CAMPBELL, Calif., Jan. 8, 2018 /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 2018, that ended November 30, 2017.
"We delivered a strong third quarter driven by continued
momentum in our core focus areas," said BJ Jenkins, president and
CEO. "As we announced in November, we entered into a definitive
agreement to be acquired by leading private equity investment firm
Thoma Bravo, LLC in an all-cash transaction valued at $27.55 per share, or approximately $1.6 billion. The proposed transaction is
expected to close before our fiscal year end of February 28, 2018."
Third Quarter Fiscal 2018 Financial Summary
- Total revenue increased 7% to $94.7
million, compared with $88.8
million in the third quarter of fiscal 2017. Subscription
revenue grew to $77.3 million, up 13%
from $68.3 million in the third
quarter of fiscal 2017, representing 82% of total revenue, and
appliance revenue was $17.5 million,
compared with $20.5 million in the
third quarter of fiscal 2017.
- Gross billings were $110.6
million, compared with $100.4
million in the third quarter of fiscal 2017. Billings for
core products increased 24% to $76.6
million, compared with $61.6
million in the third quarter of fiscal 2017. Excluding
Sonian, which Barracuda acquired during the quarter, billings for
core products increased 22% to $75.5
million. The number of active subscribers grew 16% to over
360,000 as of November 30, 2017. The
annualized renewal rate from subscriptions on a dollar basis was
101%.
- GAAP net income was $7.8 million,
or $0.14 per share, based on a
diluted share count of 55.0 million, compared to a GAAP net income
of $1.8 million, or $0.03 per share, in the third quarter of fiscal
2017.
- Non-GAAP net income was $11.6
million, or $0.21 per share,
based on a diluted share count of 55.0 million. Non-GAAP net income
excludes $9.3 million in stock-based
compensation expense, $0.4 million in
income tax benefits, $1.6 million in
amortization of intangibles, $7.7
million in other net income that includes a gain of
$7.4 million from the sale of the
SignNow business and $0.9 million in
acquisition and other benefits.
The reconciliation between non-GAAP and their most closely
comparable GAAP equivalent is contained in the tables below.
Barracuda will not hold an earnings conference call or provide
financial guidance.
Forward-Looking Statements
This announcement contains
forward-looking statements related to our pending acquisition by
Thoma Bravo, LLC and the potential
timing of the acquisition. 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, 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 and 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.
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 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
30, 2017 (1)
|
|
As of February
28, 2017
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
96,894
|
|
|
$
|
120,194
|
|
Marketable
securities
|
80,850
|
|
|
79,915
|
|
Accounts receivable,
net of allowance for doubtful accounts
|
45,229
|
|
|
40,560
|
|
Inventories,
net
|
8,259
|
|
|
5,847
|
|
Deferred
costs
|
34,352
|
|
|
32,598
|
|
Other current
assets
|
10,208
|
|
|
16,295
|
|
Total current
assets
|
275,792
|
|
|
295,409
|
|
Property and
equipment, net
|
30,824
|
|
|
29,979
|
|
Deferred costs,
non-current
|
30,502
|
|
|
27,285
|
|
Deferred income
taxes, non-current
|
704
|
|
|
1,554
|
|
Other non-current
assets
|
21,646
|
|
|
8,607
|
|
Intangible assets,
net
|
52,111
|
|
|
32,145
|
|
Goodwill
|
98,135
|
|
|
69,795
|
|
Total
assets
|
$
|
509,714
|
|
|
$
|
464,774
|
|
Liabilities and
stockholders' equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
11,243
|
|
|
$
|
11,439
|
|
Accrued payroll and
related benefits
|
12,803
|
|
|
13,593
|
|
Other accrued
liabilities
|
19,089
|
|
|
12,942
|
|
Deferred
revenue
|
247,330
|
|
|
239,796
|
|
Note
payable
|
—
|
|
|
4,115
|
|
Total current
liabilities
|
290,465
|
|
|
281,885
|
|
Long-term
liabilities:
|
|
|
|
Deferred revenue,
non-current
|
170,415
|
|
|
167,286
|
|
Deferred income
taxes, non-current
|
3,293
|
|
|
2,803
|
|
Other long-term
liabilities
|
7,394
|
|
|
6,377
|
|
Stockholders'
equity:
|
|
|
|
Common
stock
|
54
|
|
|
53
|
|
Additional paid-in
capital
|
393,048
|
|
|
370,745
|
|
Accumulated other
comprehensive loss
|
(3,199)
|
|
|
(5,226)
|
|
Accumulated
deficit
|
(351,756)
|
|
|
(359,149)
|
|
Total stockholders'
equity
|
38,147
|
|
|
6,423
|
|
Total liabilities and
stockholders' equity
|
$
|
509,714
|
|
|
$
|
464,774
|
|
|
______________________
|
|
|
(1)
|
As of March 1, 2017,
we adopted ASU 2016-09 which allowed for an accounting policy
election to either estimate the number of share-based awards that
are expected to vest or account for forfeitures when they occur. We
elected to account for forfeitures when they occur and adopted this
change on a modified retrospective basis. As a result, we recorded
the cumulative effect of the change as a $0.4 million increase
to the March 1, 2017 opening accumulated deficit balance on the
condensed consolidated balance sheets.
