Barracuda Networks Sinks Despite Meeting Earnings Expectations

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Barracuda Networks Inc. (NYSE: CUDA) reported its most recent quarterly results before the markets opened on Wednesday. The company said that it had $0.17 in earnings per share (EPS) and $94.3 million in revenue, compared with consensus estimates that called for $0.17 in EPS and revenue of $93.5 million. The fiscal second quarter of last year reportedly had EPS of $0.21 and $87.93 million in revenue.

Subscription revenue grew to $76.0 million, up 14% from $66.9 million in the same period last year, representing 81% of total revenue, and appliance revenue was $18.3 million, compared with $21.0 million.

During this quarter, the company announced several new enhancements to the Barracuda NextGen Firewall and Barracuda Web Application Firewall (WAF) to help customers accelerate Microsoft Azure adoption. Ultimately, these enhancements, combined with the addition of Barracuda Vulnerability Remediation Service, will automate the identification and remediation of vulnerabilities in web-facing applications deployed in Azure.

The firm did not issue any guidance for the coming quarter, but consensus estimates are $0.19 in EPS and $94.48 million in revenue.

On the books, Barracuda cash, cash equivalents and marketable securities totaled $206.6 million at the end of the quarter, up from with $200.1 million at the end of the previous fiscal year.

B.J. Jenkins, president and CEO, commented:

We delivered a strong second quarter achieving core billings growth of 22% year-over-year and gross billings of $108.5 million, which was above our guidance. Our performance was driven by continued traction in the areas of the market where we have been investing, especially email and public cloud security, and we are pleased to see that our efforts are generating stronger top-line results. Excluding non-core billings, we have generated four consecutive quarters of double-digit billings growth. We believe we have the right strategy in place, are focused on the right areas of the market, and provide innovative security solutions that are affordable and consumable in the form that is best suited for our customers’ needs.

Shares of Barracuda were last seen down about 11% at $22.94, with a consensus analyst price target of $28.64 and a 52-week range of $19.06 to $26.69.