Attached files
file | filename |
---|---|
8-K - FORM 8-K - Riverbed Technology, Inc. | d8k.htm |
EXHIBIT 99.1
Riverbed Technology Reports Record Fourth Quarter and Fiscal Year 2010 Revenue
| Q410 revenue increases 12% over prior quarter and 47% over prior year to $165 million |
| FY10 revenue increases 40% over prior year to $552 million |
| Cash and investments exceed $501 million at December 31, 2010 |
January 27, 2011 Riverbed Technology (NASDAQ: RVBD), the IT performance company, today reported financial results for its fourth quarter (Q410) and fiscal year ended December 31, 2010 (FY10).
Total revenue for Q410 was $165.4 million, an increase of 12% from $147.8 million reported in the third quarter of fiscal year 2010 (Q310) and an increase of 47% from $112.9 million reported in the fourth quarter of fiscal year 2009 (Q409). For fiscal year 2010 (FY10), revenue was $551.9 million, up 40% from $394.1 million in fiscal year 2009 (FY09).
GAAP net income for Q410 was $12.6 million, or $0.08 per share. This compares to GAAP net income of $13.9 million, or $0.09 per diluted share, in Q310 and $0.9 million, or $0.01 per share, in Q409. GAAP net income for FY10 was $34.2 million, or $0.22 per diluted share, compared to GAAP net income of $7.1 million, or $0.05 per share, in FY09. Non-GAAP net income for Q410 was $31.7 million, or $0.19 per diluted share. This compares to non-GAAP net income for Q310 of $26.6 million, or $0.17 per diluted share, and non-GAAP net income for Q409 of $16.1 million, or $0.11 per diluted share. Non-GAAP net income for FY10 was $92.4 million, or $0.59 per diluted share, which compares to non-GAAP net income of $50.1 million, or $0.34 per diluted share in FY09.
2010 was a year of incredible achievement for Riverbed®. We gained market share every reported quarter in what remains a rapidly growing and still under-penetrated market, said Jerry M. Kennelly, Riverbed president and CEO. For the full year, revenue increased 40% while our non-GAAP operating profit and net income both grew more than 90% compared to the prior year. We added more than 500 new customers in the fourth quarter, and we now count many of the largest companies in the world as Riverbed customers. We enter 2011 with significant momentum and expect it to be another year of strong revenue growth and expanding non-GAAP operating margins.
Q410 and FY10 Financial Highlights
| Q410 non-GAAP gross margin was 78.5% , FY10 non-GAAP gross margin was 77.8% |
| Q410 non-GAAP operating margin was 27.7%, FY10 non-GAAP operating margin was 25.6% |
| Q410 non-GAAP net income increased 19% sequentially and 97% year-over-year |
| Q410 deferred revenue increased 7% sequentially and 34% year-over-year |
| Q410 cash flow from operations of $32 million, and FY10 cash flow from operations of $145 million |
| Cash and investments totaled $501 million and no debt as of December 31, 2010 |
FY10 Business Highlights
| Identified as the WAN optimization controller (WOC) Advanced Platform worldwide market share leader for Q110*, Q210** and Q310*** based on revenue by Gartner |
| Positioned by Gartner in the leaders quadrant in the Magic Quadrant for WAN Optimization Controllers 2010 |
| Launched four new products including the Steelhead® 7050 appliance, Virtual Steelhead, Cloud Steelhead and Whitewater appliance |
| Launched multiple new software releases including Riverbed Optimization System (RiOS®) 6.1, Steelhead Mobile 3.1 and Cascade® 8.4 |
| Added ten qualified solutions to the Riverbed Services Platform |
| Successfully completed acquisitions of CACE Technologies, Inc. and Global Protocols LLC |
| Awarded the 2009 EMC(R) Partner Solution Award: Offering of the Year Symmetrix®. |
| Became the first WAN optimization vendor to achieve Microsoft SVVP validation for Windows Server 2008 R2 |
| Verizon added Riverbed WAN optimization and new consulting services to Verizon Managed WAN Optimization Services, available in 142 countries |
| Highlighted in Everything Channels 16th annual 2010 Partner Program Guide as one of North Americas top IT vendors for its Riverbed Partner Network (RPN) program |
| Achieved EAL4+ certification under the Common Criteria for Information Technology Security Evaluation and Certification Scheme (CCS). By obtaining this certification, Riverbed assures federal agencies and departments that its WAN optimization solution meets stringent government requirements mandated for commercial information security products purchased by the U.S. government for use in national security systems. |
| Recognized by the San Francisco Business Times as one of the 2010 Best Places to Work in the San Francisco Bay Area |
Conference Call
Riverbed will host a conference call today, January 27, 2011, at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) to discuss its fourth quarter and fiscal year 2010 results and outlook for the first quarter of 2011.
