CAMPBELL, Calif., April 26, 2016 /PRNewswire/ -- Barracuda Networks, Inc. (NYSE: CUDA), a leading provider of cloud-connected security and data protection solutions, today announced results for its fourth quarter and fiscal year 2016, which ended February 29, 2016.

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"We continue to build momentum in our core focus areas and are pleased with the initial results of our efforts to capitalize on the fastest growing trends in our markets," said BJ Jenkins, President and CEO. "We are focusing our efforts to be the leader in security and data protection for our customers. To reach that goal, we have made investments in enhancing our product portfolio, mobilizing our teams, and expanding our avenues to market to meet the growing demand for cost effective cloud-enabled solutions that can be deployed and managed in 'pay-as-you-go' private and public cloud environments."

"We delivered better than expected results in the fourth quarter, achieved non-GAAP earnings per share of $0.15, and our active subscriber count grew 14% to 278,000," said David Faugno, CFO. "Demonstrating our belief in our strategy, we repurchased approximately $11 million of our shares in the open market during the quarter, bringing our total for the fiscal year to $19 million."

Fourth Quarter 2016 Financial Summary


    --  Total revenue increased 16% to $83.7 million, compared with $72.2
        million in the fourth quarter of fiscal year 2015. Appliance revenue was
        $21.7 million, compared with $20.9 million in the fourth quarter of
        fiscal year 2015, and recurring subscription revenue grew to $62.1
        million, up from $51.2 million in the fourth quarter of fiscal year
        2015, representing 74% of total revenue.
    --  Gross billings were $95.8 million, compared with $96.1 million in the
        fourth quarter of fiscal 2015. The count of active subscribers grew 14%
        to 278 thousand and the dollar-based renewal rate was 96% for the
        quarter.
    --  GAAP net income was $3.2 million, or $0.06 per share, based on a diluted
        share count of 53.1 million, compared to a GAAP net loss of $68.4
        million in the fourth quarter of fiscal 2015.
    --  Non-GAAP net income was $7.9 million, or $0.15 per share, based on a
        diluted share count of 53.1 million. Non-GAAP net income excludes $7.4
        million in stock-based compensation expense, $3.8 million of income tax
        benefits, $3.1 million in amortization of intangibles, $1.4 million in
        acquisition and other non-recurring benefits, and $0.6 million in other
        income.

Fiscal Year 2016 Financial Summary


    --  Total revenue increased 15% to $320.2 million, compared with $277.4
        million in fiscal year 2015. Appliance revenue grew 7% to $89.3 million,
        up from $83.1 million in fiscal year 2015, and recurring subscription
        revenue grew 19% to $230.9 million, up from $194.3 million in fiscal
        year 2015, representing 72% of total revenue.
    --  Gross billings increased 4% to $377.5 million, compared with $364.3
        million in fiscal year 2015.
    --  GAAP net loss was $4.4 million, or $0.08 per share, based on a basic
        share count of 53.1 million.
    --  Non-GAAP net income was $22.7 million, or $0.42 per share, based on a
        diluted share count of 54.3 million. Non-GAAP net income excludes $28.8
        million in stock-based compensation expense, $12.4 million of income tax
        benefits, $5.6 million in amortization of intangibles, $5.0 million in
        acquisition and other non-recurring charges, and $0.1 million in other
        expense.

The reconciliation between GAAP and non-GAAP information is contained in the tables below.

Recent Company Highlights


    --  Launched Barracuda Essentials for Office 365: Added a suite of cloud
        services, with simple per-user licensing, designed to help organizations
        expand on the security and data protection functionality in Office 365.
    --  Introduced Advanced Security Capabilities: Announced availability of
        Anti-Phishing Link Protection and Advanced Threat Detection
        functionality for protection against targeted email attacks for
        customers of all sizes in on-premises and cloud-based environments.
    --  Expanded NextGen Firewall Appliances: Expanded the NextGen Firewall
        product family with the new Barracuda NextGen Firewall S-Series, which
        is designed to enable customers to securely connect thousands of machine
        endpoints, enabling new 'Internet of Things' applications and
        deployments.
    --  Enhanced Backup Products and Services: Announced enhancements to the
        Barracuda Backup product lines, including new subscription and cloud
        storage pricing and two new large-scale Barracuda Backup models. These
        updates offer additional flexibility for data protection and recovery in
        a single-source solution.
    --  Enhanced Web Application Security Portfolio: Introduced the new
        Barracuda Vulnerability Manager, a cloud-based service to help customers
        detect vulnerabilities in their websites and applications running in
        on-premises, cloud, and hybrid environments.
    --  Increased Industry Recognition: Recognized with numerous awards and
        accolades for channel commitment, customer service, and technology
        innovation - including CRN 5-Star Partner Program, Cloud Partner
        Program, and Channel Chief; 2016 SC Magazine Awards for Barracuda
        NextGen Firewall, Barracuda Web Application Firewall, and for the third
        time for Best Customer Service; 2016 Cybersecurity Excellence Awards
        Winner for Network Security for Barracuda NextGen Firewall F-Series;
        2016 Infosecurity Products Guide "Gold" as Best Security Vendor,
        Customer Service Department of the Year, and Innovation in Cloud
        Security; InfoTech "Champion" for the MSSP use case for next-generation
        firewalls.

