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8-K - FORM 8-K - IMPERVA INCd924790d8k.htm

Exhibit 99.01

Imperva Announces First Quarter 2015 Financial Results

 

    Total revenue of $44.8 million, up 42% year-over-year

 

    Services revenue growth of 41% was driven by the 89% year-over-year increase in subscription revenue

 

    Combined product and subscription revenue increased 56% year-over-year

 

    Number of deals booked valued over $100,000 increased 36% year-over-year

 

    Total deferred revenue as of March 31, 2015 increased 37% year-over-year to $83.7 million

 

    Increasing FY15 guidance

Redwood Shores, Calif. – May 7, 2015Imperva, Inc. (NYSE: IMPV), committed to protecting business-critical data and applications on-premises and in the cloud, today announced financial results for the first quarter ended March 31, 2015.

“We were very pleased with the progress achieved across the entire organization during the first quarter and our strong momentum was highlighted by our ability to exceed guidance across all key operating metrics,” stated Anthony Bettencourt, President and Chief Executive Officer of Imperva. “During the quarter, customer demand remained high, as evidenced by the robust growth of combined product and subscriptions revenue and the strength seen in deals greater than $100,000. Looking forward, Imperva remains well positioned to grow market share globally across our integrated discovery, compliance and protection solutions due to our improved go-to-market strategy, best-of-breed business-critical data and application security, and significantly strengthened balance sheet.”

First Quarter 2015 Financial Highlights

 

    Revenue: Total revenue for the first quarter of 2015 was $44.8 million, an increase of 42% compared to $31.5 million in the first quarter of 2014. Within total revenue, product revenue was $17.1 million, up 43% compared to $12.0 million in the same period last year. Services revenue increased 41% year-over-year to $27.7 million and accounted for 62% of total revenue. Within services revenue, overall subscription revenue grew 89% to $8.7 million, compared to the first quarter of 2014. Combined product and subscriptions revenue was $25.8 million, an increase of 56% compared to $16.6 million in the first quarter of 2014.

 

    Operating Profit (Loss): Operating loss as reported in accordance with U.S. generally accepted accounting principles (GAAP) was $(19.6) million for the first quarter compared to a loss of $(17.8) million during the first quarter in 2014. GAAP results included stock-based compensation and amortization of purchased intangibles of $12.9 million for the first quarter of 2015 and $6.9 million for the first quarter of 2014. GAAP results also included acquisition related expenses of $1.4 million during the first quarter of 2014. Non-GAAP operating loss for the first quarter was $(6.7) million, compared to a loss of $(9.6) million during the same period in 2014, excluding the above mentioned charges.

 

    Net Profit (Loss): GAAP net loss attributable to Imperva stockholders for the first quarter was $(20.0) million, or $(0.74) per share based on 27.0 million weighted average shares outstanding. This compares to GAAP net loss attributable to Imperva stockholders of $(17.4) million, or $(0.69) per share based on 25.3 million weighted average shares outstanding in the prior-year period.


Non-GAAP net loss attributable to Imperva stockholders for the first quarter of 2015 was $(7.1) million, or $(0.26) per share based on 27.0 million weighted average shares outstanding, excluding the above mentioned charges. This compares to non-GAAP net loss attributable to Imperva stockholders of $(9.1) million, or $(0.36) per share based on 25.3 million weighted average diluted shares outstanding in the prior-year period.

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 March 31, 2015, Imperva had cash, cash equivalents and investments of $242.7 million. On March 18, 2015, the company closed its follow-on offering, which generated net proceeds of $127.8 million. Total deferred revenue of $83.7 million increased 37% compared to $61.0 million as of March 31, 2014.

First Quarter and Recent Operating Highlights

 

    During the first quarter of 2015, Imperva booked 91 deals with a value over $100,000, an increase of 36% compared to 67 deals during the first quarter of last year.

 

    During the first quarter of 2015, Imperva added 150 new customers compared to 171 during the first quarter of last year. Imperva now has over 3,900 customers in more than 90 countries around the world.

 

    Imperva announced a new version of its Skyfence Cloud Gateway that provides IT staff superior visibility over contextual risk factors specific to their cloud application users and implementations.

 

    Imperva announced Internet Protocol version 6 (IPv6) support for the entire Imperva Incapsula network to ease migration and compliance needs of its customers.

