EnerNOC mulls company sale amid sluggish growth
- Demand response and efficiency provider EnerNOC is considering "strategic alternatives" that could include the sale of its software business or the entire company, officials said this week.
- The company posted revenues of $400 million in its full-year earnings report, but expects closer to $300 million in 2017.
- Within its demand response business, EnerNOC said falling revenues from grid operators, primarily PJM Interconnection, could drop its revenues from those customers year-over-year by 20% to 30%.
The largest demand response provider in the world is in trouble, and layoffs last year to streamline the company have not been enough. EnerNOC, despite recent contracts signed in Asia, says additional revenues overseas will likely not be enough to keep the company growing.
While EnerNOC had turned to software as a way to shore up demand response revenues, the company now says that market has been slow to develop.
"Although we had a number of strategic sales wins and more recently have seen indicators of accelerated market adoption, the near-term opportunity has materialized much more slowly than we expected," Tim Healy, Chairman and CEO of EnerNOC, said in a statement.
In September of last year, the company said it had a plan to restructure its subscription-based energy intelligence software to focus more on select industry segments and "high potential customers." That announcement came with a 15% force reduction. Before that in June, EnerNOC informed the U.S. Securities and Exchange Commission revealed it would sell its utility customer engagement business, and reduce its North American workforce by about 5%.
Speaking to analysts, officials warned not to read too much into the revenue drop from grid operators too broadly. Chief Financial Officer Bill Sorensen said, "it is entirely due to a program mix in PJM. ... We recognized $75 million of revenue related to the prior year, the extended program that we recognized revenue in 2016. And we don’t have any of that extended program revenue coming in 2017."
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