|
Barracuda
Networks, Inc.
|
Condensed
Consolidated Statements of Income
|
(in thousands,
except per share information)
|
(Unaudited)
|
|
|
Three Months Ended
November 30,
|
|
Nine Months Ended
November 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenue:
|
|
|
|
|
|
|
|
Appliance
|
$
|
17,459
|
|
|
$
|
20,457
|
|
|
$
|
56,071
|
|
|
$
|
62,824
|
|
Subscription
|
77,288
|
|
|
68,349
|
|
|
227,180
|
|
|
200,566
|
|
Total
revenue
|
94,747
|
|
|
88,806
|
|
|
283,251
|
|
|
263,390
|
|
Cost of
revenue
|
22,098
|
|
|
21,098
|
|
|
70,944
|
|
|
61,579
|
|
Gross
profit
|
72,649
|
|
|
67,708
|
|
|
212,307
|
|
|
201,811
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development
|
20,616
|
|
|
18,627
|
|
|
59,412
|
|
|
56,280
|
|
Sales and
marketing
|
34,988
|
|
|
33,368
|
|
|
109,769
|
|
|
96,842
|
|
General and
administrative
|
12,366
|
|
|
10,217
|
|
|
33,648
|
|
|
31,958
|
|
Total operating
expenses
|
67,970
|
|
|
62,212
|
|
|
202,829
|
|
|
185,080
|
|
Income from
operations
|
4,679
|
|
|
5,496
|
|
|
9,478
|
|
|
16,731
|
|
Other income,
net
|
7,714
|
|
|
(2,374)
|
|
|
10,022
|
|
|
131
|
|
Income before income
taxes
|
12,393
|
|
|
3,122
|
|
|
19,500
|
|
|
16,862
|
|
Provision for income
taxes
|
(4,610)
|
|
|
(1,329)
|
|
|
(7,491)
|
|
|
(9,848)
|
|
Net
income
|
$
|
7,783
|
|
|
$
|
1,793
|
|
|
$
|
12,009
|
|
|
$
|
7,014
|
|
Net income per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.15
|
|
|
$
|
0.03
|
|
|
$
|
0.23
|
|
|
$
|
0.13
|
|
Diluted
|
$
|
0.14
|
|
|
$
|
0.03
|
|
|
$
|
0.22
|
|
|
$
|
0.13
|
|
Weighted-average
shares used to compute net income per share:
|
|
|
|
|
|
|
|
Basic
|
53,378
|
|
|
52,457
|
|
|
53,098
|
|
|
52,336
|
|
Diluted
|
54,995
|
|
|
53,995
|
|
|
54,645
|
|
|
53,391
|
|
Barracuda
Networks, Inc.
