TMCNet:  Silver Spring Networks Reports Second Quarter 2013 Financial Results

[August 01, 2013]

Silver Spring Networks Reports Second Quarter 2013 Financial Results

REDWOOD CITY, Calif. --(Business Wire)--

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.

Non-GAAP revenue (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. 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 billings by adding revenue to the change in deferred revenue in a given period.

Cost of non-GAAP revenue (billings) 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 loss represents operating loss adjusted for non-GAAP revenue (billings) and cost of non-GAAP revenue (billings) and excludes expenses related to the amortization of intangible assets, legal settlements, and stock-based compensation.

Non-GAAP net 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 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.

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: 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 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; dependence on a limited number of key suppliers and customers; 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 August 1, 2013. 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. While Silver Spring believes these estimates are meaningful, they could differ from the actual amounts that Silver Spring ultimately reports in its Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2013. Silver Spring assumes no obligation and does not intend to update these estimates prior to filing its Form 10-Q for the fiscal quarter ended June 30, 2013.




 
SILVER SPRING NETWORKS
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
 
    Three Months Ended     Six Months Ended
June 30, June 30,
2013     2012 2013     2012
Revenue:
Product revenue $ 47,996 $ 43,958 $ 89,716 $ 91,898
Service revenue   55,514     7,626     67,497     15,140  
Net revenue 103,510 51,584 157,213 107,038
 
Cost of revenue:
Product cost of revenue 39,565 32,132 65,308 65,512
Service cost of revenue   15,695     12,782     33,521     24,789  
Total cost of revenue 55,260 44,914 98,829 90,301
 
Gross profit 48,250 6,670 58,384 16,737
 
Operating expenses:
Research and development 18,752 15,422 43,871 31,392
Sales and marketing 8,637 6,619 19,090 14,910
General and administrative   10,879     6,920     25,015     14,425  
Total operating expenses 38,268 28,961 87,976 60,727
 
Operating income (loss) 9,982 (22,291 ) (29,592 ) (43,990 )
 
Other income (expense)
Interest expense (184 ) (1,229 ) (1,236 ) (2,153 )
Conversion of promissory notes and remeasurement of warrants and derivatives   -     151     (23,676 )   4,400  
Other income (expense), net (184 ) (1,078 ) (24,912 ) 2,247
 
Income (loss) before provision for income taxes 9,798 (23,369 ) (54,504 ) (41,743 )
 
Provision for income taxes   328     38     392     96  
Net income (loss) $ 9,470 $ (23,407 ) $ (54,896 ) $ (41,839 )
Deemed dividend to convertible preferred stockholders   -     -     (105,000 )   -  
Net income (loss) attributable to common stockholders $ 9,470 $ (23,407 ) $ (159,896 ) $ (41,839 )
 
Net income (loss) per share
Basic net income (loss) per share attributable to common stockholders $ 0.20 $ (6.38 ) $ (5.58 ) $ (11.45 )
Diluted net income (loss) per share attributable to common stockholders $ 0.19 $ (6.38 ) $ (5.58 ) $ (11.45 )
 
Weighted average number of shares used in computation
Basic 46,599 3,669 28,637 3,655
Diluted 48,995 3,669 28,637 3,655
 
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 Six Months Ended
June 30, June 30,
2013 2012 2013 2012
Net income (loss) $ 9,470 $ (23,407 ) $ (54,896 ) $ (41,839 )
Change in deferred revenue, net of foreign currency translation (17,059 ) 22,449 3,009 26,498
Change in deferred cost of revenue, net of foreign currency translation (7,763 ) (4,903 ) (23,186 ) 2,991
Amortization of intangibles in cost of revenue 48 48 96 96
Conversion of promissory notes and remeasurement of warrants and derivatives - (151 ) 23,676 (4,400 )
Convertible notes accretion / interest - 1,012 935 1,718
Stock-based compensation 10,845 3,889 37,513 8,606
 
Non-GAAP net income (loss) $ (4,459 ) $ (1,063 ) $ (12,853 ) $ (6,330 )
 
Non-GAAP loss per share
Basic & diluted $ (0.10 ) $ (0.29 ) $ (0.45 ) $ (1.73 )
 
Weighted average number of shares used in computation
Basic & diluted 46,599 3,669 28,637 3,655
 
 
SILVER SPRING NETWORKS, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par values)
 
