SOURCE: Infoblox

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September 03, 2015 16:05 ET

Infoblox Reports Fiscal Fourth Quarter and Fiscal 2015 Results

Company Reports Record Revenue

SANTA CLARA, CA--(Marketwired - September 03, 2015) - Infoblox (NYSE: BLOX), the network control company, today reported its financial results for its fourth fiscal quarter and fiscal year ended July 31, 2015. Total net revenue for the fourth quarter of fiscal 2015 was a record $87.0 million, an increase of 34.0% on a year-over-year basis. Total net revenue for fiscal 2015 was a record $306.1 million, an increase of 22.3% compared with the total net revenue of $250.3 million in fiscal 2014.

On a GAAP basis, the Company reported a net loss of $4.7 million, or $0.08 net loss per fully diluted share, for the fourth quarter of fiscal 2015, compared with a net loss of $9.5 million, or $0.17 net loss per fully diluted share, for the fourth quarter of fiscal 2014. For fiscal 2015, the Company reported a GAAP basis net loss of $27.1 million, or $0.48 net loss per fully diluted share, compared with a net loss of $23.9 million, or $0.45 net loss per fully diluted share, in fiscal 2014.

The Company reported non-GAAP net income of $7.3 million, or $0.12 diluted net income per share on a non-GAAP weighted-average share basis, for the fourth quarter of fiscal 2015, compared with non-GAAP net income of $1.9 million, or $0.03 diluted net income per share on a non-GAAP weighted-average share basis, for the fourth quarter of fiscal 2014. For fiscal 2015, on a non-GAAP basis, the Company reported net income of $22.7 million, or $0.38 diluted income per share compared with net income of $19.5 million, or $0.34 diluted income per share, in fiscal 2014.

The GAAP to non-GAAP reconciling items for the fourth quarters and fiscal years 2015 and 2014 can be found in the "Reconciliation of GAAP to Non-GAAP Financial Measures" attached to this press release.

"We had a strong finish to fiscal 2015," said Jesper Andersen, president and chief executive officer. "Sales execution continued to improve as evidenced by our robust top line performance driven by product sales in the fourth quarter. We believe our security and cloud solutions differentiate our platform and have increased our value proposition with our customers and prospects, and contributed to driving larger deals," continued Andersen. "As we look ahead, we see multiple growth drivers for our business and believe we are well positioned for further growth."

Financial Outlook

Infoblox announced its outlook of anticipated results for the first fiscal quarter ending October 31, 2015. 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.

For the first fiscal quarter ending October 31, 2015, the Company currently expects:

  • Total net revenue in the range of $86 million to $88 million;
  • Non-GAAP gross margin to be in the range of 78% to 79%;
  • Non-GAAP operating margin in the range of 6% to 7%; and
  • Non-GAAP diluted net income per share ("non-GAAP EPS") to be in the range of $0.05 to $0.06, assuming approximately 62 million shares on a non-GAAP diluted weighted-average share basis.

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 weighted-average shares outstanding. We also provide first fiscal quarter 2016 estimates for non-GAAP gross margin, non-GAAP operating margin, non-GAAP EPS and non-GAAP diluted weighted-average shares outstanding. 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.

Income tax adjustment: For purposes of calculating non-GAAP net income and non-GAAP EPS, our interim U.S. income tax provision is recognized based on the percentage of year-to-date non-GAAP pre-tax income (loss) over projected fiscal 2015 non-GAAP pre-tax income (loss).

Acquisition related expenses: Acquisition related expenses may include transaction costs, costs for transitional employees, other acquired employee related retention costs, integration related professional services, adjustments to the fair value of the acquisition related contingent consideration, and the write-down of certain acquired in-progress research and development intangibles. 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 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."

Conference Call & Webcast

Management will host a conference call today, September 3, 2015 at 1:30 p.m. PDT/4:30 p.m. EDT to discuss its fiscal fourth quarter 2015 financial results. To access the call, investors may dial 800-230-1096 (domestic) or 612-288-0337 (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 to the company's website and a taped reply will be available for one week at 800-475-6701 (domestic) or 320-365-3844 (international), passcode 366383.

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 quotation attributable to Mr. Andersen and the statements under "Financial Outlook" 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; changes in demand for automated 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.

