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8-K - FORM 8-K - IMPERVA INCd393960d8k.htm

Exhibit 99.01

Imperva Announces Second Quarter 2012 Financial Results

 

   

Total revenue of $24.6 million during the second quarter, up 30% year-over-year

   

Services revenue growth of 41% was driven by the 229% increase in subscription revenue

   

GAAP operating loss of $1.4 million compared to $2.8 million year-over-year

   

Non-GAAP operating loss improves to $0.3 million from $2.5 million year-over-year

   

Total deferred revenue increased 49% year over year to $36.5 million

Redwood Shores, Calif. – August 9, 2012Imperva, Inc. (NYSE: IMPV), a pioneer and leader of a new category of business security solutions for critical applications and high-value data in the data center, today announced financial results for the second quarter ended June 30, 2012.

“We are very pleased with our strong execution during the quarter and ability to achieve strong results across all of our key operating metrics,” stated Shlomo Kramer, President and Chief Executive Officer of Imperva. “Our performance was driven by the combination of continued demand for our integrated solution and strong growth of subscriptions. We also had solid growth across all geographic regions and continued to make progress on leveraging the investments made in our global sales and research and development infrastructure. Imperva remains well positioned to maintain its momentum during the second half of the year due to a healthy pipeline of business and expanding product line.”

Second Quarter 2012 Financial Highlights

 

   

Revenue: Total revenue for the second quarter of 2012 was $24.6 million, an increase of 30% compared to $18.8 million in the second quarter of 2011. Within total revenue, product revenue was $14.0 million, an increase of 23% compared to the second quarter of 2011. Services revenue increased 41% year over year to $10.5 million and accounted for 43% of total revenue, up from 40% in the second quarter of 2011. Within services revenue, overall subscription revenue grew 229%, to $976,000 compared to the second quarter of 2011.

 

   

Operating Loss: Operating loss as reported in accordance with U.S. generally accepted accounting principles (GAAP) was $1.4 million for the second quarter compared to a loss of $2.8 million during the second quarter in 2011. GAAP results included stock-based compensation expense of $1.2 million for the second quarter of 2012 and $0.3 million for the second quarter of 2011. Non-GAAP operating loss for the second quarter was $0.3 million, compared to a loss of $2.5 million during the same period in 2011, excluding the above mentioned charges.

 

   

Net Loss: GAAP net loss attributable to Imperva stockholders for the second quarter was $1.5 million, or $0.07 per share based on 22.6 million weighted average diluted shares outstanding. This compares to GAAP net loss attributable to Imperva stockholders of $2.9 million, or $0.53 per share based on 5.4 million weighted average shares outstanding in the prior-year period.

Non–GAAP net loss attributable to Imperva stockholders for the second quarter of 2012 was $0.4 million, or $0.02 per share based on 22.6 million weighted average diluted shares outstanding, excluding the above mentioned charges. This compares to non-GAAP net loss attributable to Imperva stockholders of $2.6 million, or $0.16 per share based on 16.2 million weighted average diluted shares outstanding in the prior year period.


Both GAAP and non-GAAP loss per share attributable to Imperva stockholders for the second quarter ended June 30, 2012 adjust for the loss attributable to Imperva’s non controlling interest in Incapsula. A reconciliation of GAAP to non-GAAP financial measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

 

   

Balance Sheet: As of June 30, 2012, Imperva had cash, cash equivalents and investments of $100.3 million.

Second Quarter 2012 Operating Highlights

 

   

During the second quarter of 2012, Imperva booked 56 deals with a value over $100,000, up 12% compared to the second quarter of last year. During the six months ended June 30, 2012, the company booked 113 deals with a value over $100,000, an increase of 36% year over year.

 

   

Total deferred revenue of $36.5 million was up 49% compared to $24.5 million at June 30, 2011.

 

   

During the second quarter of 2012, Imperva added 127 new customers, up 37% compared to the second quarter of last year. During the six months ended June 30, 2012, the company added 216 new customers, an increase of 26% year over year. Imperva now has over 1,900 customers in more than 60 countries around the world.

 

   

Imperva released version 9.5 of its flagship SecureSphere Suite. Enhancements included:

 

   

SecureSphere Web Application Firewall - extension of Dynamic Profiling to further simplify the management of security policy for complex web applications and improve support for modern application frameworks used for mobile applications.

 

   

SecureSphere for SharePoint - enhanced protection against compromised insiders, and automates discovery of SharePoint add on applications.

 

   

SecureSphere Database Activity Monitoring - simplified management of large scale deployments and improved support for data warehousing environments, including new support for Oracle Exadata as well as extended support for Teradata and Sybase IQ.

 

   

Imperva announced it had added support for ThreatMetrix device identification and fraud malware detection to ThreatRadar Fraud Prevention Services to help secure high-risk transactions, new account origination and online authentication against fraud.