    June 30,     December 31,
2013

2012 (a)

ASSETS
Current assets:
Cash and cash equivalents $ 124,970 $ 72,646
Accounts receivable 69,711 56,528
Inventory 12,620 7,731
Deferred cost of revenue 114,208 45,298
Prepaid expenses and other current assets   6,563     3,456  
Total current assets 328,072 185,659
 
Property and equipment, net 12,951 12,701
Deferred cost of revenue, non-current 154,028 199,865
Deferred tax assets, non-current 8,029 8,265
Other long-term assets   3,805     11,254  
TOTAL ASSETS $ 506,885   $ 417,744  
 
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 35,636 $ 28,104
Accrued liabilities 21,054 14,831
Deferred revenue 192,530 89,838
Current portion of capital lease obligations 1,449 1,647
Deferred tax liability   7,897     7,897  
Total current liabilities 258,566 142,317
 
Deferred revenue, non-current 318,192 418,218
Preferred stock warrant liability - 11,261
Convertible promissory notes and embedded derivatives - 56,319
Other liabilities 16,866 18,412
 
Convertible preferred stock:
$0.001 par value; no shares authorized, issued and outstanding, and aggregate liquidation preference of $0 as of June 30, 2013; 26,072 shares authorized, 22,366 shares issued and outstanding, and aggregate liquidation preference of $381,338 as of December 31, 2012 - 270,725
 
Stockholders' equity (deficit):
Preferred stock, $0.001 par value, 10,000 shares authorized and no shares issued or outstanding as of June 30, 2013; no shares authorized, issued or outstanding,as of December 31, 2012 - -
 
Common stock, $0.001 par value; 1,000,000 shares authorized, 46,638 shares issued and outstanding as of June 30, 2013; 80,000 shares authorized and 3,764 shares issued and outstanding as of December 31, 2012 46 4
 
Additional paid-in capital 518,594 51,078
Accumulated other comprehensive income (loss) (29 ) (136 )
Accumulated deficit   (605,350 )   (550,454 )
Total stockholders' deficit   (86,739 )   (499,508 )
TOTAL LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT $ 506,885   $ 417,744  
 
(a) Derived from audited consolidated financial statements
 
 
SILVER SPRING NETWORKS
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands)
 
    Three Months Ended     Six Months Ended
June 30, June 30,
2013     2012 2013     2012
 
OPERATING ACTIVITIES
 

Net income (loss)

$ 9,470 $ (23,407 ) $ (54,896 ) $ (41,839 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 1,689 1,857 3,366 3,644
Stock-based compensation 10,845 3,889 37,513 8,606
Conversion of promissory notes and remeasurement of warrants and derivatives - (151 ) 23,676 (4,400 )
Other non-cash adjustments 472 1,261 1,452 1,656
Changes in assets and liabilities:
Accounts receivable (19,722 ) (17,573 ) (13,183 ) (16,756 )
Inventory (443 ) (2,434 ) (5,007 ) (3,255 )
Prepaid expenses and other current assets (2,066 ) (531 ) (3,187 ) (376 )
Deferred cost of revenue (7,663 ) (4,903 ) (23,073 ) 2,991
Other assets 40 (810 ) 2,362 (1,454 )
Accounts payable 9,010 6,472 7,373 3,210
Accrued liabilities 1,349 (1,006 ) (538 ) (1,671 )
Customer deposits (5 ) (917 ) (246 ) (6,808 )
Deferred revenue (17,455 ) 22,449 2,666 26,498
Other liabilities   431     1,067     (1,239 )   1,873  
Net cash used in operating activities   (14,048 )   (14,737 )   (22,961 )   (28,081 )
 
INVESTING ACTIVITIES
 
Decrease in restricted cash - - - 140
Purchases of property and equipment   (1,139 )   (1,735 )   (2,462 )   (3,133 )
Net cash used in investing activities   (1,139 )   (1,735 )   (2,462 )   (2,993 )
 
FINANCING ACTIVITIES
 
Payment upon termination of preferred stock warrants of a related party - - (12,000 ) -
Proceeds from initial public offering, net of offering costs (1,533 ) - 84,705 -
Proceeds from private placement of common stock with a related party - - 12,000 -
Payments on capital lease obligations (491 ) (250 ) (944 ) (508 )
Proceeds from sale-leaseback transaction - 960 - 1,676
Proceeds from issuance of convertible notes, net of paid issuance costs - - - 28,993
Proceeds from issuance of common stock, net of repurchases 176 107 190 402
Taxes paid related to net share settlement of equity awards   (349 )   -     (6,204 )   -  
Net cash provided by financing activities   (2,197 )   817     77,747     30,563  
 
