BARRACUDA NETWORKS INC CAMPBELL, Calif., Jan. 9, 2017 /PRNewswire/ -- Barracuda Networks, Inc. (NYSE: CUDA), a leading provider of cloud-enabled security and data protection solutions, today announced results for its third quarter fiscal 2017 that ended Nov. 30, 2016.
"Barracuda delivered a strong third quarter with core product billings outpacing our expectations, driven in part by increasing customer adoption of our cloud-based security and data protection solutions. We continue to execute on our strategy to capitalize on market trends as more customers utilize our solutions as they move applications and workloads to the cloud," said BJ Jenkins, president and CEO. "The threat landscape is complex and constantly evolving. As threats become more sophisticated, security remains a top priority for customers. We continue to drive innovation and deliver easy-to-use products that address our customers' most pressing security needs across multiple threat vectors, including email, networks, web applications and mobile devices."
Third Quarter Fiscal 2017 Financial Summary
-- Total revenue increased 11% to $88.8 million, compared with $80.1
million in the third quarter of fiscal 2016. Subscription revenue grew
to $68.3 million, up 17% from $58.4 million in the third quarter of
fiscal 2016, representing 77% of total revenue, and appliance revenue
was $20.5 million, compared with $21.7 million in the third quarter of
fiscal 2016.
-- Gross billings were $100.4 million, compared with $89.0 million in the
third quarter of fiscal 2016. Billings for core products increased 30%
to $61.6 million, compared with $47.2 million in the third quarter of
fiscal 2016. The number of active subscribers grew approximately 15% to
over 309,000 and the dollar-based renewal rate was 90% for the quarter.
-- GAAP net income was $1.8 million, or $0.03 per share, based on a diluted
share count of 54.0 million, compared to a GAAP net loss of $1.6
million, or $0.03 per share, in the third quarter of fiscal 2016.
-- Non-GAAP net income was $11.6 million, or $0.22 per share, based on a
diluted share count of 54.0 million. Non-GAAP net income excludes $9.2
million in stock-based compensation expense, $2.4 million in other
expense, $1.8 million in amortization of intangibles, $0.2 million in
acquisition and other charges, partially offset by an income tax effect
of $3.7 million.
Recent Company Highlights
-- Continued Public Cloud Momentum: Announced availability of Barracuda
NextGen Firewall on Google Cloud Platform, marking the first
next-generation firewall available on Google Cloud Platform. Barracuda
NextGen Firewall - which is available directly on AWS Marketplace,
Microsoft Azure, and now Google Cloud Platform - is designed for the
cloud era, with features that enable direct access to cloud applications
in dispersed networks where quality of service, network reliability, and
secure connectivity are required at every location. Google Cloud
Platform customers can purchase Barracuda NextGen Firewall with Bring
Your Own License (BYOL) options from Barracuda.
-- Enhanced Web Application Firewall Product Line: Launched a new metered
billing option for Barracuda Web Application Firewall on Amazon Web
Services (AWS). Barracuda Web Application Firewall is the first
third-party web application security solution available on the AWS
Marketplace where customer usage is aggregated and charged as part of an
existing AWS bill, regardless of the number of the Barracuda Web
Application Firewalls deployed. Barracuda also announced an API
integration between Barracuda's Web Application Firewall and NextGen
Firewall solutions, helping customers simplify the way application
security is deployed and managed.
-- Updated Web Security Gateway Product Line: Announced Barracuda Web
Security Gateway version 11.0, which offers customers advanced security
protection and improved SSL scanning performance, as well as the ability
to enforce policy configuration on Chromebooks. Barracuda Web Security
Gateway customers now have access to Barracuda Advanced Threat
Detection, a cloud-based microservice that protects organizations
against ransomware and other targeted attacks. With version 11.0,
Barracuda Web Security Gateway combines powerful web security
functionality with next-generation firewall capabilities allowing for
more robust, complementary security protection managed from a single
pane of glass.
-- Recognized Network Security Leadership: Received Approved Business
Security Award for network security leadership for Barracuda NextGen
Firewall based on a public comparative test report conducted by MRG
Effitas and AV-Comparatives. Barracuda was the only vendor tested that
received 100% effectiveness scores across the board for both the malware
protection tests performed by AV-Comparatives and the exploit tests
performed by MRG Effitas.
