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© 2017 Silver Spring Networks. All rights reserved. 1 © 2017 Silver Spring Networks. All rights reserved. 1

Silver Spring Networks, Inc.

March 2017

© 2017 Silver Spring Networks. All rights reserved. 2

This document contains forward-looking statements that involve risks and uncertainties. These forward-looking

statements include statements regarding the momentum in Silver Spring Networks’ business; future growth and market

opportunity; future deployments; future investment; future innovation; the performance, capabilities and benefits of our

products; and future financial results. Statements including words such as "anticipate", "believe", "estimate" or "expect" and

statements in the future tense are forward-looking statements. These forward-looking statements are preliminary estimates

and expectations based on current information and are subject to business and economic risks and uncertainties that could

cause actual events or actual future results to differ materially from the expectations set forth in the forward-looking

statements. Important factors that could cause results to differ materially from the statements herein include: timing around

customer decisions and deployment pace; receipt by our customers of required regulatory approvals; dependence on a limited

number of customers and key suppliers; general economic risks; specific economic risks in different geographies and among

different industries; failure to maintain or increase renewals and increase business from existing customers; uncertainties

around continued success in sales growth and market share gains; the expansion of our target markets, including the IoT

market; lengthy sales cycles with no assurances that a prospective customer will select Silver Spring’s products and services;

amounts included in backlog may not result in billings or revenue; adverse publicity about, or consumer or political opposition

to, the smart grid; security breaches involving smart grid products or services; the ability to integrate technology into third-party

devices and Silver Spring’s relationship with third-party manufacturers; execution and customer adoption risks related to new

product introductions and innovation, including our fifth generation networking platform and products; the ability to attract and

retain personnel, including members of Silver Spring’s management team; changes in strategy; technological changes that

make Silver Spring’s products and services less competitive; competition, particularly from larger companies with more

resources than Silver Spring; international business uncertainties; the ability to acquire and integrate other businesses; and

other risk factors set forth from time to time in Silver Spring’s filings with the SEC, copies of which are available free of charge

at the SEC’s website at www.sec.gov.

All forward-looking statements in this document reflect Silver Spring’s expectations as of February 21, 2017. Silver Spring

undertakes no obligation, and expressly disclaims any obligation, to update any forward-looking statements in this document in

light of new information or future events.

In addition, the preliminary financial results set forth herein are estimates based on information currently available to Silver

Spring. While Silver Spring Networks believes these estimates are meaningful, they could differ from the actual amounts that

Silver Spring ultimately reports in its Annual Report on Form 10-K for the year ended December 31, 2016. Silver Spring

assumes no obligation and does not intend to update these estimates prior to filing its Form 10-K for the year ended

December 31, 2016.

Forward-Looking Statements

http://www.sec.gov/


SSNI at-a-GlanceAn Emerging Leader for Broader IoT

• Founded in 2002, Silver Spring Networks, Inc.

(NYSE: SSNI) enables the Internet of Important

Things™ by reliably and securely connecting things

that matter

• Leading utilities and major cities around the world

rely on Silver Spring’s end-to-end solutions to

manage their applications and deliver operational

results

• World class network and data platform safeguarded

with military grade security

• More than 25.5MM network endpoints delivered,

11MM in contracted backlog, and active pilots with

customers that represent over 26MM potential

endpoints (as of 12/31/2016)

• Headquartered in San Jose, CA with over 700

employees and a patent portfolio with 107 granted

US patents (62 pending)1

CEO: Mike Bell

Interim CFO: Ken Gianella

COO: Ayse Ildeniz

EVP of R&D: Philippe Gaglione

CTO: Don Reeves

Co-Founder: Raj Vaswani

Company Background Financial Profile – Billings ($MM)

Management Background

Notes:

1. In addition to 170 patents granted and 67 patent applications pending in

foreign jurisdictions; as of September 30, 2016

$194 $186 $189

$38 $44 $45$45 $52 $61

$277 $282 $295

-0.1

0.1

0.3

0.5

0

100

200

300

2014 2015 2016

Products Professional Services Managed services and SaaS

Managed services / SaaS % of Billings

16% 19% 21%Note: Some figures may not add due to rounding


Our History

15 Years of Innovation and Breaking New Ground

Founding of

company

2002

First Pilot

with

Westario

Power

2005

Shipped

Gen 1

products for

Smart

Utility

2006 2007

Signed first

customer

2nd large

deployment

2008 2009

First non-

US office

opened in

Australia

2012

10MM end-

points

delivered

2013

IPO on

NYSE

under

ticker

SSNI

20MM

endpoints

delivered

2014

Launched

Smart City;

acquired

Mike Bell

appointed

CEO;

