(Source: Business Wire)
Riverbed Technology (NASDAQ: RVBD), the IT infrastructure performance
company for networks, applications and storage, today reported financial
results for its third quarter ended September 30, 2009 (Q3'09).
Total GAAP revenue for Q3'09 was $102.0 million, an increase of 12% from
$91.0 million reported in the second quarter of fiscal year 2009 (Q2'09)
and an increase of 18% from $86.5 million of revenue reported in the
third quarter of fiscal year 2008 (Q3'08). GAAP net income for Q3'09 was
$5.5 million, or $0.08 per share. This compares to a GAAP net loss in
Q2'09 of $290,000, or $0.00 per share, and a GAAP net loss of $12.4
million, or $0.17 per share, in Q3'08.
Non-GAAP revenue for Q3'09 was $102.6 million, an increase of 12% from
$91.6 million of non-GAAP revenue reported in Q2'09 and an increase of
18% from $86.5 million of revenue reported in Q3'08. Non-GAAP net income
for Q3'09 was $14.5 million, or $0.19 per diluted share. This compares
to non-GAAP net income for Q2'09 of $10.3 million, or $0.14 cents per
diluted share, and non-GAAP net income for Q3'08 of $11.0 million, or
$0.15 per share.
"We are pleased with our third quarter financial results," said Jerry M.
Kennelly, Riverbed® President and CEO. "We were able to generate record
revenue and strong sequential and year-over-year growth against the
backdrop of a still challenging global economy. As a critical enabler of
fundamental business initiatives including virtualization, cloud
computing and reducing data infrastructure costs, WAN optimization
continues to be a top IT priority."
Q3'09 Financial Highlights
Revenue increased 12% sequentially and 18% year-over-year
Non-GAAP gross margin increased to 78%
Non-GAAP operating margin increased to 22%
Non-GAAP net income increased 41% sequentially and 32% year-over-year
Days sales outstanding decreased to 42 days
Deferred revenue increased to $76 million
Cash flow from operations increased to $38 million
Cash, cash equivalents, and marketable securities totaled
approximately $297 million and no debt
Q3'09 Business Highlights
Identified as the WAN optimization controller (WOC) Advanced Platform
worldwide market share leader for Q2'09 based on revenue in the
Gartner report, "Market Share: Application Acceleration Equipment,
Worldwide, Q2'09"
Positioned by Gartner in the leaders quadrant in the "Magic Quadrant
for WAN Optimization Controllers 2009"
Added eight Fortune 500 customers, with cumulative customer count
approaching 7,000
Introduced Central Management Console - Virtual Edition (CMC-VE)
designed for managed service providers (MSPs). The new capabilities of
CMC-VE allow MSPs to reduce operational costs, improve visibility,
easily scale and flexibly allocate management licenses to enterprise
customers through its new multi-tenant capabilities. CMC-VE runs on
VMWare ESX, and MSPs can run it on any existing server that has
capacity.
Conference Call
Riverbed will host a conference call today, October 22, 2009, at 2:30
p.m. Pacific Time (5:30 p.m. Eastern Time) to discuss its third quarter
fiscal year 2009 results and outlook for the fourth quarter of 2009. The
call will be broadcast live over the Internet at www.riverbed.com/investors.
A replay of the conference call will also be available via webcast at www.riverbed.com/investors
for 12 months.
Forward Looking Statements
This press release contains forward-looking statements, including
statements related to WAN optimization as an IT priority. These
forward-looking statements involve risks and uncertainties, as well as
assumptions that, if they do not fully materialize or prove incorrect,
could cause our results to differ materially from those expressed or
implied by such forward-looking statements. The risks and uncertainties
that could cause our results to differ materially from those expressed
or implied by such forward-looking statements include our ability to
react to trends and challenges in our business and the markets in which
we operate; our ability to anticipate market needs or develop new or
enhanced products to meet those needs; the adoption rate of our
products; our ability to establish and maintain successful relationships
with our distribution partners; our ability to compete in our industry;
fluctuations in demand, sales cycles and prices for our products and
services; shortages or price fluctuations in our supply chain; our
ability to protect our intellectual property rights; general political,
economic and market conditions and events; and other risks and
uncertainties described more fully in our documents filed with or
furnished to the Securities and Exchange Commission. More information
about these and other risks that may impact Riverbed's business are set
forth in our Form 10-Q filed for the quarter ended June 30, 2009. All
forward-looking statements in this press release are based on
information available to us as of the date hereof, and we assume no
obligation to update these forward-looking statements. Any future
product, feature or related specification that may be referenced in this
release are for information purposes only and are not commitments to
deliver any technology or enhancement. Riverbed reserves the right to
modify future product plans at any time.
Use of Non-GAAP Financial Information
To supplement our financial results presented in accordance with
Generally Accepted Accounting Principles (GAAP), this press release and
the accompanying tables and the related earnings conference call contain
certain non-GAAP financial measures that we believe are helpful in
understanding our past financial performance and future results. For
reconciliations of these non-GAAP financial measures to the most
directly comparable GAAP financial measures, please see the section of
the accompanying tables titled, "GAAP to Non-GAAP Reconciliations." Our
non-GAAP financial measures are not meant to be considered in isolation
or as a substitute for comparable GAAP measures and should be read in
conjunction with our consolidated financial statements prepared in
accordance with GAAP. Our management regularly uses our supplemental
non-GAAP financial measures internally to understand and manage our
business and forecast future periods. Our non-GAAP financial measures
include adjustments based on the following items, as well as the related
income tax effects and adjustments related to our tax valuation
allowance:
Support deferred revenue: Business
combination accounting rules require us to account for the fair value of
support contracts assumed in connection with our acquisitions. The book
value of our deferred support revenue was reduced by approximately $2.0
million in the adjustment to fair value. Because these are typically
one-year contracts, our GAAP revenues for the one year period subsequent
to the acquisition of a business do not reflect the full amount of
service revenues on assumed support contracts that would have otherwise
been recorded by the acquired entity. The non-GAAP adjustment is
intended to reflect the full amount of such revenues. We believe this
adjustment is useful to investors as a measure of the ongoing
performance of our business because we have historically experienced
high renewal rates on support contracts, although we cannot be certain
that customers will renew these contracts.
