OPWR Opower, Inc.

Opower (NYSE: OPWR), the global leader in cloud-based software for the utility industry, today announced its financial results for the first quarter ended March 31, 2016.

First Quarter 2016 Financial Highlights

• Total revenue was $36.7 million, an increase of 10 percent from the comparable period in 2015.
• GAAP operating loss was $11.8 million, compared to $9.9 million for the comparable period in 2015.
• Non-GAAP operating loss was $4.7 million, compared to $4.9 million for the comparable period in 2015.
• GAAP net loss was $11.2 million, compared to $11.0 million for the comparable period in 2015. GAAP net loss per share was $0.21, based on diluted weighted-average shares outstanding of 52.9 million. This compares to a GAAP net loss per share of $0.22 for the comparable period in 2015.
• Non-GAAP net loss was $4.1 million, compared with $6.0 million for the comparable period in 2015. Non-GAAP net loss per diluted share was $0.08, based on diluted weighted-average shares outstanding of 52.9 million. This compares to a non-GAAP net loss per share of $0.12 for the comparable period in 2015.
• Adjusted EBITDA was $(1.7) million, compared to $(2.4) million for the comparable period in 2015.
• The Company had $89.6 million in cash, cash equivalents, and investments at March 31, 2016.

Conference Call Information

As a result of the earlier announcement that Oracle plans to purchase Opower, the conference call previously scheduled for today to discuss Opower’s financial results has been canceled.

Non-GAAP Financial Measures

This press release contains the following non-GAAP financial measures: Non-GAAP operating loss, non-GAAP net loss, non-GAAP net loss per share, non-GAAP weighted-average common shares outstanding and adjusted EBITDA.

We define non-GAAP operating loss, non-GAAP net loss and non-GAAP net loss per share as excluding the impact of stock-based compensation. The weighted-average shares outstanding used to calculate non-GAAP net loss per share gives effect to the conversion of the preferred stock as of the beginning of each of the periods presented, if any.

We define adjusted EBITDA as net loss adjusted to exclude our income tax provision, other income (expense), including interest, depreciation and amortization, and stock-based compensation.

We believe that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to Opower's financial condition and results of operations. We use these non-GAAP measures for financial, operational and budgetary decision-making purposes, and to compare our performance to that of prior periods for trend analyses. We believe that these non-GAAP financial measures provide useful information regarding past financial performance and future prospects, and permit us to analyze key financial metrics used to make operational decisions more thoroughly. We believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial measures with other software companies, many of which disclose similar non-GAAP financial measures.

We do not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is their exclusion of significant income and expenses that are required by GAAP to be recorded in the Company's financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by management on which income and expenses are excluded or included in determining these non-GAAP financial measures. In order to compensate for these limitations, management presents non-GAAP financial measures in connection with GAAP results. We urge investors to review the reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures that is included in this press release, and not to rely on any single financial measure to evaluate our business.

About Opower

Opower (NYSE: OPWR) is an enterprise software company that helps utilities elevate the customer experience. Energy providers use Opower's customer engagement platform to deliver proactive, digital communications that raise customer satisfaction, manage energy demand, and lower service costs. Opower's software is deployed to 100 utilities worldwide and reaches more than 60 million homes and businesses. For more information, please visit www.opower.com and follow us on Twitter at @Opower.

 

OPOWER, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands)

          March 31,

2016

December 31,

2015

  Assets Current assets: Cash and cash equivalents $ 17,057 $ 25,931 Short-term investments 43,729 35,017 Accounts receivable, net 47,705 52,655 Prepaid expenses and other current assets   6,442     5,528   Total current assets 114,933 119,131   Long-term investments 28,805 36,464 Property and equipment, net 19,170 17,879 Other assets   737     287   Total assets $ 163,645   $ 173,761     Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 1,959 $ 2,273 Accrued expenses 6,090 7,403 Deferred revenue 73,154 71,646 Accrued compensation and benefits 5,568 10,874 Other current liabilities   1,256     1,659   Total current liabilities 88,027 93,855   Deferred revenue 2,066 1,676 Other liabilities   123     95   Total liabilities   90,216     95,626     Stockholders' equity: Preferred stock - - Common stock - - Additional paid-in capital 254,795 248,521 Accumulated deficit (181,004 ) (169,853 ) Accumulated other comprehensive loss   (362 )   (533 ) Total stockholders' equity   73,429     78,135               Total liabilities and stockholders' equity $ 163,645   $ 173,761        

OPOWER, INC.