IoT push

2015

Acquired

Record

bookings

2016

Consecutive

quarters of

strong

financial

results


Broader

Internet

of Things

Our Vision

Time

Target

Devices

10s of

Millions

100s of

Millions

Billions

Smart

Utility

Networks

Smart City

Infrastructure

Networks

Open, standards-based, secure, reliable

network platform


Our Open IoT Platform

Silver Spring manages a real-time, global network of information that allows customers to

manage and analyze their data with greater productivity, efficiency, and security.

Connectivity

PlatformServices

Applications & Analytics

MeshNetworking

• Network Operations

o Network monitoring

o Security

• Enhanced Network Svs

o SLA

o Edge intelligenceNetwork Management

Platform

Data API &

Analytics Engine

Cloud-to-Cloud

Integration

Connecting a growing array of IoT devices and sensors

• Customers’ freedom of

choice

• Standard developer

tools for integration

Endpoint Devices

• SSNI Communication Modules:

‒ Standards-based (Wi-SUN)

‒ Gen5 technology with innovative features

‒ Constant powered as well as battery-

powered

Endpoint Connectivity

Gen5 NIC Milli 5


Supporting Multiple Applications On A

Single Network Platform

ELECTRICITY

WATER

PREPAY

AMI

OPERATIONS

GAS

ADVANCED

METERING

DIRECT LOAD

CONTROL

PRICE

RESPONSE

ENERGY

EFFICIENCY

DEMAND

RESPONSE

DEMAND SIDE

MANAGEMENT

CUSTOMER IQ

MARKETING

SERVICES

CUSTOMER

ENGAGEMENT

CUSTOMER

ENGAGEMENT

CUSTOMER

PROGRAMS

SILVERLINK

INSIGHTS

SERVICE

ACTIONABLE

INSIGHTS

INSIGHTS &

ANALYTICS

REVENUE

ASSURANCE

FAULT LOCATION

& SERVICE

RESTORE

VOLTAGE

OPTIMIZATION

NETWORK

MONITORING

GRID

RELIABILITY

DISTRIBUTION

AUTOMATION

PV & RENEWABLE

INTEGRATION

STREET LIGHTS

SMART

CITIES

SMART CITY

INFRASTRUCTURE

TRAFFIC &

PARKING

NOISE SENSORS

ENVIRONMENT

SENSORS

AMI New Solutions


Smart City Infrastructure VisionSmart Street Lighting Builds the Foundation of a Smart City

SMART CITY USE CASES

SMART

PARKING

WEATHER

SENSORS

DIGITAL

SIGNAGE

ACOUSTIC

SENSORS

WATER & GAS

METERING

TRAFFIC

LIGHTS &

CONTROLS

ELECTRIC

VEHICLE

CHARGING

SOLAR

INVERTERS

SECURITY AND

SURVEILLANCE

WASTE

MANAGEMENT

CANOPY APPLICATIONS

STREET LIGHTS SMART METERS

SMART CITY USE CASES

SMART

PARKING

WEATHER

SENSORS

DIGITAL

SIGNAGE

ACOUSTIC

SENSORS

WATER & GAS

METERING

TRAFFIC

LIGHTS &

CONTROLS

ELECTRIC

VEHICLE

CHARGING

SOLAR

INVERTERS

SECURITY AND

SURVEILLANCE

WASTE

MANAGEMENT

CANOPY APPLICATIONS

STREET LIGHTS SMART METERS


0

5

10

15

20

25

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

De

live

red

En

dp

oin

ts (

MM

)Our Traction with Leading Utilities & Cities

AMI

AMI

Street Light

City of Paris

Street Light

Bristol

DA

Westminster,

London

Customer Awards

DA Expand

DA

Street Light

With a backlog of $1.165B1

25.5M Endpoints

Delivered1

1. Backlog and delivered endpoints as of 12/31/2016

http://www.guelphhydro.com/index.php

http://www.guelphhydro.com/index.php


Delivering Benefits to Our Customers

• 61 million annual meter reads avoided

• Time-of-Use pricing for EV customers

• 70K homes restored 24-hours after Napa quake

• Smart Rate pricing program has saved more

than 1.5 GW

• 2015 ReliabilityOne™ National Reliability Award;

better than 99.98% service reliability

• $30 million operational cash savings for 2014

• Increased reliability by over 20% in past 5 years

• Believed to be North America’s largest street

light project

• Record reliability 2015 for third year in a row due

primarily to smart grid deployments

• ComEd estimates over $1 billion in societal

savings over same time period, with a 25%

decline in frequency and 42% decline in duration

of outages.