The call will be broadcast live over the Internet at www.riverbed.com/investors. A replay of the conference call will also be available via webcast at www.riverbed.com/investors for 12 months.
Use of Non-GAAP Financial Information
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 revenue, non-GAAP net income, non-GAAP gross margin and non-GAAP operating margin, that we believe are helpful in understanding our past financial performance and future results. 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, GAAP to Non-GAAP Reconciliations. Our non-GAAP financial measures are not meant to 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. Our non-GAAP financial measures include adjustments based on the following items, as well as the related income tax effects and adjustments related to our tax valuation allowance:
Support deferred revenue: Business combination accounting rules require us to account for the fair value of support contracts assumed in connection with our acquisitions. Because these are typically one-year contracts, our GAAP revenues for the one year period subsequent to the acquisition of a business do not reflect the full amount of service revenues on assumed support contracts that would have otherwise been recorded by the acquired entity. The non-GAAP adjustment is intended to reflect the full amount of such revenues. We believe this adjustment is useful to investors as a measure of the ongoing performance of our business because we have historically experienced high renewal rates on support contracts, although we cannot be certain that customers will renew these contracts.
Inventory and cost of product revenue: Business combination accounting rules require us to account for the fair value of inventory acquired in connection with our acquisitions. The fair value of inventory is estimated as the selling price minus the estimated cost to sell. In the period subsequent to the acquisition, the cost of product revenue includes the higher fair value of the acquired inventory.
Stock-based compensation expenses: We have excluded the effect of stock-based compensation and related payroll tax expenses from our non-GAAP operating expenses and net income measures. 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 net income. 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 and other expenses: We incur significant expenses in connection with our acquisitions and also incurred certain other operating expenses, which we would not have otherwise incurred in the periods presented as a part of our continuing operations. Acquisition related and other expenses consist of transaction costs, costs for transitional employees, other acquired employee related costs, integration related professional services, and adjustments to the fair value of the acquisition related contingent consideration. We believe it is useful for investors to understand the effects of these items on our total operating expenses.
Forward Looking Statements
This press release contains forward-looking statements, including statements relating to Riverbeds 2011 financial performance expectations. 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 Riverbeds business are set forth in our Form 10-Q filed with the SEC on October 28, 2010. 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. Any future product, feature or related specification that may be referenced in this release are for information purposes only and are not commitments to deliver any technology or enhancement. Riverbed reserves the right to modify future product plans at any time.
About Riverbed
Riverbed Technology is the IT performance company. The Riverbed family of wide area network (WAN) optimization solutions liberates businesses from common IT constraints by increasing application performance, enabling consolidation, and providing enterprise-wide network and application visibility all while eliminating the need to increase bandwidth, storage or servers. Thousands of companies with distributed operations use Riverbed to make their IT infrastructure faster, less expensive and more responsive. Additional information about Riverbed (NASDAQ: RVBD) is available at www.riverbed.com.
Riverbed and any Riverbed product or service name or logo used herein are trademarks of Riverbed Technology, Inc. All other trademarks used herein belong to their respective owners.
*Gartner, Inc., Market Share: Application Acceleration Equipment, Worldwide, 1Q10 by Joe Skorupa and Nhat Pham, June 2010
**Gartner, Inc., Market Share: Application Acceleration Equipment, Worldwide, 2Q10 by Joe Skorupa and Nhat Pham, September 2010
***Gartner, Inc., Market Share: Application Acceleration Equipment, Worldwide, 3Q10 by Joe Skorupa and Nhat Pham, December 2010
About the Magic Quadrant
The Gartner Magic Quadrant is copyrighted 2010 by Gartner, Inc., and is reused with permission. The Magic Quadrant is a graphical representation of a marketplace at and for a specific time period. It depicts
Gartners analysis of how certain vendors measure against criteria for that marketplace, as defined by Gartner. Gartner does not endorse any vendor, product or service depicted in the Magic Quadrant and does not advise technology users to select only those vendors placed in the Leaders quadrant. The Magic Quadrant is intended solely as a research tool and is not meant to be a specific guide to action. Gartner disclaims all warranties, express or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.