Business Outlook

The following forward-looking statements reflect expectations as of August 9, 2012. Results may be materially different and could be affected by the factors detailed in this press release and in recent Imperva SEC filings.

Third Quarter Expectations – Ending September 30, 2012

Imperva expects total revenue for the third quarter of 2012 to be in the range of $24.6 million to $25.0 million, representing growth in the range of 25% to 27% compared to the same period in 2011. The company expects in the third quarter of 2012 non-GAAP gross margins of approximately 79%. Further, Imperva expects in the third quarter of 2012 non-GAAP operating loss to be in the range of $0.5 million to $0.9 million and non-GAAP net loss attributable to Imperva stockholders to be in the range of $0.4 million to $0.8 million, or a loss of $0.02 to $0.03 per share, which excludes stock-based compensation expense.

Full Year Expectations –Ending December 31, 2012

Imperva expects total revenue for 2012 to be in the range of $99.5 million to $101.5 million, or up 27% to 30% compared to 2011. Imperva expects 2012 non-GAAP gross margins of approximately 79%. Further, the company expects 2012 non-GAAP operating loss to be in the range of $2.7 million to $3.1 million and non-GAAP net loss attributable to Imperva stockholders to be in the range of $2.3 million to $2.7 million, or a loss of $0.11 to $0.13, which excludes stock-based compensation expense. Imperva expects capital expenditures for the full year to be in the range of $2.0 million to $2.5 million. Finally, the company expects to generate positive cash flows from operations in 2012.

Quarterly Conference Call

Imperva will host a conference call today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to review the company’s financial results for the second quarter ended June 30, 2012. To access this call, dial 800.500.3170 for the U.S. and Canada or 719.325.2154 for international callers with conference ID #4381436. A live webcast of the conference call will be accessible from the investors page of Imperva’s website at www.imperva.com, and a recording will be archived and accessible at www.imperva.com. An audio replay of this conference call will also be available through August 23, 2012, by dialing 877.870.5176 for the U.S. and Canada, or 858.384.5517 for international callers and entering passcode 4381436.

Non-GAAP Financial Measures

Imperva reports all financial information required in accordance with U.S. generally accepted accounting principles (GAAP). To supplement the Imperva unaudited condensed consolidated financial statements presented in accordance with GAAP, Imperva uses certain non-GAAP measures of financial performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the results of Imperva operations as determined in accordance with GAAP. The non-GAAP financial measures used by Imperva include historical non-GAAP net loss and non-GAAP basic and diluted loss per share. These non-GAAP financial measures exclude stock-based compensation from the Imperva


unaudited condensed consolidated statement of operations and give pro forma effect to the conversion of convertible preferred stock and issuance of common stock in connection with Imperva’s initial public offering as if both had happened at the beginning of each period presented.

For a description of these items, including the reasons why management adjusts for them, 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 precede it. Imperva may consider whether other significant non-recurring items that arise in the future should also be excluded in calculating the non-GAAP financial measures it uses.

Imperva believes that these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding the performance of Imperva by excluding certain items that may not be indicative of the company’s core business, operating results or future outlook. Imperva management uses, and believes that investors benefit from referring to, these non-GAAP financial measures in assessing operating results of Imperva, as well as when planning, forecasting and analyzing future periods. These non-GAAP financial measures also facilitate comparisons of the performance of Imperva to prior periods.

Forward Looking Statements

This press release contains forward-looking statements, including without limitation those regarding Imperva’s “Business Outlook” (“Third Quarter Expectations – Ending September 30, 2012” and “Full Year Expectations – Ending December 31, 2012”); Imperva’s belief that it is well positioned to maintain its momentum during the second half of the year, its belief that it has a healthy pipeline of business, and its expectations regarding the impact of its expanding product line on revenue growth. These forward-looking statements are subject to material risks and uncertainties that may cause actual results to differ substantially from expectations. Investors should consider important risk factors, which include: the risk that demand for our business security solutions may not increase and may decrease; the risk that we may not timely introduce new products or versions of our products and that they may not be accepted by the market; the risk that competitors may be perceived by customers to be better positioned to help handle business security threats and protect their businesses from major risk; the risk that the growth of Imperva may be lower than anticipated; and other risks detailed under the caption “Risk Factors” in the company’s Form 10-Q filed with the Securities and Exchange Commission, or the SEC, on May 11, 2012 and the company’s other SEC filings. You can obtain copies of the company’s SEC filings on the SEC’s website at www.sec.gov.

The foregoing information represents the company’s outlook only as of the date of this press release, and Imperva undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, new developments or otherwise.

