EnerNOC's (NASDAQ: ENOC) first-quarter results came in ahead of its guidance thanks to some key customer wins and its ability to push costs down. That said, the company still lost money during the quarter, and its results didn't give it enough confidence to boost guidance.
Continue Reading Below
EnerNOC results: The raw numbers
Data source: EnerNOC.
Image source: Getty Images.
What happened with EnerNOC this quarter?
Costs continue to come down:
- Demand response revenue sank 5.1% to $34.5 million, though that was above the high end of the company's $30 million to $34 million guidance range. Meanwhile, software revenue slumped 20% to $13.6 million, which was also above the high end of its $11 million to $13 million guidance range. The primary culprit driving the year-over-year revenue decline was the sale of some business lines last year.
- Despite sinking revenue, EnerNOC managed to shrink its net loss 21% while adjusted EBITDA improved by 47%. That continues the company's trend of narrowing its first-quarter loss. Those improvements are primarily due to a 36% drop in operating expenses. As a result, the company's net loss was much less than its guidance range of $1.39 to $1.49 per share.
What management had to say
CEO Tim Healy commented on the quarter by saying, "We are pleased by our strong start to the year for both our demand response and software businesses, with a number of key customer wins and first quarter top and bottom line results above plan."
EnerNOC continues to expand its customer base. The most notable addition during the quarter was a six-figure utility bill management deal with a major European bank. Meanwhile, the company also continues to expand its solutions and relationships to meet customer demand. For example, it developed a new demand response resource to fulfill its commitment to a power company in Japan, and it doubled the size of its demand response capacity in the U.K. over the past year.
Despite this forward momentum and guidance-beating results, EnerNOC only reaffirmed the full-year guidance it provided last quarter. The company still sees revenue coming in between $310 million to $340 million, which at the midpoint is down nearly 20% from 2016 due to the business line divestitures. Meanwhile, it continues to anticipate its net loss widening to $2.07 to $2.57 per share.
EnerNOCprovided no update on its strategic review process other than to say that its board continues to "evaluate all strategic alternatives with the goal of maximizing value for all shareholders."
10 stocks we like better than EnerNOCWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and EnerNOC wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of May 1, 2017