MEDIA CONTACT
Kristalle Ward
Riverbed Technology
415-247-8140
kristalle.ward@riverbed.com
INVESTOR RELATIONS CONTACT
Renee Lyall
Riverbed Technology
415-247-6353
renee.lyall@riverbed.com
Riverbed Technology, Inc.
GAAP Condensed Consolidated Statements of Operations
In thousands, except per share amounts
Unaudited
Three months ended December 31, |
Twelve months ended December 31, |
|||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Revenue: |
||||||||||||||||
Product |
$ | 118,194 | $ | 77,563 | $ | 380,277 | $ | 267,885 | ||||||||
Support and services |
47,239 | 35,336 | 171,612 | 126,261 | ||||||||||||
Total revenue |
165,433 | 112,899 | 551,889 | 394,146 | ||||||||||||
Cost of revenue: |
||||||||||||||||
Cost of product |
24,865 | 17,276 | 81,998 | 61,052 | ||||||||||||
Cost of support and services |
14,274 | 10,531 | 50,750 | 37,916 | ||||||||||||
Total cost of revenue |
39,139 | 27,807 | 132,748 | 98,968 | ||||||||||||
Gross profit |
126,294 | 85,092 | 419,141 | 295,178 | ||||||||||||
Operating expenses: |
||||||||||||||||
Sales and marketing |
66,477 | 50,484 | 225,052 | 177,487 | ||||||||||||
Research and development |
25,617 | 18,796 | 87,117 | 69,164 | ||||||||||||
General and administrative |
12,989 | 10,698 | 47,382 | 38,080 | ||||||||||||
Acquisition-related costs |
618 | 4,551 | 3,343 | 104 | ||||||||||||
Total operating expenses |
105,701 | 84,529 | 362,894 | 284,835 | ||||||||||||
Operating income |
20,593 | 563 | 56,247 | 10,343 | ||||||||||||
Other income, net |
41 | 218 | 724 | 1,042 | ||||||||||||
Income before provision for income taxes |
20,634 | 781 | 56,971 | 11,385 | ||||||||||||
Provision (benefit) for income taxes |
8,023 | (151 | ) | 22,813 | 4,300 | |||||||||||
Net income |
$ | 12,611 | $ | 932 | $ | 34,158 | $ | 7,085 | ||||||||
Net income per share, basic |
$ | 0.08 | $ | 0.01 | $ | 0.24 | $ | 0.05 | ||||||||
Net income per share, diluted |
$ | 0.08 | $ | 0.01 | $ | 0.22 | $ | 0.05 | ||||||||
Shares used in computing basic net income per share |
149,058 | 139,390 | 145,012 | 138,400 | ||||||||||||
Shares used in computing diluted net income per share |
163,359 | 146,076 | 155,999 | 143,080 |
Riverbed Technology, Inc.
Condensed Consolidated Balance Sheets
In thousands
Unaudited
As of December 31, | ||||||||
2010 | 2009 | |||||||
ASSETS | ||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 165,726 | $ | 67,749 | ||||
Short-term investments |
259,245 | 257,938 | ||||||
Trade receivables, net |
50,726 | 48,468 | ||||||
Inventory |
15,180 | 9,742 | ||||||
Deferred tax assets |
20,832 | 9,451 | ||||||
Prepaid expenses and other current assets |
30,958 | 16,816 | ||||||
Total current assets |
542,667 | 410,164 | ||||||
Long-term investments |
76,169 | | ||||||
Fixed assets, net |
21,522 | 21,698 | ||||||
Goodwill |
25,653 | 11,312 | ||||||
Intangible assets, net |
30,789 | 19,389 | ||||||
Deferred tax assets, non-current |
35,775 | 38,619 | ||||||
Other assets |
3,506 | 4,097 | ||||||
Total assets |
$ | 736,081 | $ | 505,279 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY | ||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 27,015 | $ | 19,053 | ||||
Accrued compensation and related benefits |
32,915 | 18,692 | ||||||
Other accrued liabilities |
18,813 | 25,976 | ||||||
Deferred revenue |
89,026 | 64,478 | ||||||
Total current liabilities |
167,769 | 128,199 | ||||||
Deferred revenue, non-current |
26,511 | 21,972 | ||||||
Other long-term liabilities |
4,381 | 2,801 | ||||||
Total long-term liabilities |
30,892 | 24,773 | ||||||
Stockholders equity: |
||||||||
Common stock |
518,052 | 367,236 | ||||||
Retained earnings (Accumulated deficit) |
19,309 | (14,849 | ) | |||||
Accumulated other comprehensive gain (loss) |
59 | (80 | ) | |||||
Total stockholders equity |
537,420 | 352,307 | ||||||
Total liabilities and stockholders equity |
$ | 736,081 | $ | 505,279 | ||||
Riverbed Technology, Inc.
