BARRACUDA NETWORKS INC CAMPBELL, Calif., April 17, 2017 /PRNewswire/ -- Barracuda Networks, Inc. (NYSE: CUDA), a leading provider of cloud-enabled security and data protection solutions, today announced results for its fourth quarter and fiscal year 2017, which ended Feb. 28, 2017.
"Barracuda delivered a solid fourth quarter and finished the year strong with total gross billings surpassing $400 million, driven by continued momentum in our core focus areas. Our performance led to record earnings and the highest free cash flow in our company's history at $58.9 million," said BJ Jenkins, president and CEO. "We are proud of our team's execution as we aligned our investments, product portfolio, and routes to market to strengthen Barracuda's position as a leading comprehensive security platform for the midmarket. We believe our results demonstrate our momentum and foundation for growth as customers move their applications and data to the cloud."
Fourth Quarter Fiscal 2017 Financial Summary
-- Total revenue increased 7% to $89.3 million, compared with $83.7 million
in the fourth quarter of fiscal 2016. Subscription revenue grew to $69.4
million, up 12% from $62.1 million in the fourth quarter of fiscal 2016,
representing 78% of total revenue. Appliance revenue was $19.9 million,
compared with $21.7 million in the fourth quarter of fiscal 2016.
-- Gross billings were $103.2 million, compared with $95.8 million in the
fourth quarter of fiscal 2016. Billings for core products increased 21%
to $63.8 million, compared with $52.6 million in the fourth quarter of
fiscal 2016. The number of active subscribers grew approximately 15%
year-over-year to reach 321,000 as of February 28, 2017. The
dollar-based renewal rate was 89%, or 90% on a constant currency basis,
and 93% on an annualized basis.
-- GAAP net income was $3.2 million, or $0.06 per share, based on a diluted
share count of 54.1 million, compared to a GAAP net income of $3.2
million, or $0.06 per share, in the fourth quarter of fiscal 2016.
-- Non-GAAP net income was $10.0 million, or $0.19 per share, based on a
diluted share count of 54.1 million. Non-GAAP net income was favorably
impacted by the exclusion of $7.7 million in stock-based compensation
expense, $1.8 million in amortization of intangibles and $0.2 million in
other expense, partially offset by the exclusion of an income tax effect
of $2.4 million and $0.4 million in acquisition and other benefits.
Fiscal Year 2017 Financial Summary
-- Total revenue increased 10% to $352.6 million, compared with $320.2
million in fiscal year 2016. Subscription revenue grew to $269.9
million, up 17% from $230.9 million in fiscal year 2016, representing
77% of total revenue. Appliance revenue was $82.7 million, compared with
$89.3 million in fiscal year 2016.
-- Gross billings increased 7% to $402.1 million, compared with $377.5
million in fiscal year 2016. Billings for core products increased 23% to
$239.5 million, compared with $194.4 million in fiscal 2016.
-- GAAP net income was $10.2 million, or $0.19 per share, based on a
diluted share count of 53.6 million, compared to a GAAP net loss of $4.4
million, or $0.08 per share, on a basic share count of 53.1 in fiscal
2016.
-- Non-GAAP net income was $43.8 million, or $0.82 per share, based on a
diluted share count of 53.6 million. Non-GAAP net income was favorably
impacted by the exclusion of $32.7 million in stock-based compensation
expense, $7.2 million in amortization of intangibles, $0.6 million in
acquisition and other charges and $0.1 million in other expense,
partially offset by the exclusion of an income tax effect of $7.0
million.
The reconciliation between non-GAAP and their most closely comparable GAAP equivalent is contained in the tables below.
Recent Company Highlights
-- Introduced "Cloud Ready" Program: Announced innovative "Cloud Ready"
program that allows customers to sample the cloud for their new and
existing workloads with no upfront costs and without having to determine
where or how to allocate security resources. Customers that purchase
certain Barracuda Web Application Firewall or Barracuda NextGen Firewall
hardware products receive a cloud license to deploy the same solution in
Amazon Web Services and Microsoft Azure at no additional cost. Through
this program, Barracuda gives customers a path to adopt cloud
infrastructures, with the ability to deploy the same powerful security
capabilities and intuitive management interface whether deployed
on-premises or in the cloud.