Business Outlook

The following forward-looking statements reflect expectations as of May 7, 2015. Results may be materially different and could be affected by the factors detailed in this press release and in recent Imperva SEC filings.

Second Quarter Expectations – Ending June 30, 2015

Imperva expects total revenue for the second quarter of 2015 to be in the range of $47.0 million to $49.0 million, representing growth in the range of 22% to 27% compared to the same period in 2014. The company expects in the second quarter of 2015 non-GAAP gross margins of approximately 78.0%. Further, Imperva expects in the second quarter of 2015 non-GAAP operating loss to be in the range of $(6.6) million to $(5.4) million and non-GAAP net loss to be in the range of $(7.1) million to $(5.9) million, or a loss of $(0.24) to $(0.20) per share based on approximately 30.0 million weighted average shares, which excludes stock-based compensation and amortization of purchased intangibles.


Full Year Expectations –Ending December 31, 2015

Imperva expects total revenue for 2015 to be in the range of $202.0 million to $207.0 million, or up 23% to 26% compared to 2014. Imperva expects 2015 non-GAAP gross margins of approximately 78.5%. Further, the company expects 2015 non-GAAP operating loss to be in the range of $(21.0) million to $(17.0) million and non-GAAP net loss to be in the range of $(23.0) million to $(19.0) million, or a loss of $(0.77) to $(0.63) per share based on approximately 30.0 million weighted average shares, which excludes stock-based compensation and amortization of purchased intangibles. Imperva expects capital expenditures for the full year to be in the range of $6.0 million to $7.0 million. Finally, the company expects to generate positive cash flows from operations in 2015.

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 first quarter ended March 31, 2015. To access this call, dial (877) 627-6582 for the U.S. and Canada or (719) 325-4888 for international callers with conference ID #8985091. A live webcast of the conference call will be accessible from the investors page of the Imperva 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 May 21, 2015, by dialing (877) 870-5176 for the U.S. and Canada, or (858) 384-5517 for international callers and entering passcode #8985091.

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, amortization of purchased intangibles and acquisition-related expenses from the Imperva unaudited condensed consolidated statement of operations.

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 the Imperva “Business Outlook” (“Second Quarter Expectations – Ending June 30, 2015” and “Full Year Expectations – Ending December 31, 2015”); and Imperva’s belief that the combination of its large and growing market, improving go-to-market strategy, and business critical data and application security solutions, positions the company to maintain the momentum in 2015. 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 cyber 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 cyber 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-K filed with the Securities and Exchange Commission, or the SEC, on March 2, 2015 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® (NYSE:IMPV), is a leading provider of cyber security solutions that protect business-critical data and applications. The company’s SecureSphere, Incapsula and Skyfence product lines enable organizations to discover assets and risks, protect information wherever it lives – in the cloud and on-premises – and comply with regulations. The Imperva Application Defense Center, a research team comprised of some of the world’s leading experts in data and application security, continually enhances Imperva products with up-to-the minute threat intelligence, and publishes reports that provide insight and guidance on the latest threats and how to mitigate them. Imperva is headquartered in Redwood Shores, California. Learn more: www.imperva.com, our blog, on Twitter.

© 2015 Imperva, Inc. All rights reserved. Imperva, the Imperva logo, SecureSphere, Incapsula and Skyfence are trademarks of Imperva, Inc. and its subsidiaries.

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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  
     Mar 31     Mar 31  
     2015     2014  

Net revenue:

    

Products and license

   $ 17,104      $ 11,971   

Services

     27,653        19,545   
  

 

 

   

 

 

 

Total net revenue

  44,757      31,516   

Cost of revenue(1, 2):

Products and license

  1,998      1,732   

Services

  8,332      6,020   
  

 

 

   

 

 

 

Total cost of revenue

  10,330      7,752   
  

 

 

   

 

 

 

Gross profit

  34,427      23,764   

Operating expenses(1, 2):

Research and development

  12,678      9,961   

Sales and marketing

  31,253      23,035   

General and administrative

  9,743      8,405   

Amortization of purchased intangibles

  352      204   
  

 

 

   

 

 

 

Total operating expenses

  54,026      41,605   
  

 

 

   

 

 

 

Loss from operations

  (19,599   (17,841

Other expense, net

  (80   (154
  

 

 

   

 

 

 

Loss before provision for income taxes

  (19,679   (17,995

Provision (Benefit) for income taxes

  351      (371
  

 

 

   

 

 