Condensed Consolidated Statements of Cash Flows
In thousands
Unaudited
Year
ended December 31, |
||||||||
2010 | 2009 | |||||||
Operating activities: |
||||||||
Net income |
$ | 34,158 | $ | 7,085 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Depreciation and amortization |
15,855 | 14,340 | ||||||
Stock-based compensation |
70,801 | 56,218 | ||||||
Deferred taxes |
(11,851 | ) | (13,517 | ) | ||||
Excess tax benefit from employee stock plans |
(27,538 | ) | (2,792 | ) | ||||
Changes in operating assets and liabilities: |
||||||||
Trade receivables |
(1,026 | ) | 940 | |||||
Inventory |
(4,414 | ) | 1,341 | |||||
Prepaid expenses and other assets |
(13,515 | ) | (2,756 | ) | ||||
Accounts payable |
8,392 | (665 | ) | |||||
Accruals and other liabilities |
23,379 | 6,640 | ||||||
Acquisition-related contingent consideration |
(5,249 | ) | 1,093 | |||||
Income taxes payable |
27,436 | 1,772 | ||||||
Deferred revenue |
29,087 | 26,788 | ||||||
Net cash provided by operating activities |
145,515 | 96,487 | ||||||
Investing activities: |
||||||||
Capital expenditures |
(10,690 | ) | (8,978 | ) | ||||
Purchase of available for sale securities |
(526,051 | ) | (375,056 | ) | ||||
Proceeds from maturities of available for sale securities |
404,767 | 272,818 | ||||||
Proceeds from sales of available for sale securities |
43,862 | 16,250 | ||||||
Acquisitions, net of cash acquired |
(26,885 | ) | (20,469 | ) | ||||
Net cash used in investing activities |
(114,997 | ) | (115,435 | ) | ||||
Financing activities: |
||||||||
Acquisition-related contingent consideration |
(9,909 | ) | | |||||
Proceeds from issuance of common stock under employee stock plans, net of repurchases |
64,295 | 25,288 | ||||||
Cash used to net share settle equity awards |
(12,331 | ) | (3,044 | ) | ||||
Payments for repurchases of common stock |
| (29,016 | ) | |||||
Payment of debt assumed in acquisition |
(2,244 | ) | (5,004 | ) | ||||
Excess tax benefit from employee stock plans |
27,538 | 2,792 | ||||||
Net cash used in financing activities |
67,349 | (8,984 | ) | |||||
Effect of exchange rate changes on cash and cash equivalents |
110 | 303 | ||||||
Net decrease in cash and cash equivalents |
97,977 | (27,629 | ) | |||||
Cash and cash equivalents at beginning of period |
67,749 | 95,378 | ||||||
Cash and cash equivalents at end of period |
$ | 165,726 | $ | 67,749 | ||||
Riverbed Technology, Inc.