|
Condensed
Consolidated Statements of Cash Flows
|
(in
thousands)
|
(Unaudited)
|
|
|
Three Months Ended
November 30,
|
|
Nine Months Ended
November 30,
|
|
2017
|
|
2016
(2)
|
|
2017
|
|
2016
(2)
|
Operating
activities
|
|
|
|
|
|
|
|
Net income
|
$
|
7,783
|
|
|
$
|
1,793
|
|
|
$
|
12,009
|
|
|
$
|
7,014
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation,
amortization and impairment expense
|
4,171
|
|
|
3,975
|
|
|
12,716
|
|
|
12,442
|
|
Stock-based
compensation expense
|
9,332
|
|
|
9,217
|
|
|
26,343
|
|
|
25,050
|
|
Excess tax benefits
from equity compensation plans (1)
|
—
|
|
|
(1,232)
|
|
|
—
|
|
|
(2,023)
|
|
Deferred income
taxes
|
354
|
|
|
(83)
|
|
|
1,158
|
|
|
391
|
|
Gain on sale of
business
|
(7,382)
|
|
|
—
|
|
|
(7,382)
|
|
|
—
|
|
Other
|
349
|
|
|
173
|
|
|
88
|
|
|
(555)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Accounts receivable,
net
|
(1,213)
|
|
|
(5,786)
|
|
|
(1,531)
|
|
|
(3,054)
|
|
Inventories,
net
|
(1,741)
|
|
|
1,014
|
|
|
(2,485)
|
|
|
931
|
|
Income taxes,
net
|
2,472
|
|
|
(460)
|
|
|
10,594
|
|
|
3,138
|
|
Deferred
costs
|
(556)
|
|
|
227
|
|
|
(5,294)
|
|
|
567
|
|
Other
assets
|
(1,362)
|
|
|
106
|
|
|
(6,389)
|
|
|
(469)
|
|
Accounts
payable
|
2,980
|
|
|
1,790
|
|
|
(63)
|
|
|
(4,889)
|
|
Accrued payroll and
related benefits
|
1,270
|
|
|
(228)
|
|
|
629
|
|
|
898
|
|
Other
liabilities
|
2,438
|
|
|
116
|
|
|
1,957
|
|
|
(646)
|
|
Deferred
revenue
|
4,810
|
|
|
4,460
|
|
|
12,565
|
|
|
8,916
|
|
Net cash provided by
operating activities
|
23,705
|
|
|
15,082
|
|
|
54,915
|
|
|
47,711
|
|
Investing
activities
|
|
|
|
|
|
|
|
Purchases of
marketable securities
|
(11,041)
|
|
|
(37,784)
|
|
|
(32,810)
|
|
|
(59,561)
|
|
Proceeds from the
sale of marketable securities
|
8,570
|
|
|
1,236
|
|
|
20,820
|
|
|
11,530
|
|
Proceeds from the
maturity of marketable securities
|
2,685
|
|
|
5,572
|
|
|
11,027
|
|
|
13,590
|
|
Purchases of
non-marketable investments
|
(56)
|
|
|
—
|
|
|
(4,056)
|
|
|
(636)
|
|
Purchases of property
and equipment
|
(1,329)
|
|
|
(1,296)
|
|
|
(9,145)
|
|
|
(4,265)
|
|
Purchases of
intangible assets
|
—
|
|
|
(374)
|
|
|
—
|
|
|
(1,374)
|
|
Business
combinations, net of cash acquired
|
(51,162)
|
|
|
—
|
|
|
(51,668)
|
|
|
(243)
|
|
Sale of
business
|
2,000
|
|
|
—
|
|
|
2,000
|
|
|
—
|
|
Payment for the sale
of net liabilities
|
—
|
|
|
—
|
|
|
(800)
|
|
|
—
|
|
Net cash used in
investing activities
|
(50,333)
|
|
|
(32,646)
|
|
|
(64,632)
|
|
|
(40,959)
|
|
Financing
activities
|
|
|
|
|
|
|
|
Proceeds from
issuance of common stock
|
1,353
|
|
|
2,556
|
|
|
4,362
|
|
|
7,425
|
|
Taxes paid related to
net share settlement of equity awards
|
(3,349)
|
|
|
(3,459)
|
|
|
(7,823)
|
|
|
(6,003)
|
|
Repurchases of common
stock
|
—
|
|
|
—
|
|
|
(6,546)
|
|
|
(7,241)
|
|
Excess tax benefits
from equity compensation plans (1)
|
—
|
|
|
1,232
|
|
|
—
|
|
|
2,023
|
|
Repayment of employee
loans, net of loans extended
|
(53)
|
|
|
(120)
|
|
|
(23)
|
|
|
(122)
|
|
Repayment of note
payable
|
—
|
|
|
(67)
|
|
|
(4,115)