-- Achieved Industry Recognition: Honored as 2016 ChannelPro SMB All-Star
for continued channel leadership and product innovation with Barracuda
Essentials for Office 365, Barracuda Backup - MSP Edition, and Barracuda
NextGen Firewall - MSP Edition; Awarded Tech & Learning's Awards of
Excellence for Barracuda Essentials for Office 365, Barracuda Backup,
Barracuda Web Security Gateway, and Barracuda NextGen Firewall; and
Named Finalist for CRN products of the Year for Barracuda Backup - MSP
Edition and Barracuda Essentials for Office 365, as well as Finalist for
multiple 2017 SC Awards including Best Vulnerability Management
Solution, Best Web Application Security Solution, and Best Customer
Service.
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 to investors beginning at approximately 5:00 p.m. PT today through January 16, 2017 by dialing 1-877-344-7529 in the U.S. or 1-412-317-0088 for international callers, and entering conference ID 10097957. 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 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 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 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 will 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 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: 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 November As of February
30, 2016 29, 2016
-------- --------
Assets
Current assets:
Cash and cash equivalents $121,113 $118,654
Marketable securities 73,220 36,394
Accounts receivable, net of
allowance for doubtful
accounts 39,555 36,520
Inventories, net 4,711 5,648
Deferred costs 32,076 31,943
Other current assets 12,501 12,450
------ ------
Total current assets 283,176 241,609
Property and equipment, net 29,429 31,910
Deferred costs, non-current 26,475 27,019
Deferred income taxes, non-
current 2,759 2,992
Other non-current assets 8,158 7,293
Intangible assets, net 33,904 39,386
Goodwill 69,817 69,595
------ ------
Total assets $453,718 $419,804
======== ========
Liabilities and stockholders' deficit
Current liabilities:
Accounts payable $11,288 $15,939
Accrued payroll and related
benefits 14,020 12,371
Other accrued liabilities 20,079 19,495
Deferred revenue 237,433 235,411
Note payable 4,184 268
----- ---
Total current liabilities 287,004 283,484
Long-term liabilities:
Deferred revenue, non-current 163,867 157,363
Deferred income taxes, non-
current 2,472 2,478
Note payable, non-current - 4,115
Other long-term liabilities 5,332 4,462
Stockholders' deficit:
Common stock 53 52
Additional paid-in capital 362,204 337,439
Accumulated other
comprehensive loss (5,088) (4,509)
Accumulated deficit (362,126) (365,080)
-------- --------
Total stockholders' deficit (4,957) (32,098)
------ -------
Total liabilities and
stockholders' deficit $453,718 $419,804
======== ========
Barracuda Networks, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share information)
(Unaudited)
Three Months Ended November 30, Nine Months Ended November 30,
2016 2015 2016 2015
---- ---- ---- ----
Revenue:
Appliance $20,457 $21,655 $62,824 $67,625
Subscription 68,349 58,432 200,566 168,807
------ ------ ------- -------
Total revenue 88,806 80,087 263,390 236,432
Cost of revenue 21,098 18,352 61,579 50,253
------ ------ ------ ------
Gross profit 67,708 61,735 201,811 186,179
Operating expenses:
Research and development 18,627 18,629 56,280 54,131
Sales and marketing 33,368 36,218 96,842 104,820
General and
administrative 10,217 14,872 31,958 36,340
------ ------ ------ ------
Total operating expenses 62,212 69,719 185,080 195,291
------ ------ ------- -------
Income (loss) from
operations 5,496 (7,984) 16,731 (9,112)
Other income (expense),
net (2,374) (395) 131 (866)
------ ---- --- ----
Income (loss) before
income taxes 3,122 (8,379) 16,862 (9,978)
Benefit from (provision
for) income taxes (1,329) 6,793 (9,848) 2,321
------ ----- ------ -----
Net income (loss) $1,793 $(1,586) $7,014 $(7,657)
====== ======= ====== =======
Net income (loss) per share:
Basic $0.03 $(0.03) $0.13 $(0.14)
Diluted $0.03 $(0.03) $0.13 $(0.14)
Weighted-average shares used to compute
net income (loss) per share:
Basic 52,457 53,268 52,336 53,178
Diluted 53,995 53,268 53,391 53,178
Barracuda Networks, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
Three Months Ended November 30, Nine Months Ended November 30,
2016 2015 2016 2015
---- ---- ---- ----
Operating activities
Net income (loss) $1,793 $(1,586) $7,014 $(7,657)
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities:
Depreciation, amortization