Supplemental Financial Information
In thousands
Unaudited
Three months ended | Twelve months ended | |||||||||||||||||||
December 31, | September 30, | December 31, | December 31, | |||||||||||||||||
2010 | 2010 | 2009 | 2010 | 2009 | ||||||||||||||||
Revenue by Geography |
||||||||||||||||||||
United States |
$ | 91,661 | $ | 80,839 | $ | 64,998 | $ | 294,631 | $ | 221,206 | ||||||||||
Europe, Middle East and Africa |
42,987 | 38,405 | 29,971 | 149,647 | 104,990 | |||||||||||||||
Rest of the world |
30,785 | 28,562 | 17,930 | 107,611 | 67,950 | |||||||||||||||
Total revenue |
$ | 165,433 | $ | 147,806 | $ | 112,899 | $ | 551,889 | $ | 394,146 | ||||||||||
As a percentage of total revenues: |
||||||||||||||||||||
United States |
55% | 55% | 58% | 53% | 56% | |||||||||||||||
Europe, Middle East and Africa |
26% | 26% | 27% | 27% | 27% | |||||||||||||||
Rest of the world |
19% | 19% | 15% | 20% | 17% | |||||||||||||||
Total revenue |
100% | 100% | 100% | 100% | 100% | |||||||||||||||
Revenue by Sales Channel |
||||||||||||||||||||
Direct |
$ | 7,526 | $ | 7,721 | $ | 7,278 | $ | 31,525 | $ | 29,915 | ||||||||||
Indirect |
157,907 | 140,085 | 105,621 | 520,364 | 364,231 | |||||||||||||||
Total revenue |
$ | 165,433 | $ | 147,806 | $ | 112,899 | $ | 551,889 | $ | 394,146 | ||||||||||
As a percentage of total revenues: |
||||||||||||||||||||
Direct |
5% | 5% | 6% | 6% | 8% | |||||||||||||||
Indirect |
95% | 95% | 94% | 94% | 92% | |||||||||||||||
Total revenue |
100% | 100% | 100% | 100% | 100% | |||||||||||||||
Riverbed Technology, Inc.
GAAP to Non-GAAP Reconciliation
In thousands, except per share amounts
Unaudited
Three months ended | Twelve months ended | |||||||||||||||||||
GAAP to Non-GAAP Reconciliations: | December 31, | September 30, | December 31, | December 31, | ||||||||||||||||
2010 | 2010 | 2009 | 2010 | 2009 | ||||||||||||||||
Reconciliation of Total Revenue: |
||||||||||||||||||||
U.S. GAAP as reported |
$ | 165,433 | $ | 147,806 | $ | 112,899 | $ | 551,889 | $ | 394,146 | ||||||||||
Adjustments: |
||||||||||||||||||||
Deferred revenue adjustment (5) |
| | 313 | | 1,792 | |||||||||||||||
As Adjusted |
$ | 165,433 | $ | 147,806 | $ | 113,212 | $ | 551,889 | $ | 395,938 | ||||||||||
Reconciliation of Gross Profit: |
||||||||||||||||||||
U.S. GAAP as reported |
$ | 126,294 | $ | 113,039 | $ | 85,092 | $ | 419,141 | $ | 295,178 | ||||||||||
Adjustments: |
||||||||||||||||||||
Stock-based compensation (1) |
1,732 | 1,487 | 1,373 | 6,093 | 4,967 | |||||||||||||||
Payroll tax on stock-based compensation (2) |
162 | 54 | 7 | 290 | 26 | |||||||||||||||
Amortization on intangibles (3) |
1,287 | 740 | 740 | 3,507 | 2,546 | |||||||||||||||
Deferred revenue adjustment (5) |
| | 313 | | 1,792 | |||||||||||||||
Inventory fair value adjustment (8) |
376 | | | 376 | | |||||||||||||||
As Adjusted |
$ | 129,851 | $ | 115,320 | $ | 87,525 | $ | 429,407 | $ | 304,509 | ||||||||||
Reconciliation of Gross Margin: |
||||||||||||||||||||
U.S. GAAP as reported |
76.3% | 76.5% | 75.4% | 75.9% | 74.9% | |||||||||||||||
Adjustments: |
||||||||||||||||||||
Stock-based compensation (1) |
1.1% | 1.0% | 1.2% | 1.1% | 1.3% | |||||||||||||||
Payroll tax on stock-based compensation (2) |
0.1% | 0.0% | 0.0% | 0.1% | 0.0% | |||||||||||||||
Amortization on intangibles (3) |
0.8% | 0.5% | 0.7% | 0.6% | 0.6% | |||||||||||||||
Deferred revenue adjustment (5) |
0.0% | 0.0% | 0.0% | 0.0% | 0.1% | |||||||||||||||
