Shares of Infoblox Inc.BLOX went up a whopping 22% after the company reported encouraging first quarter fiscal 2016 results on Nov 30, 2015.
The company reported adjusted loss (excluding amortization of intangibles but including stock-based compensation expenses) of 3 cents per share, which compared favorably with the Zacks Consensus Estimate of a loss of 12 cents. Moreover, the loss narrowed from 16 cents loss per share reported in the year-ago quarter.
Infoblox's first quarter revenues not only increased 40.9% year over year to $94 million but also came in ahead of the Zacks Consensus Estimate of $85 million. The year-over-year improvement was attributed to better-than-expected product revenue growth. Also, higher demand for DDI and DNS solutions drove quarterly revenues.
Based on segments, Products and licenses revenues were $50.9 million, up 61.4 % year over year. The year-over-year increase was led by product upgrades and security. Revenues from Services came in at $43.2 million, up 22.6% year over year, primarily due to a larger installed base of customers and an increase in subscription revenues.
Infoblox's adjusted gross margin was up 194 basis points from the year-ago quarter to 79.9%, primarily due to higher product and service gross margins coupled with a higher revenue base.
The company's operating expenses increased 23.9% from the year-ago quarter. The increase was primarily due to higher research and development, sales and marketing and general and administrative expenses. As a result, the company reported an adjusted loss of $334 million compared with $8.58 billion loss reported in the year-ago quarter.
Infoblox's adjusted net loss (excluding amortization of intangibles but including stock based compensation expenses) came in at $1.28 billion or 3 cents per share compared with a loss of $9.26 billion or 16 cents per share reported in the year-ago quarter.
Infoblox exited the first quarter with cash and cash equivalents and short-term investments of $350.1 million compared with $330.8 million in the previous quarter. Receivables were $47.2 million compared with $45.9 million in the prior quarter. The company had no long-term debt during the quarter.
Infoblox reported cash flow from operations of $19.7 million for the quarter. The company during the quarter authorized a $100 million share repurchase program (included in the figure $50 as accelerated share repurchase).
For the second quarter of fiscal 2016, Infoblox expects total revenue in the range of $93 million to $95 million (mid-point $94 million). The Zacks Consensus Estimate is pegged at $94 million. Non-GAAP gross margin is expected to be in the range of 78% to 79%. Non-GAAP operating margin is expected to be in the range of 12% to 14%. The company expects non-GAAP earnings for the second quarter of fiscal 2016 in the range of $12 cents per share to $14 cents per share (excluding stock based compensation expenses).
For fiscal 2016, the company expects total revenue in the range of $370 million to $380 million (mid-point $375 million). The Zacks Consensus Estimate is pegged at $369 million. Non-GAAP operating margin is expected to be in the range of 10% to 12%.
Infoblox reported better-than-expected first quarter 2016 results. Year-over-year comparasions were favourable, primarily driven by product revenue growth. Also, the company provided an encouraging second quarter and fiscal 2016 guidance.
Furthermore, better-than-expected demand for DDI and DNS solutions, product upgrades and new customer additions during the reported quarter were the other positives.
Currently, Infoblox has a Zacks Rank #3 (Hold). A better-ranked stock worth considering is VASCO Data Security International Inc. VDSI , which has a Zacks Rank #1 (Strong Buy).