As we reported last month, smart grid network company Silver Spring Networks is still moving forward with its IPO, and on Tuesday it set the terms for its IPO (hat tip Dana Hull and the San Jose Mercury News). Silver Spring plans to sell 3.7 million shares at a price of between $16 and $18 per share, which at the midpoint would raise $63 million for the company.
That amount is less than half of what Silver Spring originally planned to raise: a maximum of $150 million. The company first filed to go public in the summer of 2011. Longtime investor Foundation Capital also plans to purchase $12 million worth of stock at the IPO price, following the IPO, in a private placement.
We’ll see what price per share Silver Spring eventually lands on before it actually goes public, assuming it does make it out. If you only look at Silver Spring’s GAAP (generally accepted accounting principles) revenue and net income, as this analyst did, the company doesn’t look all that amazing. The company hasn’t ever had a positive net income, and it recorded revenue of $147 million for the nine months ended Sept 30, 2012, which was down from $176 million from the same period in 2011.
But if you look at the deals that Silver Spring closed in 2012, and the amount it billed its utility customers for, it actually had a decent year last year. The company recorded billings of $219 million for the nine months ended Sept 30, 2012, up from $183 million for the same period of 2011. Billings are how much Silver Spring invoiced its customers, and they are considered deferred revenue until they can be officially counted as revenue.
Silver Spring also had its highest gross margin to date on those billings of 34 percent. The company has a total of $473 million in deferred revenue as of the nine months ended September 30, 2012, and about $60 million in cash for the same period.
Will Silver Spring deliver a successful IPO in a difficult year for clean power and energy efficiency companies? SolarCity was able to go public in 2012 after its investors were able to negotiate the deal, but it was touch and go. We’ll just have to wait and see.