Barracuda Reports Third Quarter Fiscal 2017 Results

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– Q3 total revenue grew 11% year-over-year to $88.8 million
– Q3 GAAP earnings per share of $0.03, and non-GAAP earnings per share of $0.22
– Total active subscribers exceeded 309,000

CAMPBELL, Calif., Jan. 9, 2017 — /BackupReview.info/ — Barracuda Networks, Inc. (NYSE: CUDA), a leading provider of cloud-enabled security and data protection solutions, today announced results for its third quarter fiscal 2017 that ended Nov. 30, 2016.

“Barracuda delivered a strong third quarter with core product billings outpacing our expectations, driven in part by increasing customer adoption of our cloud-based security and data protection solutions. We continue to execute on our strategy to capitalize on market trends as more customers utilize our solutions as they move applications and workloads to the cloud,” said BJ Jenkins, president and CEO. “The threat landscape is complex and constantly evolving. As threats become more sophisticated, security remains a top priority for customers. We continue to drive innovation and deliver easy-to-use products that address our customers’ most pressing security needs across multiple threat vectors, including email, networks, web applications and mobile devices.”

Third Quarter Fiscal 2017 Financial Summary

• Total revenue increased 11% to $88.8 million, compared with $80.1 million in the third quarter of fiscal 2016. Subscription revenue grew to $68.3 million, up 17% from $58.4 million in the third quarter of fiscal 2016, representing 77% of total revenue, and appliance revenue was $20.5 million, compared with $21.7 million in the third quarter of fiscal 2016.
• Gross billings were $100.4 million, compared with $89.0 million in the third quarter of fiscal 2016. Billings for core products increased 30% to $61.6 million, compared with $47.2 million in the third quarter of fiscal 2016. The number of active subscribers grew approximately 15% to over 309,000 and the dollar-based renewal rate was 90% for the quarter.
• GAAP net income was $1.8 million, or $0.03 per share, based on a diluted share count of 54.0 million, compared to a GAAP net loss of $1.6 million, or $0.03 per share, in the third quarter of fiscal 2016.
• Non-GAAP net income was $11.6 million, or $0.22 per share, based on a diluted share count of 54.0 million. Non-GAAP net income excludes $9.2 million in stock-based compensation expense, $2.4 million in other expense, $1.8 million in amortization of intangibles, $0.2 million in acquisition and other charges, partially offset by an income tax effect of $3.7 million.

Recent Company Highlights

• Continued Public Cloud Momentum: Announced availability of Barracuda NextGen Firewall on Google Cloud Platform, marking the first next-generation firewall available on Google Cloud Platform. Barracuda NextGen Firewall – which is available directly on AWS Marketplace, Microsoft Azure, and now Google Cloud Platform – is designed for the cloud era, with features that enable direct access to cloud applications in dispersed networks where quality of service, network reliability, and secure connectivity are required at every location. Google Cloud Platform customers can purchase Barracuda NextGen Firewall with Bring Your Own License (BYOL) options from Barracuda.
• Enhanced Web Application Firewall Product Line: Launched a new metered billing option for Barracuda Web Application Firewall on Amazon Web Services (AWS). Barracuda Web Application Firewall is the first third-party web application security solution available on the AWS Marketplace where customer usage is aggregated and charged as part of an existing AWS bill, regardless of the number of the Barracuda Web Application Firewalls deployed. Barracuda also announced an API integration between Barracuda’s Web Application Firewall and NextGen Firewall solutions, helping customers simplify the way application security is deployed and managed.
• Updated Web Security Gateway Product Line: Announced Barracuda Web Security Gateway version 11.0, which offers customers advanced security protection and improved SSL scanning performance, as well as the ability to enforce policy configuration on Chromebooks. Barracuda Web Security Gateway customers now have access to Barracuda Advanced Threat Detection, a cloud-based microservice that protects organizations against ransomware and other targeted attacks. With version 11.0, Barracuda Web Security Gateway combines powerful web security functionality with next-generation firewall capabilities allowing for more robust, complementary security protection managed from a single pane of glass.
• Recognized Network Security Leadership: Received Approved Business Security Award for network security leadership for Barracuda NextGen Firewall based on a public comparative test report conducted by MRG Effitas and AV-Comparatives. Barracuda was the only vendor tested that received 100% effectiveness scores across the board for both the malware protection tests performed by AV-Comparatives and the exploit tests performed by MRG Effitas.
• Achieved Industry Recognition: Honored as 2016 ChannelPro SMB All-Star for continued channel leadership and product innovation with Barracuda Essentials for Office 365, Barracuda Backup – MSP Edition, and Barracuda NextGen Firewall – MSP Edition; Awarded Tech & Learning’s Awards of Excellence for Barracuda Essentials for Office 365, Barracuda Backup, Barracuda Web Security Gateway, and Barracuda NextGen Firewall; and Named Finalist for CRN products of the Year for Barracuda Backup – MSP Edition and Barracuda Essentials for Office 365, as well as Finalist for multiple 2017 SC Awards including Best Vulnerability Management Solution, Best Web Application Security Solution, and Best Customer Service.