• Expected $67 million decline in 2016 rates.

• Largest 2-way residential program with 110K in-

home smart thermostats

• Ranked #1 in Customer Satisfaction in 2013 and

2014 by JD Power

• Piloting street light project

Source: Florida Power & Light 10/23/15 and 5/25/15 PR, ComEd 1/27/2016 PR and company reports, 5/5/15; PG& E Q1 2015 earnings call, OG&E company reports, SSNI internal data


Our Business ModelSolutions-oriented and Focused on High Value Creation

Time

$

+17%

+14%

+1%

2014-16

Billings CAGR

Endpoint

Monetization

Mgd Svs &

SaaS:

$2-$3/

Year1

Products2:

~$65-85

Prof. Svs.:

~$15-1720.2

25.5

8

11

2014 2016

Cumulative Network

Endpoints3

Endpoint is an electric meter connected to a home or business.

1. Based on the current model and delivered cumulative endpoints.

2. Based on the current model and new endpoints delivered within the year.

3. Cumulative endpoints delivered or in contracted backlog as of December 31 for the year indicated

Delivered

Contracted

Growth

Drivers

Solutions

capabilities

Multi-app

network

Technology

leadership +

Coverage

Up ~12%

CAGR

(MM)


Growing Managed Services & SaaS Billings

25.5MM

Endpoints

Delivered as of

Q4 2016

~11MM

Endpoints in

Backlog1

Expanded Menu

into a Growing

Footprint

Building Higher

Visibility

Recurring Base

Cumulative Endpoints Delivered (MM)2 Non-GAAP Managed services & SaaS

Billings3 ($M)

1. Total backlog as of December 31, 2016

2. Cumulative endpoints delivered as of December 31 for the year indicated

3. Certain amounts have been reclassified as of December 31 in 2012, 2013 and 2014 from Professional services to Managed services and SaaS related to product support

which is recurring in nature to conform to current period presentation

20.2 22.9

25.5

2014 2015 2016

$44.5 $52.4

$60.5

2014 2015 2016

~12% CAGR ~17% CAGR


Our Potential to Unlock New MarketsExpand with Technology and Solutions

Leading utilities and major cities world wide

Core Verticals Today

Broaden ecosystem and accelerate growth25.5 MM IoT devices delivered1

Ve

rtic

als

/ T

AM

(2

01

9)

Ap

pli

cati

on

& d

evic

es

Verticals with critical infrastructureSmart Utility Smart City

Advanced metering

Distribution automation

Demand response

Grid analytics

$7.6B

Source: 2019 TAM based on Bloomberg, Gartner, and SSNI research

1. As of Dec 31, 2016

Potential Expansion into Broader IoT

Networked streetlights

Intelligent traffic mgmt

Parking

Air & noise quality

Security monitoring

Waste management

New customers and new partnerships

$8.1B

Direct GTM; Solution-led Direct & ChannelLeverage channel and partnerships to scale

Selective organic and inorganic vertical integration

Varies

Customer use case driven; near term leverages:

IoT for Utilities IoT for Smart Cities

Paris

London

Copenhagen

Stockholm

Rhode Island


Our Strength is in Providing SolutionsCombining Our Platform with the Ecosystem

Services & Support

Application Software /

Analytics / Data Services

Control Platform

Endpoint Device

Enhanced Network &

Data Platform

Basic Network &

Communications Module

Solution Elements Revenue Model

One-Time

and/or Recurring

Recurring

Recurring

One-time1

Recurring

One-time1

3rd

parties

Selectively prime or

vertically integrate for

time-to-market / TCO

advantage

Smart Utility &

City Solutions

New Verticals

& IoT Solutions

Ecosystem / partner;

and/or vertically

integrate

Partner /

opportunistically

integrate solutions

Continue to

expand network

operations &

control platform;

