Barracuda Announces Third Quarter Fiscal 2014 Results


CAMPBELL, Calif., Jan. 9, 2014 /PRNewswire/ — Barracuda (NYSE: CUDA), a leading
provider of cloud-connected security and storage solutions, today announced
results for its third quarter, which ended November 30, 2013.

For the third quarter of fiscal 2014, gross billings grew 19% to $77.5 million,
up from $65.0 million in the third quarter of fiscal 2013. Total revenue
increased 15% to $59.4 million, up from $51.4 million in the third quarter of
fiscal 2013. Appliance revenue in the third quarter of fiscal 2014 grew to $18.2
million and recurring subscription revenue grew to $41.2 million, representing
69% of total revenue.

GAAP net loss in the third quarter of fiscal 2014 was $2.1 million, or $(0.06)
per share, based on a share count of 34.3 million. Non-GAAP net income for the
third quarter of 2014 was $0.5 million, or $0.01 per share, based on a diluted
share count of 48.7 million. Non-GAAP net income excludes $2.4 million in stock
compensation expense, $1.3 million in amortization of intangibles, and $0.6
million in acquisition and other non-recurring charges. A reconciliation between
GAAP and non-GAAP information is contained in the tables below.

“Our business showed strong performance in the third quarter across both our
security and storage segments, and we continue to see positive results from our
high growth market segments,” said BJ Jenkins, president and CEO. “During the
quarter, we added over 6,800 new active subscribers, including both small
businesses and large firms, across multiple geographies and industries. We
believe that with our recent product releases and expanded distribution
channels, Barracuda is well positioned to address the growing market trends of
cloud computing, information growth and the increasing adoption of

“The results reflect solid financial performance and controls, and we
outperformed against our outlook in several key metrics including gross
billings, revenue, non-GAAP operating income and adjusted EBITDA,” said David
Faugno, CFO. “Adjusted EBITDA in the third quarter was $12.6 million, or 21% of
total revenue, non-GAAP operating income was $1.3 million, or 2% of total
revenue, and adjusted free cash flow in the third quarter was $9.7 million, or
16% of total revenue. The Company closed the quarter with total deferred revenue
of $298.8 million, up from $286.8 million in the prior quarter.”

Recent Company Highlights

— Initial Public Offering – On November 12, 2013, Barracuda recognized net
proceeds of $75.5 million in cash from an initial public offering and
closed the quarter with cash, cash equivalents and investments of $118.5
— Market Share Recognition – Ranked in the top 5 by market share for
providers in the global backup and recovery appliances hardware market
for open systems in the report, Gartner Competitive Landscape: Backup
and Recovery Appliances for Open Systems, Worldwide, November 21, 20131;
listed by IDC’s Worldwide Quarterly PBBA Tracker, CQ3 2013 as number 2
for total PBBA units sold; and once again named the content security
appliance and virtual appliance volume leader as reported by IDC in its
Worldwide Quarterly Security Appliance Tracker, Q2, September 2013.
— Expanding Cloud Presence – Announced the availability of its Web
Application Firewall, Application Delivery Controller and Next
Generation Firewall product lines through Windows Azure and its Web
Application Firewall and Next Generation Firewall product lines through
Amazon Web Services public cloud platforms.
— Industry Recognition – Named a 2013 Tech Innovator by CRN for Barracuda
Backup with Cloud LiveBoot for VMware in the virtualization category;
honored by Tech Learning magazine’s 31st Annual Awards of Excellence
for Barracuda Web Filter and Barracuda Message Archiver; and earned
five-star ratings for Barracuda Web Application Firewall in SC
Magazine’s 2013 Application and Web Security Group Test and for
Barracuda Spam Firewall in SC Magazine’s 2013 Email Security and Content
Management Group Test.
— New Product Launches – Released the Barracuda Firewall X100 and X101,
Barracuda Load Balancer ADC 540, Barracuda Message Archiver version 3.5,
and Barracuda Backup-as-a-Service.
— Expanding Channel Reach – Added Arrow Enterprise Computing Solutions as
a new distribution partner in North America.
Conference Call Information
Barracuda will host a conference call and corresponding live webcast at 2:00
p.m. PT today. To access the conference call, dial 1-877-941-2068 for the U.S.
and Canada and 480-629-9712 for international callers. The webcast will be
available live on the investor relations section of the Company’s website at, and via replay beginning approximately two
hours after the completion of the call for a period of one year. An audio replay
of the call will be available to investors beginning at approximately 5:00 p.m.
PT today through January 13, 2014 by dialing 1-800-406-7325 in the U.S. and
Canada, or 303-590-3030 for international callers, using passcode 4656628#.
Additional information can be found in the investor slide presentation located

Forward-Looking Statements
This announcement contains forward-looking statements related to future product
performance and market growth, that involve risks and uncertainties, including
statements regarding the Company’s expectations regarding financial performance,
the potential impact of the Company’s expanded product distribution channels,
market growth rates, and product introduction. Actual results could differ
materially from those projected in the forward-looking statements as a result of
certain risk factors, including, but not limited to fluctuations in demand for
the Company’s products and services; a highly competitive business environment
for network security and storage solutions; the Company’s effectiveness in
controlling expenses; the possibility that the Company might experience delays
in the development of new technology and products; customer response to its new
technology and products; risks related to pending or future litigation; and a
dependency on third parties for certain components of the Company’s products.
The Company undertakes no obligation to update the forward-looking information
in this release. More information about potential factors that could affect the
Company’s business and financial results is included in its filings with the
Securities and Exchange Commission, including, without limitation, under the
captions: “Management’s Discussion and Analysis of Financial Condition and
Results of Operations,” and “Risk Factors,” which are on file with the
Securities and Exchange Commission.”

Non-GAAP Financial Measures

Barracuda provides all financial information required in accordance with
generally accepted accounting principles (GAAP). To supplement our consolidated
financial statements presented in accordance with GAAP, we are also providing
with this press release non-GAAP net income/(loss) and non-GAAP operating
income/(loss). In preparing our non-GAAP information, we have excluded, where
applicable, the impact of share-based compensation, amortization of intangibles
and depreciation, and acquisition and other non-recurring charges. We believe
that excluding these items provides both management and investors with
additional insight into our current operations and the trends affecting the
Company. In particular, management finds it useful to exclude these items in
order to more readily correlate the Company’s operating activities with the
Company’s ability to generate cash from operations. Accordingly, management uses
these non-GAAP measures, along with the comparable GAAP information, in
evaluating our historical performance and in planning our future business
activities. Please note that our non-GAAP measures may be different than those
used by other companies. The additional non-GAAP financial information we
present should be considered in conjunction with, and not as a substitute for,
our financial information presented in accordance with GAAP. We have provided a
non-GAAP reconciliation of the Condensed Consolidated Statement of Operations
for the periods presented in this release, which are adjusted to exclude
one-time charges, share-based compensation, amortization of intangibles and
depreciation for these periods. These measures should only be used to evaluate
the Company’s results of operations in conjunction with the corresponding GAAP
measures for comparable financial information and understanding of the Company’s
ongoing performance as a business. Barracuda uses both GAAP and non-GAAP
measures to evaluate and manage its operations.


About Barracuda Networks, Inc. (NYSE: CUDA)

Barracuda provides cloud-connected security and storage solutions that simplify
IT. These powerful, easy-to-use and affordable solutions are trusted by more
than 150,000 organizations worldwide and are delivered in appliance, virtual
appliance, cloud and hybrid deployments. Barracuda’s customer-centric business
model focuses on delivering high-value, subscription-based IT solutions that
provide end-to-end network and data security. For additional information, please

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