Infoblox Reports Fiscal Second Quarter 2016 Results
Strong Execution Drives Record Revenue With Product Revenue Up 36% Year-Over-Year
/EINPresswire.com/ -- SANTA CLARA, CA--(Marketwired - February 25, 2016) - Infoblox (NYSE: BLOX), the network control company, today reported its financial results for its second fiscal quarter ended January 31, 2016. Total net revenue for the second quarter of fiscal 2016 was a record $96 million, an increase of 29% on a year-over-year basis. Products and licenses revenue for the quarter was a record $52 million, an increase of 36% on a year-over-year basis.
On a GAAP basis, the Company reported net income of $4 million, or $0.06 net income per diluted share, for the second quarter of fiscal 2016, compared with a net loss of $7 million, or $0.13 net loss per diluted share, for the second quarter of fiscal 2015.
On a non-GAAP basis, the Company reported net income of $10 million, or $0.17 net income per diluted share for the second quarter of fiscal 2016, compared with net income of $5 million, or $0.09 net income per diluted share for the second quarter of fiscal 2015.
"We are reporting strong second quarter results today, with revenue up 29% compared to the prior year, led by product revenue which grew 36% year-over-year," said Jesper Andersen, president and chief executive officer. "Revenue grew across all major geographies, and security revenue grew more than 50%," continued Andersen. "Looking forward, we will continue to focus on strong execution combined with innovation as the industry leading DDI vendor uniquely securing the DNS infrastructure and simplifying the path to hybrid cloud deployment. We believe we are well positioned to execute on the opportunities ahead."
"Every measure of profitability in the quarter exceeded our expectations, underscoring the potential for leverage in our operating model," said Janesh Moorjani, chief financial officer. "As we move forward, we intend to continue to balance our investment in our top line growth with our commitment to drive annual improvement in our operating margin performance."
Q2'16 Financial Highlights
- Total net revenue grew 29% year-over-year to $96 million
- Products and licenses revenue grew 36% year-over-year to $52 million
- Services revenue grew 22% year-over-year to $44 million
- Non-GAAP gross margin increased to 81.9% compared to 80.1% in Q2'15
- Non-GAAP operating margin grew to 16.8% compared to 8.2% in Q2'15
- Non-GAAP net income grew 92% year-over-year to $10 million
- Cash flow from operations was $25 million compared to $15 million in Q2'15
Recent Business Highlights
- Launched NIOS 7.3 upgrading the underlying operating system for Infoblox products adding major enhancements including:
- Infoblox DNS Threat Analytics - the first technology that applies behavioral analytics to DNS queries in real time to detect and actively block data exfiltration attempts using DNS as a communications pathway
- Infoblox Reporting and Analytics - a powerful solution that unlocks the value of core network services data to help bolster security and mitigate threats, ensure compliance, improve application uptime and capacity planning to prevent network overloads or failures
- Amazon Web Services Route 53 Discovery - customers can now have a single console for DDI for their enterprise as well as AWS Route 53
- DNS Scavenging - automates the clean-up and removal of stale DNS records helping to ensure better performance and responsiveness of DNS servers and lower total cost of ownership
- Acquired IID, a leader in global cyberthreat intelligence, making Infoblox the first enterprise-grade DDI vendor to combine contextual network data with federated threat intelligence and a dedicated threat research team, to provide context-aware security using infrastructure that customers already have in place
- Announced Bloxfest, Infoblox's first end-user and customer focused conference to be hosted in May 2016
- Announced new executives and board members:
- Edzard Overbeek, most recently senior vice president of the global services business at Cisco, was appointed to the board of directors
- Janesh Moorjani, most recently senior vice president of finance at VMware, was appointed as executive vice president and chief financial officer
- Atul Garg, most recently vice president and general manager of Cloud and Automation at Hewlett Packard Software, was appointed as executive vice president of engineering
- Ashish Gupta, most recently chief marketing officer at Actian and Vidyo, was appointed as executive vice president and chief marketing officer
Financial Outlook
Infoblox announced its outlook of anticipated results for the third fiscal quarter ending April 30, 2016 and fiscal year ending July 31, 2016. This outlook is based on a number of assumptions that it believes are reasonable at the time of this earnings release. Information regarding potential risks that could cause the actual results to differ from these forward-looking statements is set forth below and in Infoblox's filings with the Securities and Exchange Commission.