Net increase in cash and cash equivalents (17,384 ) (15,655 ) 52,324 (511 )
Cash and cash equivalents - beginning of period   142,354     86,831     72,646     71,687  
Cash and cash equivalents - end of period $ 124,970   $ 71,176   $ 124,970   $ 71,176  
 
 
SILVER SPRING NETWORKS, INC.
UNAUDITED RECONCILIATION OF NET REVENUE BETWEEN GAAP AND NON-GAAP
(in thousands, except percentages)
                       
Q2 Q3 Q4 Q1 Q2 YoY%

TYPE

CY12     CY12     CY12     CY13     CY13     Change
GAAP net revenue
Product net revenue $ 43,958 $ 30,394 $ 40,332 $ 41,720 $ 47,996 9 %
Service net revenue
Managed services and SaaS 3,992 4,756 4,018 4,559 37,508 840 %
Professional   3,634     4,478     5,721     7,424     18,006   395 %
Total service net revenue $ 7,626   $ 9,234   $ 9,739   $ 11,983   $ 55,514   628 %
Total GAAP net revenue $ 51,584   $ 39,628   $ 50,071   $ 53,703   $ 103,510   101 %
% Product 85 % 77 % 81 % 78 % 46 %
% Service 15 % 23 % 19 % 22 % 54 %
 
Change in deferred net revenue
Change in deferred product revenue $ 13,710 $ 37,545 $ 25,793 $ 14,702 $ 17,905
Change in deferred service revenue
Managed services and SaaS 4,329 3,555 6,441 3,825 (28,245 )
Professional   4,410     4,493     3,271     1,541     (6,719 )
Total change in deferred service revenue   8,739     8,048     9,712     5,366     (34,964 )
Total change in deferred revenue $ 22,449 $ 45,593 $ 35,505 $ 20,068 $ (17,059 )
 
Non-GAAP revenue
Product net revenue $ 57,668 $ 67,939 $ 66,125 $ 56,422 $ 65,901 14 %
Service net revenue
Managed services and SaaS 8,321 8,311 10,459 8,384 9,263 11 %
Professional   8,044     8,971     8,992     8,965     11,287   40 %
Total service net revenue $ 16,365   $ 17,282   $ 19,451   $ 17,349   $ 20,550   26 %
Total non-GAAP net revenue $ 74,033   $ 85,221   $ 85,576   $ 73,771   $ 86,451   17 %
% Product 78 % 80 % 77 % 76 % 76 %
% Service 22 % 20 % 23 % 24 % 24 %
 
 

SOLUTION

GAAP net revenue
Advanced metering infrastructure $ 45,303 $ 34,086 $ 46,250 $ 45,149 $ 97,598 115 %
Distribution automation and demand side management   6,281     5,542     3,821     8,554     5,912   -6 %
Total GAAP net revenue $ 51,584   $ 39,628   $ 50,071   $ 53,703   $ 103,510   101 %
% Advanced metering infrastructure 88 % 86 % 92 % 84 % 94 %
% Distribution automation and demand side management 12 % 14 % 8 % 16 % 6 %
 
Change in deferred net revenue
Advanced metering infrastructure $ 22,238 $ 44,880 $ 32,208 $ 23,219 $ (21,380 )
Distribution automation and demand side management   211     713     3,297     (3,151 )   4,321  
Total change in deferred net revenue $ 22,449 $ 45,593 $ 35,505 $ 20,068 $ (17,059 )
 
Non-GAAP net revenue
Advanced metering infrastructure $ 67,541 $ 78,966 $ 78,458 $ 68,368 $ 76,218 13 %
Distribution automation and demand side management   6,492     6,255     7,118     5,403     10,233   58 %
Total Non-GAAP net revenue $ 74,033   $ 85,221   $ 85,576   $ 73,771   $ 86,451   17 %
% Advanced metering infrastructure 91 % 93 % 92 % 93 % 88 %
% Distribution automation and demand side management 9 % 7 % 8 % 7 % 12 %
 
 

