-- Quarterly Revenues Increase by 212% Year-Over-Year to $42.8
million
-- Rapid Customer Growth With Cumulative Customers Now Over 2,000
-- Gross Margins Increase to 71%
SAN FRANCISCO--(BUSINESS WIRE)--April 24, 2007--Riverbed
Technology, Inc. (Nasdaq:RVBD), the performance leader in wide-area
data services (WDS), today released financial results for the first
quarter ended March 31, 2007.
Revenues for the first quarter of 2007 were $42.8 million, which
represents a sequential increase of 26% from the immediately preceding
quarter and a year-over-year increase of 212% from the first quarter
of last year. Riverbed(R) posted its first quarter of positive net
income on a GAAP basis with $3.3 million, or $0.05 per diluted share,
compared to a net loss of $2.4 million, or $0.04 per share, in the
fourth quarter of 2006 and a net loss of $4.3 million, or a loss of
$0.36 per share, in the first quarter of 2006. Riverbed's first
quarter of 2007 GAAP results included $5.4 million of non-cash
stock-based compensation expenses.
Excluding the impact of stock-based compensation in all periods,
the non-GAAP net income for the first quarter of 2007 was $8.6
million, or $0.12 per diluted share, compared to a non-GAAP net income
of $2.4 million, or $0.03 per diluted share, in the fourth quarter of
2006 and a non-GAAP net loss of $3.4 million, or $0.28 per share, in
the first quarter of 2006.
"Our record results are a testament to the rapid growth of the
wide-area data services (WDS) market and the strength of our
industry-leading technology," noted Jerry Kennelly, Riverbed president
and chief executive officer. "Our latest release of RiOS 4.0 even
further differentiated our technology adding support for SSL and
enhanced acceleration for web-based business applications. Based on
the strength of our technology, we continue to win new customers at an
impressive rate and our cumulative customer count now exceeds 2,000."
"The first quarter of 2007 marked the first in which Riverbed was
profitable on a GAAP basis," said Randy Gottfried, Riverbed chief
financial officer. "Gross margins were 71% and we generated over $7
million in cash from operations."
Conference Call Information
Riverbed will host a conference call for analysts and investors to
discuss its first quarter results today at 5:00 p.m. Eastern Time
(2:00 p.m. Pacific Time). A live webcast of the conference call will
also be accessible from the "Investor Relations" section of the
company's website at www.riverbed.com. Following the webcast, an
archived version will be available on the website for 30 days. To hear
the replay, parties in the United States and Canada should call
800-405-2236 and enter passcode 11088216. International parties can
access the replay at 303-590-3000 and should enter passcode 11088216.
About Riverbed
Riverbed Technology is the performance leader in wide-area data
services (WDS) solutions for companies worldwide. By enabling
application performance over the wide area network (WAN) that is
orders of magnitude faster than what users experience today, Riverbed
is changing the way people work, and enabling a distributed workforce
that can collaborate as if they were local. Additional information
about Riverbed (Nasdaq: RVBD) is available at www.riverbed.com.
Forward Looking Statements
This press release contains forward-looking statements, including
statements relating to Riverbed's ability to meet the needs of
distributed organizations, grow market share or grow the market as a
whole. These forward-looking statements involve risks and
uncertainties, as well as assumptions that, if they do not fully
materialize or prove incorrect, could cause our results to differ
materially from those expressed or implied by such forward-looking
statements. The risks and uncertainties that could cause our results
to differ materially from those expressed or implied by such
forward-looking statements include our ability to react to trends and
challenges in our business and the markets in which we operate; our
ability to anticipate market needs or develop new or enhanced products
to meet those needs; the adoption rate of our products; our ability to
establish and maintain successful relationships with our distribution
partners; our ability to compete in our industry; fluctuations in
demand, sales cycles and prices for our products and services;
shortages or price fluctuations in our supply chain; our ability to
protect our intellectual property rights; general political, economic
and market conditions and events; and other risks and uncertainties
described more fully in our documents filed with or furnished to the
Securities and Exchange Commission. More information about these and
other risks that may impact Riverbed's business are set forth in our
Annual Report on Form 10-K for the year ended December 31, 2006 filed
with the SEC on February 9, 2007, as well as subsequent reports filed
with the SEC. All forward-looking statements in this press release are
based on information available to us as of the date hereof, and we
assume no obligation to update these forward-looking statements.
Non-GAAP Financial Measures
In addition to disclosing financial measures prepared in
accordance with Generally Accepted Accounting Principles (GAAP), this
press release and the accompanying tables contain non-GAAP financial
measures. For a description of these non-GAAP financial measures,
including the reasons why management uses each measure, and
reconciliations of these non-GAAP financial measures to the most
directly comparable GAAP financial measures, please see the section of
the accompanying tables titled "Use of Non-GAAP Financial Information"
as well as the related tables that follow it. We anticipate disclosing
forward-looking non-GAAP financial information in our conference call
to discuss our first quarter results, including an estimate of
non-GAAP earnings for 2007 that excludes non-cash stock-based
compensation expenses related to employee stock options and purchases
of common stock under our Employee Stock Purchase Plan. We cannot
readily estimate these expenses because they depend on such factors as
our future stock price for purposes of computing such expenses.