Conference Call Information
Barracuda will host a conference call and corresponding live webcast at 1:30 p.m. PT today. To access the conference call, dial 1-855-560-2573 for the U.S. or 1-412-542-4159 for international callers. The webcast will be available live on the investor relations section of the company's website at investors.barracuda.com, and via replay beginning approximately two hours after the completion of the call for a period of one year. An audio replay of the call will be available to investors beginning at approximately 5:00 p.m. PT today through May 3, 2016 by dialing 1-877-344-7529 in the U.S. or 1-412-317-0088 for international callers, and entering conference ID 10083175. Additional information can be found in an accompanying supplemental investor slide presentation located at investors.barracuda.com.

Forward-Looking Statements
This announcement contains forward-looking statements related to our ability to respond to the shifting market for cloud and SaaS deployments, changes in the growth rate of the markets in which we compete, changes in customer requirements, benefits and potential results related to our new products and product enhancements, and potential results from new initiatives and new channels and go-to-market strategies that involve risks and uncertainties, including statements regarding our expectations regarding financial performance and the potential impact of our new and updated products. Actual results could differ materially from those projected in the forward-looking statements as a result of certain risk factors, including, but not limited to: fluctuations in demand for our products and services; a highly competitive business environment for network security and storage solutions; the company's effectiveness in controlling expenses; the effects of significant developments in IT infrastructure deployments, particularly cloud computing; the impact of foreign currency fluctuations; the possibility that we might experience delays in the development of new technology and products; risks related to pending or future acquisitions; customer response to our new technology and products; risks related to pending or future litigation and regulatory matters; and a dependency on third parties for certain components of our products. The company undertakes no obligation to update the forward-looking information in this release. More information about potential factors that could affect our business and financial results is included in our filings with the Securities and Exchange Commission, including, without limitation, under the captions: "Management's Discussion and Analysis of Financial Condition and Results of Operations," and "Risk Factors," which are on file with the Securities and Exchange Commission.

Non-GAAP Financial Measures
Barracuda provides all financial information required in accordance with generally accepted accounting principles (GAAP). To supplement our consolidated financial statements presented in accordance with GAAP, we are also providing with this press release non-GAAP net income, non-GAAP operating income, adjusted EBITDA and adjusted free cash flow. In preparing our non-GAAP information, we have excluded certain amounts as set forth in the attached financial tables and footnotes. We believe that excluding these items provides both management and investors with additional insight into our current operations and the trends affecting the company. In particular, management finds it useful to exclude these items in order to more readily correlate the company's operating activities with the company's ability to generate cash from operations. Accordingly, management uses these non-GAAP measures, along with the comparable GAAP information, in evaluating our historical performance and in planning our future business activities. Please note that our non-GAAP measures may be different than those used by other companies. The additional non-GAAP financial information we present should be considered in conjunction with, and not as a substitute for, our financial information presented in accordance with GAAP. We have provided a non-GAAP reconciliation of the Condensed Consolidated Statement of Operations for the periods presented in this release, which exclude certain amounts as set forth in the attached financial tables and footnotes for these periods. These measures should only be used to evaluate the company's results of operations in conjunction with the corresponding GAAP measures for comparable financial information and understanding of the company's ongoing performance as a business. Barracuda uses both GAAP and non-GAAP measures to evaluate and manage its operations.

About Barracuda Networks Inc. (NYSE: CUDA)
Barracuda (NYSE: CUDA) simplifies IT with cloud-enabled solutions that empower customers to protect their networks, applications, and data, regardless of where they reside. These powerful, easy-to-use and affordable solutions are trusted by more than 150,000 organizations worldwide and are delivered in appliance, virtual appliance, cloud and hybrid deployments. Barracuda's customer-centric business model focuses on delivering high-value, subscription-based IT solutions that provide end-to-end network and data security. For additional information, please visit barracuda.com.