This outlook includes the anticipated effects of the acquisition of IID, which closed on February 8, 2016.
For the third fiscal quarter ending April 30, 2016, the Company currently expects:
- Total net revenue in the range of $91 million to $93 million;
- Non-GAAP gross margin in the range of 79% to 80%;
- Non-GAAP operating margin in the range of 5% to 6%; and
- Non-GAAP net income per diluted share ("non-GAAP EPS") in the range of $0.05 to $0.06, assuming approximately 58 million to 59 million diluted shares.
For the fiscal year ending July 31, 2016, the Company currently expects:
- Total net revenue in the range of $370 million to $380 million; and
- Non-GAAP operating margin in the range of 10% to 12%.
Conference Call & Webcast
Management will host a conference call today, February 25, 2016 at 1:30 p.m. PST/4:30 p.m. EST to discuss its fiscal second quarter 2016 financial results. To access the call, dial 800-230-1085 (domestic) or 612-288-0329 (international) at least 10 minutes prior to the scheduled start of the call. A live webcast of the call will also be available on the corporate website at: http://ir.infoblox.com. An archive of the webcast will be available on the company's website and a taped replay will be available for one week at 800-475-6701 (domestic) or 320-365-3844 (international), passcode 385185.
About Non-GAAP Financial Measures
To supplement our financial results presented in accordance with Generally Accepted Accounting Principles (GAAP), this press release and the accompanying tables and the related earnings conference call contain certain non-GAAP financial measures, including non-GAAP gross profit and gross margin, non-GAAP operating income and operating margin, non-GAAP net income, non-GAAP EPS and non-GAAP diluted shares outstanding. We also provide third fiscal quarter 2016 estimates for net revenue, non-GAAP gross margin, non-GAAP operating margin, non-GAAP EPS and non-GAAP diluted shares outstanding and fiscal 2016 estimates for net revenue and non-GAAP operating margin. We believe these non-GAAP financial measures are helpful in understanding our past financial performance and future results. Our non-GAAP financial measures should not be considered in isolation or as a substitute for comparable GAAP measures and should be read in conjunction with our consolidated financial statements prepared in accordance with GAAP. Our management regularly uses our supplemental non-GAAP financial measures internally to understand and manage our business and forecast future periods. These non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies. Our non-GAAP financial measures include adjustments based on the following items:
Stock-based compensation expenses: We have excluded the effect of stock-based compensation from our non-GAAP operating results. Although stock-based compensation is a key incentive offered to our employees, we continue to evaluate our business performance excluding stock-based compensation expenses. Stock-based compensation expenses will recur in future periods.
Amortization of intangible assets: We have excluded the effect of amortization of intangible assets from our non-GAAP operating results. Amortization of intangible assets is a non-cash expense, and it is not part of our core operations. Investors should note that the use of intangible assets contributed to revenues earned during the periods presented and will contribute to future period revenues as well.
Acquisition related expenses: We have excluded acquisition transaction costs from our non-GAAP operating results. We believe that to the extent we incur significant expenses in connection with our acquisitions, it is useful for investors to understand the effects of these items on our total operating expenses.
Our non-GAAP Financial Measures are described as follows:
Non-GAAP gross profit and gross margin. Non-GAAP gross profit is gross profit as reported on our consolidated statements of operations, excluding the impact of stock-based compensation and intangible asset amortization expense. Non-GAAP gross margin is non-GAAP gross profit divided by net revenue.
Non-GAAP operating income and operating margin. Non-GAAP operating income is income (loss) from operations as reported on our consolidated statements of operations, excluding the impact of stock-based compensation, intangible asset amortization expense and acquisition related expenses. Non-GAAP operating margin is non-GAAP operating income divided by net revenue.
