Riverbed: Fiscal 4Q12 Financial Results

(in $ million)	4Q11	4Q12	FY11	FY12
Revenue	202.8	237.4	726.5	836.9
*Growth*		17%		*15%*
Net income (loss)	20.1	4.8	63.8	54.6

Riverbed Technology, Inc. reported record revenue for its fourth quarter and fiscal year ended December 31, 2012.

Total GAAP revenue for Q412 was $237 million, up 9% compared to Q312 and 17% compared to Q411. For the full year 2012, GAAP revenue was $837 million, up 15% compared to 2011. Non-GAAP revenue for Q4’12 was $239 million, an increase of 9% compared to Q3’12 and an increase of 17% compared to Q4’11. Non-GAAP revenue for 2012 was $840 million, an increase of 15% compared to 2011.

GAAP net income for Q412 was $5 million, or $0.03 per diluted share. This compares to $25 million, or $0.15 per diluted share, in Q312 and $20 million, or $0.12 per diluted share, in Q411. GAAP net income for 2012 was $55 million, or $0.33 per diluted share. Non-GAAP net income for Q4’12 was $46 million, or $0.29 per diluted share. This compares to $46 million, or $0.28 per diluted share, in Q3’12 and $41 million, or $0.25 per diluted share, in Q4’11. Non-GAAP net income for 2012 was $163 million, or $0.99 per diluted share.

The acquisition of OPNET Technologies, Inc., closed December 18, 2012, contributed $6 million to GAAP revenue and $7 million to non-GAAP revenue in the fourth quarter. Excluding any revenue or costs associated with OPNET, non-GAAP net income was $0.29 per diluted share in the fourth quarter.

"In 2012, we expanded our addressable market through organic innovation, new partnerships and strategic acquisitions," said Jerry M. Kennelly, chairman and CEO. "Revenue dollars grew more than $111 million for the full year, with most of that growth from WAN optimization. Performance management was the fastest growing product line, underpinning our strategic decision to acquire OPNET. Looking ahead, we will benefit from continued growth in our WAN optimization business and performance management product suite. I am very optimistic as we enter our first year as a billion-dollar-plus revenue company.

"Our integration of OPNET is proceeding as planned and we intend to introduce the first phase of an integrated application and network performance management product line in the second half of this year, said Eric Wolford, president of products and marketing. OPNET complements a broad lineup of new products introduced throughout 2012 and uniquely positions us for the future of performance management.

"We saw revenue expansion in all major regions, with solid growth in enterprise sales, said Randy S. Gottfried, COO and CFO. The company continued to execute well and generated more than $217 million of free cash flow in 2012."

2012 Business Highlights

Completed the acquisition of OPNET Technologies, Inc. making Riverbed Performance Management, (RPM) a leader in the converging application and network performance management segments
Positioned by Gartner in the Leaders quadrant of the 2012 Magic Quadrant for WAN Optimization Controllers report authored by Joe Skorupa and Severine Real and published January 12, 2012
Captured more than 52% share of the worldwide Advanced Platform WAN optimization market share based on vendor revenue for the third quarter of 2012 per Gartner’s report titled Market Share: Application Acceleration Equipment, Worldwide 3Q12 authored by Joe Skorupa and Nhat Pham, December 2012
Positioned by Gartner in the Visionaries quadrant of the 2012 Magic Quadrant for Application Delivery Controllers (ADC) report authored by Joe Skorupa, Neil Rickard, and Bjarne Munch and published October 30, 2012
Positioned by Gartner in the Leaders quadrant of the 2012 Magic Quadrant for Application Performance Monitoring report authored by Jonah Kowall and Will Capelli and published August 16, 2012
Enhanced strategic relationship and product interoperability with VMware across Riverbed Steelhead, Granite, Performance Management and Stingray product solutions
Entered into a technology partnership with Juniper Networks in application delivery, WAN optimization and mobility to deliver market-leading technologies to more customers
Introduced multiple new appliance and virtual products within WAN optimization and performance management expanding the addressable market opportunity
Received certification under the J.D. Power and Associates Certified Technology Service & Support (CTSS) program and the Technology Service Industry Association’s (TSIA) Excellence in Service Operations for the second consecutive year
Named a top three Best Place to Work for 2013 in the Glassdoor Employees Choice Award. Riverbed ranked third out of close to a quarter of a million global companies rated by their employees, and second overall among technology companies.

To read the earnings call transcript