 

Net loss

  (20,030   (17,624

Add: Loss attributable to noncontrolling interest

  —        213   
  

 

 

   

 

 

 

Net loss attributable to Imperva, Inc. stockholders

$ (20,030 $ (17,411
  

 

 

   

 

 

 

Net loss per share of common stock attributable to

Imperva, Inc. stockholders, basic and diluted

$ (0.74 $ (0.69
  

 

 

   

 

 

 

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

  26,973      25,255   
  

 

 

   

 

 

 

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

Cost of revenue

$ 914    $ 374   

Research and development

  3,328      1,792   

Sales and marketing

  4,465      2,430   

General and administrative

  3,839      2,070   
  

 

 

   

 

 

 

Total stock-based compensation expense

$ 12,546    $ 6,666   
  

 

 

   

 

 

 

(2) Acquisition-related expense as included in above:

Cost of revenue

$ —      $ 156   

General and administrative

  —        1,243   
  

 

 

   

 

 

 

Total acquisition-related expense

$ —      $ 1,399   
  

 

 

   

 

 

 


IMPERVA, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

     As of
Mar 31
2015
    As of
Dec 31
2014
 

Assets

    

Current assets:

    

Cash and cash equivalents

   $ 196,486      $ 68,096   

Short-term investments

     46,251        41,624   

Restricted cash, current

     73        62   

Accounts receivable, net

     33,365        47,446   

Inventory

     555        259   

Deferred tax assets

     404        408   

Prepaid expenses and other current assets

     4,446        3,927   
  

 

 

   

 

 

 

Total current assets

  281,580      161,822   

Property and equipment, net

  7,722      7,618   

Goodwill

  34,972      34,972   

Purchased intangible assets, net

  9,047      9,399   

Severance pay fund

  4,131      3,980   

Restricted cash

  1,665      1,665   

Deferred tax assets

  329      329   

Other assets

  856      860   
  

 

 

   

 

 

 

Total assets

$ 340,302    $ 220,645   
  

 

 

   

 

 

 

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable

$ 3,733    $ 5,376   

Accrued compensation and benefits

  14,481      15,749   

Accrued and other current liabilities

  6,482      6,376   

Deferred revenue

  58,996      56,077   
  

 

 

   

 

 

 

Total current liabilities

  83,692      83,578   

Other liabilities

  10,440      10,408   

Deferred revenue

  24,687      25,098   

Accrued severance pay

  4,405      4,318   
  

 

 

   

 

 

 

Total liabilities

  123,224      123,402   

Stockholders’ equity:

Common stock

  3      2   

Additional paid-in capital

  396,338      256,388   

Accumulated deficit

  (177,688   (157,658

Accumulated other comprehensive loss

  (1,575   (1,489
  

 

 

   

 

 

 

Total Imperva, Inc. stockholders’ equity

  217,078      97,243   

Noncontrolling interest

  —        —     
  

 

 

   

 

 

 

Total stockholders’ equity

  217,078      97,243   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

$ 340,302    $ 220,645   
  

 

 

   

 

 

 


IMPERVA, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

     For the Three Months Ended  
     Mar 31
2015
    Mar 31
2014
 

Cash flows from operating activities:

    

Net loss

   $ (20,030   $ (17,624

Adjustments to reconcile net loss to net cash provided by operating activities:

    

Depreciation and amortization

     1,056        800   

Stock-based compensation

     12,546        6,666   

Amortization of acquired intangible assets

     352        204   

Amortization of premiums/accretion of discounts on short-term investments

     92        109   

Excess tax benefits from share-based compensation

     (43     —     

Other

     114        (1

Changes in operating assets and liabilities:

    

Accounts receivable, net

     14,081        15,870   

Inventory

     (296     (181

Prepaid expenses and other assets

     (515     110   

Accounts payable

     (1,812     (592

Accrued compensation and benefits

     (1,268     (598

Accrued and other liabilities

     79        269   

Severance pay, net

     (64     188   

Deferred revenue

     2,508        (2,025

Deferred tax assets

     4        (19
  

 

 

   

 

 

 

Net cash provided by operating activities

  6,804      3,176   

Cash flows from investing activities:

Purchase of short-term investments

  (22,843   (10,206

Proceeds from sales/maturities of short-term investments

  18,168      13,585   

Acquisitions, net of cash acquired

  —        (12,083

Net purchases of property and equipment

  (991   (1,718

Change in restricted cash

  (11   —     
  

 