Broaden to new

verticals

BYOD

1. One-Time charge has potential for recurring with “Bring Your Own Device” and/or provide

Network & Coms Module with a Term License, NaaS, and/or financing options

3rd

parties

3rd

parties

BYOD


Taking Our Opportunity to Scale

We are Enabling the Internet of Important ThingsTM

Solution & Managed

Service CapabilitiesIoT Pure-Play Poised

for Growth

Connectivity & Data

Management Platform

Smart Grid & Smart

City Vertical Expertise


Supplemental


State of the Business – Q416

• Solid financial results and record bookings in 2016• Winning in our core markets

• Continue to improve financial execution

• Focused and executing on our Core Business• Record backlog; New international awards - CESC and DEWA

• Regulatory approval granted for AEP Ohio

• Investing for Growth• Capture the emerging international opportunity

• Build channels and partnerships for driving deeper into our Core & IoT


$921

$770

$1,165

2014 2015 2016

20.222.9

25.5

2014 2015 2016

66.4%

56.5% 51.2%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

2014 2015 2016

Key Financial and Operating Metrics

Billings ($MM) Cumulative Network Endpoints Delivered (MM)

Total Backlog ($MM) Cost of Billings as % of Billings (%)

$194 $186 $189

$38 $44 $45

$45 $52 $61

$277 $282 $295

-0.1

0

0.1

0.2

0.3

0.4

0.5

0.6

0

50

100

150

200

250

300

350

2014 2015 2016

Products Professional Services Managed services and SaaS

Notes:

Some figures may not add due to rounding

Amounts are as of December 31 for the year indicated


$58 $60

$17 $18

Q415 Q416

$61 $62

$14 $16

Q415 Q416

$13 $13

$14 $17

$27 $30

Q415 Q416

$48 $48

$27 $30

$75 $78

Q415 Q416

Q416 Financial Results$Millions

Billings Services Billings

Billings by Solution Billings by Region

Note: Some figures may not add due to rounding

Services

Product

+12%

(1%)

Managed/SaaS

Prof. Services

+19%

+3%

+4%

New Solution

AMI

+8%

+2%

+13%International

US


$26 $23

$13 $16

$40 $39

Q415 Q416

Q416 Financial Results$Millions

Cost of Billings Services Cost of Billings

Cost of Billings as % of Billings Non-GAAP Operating Expenses


Q415 Q416

Product 55.0% 47.4%

Services 49.0% 54.4%

Managed / SaaS 51.4% 53.4%

Professional services 46.4% 55.7%

Total 52.9% 50.2%

Services

Product

$6 $7

$7

$9

$13

$16

Q415 Q416

Managed/SaaS

Prof. Services

$27

$35

Q415 Q416

+29%


$770

$1,165

Q415 Q416

$6

$4 $4

$5

$8

Q415 Q116 Q216 Q316 Q416

$113 $118

Q316 Q416

Q416 Financial Results$Millions, cumulative endpoints in millions

Cash & Equivalents Cash Flow from Operations

Cumulative Endpoints Delivered Total Backlog

22.925.5

Q415 Q416

+$5M

+11%

+51%



$237 $241

$45 $54

2015 2016

$226 $241

$56 $53

2015 2016

$186 $189

$96 $105

$282 $295

2015 2016

Full Year 2016 Financial Results$Millions

Billings Services Billings

Billings by Solution Billings by Region


Services

Product

+9%

+2%

Managed/SaaS

Prof. Services

+16%

+2%

+4%

New Solution

AMI

+7%

+20%International

US

$44 $45

$52 $61

$96 $105

2015 2016

(5%)


$114

$130

2015 2016

$27 $27

$30 $34

$56 $61

2015 2016

$103 $90

$56 $61

$159 $151

2015 2016

Full Year 2016 Financial Results$Millions

Cost of Billings Services Cost of Billings

Cost of Billings as % of Billings Non-GAAP Operating Expenses


Services

Product

Managed/SaaS

Prof. Services

2015 2016

Product 55.4% 47.4%

Services 58.5% 58.1%

Managed / SaaS 56.5% 56.7%

Professional services 61.0% 59.9%

Total 56.5% 51.2%


Silver Spring supplements the results of operations presented in accordance with generally accepted accounting principles, or GAAP, with

certain non-GAAP metrics. Silver Spring manages its business, makes planning decisions, evaluates its performance and allocates

resources by assessing non-GAAP metrics such as billings, Managed services and SaaS billings, cost of billings, non-GAAP operating

expense, and total backlog. Silver Spring believes that these non-GAAP financial metrics, when taken together with the corresponding