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 September 3, 2015, 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 September 3, 2015 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  Year Ended
  July 31,
 2015
 April 30,
 2015
 July 31,
 2014
 July 31,
 2015
 July 31,
 2014
Net revenue:              
 Products and licenses $ 46,348    $ 40,737    $ 32,022    $ 156,510    $ 130,348  
 Services  40,651     37,366     32,893     149,615     119,992  
  Total net revenue  86,999     78,103     64,915     306,125     250,340  
Cost of revenue:                   
 Products and licenses  10,039     9,069     7,235     35,362     29,327  
 Services  8,554     8,257     7,352     31,769     26,471  
  Total cost of revenue  18,593     17,326     14,587     67,131     55,798  
Gross profit  68,406     60,777     50,328     238,994     194,542  
Operating expenses:                   
 Research and development  18,309     16,709     13,670     65,092     49,289  
 Sales and marketing  44,438     39,536     38,038     162,217     138,612  
 General and administrative  10,055     9,740     7,948     37,110     29,621  
  Total operating expenses  72,802     65,985     59,656     264,419     217,522  
Loss from operations  (4,396 )   (5,208 )   (9,328 )   (25,425 )   (22,980 )
Other income (expense), net  (77 )   206     62     (651 )   (18 )
Loss before provision for income taxes  (4,473 )   (5,002 )   (9,266 )   (26,076 )   (22,998 )
Provision for income taxes  253     134     266     1,007     919  
Net loss $ (4,726 )  $ (5,136 )  $ (9,532 )  $ (27,083 )  $ (23,917 )
Net loss per share - basic and diluted $ (0.08 )  $ (0.09 )  $ (0.17 )  $ (0.48 )  $ (0.45 )
Weighted-average shares used in computing basic and diluted net loss per share  58,128     56,928     54,727     56,626     53,581  
                    
                    

 
INFOBLOX INC.
 
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(Unaudited)
      
  Three Months Ended  Year Ended
  July 31,
 2015
 April 30,
 2015
 July 31,
 2014
 July 31,
 2015
 July 31,
 2014
Gross Profit Reconciliation:              
GAAP gross profit $ 68,406    $ 60,777    $ 50,328    $ 238,994    $ 194,542  
 Stock-based compensation expense  1,045     1,001     1,002     4,450     3,619  
 Amortization of intangible assets  290     290     290     1,160     1,110  
Non-GAAP gross profit $ 69,741    $ 62,068    $ 51,620    $ 244,604    $ 199,271  
Gross Margin Reconciliation:                   
GAAP gross margin  78.6 %   77.8 %   77.5 %   78.1 %   77.7 %
 Stock-based compensation expense  1.2     1.3     1.5     1.5     1.4  
 Amortization of intangible assets  0.3     0.4     0.5     0.4     0.4  
Non-GAAP gross margin  80.1 %   79.5 %   79.5 %   80.0 %   79.5 %
Operating Income (Loss) Reconciliation:                   
GAAP operating loss $ (4,396 )  $ (5,208 )  $ (9,328 )  $ (25,425 )  $ (22,980 )
 Stock-based compensation expense  11,525     11,759     10,832     47,623     40,971  
 Amortization of intangible assets  322     617     617     2,173     2,418  
Non-GAAP operating income $ 7,451    $ 7,168    $ 2,121    $ 24,371    $ 20,409  
Operating Margin Reconciliation:                   
GAAP operating margin  (5.1 %)   (6.7 %)   (14.4 %)   (8.3 %)   (9.2 %)
 Stock-based compensation expense  13.3     15.1     16.7     15.6     16.4  
 Amortization of intangible assets  0.4     0.8     1.0     0.7     0.9  
Non-GAAP operating margin  8.6 %   9.2 %   3.3 %   8.0 %   8.1 %
Net Income (Loss) Reconciliation:                   
GAAP net loss $ (4,726 )  $ (5,136 )  $ (9,532 )  $ (27,083 )  $ (23,917 )
 Stock-based compensation expense  11,525     11,759     10,832     47,623     40,971  
 Amortization of intangible assets  322     617     617     2,173     2,418  
 Income tax adjustment  167     (45 )   -     -     -  
Non-GAAP net income $ 7,288    $ 7,195    $ 1,917    $ 22,713    $ 19,472  
                    
Non-GAAP EPS $ 0.12    $ 0.12    $ 0.03    $ 0.38    $ 0.34  
Shares used in Computing non-GAAP EPS Reconciliation:                   
Diluted shares:                   
Weighted-average shares used in calculating GAAP diluted net loss per share  58,128     56,928     54,727     56,626     53,581  
Additional dilutive securities for non-GAAP income  3,149     3,295     1,375     2,657     4,057  
Weighted-average shares used in calculating non-GAAP diluted net income per share  61,277     60,223     56,102     59,283     57,638  
                    

 
INFOBLOX INC.
 
