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Opower Announces Fourth Quarter and Full Year 2014 Financial ResultsOpower (NYSE: OPWR), a leading provider of cloud-based software for the utility industry, today announced its financial results for the fourth quarter and full year 2014. The company finished the year with revenue of $128.4 million, an increase of 45 percent year-over-year. "Revenue and profitability were above the high end of our expectations for the fourth quarter and 2014," said Dan Yates, chief executive officer of Opower. "Our strong performance reflects a healthy demand environment and the deepening of many of our customer relationships." Yates continued, "At Opower, our ambition is to lead the transformation of the utility industry with a customer engagement platform that is core to every interaction a utility company has with its customers. The utility industry is one of the largest remaining industries yet to be transformed by cloud software. We are leading that transformation." Yates also announced Customer Care: Billing Suite, a new product that will be deployed on the Opower 6 customer engagement platform. "This offering helps us entrench deeper into utility operations and is a big part of our effort to automate and improve every single customer touchpoint." Puget Sound Energy will be the first customer to launch the entire Billing Suite later this year. Opower signed several large expansions in the fourth quarter and added customers domestically and overseas. Fourth Quarter 2014 Financial Highlights Revenue
Operating Loss
Net Loss
Adjusted EBITDA
Full Year 2014 Financial Highlights Revenue
Operating Loss
Net Loss
Adjusted EBITDA
Balance Sheet
Business Outlook Opower is issuing the following guidance for the first quarter and full year of 2015, based on current expectations:
Non-GAAP net income/(loss) in the table above for the first quarter and for the full year 2015 excludes stock-based compensation expenses of $6.0 million and $30.0 million, respectively. Non-GAAP Adjusted EBITDA also excludes $2.3 million in depreciation and amortization expenses in the first quarter and $12.5 million for the full year 2015. Conference Call Information
The webcast will be archived on Opower's website for three months. 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. 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 is transforming the way utilities engage with their customers. Opower's customer engagement platform enables utilities to reach their customers at moments that matter through proactive and digitized communications that drive energy savings, increase customer engagement and satisfaction, and lower customer operation costs. Opower's software has been deployed to more than 95 utility partners around the world and reaches more than 50 million households and businesses. For more information, please visit www.opower.com and follow us on Twitter at @Opower. Cautionary Language Concerning Forward-Looking Statements This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding our revenue, net income and profitability metrics for the company's first quarter and full year 2015, and statements regarding our market position in our industry. These forward-looking statements are made as of the date of this press release and were based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. Words such as "expect," "anticipate," "should," "believe," "hope," "target," "project," "goals," "estimate," "potential," "predict," "may," "will," "might," "could," "intend," variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond our control. Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, unpredictable sales cycles and implementation times; changes to the regulatory landscape could alter our customers' buying patterns; our ability to respond to evolving technological changes; our ability to retain and attract customers; the risk of technological developments and innovations by others; failure to manage growth and effectively scale the organization; failure to protect and enforce our intellectual property rights; assertions by third parties that we infringe their intellectual property rights; the risk of losing key employees; changes to current accounting rules; and general political or destabilizing events, including war, conflict or acts of terrorism. For a detailed discussion of these and other risk factors, please refer to the risks detailed in our filings with the Securities and Exchange Commission, including, without limitation, our final prospectus for our initial public offering filed on April 4, 2014 and most recent Quarterly Report on Form 10-Q. Past performance is not necessarily indicative of future results. We anticipate that subsequent events and developments will cause our views to change. We undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.
(2) During the first quarter of 2014, the Company updated its methodology for allocating certain general and administrative costs to more closely align these costs to the functional departments consuming the related services. As a result, certain prior period costs have been reclassified from general and administrative expenses to cost of revenue, sales and marketing expenses, and research and development expenses primarily based on the headcount in each of these functional areas. The reclassifications for the three months ended December 31, 2013 reduced general and administrative expenses by $2.3 million and increased cost of revenue, sales and marketing expenses, and research and development expenses by $0.4 million, $0.9 million and $1.0 million, respectively. The reclassifications for the year ended December 31, 2013 reduced general and administrative expenses by $5.8 million and increased cost of revenue, sales and marketing, and research and development expenses by $0.8 million, $2.6 million, and $2.4 million, respectively. These reclassifications had no effect on previously reported operating loss, net loss or cash flows.
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