– Q2 total revenue grew 12% year-over-year to $87.9 million

– Q2 GAAP earnings per share of $0.05, and non-GAAP earnings per share of $0.21

– Total active subscribers exceeded 298,000

CAMPBELL, Calif., Oct. 11, 2016 — /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 2017 that ended August 31, 2016.

“In the second quarter, we are pleased with our financial results, and continue to execute on our strategy to position Barracuda as the clear choice to help customers protect their email, networks, applications and data across diverse and distributed deployments. Our total revenue grew 12% year-over-year, gross billings reached $100.3 million and our non-GAAP earnings per share more than doubled year-over-year to reach $0.21 per share,” said BJ Jenkins, president and CEO. “We continue to innovate and bring new solutions to market that fortify the security fabric across public, private and hybrid cloud deployments and can be centrally managed from a single pane of glass. We believe Barracuda is well positioned to build on our momentum and be a market leader in our targeted focus areas as customers look to adopt new application and network deployment models and move workloads to the cloud.”

Second Quarter Fiscal 2017 Financial Summary

  • Total revenue increased 12% to $87.9 million, compared with $78.4 million in the second quarter of fiscal 2016. Subscription revenue grew to $66.9 million, up 19% from $56.1 million in the second quarter of fiscal 2016, representing 76% of total revenue, and appliance revenue was $21.0 million, compared with $22.3 million in the second quarter of fiscal 2016.
  • Gross billings were $100.3 million, compared with $98.4 million in the second quarter of fiscal 2016. The number of active subscribers grew approximately 14% to over 298,000 and the dollar-based renewal rate was 96% for the quarter.
  • GAAP net income was $2.4 million, or $0.05 per share, based on a diluted share count of 53.3 million, compared to a GAAP net loss of $2.2 million, or $0.04 per share, in the second quarter of fiscal 2016.
  • Non-GAAP net income was $11.4 million, or $0.21 per share, based on a diluted share count of 53.3 million. Non-GAAP net income excludes $7.9 million in stock-based compensation expense, $1.9 million in amortization of intangibles, $0.4 millionin acquisition and other non-recurring charges, $0.3 million of income tax effect, and $1.5 million in other income.

Recent Company Highlights

  • Continued Office 365 Security Momentum: With the number of advanced threats on the rise and affecting companies of all sizes, Barracuda recently announced the availability of the new Barracuda Email Threat Scan for Office 365, a cloud-based service that identifies latent threats, including hidden advanced persistent threats, within Microsoft Office 365 email accounts. With the launch of Email Threat Scan, Barracuda provides solutions to detect, prevent and recover against ransomware and other advanced attacks, offering multi-layered protection for its customers. Barracuda Email Threat Scan provides customers with an immediate view of their email security posture and enables resellers and MSPs to build a more robust email security and data protection offering.
  • Expanded Cloud-Based Data Protection Functionality: Launched Microsoft SharePoint Online backup capability for Barracuda Cloud-to-Cloud Backup, which is available as a standalone product and as part of Barracuda Essentials for Office 365. Barracuda now offers granular backup and recovery options for Microsoft SharePoint Online to help IT departments restore deleted, corrupted or stolen files that have been encrypted by ransomware – without having to perform a full site recovery of the SharePoint environment. With this launch, Barracuda offers solutions to help customers running Office 365 detect, prevent and recover from ransomware and other malicious attacks, and to centrally secure and manage data in Exchange Online, OneDrive for Business, and SharePoint Online.
  • Expanded Cloud-Ready Next-Generation Firewall Technology: Announced availability of Barracuda NextGen Firewall F-Series version 7.0, which is designed for organizations adopting cloud-based applications, operating dispersed network environments, and leveraging cloud platforms. Barracuda NextGen Firewall F-Series version 7.0 provides intelligent network perimeters, and leverages Barracuda’s global threat intelligence framework to help prevent data exfiltration from botnets and spyware for on-premises or cloud-based networks, allowing customers to more cost effectively scale by connecting on-premises and cloud networks through multiple uplinks with dynamic failover, traffic balancing and WAN optimization.
  • Enhanced Data Protection Services: Launched Barracuda Backup version 6.3 which includes key enhancements that enable fast backup and recovery performance, improved public cloud support and expanded storage capacity at competitive price points.

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 approximately5:00 p.m. PT today through October 18, 2016 by dialing 1-877-344-7529 in the U.S. or 1-412-317-0088 for international callers, and entering conference ID 10091929. 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 focus areas, potential benefits from newly launched 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, 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 business environment for network security and storage solutions; the company’s effectiveness in controlling expenses; 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 pending 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 adjusted 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.

Forward-looking non-GAAP financial measures included in Barracuda’s guidance exclude amortization of intangible assets, stock-based compensation expense, acquisition and other non-recurring 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.

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)
As of  As of 
August 31, 2016 February 29, 2016
Current assets:
Cash and cash equivalents $                        139,173 $                               118,654
Marketable securities 40,410 36,394
Accounts receivable, net of allowance for doubtful accounts 34,028 36,520
Inventories, net 5,746 5,648
Deferred costs 32,049 31,943
Other current assets 10,862 12,450
Total current assets 262,268 241,609
Property and equipment, net 30,272 31,910
Deferred costs, non-current 26,782 27,019
Deferred income taxes, non-current 2,867 2,992
Other non-current assets 7,970 7,293
Intangible assets, net 35,660 39,386
Goodwill 70,163 69,595
Total assets $                        435,982 $                               419,804
Liabilities and stockholders’ deficit
Current liabilities:
Accounts payable $                             9,429 $                                 15,939
Accrued payroll and related benefits 13,587 12,371
Other accrued liabilities 17,935 19,495
Deferred revenue 240,813 235,411
Note payable 4,251 268
Total current liabilities 286,015 283,484
Long-term liabilities:
Deferred revenue, non-current 158,065 157,363
Deferred income taxes, non-current 2,762 2,478
Note payable, non-current 4,115
Other long-term liabilities 4,901 4,462
Stockholders’ deficit:
Common stock 52 52
Additional paid-in capital 353,352 337,439
Accumulated other comprehensive loss (5,245) (4,509)
Accumulated deficit (363,920) (365,080)
Total stockholders’ deficit (15,761) (32,098)
Total liabilities and stockholders’ deficit $                        435,982 $                               419,804


Barracuda Networks, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share information)

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