |||||||||||
| Non-GAAP net revenue | ||||||||||||||||||||||||
| Advanced metering infrastructure | $ | 61,245 | $ | 60,015 | $ | 48,037 | $ | 55,931 | $ | 63,735 | 4 | % | ||||||||||||
| New solutions | 9,643 | 10,351 | 15,062 | 13,209 | 10,962 | 14 | % | |||||||||||||||||
| Total Non-GAAP net revenue | $ | 70,888 | $ | 70,366 | $ | 63,099 | $ | 69,140 | $ | 74,697 | 5 | % | ||||||||||||
| % Advanced metering infrastructure | 86 | % | 85 | % | 76 | % | 81 | % | 85 | % | ||||||||||||||
| % New solutions | 14 | % | 15 | % | 24 | % | 19 | % | 15 | % | ||||||||||||||
|
GEOGRAPHY |
||||||||||||||||||||||||
| GAAP net revenue | ||||||||||||||||||||||||
| United States | $ | 15,700 | $ | 30,017 | $ | 122,582 | $ | 72,360 | $ | 53,113 | 238 | % | ||||||||||||
| International | 12,341 | 47,394 | 21,058 | 4,807 | 16,392 | 33 | % | |||||||||||||||||
| Total GAAP net revenue | $ | 28,041 | $ | 77,411 | $ | 143,640 | $ | 77,167 | $ | 69,505 | 148 | % | ||||||||||||
| % United States | 56 | % | 39 | % | 85 | % | 94 | % | 76 | % | ||||||||||||||
| % International | 44 | % | 61 | % | 15 | % | 6 | % | 24 | % | ||||||||||||||
| Change in deferred net revenue | ||||||||||||||||||||||||
| United States | $ | 48,248 | $ | 29,176 | $ | (66,533 | ) | $ | (17,955 | ) | $ | 12,467 | ||||||||||||
| International | (5,401 | ) | (36,221 | ) | (14,008 | ) | 9,928 | (7,275 | ) | |||||||||||||||
| Total change in deferred net revenue | $ | 42,847 | $ | (7,045 | ) | $ | (80,541 | ) | $ | (8,027 | ) | $ | 5,192 | |||||||||||
| Non-GAAP net revenue | ||||||||||||||||||||||||
| United States | $ | 63,948 | $ | 59,193 | $ | 56,049 | $ | 54,405 | $ | 65,580 | 3 | % | ||||||||||||
| International | 6,940 | 11,173 | 7,050 | 14,735 | 9,117 | 31 | % | |||||||||||||||||
| Total non-GAAP net revenue | $ | 70,888 | $ | 70,366 | $ | 63,099 | $ | 69,140 | $ | 74,697 | 5 | % | ||||||||||||
| % United States | 90 | % | 84 | % | 89 | % | 79 | % | 88 | % | ||||||||||||||
| % International | 10 | % | 16 | % | 11 | % | 21 | % | 12 | % | ||||||||||||||
| (a) | Certain amounts have been reclassified in 2014 from Professional services to Managed services and SaaS related to product support which is recurring in nature to conform to current period presentation. | |||||||||||||||||||||||
| SILVER SPRING NETWORKS, INC. | ||||||||||||||||||||||||
| UNAUDITED SUPPLEMENTAL FINANCIAL INFORMATION | ||||||||||||||||||||||||
| (in thousands, except percentages and headcount) | ||||||||||||||||||||||||
| Q3 | Q4 | Q1 | Q2 | Q3 | YoY% | |||||||||||||||||||
| CASH FLOW DATA | 2014 | 2014 | 2015 | 2015 | 2015 | Change | ||||||||||||||||||
| Operating cash flow | $ | (15,734 | ) | $ | 13,624 | $ | (455 | ) | $ | 9,613 | $ | 4,272 | 127 | % | ||||||||||
| Operating cash flow - TTM | (20,545 | ) | (8,765 | ) | (5,960 | ) | 7,048 | 27,054 | 232 | % | ||||||||||||||
| BALANCE SHEET DATA | ||||||||||||||||||||||||
