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Barracuda Networks files for $100M IPO, rival Palo Alto higher

  • Security hardware vendor Barracuda Networks has filed for a $100M IPO under the symbol CUDA. Morgan Stanley, JPMorgan, and BofA/Merrill are the underwriters. Rival Palo Alto Networks (PANW +3.5%) seems to be getting a lift from the news. (S-1)
  • Barracuda is best known for its firewall hardware and related security services; the company's product line includes both next-gen firewalls that directly compete against Palo Alto, as well as application-specific models focused on tasks such spam/virus protection and Web content filtering.
  • Barracuda also sells backup/archiving storage appliances, VPN encryption appliances, and application delivery controllers. In addition to Palo Alto, rivals include Cisco, Juniper, Fortinet, Check Point, EMC, and F5.
  • The company had  revenue of $114.1M (+20% Y/Y) in the six months ending Aug. 31, and a net loss of $4.6M. However, thanks to service subscriptions, billings amounted to $150.5M (+16%), and free cash flow $11M.  Products made up 31% of revenue, and services 69%.
  • It's a good time for security hardware IPOs, as FireEye can vouch. But there might be concerns Barracuda is growing a lot slower than FireEye (107% 1H rev. growth) and Palo Alto (49% July quarter growth).
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