Barracuda Networks Sinks Despite Strong Q1 Revenue

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When Barracuda Networks Inc. (NYSE: CUDA) reported its fiscal first-quarter financial results after the markets closed on Monday, the company said that it had $0.18 in earnings per share (EPS) and $94.2 million in revenue. That compared with consensus estimates of $0.18 in EPS and revenue of $91.15 million. In the same period of last year, the IT security company posted EPS of $0.20 and $86.65 million in revenue.

Subscription revenue grew 13% to $73.9 million, from the first quarter of the previous fiscal year, representing 78% of total revenue. Appliance revenue dropped slightly to $20.3 million, compared with $21.3 million in the same period last year.

Note that total active subscribers exceeded 335,000 for the quarter.

During this quarter, the company launched Barracuda Sentinel, a new AI solution that prevents spear phishing and cyber fraud in real time. Barracuda Sentinel combines powerful artificial intelligence technology, domain fraud protection using DMARC authentication and fraud simulation training into a comprehensive solution that guards against spear phishing, impersonation attempts, business email compromise (BEC) and cyber fraud.

On the books, Barracuda cash, cash equivalents and marketable securities totaled $207.3 million at the end of the quarter, up from $200.1 million at the end of the previous fiscal year.

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

We delivered a strong first quarter exceeding our guidance on both revenue and billings, driven by continued momentum with our email security, public cloud and MSP solutions, which led to 20% core product billings growth year-over-year. We also had strong customer renewals in the quarter that contributed to an annualized renewal rate of 93% and included expanding a multi-year public cloud engagement with a Fortune 500 customer. We are excited by the progress we are making in our core focus areas as a growing number of customers turn to Barracuda for our email security and management, network and application security and data protection solutions. We plan to continue to invest in the growth opportunities we see in the market and provide new easy-to-deploy and manage solutions that help customers navigate the evolving threat landscape safely and affordably.

Shares of Barracuda closed Monday at $24.00, with a consensus analyst price target of $28.56 and a 52-week range of $18.97 to $26.69. Following the release, the stock was initially down about 4.8% at $22.84 in early trading indications Tuesday.