Infoblox Reports Fourth Quarter and Fiscal Year 2016 Results

SANTA CLARA, Calif., Aug. 31, 2016 (GLOBE NEWSWIRE) -- Infoblox (NYSE:BLOX), the network control company, today reported its financial results for its fourth fiscal quarter and fiscal year ended July 31, 2016. Total net revenue for the fourth quarter of fiscal 2016 was $86 million. Total net revenue for fiscal 2016 was a record $358 million, an increase of 17% compared with the total net revenue of $306 million in fiscal 2015.

On a GAAP basis, the Company reported a net loss of $10 million, or $0.18 net loss per diluted share, for the fourth quarter of fiscal 2016, compared with a net loss of $5 million, or $0.08 net loss per diluted share, for the fourth quarter of fiscal 2015.  For fiscal 2016, the Company reported a GAAP basis net loss of $14 million, or $0.24 net loss per diluted share, compared with a net loss of $27 million, or $0.48 net loss per diluted share, in fiscal 2015.

On a non-GAAP basis, the Company reported net income of $4 million, or $0.08 net income per diluted share for the fourth quarter of fiscal 2016, compared with net income of $7 million, or $0.12 net income per diluted share for the fourth quarter of fiscal 2015. For fiscal 2016, on a non-GAAP basis, the Company reported net income of $26 million, or $0.43 net income per diluted share compared with net income of $23 million, or $0.38 net income per diluted share, in fiscal 2015.

“We had a strong finish to fiscal 2016,” said Jesper Andersen, president and chief executive officer. “Fourth quarter revenue grew 5% sequentially, and we achieved record fiscal 2016 revenue.  We delivered this top line growth while generating strong cash flow and improving profitability in what continues to be a relatively challenging global business environment,” continued Andersen.  “The number of security and cloud related deals grew as we successfully diversified our revenue stream and expanded our addressable market.  These achievements are the result of the hard work of our highly talented and committed Infoblox team of employees.  Looking forward, we continue to see multiple growth drivers for our business and believe we are very well positioned to execute on the opportunities ahead."

FY’16 Financial Highlights

• Revenue grew 17%  to $358 million
  
• GAAP gross margin increased to 78.7% from 78.1% and Non-GAAP gross margin increased to 80.5% from 80.0%
  
• GAAP operating margin improved to (4.7%) from (8.3%) and Non-GAAP operating margin increased to 11.4%  from 8.0%
  
• GAAP net loss decreased to $13.7 million from $27.1 million and Non-GAAP net income increased 13% to $25.7 million
  
• Cash flow from operations grew 42% to $68 million
  
• Cash, cash equivalents and short term investments total $258 million; no debt
  

FY’16 Business Highlights

• Recognized as the market-share leader in enterprise-grade DDI in a report from IDC titled "Worldwide DDI Software and Appliance Market Shares, 2015" (IDC #US40816216, May 2016).  Infoblox market share increased to 49.9 percent in 2015 from 46.7 percent in 2014. No other competitor had a market share greater than 15 percent. 
  
• Added nearly 500 new customers; more than 20% of these new customers have more than 10,000 employees or users on their network
  
• Hosted Bloxfest, Infoblox's first customer conference, with nearly 250 customers and partners in attendance 
  
• Introduced Actionable Network Intelligence, a united platform that automates core network services across data centers and clouds to proactively detect, isolate, and stop data exfiltration that exploits DNS vulnerabilities; and through Infoblox products leverage actionable network intelligence for operational efficiency and visibility
  
• Acquired and integrated IID, a leader in global cyberthreat intelligence, making Infoblox the first enterprise-grade DDI vendor to combine contextual network data with federated threat intelligence and a dedicated threat research team, to provide context-aware security using infrastructure that customers already have in place
  
• Announced Infoblox DNS Firewall as a service, extending the company's industry-leading DNS protection to roaming devices off premise 
  
• Introduced Infoblox DDI for Amazon Web Services (AWS), a virtual appliance that extends the Infoblox solution for enterprise-grade network services and security to the AWS Cloud
  
• Announced Infoblox Identity Mapping, and also integration with Cisco ISE, bridging the gap between network security and user identity by intelligently correlating two separate sets of data, making it easier for network administrators to locate the source of security events, track mobile devices and monitor network usage
  
• Launched NIOS 7.3 upgrading the underlying operating system for Infoblox products adding major enhancements 
  
• Announced new executives and board members including CFO Janesh Moorjani, EVP of Engineering Atul Garg, CMO Ashish Gupta, and board member Edzard Overbeek
  

Financial Outlook

Infoblox announced its outlook of anticipated results for the first fiscal quarter ending October 31, 2016 and fiscal year ending July 31, 2017. This outlook is based on a number of assumptions that it believes are reasonable at the time of this earnings release. Information regarding potential risks that could cause the actual results to differ from these forward-looking statements is set forth below and in Infoblox’s filings with the Securities and Exchange Commission.

For the fiscal year ending July 31, 2017, the Company currently expects:

• Total net revenue in the range of $360 million to $380 million;
  
• GAAP gross margin to be approximately 78.0% and Non-GAAP gross margin to be approximately 80.0%; and
  
• GAAP operating margin in the range of 2.1% to 2.7% and Non-GAAP operating margin in the range of 16.0% to 18.0%.
  

For the first fiscal quarter ending October 31, 2016, the Company currently expects:

• Total net revenue in the range of $83 million to $87 million;
  
• GAAP gross margin to be approximately 77.4% and Non-GAAP gross margin to be approximately 79.5%;
  
• GAAP operating margin in the range of (5.0%) to (3.0%) and Non-GAAP operating margin in the range of 10.0% to 12.0%; and
  
• GAAP net loss per share to be in the range of $0.07 to $0.05 and Non-GAAP net income per diluted share ("non-GAAP EPS") to be in the range of $0.09 to $0.11, assuming approximately 56 million to 58 million shares, on a non-GAAP diluted weighted-average share basis.

