Riverbed: Fiscal 4Q07 Financial Results

Riverbed Technology, Inc. released financial results for the fourth quarter and fiscal year ended December 31, 2007.

Revenues for the fourth quarter of 2007 were $76.3 million, an increase of 126% from the fourth quarter of 2006 and a 21% increase over the third quarter of 2007.

Riverbed posted GAAP net income of $4.8 million, or $0.07 per share, in the fourth quarter of 2007, compared to a net loss of $2.4 million, or a loss of $0.04 per share, in the fourth quarter of 2006. Riverbed’s fourth quarter of 2007 GAAP results included $9.8 million of stock-based compensation expenses and related payroll taxes. Excluding the impact of stock-based compensation and related payroll taxes in all periods, the non-GAAP net income for the fourth quarter of 2007 was $14.6 million, or $0.20 per share, compared to non-GAAP net income of $2.4 million, or $0.03 per share, in the fourth quarter of 2006.

Revenues for the year ended December 31, 2007 were $236.4 million, a 162% increase from $90.2 million of revenues in the prior year. Riverbed posted its first full year of profitability in 2007. GAAP net income for 2007 was $14.8 million, or $0.20 per share, compared to a GAAP net loss of $15.8 million, or $0.59 per share, in 2006. 2007 GAAP results included $32.6 million of stock-based compensation expenses and related payroll taxes. Non-GAAP net income for 2007 was $47.4 million, or $0.65 per share, which compares to a non-GAAP net loss of $6.6 million, or $0.12 per share for 2006.

"Over the past year, we have continued the rapid expansion of our business, growing revenues by 162%, adding over 1,800 customers and building a business that generated over 18% non-GAAP operating margins in 2007 compared to losses in 2006," noted Jerry M. Kennelly, Riverbed president and chief executive officer. "Riverbed’s record revenue performance in the fourth quarter and throughout 2007 reflects the explosive growth in demand for WDS solutions and our extremely strong competitive position within this fast growing market. Fourth quarter 2007 sequential revenue growth accelerated from the third quarter to 21% and customer acquisition was also strong. We now have a cumulative customer count of over 3,500 and continue to make inroads with the world’s largest corporations."

"With the majority of the global workforce working outside of headquarter offices, we believe that wide area data solutions can significantly improve productivity while allowing companies to consolidate expensive equipment and services, saving billions of dollars for companies worldwide. Our competitive leadership in this market remains unchanged and we are leveraging our unique software architecture to enter into attractive new markets," added Mr. Kennelly.

"GAAP gross margins reached 75% for the first time in the fourth quarter, significantly ahead of plan and reflecting reduced costs and a positive product mix. We have continued to invest in building out our R&D and sales marketing organizations given what we believe continues to be a large and growing market opportunity," said Randy Gottfried, Riverbed chief financial officer.

Riverbed Technology  Inc.