About Imperva

Imperva is a pioneer and leader of a new category of business security solutions for critical applications and high-value data in the data center. Imperva’s award-winning solutions protect against data theft, insider abuse, and fraud while streamlining regulatory compliance by


monitoring and controlling data usage and business transactions across the data center, from storage in a database or on a file server to consumption through applications. With over 1,900 end-user customers in more than 60 countries and thousands of organizations protected through cloud-based deployments, securing your business with Imperva puts you in the company of the world’s leading organizations. For more information, visit www.imperva.com, follow us on Twitter or visit our blog.

© 2012 Imperva, Inc. All rights reserved. Imperva, the Imperva logo and SecureSphere are trademarks of Imperva, Inc.

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IMPERVA, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(On a GAAP basis)

(In thousands, except per share amounts)

(Unaudited)

 

     For the Three Months Ended     For the Six Months Ended  
     June  30,
2012
    June 30,
2011
    June 30,
2012
    June  30,
2011
 

Net revenue:

        

Products and license

   $ 14,044      $ 11,379      $ 26,096      $ 21,357   

Services

     10,510        7,447        19,976        13,892   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total net revenue

     24,554        18,826        46,072        35,249   

Cost of revenue(1):

        

Products and license

     2,274        1,705        4,128        3,076   

Services

     3,139        2,206        5,872        4,169   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of revenue

     5,413        3,911        10,000        7,245   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     19,141        14,915        36,072        28,004   

Operating expenses(1):

        

Research and development

     4,925        4,316        9,918        8,243   

Sales and marketing

     11,926        10,559        23,522        20,559   

General and administrative

     3,739        2,829        7,232        5,123   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     20,590        17,704        40,672        33,925   
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from operations

     (1,449     (2,789     (4,600     (5,921

Other income (expense), net

     11        (86     (59     (175
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss before provision for income taxes

     (1,438     (2,875     (4,659     (6,096

Provision for income taxes

     227        150        380        266   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

     (1,665     (3,025     (5,039     (6,362

Add: Loss attributable to noncontrolling interest

     132        149        235        280   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss attributable to Imperva, Inc. stockholders

   $ (1,533   $ (2,876   $ (4,804   $ (6,082
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per share of common stock attributable to Imperva, Inc. stockholders, basic and diluted

   $ (0.07   $ (0.53   $ (0.21   $ (1.16
  

 

 

   

 

 

   

 

 

   

 

 

 

Shares used in computing net loss per share of common stock, basic and diluted

     22,583        5,392        22,443        5,223   
  

 

 

   

 

 

   

 

 

   

 

 

 

(1) Stock-based compensation expense as included in above:

        

Cost of revenue

   $ 104      $ 26      $ 159      $ 44   

Research and development

     260        30        387        48   

Sales and marketing

     439        85        700        143   

General and administrative

     363        152        588        341   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total stock-based compensation expense

   $ 1,166      $ 293      $ 1,834      $ 576   
  

 

 

   

 

 

   

 

 

   

 

 

 


IMPERVA, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

     As of
June 30,
2012
    As of
December 31,
2011
 

Assets

    

Current assets:

    

Cash and cash equivalents

   $ 59,855      $ 96,025   

Short-term investments

     40,407        1,587   

Restricted cash, current

     588        687   

Accounts receivable, net

     23,188        25,736   

Inventory

     383        442   

Deferred tax assets

     246        246   

Prepaid expenses and other current assets

     2,025        1,352   
  

 

 

   

 

 

 

Total current assets

     126,692        126,075   

Property and equipment, net

     4,061        4,026   

Severance pay fund

     2,693        2,652   

Restricted cash

     666        666   

Deferred tax assets

     46        46   

Other assets

     547        77   
  

 

 

   

 

 

 

Total assets

   $ 134,705      $ 133,542   
  

 

 

   

 

 

 

Liabilities and stockholders’ equity

    

Current liabilities:

    

Accounts payable

   $ 2,420      $ 3,534   

Accrued compensation and benefits

     8,457        7,491   

Accrued and other current liabilities

     4,055        4,408   

Deferred revenue

     25,461        21,982   
  

 

 

   

 

 

 

Total current liabilities

     40,393        37,415   

Other liabilities

     2,361        2,856   

Deferred revenue

     11,012        10,943   

Accrued severance pay

     3,102        2,760   
  

 

 

   

 

 

 

Total liabilities

     56,868        53,974   
  

 

 

   

 

 

 

Stockholders’ equity:

    

Common stock

     2        2   

Additional paid-in capital

     150,113        147,085   

Accumulated deficit

     (70,934     (66,130

Accumulated other comprehensive income (loss)

     (510     (616
  

 

 

   

 

 

 

Total Imperva, Inc. stockholders’ equity

     78,671        80,341   

Noncontrolling interest

     (834     (773
  

 

 

   

 

 

 