| Cash, cash equivalents and short-term investments | $ | 110,466 | $ | 120,796 | $ | 111,215 | $ | 118,555 | $ | 121,915 | 10 | % | ||||||||||||
| Deferred net revenue | ||||||||||||||||||||||||
| End of quarter | 617,416 | 609,593 | 529,984 | 521,176 | 526,000 | |||||||||||||||||||
| Less: Beginning of quarter | (575,106 | ) | (617,416 | ) | (609,593 | ) | (529,984 | ) | (521,176 | ) | ||||||||||||||
| Foreign currency translation adjustment and other | 537 | 778 | (932 | ) | 781 | 368 | ||||||||||||||||||
| Change in deferred net revenue, net of foreign currency translation and other | $ | 42,847 | $ | (7,045 | ) | $ | (80,541 | ) | $ | (8,027 | ) | $ | 5,192 | |||||||||||
| Deferred cost of revenue |
|
|||||||||||||||||||||||
| End of quarter | $ | 338,633 | $ | 333,030 | $ | 300,524 | $ | 286,044 | $ | 292,730 | ||||||||||||||
| Less: Beginning of quarter | (313,458 | ) | (338,633 | ) | (333,030 | ) | (300,524 | ) | (286,044 | ) | ||||||||||||||
| Foreign currency translation adjustment | 69 | 68 | (10 | ) | (8 | ) | 26 | |||||||||||||||||
| Change in deferred cost of revenue, net of foreign currency translation | $ | 25,244 | $ | (5,535 | ) | $ | (32,516 | ) | $ | (14,488 | ) | $ | 6,712 | |||||||||||
| STOCK-BASED COMPENSATION | ||||||||||||||||||||||||
| Cost of goods sold | $ | 2,770 | $ | 218 | $ | 1,723 | $ | 2,209 | $ | 1,197 | -57 | % | ||||||||||||
| Research and development | 3,042 | 785 | 2,180 | 2,832 | 1,771 | -42 | % | |||||||||||||||||
| Sales and marketing | 1,783 | 479 | 1,238 | 1,287 | 914 | -49 | % | |||||||||||||||||
| General and administrative | 2,881 | 909 | 1,882 | 2,333 | 1,971 | -32 | % | |||||||||||||||||
| $ | 10,476 | $ | 2,391 | $ | 7,023 | $ | 8,661 | $ | 5,853 | -44 | % | |||||||||||||
| EMPLOYEES | 589 | 576 | 623 | 640 | 645 | 10 | % | |||||||||||||||||
| HOMES & BUSINESSES | ||||||||||||||||||||||||
| Cumulative network endpoints delivered* | 19,714 | 20,266 | 20,814 | 21,506 | 22,321 | 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) | |||||||||||||||||||||||
| Q3 | Q4 | Q1 | Q2 | Q3 | YOY % | ||||||||||||||||||
| QUARTERLY RECONCILIATION OF RESULTS | 2014 | 2014 | 2015 | 2015 | 2015 | Change | |||||||||||||||||
| Net revenue | |||||||||||||||||||||||
| GAAP net revenue | $ | 28,041 | $ | 77,411 | $ | 143,640 | $ | 77,167 | $ | 69,505 | 148 | % | |||||||||||
| Change in deferred revenue, net of foreign currency translation | 42,847 | (7,045 | ) | (80,541 | ) | (8,027 | ) | 5,192 | |||||||||||||||
| Non-GAAP net revenue | $ | 70,888 | $ | 70,366 | $ | 63,099 | $ | 69,140 | $ | 74,697 | 5 | % | |||||||||||
| Gross profit | |||||||||||||||||||||||
| GAAP gross profit | $ | 1,303 | $ | 30,178 | $ | 71,455 | $ | 19,956 | $ | 32,987 | 2432 | % | |||||||||||
| Change in deferred revenue, net of foreign currency translation | 42,847 | (7,045 | ) | (80,541 | ) | (8,027 | ) | 5,192 | |||||||||||||||
