Riverbed: Fiscal 3Q09 Financial Results

Riverbed Technology reported financial results for its third quarter ended September 30, 2009.

Total GAAP revenue for Q3’09 was $102.0 million, an increase of 12% from $91.0 million reported in the second quarter of fiscal year 2009 (Q2’09) and an increase of 18% from $86.5 million of revenue reported in the third quarter of fiscal year 2008 (Q3’08). GAAP net income for Q3’09 was $5.5 million, or $0.08 per share. This compares to a GAAP net loss in Q2’09 of $290,000, or $0.00 per share, and a GAAP net loss of $12.4 million, or $0.17 per share, in Q3’08.

Non-GAAP revenue for Q3’09 was $102.6 million, an increase of 12% from $91.6 million of non-GAAP revenue reported in Q2’09 and an increase of 18% from $86.5 million of revenue reported in Q3’08. Non-GAAP net income for Q3’09 was $14.5 million, or $0.19 per diluted share. This compares to non-GAAP net income for Q2’09 of $10.3 million, or $0.14 cents per diluted share, and non-GAAP net income for Q3’08 of $11.0 million, or $0.15 per share.

“We are pleased with our third quarter financial results,” said Jerry M. Kennelly, Riverbed President and CEO. “We were able to generate record revenue and strong sequential and year-over-year growth against the backdrop of a still challenging global economy. As a critical enabler of fundamental business initiatives including virtualization, cloud computing and reducing data infrastructure costs, WAN optimization continues to be a top IT priority.”

Q3’09 Financial Highlights

• Revenue increased 12% sequentially and 18% year-over-year
• Non-GAAP gross margin increased to 78%
• Non-GAAP operating margin increased to 22%
• Non-GAAP net income increased 41% sequentially and 32% year-over-year
• Days sales outstanding decreased to 42 days
• Deferred revenue increased to $76 million
• Cash flow from operations increased to $38 million
• Cash, cash equivalents, and marketable securities totaled approximately $297 million and no debt

Q3’09 Business Highlights

• Identified as the WAN optimization controller (WOC) Advanced Platform worldwide market share leader for Q2’09 based on revenue in the Gartner report, "Market Share: Application Acceleration Equipment, Worldwide, Q2’09"
• Positioned by Gartner in the leaders quadrant in the ‘Magic Quadrant for WAN Optimization Controllers 2009’
• Added eight Fortune 500 customers, with cumulative customer count approaching 7,000
• Introduced Central Management Console – Virtual Edition (CMC-VE) designed for managed service providers (MSPs). The new capabilities of CMC-VE allow MSPs to reduce operational costs, improve visibility, easily scale and flexibly allocate management licenses to enterprise customers through its new multi-tenant capabilities. CMC-VE runs on VMWare ESX, and MSPs can run it on any existing server that has capacity.