GAAP financial measures, offer valuable supplemental information regarding the performance of its business, and will help investors better

understand the sales volumes, and gross margin and profitability trends, as well as the cash flow characteristics, of its business. The non-

GAAP metrics should not be considered in isolation from, are not a substitute for, and do not purport to be an alternative to, revenue, cost of

revenue, operating expense or any other performance measure derived in accordance with GAAP. Silver Spring may consider whether

other significant non-recurring items that arise in the future should also be excluded in calculating the non-GAAP financial measures it uses.

Billings represents amounts invoiced for products for which ownership, typically evidenced by title and risk of loss, has transferred or

services that have been provided to the customer, and for which payment is expected to be made in accordance with normal payment

terms. Billings excludes amounts for undelivered products, services to be performed in the future, and amounts paid or payable to

customers. Billings are initially recorded as deferred revenue and are then recognized as revenue when all revenue recognition criteria has

been met under Silver Spring’s accounting policies as described in Silver Spring’s filings with the Securities and Exchange Commission.

Silver Spring reconciles revenue to billings by adding revenue to the change in deferred revenue in a given period.

Cost of billings represents the cost associated with products and services that have been delivered to the customer, excluding stock-

based compensation, amortization of intangibles and acquisition-related charges. Cost of product shipments for which revenue is not

recognized in the period incurred is recorded as deferred cost of revenue. Deferred cost of revenue is expensed in the statement of

operations as cost of revenue when the corresponding revenue is recognized. Costs related to services are expensed in the period

incurred. Silver Spring reconciles cost of revenue to cost of billings by adding cost of revenue and the change in deferred cost of revenue,

less stock-based compensation, amortization and impairment of intangibles and acquisition-related charges, included in cost of revenue in

a given period.

Non-GAAP operating expense consists of research and development, sales and marketing, and general and administrative expenses,

excluding amortization and impairment of intangible assets, stock-based compensation, acquisition-related charges, restructuring and legal

settlements.

Total backlog represents future product and service billings that Silver Spring expects to generate pursuant to contracts entered into with

its utility customers and meter manufacturers. Total backlog includes order backlog, which represents future billings for open purchase

orders and other firm commitments.

Non-GAAP and Other Financial Measures


GAAP to Non-GAAP Reconciliation

Revenue / Billings by Type

$000's, except percentages YoY% YoY%

REVENUE AND BILLINGS BY TYPE Change Change

Revenue:

Product $ 143,202 $ 40,386 -72% $ 129,333 $ 353,041 $ 193,618 -45%

Services

Managed services and SaaS (a) 37,142 15,581 -58% 35,220 71,947 65,309 -9%

Professional services (a) 18,903 10,283 -46% 26,735 64,571 52,081 -19%

Total services 56,045 25,864 -54% 61,955 136,518 117,390 -14%

Total revenue $ 199,247 $ 66,250 -67% $ 191,288 $ 489,559 $ 311,008 -36%

% Product 72% 61% 68% 72% 62%

% Services 28% 39% 32% 28% 38%

Change in deferred revenue:

Product $ (95,194) $ 7,155 $ 64,691 $ (167,458) $ (4,334)

Services

Managed services and SaaS (22,896) 1,427 9,284 (19,531) (4,762)

Professional services (6,169) 2,867 11,445 (20,646) (7,309)

Total services (29,065) 4,294 20,729 (40,177) (12,071)

Total change in deferred revenue $ (124,259) $ 11,449 $ 85,420 $ (207,635) $ (16,405)

Billings

Product $ 48,008 $ 47,541 -1% $ 194,024 $ 185,583 $ 189,284 2%

Services

Managed services and SaaS (a) 14,246 17,008 19% 44,504 52,416 60,547 16%

Professional services (a) 12,734 13,150 3% 38,180 43,925 44,772 2%

Total services 26,980 30,158 12% 82,684 96,341 105,319 9%

Total Billings $ 74,988 $ 77,699 4% $ 276,708 $ 281,924 $ 294,603 4%

% Product 64% 61% 70% 66% 64%

% Services 36% 39% 30% 34% 36%

(a)

Full Year

2014

Certain amounts have been reclassif ied in 2014 from Professional services to Managed services and SaaS related to product support w hich is recurring in nature to conform to current period presentation.

