SAN FRANCISCO–(BUSINESS WIRE)–
Riverbed Technology (NASDAQ: RVBD – News), the IT performance company, today
reported financial results for its fourth quarter (Q4’11) and fiscal
year ended December 31, 2011.
Total GAAP revenue for Q4’11 was $203 million, an increase of 7% from
$190 million reported in the third quarter of fiscal year 2011 (Q3’11)
and an increase of 23% from $165 million reported in the fourth quarter
of fiscal year 2010 (Q4’10). For fiscal year 2011, GAAP revenue was $726
million, up 32% from $552 million in fiscal year 2010. GAAP net income
for Q4’11 was $20 million, or $0.12 per diluted share. This compares to
GAAP net income of $19 million, or $0.12 per share, in Q3’11 and $13
million, or $0.08 per share, in Q4’10. GAAP net income for 2011 was $64
million, or $0.38 per diluted share, compared to GAAP net income of $34
million, or $0.22 per diluted share, in 2010.
Non-GAAP revenue for Q4’11 was $204 million, an increase of 7% from $191
million reported in Q3’11, and an increase of 23% from $165 million
reported in Q4’10. For fiscal year 2011, non-GAAP revenue was $728
million, up 32% from $552 million in fiscal year 2010. Non-GAAP net
income for Q4’11 was $41 million, or $0.25 per diluted share. This
compares to non-GAAP net income for Q3’11 of $40 million, or $0.24 per
diluted share, and non-GAAP net income for Q4’10 of $32 million, or
$0.19 per diluted share. Non-GAAP net income for 2011 was $150 million,
or $0.90 per diluted share, which compares to non-GAAP net income of $92
million, or $0.59 per diluted share in 2010.
“2011 was a year of tremendous achievement for Riverbed® and a year in
which we expanded our addressable market through new innovations,
strategic acquisitions and partnerships. For the full year, revenue
increased 32% while our non-GAAP net income grew 62% over 2010,” said
Jerry M. Kennelly, Riverbed president and CEO. “We believe we are in the
strongest strategic and competitive position in our history. Adding to
that, early in 2012 we will be entering what we think will be Riverbed’s
most exciting and important product cycle yet.”
“The business has been executing well and fourth quarter revenue growth
was fueled by strong enterprise sales in both the U.S. and EMEA,” added
Randy S. Gottfried, Riverbed Chief Financial Officer. “Despite higher
disk drive costs resulting from recent Thai floods, we reported strong
gross and operating margins in the fourth quarter. We believe our past
investments in our core and new products will continue to yield solid
revenue and profit growth in 2012.”
2011 Business Highlights
-
Awarded IDG’s InfoWorld 2011 Technology of the Year Award in the Best
WAN Accelerator category for the sixth consecutive time.
-
Received certification under the J.D. Power and Associates Certified
Technology Service Support (CTSS) program and the Technology Service
Industry Association’s (TSIA) Excellence in Service Operations.
Riverbed is one of a select few companies to receive this distinction
for global certification under both the J.D. Power and Associates CTSS
and the TSIA Excellence in Service Operations program in the same year.
-
Announced with Akamai the intention to develop a joint application
acceleration solution for hybrid cloud networks and SAAS applications.
-
Introduced Riverbed Stingray(TM), a new portfolio of asymmetric
software- and virtual-based offerings, including application delivery
controllers, web content optimization and Web application firewalls
based on technologies acquired from Zeus Technology and Aptimize
Limited.
-
Launched Riverbed Optimization System (RiOS®) 7.0, expanding
optimizations to include native support for HTTP video, UDP, and IPv6.
Also included enhanced optimizations for virtual desktop
infrastructure, Quality of Service, and integrated Cascade® Shark
functionality into the Steelhead® appliance to deliver on-demand
packet capture and analysis.
-
Introduced Cascade 9.0, providing customers with fine-grained
classification of traffic, including advanced Layer-7 awareness and a
single business-level performance view of applications and services.
-
Integrated the application-aware functionality of Cascade Profiler(TM)
with the Cascade Shark(TM) network traffic recording appliance and
Cascade Pilot(TM) network analysis software.
-
Expanded the ecosystem for Riverbed Whitewater® to include more than
15 cloud storage, backup software, and critical database protection
solutions.
-
Extended the Riverbed solutions available through the EMC Select
Program to include all Steelhead Appliance models, Steelhead Mobile,
Riverbed Services Platform, Central Management Controller,
Interceptor®, and all Cascade products.
