Riverbed Technology Reports Record Second Fiscal Quarter 2010

Riverbed Technology reported financial results for its second fiscal quarter ended June 30, 2010 (Q2’10). Revenues for Q2’10 were $126.2 million, up 12.3% compared to the first fiscal quarter of 2010 (Q1’10), and up 38.7% compared to the second quarter of fiscal year 2009 (Q2’09).

Reporting on a GAAP basis, net income for Q2’10 was $6.6 million, or $0.09 per diluted share. This compares to GAAP net income of $1.1 million, or $0.01 per share, in Q1’10 and a GAAP net loss of $0.3 million, or $0.00 per share, in Q2’09.

Non-GAAP net income for Q2’10 was $19.2 million, or $0.25 per diluted share, as compared to non-GAAP net income for Q1’10 of $14.8 million, or $0.20 per diluted share, and non-GAAP net income of $10.3 million, or $0.14 per diluted share, in Q2’09. A reconciliation between GAAP and non-GAAP information is contained in the tables below.

“Riverbed® reported a record breaking second quarter as WAN optimization continues to be a strategic priority investment for businesses and governments around the world,” said Jerry M. Kennelly, Riverbed president and CEO. “We executed well, achieving 39 percent year-over-year revenue growth with product sales increasing more than 40 percent over the prior year, marking our fourth consecutive quarter of product revenue acceleration.” Kennelly added, “We also achieved significant operating leverage with our non-GAAP operating profit doubling over the prior year.”

Q2’10 Financial Highlights

  • Total revenue increased 12% sequentially and 39% year-over-year
  • Product revenue increased 13% sequentially and 40% year-over-year
  • Non-GAAP gross margin increased to 77.3%, compared to 77.1% in Q1’10 and 76.1% in Q2’09
  • Non-GAAP operating margin increased to 24.2% compared to 20.8% in Q1’10 and 16.7% in Q2’09
  • Non-GAAP net income increased 30% sequentially and 87% year-over-year
  • Days sales outstanding decreased to 32 days from 34 in Q1’10
  • Cash and investments grew to $422 million compared to $387 million in Q1’10 and $269 million in Q2’09

Q2’10 Business Highlights

  • Identified as the Advanced Platform WAN optimization controller worldwide market share leader for Q1’10 based on revenue in the June 2010 Gartner report, “Market Share Analysis: Application Acceleration Equipment, Worldwide, 1Q10″.
  • Further enhanced competitive position with launch of the Riverbed Optimization System (RiOS®) version 6.1 making Riverbed the only WAN optimization vendor to offer optimizations for Microsoft Exchange Server 2010, Microsoft SharePoint 2010, Microsoft Online Services for both Exchange and SharePoint, Lotus Notes 8.5, EMC® SRDF® at both the network and application layers, auto configuration for EMC SRDF, and storage networking optimizations for FCIP traffic over the Brocade 7500 and Cisco MDS gateways.
  • Added five qualified solutions to the Riverbed Services Platform (RSP) including HP Client Automation (HPCA), McAfee Firewall Enterprise, Microsoft Forefront Threat Management Gateway, Polycom Video Edge, and Vyatta Subscription Edition router, firewall and VPN software.
  • Verizon added Riverbed WAN optimization and new consulting services to Verizon Managed WAN Optimization Services, available in 142 countries.
  • Awarded the 2009 EMC Partner Solution Award: Offering of the Year – Symmetrix®.
  • Awarded the 2010 Asia Pacific Frost & Sullivan Application Networking Vendor of the Year Award in recognition of outstanding performance in the Asia Pacific information and communications technology industry. Frost and Sullivan also highlighted Riverbed as the market share leader in the Asia Pacific WAN Optimization Controller Market, CY 2009.
  • Won two Technology Services Industry Association (TSIA) STAR Awards for Best Practices, in the categories of Emerging Company Support and SMB Service Delivery Optimization.
  • Highlighted in Everything Channel’s 16th annual 2010 Partner Program Guide as one of North America’s top IT vendors for its Riverbed Partner Network (RPN) program.
  • Recognized by the San Francisco Business Times as one of the 2010 Best Places to Work in the San Francisco Bay Area

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