and impairment expense 3,975 3,458 12,442 7,927
Stock-based compensation
expense 9,217 7,706 25,050 21,416
Excess tax benefits from
equity compensation plans (1,232) (130) (2,023) (3,390)
Deferred income taxes (83) (4,166) 391 (3,927)
Other 173 224 (555) 894
Changes in operating assets and
liabilities:
Accounts receivable, net (5,786) 1,070 (3,054) (1,073)
Inventories, net 1,014 (539) 931 (1,664)
Income taxes, net (460) (3,136) 3,138 883
Deferred costs 227 787 567 (1,497)
Other assets 106 (866) (469) (1,799)
Accounts payable 1,790 (3,902) (4,889) (1,677)
Accrued payroll and
related benefits (228) 1,423 898 3,721
Other liabilities 116 3,727 (646) 3,780
Deferred revenue 4,460 1,182 8,916 17,934
----- ----- ----- ------
Net cash provided by
operating activities 15,082 5,252 47,711 33,871
Investing activities
Proceeds from the sale of
marketable securities 1,236 2,025 11,530 9,202
Proceeds from the maturity
of marketable securities 5,572 9,860 13,590 14,527
Purchases of marketable
securities (37,784) (4,800) (59,561) (19,040)
Purchases of property and
equipment (1,296) (2,057) (4,265) (5,500)
Purchases of intangible
assets (374) - (1,374) -
Purchases of non-
marketable investments - (1,050) (636) (1,400)
Business combinations, net
of cash acquired - (56,113) (243) (56,862)
--- ------- ---- -------
Net cash used in investing
activities (32,646) (52,135) (40,959) (59,073)
Financing activities
Proceeds from issuance of
common stock 2,556 412 7,425 4,712
Taxes paid related to net
share settlement of
equity awards (3,459) (1,943) (6,003) (5,969)
Repurchases of common
stock - (8,000) (7,241) (8,000)
Employee loans extended,
net of repayment (120) (4) (122) (2,488)
Excess tax benefits from
equity compensation plans 1,232 130 2,023 3,390
Repayment of note payable (67) (96) (200) (221)
Other - (74) - (255)
--- --- --- ----
Net cash provided by (used
in) financing activities 142 (9,575) (4,118) (8,831)
Effect of exchange rate
changes on cash and cash
equivalents (638) (152) (175) (267)
---- ---- ---- ----
Net increase (decrease) in
cash and cash equivalents (18,060) (56,610) 2,459 (34,300)
Cash and cash equivalents
at beginning of period 139,173 173,683 118,654 151,373
------- ------- ------- -------
Cash and cash equivalents
at end of period $121,113 $117,073 $121,113 $117,073
======== ======== ======== ========
Barracuda Networks, Inc.
Reconciliation of Selected GAAP to Non-GAAP Financial Measures
(in thousands)
(Unaudited)
Three Months Ended November 30, Nine Months Ended November 30,
2016 2015 2016 2015
---- ---- ---- ----
GAAP cost of
revenue $21,098 $18,352 $61,579 $50,253
Amortization of
intangible
assets (1) 1,219 858 3,752 1,686
Depreciation
expense (2) 1,467 1,380 4,644 3,512
Stock-based
compensation
expense (3) 323 286 959 752
--- --- --- ---
Non-GAAP cost of
revenue $18,089 $15,828 $52,224 $44,303
======= ======= ======= =======
GAAP sales and
marketing
expense $33,368 $36,218 $96,842 $104,820
Amortization of
intangible
assets (1) 536 436 1,735 799
Depreciation
expense (2) 74 160 182 229
Stock-based
compensation
expense (3) 2,211 1,812 6,002 5,001
Acquisition and
other charges
(4) - (24) - (317)
--- --- --- ----
Non-GAAP sales
and marketing
expense $30,547 $33,834 $88,923 $99,108
======= ======= ======= =======
GAAP research and
development
expense $18,627 $18,629 $56,280 $54,131
Depreciation
expense (2) 126 215 417 544
Stock-based
compensation
expense (3) 3,737 2,271 8,809 6,106
Acquisition and
other charges
(4) - 531 217 2,221
--- --- --- -----
Non-GAAP
research and
development
expense $14,764 $15,612 $46,837 $45,260
======= ======= ======= =======
GAAP general and
administrative
expense $10,217 $14,872 $31,958 $36,340
Depreciation
expense (2) 553 409 1,712 1,157
Stock-based
compensation
expense (3) 2,946 3,337 9,280 9,557
Acquisition and
other charges
(4) 166 4,220 750 4,523
--- ----- --- -----
Non-GAAP general
and
administrative
expense $6,552 $6,906 $20,216 $21,103
====== ====== ======= =======
GAAP total
expense $83,310 $88,071 $246,659 $245,544
Amortization of
intangible
assets (1) 1,755 1,294 5,487 2,485
Depreciation
expense (2) 2,220 2,164 6,955 5,442
Stock-based
compensation
expense (3) 9,217 7,706 25,050 21,416
Acquisition and
other charges
(4) 166 4,727 967 6,427
--- ----- --- -----
Non-GAAP total
expense $69,952 $72,180 $208,200 $209,774
======= ======= ======== ========
Depreciation
expense (2) 2,220 2,164 6,955 5,442
----- ----- ----- -----
Non-GAAP total
expense
including
depreciation $72,172 $74,344 $215,155 $215,216
======= ======= ======== ========
Barracuda Networks, Inc.