Conference Call
Riverbed will host a conference call today, January 26, 2012, at 1:30
p.m. Pacific Time (4:30 p.m. Eastern Time) to discuss its fourth quarter
and full year 2011 results and outlook for 2012. The call will be
broadcast live over the Internet at www.riverbed.com/investors.
A replay of the conference call will also be available via webcast at www.riverbed.com/investors
for 12 months.
Use of Non-GAAP Financial Information
To supplement our financial results presented in accordance with
Generally Accepted Accounting Principles (GAAP), this press release and
the accompanying tables and the related earnings conference call contain
certain non-GAAP financial measures, including non-GAAP support and
service revenue, non-GAAP revenue, non-GAAP gross profit, non-GAAP
operating profit, non-GAAP operating margin, non-GAAP net income and net
income per share, non-GAAP gross margin and non-GAAP operating margin,
that we believe are helpful in understanding our past financial
performance and future results. For reconciliations of these non-GAAP
financial measures to the most directly comparable GAAP financial
measures, please see the section of the accompanying tables titled,
“GAAP to Non-GAAP Reconciliations.” Our non-GAAP financial measures are
not meant to be considered in isolation or as a substitute for
comparable GAAP measures and should be read in conjunction with our
consolidated financial statements prepared in accordance with GAAP. Our
management regularly uses our supplemental non-GAAP financial measures
internally to understand and manage our business and forecast future
periods. Our non-GAAP financial measures include adjustments based on
the following items, as well as the related income tax effects,
adjustments related to our tax valuation allowance and the interim tax
cost of the one-time transfer of intellectual property rights between
Riverbed legal entities:
Support deferred revenue: Business
combination accounting rules require us to account for the fair value of
support contracts assumed in connection with our acquisitions. The book
value of the acquisition deferred support revenue was reduced by $4
million in the adjustment to fair value. Because these are typically
one-year contracts, our GAAP revenues for an one year period subsequent
to the acquisition of a business do not reflect the full amount of
service revenues on assumed support contracts that would have otherwise
been recorded by the acquired entity. The non-GAAP adjustment is
intended to reflect the full amount of such revenues. We believe this
adjustment is useful to investors as a measure of the ongoing
performance of our business because we have historically experienced
high renewal rates on support contracts, although we cannot be certain
that customers will renew these contracts.
Stock-based compensation expenses: We have
excluded the effect of stock-based compensation and related payroll tax
expenses from our non-GAAP operating expenses and net income measures.
Although stock-based compensation is a key incentive offered to our
employees, we continue to evaluate our business performance excluding
stock-based compensation expenses. Stock-based compensation expenses
will recur in future periods.
Amortization of intangible assets: We have
excluded the effect of amortization of intangible assets from our
non-GAAP net income. Amortization of intangible assets is a non-cash
expense, and it is not part of our core operations. Investors should
note that the use of intangible assets contributed to revenues earned
during the periods presented and will contribute to future period
revenues as well.
Acquisition related and other expenses: We
incur significant expenses in connection with our acquisitions and also
incurred certain other operating expenses, which we would not have
otherwise incurred in the periods presented as a part of our continuing
operations. Acquisition related and other expenses consist of
transaction costs, costs for transitional employees, other acquired
employee related retention costs, integration related professional
services, adjustments to the fair value of the acquisition related
contingent consideration, adjustments to the fair value of inventory,
and foreign exchange losses on the acquisition related contingent
consideration. We believe it is useful for investors to understand the
effects of these items on our total operating expenses.
Forward-Looking Statements
This press release contains forward-looking statements, including
statements relating to our strategic and competitive position, our
upcoming product cycle, and our expectations regarding revenue and
profit growth in 2012. These forward-looking statements involve risks
and uncertainties, as well as assumptions that, if they do not fully
materialize or prove incorrect, could cause our results to differ
materially from those expressed or implied by such forward-looking
statements. The risks and uncertainties that could cause our results to
differ materially from those expressed or implied by such
forward-looking statements include our ability to react to trends and
challenges in our business and the markets in which we operate; our
ability to anticipate market needs or develop new or enhanced products
to meet those needs; the adoption rate of our products; our ability to
establish and maintain successful relationships with our distribution
partners; our ability to compete in our industry; fluctuations in
demand, sales cycles and prices for our products and services; shortages
or price fluctuations in our supply chain; our ability to protect our
intellectual property rights; general political, economic and market
conditions and events; difficulties encountered in integrating new or
acquired businesses and technologies; the inability to identify and
realize the anticipated benefits of acquisitions; the expense and impact
of legal proceedings; and other risks and uncertainties described more
fully in our documents filed with or furnished to the Securities and
Exchange Commission. More information about these and other risks that
may impact Riverbed’s business are set forth in our Form 10-K filed with
the SEC for the period ended December 31, 2010, and our subsequent Forms
10-Q filed with the SEC. All forward-looking statements in this press
release are based on information available to us as of the date hereof,
and we assume no obligation to update these forward-looking statements.