| Change in deferred cost of revenue, net of foreign currency translation | (25,244 | ) | 5,535 | 32,516 | 14,488 | (6,712 | ) | ||||||||||||||||
| Amortization of intangible assets | 182 | 140 | 262 | 260 | 260 | ||||||||||||||||||
| Stock-based compensation | 2,770 | 218 | 1,723 | 2,209 | 1,197 | ||||||||||||||||||
| Acquisition-related charges (a) | — | — | 11 | 60 | 14 | ||||||||||||||||||
| Non-GAAP gross profit | $ | 21,858 | $ | 29,026 | $ | 25,426 | $ | 28,946 | $ | 32,938 | 51 | % | |||||||||||
| GAAP gross margin % (as a % of GAAP net revenue) | 5 | % | 39 | % | 50 | % | 26 | % | 47 | % | |||||||||||||
| Non-GAAP gross margin % (as a % of non-GAAP net revenue) | 31 | % | 41 | % | 40 | % | 42 | % | 44 | % | |||||||||||||
| Operating (loss) income | |||||||||||||||||||||||
| GAAP operating (loss) income | $ | (37,420 | ) | $ | 1,392 | $ | 34,141 | $ | (16,539 | ) | $ | (394 | ) | 99 | % | ||||||||
| Change in deferred revenue, net of foreign currency translation | 42,847 | (7,045 | ) | (80,541 | ) | (8,027 | ) | 5,192 | |||||||||||||||
| Change in deferred cost of revenue, net of foreign currency translation | (25,244 | ) | 5,535 | 32,516 | 14,488 | (6,712 | ) | ||||||||||||||||
| Amortization of intangible assets | 299 | 219 | 409 | 422 | 421 | ||||||||||||||||||
| Stock-based compensation | 10,476 | 2,391 | 7,023 | 8,661 | 5,853 | ||||||||||||||||||
| Acquisition-related charges (a) | — | — | 735 | 751 | 559 | ||||||||||||||||||
| Restructuring | 1,888 | (99 | ) | 194 | 1,078 | 339 | |||||||||||||||||
| Non-GAAP operating (loss) income | $ | (7,154 | ) | $ | 2,393 | # | $ | (5,523 | ) | $ | 834 | $ | 5,258 | 173 | % | ||||||||
| GAAP operating margin % (as a % of GAAP revenue) | -133 | % | 2 | % | 24 | % | -21 | % | -1 | % | |||||||||||||
| Non-GAAP operating margin % (as a % of non-GAAP net revenue) | -10 | % | 3 | % | -9 | % | 1 | % | 7 | % | |||||||||||||
| Adjusted EBITDA | |||||||||||||||||||||||
| GAAP net (loss) income | $ | (37,273 | ) | $ | 501 | $ | 34,905 | $ | (16,175 | ) | $ | (622 | ) | 98 | % | ||||||||
| Change in deferred revenue, net of foreign currency translation | 42,847 | (7,045 | ) | (80,541 | ) | (8,027 | ) | 5,192 | |||||||||||||||
| Change in deferred cost of revenue, net of foreign currency translation | (25,244 | ) | 5,535 | 32,516 | 14,488 | (6,712 | ) | ||||||||||||||||
| Other (income) expense, net | (7 | ) | (68 | ) | (288 | ) | (74 | ) | 99 | ||||||||||||||
| (Benefit) provision for income taxes | (140 | ) | 959 | (476 | ) | (290 | ) | 129 | |||||||||||||||
| Depreciation and amortization | 1,771 | 1,763 | 1,949 | 1,953 | 1,990 | ||||||||||||||||||
| Stock-based compensation | 10,476 | 2,391 | 7,023 | 8,661 | 5,853 | ||||||||||||||||||
| Acquisition-related charges (a) | — | — | 735 | 751 | 559 | ||||||||||||||||||
