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Silver Spring Networks Reports Second Quarter 2013 Financial Results

Silver Spring Networks, Inc. (NYSE: SSNI) today announced preliminary unaudited financial results for its second quarter ended June 30, 2013.

Non-GAAP revenue (billings) for the second quarter was $86.5 million, up 17% year-over-year, driven by growth in service and product revenue. GAAP revenue was $103.5 million as compared to $51.6 million a year ago.

Non-GAAP gross profit margin was 30.1%, up sequentially from 29.2% in Q1 and down as expected when compared to 33.6% a year ago due to changes in non-GAAP revenue mix. GAAP gross profit margin was 46.6% as compared to 12.9% a year ago.

Non-GAAP net loss was $4.5 million as compared with a non-GAAP net loss of $1.1 million a year ago. GAAP net income was $9.5 million as compared with a GAAP net loss of $23.4 million a year ago.

Silver Spring ended the quarter with $125 million in cash.

“We had a strong second quarter with 17% growth year-over-year and delivered innovative new products,” said Scott Lang, Chairman, President, and Chief Executive Officer. “We continue to execute on our technology roadmap delivering solutions to our customers that enable them to unlock even greater value from our leading networking platform.”

Business Highlights (through August 1, 2013)

  • 17 million cumulative network endpoints delivered from inception through June 30, 2013 – up 22% from a year ago.
  • SmartCo agreement to deploy networking platform in New Zealand unlocking benefits for lines companies, energy retailers and consumers in a disaggregated energy market.
  • Snohomish County Public Utility District contract for distribution automation solution.
  • Modesto Irrigation District selects advanced Conservation Voltage Reduction solution from Silver Spring and DVI, a subsidiary of Dominion.
  • Oklahoma Gas and Electric expands demand response program by adding UtilityIQ Demand Optimizer application to the platform.
  • EVESA, first customer for new street light solution in the City of Paris.
  • Pacific Gas and Electric renews managed services agreement for five years.

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 second quarter ended June 30, 2013 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 800-768-6490 (U.S.) or 785-830-7987 (International), access code 8763127 or via webcast 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 17 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 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 (billings), cost of non-GAAP revenue (billings), non-GAAP gross profit (loss), non-GAAP operating loss, non-GAAP net loss, non-GAAP earnings (loss) per share, and adjusted EBITDA, in addition to other financial measures presented in accordance with GAAP. Silver Spring believes that these non-GAAP 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. These 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.

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