Any future product, feature or related specification that may be
referenced in this release are for information purposes only and are not
commitments to deliver any technology or enhancement. Riverbed reserves
the right to modify future product plans at any time.
About Riverbed
Riverbed delivers performance for the globally connected enterprise.
With Riverbed, enterprises can successfully and intelligently implement
strategic initiatives such as virtualization, consolidation, cloud
computing, and disaster recovery without fear of compromising
performance. By giving enterprises the platform they need to understand,
optimize and consolidate their IT, Riverbed helps enterprises to build a
fast, fluid and dynamic IT architecture that aligns with the business
needs of the organization. Additional information about Riverbed
(NASDAQ: RVBD – News) is available at www.riverbed.com.
Riverbed and any Riverbed product or service name or logo used herein
are trademarks of Riverbed Technology, Inc. All other trademarks used
herein belong to their respective owners.
Riverbed Technology, Inc.
GAAP Condensed Consolidated Statements of Operations
In thousands, except per share amounts
Unaudited
Three months ended
Twelve months ended
December 31,
December 31,
2011
2010
2011
2010
Revenue:
Product
$
140,303
$
118,194
$
501,376
$
380,277
Support and services
62,532
47,239
225,100
171,612
Total revenue
202,835
165,433
726,476
551,889
Cost of revenue:
Cost of product
30,764
24,865
105,150
81,998
Cost of support and services
19,292
14,274
68,925
50,750
Total cost of revenue
50,056
39,139
174,075
132,748
Gross profit
152,779
126,294
552,401
419,141
Operating expenses:
Sales and marketing
77,606
66,477
272,635
225,052
Research and development
33,714
25,617
122,964
87,117
General and administrative
15,750
12,989
59,699
47,382
Acquisition-related costs
1,087
618
5,211
3,343
Total operating expenses
128,157
105,701
460,509
362,894
Operating profit
24,622
20,593
91,892
56,247
Other income (expense), net
(534
)
41
154
724
Income before provision for income taxes
24,088
20,634
92,046
56,971
Provision for income taxes
3,934
8,023
28,239
22,813
Net income
$
20,154
$
12,611
$
63,807
$
34,158
Net income per share, basic
$
0.13
$
0.08
$
0.41
$
0.24
Net income per share, diluted
$
0.12
$
0.08
$
0.38
$
0.22
Shares used in computing basic net income per share
155,699
149,058
154,411
145,012
Shares used in computing diluted net income per share
166,838
163,359
166,900
155,999
Riverbed Technology, Inc.
Condensed Consolidated Balance Sheets
In thousands
December 31,
December 31,
2011
2010
ASSETS
Current assets:
Cash and cash equivalents
$
215,476
$
165,726
Short-term investments
254,753
259,245
Trade receivables, net
78,016
50,726
Inventory
11,437
15,180
Deferred tax assets
16,783
20,832
Prepaid expenses and other current assets
30,958
Total current assets
542,667
Long-term investments
123,134
76,169
Fixed assets, net
29,277
21,522
Goodwill
25,653
Intangible assets, net
68,274
30,789
Deferred tax assets, non-current
56,708
35,775
Other assets
3,506
Total assets
$
1,031,199
$
736,081
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$
35,341
$
27,015
Accrued compensation and related benefits
61,256
32,915
Other accrued liabilities
42,959
18,813
Deferred revenue
121,131
89,026
Total current liabilities
260,687
167,769
Deferred revenue, non-current
36,248
26,511
Other long-term liabilities
23,200
4,381
Total long-term liabilities
59,448
30,892
Stockholders’ equity:
Common stock
631,921
518,052
Retained earnings
83,116
19,309
Accumulated other comprehensive income (loss)
(3,973
)
59
Total stockholders’ equity
711,064
537,420
Total liabilities and stockholders’ equity
$
1,031,199
$
736,081
Riverbed Technology, Inc.