Total stockholders’ equity

     77,837        79,568   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 134,705      $ 133,542   
  

 

 

   

 

 

 


IMPERVA, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

     For the Six Months Ended  
     June  30,
2012
    June  30,
2011
 

Cash flows from operating activities:

    

Net loss

   $ (5,039   $ (6,362

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

    

Depreciation and amortization

     850        720   

Stock-based compensation

     1,834        576   

Revaluation of convertible preferred stock warrant liability

     —          121   

Amortization of premiums/accretion of discounts on ST investments

     197        —     

Changes in operating assets and liabilities:

    

Accounts receivable, net

     2,548        173   

Inventory

     59        (97

Prepaid expenses and other assets

     (793     (241

Accounts payable

     (1,114     (1,104

Accrued compensation and benefits

     966        279   

Accrued and other liabilities

     (496     (232

Severance pay, net

     301        44   

Deferred revenue

     3,548        3,234   

Deferred tax assets

     —          (34

Other

     (4     27   
  

 

 

   

 

 

 

Net cash provided by (used in) operating activities

     2,857        (2,896

Cash flows from investing activities:

    

Purchase of short-term investments

     (41,256     (988

Proceeds from sales/maturities of short-term investments

     2,310        1,870   

Purchase of property and equipment

     (885     (709

Change in other assets

     (350     —     

Change in restricted cash

     99        709   
  

 

 

   

 

 

 

Net cash provided by (used in) investing activities

     (40,082     882   

Cash flows from financing activities:

    

Proceeds from exercise of stock options

     1,087        504   

Repayment of revolving credit facility

     —          (501
  

 

 

   

 

 

 

Net cash provided by financing activities

     1,087        3   

Effect of exchange rate changes on cash

     (32     112   
  

 

 

   

 

 

 

Net decrease in cash and cash equivalents

     (36,170     (1,899

Cash and cash equivalents at beginning of period

   $ 96,025      $ 16,410   
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 59,855      $ 14,511   
  

 

 

   

 

 

 


IMPERVA, INC. AND SUBSIDIARIES

(Reconciliation of GAAP to Non-GAAP Measures)

(In thousands, except per share amounts)

(Unaudited)

 

     For the Three Months Ended     For the Six Months Ended  
     June  30,
2012
    June 30,
2011
    June  30,
2012
    June 30,
2011
 

GAAP operating loss

   $ (1,449   $ (2,789   $ (4,600   $ (5,921

Plus:

        

Stock-based compensation expense

     1,166        293        1,834        576   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP operating loss

   $ (283   $ (2,496   $ (2,766   $ (5,345
  

 

 

   

 

 

   

 

 

   

 

 

 

GAAP net loss attributable to Imperva, Inc. stockholders

   $ (1,533   $ (2,876   $ (4,804   $ (6,082

Plus:

        

Stock-based compensation expense

     1,166        293        1,834        576   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net loss

   $ (367   $ (2,583   $ (2,970   $ (5,506
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding, basic and diluted

     22,583        5,392        22,443        5,223   

Plus:

        

Additional weighted average shares giving effect to initial public offering and conversion of convertible preferred stock at the beginning of the period

     —          10,761        —          10,761   
  

 

 

   

 

 

   

 

 

   

 

 

 

Shares used in computing Non-GAAP net loss per share, basic and diluted

     22,583        16,153        22,443        15,984   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net loss, basic and diluted

   $ (0.02   $ (0.16   $ (0.13   $ (0.34

- Due to rounding, totals may not equal the sum of the line items in the table above.


Use of Non-GAAP Financial Information

In addition to the reasons stated above, which are generally applicable to each of the items Imperva excludes from its non-GAAP financial measures, Imperva believes it is appropriate to exclude or give effect to certain items for the following reasons:

Stock-Based Compensation: When evaluating the performance of its consolidated results, Imperva does not consider stock-based compensation charges. Likewise, the Imperva management team excludes stock-based compensation expense from its operating plans. In contrast, the Imperva management team is held accountable for cash-based compensation and such amounts are included in its operating plans. Further, when considering the impact of equity award grants, Imperva places a greater emphasis on overall stockholder dilution rather than the accounting charges associated with such grants.

Imperva believes it is useful to provide a non-GAAP financial measure that excludes stock-based compensation in order to better understand the long-term performance of its business.

Conversion of Preferred and Shares from Initial Public Offering: Imperva believes it is useful to provide a non-GAAP financial measure that gives pro forma effect to the conversion of preferred stock and issuance of common stock in connection with Imperva’s initial public offering as if both had happened at the beginning of each period presented in order to have an alternative way to evaluate per share performance on a comparative basis.

Investor Relations Contact Information

Seth Potter

646.277.1230

IR@imperva.com

Seth.Potter@icrinc.com