|
|
|
(200)
|
|
Payments of
acquisition-related liabilities
|
—
|
|
|
—
|
|
|
(742)
|
|
|
—
|
|
Net cash provided by
(used in) financing activities
|
(2,049)
|
|
|
142
|
|
|
(14,887)
|
|
|
(4,118)
|
|
Effect of exchange
rate changes
|
2
|
|
|
(638)
|
|
|
1,337
|
|
|
(175)
|
|
Net increase
(decrease) in cash, cash equivalents and restricted cash
|
(28,675)
|
|
|
(18,060)
|
|
|
(23,267)
|
|
|
2,459
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
126,245
|
|
|
139,173
|
|
|
120,837
|
|
|
118,654
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
97,570
|
|
|
$
|
121,113
|
|
|
$
|
97,570
|
|
|
$
|
121,113
|
|
|
______________________
|
|
|
(1)
|
As of March 1, 2017,
we adopted ASU 2016-09 which required any excess tax benefits to be
classified as an operating activity. Prior to the new standard, we
were required to present excess tax benefits as a cash inflow from
financing activities with a corresponding cash outflow from
operating activities. We elected to apply the amendment related to
the presentation of excess tax benefits on the statements of cash
flows prospectively, while the prior period presented has not been
adjusted.
|
|
|
(2)
|
We early adopted ASU
2016-18 which requires that a statement of cash flows
explain the change during the period for the total
of cash, cash equivalents and restricted cash.
Therefore, restricted cash has been included with cash and cash
equivalents when reconciling the beginning-of-period and
end-of-period total amounts presented and has been applied
retrospectively to the prior period presented.
Net cash flows for the three and nine months ended
November 30, 2016 did not significantly change as a
result.
|
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,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
GAAP cost of
revenue
|
$
|
22,098
|
|
|
$
|
21,098
|
|
|
$
|
70,944
|
|
|
$
|
61,579
|
|
Amortization of
intangible assets (1)
|
1,105
|
|
|
1,219
|
|
|
3,546
|
|
|
3,752
|
|
Depreciation expense
(2)
|
1,869
|
|
|
1,467
|
|
|
5,375
|
|
|
4,644
|
|
Stock-based
compensation expense (3)
|
550
|
|
|
323
|
|
|
1,472
|
|
|
959
|
|
Acquisition and other
charges (4)
|
(865)
|
|
|
—
|
|
|
(18)
|
|
|
—
|
|
Non-GAAP cost of
revenue
|
$
|
19,439
|
|
|
$
|
18,089
|
|
|
$
|
60,569
|
|
|
$
|
52,224
|
|
GAAP sales and
marketing expense
|
$
|
34,988
|
|
|
$
|
33,368
|
|
|
$
|
109,769
|
|
|
$
|
96,842
|
|
Amortization of
intangible assets (1)
|
491
|
|
|
536
|
|
|
1,503
|
|
|
1,735
|
|
Depreciation expense
(2)
|
91
|
|
|
74
|
|
|
250
|
|
|
182
|
|
Stock-based
compensation expense (3)
|
2,426
|
|
|
2,211
|
|
|
7,960
|
|
|
6,002
|
|
Non-GAAP sales and
marketing expense
|
$
|
31,980
|
|
|
$
|
30,547
|
|
|
$
|
100,056
|
|
|
$
|
88,923
|
|
GAAP research and
development expense
|
$
|
20,616
|
|
|
$
|
18,627
|
|
|
$
|
59,412
|
|
|
$
|
56,280
|
|
Depreciation expense
(2)
|
122
|
|
|
126
|
|
|
427
|
|
|
417
|
|
Stock-based
compensation expense (3)
|
4,272
|
|
|
3,737
|
|
|
10,081
|
|
|
8,809
|
|
Acquisition and other
charges (4)
|
—
|
|
|
—
|
|
|
(160)
|
|
|