| Restructuring | 1,888 | (99 | ) | 194 | 1,078 | 339 | |||||||||||||||||
| Adjusted EBITDA | $ | (5,682 | ) | $ | 3,937 | $ | (3,983 | ) | $ | 2,365 | $ | 6,827 | 220 | % | |||||||||
| Net (loss) income | |||||||||||||||||||||||
| GAAP net (loss) income | $ | (37,273 | ) | $ | 501 | $ | 34,905 | $ | (16,175 | ) | $ | (622 | ) | 98 | % | ||||||||
| Change in deferred revenue, net of foreign currency translation | 42,847 | (7,045 | ) | (80,541 | ) | (8,027 | ) | 5,192 | |||||||||||||||
| Change in deferred cost of revenue, net of foreign currency translation | (25,244 | ) | 5,535 | 32,516 | 14,488 | (6,712 | ) | ||||||||||||||||
| Amortization of intangible assets | 299 | 219 | 409 | 422 | 421 | ||||||||||||||||||
| Stock-based compensation | 10,476 | 2,391 | 7,023 | 8,661 | 5,853 | ||||||||||||||||||
| Acquisition-related charges (a) | — | — | 735 | 751 | 559 | ||||||||||||||||||
| Income tax benefit related to Detectent acquisition | — | — | (890 | ) | (124 | ) | (114 | ) | |||||||||||||||
| Restructuring | 1,888 | (99 | ) | 194 | 1,078 | 339 | |||||||||||||||||
| Non-GAAP net (loss) income | $ | (7,007 | ) | $ | 1,502 | $ | (5,649 | ) | $ | 1,074 | $ | 4,916 | 170 | % | |||||||||
| GAAP net margin % (as a % of GAAP revenue) | -133 | % | 1 | % | 24 | % | -21 | % | -1 | % | |||||||||||||
| Non-GAAP net margin % (as a % of non-GAAP net revenue) | -10 | % | 2 | % | -9 | % | 2 | % | 7 | % | |||||||||||||
| GAAP net (loss) income per share | |||||||||||||||||||||||
| Basic | $ | (0.77 | ) | $ | 0.01 | $ | 0.71 | $ | (0.32 | ) | $ | (0.01 | ) | ||||||||||
| Diluted | $ | (0.77 | ) | $ | 0.01 | $ | 0.69 | $ | (0.32 | ) | $ | (0.01 | ) | ||||||||||
| Weighted average number of shares used in computation | |||||||||||||||||||||||
| Basic | 48,551 | 48,929 | 49,306 | 49,862 | 50,188 | ||||||||||||||||||
| Diluted | 48,551 | 50,191 | 50,899 | 49,862 | 50,188 | ||||||||||||||||||
| Non-GAAP net (loss) income per share | |||||||||||||||||||||||
| Basic | $ | (0.14 | ) | $ | 0.03 | $ | (0.11 | ) | $ | 0.02 | $ | 0.10 | |||||||||||
| Diluted | $ | (0.14 | ) | $ | 0.03 | $ | (0.11 | ) | $ | 0.02 | $ | 0.10 | |||||||||||
| Weighted average number of shares used in computation | |||||||||||||||||||||||
| Basic | 48,551 | 48,929 | 49,306 | 49,862 | 50,188 | ||||||||||||||||||
| Diluted | 48,551 | 50,191 | 49,306 | 51,390 | 51,713 | ||||||||||||||||||
| (a) Acquisition-related charges in 2014 were not included. | |||||||||||||||||||||||
| SILVER SPRING NETWORKS, INC. | ||||||||||||||||||||||||
|
RECONCILIATION OF GAAP TO NON-GAAP MEASURES |
||||||||||||||||||||||||
| (in thousands, except percentages) | ||||||||||||||||||||||||
| Three Months Ended September 30, 2015 | ||||||||||||||||||||||||
| GAAP |
Change in Deferred |
Stock-based |
Amortization of |
Acquisition- |
Non-GAAP | |||||||||||||||||||
| Product revenue | $ | 50,093 | $ | 1,785 | $ | - | $ | - | $ | - | $ | 51,878 | ||||||||||||