Full Year Full Year

2015 2016

Q4

2015 2016

Q4

2015-2016



Revenue / Billings by Solution


REVENUE AND BILLINGS BY SOLUTION Change Change

Revenue:

Advanced metering infrastructure $ 181,892 $ 57,148 -69% $ 167,506 $ 421,813 $ 269,046 -36%

New solutions 17,355 9,102 -48% 23,782 67,746 41,962 -38%

Total revenue $ 199,247 $ 66,250 -67% $ 191,288 $ 489,559 $ 311,008 -36%

% Advanced metering infrastructure 91% 86% 88% 86% 87%

% New solutions 9% 14% 12% 14% 13%

Change in deferred revenue

Advanced metering infrastructure $ (123,525) $ 2,528 $ 67,922 $ (195,743) $ (27,777)

New solutions (734) 8,921 17,498 (11,892) 11,372

Total change in deferred revenue $ (124,259) $ 11,449 $ 85,420 $ (207,635) $ (16,405)

Billings

Advanced metering infrastructure $ 58,367 $ 59,676 2% $ 235,428 $ 226,070 $ 241,269 7%

New solutions 16,621 18,023 8% 41,280 55,854 53,334 -5%

Total Billings $ 74,988 $ 77,699 4% $ 276,708 $ 281,924 $ 294,603 4%

% Advanced metering infrastructure 78% 77% 85% 80% 82%

% New solutions 22% 23% 15% 20% 18%

Full Year

2014 2015 2016

Full Year Full YearQ4 Q4

2015 2016

2015-2016



Revenue / Billings by Geography


REVENUE AND BILLINGS BY GEOGRAPHY Change Change

Revenue:

United States $ 177,896 $ 53,087 -70% $ 425,951 $ 260,229 -39%

International 21,351 13,163 -38% 63,608 50,779 -20%

Total revenue $ 199,247 $ 66,250 -67% $ 489,559 $ 311,008 -36%

% United States 89% 80% 87% 84%

% International 11% 20% 13% 16%

Change in deferred revenue

United States $ (116,859) $ 8,880 $ (188,880) $ (19,233)

International (7,400) 2,569 (18,755) 2,828

Total change in deferred revenue $ (124,259) $ 11,449 $ (207,635) $ (16,405)

Billings

United States $ 61,037 $ 61,967 2% $ 237,071 $ 240,996 2%

International 13,951 15,732 13% 44,853 53,607 20%

Total Billings $ 74,988 $ 77,699 4% $ 281,924 $ 294,603 4%

% United States 81% 80% 84% 82%

% International 19% 20% 16% 18%

Full Year Full Year

2015 20162015 2016

Q4 Q4



Cost of Revenue / Cost of Billings

$000's

Cost of

Revenue

Change in

Deferred Cost of

Revenue (a)

Stock-based

Compensation

Amortization of

Intangible

Assets

Acquisition-

Related Costs Cost of Billings

Cost of Revenue / Cost of Billings:

Product 19,915$ 3,177$ (455)$ (79)$ -$ 22,558$

Services

Managed services and SaaS 9,762 - (680) - - 9,082

Professional services 8,156 - (810) - (15) 7,331

Total services 17,918$ -$ (1,490)$ -$ (15)$ 16,413$

Total Cost of Revenue / Cost of Billings 37,833$ 3,177$ (1,945)$ (79)$ (15)$ 38,971$

Cost of

Revenue

Change in

Deferred Cost of

Revenue (a)

Stock-based

Compensation

Amortization of

Intangible

Assets

Acquisition-



Product 83,903$ (56,982)$ (250)$ (259)$ -$ 26,412$

Services

Managed services and SaaS 7,592 - (271) - - 7,321

Professional services 6,407 - (485) - (15) 5,907

Total services 13,999$ -$ (756)$ -$ (15)$ 13,228$

Total Cost of Revenue / Cost of Billings 97,902$ (56,982)$ (1,006)$ (259)$ (15)$ 39,640$

(a)

Three Months Ended December 31, 2016

Amounts presented net of foreign currency translation.




