Thu, Nov. 5, 12:47 PM
- Fortinet (FTNT -4.2%), Barracuda (CUDA -3.9%), Vasco (VDSI -1.9%), Proofpoint (PFPT -4.6%), and KEYW (KEYW -6.3%) have joined the ranks of enterprise security tech firms selling off in the wake of FireEye's Q3 revenue/billings miss, soft Q4 sales guidance, and full-year billings guidance cut.
- Other decliners include Palo Alto Networks, CyberArk, and Rapid7. FireEye itself is down 23%.
- Also: PC/mobile security software firm AVG is down 17.7% after missing Q3 estimates and providing light Q4 guidance. Symantec is up slightly following an FQ2 EPS beat.
- The PureFunds ISE Cyber Security ETF (HACK -3.1%) has fallen below $27. CyberArk reports after the bell.
- Update: FBR's Daniel Ives is defending the group. "Importantly, we note that nearly every major cybersecurity player (Check Point, Imperva, Proofpoint, Palo Alto, Fortinet) recently has delivered strong results across the board with a healthy outlook ... We continue to strongly believe that FireEye's issues are much more company-specific as DeWalt & Co. are dealing with a plethora of execution/product headaches in the field, which are major overhangs on the FireEye story heading into 2016. We continue to see white-hot cybersecurity spending, which we view as a 30%+ growth area in a 2%–3% overall IT landscape as the threat landscape escalates. We would be strong buyers of the cybersecurity basket, with PANW, PFPT, and CHKP front and center."
Fri, Oct. 30, 12:15 PM
- Imperva (NYSE:IMPV) beat Q3 estimates and forecast Q4 revenue of $66M-$68M and EPS of $0.10-$0.16, above a consensus of $62.3M and -$0.06. Moreover, on the earnings call (transcript), the Web app firewall and database security software vendor set initial 2016 revenue growth guidance of "at least 25%," above a 24% consensus. (earnings release)
- With strong corporate IT security spend providing a lift, product/license revenue rose 55% Y/Y in Q3 to $30.5M, and services revenue 43% to $32.9M. Within services, subscription revenue grew 93% to $12.3M. $100K+ deals rose to 130 from 106 a year ago. 188 new customers were added, and Fortune 1000 penetration stands at 13%.
- The Americas (revenue +86% Y/Y) are driving most of Imperva's growth. EMEA (revenue +9%, hurt by a weak euro) and Asia-Pac (-3%) are softer. Opreating expenses (non-GAAP) rose 23% Y/Y to $28.5M, falling to 45% of revenue from 54% a year ago.
- Next-gen firewall leader Palo Alto Networks (PANW +2.5%), privileged account security software leader CyberArk (CYBR +4.4%), SaaS threat-protection/compliance software vendor Proofpoint (PFPT +3.4%), and security/storage appliance vendor Barracuda (CUDA +3.2%) are following Imperva higher. The Nasdaq is nearly flat.
- CyberArk reports on Nov. 5; Proofpoint delivered a Q3 beat and strong guidance last week. Barracuda directly competes with Imperva in the Web app firewall market, while Palo Alto's next-gen firewalls indirectly compete.
Wed, Oct. 28, 2:24 AM
- Following years of intense debate, the Senate has passed a controversial bill that will see the Department of Homeland Security become a hub for sharing information about cyber attacks within the government and the private sector.
- The bill, which has faced privacy concerns from high-tech firms and advocacy groups, must now be reconciled with a separate piece of legislation that was passed by the House of Representatives earlier this year.
- Related tickers: KEYW, CUDA, PFPT, FEYE, PANW, QLYS, CYBR, HACK
Fri, Oct. 2, 12:37 PM
- Barracuda Networks (NYSE:CUDA) is recovering some of this week's big post-earnings losses after announcing a $50M buyback yesterday afternoon.
- Shares are still down 31% on the week, and 51% YTD. Shares go for 2.2x an FY16 (ends Feb. '16) revenue consensus of $322.3M, after backing out net cash/investments.
Thu, Oct. 1, 5:57 PM
- Barracuda's (NYSE:CUDA) buyback lasts until Sep. 30, 2017, and is good for repurchasing 6% of shares at current levels. It arrives shortly after the security and storage appliance maker plunged in response to the light FQ3 and FY16 guidance provided with its mixed FQ2 results.
- Barracuda had $218M in cash/marketable investments to pay for buybacks with at the end of August, and less than $5M in debt.
Wed, Sep. 30, 12:43 PM
Wed, Sep. 30, 9:13 AM
Tue, Sep. 29, 5:40 PM
Tue, Sep. 29, 5:12 PM
- In addition to slightly missing FQ2 revenue estimates (while slightly beating on EPS), Barracuda (NYSE:CUDA) has guided on its earnings call for billings to rise 10%-13% Y/Y in FQ3 and FQ4, below prior guidance of 16%-18%. Soft EMEA and Asian sales are blamed.
- Billings totaled $98.4M in FQ2, +11% Y/Y (+14% exc. forex) and above revenue of $78.4M. CEO B.J. Jenkins: "The currency environment and longer sales cycles which we experienced in EMEA in Q2 impacted our gross billing performance this quarter. Our storage category billings grew in the mid-twenty percent range year-over-year on a constant currency basis in Q2. However, we do see some evidence that growth in the overall storage market has slowed and that customer requirements are evolving, and we are adjusting our approach accordingly." Enterprise storage demand has been soft in recent months; cloud storage adoption is widely seen as a culprit.
