EX-99.1 2 q1-16exhibit991xfyx16.htm EARNINGS RELEASE Exhibit


Exhibit 99.1
For Release November 30, 2015
1:10 p.m. Pacific
PRESS RELEASE
Investor Contact:
Renee Lyall
Infoblox
408.986.4748
rlyall@infoblox.com
Media Contact:
Mike Langberg
Infoblox
408.986.5697
mlangberg@infoblox.com


Infoblox Reports Fiscal First Quarter 2016 Results
Company Reports Record Revenue
Announces $100 Million Share Repurchase Authorization, to Include $50 Million Accelerated Share Repurchase


SANTA CLARA, Calif., November 30, 2015 — Infoblox (NYSE:BLOX), the network control company, today reported its financial results for its first fiscal quarter October 31, 2015. Total net revenue for the first quarter of fiscal 2016 was a record $94.0 million, an increase of 40.9% on a year-over-year basis.
On a GAAP basis, the Company reported a net loss of $1.5 million, or $0.03 net loss per fully diluted share, for the first quarter of fiscal 2016, compared with a net loss of $10.2 million, or $0.18 net loss per fully diluted share, for the first quarter of fiscal 2015.
The Company reported non-GAAP net income of $7.8 million, or $0.13 diluted net income per share on a non-GAAP weighted-average share basis, for the first quarter of fiscal 2016, compared with non-GAAP net income of $3.0 million, or $0.05 diluted net income per share on a non-GAAP weighted-average share basis, for the first quarter of fiscal 2015.
The GAAP to non-GAAP reconciling items for the first quarters of fiscal years 2016 and 2015 can be found in the "Reconciliation of GAAP to Non-GAAP Financial Measures" attached to this press release.

“Infoblox offers best-of-breed DDI and DNS security solutions that drove record first quarter revenue as we executed well across key operating metrics,” said Jesper Andersen, president and chief executive officer of Infoblox. “We saw strong revenue growth across all major geographies, and security revenue exceeded $10 million in the quarter,” continued Andersen. “The authorization of a $100 million share repurchase program, including a $50 million accelerated share repurchase, underscores the confidence we have in our business, and demonstrates our commitment to returning value to stockholders. Looking forward, we see multiple growth drivers for our business and believe we are well positioned to execute on the opportunities ahead.”

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Q1’16 Financial Highlights
•
Total revenue grew 8.1% sequentially and 40.9% year-over-year
•
Product revenue grew 9.7% sequentially and 61.4% year-over-year
•
Services revenue grew 6.2% sequentially and 22.6% year-over-year
•
Non-GAAP gross margin grew to 81.2% compared to 79.9% in Q1’15
•
Non-GAAP operating margin grew to 13.3% compared to 5.5% in Q1’15
•
Non-GAAP net income grew 163.3% year-over-year to $7.8 million
•
Cash flow from operations was $19.7 million compared to $12.3 million in Q1'15
•
Cash, cash equivalents, and short term investments grew to $350 million compared to $282 million one year ago
 
Q1’16 Business Highlights
•
Introduced Infoblox DDI for Amazon Web Services (AWS), a virtual appliance that extends the Infoblox solution for enterprise-grade network services and security to the AWS Cloud
•
Announced Infoblox Identity Mapping, and also integration with Cisco ISE, bridging the gap between network security and user identity by intelligently correlating two separate sets of data, making it easier for network administrators to locate the source of security events, track mobile devices and monitor network usage
•
Delivered key enhancements to its carrier-grade DNS solution portfolio to block more types of attacks against service providers and deliver a better subscriber experience including Distributed NXDOMAIN attack protection, Dual-engine DNS, and Enhanced DNS Tunneling Protection.


$100 Million Share Repurchase Authorization

The Company also announced that its board of directors has authorized a $100 million share repurchase program, with $50 million of that program expected to be executed as an accelerated share repurchase in the short term.

For the remaining authorized $50 million, stock purchases may be made from time to time in compliance with applicable securities laws in the open market or in privately negotiated transactions. The timing and amounts of any purchases will be based on market conditions and other factors including price, regulatory requirements and capital availability. The remaining $50 million authorization does not require the purchase of any minimum number of shares, has no expiration date and may be suspended, modified or discontinued at any time without prior notice.


