Barracuda: Fiscal 2Q16 Financial Results

 Barracuda Networks, Inc., announced results for its second quarter of fiscal 2016, which ended August 31, 2015.

Billings and Revenue
For the second quarter of fiscal 2016, gross billings grew to $98.4 million, up from $89.0 million in the second quarter of fiscal 2015. Total revenue increased 14% to $78.4 million, up from $68.7 million in the second quarter of fiscal 2015. Appliance revenue in the second quarter of fiscal 2016 grew to $22.3 million, up from $20.7 million in the second quarter of fiscal 2015, and recurring subscription revenue grew to $56.1 million in the second quarter of fiscal 2016, up from $48.0 million in the second quarter of fiscal 2015, representing 72% of total revenue.

Net Income
GAAP net loss in the second quarter of fiscal 2016 was $2.2 million, or $0.04 loss per share, based on a basic share count of 53.3 million. Non-GAAP net income for the second quarter of fiscal 2016 was $5.6 million, or $0.10 per share, based on a diluted share count of 54.9 million. Non-GAAP net income excludes $7.2 million in stock-based compensation expense, $0.6 million in acquisition and other non-recurring charges, $0.6 million in amortization of intangibles, $0.4 million in income tax benefits of non-GAAP exclusions, and $0.2 million in other income. The reconciliation between GAAP and non-GAAP information is contained in the tables below.

“We now have more than 261,000 active subscribers and this quarter’s dollar-based renewal rates were 95.1%. In the second quarter, gross billings grew to $98.4 million, up 4% sequentially and up 14% year-over-year in constant currency. The currency environment and longer sales cycles which we experienced in EMEA in Q2 impacted our gross billing performance this quarter. Our storage category billings grew in the mid-twenty percentage range year-over-year on a constant currency basis in Q2. However, we do see some evidence that growth in the overall storage market has slowed and that customer requirements are evolving, and we are adjusting our approach accordingly,” said BJ Jenkins, president and CEO. “Further, we are excited about our pending acquisition of Intronis because it will expand our presence with MSPs, and enables Barracuda to reach more of the market, by offering storage and security solutions the way customers want to consume them.”

“During the quarter, we achieved 14% year-over-year growth in revenue and delivered better than expected bottom-line results by executing on our business model,” said David Faugno, CFO. “In the quarter, non-GAAP operating income grew 22% year-over-year to $8.1 million, representing 10.3% of total revenue.“

Recent Highlights

• Signed Definitive Agreement to Acquire Intronis: The Intronis ECHOplatform currently enables nearly 2,000 MSPs which today serve more than 36,000 end customers in the small business and mid-market segment. Intronis’ focus on the MSP experience and award-winning infrastructure will expand Barracuda’s channel reach in the fast-growing MSP partner segment. There are, according to Gartner1, significant opportunities for MSPs to support their clients’ cloud migration plans and their IT service deployment, management and security needs.
• Enhanced Public Cloud Integration: Extended relationship with Microsoft Azure by integrating the Barracuda Web Application Firewall into the Azure App service, allowing customers to easily augment security for applications developed on any platform through the Azure App Service.
• Enhanced Products and Services: Introduced Barracuda Backup Virtual Appliance (Vx), a software solution that can be deployed in virtual environments to leverage existing compute and storage infrastructures while optimizing local storage and bandwidth requirements with deduplication and compression; launched CudaDrive, a flexible and secure cloud service with virtual and user data protection that enables businesses to securely store, share, and access files stored in the Barracuda cloud from anywhere.