Published on August 25th, 2011 | by Alexis Argent0
Aruba Networks Reports Record Fourth Quarter and Fiscal Year 2011 Financial Results
- Grew Fiscal Year Revenue 49 percent to $396.5 million
- Record Revenue of $113.8 Million in Q4 Increased 47 Percent Year-over-Year
- Added Over 1,500 New Customers in Q4 to Surpass 15,500 Cumulative Customers
- Cash and Short Term Investments Increased $23.2 Million in Q4 to $234.0 Million With No Debt
Aruba Networks, Inc. , a global leader in distributed enterprise network solutions, today released financial results for its fiscal fourth quarter and fiscal year ended July 31, 2011. Revenue for Q4’11 was $113.8 million, an increase of 47 percent from the $77.3 million reported in Q4’10. GAAP net income for Q4’11 was $68.2 million, or $0.57 per share, compared with net income of $0.4 million, or $0.00 per share, in Q4’10. As a result of our increasing operating profitability in fiscal 2011 and expectations for continued profits going forward, GAAP net income for the fourth quarter included a one-time tax benefit of $72.8 million, equivalent to $0.61 per share, due to the release of the company’s valuation allowances and the recording of the associated net deferred tax assets on its balance sheet. This one-time event is in conjunction with the establishment of Aruba’s international operating entities to optimize Aruba’s long term tax structure.
Non-GAAP net income for Q4’11 was $20.2 million, or $0.17 per share. This compares with $11.1 million, or $0.10 per share, in Q4’10. A reconciliation between GAAP and non-GAAP information is contained in the tables below.
Fiscal year 2011 revenue was $396.5 million, an increase of 49 percent from the $266.5 million reported in fiscal year 2010. GAAP net income for fiscal year 2011 was $70.7 million, or $0.60 per share, compared with a net loss of $34.0 million, or $0.38 per share, in fiscal year 2010. Non-GAAP net income for fiscal year 2011 was $69.3 million, or $0.59 per share, compared with $30.0 million, or $0.29 per share, in fiscal year 2010.
“Demand for our wireless LAN solutions continued to be strong throughout our fiscal fourth quarter, as revenue increased by 47 percent year-over-year and 8 percent sequentially,” said Dominic Orr, President and Chief Executive Officer of Aruba. “Mobile device adoption continues to accelerate resulting in proliferating demand for Enterprise mobility solutions. Revenue from the existing customer base remains strong and we are especially encouraged by our rapid new customer acquisitions adding over 4,500 customers in the last twelve months. With robust Q4 bookings and a solid pipeline for our wireless LAN solutions, we enter our fiscal 2012 confident in our ability to grow faster than the market and increase our market share.”
“In addition to delivering a strong Q4, for the fiscal year, Aruba achieved record revenue, non-GAAP gross margin, operating margin and net income,” said Michael Galvin, Aruba’s Chief Financial Officer. “We also generated nearly $58 million in cash flow from operations during the fiscal year.”
- Proof of High-Density iPad Multimedia Performance over Aruba Wi-Fi – Validated by the University of Ottawa information technology (IT) department, six leading multimedia educational applications were delivered to a high density iPad environment, concurrently with 100 percent of the iPads meeting the multimedia Service Level Agreement (SLA).
- Proven High Performance for Microsoft Lync Server 2010 over Wi-Fi – Aruba announced that its MOVE architecture for Wi-Fi networking enables wire-like performance for Microsoft Lync Server 2010, with tests showing up to 75 percent better performance for Microsoft Lync Server 2010 compared to an equivalent Cisco Wi-Fi network.
- Suite B Cryptography for Mobile Networks Introduced – Aruba announced the expansion of its secure mobility offerings by introducing Suite B cryptography on the Aruba Mobility Controller for use in classified government and high-security enterprise networks to ease government smartphone and tablet adoption.
This press release contains forward-looking statements, including statements about (1) our belief in the company’s ability to grow faster than the market and increase market share and (2) our expectations regarding continued acceleration of mobility device adoption resulting in increased demand for Enterprise mobility solutions.
These forward-looking statements involve risks and uncertainties, as well as assumptions which, if they do not fully materialize or prove incorrect, could cause Aruba’s 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: (1) business and economic conditions and growth trends in the networking industry, our vertical markets and various geographic regions; and (2) changes in overall information technology spending; as well as those risks and uncertainties included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in Aruba’s report on Form 10-Q for the fiscal third quarter ended April 30, 2011, which was filed with the SEC on June 7, 2011. 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.
Non-GAAP Financial Measures
In addition to disclosing financial measures prepared in accordance with Generally Accepted Accounting Principles (GAAP), this press release and the accompanying tables contain the following non-GAAP financial measures: non-GAAP net income and non-GAAP earnings per share (EPS). The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
Non-GAAP net income and EPS.
Aruba defines non-GAAP net income as net income plus stock-based expenses and related payroll taxes, amortization expense of acquired intangible assets and other acquisition related expenses, the change in the valuation of the contingent rights liability, litigation reserves, and the release of the valuation allowance on deferred income tax assets. Aruba defines non-GAAP EPS as non-GAAP net income divided by the weighted average diluted shares outstanding. Aruba’s management regularly uses these non-GAAP financial measures to understand and manage its business and believes that these non-GAAP financial measures provide meaningful supplemental information regarding the company’s performance by excluding certain expenses that may not be indicative of Aruba’s “recurring operating results,” meaning its operating performance excluding not only stock-based expenses and related payroll taxes, but also discrete charges that are infrequent in nature, such as litigation reserves and releases of valuation allowances. Because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use, Aruba’s management believes that providing non-GAAP financial measures that exclude stock-based expenses allows investors to compare these results with those of other companies, as well as providing management with an important tool for financial and operational decision making and for evaluating the company’s operating results over different periods of time. Similarly, by excluding amortization expense of acquired intangible assets and other acquisition related expenses, the change in the valuation of the contingent rights liability, litigation reserves and the release of the valuation allowance on deferred income tax assets, Aruba’s management believes that investors can better understand and measure the company’s recurring operating results.
There are a number of limitations related to the use of non-GAAP net income and EPS versus net income and EPS calculated in accordance with GAAP. First, these non-GAAP financial measures exclude some costs, namely stock-based expenses and related payroll taxes, that are recurring. Stock-based expenses and related payroll taxes have been and will continue to be for the foreseeable future a significant recurring expense in Aruba’s business. Second, stock-based awards are an important part of Aruba’s employees’ compensation and impacts their performance. Third, the components of the costs that Aruba excludes in its calculation of non-GAAP net income may differ from the components that its peer companies exclude when they report their results of operations. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from these non-GAAP financial measures and evaluating these non-GAAP financial measures together with their most directly comparable financial measures calculated in accordance with GAAP. The accompanying tables have more details on these non-GAAP financial measures, including reconciliations between these financial measures and their most directly comparable GAAP equivalents.
About Aruba Networks
Aruba Networks is a leading provider of next-generation network access solutions for the mobile enterprise. The company’s Mobile Virtual Enterprise (MOVE) architecture unifies wired and wireless network infrastructures into one seamless access solution for corporate headquarters, mobile business professionals, remote workers and guests. This unified approach to access networks dramatically improves productivity and lowers capital and operational costs.
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