Barracuda Networks, Barracuda and the Barracuda Networks logo are registered trademarks or trademarks of Barracuda Networks, Inc. in the US and other countries.

Contacts:
Investor Relations:
Adam Carson; +1 408-342-5480; ir@barracuda.com
Corporate Communications: Mary Catherine Petermann; +1 404-307-6290; mc@barracuda.com


                                                  Barracuda Networks, Inc.

                                            Condensed Consolidated Balance Sheets

                                                       (in thousands)

                                                         (Unaudited)


                                                              February 29, 2016       February 28, 2015
                                                            -----------------       -----------------

    Assets

    Current assets:

                Cash and cash equivalents                                  $118,654                 $151,373

                Marketable securities                                        36,394                   40,754

                 Accounts receivable, net of allowance
                 for doubtful accounts                                       36,520                   40,725

                Inventories, net                                              5,648                    4,454

                Deferred costs                                               31,943                   30,221

                Deferred income taxes                                             -                     479

                Other current assets                                         12,450                   12,260
                                                                           ------

    Total current assets                                                  241,609                  280,266


                Property and equipment, net                                  31,910                   27,839

                Deferred costs, non-current                                  27,019                   27,715

                Deferred income taxes, non-current                            2,992                      443

                Other non-current assets                                      7,293                    4,123

                Intangible assets, net                                       39,386                    9,217

                Goodwill                                                     69,595                   39,742

    Total assets                                                         $419,804                 $389,345
                                                                         ========                 ========


    Liabilities and stockholders' deficit

    Current liabilities:

                Accounts payable                                            $15,939                  $16,356

                Accrued payroll and related benefits                         12,371                   11,656

                Other accrued liabilities                                    19,495                   12,465

                Deferred revenue                                            235,411                  209,904

                Deferred income taxes                                             -                     563

                Note payable                                                    268                      252
                                                                              ---

    Total current liabilities                                             283,484                  251,196


    Long-term liabilities:

                Deferred revenue, non-current                               157,363                  163,253

                Deferred income taxes, non-current                            2,478                    2,396

                Note payable, non-current                                     4,115                    4,383

                Other long-term liabilities                                   4,462                    7,201


    Stockholders' deficit:

                Common stock                                                     52                       53

                Additional paid-in capital                                  337,439                  316,035

                Accumulated other comprehensive loss                        (4,509)                 (4,233)

                Accumulated deficit                                       (365,080)               (350,939)
                                                                        ---------

    Total stockholders' deficit                                          (32,098)                (39,084)

    Total liabilities and
     stockholders' deficit                                               $419,804                 $389,345
                                                                         ========                 ========


                                                                                    Barracuda Networks, Inc.

                                                                         Condensed Consolidated Statements of Operations

                                                                          (in thousands, except per share information)

                                                                                           (Unaudited)


                                                                    Three months ended                   Twelve months ended
                                                                      February 28/29,                       February 28/29,
                                                                -------------------                  --------------------

                                                                               2016                                   2015                  2016                     2015
                                                                               ----                                   ----                  ----                     ----


    Revenue:

                Appliance                               $21,650                            $20,942                            $89,275                $83,146

                Subscription                             62,076                             51,236                            230,883                194,300
                ---------

                                   Total revenue                             83,726                                 72,178               320,158                  277,446


    Cost of revenue                                                         19,879                                 15,779                70,132                   58,667
                                                                            ------                                 ------                ------                   ------


    Gross profit                                                            63,847                                 56,399               250,026                  218,779


    Operating expenses:

                 Research and
                 development                             17,120                             16,570                             71,251                 58,737

                 Sales and
                 marketing                               33,504                             31,621                            138,324                125,526

                 General and
                 administrative                          10,998                              9,491                             47,338                 35,438
                ---------

                                   Total operating expenses                  61,622                                 57,682               256,913                  219,701
                                                                             ------                                 ------               -------                  -------

    Income (loss) from operations                                            2,225                                (1,283)              (6,887)                   (922)


    Other income (expense), net                                                604                                (1,147)                (262)                 (3,674)
                                                                               ---                                 ------                  ----                   ------


    Income (loss) before income taxes                                        2,829                                (2,430)              (7,149)                 (4,596)

    Benefit from (provision for) income
     taxes                                                                     406                               (65,921)                2,727                 (62,902)
                                                                               ---                                -------                 -----                  -------

    Net income (loss)                                                       $3,235                              $(68,351)             $(4,422)               $(67,498)
                                                                            ======                               ========               =======                 ========


    Net income (loss) per share:

                Basic                                                           $0.06                                $(1.30)              $(0.08)                 $(1.30)

                Diluted                                   $0.06                            $(1.30)                           $(0.08)               $(1.30)


    Weighted-average shares used to compute net income (loss)
     per share:

                Basic                                                          52,746                                 52,629                53,070                   51,898

                Diluted                                  53,118                             52,629                             53,070                 51,898


                                                  Barracuda Networks, Inc.