Non-GAAP net income and non-GAAP EPS. Non-GAAP net income is net income (loss) as reported on our consolidated statements of operations, excluding the impact of stock-based compensation, intangible asset amortization expense and acquisition related expenses with income taxes adjusted to reflect our estimated long-term effective tax rate on a non-GAAP basis. Non-GAAP EPS is non-GAAP net income divided by non-GAAP diluted weighted average shares outstanding.
For reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section of the accompanying tables titled, "Reconciliation of GAAP to Non-GAAP Financial Measures."
About Infoblox
Infoblox (NYSE: BLOX) delivers critical network services that protect Domain Name System (DNS) infrastructure, automate cloud deployments, and increase the reliability of enterprise and service provider networks around the world. As the industry leader in DNS, DHCP, and IP address management, the category known as DDI, Infoblox (www.infoblox.com) reduces the risk and complexity of networking.
Cautionary Statement
All statements in this release that are not statements of historical fact, including but not limited to the quotations attributable to Mr. Andersen and Mr. Moorjani, the statements under "Financial Outlook" and regarding the expected benefits of and the capabilities enabled by the IID acquisition are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause our actual results to differ materially, including, but not limited to: unexpected delays in the delivery of our solutions, particularly at the end of the quarter; unforeseen difficulties in integrating IID; the expected benefits of the IID acquisition may take longer to materialize or be less significant than expected; changes in demand for network control solutions; the market acceptance of our products; the fluctuations in our gross margins; the concentration of our customer base; competitive developments including pricing pressures; our ability to manage operating expenses effectively; and the general economic, industry or political conditions in the United States or internationally. Such risk factors also include those related to whether or not we will complete our share repurchase program during any particular time frame or at all and whether our cash and short term investments may be insufficient to fund our share repurchase program.
For a detailed discussion of these and other risk factors, please refer to our filings with the Securities and Exchange Commission, which are available on our investor relations Web site (http://ir.infoblox.com/) and on the SEC's Web site (www.sec.gov).
All information provided in this release and in the attachments is as of February 25, 2016, and stockholders of Infoblox are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date such statements are made. Infoblox does not undertake any obligation to publicly update any forward-looking statements to reflect events, circumstances or new information after this February 25, 2016, press release, or to reflect the occurrence of unanticipated events.
INFOBLOX INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - GAAP BASIS
(In thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
-------------------------------- ---------------------
January October January January January
31, 31, 31, 31, 31,
2016 2015 2015 2016 2015
---------- ---------- ---------- ---------- ----------
Net revenue:
Products and
licenses $ 51,516 $ 50,857 $ 37,917 $ 102,373 $ 69,425
Services 44,483 43,165 36,387 87,648 71,598
---------- ---------- ---------- ---------- ----------
Total net revenue 95,999 94,022 74,304 190,021 141,023
---------- ---------- ---------- ---------- ----------
Cost of revenue:
Products and
licenses 9,856 10,350 8,787 20,206 16,254
Services 9,065 8,752 7,491 17,817 14,958
---------- ---------- ---------- ---------- ----------
Total cost of
revenue 18,921 19,102 16,278 38,023 31,212
---------- ---------- ---------- ---------- ----------
Gross profit 77,078 74,920 58,026 151,998 109,811
---------- ---------- ---------- ---------- ----------
Operating expenses:
Research and
development 17,461 17,833 15,504 35,294 30,074