Stock-based compensation expenses:
We have excluded the effect of stock-based compensation and stock-based
payroll expenses from our non-GAAP operating expenses and net income
measures. Although stock-based compensation is a key incentive offered
to our employees, we continue to evaluate our business performance
excluding stock-based compensation expenses. Stock-based compensation
expenses will recur in future periods.
Amortization of intangible assets:
We have excluded the effect of amortization of intangible assets from
our non-GAAP net income. Amortization of intangible assets is a non-cash
expense, and it is not part of our core operations. Investors should
note that the use of intangible assets contributed to revenues earned
during the periods presented and will contribute to future period
revenues as well.
Acquisition related and other expenses:
We incurred significant expenses in connection with our acquisition of
Mazu and also incurred certain other operating expenses, which we would
not have otherwise incurred in the periods presented as a part of our
continuing operations. Acquisition related and other expenses consist of
transaction costs, costs for transitional employees, other acquired
employee related costs, integration related professional services, and
adjustments to the fair value of the acquisition related contingent
consideration. We believe it is useful for investors to understand the
effects of these items on our total operating expenses.
About Riverbed
Riverbed Technology is the IT infrastructure performance company. The
Riverbed family of wide area network (WAN) optimization solutions
liberates businesses from common IT constraints by increasing
application performance, enabling consolidation, and providing
enterprise-wide network and application visibility -- all while
eliminating the need to increase bandwidth, storage or servers.
Thousands of companies with distributed operations use Riverbed to make
their IT infrastructure faster, less expensive and more responsive.
Additional information about Riverbed (NASDAQ: RVBD) is available at www.riverbed.com.
Riverbed Technology, Riverbed, Steelhead, RiOS, Interceptor, Think
Fast, the Riverbed logo, Mazu, Profiler, and Cascade are trademarks or
registered trademarks of Riverbed Technology, Inc. All other trademarks
used or mentioned herein belong to their respective owners.
About the Magic Quadrant
The Magic Quadrant is copyrighted 2009 by Gartner, Inc. and is reused
with permission. The Magic Quadrant is a graphical representation of a
marketplace at and for a specific time period. It depicts Gartner's
analysis of how certain vendors measure against criteria for that
marketplace, as defined by Gartner. Gartner does not endorse any vendor,
product or service depicted in the Magic Quadrant, and does not advise
technology users to select only those vendors placed in the "Leaders"
quadrant. The Magic Quadrant is intended solely as a research tool, and
is not meant to be a specific guide to action. Gartner disclaims all
warranties, express or implied, with respect to this research, including
any warranties of merchantability or fitness for a particular purpose.
Riverbed Technology, Inc.
GAAP Condensed Consolidated Statements of Operations
In thousands, except per share amounts
Unaudited
Three months endedSeptember 30, Nine months endedSeptember 30,
2009 2008 2009 2008
Revenue:
Product $ 69,543 $ 65,238 $ 190,322 $ 185,574
Support and services 32,506 21,309 90,925 55,547
Total revenue 102,049 86,547 281,247 241,121
Cost of revenue:
Cost of product 14,982 16,653 43,776 45,153
Cost of support and services 9,410 7,174 27,385 20,151
Total cost of revenue 24,392 23,827 71,161 65,304
Gross profit 77,657 62,720 210,086 175,817
Operating expenses:
Sales and marketing 44,192 34,855 127,003 100,992
Research and development 17,302 14,582 50,368 43,278
General and administrative 9,297 10,419 27,382 29,925
Other charges - 11,000 - 11,000
Acquisition-related costs (3,008 ) - (4,447 ) -
Total operating expenses 67,783 70,856 200,306 185,195
Operating income (loss) 9,874 (8,136 ) 9,780 (9,378 )
Other income, net 141 1,287 824 5,059
Income (loss) before provision for income taxes 10,015 (6,849 ) 10,604 (4,319 )
Provision for income taxes 4,546 5,574 4,451 8,335
Net income (loss) $ 5,469 $ (12,423 ) $ 6,153 $ (12,654 )
Net income (loss) per share, basic $ 0.08 $ (0.17 ) $ 0.09 $ (0.18 )
Net income (loss) per share, diluted $ 0.08 $ (0.17 ) $ 0.09 $ (0.18 )
Shares used in computing basic net income (loss) per share 69,370 71,005 69,035 70,915
Shares used in computing diluted net income (loss) per share 71,968 71,005 71,040 70,915
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Riverbed Technology, Inc.
GAAP to Non-GAAP Reconciliation
In thousands, except per share amounts
Unaudited
Three months ended Nine months ended
GAAP to Non-GAAP Reconciliations: September 30, June 30, September 30, September 30,
2009 2009 2008 2009 2008
Reconciliation of Total Revenue:
U.S.