   



2


Financial Outlook
Infoblox announced its outlook of anticipated results for the second fiscal quarter ending January 31, 2016 and fiscal year ending July 31, 2016. This outlook is based on a number of assumptions that it believes are reasonable at the time of this earnings release. Information regarding potential risks that could cause the actual results to differ from these forward-looking statements is set forth below and in Infoblox’s filings with the Securities and Exchange Commission.
For the second fiscal quarter ending January 31, 2016, the Company currently expects:
•Total net revenue in the range of $93 million to $95 million;
•Non-GAAP gross margin to be in the range of 78% to 79%;
•Non-GAAP operating margin in the range of 12% to 14%; and
•Non-GAAP diluted net income per share ("non-GAAP EPS") to be in the range of $0.12 to $0.14, assuming approximately 61 million shares on a non-GAAP diluted weighted-average share basis.     
For the fiscal year ending July 31, 2016, the Company currently expects:
•Total net revenue in the range of $370 million to $380 million; and
•Non-GAAP operating margin in the range of 10% to 12%
About Non-GAAP Financial Measures
To supplement our financial results presented in accordance with Generally Accepted Accounting Principles (GAAP), this press release and the accompanying tables and the related earnings conference call contain certain non-GAAP financial measures, including non-GAAP gross profit and gross margin, non-GAAP operating income and operating margin, non-GAAP net income, non-GAAP EPS and non-GAAP diluted weighted-average shares outstanding. We also provide second fiscal quarter 2016 estimates for net revenue, non-GAAP gross margin, non-GAAP operating margin, non-GAAP EPS and non-GAAP diluted weighted-average shares outstanding and fiscal 2016 estimates for net revenue and non-GAAP operating margin. We believe these non-GAAP financial measures are helpful in understanding our past financial performance and future results. Our non-GAAP financial measures should not be considered in isolation or as a substitute for comparable GAAP measures and should be read in conjunction with our consolidated financial statements prepared in accordance with GAAP. Our management regularly uses our supplemental non-GAAP financial measures internally to understand and manage our business and forecast future periods. These non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies. Our non-GAAP financial measures include adjustments based on the following items:
Stock-based compensation expenses: We have excluded the effect of stock-based compensation from our non-GAAP operating results. Although stock-based compensation is a key incentive offered to our employees, we continue to evaluate our business performance excluding stock-based compensation expenses. Stock-based compensation expenses will recur in future periods.
Amortization of intangible assets: We have excluded the effect of amortization of intangible assets from our non-GAAP operating results. Amortization of intangible assets is a non-cash expense, and it is not part of our core operations. Investors should note that the use of intangible assets contributed to revenues earned during the periods presented and will contribute to future period revenues as well.    
Acquisition related expenses: Acquisition related expenses may include transaction costs, costs for transitional employees, other acquired employee related retention costs, integration related professional services, adjustments to the fair value of the acquisition related contingent consideration, and the write-down of certain acquired in-progress research and development intangibles. We believe that to the extent we incur significant expenses in connection with our acquisitions, it is useful for investors to understand the effects of these items on our total operating expenses.
Our non-GAAP Financial Measures are described as follows:
Non-GAAP gross profit and gross margin. Non-GAAP gross profit is gross profit as reported on our consolidated statements of operations, excluding the impact of stock-based compensation and intangible asset amortization expense. Non-GAAP gross margin is non-GAAP gross profit divided by net revenue.
Non-GAAP operating income and operating margin. Non-GAAP operating income is income (loss) from operations as reported on our consolidated statements of operations, excluding the impact of stock-based compensation, intangible asset amortization expense and acquisition related expenses. Non-GAAP operating margin is non-GAAP operating income divided by net revenue.

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Non-GAAP net income and non-GAAP EPS. Non-GAAP net income is net income (loss) as reported on our consolidated statements of operations, excluding the impact of stock-based compensation, intangible asset amortization expense and acquisition related expenses with income taxes adjusted to reflect our estimated long-term effective tax rate on a non-GAAP basis. Non-GAAP EPS is non-GAAP net income divided by non-GAAP diluted weighted average shares outstanding.
For reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section of the accompanying tables titled, “Reconciliation of GAAP to Non-GAAP Financial Measures.”

Conference Call & Webcast
Management will host a conference call today, November 30, 2015 at 1:30 p.m. PST/4:30 p.m. EST to discuss its fiscal first quarter 2016 financial results. To access the call, dial 877-531-2988 (domestic) or 612-332-1210 (international) at least 10 minutes prior to the scheduled start of the call. A live webcast of the call will also be available on the corporate website at: http://ir.infoblox.com. An archive of the webcast will be available on the company's website and a taped replay will be available for one week at 800-475-6701 (domestic) or 320-365-3844 (international), passcode 373261.
About Infoblox
Infoblox (NYSE:BLOX) delivers critical network services that protect Domain Name System (DNS) infrastructure, automate cloud deployments, and increase the reliability of enterprise and service provider networks around the world. As the industry leader in DNS, DHCP, and IP address management, the category known as DDI, Infoblox (www.infoblox.com) reduces the risk and complexity of networking.