Conference Call Information
Barracuda will host a conference call and corresponding live webcast at 1:30 p.m. PT today. To access the conference call, dial 1-855-560-2573 for the U.S. or 1-412-542-4159 for international callers. The webcast will be available live on the investor relations section of the company’s website at investors.barracuda.com, and via replay beginning approximately one hour after the completion of the call for a period of one year. An audio replay of the call will be available to investors beginning at approximately 5:00 p.m. PT today through January 16, 2017 by dialing 1-877-344-7529 in the U.S. or 1-412-317-0088 for international callers, and entering conference ID 10097957. Additional information can be found in an accompanying supplemental investor slide presentation located at investors.barracuda.com.

Forward-Looking Statements
This announcement contains forward-looking statements related to our strategy and core products, the adoption of our cloud and security and data protection products, potential benefits from newly launched and updated products to customers and partners, and potential results from new initiatives and new channels and go-to-market strategies that involve risks and uncertainties, including statements regarding our expectations regarding financial performance, and the potential impact of our new and updated products. Actual results could differ materially from those projected in the forward-looking statements as a result of certain risk factors, including, but not limited to: fluctuations in demand for our products and services; a highly competitive and evolving business environment for network security and storage solutions; the company’s effectiveness in controlling expenses and timing of infrastructure costs; the effects of significant developments in IT infrastructure deployments, particularly cloud computing; the impact of foreign currency fluctuations; the possibility that we might experience delays in the development of new technology and products; risks related to recent or future acquisitions; customer response to our new technology and products; risks related to pending or future litigation and regulatory matters; a dependency on third parties for certain components of our products and the impact of changes in our management team. The company undertakes no obligation to update the forward-looking information in this release. More information about potential factors that could affect our business and financial results is included in our filings with the Securities and Exchange Commission, including, without limitation, under the captions: “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Risk Factors,” which are on file with the Securities and Exchange Commission.

Non-GAAP Financial Measures
Barracuda provides all financial information required in accordance with generally accepted accounting principles (GAAP). To supplement our consolidated financial statements presented in accordance with GAAP, we are also providing with this press release and on our conference call with non-GAAP net income, non-GAAP operating income, non-GAAP gross margins, non-GAAP operating expenses, adjusted EBITDA and free cash flow. In preparing our non-GAAP information, we have excluded certain amounts as set forth in the attached financial tables and footnotes. We believe that excluding these items provides both management and investors with additional insight into our current operations and the trends affecting the company. In particular, management finds it useful to exclude these items in order to more readily correlate the company’s operating activities with the company’s ability to generate cash from operations. Accordingly, management uses these non-GAAP measures, along with the comparable GAAP information, in evaluating our historical performance and in planning our future business activities. Please note that our non-GAAP measures may be different than those used by other companies. The additional non-GAAP financial information we present should be considered in conjunction with, and not as a substitute for, our financial information presented in accordance with GAAP. We have provided reconciliations of these non-GAAP measures to their comparable GAAP measures for the periods presented in this release, which exclude certain amounts as set forth in the attached financial tables and footnotes for these periods. These measures should only be used to evaluate the company’s results of operations in conjunction with the corresponding GAAP measures for comparable financial information and understanding of the company’s ongoing performance as a business. Barracuda uses both GAAP and non-GAAP measures to evaluate and manage its operations.

Beginning in the third quarter of fiscal 2017, we modified our reporting practices to comply with recent SEC interpretations on the use of non-GAAP measures. As a result, we have modified our historical presentation of adjusted EBITDA and free cash flow. We will no longer adjust for changes in deferred revenue and associated deferred costs in our calculation of adjusted EBITDA, and for free cash flow we will not adjust for the cash payment impact of acquisition and other charges. Prior period information has been recast to conform to the adjusted calculations.

Forward-looking non-GAAP financial measures included in Barracuda’s guidance exclude amortization of intangible assets, stock-based compensation expense, acquisition and other charges, income tax effects related to such exclusions and other expense (income) adjustments. Barracuda does not provide reconciliations of its forward-looking non-GAAP financial measures to the corresponding GAAP measures due to the high variability of, and difficulty in making accurate forecasts and projections with respect to, the items excluded from these non-GAAP financial measures. In particular, stock-based compensation and related taxes are impacted by the company’s future hiring and retention needs, as well as the future fair market value of its common stock, all of which is difficult to predict and subject to constant change. Accordingly, reconciliations of its forward-looking non-GAAP financial measures to the corresponding GAAP measures are not available without unreasonable effort. The actual amounts of these excluded items will have a significant impact on the company’s GAAP operating income (loss) and net income (loss) per diluted share.

About Barracuda Networks, Inc. (NYSE: CUDA)
Barracuda (NYSE: CUDA) simplifies IT with cloud-enabled solutions that empower customers to protect their networks, applications, and data, regardless of where they reside. These powerful, easy-to-use and affordable solutions are trusted by more than 150,000 organizations worldwide and are delivered in appliance, virtual appliance, cloud and hybrid deployments. Barracuda’s customer-centric business model focuses on delivering high-value, subscription-based IT solutions that provide end-to-end network and data security. For additional information, please visit barracuda.com

Barracuda Networks, Barracuda and the Barracuda Networks logo are registered trademarks or trademarks of Barracuda Networks, Inc. in the US and other countries.

Contacts:
Investor Relations:
Maria Riley
+1 415-217-7722
ir@barracuda.com

Corporate Communications:
Mary Catherine Petermann
+1 404-307-6290
mc@barracuda.com

For detailed financial report, visit: https://goo.gl/8OJQsb

Tags: Barracuda, Barracuda Financials, Barracuda Networks