CONSOLIDATED STATEMENT OF OPERATIONS

(Unaudited, in thousands, except per share data)

      Three Months Ended

March 31,

2016 2015   Revenue: Subscription $ 31,812 $ 30,386 Services   4,877     3,035   Total revenue 36,689   33,421     Cost of revenue (1): Subscription 10,198 8,430 Services   4,378     3,584   Total cost of revenue 14,576   12,014     Gross profit 22,113 21,407   Operating expenses (1): Sales and marketing 15,861 14,501 Research and development 13,311 12,213 General and administrative   4,729     4,575   Total operating expenses   33,901     31,289     Operating loss (11,788 ) (9,882 )   Other income (expense): Loss on foreign currency 569 (1,032 ) Interest expense (29 ) (1 ) Other, net   98     (4 ) Loss before income taxes (11,150 ) (10,919 ) Provision for (benefit from) income taxes   1     55   Net loss $ (11,151 ) $ (10,974 )   Weighted-average common stock outstanding: Basic and diluted 52,939 50,523   Net loss per share: Basic and diluted $ (0.21 ) $ (0.22 )  

(1) Stock-based compensation was allocated as follows:

Three Months Ended

March 31,

2016 2015 Cost of revenue - Subscription $ 318 $ 147 Cost of revenue - Services 406 265 Sales and marketing 2,854 1,888 Research and development 2,355 1,658 General and administrative   1,158     1,046   Total stock-based compensation $ 7,091   $ 5,004      

OPOWER, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited, in thousands)

        Three Months Ended

March 31,

2016     2015   Operating Activities Net loss $ (11,151 ) $ (10,974 ) Adjustments to reconcile net loss to net cash used in operating activities:

 

Depreciation and amortization 2,966 2,520 Stock-based compensation expense 7,091 5,004 Other (422 ) 1,036

 

Changes in operating assets and liabilities:

 

Accounts receivable 5,103 17,437 Prepaid expenses and other current assets (868 ) (882 ) Other assets (461 ) (87 ) Accounts payable (318 ) 585 Accrued expenses (1,217 ) (1,177 ) Accrued compensation and benefits (5,308 ) (1,686 ) Deferred revenue 1,860 (6,124 ) Other liabilities   (192 )   (376 ) Net cash used in operating activities   (2,917 )   5,276     Investing Activities Purchases of available-for-sale securities (9,431 ) - Sales and maturities of available-for-sale securities 8,442 - Additions to property and equipment   (4,107 )   (2,366 ) Net cash used in investing activities   (5,096 )   (2,366 )   Financing Activities Proceeds from issuance of common stock 720 835 Taxes paid related to net share settlement of equity awards (1,803 ) (1,135 ) Principal payments on capital lease obligations   (183 )   (110 ) Net cash provided by (used in) financing activities   (1,266 )   (410 )   Effect of exchange rate changes on cash and cash equivalents 405 (830 )   Net increase (decrease) in cash and cash equivalents (8,874 ) 1,670 Cash and cash equivalents, beginning of period   25,931     125,725   Cash and cash equivalents, end of period $ 17,057   $ 127,395      

OPOWER, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(Unaudited, in thousands, except per share data)

        Three Months Ended

March 31,

2016     2015   Reconciliation of Net Loss to Adjusted EBITDA: Net loss $ (11,151 ) $ (10,974 ) Provision for (benefit from) income taxes 1 55 Other (income) expense, including interest (638 ) 1,037 Depreciation and amortization 2,966 2,520 Stock-based compensation   7,091     5,004   Adjusted EBITDA $ (1,731 ) $ (2,358 )   Reconciliation of Cost of Revenue to Non-GAAP Cost of Revenue: Cost of revenue $ 14,576 $ 12,014 Less: Stock-based compensation   724     412   Non-GAAP cost of revenue $ 13,852   $ 11,602     Reconciliation of Subscription Gross Margin to Non-GAAP Subscription Gross Margin: Subscription gross margin 67.9 % 72.3 % Add back: Subscription stock-based compensation   1.0 %   0.4 % Non-GAAP Subscription gross margin   68.9 %   72.7 %   Reconciliation of Services Gross Margin to Non-GAAP Services Gross Margin: Services gross margin 10.2 % -18.1 % Add back: Services stock-based compensation   8.3 %   8.7 % Non-GAAP Services gross margin   18.5 %   -9.4 %   Reconciliation of Gross Margin to Non-GAAP Gross Margin: Gross margin 60.3 % 64.1 % Add back: Stock-based compensation   2.0 %   1.2 % Non-GAAP gross margin   62.3 %   65.3 %   Reconciliation of Operating Expenses to Non-GAAP Operating Expenses: Operating expenses $ 33,901 $ 31,289 Less: Stock-based compensation   6,367     4,592   Non-GAAP operating expenses $ 27,534   $ 26,697     Reconciliation of Operating Loss to Non-GAAP Operating Loss: Operating loss $ (11,788 ) $ (9,882 ) Add back: Stock-based compensation   7,091     5,004   Non-GAAP operating loss $ (4,697 ) $ (4,878 )     Reconciliation of Net Loss to Non-GAAP Net Loss: Net loss $ (11,151 ) $ (10,974 ) Add back: Stock-based compensation   7,091     5,004   Non-GAAP net loss $ (4,060 ) $ (5,970 )   Shares used in computing Non-GAAP Per Share Amounts: Weighted-average common stock outstanding, basic and diluted 52,939 50,523 Add: Additional weighted-average shares giving effect to the conversion of preferred stock as of the beginning of the period   -     -   Non-GAAP weighted-average common stock outstanding, basic and diluted   52,939     50,523   Non-GAAP net loss per share $ (0.08 ) $ (0.12 )  

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OpowerInvestor ContactCharlie Mayer, 571-483-5200investor@opower.comorMedia ContactAlex Kotranalex.kotran@opower.com