| Service revenue | ||||||||||||||||||||||||
| Managed services and SaaS | 11,223 | 1,397 | - | - | - | 12,620 | ||||||||||||||||||
| Professional services | 8,189 | 2,010 | - | - | - | 10,199 | ||||||||||||||||||
| Total service net revenue | $ | 19,412 | $ | 3,407 | $ | - | $ | - | $ | - | $ | 22,819 | ||||||||||||
| Net revenue | $ | 69,505 | $ | 5,192 | $ | - | $ | - | $ | - | $ | 74,697 | ||||||||||||
| Product cost of revenue | $ | 21,377 | $ | 6,712 | $ | (252 | ) | $ | (260 | ) | $ | - | $ | 27,577 | ||||||||||
| Service cost of revenue | ||||||||||||||||||||||||
| Managed services and SaaS | 8,086 | - | (438 | ) | - | (14 | ) | 7,634 | ||||||||||||||||
| Professional services | 7,055 | - | (507 | ) | - | - | 6,548 | |||||||||||||||||
| Total service cost of revenue | $ | 15,141 | $ | - | $ | (945 | ) | $ | - | $ | (14 | ) | $ | 14,182 | ||||||||||
| Total cost of revenue | $ | 36,518 | $ | 6,712 | $ | (1,197 | ) | $ | (260 | ) | $ | (14 | ) | $ | 41,759 | |||||||||
| Gross profit | $ | 32,987 | $ | (1,520 | ) | $ | 1,197 | $ | 260 | $ | 14 | $ | 32,938 | |||||||||||
| Product gross margin % | 57.3 | % | -11.5 | % | 0.5 | % | 0.5 | % | - | 46.8 | % | |||||||||||||
| Service gross margin % | ||||||||||||||||||||||||
| Managed service and SaaS gross margin % | 28.0 | % | 8.0 | % | 3.5 | % | - | 0.1 | % | 39.5 | % | |||||||||||||
| Professional services gross margin % | 13.8 | % | 17.0 | % | 5.0 | % | - | - | 35.8 | % | ||||||||||||||
| Total service gross margin % | 22.0 | % | 11.6 | % | 4.1 | % | - | 0.1 | % | 37.9 | % | |||||||||||||
| Total gross margin % | 47.5 | % | -5.3 | % | 1.6 | % | 0.3 | % | 0.0 | % | 44.1 | % | ||||||||||||
| Three Months Ended September 30, 2014 | ||||||||||||||||||||||||
| GAAP |
Change in Deferred |
Stock-based |
Amortization of |
Acquisition- |
Non-GAAP | |||||||||||||||||||
| Product revenue | $ | 16,321 | $ | 33,238 | $ | - | $ | - | $ | - | $ | 49,559 | ||||||||||||
| Service revenue | ||||||||||||||||||||||||
| Managed services and SaaS (a) | 7,546 | 3,960 | - | - | - | 11,506 | ||||||||||||||||||
| Professional services (a) | 4,174 | 5,649 | - | - | - | 9,823 | ||||||||||||||||||
| Total service net revenue | $ | 11,720 | $ | 9,609 | $ | - | $ | - | $ | - | $ | 21,329 | ||||||||||||
| Net revenue | $ | 28,041 | $ | 42,847 | $ | - | $ | - | $ | - | $ | 70,888 | ||||||||||||
| Product cost of revenue | $ | 10,791 | $ | 25,244 | $ | (840 | ) | $ | (182 | ) | $ | - | $ | 35,013 | ||||||||||
| Service cost of revenue | ||||||||||||||||||||||||
| Managed services and SaaS (a) | 6,677 | - | (325 | ) | - | - | 6,352 | |||||||||||||||||
| Professional services (a) | 9,270 | - | (1,605 | ) | - | - | 7,665 | |||||||||||||||||
| Total service cost of revenue | $ | 15,947 | $ | - | $ | (1,930 | ) | $ | - | $ | - | $ | 14,017 | |||||||||||
