Barracuda: Fiscal 3Q14 Financial Results

Barracuda Networks, Inc., provider of cloud-connected security and storage solutions, announced results for its third quarter, which ended November 30, 2013.

In a release on January 9, the company noted that for the third quarter of fiscal 2014, gross billings grew 19% to $77.5 million, up from $65.0 million in the third quarter of fiscal 2013.

Total revenue increased 15% to $59.4 million, up from $51.4 million in the third quarter of fiscal 2013.

Appliance revenue in the third quarter of fiscal 2014 grew to $18.2 million and recurring subscription revenue grew to $41.2 million, representing 69% of total revenue.

GAAP net loss in the third quarter of fiscal 2014 was $2.1 million, or $(0.06) per share, based on a share count of 34.3 million. Non-GAAP net income for the third quarter of 2014 was $0.5 million, or $0.01 per share, based on a diluted share count of 48.7 million. Non-GAAP net income excludes $2.4 million in stock compensation expense, $1.3 million in amortization of intangibles, and $0.6 million in acquisition and other non-recurring charges.

“Our business showed strong performance in the third quarter across both our security and storage segments, and we continue to see positive results from our high growth market segments,” said BJ Jenkins, president and CEO. “During the quarter, we added over 6,800 new active subscribers, including both small businesses and large firms, across multiple geographies and industries. We believe that with our recent product releases and expanded distribution channels, Barracuda is well positioned to address the growing market trends of cloud computing, information growth and the increasing adoption of virtualization.”

“The results reflect solid financial performance and controls, and we outperformed against our outlook in several key metrics including gross billings, revenue, non-GAAP operating income and adjusted EBITDA,” said David Faugno, CFO. “Adjusted EBITDA in the third quarter was $12.6 million, or 21% of total revenue, non- GAAP operating income was $1.3 million, or 2% of total revenue, and adjusted free cash flow in the third quarter was $9.7 million, or 16% of total revenue. The company closed the quarter with total deferred revenue of $298.8 million, up from $286.8 million in the prior quarter.”

Recent company highlights

• IPO On November 12, 2013: Barracuda recognized net proceeds of $75.5 million in cash from an initial public offering and closed the quarter with cash, cash equivalents and investments of $118.5 million.
• Market Share Recognition: Ranked in the top five by market share for providers in the global backup and recovery appliances hardware market for open systems in the report, Gartner Competitive Landscape: Backup and Recovery Appliances for Open Systems, Worldwide, November 21, 2013; listed by IDC’s Worldwide Quarterly PBBA Tracker, CQ3 2013 as number two for total PBBA units sold; and once again named the content security appliance and virtual appliance volume leader as reported by IDC in its Worldwide Quarterly Security Appliance Tracker, Q2, September 2013.
• Expanding Cloud Presence: Announced the availability of its Web Application Firewall, Application Delivery Controller and Next Generation Firewall product lines through Windows Azure and its Web Application Firewall and Next Generation Firewall product lines through Amazon Web Services public cloud platforms.
• Industry Recognition: Named a 2013 Tech Innovator by CRN for Barracuda Backup with Cloud LiveBoot for VMware in the virtualization category; honored by Tech & Learning magazine’s 31st Annual Awards of Excellence for Barracuda Web Filter and Barracuda Message Archiver; and earned five-star ratings for Barracuda Web Application Firewall in SC Magazine’s 2013 Application and Web Security Group Test and for Barracuda Spam Firewall in SC Magazine’s 2013 Email Security and Content Management Group Test.
• New Product Launches: Released the Barracuda Firewall X100 and X101, Barracuda Load Balancer ADC 540, Barracuda Message Archiver version 3.5, and Barracuda Backup-as-a-Service.
• Expanding Channel Reach: Added Arrow Enterprise Computing Solutions as a new distribution partner in North America.