GEOGRAPHY

GAAP net revenue
United States $ 47,415 $ 35,110 $ 46,421 $ 50,747 $ 94,516 99 %
International   4,169     4,518     3,650     2,956     8,994   116 %
Total GAAP net revenue $ 51,584   $ 39,628   $ 50,071   $ 53,703   $ 103,510   101 %
% United States 92 % 89 % 93 % 94 % 91 %
% International 8 % 11 % 7 % 6 % 9 %
 
Change in deferred net revenue
United States $ 16,183 $ 38,325 $ 21,927 $ 8,839 $ (21,032 )
International   6,266     7,268     13,578     11,229     3,973  
Total change in deferred net revenue $ 22,449 $ 45,593 $ 35,505 $ 20,068 $ (17,059 )
 
Non-GAAP net revenue
United States $ 63,598 $ 73,435 $ 68,348 $ 59,586 $ 73,484 16 %
International   10,435     11,786     17,228     14,185     12,967   24 %
Total non-GAAP net revenue $ 74,033   $ 85,221   $ 85,576   $ 73,771   $ 86,451   17 %
% United States 86 % 86 % 80 % 81 % 85 %
% International 14 % 14 % 20 % 19 % 15 %
 
 
SILVER SPRING NETWORKS, INC.
UNAUDITED SUPPLEMENTAL FINANCIAL INFORMATION
(in thousands, except percentages and headcount)
                       
Q2 Q3 Q4 Q1 Q2 YoY%
CY12     CY12     CY12     CY13     CY13     Change
 
CASH FLOW DATA
Operating cash flow $ (14,737 ) $ (10,199 ) $ 14,002 $ (8,913 ) $ (14,048 ) 5 %
Operating cash flow - TTM (34,008 ) (43,330 ) (24,278 ) (19,847 ) (19,158 ) 44 %
 
BALANCE SHEET DATA
Cash, cash equivalents and short-term investments $ 71,176 $ 59,624 $ 72,646 $ 142,354 $ 124,970 76 %
Deferred net revenue
End of quarter 426,958 472,551 508,056 528,176 510,722
Less: Beginning of quarter (404,509 ) (426,958 ) (472,551 ) (508,056 ) (528,176 )
Foreign currency translation adjustment   -     -     -     (52 )   395  
Change in deferred net revenue, net of foreign currency translation $ 22,449   $ 45,593   $ 35,505   $ 20,068   $ (17,059 )
Deferred cost of revenue
End of quarter 203,312 227,170 245,163 260,572 268,236
Less: Beginning of quarter (198,409 ) (203,312 ) (227,170 ) (245,163 ) (260,572 )
Foreign currency translation adjustment   -     -     -     14     99  
Change in deferred cost of revenue, net of foreign currency translation $ 4,903   $ 23,858   $ 17,993   $ 15,423   $ 7,763  
 
STOCK-BASED COMPENSATION
Cost of goods sold $ 640 $ 521 $ 560 $ 6,724 $ 2,531 295 %
Research and development 1,101 876 934 9,544 3,607 228 %
Sales and marketing 725 632 550 3,346 1,526 110 %
General and administrative   1,423     1,188     1,225     7,054     3,181   124 %
Total $ 3,889   $ 3,217   $ 3,269   $ 26,668   $ 10,845   179 %
 
EMPLOYEES 573 570 566 572 589 3 %
 
HOMES & BUSINESSES
Cumulative network endpoints delivered* 13,981 14,967 15,781 16,507 17,008 22 %
*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)
                       
Q2 Q3 Q4 Q1 Q2 YOY %
CY12     CY12     CY12     CY13     CY13     Change
QUARTERLY RECONCILIATION OF RESULTS
 
Net revenue

GAAP net revenue

$

51,584

$

39,628

$

50,071

$

53,703

$

103,510

101

%

Change in deferred revenue, net of foreign currency translation   22,449     45,593     35,505     20,068     (17,059 )
Non-GAAP net revenue $ 74,033   $ 85,221   $ 85,576   $ 73,771   $ 86,451   17 %
 