###
Cautionary Statement
All statements in this release that are not statements of historical fact, including but not limited to the quotations attributable to Mr. Andersen and the statements under “Financial Outlook” and our share repurchase authorization are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause our actual results to differ materially, including, but not limited to: unexpected delays in the delivery of our solutions, particularly at the end of the quarter; changes in demand for network control solutions; the market acceptance of our products; the fluctuations in our gross margins; the concentration of our customer base; competitive developments including pricing pressures; our ability to manage operating expenses effectively; and the general economic, industry or political conditions in the United States or internationally. Such risk factors also include those related to whether or not we will complete our share repurchase program during any particular time frame or at all and whether our cash and short term investments may be insufficient to fund our share repurchase program.
For a detailed discussion of these and other risk factors, please refer to our filings with the Securities and Exchange Commission, which are available on our investor relations Web site (http://ir.infoblox.com/) and on the SEC’s Web site (www.sec.gov).
All information provided in this release and in the attachments is as of November 30, 2015, and stockholders of Infoblox are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date such statements are made. Infoblox does not undertake any obligation to publicly update any forward-looking statements to reflect events, circumstances or new information after this November 30, 2015 press release, or to reflect the occurrence of unanticipated events.

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INFOBLOX INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - GAAP BASIS
(In thousands, except per share data)
(Unaudited)
 
 
 
Three Months Ended
 
 
October 31,
2015
 
July 31,
2015
 
October 31,
2014
Net revenue:
 
 
 
 
 
 
Products and licenses
 
$
50,857

 
$
46,348

 
$
31,508

Services
 
43,165

 
40,651

 
35,211

Total net revenue
 
94,022

 
86,999

 
66,719

Cost of revenue:
 
 
 
 
 
 
Products and licenses
 
10,350

 
10,039

 
7,467

Services
 
8,752

 
8,554

 
7,467

Total cost of revenue
 
19,102

 
18,593

 
14,934

Gross profit
 
74,920

 
68,406

 
51,785

Operating expenses:
 
 
 
 
 
 
Research and development
 
17,833

 
18,309

 
14,570

Sales and marketing
 
47,286

 
44,438

 
38,455

General and administrative
 
10,457

 
10,055

 
7,960

Total operating expenses
 
75,576

 
72,802

 
60,985

Loss from operations
 
(656
)
 
(4,396
)
 
(9,200
)
Other expense, net
 
95

 
(77
)
 
(190
)
Loss before provision for income taxes
 
(561
)
 
(4,473
)
 
(9,390
)
Provision for income taxes
 
950

 
253

 
820

Net loss
 
$
(1,511
)
 
$
(4,726
)
 
$
(10,210
)
Net loss per share - basic and diluted
 
$
(0.03
)
 
$
(0.08
)
 
$
(0.18
)
Weighted-average shares used in computing basic and diluted net loss per share
 
59,272

 
58,128

 
55,371





5


INFOBLOX INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(Unaudited)
 
 
 
Three Months Ended
 
 
October 31,
2015
 
July 31,
2015
 
October 31,
2014
Gross Profit Reconciliation:
 
 
 
 
 
 
GAAP gross profit
 
$
74,920

 
$
68,406

 
$
51,785

Stock-based compensation expense
 
1,128

 
1,045

 
1,203

Amortization of intangible assets
 
290

 
290

 
290

Non-GAAP gross profit
 
$
76,338

 
$
69,741

 
$
53,278

Gross Margin Reconciliation:
 
 
 
 
 
 
GAAP gross margin
 
79.7
 %
 
78.6
 %
 
77.6
 %
Stock-based compensation expense
 
1.2

 
1.2

 
1.8

Amortization of intangible assets
 
0.3

 
0.3

 
0.5

Non-GAAP gross margin
 
81.2
 %
 
80.1
 %
 
79.9
 %
Operating Income (Loss) Reconciliation:
 
 
 
 
 
 
GAAP operating loss
 
$
(656
)
 
$
(4,396
)
 
$
(9,200
)
Stock-based compensation expense
 
12,828

 
11,525

 
12,222

Amortization of intangible assets
 
322

 
322

 
617

Non-GAAP operating income
 
$
12,494

 
$
7,451

 
$
3,639

Operating Margin Reconciliation:
 
 
 
 
 
 
GAAP operating margin
 
(0.7
%)
 
(5.1
%)
 
(13.8
%)
Stock-based compensation expense
 
13.6

 
13.3

 
18.4

Amortization of intangible assets
 
0.4

 
0.4

 
0.9

Non-GAAP operating margin
 
13.3
 %
 
8.6
 %
 
5.5
 %
Net Income (Loss) Reconciliation:
 
 
 
 
 
 
GAAP net loss
 
$
(1,511
)
 
$
(4,726
)
 
$
(10,210
)
Stock-based compensation expense
 
12,828

 
11,525

 
12,222

Amortization of intangible assets
 
322

 
322

 
617

Income tax adjustment
 
(3,834
)
 
