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Q1 2011 Earnings Call
May 05, 2011 5:00 pm ET
Ronald Sege - Chief Executive Officer, President, Director and Member of Stock Option Committee
Oliver Stanfield - Chief Financial Officer, Principal Accounting Officer and Executive Vice President of Finance
Annie Leschin - IR
Michael Horwitz - Robert W. Baird & Co. Incorporated
Benjamin Schuman - Pacific Crest Securities, Inc.
Craig Irwin - Wedbush Securities Inc.
Elaine Kwei - Jefferies & Company, Inc.
Colin Rusch - ThinkEquity LLC
Sean Hannan - Needham & Company, LLC
Mike Ritzenthaler - Piper Jaffray Companies
Dale Pfau - Cantor Fitzgerald & Co.
John Quealy - Canaccord Genuity
Unknown Analyst -
Welcome to Echelon Earnings Conference Call. Now, I'd like to turn the call over to Annie Leschin, Investor Relations.
Previous Statements by ELON
» Echelon CEO Discusses Q4 2010 Results - Earnings Call Transcript
» Echelon CEO Discusses Q3 2010 Results – Earnings Call Transcript
» Echelon Corporation Q2 2010 Earnings Call Transcript
Additionally, this quarter, we are going to refer to a set of slides that we have posted on the IR section of our website to help walk through the quarterly results and outlook for our markets.
Before we begin, I would like to let everyone know that in the second quarter, Echelon will be participating in Deutsche Bank's Alternative Energy, Utilities & Power Conference on May 11 in New York City, JPMorgan's Global Technology, Media and Telecom Conference on May 16 in Boston and Needham's Clean Tech Conference on May 17 in New York. As additional events are scheduled in the quarter, we will make other announcements.
Now I'd like to remind everyone that during the course of this call, we may make statements relating to our business outlook, future financial and operating results, accounting matters and overall future prospects. These forward-looking statements are based on certain assumptions and are subject to a number of risks and uncertainties. We encourage you to read the risks described in our press release, as well as those in our SEC reports including our report on Form 10-K and subsequent reports on Form 10-Q for more complete disclosure of the risks and uncertainties related to our business. The financial information presented in this call reflects estimates based on information that is available to us at this time. Actual results could differ materially. Echelon undertakes no obligation to update or revise these forward-looking statements and guidance will not be updated after today's call until our next scheduled quarterly financial release.
I'd now like to turn the call over to Ron Sege.
Thank you, Annie, and good afternoon, everyone. Let's start with Slide 3 in the presentation. I'm pleased to report that our focus on sales discipline, go to market execution and accelerated innovation showed results in Q1. Under our core theme of one company focused on open standard energy control networking, we are successfully building pipeline as we sell into our 2 target markets, utility and commercial and in most promising geographies and vertical flow of life. We've begun to partner more successfully and more flexibly across our range of solutions and we are beginning to layout our strategic vision to lead this market with the introduction and extension of the Echelon Control Operating System, COS, the world’s first open standard control operating system and a broad range of hardware that runs it.
Turning to Slide 4, as a result of this improving execution and clear direction, I am happy to report that we once again achieved our guidance on both the top and bottom lines in Q1 with revenue of $28.4 million and non-GAAP net loss of $6.1 million. Revenue grew 56% versus Q1 2010, which we believe is well ahead of market growth rates.
Even more encouraging is our guidance for Q2 2011 which represents another 56% year-over-year increase with revenues of $42 million to $44 million and a non-GAAP profit range of breakeven to $0.02 per share.
Given our momentum so far this year, we now expect to achieve 2011 growth towards the higher end of our previously guided range of 20% to 30%.
Turning to Slide 5, let me begin with a few high-level comments before I discuss the details of our Q1 results. The tragic and challenging events worldwide in recent months have, in our opinion, reinforced the critical need for better energy management. From the terrible incident at the Japanese nuclear plants to the unrest in much of the Middle East, global interest in energy independence and, therefore, in the benefits of the smart grid is accelerating. The smart grid requires control networking, a combination of control software and control hardware that is reliable, survivable and instantaneous. This has been Echelon's specialty and core competency for 20 years, giving us a unique perspective on the needs and the dynamics of this market.
While the macro trends appear positive, post-recession, we are seeing increased scrutiny of the business cases for smart grid investments. These business cases rest on specific drivers in various geographies and verticals. Consideration such as energy supply availability, the condition of existing distribution grids, back levels, interest in renewables and electric vehicles and commitments to reducing greenhouse emissions and improving air quality are increasingly determining specific smart grid demand.