Silver Spring Networks surprises Wall Street

Smart grid networking equipment maker Silver Spring Networks had a very good day on Friday after it significantly beat earning estimates. The company actually showed GAAP net income of $9.5 million, and revenue was up 17 percent year over year. Additionally margins appear to be holding steady at around 30 percent.
The company highlighted new deals with various utilities, including a New Zealand consortium of line companies, a good sign if the company can build foreign business. It’s also trying to move beyond products as it moves to expand its model beyond just hardware. It noted that Oklahoma Gas&Electric had expanded its demand response program by adding the UtilityIQ application to its platform.

It’s that second line of revenue, being able to continue to sell services and software to existing customers that will be critical for Silver Spring going forward. Eventually we will reach full smart metering deployment. And once that happens, there will have to be value added services, which save utilities money and increase reliability, if Silver Spring is going to grow.