-- Expanded Cloud-based Application Security Capabilities: Launched
Barracuda Vulnerability Remediation Service, a cloud-based service that
automates security policy enforcement with on-demand or scheduled
scanning and automatic remediation of web application vulnerabilities.
The service simplifies security operations for DevOps teams looking to
leverage the agility and elasticity of public cloud platforms by
integrating security directly into the application development process.
Barracuda Vulnerability Remediation Service enables administrators to
find, continuously monitor for and automatically fix vulnerabilities.
The service can be used for applications deployed on-premises, or in
hybrid or cloud-only environments, with policy configurations that can
be applied across any number of Web Application Firewall instances.
-- Enhanced Data Protection Product Portfolio: Announced an appliance
refresh across the Barracuda Backup product line, which gives customers
increased storage capacity up to 100% in some cases, offering a lower
cost per Terabyte and enabling more room for data growth. As part of the
refresh, customers with cloud storage subscriptions can now replicate
more data to the cloud with no increase in subscription prices.
Additionally, 10 Gigabit Ethernet connections are now included with the
Barracuda Backup 690, 790, and 890 appliances for a faster data
transfer.
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 one hour after the completion of the call for a period of one year. An audio replay of the call will be available beginning at approximately 5:00 p.m. PT today through April 24, 2017 by dialing 1-877-344-7529 in the U.S. or 1-412-317-0088 for international callers, and entering conference ID 10102620. Additional supplemental financial information will also be accessible on the company's website at investors.barracuda.com.
Forward-Looking Statements
This announcement contains forward-looking statements related to our strategy and core products, the adoption of our cloud and security and data protection products, potential benefits from newly launched and updated products to customers and partners, and potential results from new initiatives, 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 and evolving business environment for network security and storage solutions; the company's effectiveness in controlling expenses and timing of infrastructure costs; 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 recent or future acquisitions; customer response to our new technology and products; risks related to pending or future litigation and regulatory matters; a dependency on third parties for certain components of our products and the impact of changes in our management team. 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 and on our conference call with non-GAAP net income, non-GAAP operating income, non-GAAP gross margins, non-GAAP operating expenses, adjusted EBITDA and 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 reconciliations of these non-GAAP measures to their comparable GAAP measures 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.
Beginning in the third quarter of fiscal 2017, we modified our reporting practices to comply with recent SEC interpretations on the use of non-GAAP measures. As a result, we have modified our historical presentation of adjusted EBITDA and free cash flow. We no longer adjust for changes in deferred revenue and associated deferred costs in our calculation of adjusted EBITDA, and for free cash flow we will not adjust for the cash payment impact of acquisition and other charges. Prior period information has been recast to conform to the adjusted calculations.
Forward-looking non-GAAP financial measures included in Barracuda's guidance exclude amortization of intangible assets, stock-based compensation expense, acquisition and other charges, income tax effects related to such exclusions and other expense (income) adjustments. Barracuda does not provide reconciliations of its forward-looking non-GAAP financial measures to the corresponding GAAP measures due to the high variability of, and difficulty in making accurate forecasts and projections with respect to, the items excluded from these non-GAAP financial measures. In particular, stock-based compensation and related taxes are impacted by the company's future hiring and retention needs, as well as the future fair market value of its common stock, all of which is difficult to predict and subject to constant change. Accordingly, reconciliations of its forward-looking non-GAAP financial measures to the corresponding GAAP measures are not available without unreasonable effort. The actual amounts of these excluded items will have a significant impact on the company's GAAP operating income (loss) and net income (loss) per diluted share.
