Barracuda: Fiscal 2Q18 Financial Results

(in $ million)	2Q17	2Q18	6 mo. 17	6 mo. 18
Revenue	87.9	94.3	174.6	188.5
*Growth*		7%		8%
Net income (loss)	2.4	1.6	5.2	4.2

Barracuda Networks, Inc. announced results for its second quarter fiscal 2018 that ended August 31, 2017.

“We delivered a strong second quarter achieving core billings growth of 22% year-over-year and gross billings of $108.5 million, which was above our guidance. Our performance was driven by continued traction in the areas of the market where we have been investing, especially email and public cloud security, and we are pleased to see that our efforts are generating stronger top-line results,” said BJ Jenkins, president and CEO. “Excluding non-core billings, we have generated four consecutive quarters of double-digit billings growth. We believe we have the right strategy in place, are focused on the right areas of the market, and provide innovative security solutions that are affordable and consumable in the form that is best suited for our customers’ needs.”

Second Quarter Fiscal 2018 Financial Summary
• Total revenue increased 7% to $94.3 million, compared with $87.9 million in the second quarter of fiscal 2017. Subscription revenue grew to $76.0 million, up 14% from $66.9 million in the second quarter of fiscal 2017, representing 81% of total revenue, and appliance revenue was $18.3 million, compared with $21.0 million in the second quarter of fiscal 2017.
• Gross billings were $108.5 million, compared with $100.3 million in the second quarter of fiscal 2017. Billings for core products increased 22% to $70.9 million, compared with $58.1 million in the second quarter of fiscal 2017. The number of active subscribers grew 17% to over 348,000 as of August 31, 2017. The annualized renewal rate from subscriptions on a dollar basis was 91%.
• GAAP net income was $1.6 million, or $0.03 per share, based on a diluted share count of 54.6 million, compared to a GAAP net income of $2.4 million, or $0.05 per share, in the second quarter of fiscal 2017.
• Non-GAAP net income was $9.1 million, or $0.17 per share, based on a diluted share count of 54.6 million. Non-GAAP net income excludes $9.6 million in stock-based compensation expense, $3.6 million in income tax benefits, $1.7 million in amortization of intangibles, $1.1 million in other net income and $0.9 million in acquisition and other charges.

Comments

BJ Jenkins, president and CEO:
"We now have approximately 5,000 customers using Essentials, of which over 50% are net new to Barracuda.
"Today, we support over 8PB of storage in our cloud and ingest into the cloud over 4GB of backup data per second. We help our customers with approximately 3 million backup jobs per month and with over 12,000 recoveries per month on average. Additionally, we have archived over 13 billion e-mails in total.
"In the second quarter, we added 300 public cloud customers and billings for our public cloud solutions more than doubled year-over-year."

Dustin Driggs, CFO:
"On a geographic basis, we derived 76% of total second quarter revenue from the Americas, 18% from EMEA and 6% from AsiaPac. Our number of active subscribers in the second quarter exceeded 348,000, which was an increase of 17% year-over-year.
"Now, turning to guidance, for 3FQ18, we expect billings to be in the range of $107 million to $110 million. We expect revenue to be in the range of $92.5 million to $94.5 million."