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- Q2 total revenue grew 7% year-over-year to $94.3 million

- Q2 GAAP earnings per share of $0.03, and non-GAAP earnings per share of $0.17

- Total active subscribers increased 17% to over 348,000

CAMPBELL, Calif., Oct. 10, 2017 — /BackupReview.info/ — Barracuda Networks, Inc. (NYSE: CUDA), a leading provider of cloud-enabled security and data protection solutions, today announced results for its second quarter fiscal 2018 that ended August 31, 2017.

“We delivered a strong second quarter achieving core billings growth of 22% year-over-year and gross billings of $108.5 million, which was above our guidance. Our performance was driven by continued traction in the areas of the market where we have been investing, especially email and public cloud security, and we are pleased to see that our efforts are generating stronger top-line results,” said BJ Jenkins, president and CEO. “Excluding non-core billings, we have generated four consecutive quarters of double-digit billings growth. We believe we have the right strategy in place, are focused on the right areas of the market, and provide innovative security solutions that are affordable and consumable in the form that is best suited for our customers’ needs.”

Second Quarter Fiscal 2018 Financial Summary

  • Total revenue increased 7% to $94.3 million, compared with $87.9 million in the second quarter of fiscal 2017. Subscription revenue grew to $76.0 million, up 14% from $66.9 million in the second quarter of fiscal 2017, representing 81% of total revenue, and appliance revenue was $18.3 million, compared with $21.0 million in the second quarter of fiscal 2017.
  • Gross billings were $108.5 million, compared with $100.3 million in the second quarter of fiscal 2017. Billings for core products increased 22% to $70.9 million, compared with $58.1 million in the second quarter of fiscal 2017. The number of active subscribers grew 17% to over 348,000 as of August 31, 2017. The annualized renewal rate from subscriptions on a dollar basis was 91%.
  • GAAP net income was $1.6 million, or $0.03 per share, based on a diluted share count of 54.6 million, compared to a GAAP net income of $2.4 million, or $0.05 per share, in the second quarter of fiscal 2017.
  • Non-GAAP net income was $9.1 million, or $0.17 per share, based on a diluted share count of 54.6 million. Non-GAAP net income excludes $9.6 million in stock-based compensation expense, $3.6 million in income tax benefits, $1.7 million in amortization of intangibles, $1.1 million in other net income and $0.9 million in acquisition and other charges.

The reconciliation between non-GAAP and their most closely comparable GAAP equivalent is contained in the tables below.

Recent Company Highlights

  • Continued Public Cloud Momentum – Announced several new enhancements to the Barracuda NextGen Firewall and Barracuda Web Application Firewall (WAF) to help customers accelerate Microsoft Azure adoption. Barracuda cloud-ready firewalls now natively send publishing logs to the Microsoft OMS dashboard. Barracuda NextGen Firewall also includes enhanced SD-WAN capabilities to easily and cost effectively provide secure, optimized site-to-cloud connectivity. Additionally, new enhancements to the Barracuda WAF REST API provides security for automation and orchestration to DevOps tools, which complements the new integration with Puppet to give customers greater security control over their web applications. These enhancements, combined with the addition of Barracuda Vulnerability Remediation Service, automate the identification and remediation of vulnerabilities in web-facing applications deployed in Azure.
  • Expanded Cloud-Based Data Protection Functionality – Announced new Barracuda Backup feature that provides customers, resellers, and MSPs with the ability to replicate data securely and efficiently from either on-premises physical or virtual backup appliances to Amazon Web Services (AWS). With this new feature, organizations can further leverage the cloud as a simple and cost-effective way to protect their data from accidental or malicious data loss, including natural disasters or security threats like ransomware. The ability to replicate data to AWS also helps prepare customers for current and future public cloud migrations.
  • Rebranded MSP Business and Enhanced ECHOPlatform – Launched new Barracuda MSP brand, formerly known as Intronis MSP Solutions. Along with the rebranding to Barracuda MSP, Barracuda established two new educational initiatives – SmarterMSP.com and Ready, Set, Managed! – designed to help IT channel providers successfully deliver managed services. Additionally, released a new version of ECHOPlatform which includes enhancements that further centralize and streamline management of Barracuda security and data protection solutions for new and existing MSP partners.

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 Oct. 17, 2017 by dialing 1-877-344-7529 in the U.S. or 1-412-317-0088 for international callers, and entering conference ID 10111827. Additional supplemental financial information will also be accessible on the company’s website 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, our MSP products, and the potential benefits from newly launched and updated products to customers and partners, and potential results from new initiatives, 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 and our historical presentation of adjusted EBITDA and free cash flow. We 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 deployment configurations. Barracuda’s customer-centric business model focuses on delivering high-value, subscription-based IT solutions that provide end-to-end network and data protection. For additional information, please visit barracuda.com.

Barracuda Networks, Barracuda, and the Barracuda Networks logo are registered 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

 

Barracuda Networks, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
As of August 31,2017 (1) As of February 28,2017
Assets
Current assets:
Cash and cash equivalents $ 125,585 $ 120,194
Marketable securities 80,991 79,915
Accounts receivable, net of allowance for doubtful accounts 40,899 40,560
Inventories, net 6,520 5,847
Deferred costs 34,206 32,598
Other current assets 10,473 16,295
Total current assets 298,674 295,409
Property and equipment, net 32,043 29,979
Deferred costs, non-current 30,246 27,285
Deferred income taxes, non-current 1,023 1,554
Other non-current assets 15,320 8,607
Intangible assets, net 28,692 32,145
Goodwill 70,653 69,795
Total assets $ 476,651 $ 464,774
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable $ 7,710 $ 11,439
Accrued payroll and related benefits 12,825 13,593
Other accrued liabilities 10,773 12,942
Deferred revenue 245,517 239,796
Note payable 4,115
Total current liabilities 276,825 281,885
Long-term liabilities:
Deferred revenue, non-current 168,148 167,286
Deferred income taxes, non-current 3,073 2,803
Other long-term liabilities 6,776 6,377
Stockholders’ equity:
Common stock 53 53
Additional paid-in capital 384,395 370,745
Accumulated other comprehensive loss (3,076) (5,226)
Accumulated deficit (359,543) (359,149)
Total stockholders’ equity 21,829 6,423
Total liabilities and stockholders’ equity $ 476,651 $ 464,774

 

(1) As of March 1, 2017, we adopted ASU 2016-09 which allowed for an accounting policy election to either estimate the number of share-based awards that are expected to vest or account for forfeitures when they occur. We elected to account for forfeitures when they occur and adopted this change on a modified retrospective basis. As a result, we recorded the cumulative effect of the change as a $0.4 million increase to the March 1, 2017 opening accumulated deficit balance on the condensed consolidated balance sheets.

 

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

 

 

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