Silver Spring Networks reported Monday that it swung to profitability in 2015, according to preliminary financial results, and it also announced a big smart meter networking win with New York utility Consolidated Edison to sweeten the news.
Silver Spring projected that it will earn 8 cents to 9 cents per share in fiscal year 2015 on revenues of $281 million to $282 million on a non-GAAP basis, coming in at the high range of its previous 2015 estimates. It’s the first annual profit for the publicly traded Redwood City, Calif.-based company, and a turnaround from 2014’s non-GAAP loss of $24.4 million, or 50 cents per share, on revenue of $276.7 million.
Silver Spring also reported that it shipped about 613,000 wirelessly connected devices in 2015, up 13 percent from the previous year, bringing its cumulative total to more than 22.9 million endpoints. In addition, the company announced that it has filed a $200 million mixed shelf registration with the U.S Securities and Exchange Commission for future stock, debt or warrant offerings to be used for “general corporate purposes.”
These results, released a week ahead of its detailed fourth-quarter and full year 2015 results due on Feb. 16, were accompanied by news of Silver Spring’s award of a contract to deploy a combined 5.2 million smart meters with New York utilities Con Edison and Orange & Rockland Utilities.
That includes about 3.9 million electric meters and 1.3 million natural gas meters for the two regulated operating companies of Consolidated Edison, in a deployment that awaits final approval from New York’s Public Service Commission before a scheduled start in early 2017.
This win is noteworthy, in that it fits in with a much more robust set of capabilities being demanded of utility advanced metering infrastructure (AMI) networks under New York’s Reforming the Energy Vision (REV) proceeding, Silver Spring CEO Michael Bell noted in a Monday conference call.
That includes 15-minute interval meter reads, as well as “real-time visibility into grid conditions and the ability to optimize voltage levels for maximum efficiency and minimal environmental impact,” he said. “Con Edison also plans to integrate a growing number of distributed energy resources and to support a variety of sensors and smart city applications.”
Previous generations of smart meter networks haven’t required this kind of multi-application capabilities. But they’re part of the suite of services that Silver Spring has been promoting to differentiate it from competitors such as Itron, Landis+Gyr and Elster.
In particular, it’s an important proving point for the company’s goal of becoming a favored provider of networks to support the “internet of things,” or IOT, Bell said. That’s a catch-all term that includes all manner of wirelessly connected endpoints that can deliver data and remote-control capabilities to utilities and cities.
Silver Spring’s main foray into the IOT space has been in networked streetlights, boosted by its acquisition of Streetlight.Vision in 2014. The company has deployed pure-play streetlighting networks for the cities of Copenhagen, Paris and Glasgow, among others. It’s also put existing smart meter networks to use connecting streetlights for customers of utilities including Florida Power & Light in Miami-Dade County and Chicago’s Commonwealth Edison.
But these networks are only the starting point for what Bell described as a full-court press into IOT applications for Silver Spring as part of its new “Starfish” platform -- a “robust, scalable and secure IOT networking solution” to “enable commercial enterprises, cities, utilities, and developers to access a reliable, secure, and scalable IOT network service with service-level agreements that meet their needs.”
This move into IOT applications for its utility and streetlight-centric networks isn’t unique to Silver Spring. Competitors like Itron have been building increased computing and analytics flexibility into their networks, in hopes of adding smart thermostats,solarinverters, distribution grid devices, parking meters, traffic lights and environmental sensors to their roster of connected endpoints. (For a deeper dive into Starfish and Silver Spring’s IOT ambitions, check out our upcoming report at GTM Squared.)
Silver Spring has brought increased bandwidth to its “Gen5” networking technology, doubling its throughput speed to 2.4 megabits per second and achieving a tenfold increase in processing power, compared to previous iterations of the technology announced in Jan. 2015.
“We continue to invest in additional applications beyond AMI to capitalize on our growing footprint and unlock benefits of our multi-application network for our customers, led by streetlights, distribution automation, and analytics,” Bell said.