Reconciliation of Selected GAAP to Non-GAAP Financial Measures
(in thousands, except per share information)
(Unaudited)
Three Months Ended November 30, Nine Months Ended November 30,
2016 2015 2016 2015
---- ---- ---- ----
GAAP operating
income (loss) $5,496 $(7,984) $16,731 $(9,112)
Amortization of
intangible
assets (1) 1,755 1,294 5,487 2,485
Stock-based
compensation
expense (3) 9,217 7,706 25,050 21,416
Acquisition and
other charges
(4) 166 4,727 967 6,427
--- ----- --- -----
Non-GAAP
operating income $16,634 $5,743 $48,235 $21,216
======= ====== ======= =======
GAAP net income
(loss) $1,793 $(1,586) $7,014 $(7,657)
Amortization of
intangible
assets (1) 1,755 1,294 5,487 2,485
Stock-based
compensation
expense (3) 9,217 7,706 25,050 21,416
Acquisition and
other charges
(4) 166 4,727 967 6,427
Income tax effect
on non-GAAP
exclusions (5) (3,662) (8,500) (4,633) (8,642)
Other expense
(income)
adjustments (6) 2,378 340 (96) 718
----- --- --- ---
Non-GAAP net
income $11,647 $3,981 $33,789 $14,747
======= ====== ======= =======
Non-GAAP diluted
earnings per
share (7) $0.22 $0.07 $0.63 $0.27
Weighted-average
shares used to
compute diluted
earnings per
share 53,995 54,283 53,391 54,743
(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 and 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 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 November 30, Nine Months Ended November 30,
2016 2015 2016 2015
---- ---- ---- ----
GAAP net income (loss) $1,793 $(1,586) $7,014 $(7,657)
Other expense (income),
net 2,374 395 (131) 866
Provision for (benefit
from) income taxes 1,329 (6,793) 9,848 (2,321)
Acquisition and other
charges 166 4,727 967 6,427
Stock-based compensation
expense 9,217 7,706 25,050 21,416
Amortization of intangible
assets 1,755 1,294 5,487 2,485
Depreciation expense 2,220 2,164 6,955 5,442
----- ----- ----- -----
Adjusted EBITDA (1) $18,854 $7,907 $55,190 $26,658
======= ====== ======= =======
(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 November 30, Nine Months Ended November 30,
2016 2015 2016 2015
---- ---- ---- ----
Change
in
deferred
revenue $2,422 $1,782 $8,526 $18,755
Change
in
deferred
costs $280 $959 $411 $(1,319)
Barracuda Networks, Inc.
Reconciliation of GAAP Cash Flows from Operating Activities to Free Cash Flow
(in thousands)
(Unaudited)
Three Months Ended November 30, Nine Months Ended November 30,
2016 2015 2016 2015
---- ---- ---- ----
GAAP cash flows from
operating
activities $15,082 $5,252 $47,711 $33,871
Purchases of
property and
equipment (1,296) (2,057) (4,265) (5,500)
Free cash flow (1) $13,786 $3,195 $43,446 $28,371
======= ====== ======= =======
(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 adjusted 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 November 30, Nine Months Ended November 30,
2016 2015 2016 2015
---- ---- ---- ----
GAAP Revenue $88,806 $80,087 $263,390 $236,432
Total deferred
revenue, end of
period 401,300 391,617 401,300 391,617
Less: total deferred
revenue, beginning of
period (398,878) (389,835) (392,774) (372,862)
Deferred revenue
adjustments 9,171 7,139 26,982 26,540
----- ----- ------ ------
Total change in
deferred revenue and
adjustments 11,593 8,921 35,508 45,295
------ ----- ------ ------
Gross billings (1)(2) $100,399 $89,008 $298,898 $281,727
======== ======= ======== ========
(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 November 30, 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.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/barracuda-reports-third-quarter-fiscal-2017-results-300388047.html
SOURCE Barracuda Networks, Inc.
