Coming off its second restructuring in four years, smart grid technology provider Silver Spring Networks is expanding its geographical footprint and moving beyond the power sector into the broader industrial internet of things market, its executives said.
The company's recent contract awards highlight its strategy to "leverage our [advanced metering infrastructure, or AMI] networks for a wide range of applications," including water, environmental monitoring, security and medical devices, President and CEO Mike Bell said on an Aug. 8 earnings call. "Moving into a number of new industrial verticals, we remain confident in our position as the network and data platform provider for the Internet of important things."
Among Silver Spring's recent wins are an agreement to link 28,000 smart street lights in London's Barking and Dagenham district, a partnership with Ameresco Inc. to connect more than 250,000 street lights in Chicago in what the company called "the largest city-led wireless street lighting network in the U.S.", a contract with Irish communications provider ESB Telecoms to create a nationwide internet of things network based on Silver Spring's Starfish platform and the installation of a smart grid network for the Dubai Electricity And Water Authority to cover the Emirate of Dubai with an internet of things communications platform.
Those deployments build on previous contracts in Silver Spring's core business, such as an agreement with Entergy Services Inc., announced in October 2016, to deploy the company’s AMI platform to 2.8 million customers of Entergy Corp. utilities in Arkansas, Louisiana, Mississippi and Texas. Those installations will begin in 2018.
Proprietary technology going 'the way of the dodo'
"With our network technology, you can connect just about anything," Bell asserted. "This is the larger [internet of things] that we've been talking about."
Bell also noted that the power sector is moving away from the proprietary AMI technology that some of Silver Spring's competitors rely on toward more standardized systems.
"I've been saying for a long time that standards-based networks are the way to go, and this proprietary stuff that people are trying to roll out will go the way of the dodo."
The company's second-quarter financial results show that "We're back on track for a solid 2017," said CFO Catriona Fallon. Second-quarter revenue on a GAAP basis was $261.6 million, up 114.5% from the same period a year ago, while operating expenses, including a $1.2 million restructuring charge, totaled $38.3 million, up slightly year over year. Billings on a non-GAAP basis were $78.7 million, up nearly 10% from the second quarter of 2016.
Like other smart meter providers, Silver Spring, which was founded in 2002 and went public in 2013, has been hit in recent years by a slowdown in utility smart grid deployments.
The company reduced its headcount from 704 to 646 (8%) in the second quarter, Fallon said, and expects to save $1.5 million to $1.7 million in operating expenses from the restructuring measures completed to date. At the same time, the company is expanding its overseas sales offices to take advantage of expanding opportunities in the Middle East and Asia Pacific.
"We're going after international opportunities in a much more intelligent way," said Bell. "We've changed our sales structure to be geographically based, so that the heads of geographies really are experts at doing business in those parts of the world."