Sales and marketing 45,996 47,286 39,788 93,282 78,243
General and
administrative 11,149 10,457 9,355 21,606 17,315
---------- ---------- ---------- ---------- ----------
Total operating
expenses 74,606 75,576 64,647 150,182 125,632
---------- ---------- ---------- ---------- ----------
Income (loss) from
operations 2,472 (656) (6,621) 1,816 (15,821)
Other income
(expense), net 167 95 (590) 262 (780)
---------- ---------- ---------- ---------- ----------
Income (loss) before
provision for
(benefit from)
income taxes 2,639 (561) (7,211) 2,078 (16,601)
Provision for
(benefit from)
income taxes (1,139) 950 (200) (189) 620
---------- ---------- ---------- ---------- ----------
Net income (loss) $ 3,778 $ (1,511) $ (7,011) $ 2,267 $ (17,221)
========== ========== ========== ========== ==========
Net income (loss )
per share - basic
and diluted $ 0.06 $ (0.03) $ (0.13) $ 0.04 $ (0.31)
========== ========== ========== ========== ==========
Weighted-average
shares used in
computing basic net
income (loss) per
share 58,926 59,272 56,087 59,099 55,729
========== ========== ========== ========== ==========
Weighted-average
shares used in
computing diluted
net income (loss)
per share 60,138 59,272 56,087 60,795 55,729
========== ========== ========== ========== ==========
INFOBLOX INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
---------------------------------- ----------------------
January October January January January
31, 31, 31, 31, 31,
2016 2015 2015 2016 2015
---------- ----------- ----------- ---------- -----------
Gross Profit
Reconciliation:
GAAP gross profit $ 77,078 $ 74,920 $ 58,026 $ 151,998 $ 109,811
Stock-based
compensation
expense 1,221 1,128 1,201 2,349 2,404
Amortization of
intangible
assets 290 290 290 580 580
---------- ----------- ----------- ---------- -----------
Non-GAAP gross
profit $ 78,589 $ 76,338 $ 59,517 $ 154,927 $ 112,795
========== =========== =========== ========== ===========
Gross Margin
Reconciliation:
GAAP gross margin 80.3% 79.7% 78.1% 80.0% 77.9%
Stock-based
compensation
expense 1.3 1.2 1.6 1.2 1.7
Amortization of
intangible
assets 0.3 0.3 0.4 0.3 0.4
---------- ----------- ----------- ---------- -----------
Non-GAAP gross
margin 81.9% 81.2% 80.1% 81.5% 80.0%
========== =========== =========== ========== ===========
Operating Income
(Loss)
Reconciliation:
GAAP operating
income (loss) $ 2,472 $ (656) $ (6,621) $ 1,816 $ (15,821)
Stock-based
compensation
expense 12,965 12,828 12,117 25,793 24,339
Acquisition
related
expenses 382 - - 382 -
Amortization of
intangible
assets 322 322 617 644 1,234
---------- ----------- ----------- ---------- -----------
Non-GAAP operating
income $ 16,141 $ 12,494 $ 6,113 $ 28,635 $ 9,752
========== =========== =========== ========== ===========
Operating Margin
Reconciliation:
GAAP operating
margin 2.6% (0.7%) (8.9%) 1.0% (11.2%)
Stock-based
compensation
expense 13.5 13.6 16.3 13.6 17.3
Acquisition
related
expenses 0.4 - - 0.2 -
Amortization of
intangible
assets 0.3 0.4 0.8 0.3 0.9
---------- ----------- ----------- ---------- -----------
Non-GAAP operating
margin 16.8% 13.3% 8.2% 15.1% 7.0%
========== =========== =========== ========== ===========
Net Income (Loss)
Reconciliation:
GAAP net income
(loss) $ 3,778 $ (1,511) $ (7,011) $ 2,267 $ (17,221)
Stock-based
compensation
expense 12,965 12,828 12,117 25,793 24,339
Acquisition
related
expenses 382 - - 382 -
Amortization of
intangible
assets 322 322 617 644 1,234
Income tax
adjustment (7,336) (3,834) (457) (11,170) (122)
---------- ----------- ----------- ---------- -----------
Non-GAAP net
income $ 10,111 $ 7,805 $ 5,266 $ 17,916 $ 8,230
========== =========== =========== ========== ===========
Non-GAAP EPS $ 0.17 $ 0.13 $ 0.09 $ 0.29 $ 0.14
========== =========== =========== ========== ===========
Shares used in
Computing non-
GAAP EPS
Reconciliation:
Diluted shares:
Weighted-average
shares used in
calculating GAAP
diluted net
income (loss) per
share 60,138 59,272 56,087 60,795 55,729
Additional
dilutive
securities for
non-GAAP income - 1,976 2,372 - 1,838
---------- ----------- ----------- ---------- -----------
Weighted-average
shares used in
calculating non-
GAAP diluted net