Inventory fair value adjustment (8) |
0.2% | 0.0% | 0.0% | 0.1% | 0.0% | |||||||||||||||
As Adjusted |
78.5% | 78.0% | 77.3% | 77.8% | 76.9% | |||||||||||||||
Reconciliation of Operating Income: |
||||||||||||||||||||
U.S. GAAP as reported |
$ | 20,593 | $ | 22,493 | $ | 563 | $ | 56,247 | $ | 10,343 | ||||||||||
Adjustments: |
||||||||||||||||||||
Stock-based compensation (1) |
20,305 | 17,331 | 15,787 | 70,801 | 56,218 | |||||||||||||||
Payroll tax on stock-based compensation (2) |
1,634 | 516 | 172 | 3,147 | 490 | |||||||||||||||
Amortization on intangibles (3) |
1,815 | 1,195 | 1,195 | 5,400 | 4,111 | |||||||||||||||
Acquisition-related costs (credits) (4) |
1,104 | | 6,040 | 5,260 | 2,464 | |||||||||||||||
Deferred revenue adjustment (5) |
| | 313 | | 1,792 | |||||||||||||||
Inventory fair value adjustment (8) |
376 | | | 376 | | |||||||||||||||
As Adjusted |
$ | 45,827 | $ | 41,535 | $ | 24,070 | $ | 141,231 | $ | 75,418 | ||||||||||
Reconciliation of Operating Margin: |
||||||||||||||||||||
U.S. GAAP as reported |
12.4% | 15.2% | 0.5% | 10.2% | 2.6% | |||||||||||||||
Adjustments: |
||||||||||||||||||||
Stock-based compensation (1) |
12.3% | 11.8% | 13.9% | 12.7% | 14.2% | |||||||||||||||
Payroll tax on stock-based compensation (2) |
1.0% | 0.3% | 0.2% | 0.6% | 0.1% | |||||||||||||||
Amortization on intangibles (3) |
1.1% | 0.8% | 1.1% | 1.0% | 1.0% | |||||||||||||||
Acquisition-related costs (credits) (4) |
0.7% | 0.0% | 5.3% | 1.0% | 0.6% | |||||||||||||||
Deferred revenue adjustment (5) |
0.0% | 0.0% | 0.3% | 0.0% | 0.5% | |||||||||||||||
Inventory fair value adjustment (8) |
0.2% | 0.0% | 0.0% | 0.1% | 0.0% | |||||||||||||||
As Adjusted |
27.7% | 28.1% | 21.3% | 25.6% | 19.0% | |||||||||||||||
Three months ended | Twelve months ended | |||||||||||||||||||
GAAP to Non-GAAP Reconciliations: | December 31, | September 30, | December 31, | December 31, | ||||||||||||||||
2010 | 2010 | 2009 | 2010 | 2009 | ||||||||||||||||
Reconciliation of Net Income: |
||||||||||||||||||||
U.S. GAAP as reported |
$ | 12,611 | $ | 13,910 | $ | 932 | $ | 34,158 | $ | 7,085 | ||||||||||
Adjustments: |
||||||||||||||||||||
Stock-based compensation (1) |
20,305 | 17,331 | 15,787 | 70,801 | 56,218 | |||||||||||||||
Payroll tax on stock-based compensation (2) |
1,634 | 516 | 172 | 3,147 | 490 | |||||||||||||||
Amortization on intangibles (3) |
1,815 | 1,195 | 1,195 | 5,400 | 4,111 | |||||||||||||||
Acquisition-related costs (credits) (4) |
1,104 | | 6,040 | 5,260 | 2,464 | |||||||||||||||
Deferred revenue adjustment (5) |
| | 313 | | 1,792 | |||||||||||||||
Inventory fair value adjustment (8) |
376 | | | 376 | | |||||||||||||||
Income tax adjustments (6) |
(6,114 | ) | (6,333 | ) | (8,368 | ) | (26,758 | ) | (22,097 | ) | ||||||||||
As Adjusted |
$ | 31,731 | $ | 26,619 | $ | 16,071 | $ | 92,384 | $ | 50,063 | ||||||||||
Reconciliation of Net Income per share, diluted: |
||||||||||||||||||||
U.S. GAAP as reported |
$ | 0.08 | $ | 0.09 | $ | 0.01 | $ | 0.22 | $ | 0.05 | ||||||||||
Adjustments: |
||||||||||||||||||||
Stock-based compensation (1) |
0.12 | 0.11 | 0.10 | 0.46 | 0.38 | |||||||||||||||
Payroll tax on stock-based compensation (2) |
0.01 | | | 0.02 | | |||||||||||||||
Amortization on intangibles (3) |
0.01 | 0.01 | 0.01 | 0.03 | 0.03 | |||||||||||||||
Acquisition-related costs (credits) (4) |
0.01 | | 0.04 | 0.03 | 0.02 | |||||||||||||||
Deferred revenue adjustment (5) |
| | | | 0.01 | |||||||||||||||
