Financial

posted on 29 July 2008 11:15

Wide area data services (WDS) WAN acceleration supplier Riverbed produced a thumping great rise in Q2 08 revenues but swung into a GAAP net loss compared to its profit in the year-ago quarter.

For Q2 08 Riverbed reported $81.6 million revenues, 51 percent higher than Q2 08's $54.04 million. But it reported a GAAP net loss for the quarter of $0.869 million ($0.01/share) compared to net income in Q2 07 of $3.9 million ($0.05). Although the company talks about a high GAAP tax rate of 163 percent in the quarter compared to last year's 17 percent a look at the non-GGAP figures also produces a net income fall: Q2 07's $11.l7 million falls to Q2 08's $9.9 million.

Riverbed's second quarter of 2008 GAAP results also included $14.0 million of stock-based compensation expenses and related payroll taxes.

Jerry Kennelly, Riverbed president and CEO, said: "We are encouraged by our strong sequential and year-over-year revenue growth, as we posted the highest revenues in company history. Wide area data services offers compelling productivity and cost benefits, and the technological advantages of Riverbed's products are clearly evident in our competitive win rate and industry-leading customer base. During the second quarter, we added a significant number of new customers across a broad range of verticals, bringing our cumulative customer count to over 4,500. New customers included a number of the world's largest companies, and we now have 44 of the Forbes Global 100, many of which have been won in technical bake-offs against our competition."

Randy Gottfried, Riverbed CFO, said: "Gross margins increased for both our product and service offerings, and total operating expenses decreased as a percentage of sales compared to the first quarter of 2008. Total deferred revenue increased 16% quarter-over-quarter to more than $44 million and we ended the quarter with $269 million in cash and marketable securities, after buying back $12.5 million of Riverbed stock as part of our stock repurchase program announced in April."

The non-GAAP tax rate in Q2 08 was 35 percent compared to 7 percent in Q2 07.

There was nothing in the earnings call transcipt http://seekingalpha.com/article/86913-riverbed-technology-inc-q2-2008-earnings-call-transcript to explain the net income decline.

The company's Q3 outlook is for modest sequential growth in the range of $83 million to $85 million, with non-GAAP EPS of approximately $0.14 per share for the quarter. This projection incorporates approximately $1.5 million in expenses related to IPO litigation and a non-GAAP tax rate of 36%.

Riverbed is raising its full year guidance based on its Q2 performance. It is currently expecting revenues in the range of $329 million to $335 million and non-GAAP earnings per share of $0.53 to $0.55 per share for the full year.

^{[Chris Mellor.]}