income per share 60,138 61,248 58,459 60,795 57,567
========== =========== =========== ========== ===========
INFOBLOX INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
January 31, July 31,
2016 2015
------------- -------------
(Unaudited) (a)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 132,804 $ 103,124
Short-term investments 194,427 227,712
Accounts receivable, net 53,883 45,881
Inventory 6,709 8,588
Prepaid expenses and other current assets 11,860 10,459
------------- -------------
Total current assets 399,683 395,764
Property and equipment, net 23,212 23,225
Restricted cash 3,518 3,515
Intangible assets, net 1,279 1,923
Goodwill 33,293 33,293
Other assets 1,279 1,547
------------- -------------
TOTAL ASSETS $ 462,264 $ 459,267
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities $ 19,199 $ 19,136
Accrued compensation 19,091 22,931
Deferred revenue, net 108,216 95,130
------------- -------------
Total current liabilities 146,506 137,197
Deferred revenue, net 50,924 41,717
Other liabilities 4,687 5,201
------------- -------------
TOTAL LIABILITIES 202,117 184,115
------------- -------------
STOCKHOLDERS' EQUITY:
Convertible preferred stock, $0.0001 par value
per share--5,000 shares authorized; no shares
issued or outstanding - -
Common stock, $0.0001 par value per share--
100,000 shares authorized; 58,517 shares and
58,836 shares issued and outstanding as of
January 31, 2016 and July 31, 2015 6 6
Additional paid-in capital 446,195 438,725
Accumulated other comprehensive loss (218) (37)
Accumulated deficit (185,836) (163,542)
------------- -------------
TOTAL STOCKHOLDERS' EQUITY 260,147 275,152
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 462,264 $ 459,267
============= =============
(a) Derived from the July 31, 2015 audited consolidated financial statements.
INFOBLOX INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
---------------------------
January 31, January 31,
2016 2015
------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 2,267 $ (17,221)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Stock-based compensation 25,792 24,339
Depreciation and amortization 4,982 4,437
Increase (decrease) in excess tax benefits from
employee stock plans 387 (241)
Other 557 1,552
Changes in operating assets and liabilities:
Accounts receivable, net (8,002) (2,473)
Inventory 1,778 (1,267)
Prepaid expenses, other current assets and
other assets (930) (907)
Accounts payable and accrued liabilities 358 553
Accrued compensation (3,840) 3,247
Deferred revenue, net 22,293 15,239
Other liabilities (514) (430)
------------- -------------
Net cash provided by operating activities 45,128 26,828
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of short-term investments (29,905) (56,316)
Proceeds from maturities of short-term
investments 62,700 40,880
Purchases of property and equipment (5,144) (3,299)
Proceeds from sales of short-term investments - 1,001
------------- -------------
Net cash provided by (used in) investing
activities 27,651 (17,734)
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Common stock repurchases (50,019) -
Proceeds from issuance of common stock under
the employee stock plans 7,555 7,633
Increase (decrease) in excess tax benefits from
employee stock plans (387) 241
------------- -------------
Net cash provided by (used in) financing
activities (42,851) 7,874
------------- -------------
Effect of foreign exchange rate changes on cash
and cash equivalents (248) (1,269)
------------- -------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 29,680 15,699
CASH AND CASH EQUIVALENTS--Beginning of period 103,124 78,535
------------- -------------
CASH AND CASH EQUIVALENTS--End of period $ 132,804 $ 94,234
============= =============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Purchases of property and equipment not yet paid $ 522 $ 378
============= =============
Cash paid for income taxes, net $ 439 $ 138
============= =============
PRESS RELEASE
Investor Contact:
Renee Lyall
Infoblox
408.986.4748
rlyall@infoblox.com
Media Contact:
Mike Langberg
Infoblox
408.986.5697
mlangberg@infoblox.com
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