                               Reconciliation of Selected GAAP to Non-GAAP Financial Measures

                                                       (in thousands)

                                                        (Unaudited)


                                                                     Three months ended                  Twelve months ended
                                                                       February 28/29,                   February 28/29,
                                                                 -------------------              --------------------

                                                                      2016                    2015                      2016            2015
                                                                      ----                    ----                      ----            ----


    GAAP cost of revenue                                 $19,879                  $15,779                 $70,132               $58,667

                              Amortization of intangible assets
                              (1)                                      1,561                     404                     3,247           2,283

                             Depreciation expense (2)                  1,550                     930                     5,062           3,175

                              Stock-based compensation expense
                              (3)                                        310                     143                     1,062             389

    Non-GAAP cost of revenue                             $16,458                  $14,302                 $60,761               $52,820
                                                         =======                  =======                 =======               =======


    GAAP sales and marketing
     expense                                             $33,504                  $31,621                $138,324              $125,526

                              Amortization of intangible assets
                              (1)                                      1,544                     181                     2,343           1,160

                             Depreciation expense (2)                   (69)                     34                       160             153

                              Stock-based compensation expense
                              (3)                                      1,565                   1,265                     6,566           3,811

                              Acquisition and other non-
                              recurring charges (4)                  (1,029)                     99                   (1,346)             99

    Non-GAAP sales and
     marketing expense                                   $31,493                  $30,042                $130,601              $120,303
                                                         =======                  =======                ========              ========


    GAAP research and
     development expense                                 $17,120                  $16,570                 $71,251               $58,737

                             Depreciation expense (2)                    113                     187                       657             670

                              Stock-based compensation expense
                              (3)                                      2,141                   1,510                     8,247           4,410

                              Acquisition and other non-
                              recurring charges (4)                    (536)                    378                     1,685           1,505

    Non-GAAP research and
     development expense                                 $15,402                  $14,495                 $60,662               $52,152
                                                         =======                  =======                 =======               =======


    GAAP general and
     administrative expense                              $10,998                   $9,491                 $47,338               $35,438

                             Depreciation expense (2)                    674                     355                     1,831           1,190

                              Stock-based compensation expense
                              (3)                                      3,414                   2,458                    12,971           8,448

                              Acquisition and other non-
                              recurring charges (4)                      126                     199                     4,649             686

    Non-GAAP general and
     administrative expense                               $6,784                   $6,479                 $27,887               $25,114
                                                          ======                   ======                 =======               =======


    GAAP total expense                                   $81,501                  $73,461                $327,045              $278,368

                              Amortization of intangible assets
                              (1)                                      3,105                     585                     5,590           3,443

                             Depreciation expense (2)                  2,268                   1,506                     7,710           5,188

                              Stock-based compensation expense
                              (3)                                      7,430                   5,376                    28,846          17,058

                              Acquisition and other non-
                              recurring charges (4)                  (1,439)                    676                     4,988           2,290

    Non-GAAP total expense                               $70,137                  $65,318                $279,911              $250,389
                                                         =======                  =======                ========              ========

                             Depreciation expense (2)                  2,268                   1,506                     7,710           5,188

    Non-GAAP total expense
     including depreciation                              $72,405                  $66,824                $287,621              $255,577
                                                         =======                  =======                ========              ========





                                                    Barracuda Networks, Inc.

