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Silver Spring Networks Reports Third Quarter 2015 Financial Results

The following excerpt is from the company's SEC filing.

$0.10 non-GAAP Earnings Per Share on $75 million Top-Line

51% Growth in non-GAAP Gross Profit

29% Growth in Endpoints Delivered

$4 Million in Positive Cash Flow from Operations

Redwood City, CA November 3, 2015 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 Springs technology platform, business model and established leadership position at some of the worlds 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 Springs 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

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

About Silver Spring Networks

Silver Spring Networks is a leading networking platform and solutions provider for smart energy networks. Silver Springs 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 Springs 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

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...