Condensed Consolidated Statements of Cash Flows
In thousands
Unaudited
Twelve months ended
December 31,
2011
2010
Operating activities:
Net income
$
63,807
$
34,158
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
24,474
15,855
Stock-based compensation
89,734
70,801
Deferred taxes
(24,693
)
(11,851
)
Excess tax benefit from employee stock plans
(50,673
)
(27,538
)
Changes in operating assets and liabilities:
Trade receivables
(23,294
)
(1,026
)
Inventory
3,742
(4,414
)
Prepaid expenses and other assets
(21,900
)
(13,515
)
Accounts payable
7,259
8,392
Accruals and other liabilities
46,293
23,379
Acquisition-related contingent consideration
1,323
(5,249
)
Income taxes payable
50,993
27,436
Deferred revenue
41,843
29,087
208,908
145,515
Investing activities:
Capital expenditures
(18,059
)
(10,690
)
Purchase of available for sale securities
(616,592
)
(526,051
)
Proceeds from maturities of available for sale securities
401,795
404,767
Proceeds from sales of available for sale securities
169,123
43,862
Acquisitions, net of cash acquired
(120,537
)
(26,885
)
Net cash used in investing activities
(184,270
)
(114,997
)
Financing activities:
Acquisition-related contingent consideration
-
(9,909
)
Proceeds from issuance of common stock under employee
stock plans, net of repurchases
55,830
64,295
Cash used to net share settle equity awards
(47,648
)
(12,331
)
Payments for repurchases of common stock
(35,040
)
-
Payment of debt assumed in acquisition
-
(2,244
)
Excess tax benefit from employee stock plans
50,673
27,538
Net cash provided by financing activities
23,815
67,349
Effect of exchange rate changes on cash and cash equivalents
1,297
110
49,750
97,977
Cash and cash equivalents at beginning of period
165,726
67,749
Cash and cash equivalents at end of period
$
215,476
$
165,726
Riverbed Technology, Inc.
Supplemental Financial Information
In thousands
Unaudited
Three months ended
Twelve months ended
December 31,
September 30,
December 31,
December 31,
2011
2011
2010
2011
2010
Revenue by Geography
United States
$
108,976
$
106,326
$
91,661
$
402,157
$
294,631
Europe, Middle East and Africa
58,501
49,847
42,987
187,425
149,647
Rest of the world
35,358
33,610
30,785
136,894
107,611
Total revenue
$
202,835
$
189,783
$
165,433
$
726,476
$
551,889
As a percentage of total revenues:
United States
54
%
56
%
55
%
55
%
53
%
Europe, Middle East and Africa
29
%
26
%
26
%
26
%
27
%
Rest of the world
17
%
18
%
19
%
19
%
20
%
Total revenue
100
%
100
%
100
%
100
%
100
%
Revenue by Sales Channel
Direct
$
7,599
$
7,068
$
7,526
$
32,627
$
31,525
Indirect
195,236
182,715
157,907
693,849
520,364
Total revenue
$
202,835
$
189,783
$
165,433
$
726,476
$
551,889
As a percentage of total revenues:
Direct
4
%
4
%
5
%
4
%
6
%
Indirect
96
%
96
%
95
%
96
%
94
%
Total revenue
100
%
100
%
100
%
100
%
100
%
Riverbed Technology, Inc.