                                 Reconciliation of Selected GAAP to Non-GAAP Financial Measures

                                          (in thousands, except per share information)

                                                          (Unaudited)


                                                                      Three months ended               Twelve months ended
                                                                           February 28/29,                  February 28/29,
                                                                     -------------------              --------------------

                                                                          2016                    2015                     2016                 2015
                                                                          ----                    ----                     ----                 ----


    GAAP operating income (loss)                              $2,225                 $(1,283)               $(6,887)                 $(922)

                                  Amortization of intangible assets
                                  (1)                                      3,105                     585                    5,590                3,443

                                  Stock-based compensation expense
                                  (3)                                      7,430                   5,376                   28,846               17,058

                                  Acquisition and other non-
                                  recurring charges (4)                  (1,439)                    676                    4,988                2,290

    Non-GAAP operating income                                $11,321                   $5,354                 $32,537                 $21,869
                                                             =======                   ======                 =======                 =======


    GAAP net income (loss)                                    $3,235                $(68,351)               $(4,422)              $(67,498)

                                  Amortization of intangible assets
                                  (1)                                      3,105                     585                    5,590                3,443

                                  Stock-based compensation expense
                                  (3)                                      7,430                   5,376                   28,846               17,058

                                  Acquisition and other non-
                                  recurring charges (4)                  (1,439)                    676                    4,988                2,290

                                  Income tax effect on non-GAAP
                                  exclusions (5)                         (3,793)                 64,326                 (12,435)              56,445

                                  Other expense (income) adjustments
                                  (6)                                      (631)                  1,111                       87                3,330

    Non-GAAP net income                                       $7,907                   $3,723                 $22,654                 $15,068
                                                              ======                   ======                 =======                 =======


    Non-GAAP diluted earnings
     per share (7)                                             $0.15                    $0.07                   $0.42                   $0.28
                                                               =====                    =====                   =====                   =====

    Weighted-average shares
     used to compute diluted
     earnings per share                                                 53,118                  54,656                   54,337               54,002
                                                                        ======                  ======                   ======               ======



           (1)    Amortization of Intangible
                   Assets.We provide non-GAAP
                   information which excludes
                   expenses for the
                   amortization of intangible
                   assets, as well as certain
                   losses on disposal and
                   impairment of such assets,
                   that primarily relate to
                   purchased intangible assets
                   associated with our
                   acquisitions. We believe
                   that eliminating this
                   expense from our non-GAAP
                   measures is useful to
                   investors, because the
                   amortization of intangible
                   assets can be inconsistent
                   in amount and frequency and
                   is significantly impacted by
                   the timing and magnitude of
                   our acquisition
                   transactions, which also
                   vary in frequency from
                   period to period.
                   Accordingly, we analyze the
                   performance of our
                   operations in each period
                   without regard to such
                   expenses.
                  -----------------------------


           (2)    Depreciation Expense. We
                   provide non-GAAP
                   information which excludes
                   depreciation expense related
                   to the amortization of
                   property and equipment, as
                   well as certain losses from
                   disposal of such assets. We
                   believe that eliminating
                   this expense from our non-
                   GAAP measures is useful to
                   investors, because the
                   acquisition of property and
                   equipment, and the
                   corresponding depreciation
                   expense, can be inconsistent
                   in amount and can vary from
                   period to period.
                  -----------------------------


           (3)    Stock-Based Compensation
                   Expense. We provide non-
                   GAAP information which
                   excludes expenses for stock-
                   based compensation. We
                   believe the exclusion of
                   this item allows for
                   financial results that are
                   more indicative of our
                   continuing operations. We
                   believe that the exclusion
                   of stock-based compensation
                   expense provides for a
                   better comparison of our
                   operating results to prior
                   periods and to our peer
                   companies as the
                   calculations of stock-based
                   compensation vary from
                   period to period and company
                   to company due to different
                   valuation methodologies,
                   subjective assumptions and
                   the variety of award types.
                  -----------------------------


           (4)    Acquisition and Other Non-
                   Recurring Charges. We
                   exclude certain expense
                   items resulting from
                   acquisitions and other non-
                   recurring charges, which we
                   do not expect to recur in
                   our continuing operating
                   results. We believe that
                   adjusting for these charges
                   allows us to better compare
                   results from period to
                   period in order to assess
                   the ongoing operating
                   results of our business. The
                   charges include: (i) costs
                   and settlements associated
                   with an internal
                   investigation of export
                   control compliance, (ii)
                   costs associated with an
                   intellectual property
                   settlement, and (iii) legal,
                   valuation consulting and
                   other expenses incurred in
                   connection with
                   acquisitions, the fair value
                   remeasurements of contingent
                   considerations, the payments
                   made under the terms of
                   certain acquisition
                   agreements and other non-
                   recurring expenses.
                  -----------------------------


