Market Overview

Barracuda Networks Conference Call Highlights

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Shares of Barracuda Networks (NYSE: CUDA) were up more than one percent Friday morning, following its third-quarter earnings release.

Shares were down 1.7 percent at last check.

Below are some highlights and key takeaways from the company's conference call.

Growth:

  • Billings in the first quarter grew 17 percent year-over-year to $87.6 million.
  • Revenue grew 18% year-over-year to $66.2 million.
  • We also had strong adjusted EBITDA performance.
  • And we look forward to sharing more of the details on these product enhancements over the coming quarters.
  • Turning to our security category, we continued to make strong progress with our public cloud initiatives in Microsoft Azure and Amazon Web Services.
  • Once again, Barracuda was ranked by IDC in the first calendar quarter of 2014 as the number one volume leader in Content Security appliance market share
  • Lastly, we also launched our new Barracuda Web Filter version 8.0.

Global:

  • Geographically, we saw a good demand across all of our markets.
  • Increased billings growth was driven primarily by the Americas.
  • We also saw APAC grow nicely despite some currency headwinds with Southeast Asia and Korea performing particularly well.
  • EMEA showed good year-over-year growth following the strong prior quarter with particular strength in Austria, Eastern Europe and the Middle East.

Results:

  • Gross margins in the first quarter were again strong at 80.4 percent, up from 79.5 percent.
  • We expect fluctuations in our gross margins from quarter-to-quarter as we continue to invest in our cloud service infrastructure.
  • Research and development expenses for the first quarter were $11.7 million or 18 percent of revenue.
  • Sales and marketing expenses for the first quarter were $28.6 million or 43 percent of revenue.

Guidance:

  • We expect revenue in the second quarter of fiscal year 2015 to be in the range of $66 million to $67 million.
  • We expect non-GAAP operating income for the second quarter to be between $2.5 million and $3.5 million.
  • Non-GAAP earnings per share for the second quarter is expected to be between $0.03 and $0.04 of earnings per share.
  • Assume a share count range of 54 million to 55 million shares for the second quarter, and a non-GAAP tax rate range of 30 percent to 35 percent.
  • For fiscal year 2015, given the performance in Q1, we are increasing our revenue guidance to be between $270 million and $274 million.
  • This range represents year-over-year growth of approximately 15 percent, 17 percent.

Posted-In: Earnings News Guidance

 

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