167

 
335

Non-GAAP net income
 
$
7,805

 
$
7,288

 
$
2,964

 
 
 
 
 
 
 
Non-GAAP EPS
 
$
0.13

 
$
0.12

 
$
0.05

Shares used in Computing non-GAAP EPS Reconciliation:
 
 
 
 
 
 
Diluted shares:
 
 
 
 
 
 
Weighted-average shares used in calculating GAAP diluted net loss per share
 
59,272

 
58,128

 
55,371

Additional dilutive securities for non-GAAP income
 
1,976

 
3,149

 
1,299

Weighted-average shares used in calculating non-GAAP diluted net income per share
 
61,248

 
61,277

 
56,670



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INFOBLOX INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
 
 
 
October 31, 2015
 
July 31, 2015
 
 
(Unaudited)
 
(a)
ASSETS
 
 
 
 
CURRENT ASSETS:
 
 
 
 
Cash and cash equivalents
 
$
127,621

 
$
103,124

Short-term investments
 
222,500

 
227,712

Accounts receivable, net
 
47,233

 
45,881

Inventory
 
7,402

 
8,588

Prepaid expenses and other current assets
 
8,704

 
10,459

Total current assets
 
413,460

 
395,764

Property and equipment, net
 
24,138

 
23,225

Restricted cash
 
3,512

 
3,515

Intangible assets, net
 
1,601

 
1,923

Goodwill
 
33,293

 
33,293

Other assets
 
1,276

 
1,547

TOTAL ASSETS
 
$
477,280

 
$
459,267

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
CURRENT LIABILITIES:
 
 
 
 
Accounts payable and accrued liabilities
 
$
18,657

 
$
19,136

Accrued compensation
 
20,692

 
22,931

Deferred revenue, net
 
97,454

 
95,130

Total current liabilities
 
136,803

 
137,197

Deferred revenue, net
 
46,053

 
41,717

Other liabilities
 
4,937

 
5,201

TOTAL LIABILITIES
 
187,793

 
184,115

STOCKHOLDERS’ EQUITY:
 
 
 
 
Convertible preferred stock, $0.0001 par value per share—5,000 shares authorized; no shares issued or outstanding
 
—

 
—

Common stock, $0.0001 par value per share—100,000 shares authorized; 59,762 shares and 58,836 shares issued and outstanding as of October 31, 2015 and July 31, 2015
 
6

 
6

Additional paid-in capital
 
454,610

 
438,725

Accumulated other comprehensive loss
 
(76
)
 
(37
)
Accumulated deficit
 
(165,053
)
 
(163,542
)
TOTAL STOCKHOLDERS’ EQUITY
 
289,487

 
275,152

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
 
$
477,280

 
$
459,267


(a) Derived from the July 31, 2015 audited consolidated financial statements.

7


INFOBLOX INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
 
Three Months Ended
 
October 31, 2015
 
October 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
Net loss
$
(1,511
)
 
$
(10,210
)
Adjustments to reconcile net loss to net cash provided by operating activities:
 
 
 
Stock-based compensation
12,827

 
12,222

Depreciation and amortization
2,325

 
2,213

Excess tax benefits from employee stock plans
(716
)
 
(600
)
Other
227

 
598

Changes in operating assets and liabilities:
 
 
 
Accounts receivable, net
(1,352
)
 
99

Inventory
1,080

 
(978
)
Prepaid expenses, other current assets and other assets
2,135

 
597

Accounts payable and accrued liabilities
536

 
1,380

Accrued compensation
(2,239
)
 
2,040

Deferred revenue, net
6,660

 
5,142

Other liabilities
(264
)
 
(208
)
Net cash provided by operating activities
19,708

 
12,295

CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
Purchases of short-term investments
(29,905
)
 
(32,577
)
Proceeds from maturities of short-term investments
34,920

 
20,340

Purchases of property and equipment
(3,205
)
 
(1,751
)
Proceeds from sales of short-term investments
—

 
1,001

Net cash provided by (used in) investing activities
1,810

 
(12,987
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
Proceeds from issuance of common stock under the employee stock plans
2,332

 
1,535

Excess tax benefits from employee stock plans
716

 
600

Net cash provided by financing activities
3,048

 
2,135

 
 
 
 
Effect of foreign exchange rate changes on cash and cash equivalents
(69
)
 
(434
)
 
 
 
 
NET INCREASE IN CASH AND CASH EQUIVALENTS
24,497

 
1,009

CASH AND CASH EQUIVALENTS—Beginning of period
103,124

 
78,535

CASH AND CASH EQUIVALENTS—End of period
$
127,621

 
$
79,544

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
 
 
 
Purchases of property and equipment not yet paid
$
1,051

 
$
328

Cash paid for income taxes, net
$
158

 
$
172


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