           (5)    Income Tax Effect of Non-
                   GAAP Exclusions. We believe
                   providing financial
                   information with and without
                   the income tax effect of
                   excluding items related to
                   our non-GAAP financial
                   measures provide our
                   management and users of the
                   financial statements with
                   better clarity regarding the
                   ongoing performance and
                   future liquidity of our
                   business. Excluded items
                   include, but are not limited
                   to: (i) amortization expense
                   of intangible assets, (ii)
                   stock-based compensation
                   expense, (iii) acquisition
                   and other non-recurring
                   charges, and (iv) quarterly
                   changes to the valuation
                   allowance previously
                   established.
                  ----------------------------


           (6)    Other expense (income)
                   adjustments. We provide non-
                   GAAP information that
                   excludes the effect of
                   certain other income and
                   losses. These adjustments
                   most significantly consist
                   of foreign currency
                   remeasurement gains and
                   losses. For all non-
                   functional currency account
                   balances, the remeasurement
                   of such balances to the
                   functional currency will
                   result in either a foreign
                   exchange gain or a loss
                   which is recorded in other
                   income (expense), net. We
                   believe that eliminating
                   these items from our non-
                   GAAP measures is useful to
                   investors, because foreign
                   currency remeasurement
                   adjustments can be
                   inconsistent in amount and
                   can vary from period to
                   period.
                  -----------------------------


           (7)    Non-GAAP Diluted Earnings
                   Per Share. We provide non-
                   GAAP diluted earnings per
                   share. The non-GAAP diluted
                   earnings per share amount is
                   calculated based on our non-
                   GAAP net income divided by
                   the weighted-average
                   diluted shares outstanding
                   for the period.
                  ----------------------------




                                                   Barracuda Networks, Inc.

                                 Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA

                                                        (in thousands)

                                                         (Unaudited)


                                                                      Three months ended                    Twelve months ended
                                                                        February 28/29,                     February 28/29,
                                                                  -------------------                --------------------

                                                                       2016                      2015                      2016                     2015
                                                                       ----                      ----                      ----                     ----


    GAAP net income (loss)                               $3,235                  $(68,351)                 $(4,422)               $(67,498)

                           Deferred revenue, end of period            392,774                   372,862                   392,774                  372,862

                            Less: Deferred revenue, beginning
                            of period                               (391,617)                (357,694)                (372,862)               (313,157)

                           Less: Deferred costs, end of period       (58,962)                 (57,936)                 (58,962)                (57,936)

                           Deferred costs, beginning of period         59,255                    56,114                    57,936                   50,279

                           Other expense (income), net                  (604)                    1,147                       262                    3,674

                            Provision for (benefit from) income
                            taxes                                       (406)                   65,921                   (2,727)                  62,902

                            Acquisition and other non-
                            recurring charges                         (1,439)                      676                     4,988                    2,290

                           Stock-based compensation expense             7,430                     5,376                    28,846                   17,058

                           Amortization of intangible assets            3,105                       585                     5,590                    3,443

                           Depreciation expense                         2,268                     1,506                     7,710                    5,188

    Adjusted EBITDA (1)                                 $15,039                    $20,206                   $59,133                  $79,105
                                                        =======                    =======                   =======                  =======



           (1)    Adjusted EBITDA. We define
                   adjusted EBITDA as net
                   income (loss) plus increases
                   in deferred revenue and
                   increases in the associated
                   deferred costs, plus non-
                   cash and non-operating
                   charges which include: (i)
                   other expense (income), net,
                   (ii) provision for (benefit
                   from) income taxes, (iii)
                   acquisition and other non-
                   recurring charges, (iv)
                   stock-based compensation
                   expense, (v) amortization of
                   intangible assets, including
                   certain losses on disposal
                   and impairment of intangible
                   assets, and (vi)
                   depreciation expense,
                   including certain losses on
                   disposal of fixed assets.
                   The deferred revenue
                   balances for the periods
                   presented exclude any
                   remaining acquisition date
                   deferred revenue amounts
                   assumed in connection with
                   our acquisition of C2C
                   Systems Limited, which
                   closed in the second quarter
                   of fiscal 2015. We believe
                   adjusted EBITDA provides an
                   indication of profitability
                   from our operations, and
                   provides a consistent
                   measure of our performance
                   from period to period.
                   ----------------------------




                                                   Barracuda Networks, Inc.