GAAP to Non-GAAP Reconciliation
In thousands, except per share amounts
Unaudited
Three months ended
Twelve months ended
GAAP to Non-GAAP Reconciliations:
December 31,
September 30,
December 31,
December 31,
2011
2011
2010
2011
2010
Reconciliation of Total revenue:
U.S. GAAP as reported
$
202,835
$
189,783
$
165,433
$
726,476
$
551,889
Adjustments:
Deferred revenue adjustment (6)
1,189
813
-
2,002
-
As adjusted
$
204,024
$
190,596
$
165,433
$
728,478
$
551,889
Reconciliation of Net income:
U.S. GAAP as reported
$
20,154
$
19,325
$
12,611
$
63,807
$
34,158
Adjustments:
Stock-based compensation (1)
21,734
22,504
20,305
89,734
70,801
Payroll tax on stock-based compensation (2)
3,565
234
1,634
7,465
3,147
Amortization on intangibles (3)
4,858
3,968
1,815
13,120
5,400
Acquisition-related costs (5)
3,400
4,681
1,104
10,853
5,260
Inventory fair value adjustment (4)
-
120
376
359
376
Deferred revenue adjustment (6)
1,189
813
-
2,002
-
Income tax adjustments (7)
(13,787
)
(11,565
)
(6,114
)
(37,375
)
(26,758
)
As adjusted
$
41,113
$
40,080
$
31,731
$
149,965
$
92,384
Reconciliation of Net income per share, diluted:
U.S. GAAP as reported
$
0.12
$
0.12
$
0.08
$
0.38
$
0.22
Adjustments:
Stock-based compensation (1)
0.13
0.14
0.12
0.54
0.46
Payroll tax on stock-based compensation (2)
0.02
-
0.01
0.04
0.02
Amortization on intangibles (3)
0.03
0.02
0.01
0.08
0.03
Acquisition-related costs (5)
0.02
0.03
0.01
0.07
0.03
Deferred revenue adjustment (6)
0.01
-
-
0.01
-
Income tax adjustments (7)
(0.08
)
(0.07
)
(0.04
)
(0.22
)
(0.17
)
As adjusted
$
0.25
$
0.24
$
0.19
$
0.90
$
0.59
Non-GAAP Net income per share, basic
$
0.26
$
0.26
$
0.21
$
0.97
$
0.64
Non-GAAP Net income per share, diluted
$
0.25
$
0.24
$
0.19
$
0.90
$
0.59
Shares used in computing basic net income per share (8)
155,699
155,367
149,058
154,411
145,012
Shares used in computing diluted net income per share (8)
166,838
167,031
163,359
166,900
155,999
Non-GAAP adjustments:
Support and services revenue
$
1,189
$
813
$
-
$
2,002
$
-
Cost of product
3,781
3,250
1,838
10,991
4,461
Cost of support and services
1,793
1,604
1,719
7,001
5,805
Sales and marketing
12,063
10,593
9,287
43,478
33,010
Research and development
8,688
7,699
6,846
32,457
21,621
General and administrative
5,534
5,148
4,926
21,301
16,744
Other acquisition costs
1,087
2,732
618
5,211
3,343
Other expense (9)
611
481
-
1,092
-
Provision for income taxes
(13,787
)
(11,565
)
(6,114
)
(37,375
)
(26,758
)
Total Non-GAAP adjustments
$
20,959
$
20,755
$
19,120
$
86,158
$
58,226
(1)
Stock-based compensation expense is calculated in accordance with
the fair value recognition provisions of Financial Accounting
Standards Board Accounting Standards Codification (ASC) Topic 718, Compensation
– Stock Compensation effective January 1, 2006.
(2)
Payroll tax on stock-based compensation represents the incremental
cost for employer payroll taxes on stock option exercises and
restricted stock units vested and released.
(3)
The intangible assets recorded at fair value as a result of our
acquisition are amortized over the estimated useful life of the
respective asset.
(4)
The inventory fair value adjustment recorded pursuant to our
acquisition is excluded from our non-GAAP operating expenses as this
cost would not have otherwise occurred in the period presented.
(5)
We incurred expenses in connection with our acquisitions, which
would not have otherwise occurred in the period presented as part of
our operating expenses; therefore, these costs or credits are
excluded from our non-GAAP operating expenses.
(6)
Business combination accounting rules require us to account for the
fair value of deferred revenue assumed in connection with an
acquisition. The non-GAAP adjustment is intended to reflect the full
amount of support and service revenue that would have otherwise been
recorded by the acquired entity.
(7)
The non-GAAP tax rate excludes the income tax effects of non-GAAP
adjustments. Additionally, the non-GAAP tax rate includes
adjustments to our tax valuation allowance on deferred tax assets
and excludes the interim tax cost of the one-time transfer of
intellectual property rights between our legal entities.
(8)
Shares used in computing basic and diluted net income per share is
reflective of the stock split for all periods presented.
(9)
We incurred expenses, including revaluation of the contingent
consideration, in connection with our acquisitions, which would not
have otherwise occurred in the period presented as part of our other
income (expense); therefore, these costs are excluded from our
non-GAAP other income (expense).
Article source: http://finance.yahoo.com/news/riverbed-technology-reports-record-fourth-210500801.html
