Riverbed: Fiscal 4Q13 Financial Results

Riverbed Technology, Inc. reported record revenue for its fourth quarter (Q4’13) and fiscal year ended December 31, 2013 (FY’13).

Total GAAP revenue for Q4’13 was $283 million, up 8% compared to the third quarter of fiscal year 2013 (Q3’13) and 19% compared to the fourth quarter of fiscal year 2012 (Q4’12). For FY’13, GAAP revenue was $1.0 billion, up 24% compared to fiscal year ended December 31, 2012 (FY’12). GAAP net income for Q4’13 was $8 million, or $0.05 per diluted share. This compares to $4 million, or $0.02 per diluted share, in Q3’13 and $5 million, or $0.03 per diluted share, in Q4’12. GAAP net loss for FY’13 was $12 million, or ($0.08) per diluted share.

Non-GAAP revenue for Q4’13 was $285 million, an increase of 7% compared to Q3’13 and an increase of 19% compared to Q4’12. Non-GAAP revenue for FY’13 was $1.1 billion, an increase of 26% compared to FY’12. Non-GAAP net income for Q4’13 was $51 million, or $0.31 per diluted share. This compares to $43 million, or $0.26 per diluted share, in Q3’13 and $46 million, or $0.29 per diluted share, in Q4’12. Non-GAAP net income for FY’13 was $169 million, or $1.01 per diluted share.

“Riverbed is executing well on a strategy to create sustained growth for our business, strategic value for our customers, and profitable returns for our shareholders,” said Jerry M. Kennelly, chairman and CEO, Riverbed. “Our strong 2013 finish demonstrates progress across our major product lines and all geographies, and strength in enterprise sales. For the full year we are reporting more than $1 billion in revenue, an important milestone in the company’s history, and a good base from which we will drive our next leg of growth.”

Kennelly continued: “As customers increasingly adopt the full breadth of the Riverbed Application Performance Platform to achieve the benefits of location-independent computing and eliminate technical constraints from their business operations, we expect to increase our share of the $11 billion application performance infrastructure market.“

Q4’13 and FY’13 Financial Highlights

• Q4’13 non-GAAP revenue grew 7% sequentially and 19% year-over-year to $285 million
• FY’13 non-GAAP revenue grew 26% to $1.1 billion
• Q4’13 non-GAAP gross margin of 79.9%
• Q4’13 non-GAAP operating margin of 25.8%
• Q4’13 free cash flow of $82 million; FY’13 free cash flow of $192 million
• Repurchased $75 million in shares in Q4’13; repurchased $200 million in shares in FY’13

Q4’13 Business Highlights

• Unveiled the company’s vision and multi-product platform strategy to expand within the $11 billion Application Performance Infrastructure market
• Named one of the Top 20 Best Places to Work in the Glassdoor Employees’ Choice Awards for the second consecutive year. Riverbed also ranked in the top 10 best places to work in the technology industry.
• Ranked as one of the fastest growing companies in North America on Deloitte’s 2013 Technology Fast 500.
• Recognized in the leaders quadrant of the Gartner Magic Quadrant for Application Performance Monitoring” for the third consecutive time (published in December 2013).
• Positioned by Gartner as the only vendor in the Visionaries Quadrant of the 2013 Magic Quadrant for Application Delivery Controllers (ADC) authored by Mark Fabbi, Neil Rickard, Bjarne Munch and Andrew Lerner, and published in October 2013.
• Awarded InfoWorld Technology of the Year Awards for its Riverbed Granite branch converged infrastructure and Steelhead WAN optimization solutions. Granite received the InfoWorld Technology of the Year Award recognition for the second consecutive year and Steelhead has won eight consecutive times.
• Launched availability of Granite 2.6, with new features that support more branches, bigger data sets (with 2x higher capacity models), and additional enterprise storage solutions, including IBM Storwize V7000.
• Introduced a single integrated WAN Optimization and Performance Management solution that brings together the Steelhead WAN optimization product family and Riverbed Cascade network performance management (NPM) product family to deliver application acceleration anywhere while enhancing end-user experience and visibility.
• Released Stingray Traffic Manager 9.5, a full performance software and virtual Layer 7 application delivery controller (ADC) that enables enterprises and cloud operators to create, manage, and deliver key services more quickly, more flexibly, and at a lower cost.
• Announced improvements to its program that will simplify processes, training and competency certification to help partners capitalize on new market prospects and accelerate their growth. The new program reinforces that Riverbed is committed to the channel with increased investment and focus on its partners’ go-to-market efforts.