Barracuda: Fiscal 3Q15 Financial Results

Barracuda Networks, Inc. announced results for its third quarter of fiscal 2015, which ended November 30, 2014.

Billings and Revenue
For the third quarter of fiscal 2015, gross billings grew 18% to $91.5 million, up from $77.5 million in the third quarter of fiscal 2014. Total revenue increased 19% to $70.4 million, up from $59.4 million in the third quarter of fiscal 2014. Appliance revenue in the third quarter of fiscal 2015 increased to $20.7 million up from $18.2 million in the third quarter of fiscal 2014, and subscription revenue grew to $49.7 million in the third quarter of fiscal 2015 up from $41.2 million in the third quarter of fiscal 2014, representing 71% of total revenue.

Net Income
GAAP net loss in the third quarter of fiscal 2015 was $36,000, or $0.00 loss per share, based on a basic share count of 52.1 million. Non-GAAP net income for the third quarter of fiscal 2015 was $3.2 million, or $0.06 earnings per share, based on a diluted share count of 54.0 million. Non-GAAP net income excludes $4.9 million in stock-based compensation expense, $4.7 million in income tax benefit of non-GAAP exclusions, $1.7 million net in other income and expense, $0.8 million in amortization of intangible assets, and $0.6 million in acquisition and other non-recurring charges.

“We delivered another quarter of strong financial performance across all of our major markets and product categories,” said BJ Jenkins, president and CEO. “In the third quarter, we added more than 9,300 new active subscribers, bringing our total active subscribers to more than 234,900. Our results reflect the continued demand for our storage and network and application security products which continue to drive our top line growth. We also continued to make progress in the public cloud market with more integrations of our products into Microsoft Azure and Amazon Web Services. Given the expanding opportunities for our products, we will continue to invest to grow our sales and R&D efforts while driving toward our long-term model.“

“We achieved record results in gross billings in Q3, which grew 20% year-over-year on a constant currency basis,” said David Faugno, CFO. “In the quarter, adjusted EBITDA grew 54% year-over-year to $19 million, or 28% of total revenue. On a trailing 12-month basis, adjusted free cash flow was $46.0 million, growing 49% year-over-year.”

Recent company Highlights

• Storage Product Innovation – Released a number of new product updates across the storage portfolio, including ArchiveOne version 7.0 that expands information management functionality, and Backup 995 with 72TB of usable storage capacity and 32TB of suggested backup.
• Security Product Innovation – Launched Total Threat Protection initiative, which is aimed at providing customers security protection, a single point of service, and affordability across multiple threat vectors. Also launched a number of new products and enhancements including: Security Suite to provide protection for the three most commonly deployed threat vectors – email, web browsing and network perimeters; and Web Application Firewall updates including URL encryption, SSL enhancements, improved user access control, and improved administrative interface.
• Public cloud Momentum – Announced several new integrations with Microsoft Azure, including commerce-enablement in the Azure Marketplace for the Web Application Firewall, Spam Firewall, and Message Archiver to allow customers to purchase these solutions directly from Microsoft; Web Application Firewall integration with Azure Active Directory to streamline authentication and access; and Web Application Firewall availability in the new Microsoft Azure Government cloud; and announced the availability of the Load Balancer ADC on Amazon Web Services.
• Industry Recognition – Received a number of industry accolades and achievements, including: Volume Leader in Content Security appliances for Q3 CY2014 by IDC; Number one vendor in unit volume for integrated PBBA by IDC; Five Star review by PC Pro for Backup 290; Readers’ Choice awards by TechTarget and Information Security magazine for Spam Firewall and Web Application Firewall; Excellence Awards for Best Upgraded Products by Tech & Learning magazine for Message Archiver, Backup, Spam Firewall and Web Filter; Excellence Awards for Best New Products by Tech & Learning magazine for Copy and SignNow; Best Buy ratings and Five Star reviews by SC Magazine for both Web Application Firewall and Spam Firewall; and 2014 Cloud Computing and DR award by TMC Net for Backup.