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
      
  July 31, 2015  July 31, 2014
  (Unaudited)  (a)
ASSETS     
CURRENT ASSETS:     
 Cash and cash equivalents $ 103,124    $ 78,535  
 Short-term investments  227,712     191,316  
 Accounts receivable, net  45,881     36,420  
 Inventory  8,588     6,345  
 Prepaid expenses and other current assets  10,459     7,506  
  Total current assets  395,764     320,122  
Property and equipment, net  23,225     18,785  
Restricted cash  3,515     3,516  
Intangible assets, net  1,923     4,096  
Goodwill  33,293     33,293  
Other assets  1,547     756  
TOTAL ASSETS $ 459,267    $ 380,568  
LIABILITIES AND STOCKHOLDERS' EQUITY       
CURRENT LIABILITIES:       
 Accounts payable and accrued liabilities $ 19,136    $ 15,648  
 Accrued compensation  22,931     13,197  
 Deferred revenue, net  95,130     81,964  
  Total current liabilities  137,197     110,809  
Deferred revenue, net  41,717     34,149  
Other liabilities  5,201     6,314  
TOTAL LIABILITIES  184,115     151,272  
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; 58,836 shares and 55,065 shares issued and outstanding as of July 31, 2015 and July 31, 2014  6     6  
 Additional paid-in capital  438,725     365,833  
 Accumulated other comprehensive loss  (37 )   (84 )
 Accumulated deficit  (163,542 )   (136,459 )
TOTAL STOCKHOLDERS' EQUITY  275,152     229,296  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 459,267    $ 380,568  
        
(a) Derived from the July 31, 2014 audited consolidated financial statements.
 

 
INFOBLOX INC.
 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
   
  Year Ended July 31,
  2015  2014
CASH FLOWS FROM OPERATING ACTIVITIES:     
Net loss $ (27,083 )  $ (23,917 )
Adjustments to reconcile net loss to net cash provided by operating activities:       
 Stock-based compensation  47,623     40,971  
 Depreciation and amortization  8,888     8,735  
 Excess tax benefits from employee stock plans  (207 )   (170 )
 Other  2,096     827  
 Changes in operating assets and liabilities:       
  Accounts receivable, net  (9,461 )   2,308  
  Inventory  (2,615 )   (1,867 )
  Prepaid expenses, other current assets and other assets  (3,629 )   (1,500 )
  Accounts payable and accrued liabilities  2,833     3,061  
  Accrued compensation  9,734     725  
  Deferred revenue, net  20,734     17,927  
  Other liabilities  (902 )   (792 )
   Net cash provided by operating activities  48,011     46,308  
CASH FLOWS FROM INVESTING ACTIVITIES:       
 Purchases of short-term investments  (147,137 )   (186,322 )
 Proceeds from maturities of short-term investments  109,290     86,730  
 Proceeds from sales of short-term investments  1,001     47,180  
 Purchases of property and equipment  (10,303 )   (6,352 )
 Business acquisition  -     (1,000 )
   Net cash used in investing activities  (47,149 )   (59,764 )
CASH FLOWS FROM FINANCING ACTIVITIES:       
 Proceeds from issuance of common stock under the employee stock plans  25,039     21,993  
 Excess tax benefits from employee stock plans  207     170  
   Net cash provided by financing activities  25,246     22,163  
        
Effect of foreign exchange rate changes on cash and cash equivalents  (1,519 )   -  
        
NET INCREASE IN CASH AND CASH EQUIVALENTS  24,589     8,707  
CASH AND CASH EQUIVALENTS-Beginning of period  78,535     69,828  
CASH AND CASH EQUIVALENTS-End of period $ 103,124    $ 78,535  
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:       
Purchases of property and equipment not yet paid $ 1,341    $ 484  
Cash paid for income taxes, net $ 483    $ 489  
Restricted stock units released in connection with business acquisition $ -    $ 573  
        
        

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