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 deployment configurations. Barracuda's customer-centric business model focuses on delivering high-value, subscription-based IT solutions that provide end-to-end network and data protection. 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: Maria Riley; +1 415-217-7722; 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)
As of February As of February
28, 2017 29, 2016
-------- --------
Assets
Current assets:
Cash and cash equivalents $120,194 $118,654
Marketable securities 79,915 36,394
Accounts receivable, net of
allowance for doubtful
accounts 40,560 36,520
Inventories, net 5,847 5,648
Deferred costs 32,598 31,943
Other current assets 16,295 12,450
------ ------
Total current assets 295,409 241,609
Property and equipment, net 29,979 31,910
Deferred costs, non-current 27,285 27,019
Deferred income taxes, non-
current 1,554 2,992
Other non-current assets 8,607 7,293
Intangible assets, net 32,145 39,386
Goodwill 69,795 69,595
------ ------
Total assets $464,774 $419,804
======== ========
Liabilities and stockholders' equity (deficit)
Current liabilities:
Accounts payable $11,439 $15,939
Accrued payroll and related
benefits 13,593 12,371
Other accrued liabilities 12,942 19,495
Deferred revenue 239,796 235,411
Note payable 4,115 268
----- ---
Total current liabilities 281,885 283,484
Long-term liabilities:
Deferred revenue, non-current 167,286 157,363
Deferred income taxes, non-
current 2,803 2,478
Note payable, non-current - 4,115
Other long-term liabilities 6,377 4,462
Stockholders' equity (deficit):
Common stock 53 52
Additional paid-in capital 370,745 337,439
Accumulated other
comprehensive loss (5,226) (4,509)
Accumulated deficit (359,149) (365,080)
-------- --------
Total stockholders' equity
(deficit) 6,423 (32,098)
----- -------
Total liabilities and
stockholders' equity
(deficit) $464,774 $419,804
======== ========
Barracuda Networks, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share information)
(Unaudited)
Three Months Ended February Twelve Months Ended February
28/29, 28/29,
2017 2016 2017 2016
---- ---- ---- ----
Revenue:
Appliance $19,908 $21,650 $82,732 $89,275
Subscription 69,351 62,076 269,917 230,883
------ ------ ------- -------
Total revenue 89,259 83,726 352,649 320,158
Cost of revenue 22,193 19,879 83,772 70,132
------ ------ ------ ------
Gross profit 67,066 63,847 268,877 250,026
Operating expenses:
Research and development 18,790 17,120 75,070 71,251
Sales and marketing 32,865 33,504 129,707 138,324
General and administrative 10,084 10,998 42,042 47,338
------ ------ ------ ------
Total operating expenses 61,739 61,622 246,819 256,913
------ ------ ------- -------
Income (loss) from
operations 5,327 2,225 22,058 (6,887)
Other income (expense), net (201) 604 (70) (262)
---- --- --- ----
Income (loss) before income
taxes 5,126 2,829 21,988 (7,149)
Benefit from (provision
for) income taxes (1,905) 406 (11,753) 2,727
------ --- ------- -----
Net income (loss) $3,221 $3,235 $10,235 $(4,422)
====== ====== ======= =======
Net income (loss) per share:
Basic $0.06 $0.06 $0.20 $(0.08)
Diluted $0.06 $0.06 $0.19 $(0.08)
Weighted-average shares used to compute net
income (loss) per share:
Basic 52,818 52,746 52,456 53,070
Diluted 54,117 53,118 53,572 53,070
Barracuda Networks, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
Three Months Ended February Twelve Months Ended February
28/29, 28/29,
2017 2016 2017 2016
---- ---- ---- ----
Operating activities
Net income (loss) $3,221 $3,235 $10,235 $(4,422)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation, amortization,