| Total cost of revenue | $ | 26,738 | $ | 25,244 | $ | (2,770 | ) | $ | (182 | ) | $ | - | $ | 49,030 | ||||||||||
| Gross profit | $ | 1,303 | $ | 17,603 | $ | 2,770 | $ | 182 | $ | - | $ | 21,858 | ||||||||||||
| Product gross margin % | 33.9 | % | -6.6 | % | 1.7 | % | 0.3 | % | 0 | 29.3 | % | |||||||||||||
| Service gross margin % | ||||||||||||||||||||||||
| Managed service and SaaS gross margin % (a) | 11.5 | % | 30.5 | % | 2.8 | % | - | - | 44.8 | % | ||||||||||||||
| Professional services gross margin % (a) | -122.1 | % | 127.7 | % | 16.3 | % | - | - | 22.0 | % | ||||||||||||||
| Total service gross margin % | -36.1 | % | 61.3 | % | 9.0 | % | 0.0 | % | - | 34.3 | % | |||||||||||||
| Total gross margin % | 4.6 | % | 22.0 | % | 3.9 | % | 0.3 | % | - | 30.8 | % | |||||||||||||
| (a) | Certain amounts have been reclassified in 2014 from Professional services to Managed services and SaaS related to product support which is recurring in nature to conform to current period presentation. | |||||||||||||||||||||||
| (b) | Amounts presented net of foreign currency translation. | |||||||||||||||||||||||
| SILVER SPRING NETWORKS, INC. | ||||||||||||||||||||||||||||
| RECONCILIATION OF GAAP TO NON-GAAP MEASURES | ||||||||||||||||||||||||||||
| (in thousands, except percentages) | ||||||||||||||||||||||||||||
| Nine Months Ended September 30, 2015 | ||||||||||||||||||||||||||||
| GAAP |
Change in Deferred |
Stock-based |
Amortization of |
Acquisition- |
Non-GAAP | |||||||||||||||||||||||
| Product revenue | $ | 209,839 | $ | (72,264 | ) | $ | - | $ | - |
$ |
- |
$ | 137,575 | |||||||||||||||
| Service revenue | ||||||||||||||||||||||||||||
| Managed services and SaaS | 34,805 | 3,365 | - | - | - | 38,170 | ||||||||||||||||||||||
| Professional services | 45,668 | (14,477 | ) | - | - | - | 31,191 | |||||||||||||||||||||
| Total service net revenue | $ | 80,473 | $ | (11,112 | ) | $ | - | $ | - | $ | - | $ | 69,361 | |||||||||||||||
| Net revenue | $ | 290,312 | $ | (83,376 | ) | $ | - | $ | - | $ | - | $ | 206,936 | |||||||||||||||
| Product cost of revenue | $ | 118,527 | $ | (40,292 | ) | $ | (1,039 | ) | $ | (782 | ) | $ | - | $ | 76,414 | |||||||||||||
| Service cost of revenue | ||||||||||||||||||||||||||||
| Managed services and SaaS | 24,071 | - | (1,680 | ) | - | (85 | ) | 22,306 | ||||||||||||||||||||
| Professional services | 23,316 | - | (2,410 | ) | - | - | 20,906 | |||||||||||||||||||||
| Total service cost of revenue | $ | 47,387 | $ | - | $ | (4,090 | ) | $ | - | $ | (85 | ) | $ | 43,212 | ||||||||||||||
| Total cost of revenue | $ | 165,914 | $ | (40,292 | ) | $ | (5,129 | ) | $ | (782 | ) | $ | (85 | ) | $ | 119,626 | ||||||||||||
| Gross profit | $ | 124,398 | $ | (43,084 | ) | $ | 5,129 | $ | 782 | $ | 85 | $ | 87,310 | |||||||||||||||
| Product gross margin % | 43.5 | % | -0.4 | % | 0.8 | % | 0.6 | % | - | 44.5 | % | |||||||||||||||||