217
|
|
Non-GAAP research and
development expense
|
$
|
16,222
|
|
|
$
|
14,764
|
|
|
$
|
49,064
|
|
|
$
|
46,837
|
|
GAAP general and
administrative expense
|
$
|
12,366
|
|
|
$
|
10,217
|
|
|
$
|
33,648
|
|
|
$
|
31,958
|
|
Depreciation expense
(2)
|
495
|
|
|
553
|
|
|
1,615
|
|
|
1,712
|
|
Stock-based
compensation expense (3)
|
2,083
|
|
|
2,946
|
|
|
6,830
|
|
|
9,280
|
|
Acquisition and other
charges (4)
|
1,746
|
|
|
166
|
|
|
2,833
|
|
|
750
|
|
Non-GAAP general and
administrative expense
|
$
|
8,042
|
|
|
$
|
6,552
|
|
|
$
|
22,370
|
|
|
$
|
20,216
|
|
GAAP total
expense
|
$
|
90,068
|
|
|
$
|
83,310
|
|
|
$
|
273,773
|
|
|
$
|
246,659
|
|
Amortization of
intangible assets (1)
|
1,596
|
|
|
1,755
|
|
|
5,049
|
|
|
5,487
|
|
Depreciation expense
(2)
|
2,577
|
|
|
2,220
|
|
|
7,667
|
|
|
6,955
|
|
Stock-based
compensation expense (3)
|
9,331
|
|
|
9,217
|
|
|
26,343
|
|
|
25,050
|
|
Acquisition and other
charges (4)
|
881
|
|
|
166
|
|
|
2,655
|
|
|
967
|
|
Non-GAAP total
expense
|
$
|
75,683
|
|
|
$
|
69,952
|
|
|
$
|
232,059
|
|
|
$
|
208,200
|
|
Depreciation expense
(2)
|
2,577
|
|
|
2,220
|
|
|
7,667
|
|
|
6,955
|
|
Non-GAAP total
expense including depreciation
|
$
|
78,260
|
|
|
$
|
72,172
|
|
|
$
|
239,726
|
|
|
$
|
215,155
|
|
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,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
GAAP operating
income
|
$
|
4,679
|
|
|
$
|
5,496
|
|
|
$
|
9,478
|
|
|
$
|
16,731
|
|
Amortization of
intangible assets (1)
|
1,596
|
|
|
1,755
|
|
|
5,049
|
|
|
5,487
|
|
Stock-based
compensation expense (3)
|
9,331
|
|
|
9,217
|
|
|
26,343
|
|
|
25,050
|
|
Acquisition and other
charges (4)
|
881
|
|
|
166
|
|
|
2,655
|
|
|
967
|
|
Non-GAAP operating
income
|
$
|
16,487
|
|
|
$
|
16,634
|
|
|
$
|
43,525
|
|
|
$
|
48,235
|
|
GAAP net
income
|
$
|
7,783
|
|
|
$
|
1,793
|
|
|
$
|
12,009
|
|
|
$
|
7,014
|
|
Amortization of
intangible assets (1)
|
1,596
|
|
|
1,755
|
|
|
5,049
|
|
|
5,487
|
|
Stock-based
compensation expense (3)
|
9,331
|
|
|
9,217
|
|
|
26,343
|
|
|
25,050
|
|
Acquisition and other
charges (4)
|
881
|
|
|
166
|
|
|
2,655
|
|
|
967
|
|
Income tax effect on
non-GAAP exclusions (5)
|
(353)
|
|
|
(3,662)
|
|
|
(5,663)
|
|
|
(4,633)
|
|
Other income
adjustments (6)
|
(7,658)
|
|
|
2,378
|
|
|
(9,702)
|
|
|
(96)
|
|
Non-GAAP net
income
|
$
|
11,580
|
|
|
$
|
11,647
|
|
|
$
|
30,691
|
|
|
$
|
33,789
|
|
Non-GAAP diluted
earnings per share (7)
|
$
|
0.21
|
|
|
$
|
0.22
|
|
|
$
|
0.56
|
|
|
$
|
0.63
|
|
Weighted-average
shares used to compute diluted earnings per share
|
54,995
|
|
|
53,995
|
|
|
54,645
|
|
|
53,391
|
|
|
______________________
|
|
|
(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, losses and gains that are non-recurring, infrequent,
and/or unusual in nature, such as expenses incurred in connection
with litigation, export compliance, intellectual property
settlement, indirect tax costs, and other matters, as well as a
gain resulting from the disposition of net liabilities related to
our CudaCam product offerings.