and impairment expense 3,989 5,373 16,431 13,300
Stock-based compensation
expense 7,655 7,430 32,705 28,846
Excess tax benefits from
equity compensation plans 114 (398) (1,909) (3,788)
Deferred income taxes 1,251 (2,665) 1,642 (6,592)
Other 62 (1,759) (493) (865)
Changes in operating assets and liabilities:
Accounts receivable, net (1,049) 5,500 (4,103) 4,427
Inventories, net (1,133) 471 (202) (1,193)
Income taxes, net (1,207) 1,873 1,931 2,756
Deferred costs (1,292) 385 (725) (1,112)
Other assets (419) (388) (888) (2,187)
Accounts payable (499) 957 (5,388) (720)
Accrued payroll and related
benefits 135 (382) 1,033 3,339
Other liabilities 1,043 (5,306) 397 (1,526)
Deferred revenue 5,621 1,069 14,537 19,003
----- ----- ------ ------
Net cash provided by
operating activities 17,492 15,395 65,203 49,266
Investing activities
Purchases of marketable
securities (14,966) (6,981) (74,527) (26,021)
Proceeds from the sale of
marketable securities 1,931 1,108 13,461 10,310
Proceeds from the maturity
of marketable securities 4,007 5,520 17,597 20,047
Purchases of non-
marketable investments (600) - (1,236) (1,400)
Purchases of property and
equipment (2,070) (2,318) (6,335) (7,818)
Purchases of intangible
assets - - (1,374) -
Business combinations, net
of cash acquired (6,707) - (6,950) (56,862)
------ --- ------ -------
Net cash used in investing
activities (18,405) (2,671) (59,364) (61,744)
Financing activities
Proceeds from issuance of
common stock 1,474 133 8,899 4,845
Taxes paid related to net
share settlement of equity
awards (1,058) (765) (7,061) (6,734)
Repurchases of common stock (355) (11,216) (7,596) (19,216)
Excess tax benefits from
equity compensation plans (114) 398 1,909 3,788
Repayment of employee
loans, net of loans
extended 122 24 - (2,464)
Repayment of note payable (68) (64) (268) (285)
Other - (75) - (330)
--- --- --- ----
Net cash provided by (used
in) financing activities 1 (11,565) (4,117) (20,396)
Effect of exchange rate
changes on cash and cash
equivalents (7) 422 (182) 155
--- --- ---- ---
Net increase (decrease) in
cash and cash equivalents (919) 1,581 1,540 (32,719)
Cash and cash equivalents
at beginning of period 121,113 117,073 118,654 151,373
------- ------- ------- -------
Cash and cash equivalents
at end of period $120,194 $118,654 $120,194 $118,654
======== ======== ======== ========
Barracuda Networks, Inc.
Reconciliation of Selected GAAP to Non-GAAP Financial Measures
(in thousands)
(Unaudited)
Three Months Ended February Twelve Months Ended February
28/29, 28/29,
2017 2016 2017 2016
---- ---- ---- ----
GAAP cost of
revenue $22,193 $19,879 $83,772 $70,132
Amortization of
intangible assets
(1) 1,252 1,561 5,004 3,247
Depreciation
expense (2) 1,511 1,550 6,155 5,062
Stock-based
compensation
expense (3) 408 310 1,367 1,062
--- --- ----- -----
Non-GAAP cost of
revenue $19,022 $16,458 $71,246 $60,761
======= ======= ======= =======
GAAP sales and
marketing expense $32,865 $33,504 $129,707 $138,324
Amortization of
intangible assets
(1) 507 1,544 2,242 2,343
Depreciation
expense (2) 64 (69) 246 160
Stock-based
compensation
expense (3) 2,072 1,565 8,074 6,566
Acquisition and
other charges (4) - (1,029) - (1,346)
--- ------ --- ------
Non-GAAP sales and
marketing expense $30,222 $31,493 $119,145 $130,601
======= ======= ======== ========
GAAP research and
development
expense $18,790 $17,120 $75,070 $71,251
Depreciation
expense (2) 111 113 528 657
Stock-based
compensation
expense (3) 2,842 2,141 11,651 8,247
Acquisition and
other charges (4) (419) (536) (202) 1,685
---- ---- ---- -----
Non-GAAP research
and development