                    Reconciliation of GAAP Cash Flows from Operating Activities to Adjusted Free Cash Flow

                                                        (in thousands)

                                                         (Unaudited)


                   Three months ended                 Twelve months ended
                      February 28/29,                     February 28/29,
                  -------------------                --------------------

                                 2016                                 2015                                  2016        2015
                                 ----                                 ----                                  ----        ----


    GAAP cash
     flows from
     operating
     activities               $15,395                              $21,030                               $49,266     $54,104

    Purchase of
     property and
     equipment                (2,318)                             (5,458)                              (7,818)   (12,517)

    Acquisition
     and other
     non-
     recurring
     charges (1)                3,373                                  667                                 5,107       2,017

    Adjusted free
     cash flow
     (2)                     $16,450                              $16,239                               $46,555     $43,604
                              =======                              =======                               =======     =======



        (1)       Acquisition and Other Non-
                   Recurring Charges. We
                   exclude the cash flow impact
                   resulting from acquisitions
                   and other non-recurring
                   charges, which we do not
                   expect to recur in our
                   continuing operating
                   results. We believe that
                   adjusting for these cash
                   outflows allows us to better
                   compare results from period
                   to period in order to assess
                   the ongoing operating
                   results of our business. The
                   cash flows include: (i)
                   payments associated with an
                   intellectual property
                   settlement, (ii) payments
                   associated with an internal
                   investigation of export
                   control compliance, and
                   (iii) payments related to
                   legal, valuation consulting
                   and other expenses incurred
                   in connection with
                   acquisitions, as well as the
                   payments under the terms of
                   certain acquisition
                   agreements and other non-
                   recurring expenses.
                  -----------------------------


        (2)       Adjusted Free Cash Flow. We
                   define adjusted free cash
                   flow as cash flows from
                   operating activities less
                   the purchases of property
                   and equipment plus the cash
                   flow effect of acquisition
                   and other non-recurring
                   charges. We believe that
                   adjusting free cash flow to
                   exclude these charges allows
                   us to better compare results
                   from period to period in
                   order to assess the ongoing
                   free cash flow of our
                   business. We believe
                   adjusted free cash flow is
                   an important liquidity
                   measure that reflects the
                   cash generated by the
                   business after the purchase
                   of property and equipment
                   that can then be used for,
                   among other things,
                   strategic acquisitions,
                   investments in the business
                   and funding ongoing
                   operations.
                  ----------------------------




                                               Barracuda Networks, Inc.

                                   Reconciliation of GAAP Revenue to Gross Billings

                                                    (in thousands)

                                                      (Unaudited)


                                                               Three months ended                  Twelve months ended
                                                                 February 28/29,                   February 28/29,
                                                           -------------------              --------------------

                                                                2016                    2015                      2016                  2015
                                                                ----                    ----                      ----                  ----


    GAAP Revenue                                  $83,726                   $72,178                $320,158              $277,446

                           Total deferred revenue, end of
                           period                              392,774                 372,862                   392,774               372,862

                           Less:  total deferred revenue,
                           beginning of period               (391,617)              (357,694)                (372,862)            (313,157)

                          Deferred revenue adjustments          10,905                   8,779                    37,445                27,141
                                                              ------

                           Total change in deferred
                           revenue and adjustments              12,062                  23,947                    57,357                86,846

    Gross billings (1)(2)                         $95,788                   $96,125                $377,515              $364,292
                                                  =======                   =======                ========              ========



        (1)       Gross Billings. We define
                   gross billings as total
                   revenue plus the change in
                   deferred revenue and other
                   adjustments, which primarily
                   consist of returns and
                   reserves with respect to the
                   30-day right of return we
                   provide to customers, as
                   well as rebates for certain
                   channel partner activities.
                   The deferred revenue
                   balances for the periods
                   presented exclude any
                   remaining acquisition date
                   deferred revenue amounts
                   assumed in connection with
                   our acquisition of C2C
                   Systems Limited, which
                   closed in the second quarter
                   of fiscal 2015. We believe
                   that gross billings provide
                   insight into the sales of
                   our solutions and
                   performance of our business.
                  -----------------------------


        (2)       In order to determine how our
                   business performed exclusive
                   of the effect of foreign
                   currency fluctuations, we
                   compare the percentage
                   change in our gross billings
                   from one period to another
                   using a constant currency.
                   To present this gross
                   billings information, the
                   current and comparative
                   prior period results for
                   entities that operate in
                   other than U.S. dollars are
                   converted into U.S. dollars
                   at constant exchange rates.
                   For example, the rates in
                   effect at February 28, 2015,
                   which was the last day of
                   our prior fiscal year's
                   comparable quarter, were
                   used to convert current and
                   comparable prior period
                   gross billings rather than
                   the actual exchange rates in
                   effect during the respective
                   period.


                                                                                           Barracuda Networks, Inc.

