Riverbed Technology, Inc. Reports Third Quarter 2007 Financial Results
Quarterly Revenues Increase by 157% Year-Over-Year to $63.3 Million Cumulative Customer Count Now Exceeds 3,000
San Francisco, CA — October 23, 2007 — Riverbed Technology, Inc. (Nasdaq: RVBD), the technology and market leader in wide-area data services (WDS), today released financial results for the third quarter ended September 30, 2007.
Revenues for the third quarter of 2007 were $63.3 million, which represents an increase of 157% from the third quarter of last year. Riverbed® posted GAAP net income of $2.8 million, or $0.04 per diluted share, compared to a net loss of $3.1 million, or a loss of $0.16 per share, in the third quarter of 2006. Riverbed's third quarter of 2007 GAAP results included $9.7 million of stock-based compensation expenses and stock-based payroll taxes.
Excluding the impact of stock-based compensation and related payroll taxes in all periods, the non-GAAP net income for the third quarter of 2007 was $12.4 million, or $0.17 per diluted share, compared to a non-GAAP net loss of $1.0 million, or $0.02 per share, in the third quarter of 2006.
"Strong broad-based demand led to another record quarter with year-over-year revenue growth of 157%," noted Jerry Kennelly, Riverbed president and chief executive officer. "Our leadership position in the WDS market is clearly evident in our rapid revenue growth and our high rate of new customer acquisition. Our cumulative customers now total more than 3,000, including over 100 of the Fortune 500. This week, we further added to our competitive differentiation with the announcement of RiOS™ 4.1, which delivers enhanced speed, scalability, and security. We are also pleased with the initial reception to our Steelhead Mobile product which we introduced at the end of the third quarter. Riverbed has the most comprehensive WDS solution addressing the needs of mobile workers, remote offices, and data centers. Many potential customers have cited Steelhead Mobile as another key differentiator for Riverbed."
"GAAP gross margins improved from 69.7% in the June quarter to a record 71.3% in the third quarter. This improvement, combined with our rapid revenue growth, led to record non-GAAP net income despite a higher tax rate and even as we rapidly added personnel and invested in our infrastructure to facilitate anticipated future growth. Over the coming year, we will continue to invest in our technology, sales, marketing, and infrastructure to capitalize on what we believe is a tremendous market opportunity," said Randy Gottfried, Riverbed chief financial officer.
Conference Call Information
Riverbed will host a conference call for analysts and investors to discuss its third quarter results today at 5:30 p.m. Eastern Time (2:30 p.m. Pacific Time). A live webcast of the conference call will also be accessible from the "Investor Relations" section of the company's website at www.riverbed.com. Following the webcast, an archived version will be available on the website for 30 days. To
hear the replay, parties in the United States and Canada should call 800-405-2236 and enter passcode 11098947. International parties can access the replay at 303-590-3000 and should enter passcode 11098947.
About Riverbed
Riverbed Technology is the technology and market leader in wide-area data services (WDS) solutions for companies worldwide. By enabling application performance over the wide area network (WAN) that is orders of magnitude faster than what users experience today, Riverbed is changing the way people work, and enabling a distributed workforce that can collaborate as if they were local. Additional information about Riverbed (Nasdaq: RVBD) is available at www.riverbed.com.
Forward Looking Statements
This press release contains forward-looking statements, including statements relating to the expected demand for Riverbed's products and services, the growth prospects of the WDS market, and statements relating to Riverbed's ability to meet the needs of distributed organizations, grow market share or grow the market as a whole. These forward-looking statements involve risks and uncertainties, as well as assumptions that, if they do not fully materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. The risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward-looking statements include our ability to react to trends and challenges in our business and the markets in which we operate; our ability to anticipate market needs or develop new or enhanced products to meet those needs;
the adoption rate of our products; our ability to establish and maintain successful relationships with our distribution partners; our ability to compete in our industry; fluctuations in demand, sales cycles and prices for our products and services; shortages or price fluctuations in our supply chain; our ability to protect our intellectual property rights; general political, economic and market conditions and events; and other risks and uncertainties described more fully in our documents filed with or furnished to the Securities and Exchange Commission. More information about these and other risks that may impact Riverbed's business are set forth in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2007 filed with the SEC on July 30, 2007, as well as subsequent reports filed with the SEC. All forward-looking statements in this press release are based on information available to us as of the date hereof, and we assume no obligation to update these forward-looking statements.
Any future product, feature or related specification that may be referenced in this release are for information purposes only and are not commitments to deliver any technology or enhancement. Riverbed reserves the right to modify future product plans at any time.
Non-GAAP Financial Measures
In addition to disclosing financial measures prepared in accordance with Generally Accepted Accounting Principles (GAAP), this press release and the accompanying tables contain non-GAAP financial measures. For a description of these non-GAAP financial measures, including the reasons why management uses each measure, and reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section of the accompanying tables titled "Use of Non-GAAP Financial Information" as well as the related tables that follow it. We anticipate disclosing forward-looking non-GAAP financial information in our conference call to discuss our third quarter results, including an estimate of non-GAAP earnings for 2007 that excludes stock-based compensation expenses related to employee stock options, purchases of common stock under our Employee Stock Purchase Plan, and related payroll taxes.
We cannot readily estimate these expenses because they depend on such factors as our future stock price for purposes of computing such expenses.
A copy of this press release can be found on the investor relations page of Riverbed's website at www.riverbed.com.
Riverbed Technology, Riverbed, Steelhead, RiOS, Interceptor, and the Riverbed logo are trademarks or registered trademarks of Riverbed Technology, Inc. All other trademarks used or mentioned herein belong to their respective owners.
GAAP Condensed Consolidated Statements of Operations
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Media Contacts:
Randy Gottfried, Chief Financial Officer
415-247-6397
ir@riverbed.com
Chris Danne
The Blueshirt Group
415-217-7722
chris@blueshirtgroup.com
