Riverbed: Fiscal 2Q08 Financial Results

Riverbed Technology, Inc. released financial results for the second fiscal quarter ended June 30, 2008.

Revenues for the second quarter of 2008 were $81.6 million, an increase of 51% from the second quarter of 2007 and an increase of 12% from the first quarter of 2008. Pre-tax GAAP income was $1.4 million in the second quarter of 2008. Due to a GAAP tax rate of 163% in the period, Riverbed posted a GAAP net loss of $869,000, or $0.01 per share. In the second quarter of 2007, with a GAAP tax rate of 17%, GAAP net income was $3.9 million, or $0.05 per share. Riverbed’s second quarter of 2008 GAAP results included $14.0 million of stock-based compensation expenses and related payroll taxes. Excluding the impact of stock-based compensation and related payroll taxes in all periods, as well as related income tax effects, the non-GAAP net income for the second quarter of 2008 was $9.9 million, or $0.13 per share, compared to non-GAAP net income of $11.7 million, or $0.16 per share, in the second quarter of 2007. Our non-GAAP tax rate in the second quarter of 2008 was 35%, and our non-GAAP tax rate for the second quarter of 2007 was 7%.

"We are encouraged by our strong sequential and year-over-year revenue growth, as we posted the highest revenues in company history," said Jerry M. Kennelly, Riverbed president and chief executive officer. "Wide area data services offers compelling productivity and cost benefits, and the technological advantages of Riverbed’s products are clearly evident in our competitive win rate and industry-leading customer base. During the second quarter, we added a significant number of new customers across a broad range of verticals, bringing our cumulative customer count to over 4,500. New customers included a number of the world’s largest companies, and we now have 44 of the Forbes Global 100, many of which have been won in technical bake-offs against our competition."

"Gross margins increased for both our product and service offerings, and total operating expenses decreased as a percentage of sales compared to the first quarter of 2008," said Randy Gottfried, Riverbed chief financial officer. "Total deferred revenue increased 16% quarter-over-quarter to more than $44 million and we ended the quarter with $269 million in cash and marketable securities, after buying back $12.5 million of Riverbed stock as part of our stock repurchase program announced in April."