                                                                               Condensed Consolidated Statements of Cash Flows

                                                                                                (in thousands)

                                                                                                 (Unaudited)


                                                                                                                                                 Three months ended                   Twelve months ended
                                                                                                                                                   February 28/29,                    February 28/29,
                                                                                                                                             -------------------               --------------------

                                                                                                                                                  2016                     2015                      2016                     2015
                                                                                                                                                  ----                     ----                      ----                     ----


    Operating activities

    Net income (loss)                                                                                                                 $3,235                $(68,351)                $(4,422)               $(67,498)

    Adjustments to reconcile net income (loss) to net cash provided by operating
     activities:

                                                                                    Depreciation, amortization and impairment expense              5,373                    2,091                    13,300                    8,631

                                                                                    Stock-based compensation expense                               7,430                    5,376                    28,846                   17,058

                                                                                    Excess tax benefits from equity compensation plans             (398)                 (2,195)                  (3,788)                 (8,947)

                                                                                    Deferred income taxes                                        (2,665)                  69,458                   (6,592)                  59,261

                                                                                    Other                                                        (1,759)                     282                     (865)                     486

    Changes in operating assets and liabilities:

                                                                                    Accounts receivable, net                                       5,500                    (160)                    4,427                 (12,945)

                                                                                    Inventories, net                                                 471                      682                   (1,193)                   1,189

                                                                                    Income taxes, net                                              1,873                  (3,625)                    2,756                    (485)

                                                                                    Deferred costs                                                   385                  (2,101)                  (1,112)                 (8,189)

                                                                                    Other assets                                                   (388)                 (2,138)                  (2,187)                 (2,158)

                                                                                    Accounts payable                                                 957                    3,239                     (720)                   2,835

                                                                                    Accrued payroll and related benefits                           (382)                   1,656                     3,339                    1,959

                                                                                    Other liabilities                                            (5,306)                   1,722                   (1,526)                   3,566

                                                                                    Deferred revenue                                               1,069                   15,094                    19,003                   59,341
                                                                                                                                                 -----

    Net cash provided by operating activities                                                                                                   15,395                   21,030                    49,266                   54,104


    Investing activities

                                                                                    Proceeds from the sale of marketable securities                1,108                      249                    10,310                      249

                                                                                    Proceeds from the maturity of marketable securities            5,520                      735                    20,047                      735

                                                                                    Purchase of marketable securities                            (6,981)                (30,489)                 (26,021)                (41,977)

                                                                                    Purchase of property and equipment                           (2,318)                 (5,458)                  (7,818)                (12,517)

                                                                                    Purchase of intangible assets                                      -                       -                        -                    (38)

                                                                                     Purchase of investments in non-marketable equity and
                                                                                     debt securities                                                   -                   (100)                  (1,400)                 (1,200)

                                                                                    Business combinations, net of cash acquired                        -                       -                 (56,862)                 (4,791)
                                                                                    -------------------------

    Net cash used in investing activities                                                                                                      (2,671)                (35,063)                 (61,744)                (59,539)


    Financing activities

                                                                                    Proceeds from issuance of common stock                           133                    3,916                     4,845                   16,476

                                                                                     Taxes paid related to net share settlement of equity
                                                                                     awards                                                        (765)                 (1,515)                  (6,734)                 (5,369)

                                                                                    Repurchase of common stock                                  (11,216)                       -                 (19,216)                       -

                                                                                    Employee loans extended, net of repayment                         24                    1,150                   (2,464)                   1,921

                                                                                    Excess tax benefits from equity compensation plans               398                    2,195                     3,788                    8,947

                                                                                    Repayment of note payable                                       (64)                    (60)                    (285)                   (237)

                                                                                    Other                                                           (75)                    (34)                    (330)                    (34)
                                                                                                                                                  ----

    Net cash provided by (used in) financing
     activities                                                                                                                               (11,565)                   5,652                  (20,396)                  21,704


    Effect of exchange rate changes on cash and cash
     equivalents                                                                                                                                   422                    (141)                      155                    (775)

                                                                                                                                                                                                                            ---

    Net increase (decrease) in cash and cash
     equivalents                                                                                                                                 1,581                  (8,522)                 (32,719)                  15,494


    Cash and cash equivalents at beginning of period                                                                                           117,073                  159,895                   151,373                  135,879

    Cash and cash equivalents at end of period                                                                                      $118,654                 $151,373                 $118,654                 $151,373
                                                                                                                                    ========                 ========                 ========                 ========

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SOURCE Barracuda Networks, Inc.