A copy of this press release can be found on the investor
relations page of Riverbed's website at www.riverbed.com.
Riverbed Technology, Riverbed, Steelhead, RiOS, Interceptor, and
the Riverbed logo are trademarks or registered trademarks of Riverbed
Technology, Inc. All other trademarks used or mentioned herein belong
to their respective owners.
Riverbed Technology, Inc.
GAAP Condensed Consolidated Statements of Operations
In thousands, except per share amounts
Three months ended
March 31,
------------------
2007 2006
-------- --------
Revenue: (unaudited)
Product $33,637 $10,836
Support and services 6,837 1,523
Ratable product and related support and services 2,310 1,362
-------- --------
Total revenue 42,784 13,721
Cost of revenue:
Cost of product 9,661 3,590
Cost of support and services 2,290 692
Cost of ratable product and related support and
services 603 497
-------- --------
Total cost of revenue 12,554 4,779
-------- --------
Gross profit 30,230 8,942
Operating expenses:
Sales and marketing 17,092 8,028
Research and development 7,458 3,465
General and administrative 4,037 1,596
-------- --------
Total operating expenses 28,587 13,089
-------- --------
Operating income (loss) 1,643 (4,147)
Other income (expense), net 1,719 (102)
-------- --------
Loss before provision for income taxes 3,362 (4,249)
Provision for income taxes 103 37
-------- --------
Net income (loss) $ 3,259 $(4,286)
======== ========
Net income (loss) per share, basic $ 0.05 $ (0.36)
Net income (loss) per share, diluted $ 0.05 $ (0.36)
Shares used in computing basic net income (loss)
per share 65,037 12,010
Shares used in computing diluted net income (loss)
per share 70,350 12,010
Stock-based compensation expense included in above:
Cost of product $ 8 $ -
Cost of support and services 372 36
Sales and marketing 2,742 465
Research and development 1,456 219
General and administrative 798 175
-------- --------
Total stock-based compensation expense $ 5,376 $ 895
======== ========
Riverbed Technology, Inc.
GAAP to Non-GAAP Reconciliation
In thousands, except per share amounts
Unaudited
-------------------------------
Three months ended
March 31, 2007
-------------------------------
GAAP Adjustments Non-GAAP
-------- ------------- --------
Reconciliation of gross profit:
Total revenue $42,784 $ - $42,784
Total cost of revenue 12,554 (380)a 12,174
-------- ----------- --------
Gross profit $30,230 $ 380 $30,610
======== =========== ========
Reconciliation of operating expenses:
Sales and marketing $17,092 $ (2,742)a $14,350
Research and development 7,458 (1,456)a 6,002
General and administrative 4,037 (798)a 3,239
-------- ----------- --------
Total operating expenses $28,587 $ (4,996) $23,591
======== =========== ========
Reconciliation of operating income,
net income and net income per share:
Operating income $ 1,643 $ 5,376 $ 7,019
Net income $ 3,259 $ 5,376 $ 8,635
Net income per share, basic $ 0.05 $ 0.13
Net income per share, diluted $ 0.05 $ 0.12
Shares used in computing basic net
income per share 65,037 65,037
Shares used in computing diluted
net income per share 70,350 70,350
Use of Non-GAAP Financial Information:
To supplement our condensed consolidated financial statements
presented on a GAAP basis, Riverbed uses non-GAAP measures of
operating results, net income and net income per share, which are
adjusted to exclude stock-based compensation expense. We believe
these adjustments are appropriate to enhance an overall
understanding of our past financial performance and also our
prospects for the future. These adjustments to our current period
GAAP results are made with the intent of providing both
management and investors a more complete understanding of
Riverbed's underlying operating results and trends and our
marketplace performance. The non-GAAP results are an indication
of our baseline performance that are considered by management for
purpose of making operational decisions. In addition, these
adjusted non-GAAP results are the primary indicators management
uses as a basis for our planning and forecasting of future
periods. The presentation of this additional information is not
meant to be considered in isolation or as a substitute for net
income or basic and diluted net income per share prepared in
accordance with generally accepted accounting principles in the
United States. Non-GAAP financial measures are not based on a
comprehensive set of accounting rules or principles and are
subject to limitations.
(a) Excluded amount represents stock-based compensation expense.
Stock-based compensation is a non-cash expense accounted for in
accordance with the intrinsic value method under Accounting
Principles Board No. 25 through December 31, 2005, and with the
fair value recognition provisions of Statement of Financial
Accounting Standards No. 123R effective January 1, 2006. While a
large component of our expense, we believe investors want to
exclude the effects of stock-based compensation expense in order
to compare our financial performance with that of other companies
and between time periods.