Conference Call & Webcast

Management will host a conference call today, August 31, 2016 at 1:30 p.m. PDT/4:30 p.m. EDT to discuss its fiscal fourth quarter and fiscal 2016 financial results. To access the call, dial 800-230-1059 (domestic) or 612-234-9959 (international) at least 10 minutes prior to the scheduled start of the call. A live webcast of the call will also be available on the corporate website at: http://ir.infoblox.com.  An archive of the webcast will be available on the company's website and a taped replay will be available for one week at 800-475-6701 (domestic) or 320-365-3844 (international), passcode 399902.

About Non-GAAP Financial Measures

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 gross profit and gross margin, non-GAAP operating income and operating margin, non-GAAP net income, non-GAAP EPS and non-GAAP diluted shares outstanding. We also provide first fiscal quarter 2017 and fiscal year 2017 estimates for net revenue, non-GAAP gross margin, non-GAAP operating margin and first fiscal quarter 2017 estimates for non-GAAP EPS and non-GAAP diluted weighted-average shares outstanding. We believe these non-GAAP financial measures are helpful in understanding our past financial performance and future results. Our non-GAAP financial measures should not 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. These non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies. Our non-GAAP financial measures include adjustments based on the following items:

Stock-based compensation expenses: We have excluded the effect of stock-based compensation from our non-GAAP operating results. 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.

Restructuring charges: We have excluded the effect of restructuring charges from our non-GAAP operating results. Restructuring charges result from events which occur outside of the ordinary course of continuing operations. Although these events are reflected in our GAAP financial results, these unique transactions may limit the comparability of our ongoing operations with prior and future periods. As such, we believe that these expenses do not accurately reflect the underlying performance of our continuing operations for the period in which they are incurred.

Amortization of intangible assets: We have excluded the effect of amortization of intangible assets from our non-GAAP operating results. 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.

Expenses related to non-routine stockholder matters: We have excluded the effect of certain expenses related to non-routine stockholder matters from our non-GAAP operating results. Non-routine stockholder matters are unique events which occur outside of the ordinary course of continuing operations. Although these events are reflected in our GAAP financial results, these unique transactions may limit the comparability of our ongoing operations with prior and future periods. As such, we believe that these expenses do not accurately reflect the underlying performance of our continuing operations for the period in which they are incurred.

Acquisition related expenses: We have excluded acquisition transaction costs from our non-GAAP operating results. We believe that to the extent we incur significant expenses in connection with our acquisitions, it is useful for investors to understand the effects of these items on our total operating expenses.

Our non-GAAP Financial Measures are described as follows:
               
Non-GAAP gross profit and gross margin. Non-GAAP gross profit is gross profit as reported on our consolidated statements of operations, excluding the impact of stock-based compensation and intangible asset amortization expense. Non-GAAP gross margin is non-GAAP gross profit divided by net revenue.
               
Non-GAAP operating income and operating margin. Non-GAAP operating income is income (loss) from operations as reported on our consolidated statements of operations, excluding the impact of stock-based compensation, restructuring charges, intangible asset amortization expense, expenses related to non-routine stockholder matters and acquisition related expenses. Non-GAAP operating margin is non-GAAP operating income divided by net revenue.
               
Non-GAAP net income and non-GAAP EPS. Non-GAAP net income is net income (loss) as reported on our consolidated statements of operations, excluding the impact of stock-based compensation, restructuring charges, intangible asset amortization expense, expenses related to non-routine stockholder matters and acquisition related expenses with income taxes adjusted to reflect our estimated long-term effective tax rate on a non-GAAP basis. Non-GAAP EPS is non-GAAP net income divided by non-GAAP diluted weighted-average shares outstanding.
               
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, “Reconciliation of GAAP to Non-GAAP Financial Measures.” For a reconciliation of the forecasted ranges in the financial outlook for non-GAAP gross margin, non-GAAP operating margin and non-GAAP EPS to the most comparable GAAP financial measures, please see the section of the accompanying tables titled, “Reconciliation of GAAP to Non-GAAP Forecasted Ranges.”

About Infoblox

Infoblox (NYSE:BLOX) delivers critical network services that protect Domain Name System (DNS) infrastructure, automate cloud deployments, and increase the reliability of enterprise and service provider networks around the world. As the industry leader in DNS, DHCP, and IP address management, the category known as DDI, Infoblox (www.infoblox.com) reduces the risk and complexity of networking.

Cautionary Statement

All statements in this release that are not statements of historical fact, including but not limited to the quotation attributable to Mr. Andersen and the statements under “Financial Outlook” are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause our actual results to differ materially, including, but not limited to: unexpected delays in the delivery of our solutions, particularly at the end of the quarter; changes in demand for network control solutions; the market acceptance of our products; the fluctuations in our gross margins; the concentration of our customer base; competitive developments including pricing pressures; our ability to manage operating expenses effectively; and the general economic, industry or political conditions in the United States or internationally.

For a detailed discussion of these and other risk factors, please refer to our filings with the Securities and Exchange Commission, which are available on our investor relations Web site (http://ir.infoblox.com/) and on the SEC’s Web site (www.sec.gov).

All information provided in this release and in the attachments is as of August 31, 2016, and stockholders of Infoblox are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date such statements are made. Infoblox does not undertake any obligation to publicly update any forward-looking statements to reflect events, circumstances or new information after this August 31, 2016, press release, or to reflect the occurrence of unanticipated events.