Opower has signed its largest deal to date, a nearly $90 million, seven-year contract with Pacific Gas & Electric. Specific details of the contract were not given on the company’s first-quarter earnings call on Tuesday.
“This contract with PG&E validates our belief that utilities seek to consolidate their customer engagement solutions with a single strategic vendor,” Dan Yates, CEO of Opower, said in a statement. “We believe our platform is the solution that utilities need as they replace disjointed applications that are costly to maintain and produce an unsatisfying experience for customers.”
Opower has expanded its offerings from behavioral energy-efficiency reports to more holistic energy-efficiency services for utilities, providing deeper segmentation and various digital engagement tools. Opower has also added partners as it seeks to be the chosen platform for customer engagement with utilities beyond just the residential customer class.
First-quarter revenue was $33.4 million, up 17 percent from the first quarter the previous year. Non-GAAP net loss was $6 million, compared to $5.3 million for the same period in 2014.
Opower would not comment on which of its partners, such as FirstFuel or EnergySavvy, are involved in the PG&E deal. Nor would it comment on whether the scope of the contract covered all customer classes from large industrial down to residential customers. Late last year, Opower booked a significant expansion of its platform with Southern California Edison to serve all customer classes. Revenue from that deal is expected in 2015.
The PG&E deal combines Opower’s energy-efficiency offering and digital engagement. National Grid and Exelon are also using Opower for those two applications. Revenue from the PG&E contract will start coming through in 2016.
Opower also resigned its very first customer from 2008, Sacramento Municipal Utility District, which had chosen another vendor in 2013 when Opower failed to deliver a suite of offerings to meet its needs. SMUD will be using Opower for enterprise-wide digital engagement and energy efficiency, according to Yates.
The company will begin separating revenue from its subscription business and services company, the latter of which will likely remain about 10 percent of the business. Opower has approximately 50 million endpoints each for its digital engagement tool and energy-efficiency offering, and expects to double its demand response numbers from 1 million to 2 million this summer. Its latest product, Billing Suite, will be launched by Puget Sound Energy later this year.
The company remains on track for 14 percent growth from 2014 to 2015, with revenue expectations steady between $144 million and $149 million for this year. Non-GAAP net loss has been adjusted down slightly to $30 million to $35 million for the full year.