expense $16,256 $15,402 $63,093 $60,662
======= ======= ======= =======
GAAP general and
administrative
expense $10,084 $10,998 $42,042 $47,338
Depreciation
expense (2) 544 674 2,256 1,831
Stock-based
compensation
expense (3) 2,333 3,414 11,613 12,971
Acquisition and
other charges (4) 64 126 814 4,649
--- --- --- -----
Non-GAAP general
and administrative
expense $7,143 $6,784 $27,359 $27,887
====== ====== ======= =======
GAAP total expense $83,932 $81,501 $330,591 $327,045
Amortization of
intangible assets
(1) 1,759 3,105 7,246 5,590
Depreciation
expense (2) 2,230 2,268 9,185 7,710
Stock-based
compensation
expense (3) 7,655 7,430 32,705 28,846
Acquisition and
other charges (4) (355) (1,439) 612 4,988
---- ------ --- -----
Non-GAAP total
expense $72,643 $70,137 $280,843 $279,911
======= ======= ======== ========
Depreciation
expense (2) 2,230 2,268 9,185 7,710
----- ----- ----- -----
Non-GAAP total
expense including
depreciation $74,873 $72,405 $290,028 $287,621
======= ======= ======== ========
Barracuda Networks, Inc.
Reconciliation of Selected GAAP to Non-GAAP Financial Measures
(in thousands, except per share information)
(Unaudited)
Three Months Ended February Twelve Months Ended February
28/29, 28/29,
2017 2016 2017 2016
---- ---- ---- ----
GAAP operating
income (loss) $5,327 $2,225 $22,058 $(6,887)
Amortization of
intangible assets
(1) 1,759 3,105 7,246 5,590
Stock-based
compensation
expense (3) 7,655 7,430 32,705 28,846
Acquisition and
other charges (4) (355) (1,439) 612 4,988
---- ------ --- -----
Non-GAAP operating
income $14,386 $11,321 $62,621 $32,537
======= ======= ======= =======
GAAP net income
(loss) $3,221 $3,235 $10,235 $(4,422)
Amortization of
intangible assets
(1) 1,759 3,105 7,246 5,590
Stock-based
compensation
expense (3) 7,655 7,430 32,705 28,846
Acquisition and
other charges (4) (355) (1,439) 612 4,988
Income tax effect
on non-GAAP
exclusions (5) (2,396) (3,793) (7,029) (12,435)
Other expense
(income)
adjustments (6) 154 (631) 58 87
--- ---- --- ---
Non-GAAP net income $10,038 $7,907 $43,827 $22,654
======= ====== ======= =======
Non-GAAP diluted
earnings per share
(7) $0.19 $0.15 $0.82 $0.42
Weighted-average
shares used to
compute diluted
earnings per share 54,117 53,118 53,572 54,337
(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 stock-based compensation expense
allows for financial results that are
more indicative of our continuing
operations. We also 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 Charges. We
exclude certain expense items resulting
from acquisitions and other charges,
which we believe are non-recurring,
infrequent, and/or unusual in nature,
can vary significantly in amount and
frequency, and are unrelated to our
ongoing operating performance. 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) acquisition-related expenses for
legal, accounting, and other
professional fees, integration costs,
fair value remeasurements of contingent
consideration obligations and
contingent consideration payments made
under the terms of acquisition
agreements, and (ii) other costs that
are non-recurring, infrequent, and/or
unusual in nature, such as expenses
incurred in connection with litigation,
export compliance, intellectual
property settlement, and other matters.
----------------------------------------
(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 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
consist of realized gains and losses
from the sale of marketable securities,
foreign currency remeasurement gains
and losses and impairment charges
related to non-marketable investments.
