Barracuda: Fiscal 4Q14 Financial Results

Barracuda Networks, Inc. announced results for its fourth quarter and fiscal year 2014, which ended February 28, 2014.

Fourth Quarter 2014 Financial Highlights

• Billings and Revenue: For the fourth quarter of fiscal 2014, gross billings grew 18% to $82.0 million, up from $69.5 million in the fourth quarter of fiscal 2013. Total revenue increased 15% to $60.3 million, up from $52.5 million in the fourth quarter of fiscal 2013. Appliance revenue in the fourth quarter of fiscal 2014 grew to $18.3 million and recurring subscription revenue grew to $42.0 million, representing 70% of total revenue.
• Net Income: GAAP net income in the fourth quarter of fiscal 2014 was $3.0 million, or $0.06 earnings per share, based on a diluted share count of 53.6 million. Non-GAAP net income for the fourth quarter of 2014 was $3.0 million, or $0.06 earnings per share, based on a diluted share count of 53.6 million. Non-GAAP net income excludes $3.3 million in stock-based compensation expense, $4.0 million in income tax benefit of non-GAAP exclusions, $1.0 million in amortization of intangibles, and $0.4 million in acquisition and other non-recurring charges.

Fiscal Year 2014 Financial Highlights

• Billings and Revenue: For fiscal 2014, gross billings grew 17% to $310.0 million, up from $264.2 million in fiscal 2013. Total revenue increased 18% to $233.8 million, up from $198.9 million in fiscal 2013. Appliance revenue in fiscal 2014 grew to $71.9 million and recurring subscription revenue grew to $161.9 million, representing 69% of total revenue.
• Net Income/Loss: GAAP net loss in fiscal 2014 was $3.6 million, or $0.10 loss per share, based on a share count of 35.4 million. Non-GAAP net income in 2014 was $5.1 million, or $0.10 earnings per share, based on a diluted share count of 49.1 million.

“We made good progress in the fourth quarter across all of our markets and product categories, especially our higher growth market categories of network and application security and storage, which are becoming larger portions of our overall business,” said BJ Jenkins, president and CEO. “During the quarter, we added over 7,900 new active subscribers, ending our fiscal year with more than 205,000 active subscribers. In addition to adding new customers, we also made good progress with our installed-base selling initiatives, accelerating growth in the number of multi-product customers. As Barracuda expands our product offerings and the availability of solutions in areas of growing adoption such as public cloud platforms, we are strengthening our positioning and availability of our security and storage solutions that simplify the lives of IT professionals.“

“We had strong financial performance in the fourth quarter, particularly with our cash flow metrics, which were driven by our billings growth,” said David Faugno, CFO. “Adjusted free cash flow in the fourth quarter was $18.7 million, or 31% of total revenue, and non-GAAP operating income was $3.3 million. The company closed the fourth quarter and fiscal year with total deferred revenue of $313.2 million, up from $298.8 million in the third quarter, and cash and cash equivalents of $135.9 million, up from $117.2 million in the third quarter.”

Recent Company Highlights

• New Product Launches and Updates – Extended the Barracuda NG Firewall model range for remote offices; expanded Copy for Companies to improve security and the user experience; announced worldwide availability of new Backup-as-a-Service offering; and launched Threatglass, a free community resource where users can browse and analyze web-based malware.
• Expanding Cloud Presence – Announced the availability of the Barracuda NG Firewall on both the Microsoft Azure and Amazon Web Services (AWS Marketplace) public cloud platforms, and the availability of the Barracuda Spam Firewall in the AWS Marketplace.
• Market Share Recognition – Again ranked number one in integrated purpose-built backup appliance units shipped worldwide by IDC’s Worldwide Quarterly PBBA Tracker, CQ4 2013; and named a leader in messaging security in the IDC Marketscape: Worldwide Messaging Security Appliance/Software 2013-2014 Vendor Assessment.
• Industry Recognition – Achieved 5-Star rating in the CRN 2014 Partner Program Guide for the second consecutive year; named Network Computing 2013 Security Product of the Year for Barracuda NG Firewall; awarded three SC Magazine awards for Best Customer Service, Best Web Application Firewall for Barracuda Web Application Firewall and Best SME Security Solution for Barracuda Spam Firewall; received five Infosecurity Products Guide Excellence awards for Best Content Filtering Gold for Barracuda Web Filter, Best Storage & Archiving Gold for Barracuda Backup, Best Security Hardware Bronze for Barracuda Firewall, Best Cloud Security Bronze for Barracuda Web Application Firewall on Microsoft Azure, and Best Application Security Bronze for Barracuda Load Balancer ADC; and received the Reseller Choice Award for Best Cloud Backup.