Riverbed: Fiscal 4Q11 Financial Results

Riverbed Technology, Inc. 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, a 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 with the Cascade Shark network traffic recording appliance and Cascade Pilot 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.

To read the earnings call transcript