| Service gross margin % | ||||||||||||||||||||||||||||
| Managed service and SaaS gross margin % | 30.8 | % | 6.1 | % | 4.4 | % | - | 0.2 | % | 41.6 | % | |||||||||||||||||
| Professional services gross margin % | 48.9 | % | -23.7 | % | 7.7 | % | - | - | 33.0 | % | ||||||||||||||||||
| Total service gross margin % | 41.1 | % | -9.4 | % | 5.9 | % | - | 0.1 | % | 37.7 | % | |||||||||||||||||
| Total gross margin % | 42.8 | % | -3.6 | % | 2.5 | % | 0.4 | % | 0.0 | % | 42.2 | % | ||||||||||||||||
| Nine Months Ended September 30, 2014 | ||||||||||||||||||||||||||||
| GAAP |
Change in Deferred |
Stock-based |
Amortization of |
Acquisition- |
Non-GAAP | |||||||||||||||||||||||
| Product revenue | $ | 69,299 | $ | 74,682 | $ | - | $ | - | $ | - | $ | 143,981 | ||||||||||||||||
| Service revenue | ||||||||||||||||||||||||||||
| Managed services and SaaS (a) | 24,651 | 8,300 | - | - | - | 32,951 | ||||||||||||||||||||||
| Professional services (a) | 19,927 | 9,483 | - | - | - | 29,410 | ||||||||||||||||||||||
| Total service net revenue | $ | 44,578 | $ | 17,783 | $ | - | $ | - | $ | - | $ | 62,361 | ||||||||||||||||
| Net revenue | $ | 113,877 | $ | 92,465 | $ | - | $ | - | $ | - | $ | 206,342 | ||||||||||||||||
| Product cost of revenue | $ | 42,120 | $ | 62,302 | $ | (1,914 | ) | $ | (278 | ) | $ | - | $ | 102,230 | ||||||||||||||
| Service cost of revenue | ||||||||||||||||||||||||||||
| Managed services and SaaS (a) | 19,769 | - | (992 | ) | - | - | 18,777 | |||||||||||||||||||||
| Professional services (a) | 25,829 | - | (4,486 | ) | - | - | 21,343 | |||||||||||||||||||||
| Total service cost of revenue | $ | 45,598 | $ | - | $ | (5,478 | ) | $ | - | $ | - | $ | 40,120 | |||||||||||||||
| Total cost of revenue | $ | 87,718 | $ | 62,302 | $ | (7,392 | ) | $ | (278 | ) | $ | - | $ | 142,350 | ||||||||||||||
| Gross profit | $ | 26,159 | $ | 30,163 | $ | 7,392 | $ | 278 | $ | - | $ | 63,992 | ||||||||||||||||
| Product gross margin % | 39.2 | % | -11.7 | % | 1.3 | % | 0.2 | % | - | 29.0 | % | |||||||||||||||||
| Service gross margin % | ||||||||||||||||||||||||||||
| Managed service and SaaS gross margin % (a) | 19.8 | % | 20.2 | % | 3.0 | % | - | - | 43.0 | % | ||||||||||||||||||
| Professional services gross margin % (a) | -29.6 | % | 41.8 | % | 15.3 | % | - | - | 27.4 | % | ||||||||||||||||||
| Total service gross margin % | -2.3 | % | 29.2 | % | 8.8 | % | - | - | 35.7 | % | ||||||||||||||||||
| Total gross margin % | 23.0 | % | 4.3 | % | 3.6 | % | 0.1 | % | - | 31.0 | % | |||||||||||||||||
| (a) | Certain amounts have been reclassified in 2014 from Professional services to Managed services and SaaS related to product support which is recurring in nature to conform to current period presentation. | |||||||||||||||||||||||||||
| (b) | Amounts presented net of foreign currency translation. | |||||||||||||||||||||||||||