Riverbed Technology, Inc.
GAAP to Non-GAAP Reconciliation
In thousands, except per share amounts
Unaudited
------------------------------
Three months ended
March 31, 2006
------------------------------
GAAP Adjustments Non-GAAP
-------- ----------- --------
Reconciliation of gross profit:
Total revenue $13,721 $ - $13,721
Total cost of revenue 4,779 (36)a 4,743
-------- ----------- --------
Gross profit $ 8,942 $ 36 $ 8,978
======== =========== ========
Reconciliation of operating expenses:
Sales and marketing $ 8,028 $ (465)a $ 7,563
Research and development 3,465 (219)a 3,246
General and administrative 1,596 (175)a 1,421
-------- ----------- --------
Total operating expenses $13,089 $ (859) $12,230
======== =========== ========
Reconciliation of operating loss and
net loss:
Operating loss $(4,147) $ 895 $(3,252)
Net loss $(4,286) $ 895 $(3,391)
(a) Excluded amount represents stock-based compensation expense.
Stock-based compensation is a non-cash expense accounted for in
accordance with the intrinsic value method under Accounting
Principles Board No. 25 through December 31, 2005 and with the
fair value recognition provisions of Statement of Financial
Accounting Standards No. 123R effective January 1, 2006. While a
large component of our expense, we believe investors want to
exclude the effects of stock-based compensation expense in order
to compare our financial performance with that of other companies
and between time periods.
Riverbed Technology, Inc.
Condensed Consolidated Balance Sheets
In thousands
March 31, December 31,
2007 2006
----------- ------------
ASSETS
Current assets:
Cash and cash equivalents $ 193,035 $ 105,330
Marketable securities 7,944 3,999
Trade receivables, net 21,830 18,148
Other receivables 1,481 118
Inventory 7,400 7,452
Prepaid expenses and other current assets 5,290 5,438
----------- ------------
Total current assets 236,980 140,485
----------- ------------
Fixed assets, net 10,453 7,718
Other assets 4,439 2,566
----------- ------------
Total assets $ 251,872 $ 150,769
=========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 9,701 $ 11,113
Accrued compensation and related benefits 8,837 8,285
Other accrued liabilities 5,450 2,931
Deferred revenue 18,541 16,837
----------- ------------
Total current liabilities 42,529 39,166
----------- ------------
Deferred revenue non-current 3,528 2,245
Other long-term liabilities 365 378
----------- ------------
Total long-term liabilities 3,893 2,623
----------- ------------
Stockholders' equity:
Common stock and additional paid-in-capital 254,659 162,033
Deferred stock-based compensation (5,120) (5,704)
Accumulated deficit (44,076) (47,333)
Accumulated other comprehensive loss (13) (16)
----------- ------------
Total stockholders' equity 205,450 108,980
----------- ------------
----------- ------------
Total liabilities and stockholders' equity $ 251,872 $ 150,769
=========== ============
Riverbed Technology, Inc.
Condensed Consolidated Statements of Cash Flows
In thousands
Three months ended
March 31,
------------------
2007 2006
--------- --------
Operating activities:
Net income (loss) $ 3,259 $(4,286)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities
Depreciation and amortization 979 332
Stock-based compensation 5,376 895
Revaluation and amortization of warrants - 177
Provision of trade receivable allowances 88 57
Changes in operating assets and liabilities
(Increase) in trade receivables (3,770) (1,263)
(Increase) in inventory (784) (1,655)
(Increase) in prepaid expenses and other assets (362) (882)
Increase (decrease) in accounts payable and other
current liabilities (804) 251
Increase in income taxes payable 50 32
Increase in deferred revenue 2,987 1,507
--------- --------
Net cash provided by (used in) operating
activities 7,019 (4,835)
Investing activities:
Capital expenditures (1,518) (630)
Purchase of available for sale securities, net of
maturities (3,945) -
Increase in other assets (1,600) -
--------- --------
Net cash used in investing activities (7,063) (630)
Financing activities:
Proceeds from issuance of convertible preferred
stock, net of issuance costs - 19,915
Proceeds from issuance of common stock, net of
repurchases 81 91
Proceeds from follow on offering of common stock 87,664 -
Payments of debt - (313)
--------- --------
Net cash provided by financing activities 87,745 19,693
Effect of exchange rate changes on cash and cash
equivalents 4 2
--------- --------
Net increase in cash and cash equivalents 87,705 14,230
Cash and cash equivalents at beginning of period 105,330 10,410
--------- --------
Cash and cash equivalents at end of period $193,035 $24,640
========= ========
CONTACT: Riverbed Technology, Inc.
Randy Gottfried, 415-247-6397
Chief Financial Officer
or
The Blueshirt Group
Chris Danne, 415-217-7722
chris@blueshirtgroup.com
SOURCE: Riverbed Technology, Inc.