- Appliance revenue rose 8% Y/Y to $22.3M; recurring subscription revenue rose 17% to $56.1M. Non-GAAP costs/expenses rose 13% to $70.3M.
- Separately, Barracuda has announced it's buying Intronis, a provider of cloud backup and disaster recovery software for managed service providers (MSPs) catering to SMBs. Terms are undisclosed.
- Intronis claims nearly 2K MSP partners with more than 36K end-customers. Jenkins: "We believe a larger opportunity exists to add Barracuda's award-winning security and data protection solutions to the Intronis platform to expand its offerings." Intronis supports backups for servers running VMware and Microsoft's virtualization platforms, as well as Microsoft Exchange and SQL Server.
- Shares have plunged to $17.95 after hours. Barracuda also nosedived post-earnings in July due to billings growth concerns.
- FQ2 results, PR
- Update (5:43PM ET): Barracuda has also guided for FQ3 revenue of $79M-$81M and EPS of $0.07-$0.08, below a consensus of $82.5M and $0.10. FY16 (ends in February) EPS guidance has been cut to $0.34-$0.36 from $0.36-$0.41; consensus is at $0.39.
Tue, Sep. 29, 4:23 PM
Mon, Sep. 28, 5:35 PM
Thu, Jul. 23, 11:27 AM
- As was the case 3 months ago, security tech plays are up strongly (HACK +3.6%) after Fortinet (FTNT +12%) beat estimates, reported strong billings, and delivered above-consensus top-line guidance. The Nasdaq is up 0.3%.
- In addition to FireEye, Palo Alto Networks, and CyberArk (previously covered), gainers include Barracuda Networks (CUDA +6.4%), KEYW Holding (KEYW +4.5%), Symantec (SYMC +1.9%), Imperva (IMPV +7.6%), Proofpoint (PFPT +3.6%), Vasco (VDSI +4.5%), AVG (AVG +3.1%), and Qualys (QLYS +5.7%). AVG is benefiting a bullish JPMorgan coverage launch; Proofpoint reports after the close.
- JPMorgan's Sterling Auty has upgraded Fortinet to Overweight, and a slew of firms have hiked their targets. Auty argues Fortinet's numbers suggest its efforts to grow its high-end presence (aided by major sales investments in recent years), and forecasts free cash flow will rise 43% this year.
- On Fortinet's earnings call (transcript), CFO Drew Del Matto mentioned $100K+ deals rose 53% Y/Y and $1M+ deal 133% (compares with 40% total billings growth). He also mentioned the company's high-end FortiGate UTM/next-gen firewall appliances made up 45% of billings (a new high), and that U.S. enterprise sales (benefiting from strong cybersecurity spend) rose 90%. Major deals were struck with "two of the most recognizable technology brands in the world," as well as two large i-banks.
Fri, Jul. 10, 2:27 PM
- Though several firms have cut their targets, Barracuda (CUDA -19.2%) hasn't seen any downgrades as shares lose nearly a fifth of their value in response to the softer-than-expected billings reported along with an FQ1 beat and FY16 guidance reiteration.
- "We are opportunistic buyers of CUDA," says Pac Crest's Rob Owens (Outperform rating, $49 target). "Commentary suggests that an end-of-quarter acceleration and a strong June have contributed to a better outlook for the rest of the year, as evidenced by F2016 guidance being maintained ... While a disappointing billings number in the quarter is certainly a hiccup, we do not view it as changing the fundamentals nor the underlying opportunity."
- Morgan Stanley's Melissa Gorham (Overweight rating, $45 target) is "disappointed" with Barracuda's "poor execution." But she also thinks growing mid-market security IT spend remains a growth driver, and that rising sales of cloud services attached to product sales will boost margins.
- Summit Research's Srini Nandury (Buy rating, $45 target): "We continue to believe in the moat around Barracuda's business model – easy to use low cost products – that isn't easily surmountable for larger vendors." He also likes the fact 70% of Barracuda's revenue is recurring/subscription-based.
Fri, Jul. 10, 12:45 PM
Fri, Jul. 10, 9:12 AM
Thu, Jul. 9, 5:07 PM
- Though Barracuda (NYSE:CUDA) beat FQ1 estimates, its billings rose only 8% Y/Y to $94.3M. That was well below revenue growth of 18%, as well as the company's FY16 (ends Feb. '16) billings growth guidance range of 16%-18%.
- When asked on the CC (webcast) about billings growth, Barracuda stated a mix shift towards virtual (software-based) appliances had a 100-200 bps impact. Barracuda insists the shift is a positive, noting virtual appliance sales carry higher gross margins and asserting they have greater long-term profitability.
- Also: Storage billings growth was in the low-double digits, down sharply from the 30%+ seen in FQ4. Barracuda attributes this to push-outs for major deals and shorter deal lengths, while promising growth will rebound.
- The company is maintaining FY16 billings guidance of $421M-$430M, revenue guidance of $325M-$330M ($328M consensus), and EPS guidance of $0.36-$0.41 ($0.39 consensus). FQ2 EPS guidance of $0.09 is in-line, but revenue guidance of $78M-$79M is below an $80.4M consensus.
- Shares have tumbled to $32.73 AH. They went into earnings up 61% from an Oct. 2014 low of $24.31.
- FQ1 results, PR
Barracuda Networks, Inc. designs and delivers security and storage solutions. It offers cloud-connected solutions that help customers address security threats, improve network performance and protect and store data.
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