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 these
items 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. Non-GAAP diluted earnings per
share 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 February Twelve Months Ended February
28/29, 28/29,
2017 2016 2017 2016
---- ---- ---- ----
GAAP net income (loss) $3,221 $3,235 $10,235 $(4,422)
Other expense (income), net 201 (604) 70 262
Provision for (benefit
from) income taxes 1,905 (406) 11,753 (2,727)
Acquisition and other
charges (355) (1,439) 612 4,988
Stock-based compensation
expense 7,655 7,430 32,705 28,846
Amortization of intangible
assets 1,759 3,105 7,246 5,590
Depreciation expense 2,230 2,268 9,185 7,710
----- ----- ----- -----
Adjusted EBITDA (1) $16,616 $13,589 $71,806 $40,247
======= ======= ======= =======
(1) Adjusted EBITDA. Beginning in the
third quarter of fiscal 2017, we
modified our reporting practices
to comply with recent SEC
interpretations on the use of non-
GAAP measures. As a result, we
have modified our historical
presentation of adjusted EBITDA
and will no longer adjust for
changes in deferred revenue and
associated deferred costs in our
calculation of adjusted EBITDA.
These changes do not impact our
current and historical
presentation of GAAP results.
Prior period information has been
recast to conform to the adjusted
calculation. We define adjusted
EBITDA as net income (loss) 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 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. We believe adjusted
EBITDA provides an indication of
profitability from our operations,
and provides a consistent measure
of our performance from period to
period.
----------------------------------
In addition to adjusted EBITDA,
we also monitor the changes in
deferred revenue and associated
deferred costs to facilitate a
supplemental comparison of our
performance from period to
period as set forth in the
table below (in thousands):
Three Months Ended February Twelve Months Ended February
28/29, 28/29,
2017 2016 2017 2016
---- ---- ---- ----
Increase in
deferred
revenue $5,782 $1,157 $14,308 $19,912
Increase
(decrease) in
deferred
costs $1,332 $(293) $921 $1,026
Barracuda Networks, Inc.
Reconciliation of GAAP Cash Flows from Operating Activities to Free Cash Flow
(in thousands)
(Unaudited)
Three Months Ended February Twelve Months Ended February
28/29, 28/29,
2017 2016 2017 2016
---- ---- ---- ----
GAAP cash flows from
operating activities $17,492 $15,395 $65,203 $49,266
Purchases of property
and equipment (2,070) (2,318) (6,335) (7,818)
Free cash flow (1) $15,422 $13,077 $58,868 $41,448
======= ======= ======= =======
(1) Free Cash Flow. Beginning in the
third quarter of fiscal 2017, we
modified our reporting practices
to comply with recent SEC
interpretations on the use of non-
GAAP measures. As a result, we
have modified our historical
presentation of free cash flow and
will no longer adjust free cash
flow for the cash payment impact
of acquisition and other charges.
These changes do not impact our
current and historical
presentation of GAAP results.
Prior period information has been
recast to conform to the adjusted
calculation. We define free cash
flow as cash flows from operating
activities less the purchases of
property and equipment. We believe
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 February Twelve Months Ended February
28/29, 28/29,
2017 2016 2017 2016
---- ---- ---- ----
GAAP Revenue $89,259 $83,726 $352,649 $320,158
Total deferred revenue,
end of period 407,082 392,774 407,082 392,774
Less: total deferred
revenue, beginning of
period (401,300) (391,617) (392,774) (372,862)
Deferred revenue
adjustments 8,178 10,905 35,160 37,445
----- ------ ------ ------
Total change in deferred
revenue and adjustments 13,960 12,062 49,468 57,357
------ ------ ------ ------
Gross billings (1)(2) $103,219 $95,788 $402,117 $377,515
======== ======= ======== ========
(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. We believe
that gross billings provide
insight into the sales of our
solutions and performance of
our business. The deferred
revenue balances for the prior
fiscal year's comparable
periods exclude amounts related
to the deferred revenue assumed
in connection with our
acquisition of C2C Systems
Limited, which closed in the
second quarter of fiscal 2015.
-------------------------------
(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 29, 2016,
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.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/barracuda-reports-fourth-quarter-and-fiscal-2017-results-300440403.html
SOURCE Barracuda Networks, Inc.