|
|
|
(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 Income
Adjustments. We provide non-GAAP information that excludes the
effect of certain other income and losses. These adjustments may
consist of realized gains and losses from the sale of marketable
securities, foreign currency remeasurement gains and losses,
impairment charges related to non-marketable investments and gains
or losses from divestiture of our business unit; specifically, a
gain of $7.4 million that resulted from the sale of our SignNow
business during the third quarter of fiscal 2018. 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, 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 to Adjusted EBITDA
|
(in
thousands)
|
(Unaudited)
|
|
|
Three Months Ended
November 30,
|
|
Nine Months Ended
November 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
GAAP net
income
|
$
|
7,783
|
|
|
$
|
1,793
|
|
|
$
|
12,009
|
|
|
$
|
7,014
|
|
Other income,
net
|
(7,714)
|
|
|
2,374
|
|
|
(10,022)
|
|
|
(131)
|
|
Provision for income
taxes
|
4,610
|
|
|
1,329
|
|
|
7,491
|
|
|
9,848
|
|
Acquisition and other
charges
|
881
|
|
|
166
|
|
|
2,655
|
|
|
967
|
|
Stock-based
compensation expense
|
9,331
|
|
|
9,217
|
|
|
26,343
|
|
|
25,050
|
|
Amortization of
intangible assets
|
1,596
|
|
|
1,755
|
|
|
5,049
|
|
|
5,487
|
|
Depreciation
expense
|
2,577
|
|
|
2,220
|
|
|
7,667
|
|
|
6,955
|
|
Adjusted EBITDA
(1)
|
$
|
19,064
|
|
|
$
|
18,854
|
|
|
$
|
51,192
|
|
|
$
|
55,190
|
|
|
______________________
|
|
|
(1)
|
Adjusted
EBITDA. Beginning in the third quarter of fiscal 2017, we
modified our reporting practices and our historical presentation of
adjusted EBITDA by no longer adjusting for changes in deferred
revenue and associated deferred costs. 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 plus non-cash
and non-operating charges which include: (i) other income, net,
(ii) provision for 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. The other income, net includes a gain of
$7.4 million that resulted from the sale of our SignNow business
during the third quarter of fiscal 2018
|
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,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
GAAP cash flows from
operating activities
|
$
|
23,705
|
|
|
$
|
15,082
|
|
|
$
|
54,915
|
|
|
$
|
47,711
|
|
Purchases of property
and equipment
|
(1,329)
|
|
|
(1,296)
|
|
|
(9,145)
|
|
|
(4,265)
|
|
Free cash flow
(1)
|
$
|
22,376
|
|
|
$
|
13,786
|
|
|
$
|
45,770
|
|
|
$
|
43,446
|
|
|
______________________
|
|
|
(1)
|
Free Cash
Flow. Beginning in the third quarter of fiscal 2017, we
modified our reporting practices and our historical presentation of
adjusted free cash flow by no longer adjusting 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,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
GAAP
Revenue
|
$
|
94,747
|
|
|
$
|
88,806
|
|
|
$
|
283,251
|
|
|
$
|
263,390
|
|
Total deferred
revenue, end of period
|
417,745
|
|
|
401,300
|
|
|
417,745
|
|
|
401,300
|
|
Less: total deferred
revenue, beginning of period
|
(413,665)
|
|
|
(398,878)
|
|
|
(407,082)
|
|
|
(392,774)
|
|
Deferred revenue
adjustments
|
11,806
|
|
|
9,171
|
|
|
30,441
|
|
|
26,982
|
|
Total change in
deferred revenue and adjustments
|
15,886
|
|
|
11,593
|
|
|
41,104
|
|
|
35,508
|
|
Gross billings
(1)(2)
|
$
|
110,633
|
|
|
$
|
100,399
|
|
|
$
|
324,355
|
|
|
$
|
298,898
|
|
|
______________________
|
|
|
(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.
|
|
|
(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 average exchange rates for the
second quarter of fiscal 2018 were used to convert current and
comparable prior period gross billings rather than the actual
exchange rates in effect during the respective period.
|
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SOURCE Barracuda Networks, Inc.