 

   

 

 

 

Net cash used in investing activities

  (5,677   (10,422

Cash flows from financing activities:

Proceeds from follow-on public offering, net of offering costs

  127,854      —     

Proceeds from issuance of common stock, net of repurchases

  1,618      2,471   

Excess tax benefits from share-based compensation

  43      —     

Shares withheld for tax withholding on vesting of restricted stock units

  (2,137   (1,182
  

 

 

   

 

 

 

Net cash provided by financing activities

  127,378      1,289   

Effect of exchange rate changes on cash and cash equivalents

  (115   —     
  

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

  128,390      (5,957

Cash and cash equivalents at beginning of period

  68,096      76,704   
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

$ 196,486    $ 70,747   
  

 

 

   

 

 

 


IMPERVA, INC. AND SUBSIDIARIES

(Reconciliation of GAAP to Non-GAAP Measures)

(In thousands, except per share amounts)

(Unaudited)

 

     For the Three Months Ended  
     Mar 31
2015
    Mar 31
2014
 

GAAP operating loss

   $ (19,599   $ (17,841

Plus:

    

Stock-based compensation expense

     12,546        6,666   

Acquisition-related expense

     —          1,399   

Amortization of purchased intangibles

     352        204   
  

 

 

   

 

 

 

Non-GAAP operating loss

$ (6,701 $ (9,572
  

 

 

   

 

 

 

GAAP net loss attributable to Imperva, Inc. stockholders

$ (20,030 $ (17,411

Plus:

Stock-based compensation expense

  12,546      6,666   

Acquisition-related expense

  —        1,399   

Amortization of purchased intangibles

  352      204   
  

 

 

   

 

 

 

Non-GAAP net loss

$ (7,132 $ (9,142
  

 

 

   

 

 

 

Weighted average shares outstanding, basic and diluted

  26,973      25,255   

Non-GAAP net loss, basic and diluted

$ (0.26 $ (0.36


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.

Acquisition-Related Charges: GAAP requires expenses to be recognized for various types of events associated with a business acquisition, such as legal, accounting, advisory and other deal related expenses. These expenses vary significantly and are unique to each transaction. Additionally, Imperva does not acquire businesses on a predictable cycle. Imperva records these acquisition and other transaction costs as operating expenses when they are incurred. Imperva believes that these acquisition and other transaction costs affect comparability from period to period and that investors benefit from a supplemental non-GAAP financial measure that excludes these expenses.

Imperva excludes stock-based compensation and acquisition-related charges from its non-GAAP financial measures primarily because they are expenses that it does not consider part of ongoing operating results when assessing the performance of its business, and the exclusion of these expenses facilitates the comparison of results and business outlook for future periods with results for prior periods in order to better understand the long term performance of its business.

Amortization of Purchased Intangibles. When analyzing the operating performance of an acquired entity, Imperva’s management focuses on the total return provided by the investment (i.e., operating profit generated from the acquired entity as compared to the purchase price paid) without taking into consideration any allocations made for accounting purposes. Because the purchase price for an acquisition necessarily reflects the accounting value assigned to intangible assets (including acquired technology and goodwill), when analyzing the operating performance of an acquisition in subsequent periods, Imperva’s management excludes the GAAP impact of acquired intangible assets to its financial results. Imperva believes that such an approach is useful in understanding the long-term return provided by an acquisition and that investors benefit from a supplemental non-GAAP financial measure that excludes the accounting expense associated with acquired intangible assets.

In addition, in accordance with GAAP, Imperva generally recognizes expenses for internally-developed intangible assets as they are incurred until technological feasibility is reached, notwithstanding the potential future benefit such assets may provide. Unlike internally-developed intangible assets, however, and also in accordance with GAAP, Imperva generally capitalizes the cost of acquired intangible assets and recognizes that cost as an expense over the useful lives of the assets acquired (other than goodwill, which is not amortized, as required under GAAP). As a result of their GAAP treatment, there is an inherent lack of comparability between the financial performance of internally-developed intangible assets and acquired intangible assets. Accordingly, Imperva believes it is useful to provide, as a supplement to its GAAP operating results, a non-GAAP financial measure that excludes the amortization of acquired intangibles.


Investor Relations Contact Information

Seth Potter

646.277.1230

IR@imperva.com

Seth.Potter@icrinc.com