Income tax adjustments (6) |
(0.04 | ) | (0.04 | ) | (0.05 | ) | (0.17 | ) | (0.15 | ) | ||||||||||
As Adjusted |
$ | 0.19 | $ | 0.17 | $ | 0.11 | $ | 0.59 | $ | 0.34 | ||||||||||
Non-GAAP Net income per share, basic |
$ | 0.21 | $ | 0.18 | $ | 0.12 | $ | 0.64 | $ | 0.36 | ||||||||||
Non-GAAP Net income per share, diluted (7) |
$ | 0.19 | $ | 0.17 | $ | 0.11 | $ | 0.59 | $ | 0.34 | ||||||||||
Shares used in computing basic net income per share (9) |
149,058 | 145,978 | 139,390 | 145,012 | 138,400 | |||||||||||||||
Shares used in computing diluted net income per share (7)(9) |
163,359 | 157,930 | 152,268 | 155,999 | 148,176 | |||||||||||||||
Non-GAAP adjustments: |
||||||||||||||||||||
Support and services revenue |
$ | | $ | | $ | 313 | $ | | $ | 1,792 | ||||||||||
Cost of product |
1,838 | 877 | 863 | 4,461 | 2,999 | |||||||||||||||
Cost of support and services |
1,719 | 1,404 | 1,257 | 5,805 | 4,540 | |||||||||||||||
Sales and marketing |
9,287 | 7,904 | 8,140 | 33,010 | 27,988 | |||||||||||||||
Research and development |
6,846 | 4,923 | 4,566 | 21,621 | 15,245 | |||||||||||||||
General and administrative |
4,926 | 3,934 | 3,817 | 16,744 | 12,407 | |||||||||||||||
Other acquisition costs (credits) |
618 | | 4,551 | 3,343 | 104 | |||||||||||||||
Provision for income taxes |
(6,114 | ) | (6,333 | ) | (8,368 | ) | (26,758 | ) | (22,097 | ) | ||||||||||
Total Non-GAAP Adjustments |
$ | 19,120 | $ | 12,709 | $ | 15,139 | $ | 58,226 | $ | 42,978 | ||||||||||
(1) | Stock-based compensation expense is calculated in accordance with the fair value recognition provisions of Financial Accounting Standards Board Accounting Standards Codification (ASC) Topic 718, Compensation - Stock Compensation effective January 1, 2006. |
(2) | Payroll tax on stock-based compensation represents the incremental cost for employer payroll taxes on stock option exercises and restricted stock units vested and released. |
(3) | The intangible assets recorded at fair value as a result of our acquisitions are amortized over the estimated useful life of the respective asset. |
(4) | We incurred expenses, such as revaluation of the contingent consideration, in connection with our acquisitions, which would not have otherwise occurred in the period presented as part of our operating expenses; therefore, these costs or credits are excluded from our non-GAAP operating expenses. |
(5) | Business combination accounting rules require us to account for the fair value of deferred revenue assumed in connection with an acquisition. The non-GAAP adjustment is intended to reflect the full amount of support and service revenue that would have otherwise been recorded by the acquired entity. |
(6) | The non-GAAP tax rate excludes the income tax effects of non-GAAP adjustments. Additionally, the non-GAAP tax rate does not assume a valuation allowance on our deferred tax assets. |
(7) | Non-GAAP diluted earnings per share and non-GAAP diluted weighted average shares outstanding were calculated excluding the effects of expensing stock options under ASC Topic 718 for the periods ended December 31, 2009. |
(8) | The inventory fair value adjustment recorded pursuant to our acquisition is excluded from our non-GAAP operating expenses as this cost would not have otherwise occurred in the period presented. |
(9) | Shares used in computing basic and diluted net income per share is reflective of the stock split for all periods presented. |