Operating Expenses / Non-GAAP Operating Expenses

$000's

Operating

Expenses

Stock-based

Compensation

Amortization

and

Impairment of

Intangible

Assets

Restructuring &

Litigation

Acquisition-

Related Costs

Non-GAAP

Operating

Expenses

Operating Expenses / Non-GAAP Operating Expenses:

Research and development 19,090$ (2,450)$ -$ -$ (311)$ 16,329$

Sales and marketing 10,809 (1,152) (105) - (66) 9,486

General and administrative 12,049 (2,423) (8) - (117) 9,501

Impairment of intangible assets - - - - - -

Restructuring - - - - - -

Total Operating Expenses / Non-GAAP Operating Expenses 41,948$ (6,025)$ (113)$ -$ (494)$ 35,316$

Operating

Expenses

Stock-based

Compensation

Amortization

and

Impairment of

Intangible

Assets

Restructuring &

Litigation

Acquisition-

Related Costs

Non-GAAP

Operating

Expenses



Sales and marketing 7,343 (665) (155) - (64) 6,459

General and administrative 14,483 (1,994) (8) (3,595) (116) 8,770


Restructuring 60 - - (60) - -

Total Operating Expenses / Non-GAAP Operating Expenses 35,600$ (3,936)$ (163)$ (3,655)$ (491)$ 27,355$





Cost of Revenue / Cost of Billings$000's

Cost of

Revenue

Change in

Deferred Cost of

Revenue (b)

Stock-based

Compensation

Amortization of

Intangible

Assets

Acquisition-



Product 106,583$ (14,551)$ (1,737)$ (522)$ -$ 89,773$

Services

Managed services and SaaS 36,772 - (2,415) - - 34,357

Professional services 29,454 - (2,592) - (61) 26,801

Total services 66,226$ -$ (5,007)$ -$ (61)$ 61,158$

Total Cost of Revenue / Cost of Billings 172,809$ (14,551)$ (6,744)$ (522)$ (61)$ 150,931$

Cost of

Revenue

Change in

Deferred Cost of

Revenue (b)

Stock-based

Compensation

Amortization of

Intangible

Assets

Acquisition-



Product 202,430$ (97,274)$ (1,288)$ (1,041)$ -$ 102,827$

Services

Managed services and SaaS 31,663 - (2,037) - - 29,626

Professional services 29,723 - (2,810) - (100) 26,813

Total services 61,386$ -$ (4,847)$ -$ (100)$ 56,439$

Total Cost of Revenue / Cost of Billings 263,816$ (97,274)$ (6,135)$ (1,041)$ (100)$ 159,266$

Cost of

Revenue

Change in

Deferred Cost of

Revenue (b)

Stock-based

Compensation

Amortization of

Intangible

Assets

Acquisition-



Product 77,158$ 56,767$ (1,837)$ (417)$ -$ 131,671$

Services

Managed services and SaaS (a) 25,800 - (919) - - 24,881

Professional services (a) 31,993 - (4,853) - - 27,140

Total services 57,793$ -$ (5,772)$ -$ -$ 52,021$

Total Cost of Revenue / Cost of Billings 134,951$ 56,767$ (7,609)$ (417)$ -$ 183,692$

(a)

(b)

Certain amounts have been reclassif ied in 2014 from Professional services to Managed services and SaaS related to product support w hich

is recurring in nature to conform to current period presentation.

Twelve Months Ended December 31, 2016



Amounts presented net of foreign currency translation.



Operating Expenses / Non-GAAP Operating Expenses

$000's

Operating

Expenses

Stock-based

Compensation

Amortization

and

Impairment of

Intangible

Assets

Restructuring &

Litigation

Acquisition-

Related Costs

Non-GAAP

Operating

Expenses


Research and development 70,673$ (9,309)$ -$ -$ (1,243)$ 60,121$


General and administrative 45,801 (10,104) (33) - (477) 35,187

Impairment of intangible assets 2,204 - (2,204) - - -

Restructuring 39 - - (39) - -

Total Operating Expenses / Non-GAAP Operating Expenses 158,123$ (23,065)$ (2,863)$ (39)$ (1,982)$ 130,174$

Operating

Expenses

Stock-based

Compensation

Amortization

and

Impairment of

Intangible

Assets

Restructuring &

Litigation

Acquisition-

Related Costs

Non-GAAP

Operating

Expenses




General and administrative 46,372 (8,179) (32) (3,595) (1,913) 32,653


Restructuring 1,671 - - (1,671) - -

Total Operating Expenses / Non-GAAP Operating Expenses 142,790$ (20,344)$ (633)$ (5,266)$ (2,451)$ 114,096$



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