Gross profit
GAAP gross profit $ 6,670 $ 4,434 $ 10,548 $ 10,134 $ 48,250 623 %
Change in deferred revenue, net of foreign currency translation 22,449 45,593 35,505 20,068 (17,059 )
Change in deferred cost of revenue, net of foreign currency translation (4,903 ) (23,858 ) (17,993 ) (15,423 ) (7,763 )
Amortization of intangibles in cost of revenue 48 48 48 48 48
Stock-based compensation   640     521     560     6,724     2,531  
Non-GAAP gross profit $ 24,904   $ 26,738   $ 28,668   $ 21,551   $ 26,007   4 %
GAAP gross margin % (as a % of GAAP net revenue) 13 % 11 % 21 % 19 % 47 %
Non-GAAP gross margin % (as a % of non-GAAP net revenue) 34 % 31 % 34 % 29 % 30 %
 
Operating income (loss)
GAAP operating income (loss) $ (22,291 ) $ (24,467 ) $ (20,187 ) $ (39,574 ) $ 9,982 145 %
Change in deferred revenue, net of foreign currency translation 22,449 45,593

 

35,505 20,068 (17,059 )
Change in deferred cost of revenue, net of foreign currency translation (4,903 ) (23,858 )

 

(17,993 )

 

(15,423 ) (7,763 )
Amortization of intangibles in cost of revenue 48 48 48 48 48
Stock-based compensation   3,889     3,217     3,269     26,668     10,845  
Non-GAAP operating income (loss) $ (808 ) $ 533   $ 642   $ (8,213 ) $ (3,947 ) -388 %
GAAP operating margin % (as a % of GAAP revenue) -43 % -62 % -40 % -74 % 10 %
Non-GAAP operating margin % (as a % of non-GAAP net revenue) -1 % 1 % 1 % -11 % -5 %
 
Adjusted EBITDA
GAAP net income (loss) $ (23,407 ) $ (26,868 ) $ (21,010 ) $ (64,366 ) $ 9,470 140 %
Change in deferred revenue, net of foreign currency translation 22,449 45,593 35,505 20,068 (17,059 )
Change in deferred cost of revenue, net of foreign currency translation (4,903 ) (23,858 ) (17,993 ) (15,423 ) (7,763 )
Other (income) expense, net 1,078 2,028 902 24,728 184
Provision for income taxes 38 373 (79 ) 64 328
Depreciation and amortization 1,857 1,815 1,796 1,677 1,689
Stock-based compensation   3,889     3,217     3,269     26,668     10,845  
Adjusted EBITDA $ 1,001   $ 2,300   $ 2,390   $ (6,584 ) $ (2,306 ) -330 %
 
Net income (loss)
GAAP net income (loss) $ (23,407 ) $ (26,868 ) $ (21,010 ) $ (64,366 ) $ 9,470 140 %
Change in deferred revenue, net of foreign currency translation 22,449 45,593 35,505 20,068 (17,059 )
Change in deferred cost of revenue, net of foreign currency translation (4,903 ) (23,858 ) (17,993 ) (15,423 ) (7,763 )
Amortization of intangibles in cost of revenue 48 48 48 48 48
Convertible notes accretion / interest 1,012 1,069 1,081 935 -
Conversion of promissory notes and remeasurement of warrants and derivatives (151 ) 830 (308 ) 23,676 -
Stock-based compensation   3,889     3,217     3,269     26,668     10,845  
Non-GAAP net income (loss) $ (1,063 ) $ 31   $ 592   $ (8,394 ) $ (4,459 ) -319 %
GAAP net margin % (as a % of GAAP revenue) -45 % -68 % -42 % -120 % 9 %
Non-GAAP net margin % (as a % of non-GAAP net revenue) -1 % 0 % 1 % -11 % -5 %
 
GAAP income (loss) per share
Basic $ (6.38 ) $ (7.30 ) $ (5.65 ) $ (16.18

)*

 

 

$ 0.20
Diluted $ (6.38 ) $ (7.30 ) $ (5.65 ) $ (16.18

)*

 

 

$ 0.19
 
Weighted average number of shares used in computation
Basic 3,669 3,682 3,720 10,469 46,599
Diluted 3,669 3,682 3,720 10,469 48,995

* GAAP income (loss) per share is based on net loss attributable to common stockholders

 
Non-GAAP income (loss) per share
Basic $ (0.29 ) $ 0.01 $ 0.16 $ (0.80 ) $ (0.10 )
Diluted $ (0.29 ) $ 0.00 $ 0.02 $ (0.80 ) $ (0.10 )
 
Weighted average number of shares used in computation
Basic 3,669 3,682 3,720 10,469 46,599
Diluted 3,669 29,556 29,394 10,469 46,599


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