Riverbed Technology, Inc. Reports Third Quarter Financial Results
Revenues Increase 36% Sequentially and 247% Year-over-Year to $24.6 Million
San Francisco, CA — October 26, 2006 — Riverbed Technology, Inc. (Nasdaq: RVBD) today released financial results for the third quarter ended September 30, 2006. Net revenues for the third quarter of 2006 were $24.6 million, which represents a sequential increase of 36% from the immediately preceding quarter and a year-over-year increase of 247% from the third quarter of last year.
The net loss on a GAAP basis for the third quarter of 2006 was $3.1 million, or $0.16 per share, compared to a net loss of $6.1 million in the second quarter of 2006 and a net loss of $3.9 million in the third quarter of 2005. Riverbed's third quarter of 2006 GAAP results included $2.1 million of non-cash stock-based compensation expenses related to employee stock options.
Excluding the impact of stock-based compensation in all periods and assuming preferred shares were converted as of the later of their issuance or the beginning of the respective periods, the non-GAAP net loss for the third quarter of 2006 was $1.0 million, or $0.02 per share, compared to a non-GAAP net loss of $4.6 million in the second quarter of 2006 and a non-GAAP net loss of $3.5 million in the third quarter of 2005.
"Riverbed's revenue growth accelerated in the third quarter, indicative of the strong demand for our industry-leading technology and the rapid expansion of our market," commented Jerry Kennelly, chairman and chief executive officer of Riverbed®. During the September quarter, Riverbed added approximately 300 new customers, bringing its cumulative customer total to over 1,300 since it began shipping Steelhead® wide-area data services (WDS) appliances in mid-2004.
"Our business model improved substantially in the third quarter as we increased gross margins and decreased operating expenses as a percentage of revenue compared to all prior periods. We also generated positive cash flow from operations in the quarter for the first time in Riverbed's history," added Randy Gottfried, chief financial officer of Riverbed.
Recent Highlights
Riverbed’s focus on delivering to distributed organizations of all sizes industry-leading performance, scalability, and simplicity was reflected in a number of key business initiatives and recent milestones.
- Riverbed successfully completed its initial public offering, raising $87.4 million, net of underwriting discounts and other transaction expenses.
- Riverbed began shipping the next generation of the Riverbed Optimization System (RiOS™), version 3.0, as well as the Interceptor™ appliance and five new Steelhead appliances that deliver high scalability and acceleration for up to one million simultaneous connections at 4 Gbps throughput.
- Riverbed also announced that Gartner positioned the Company in the Leaders quadrant in the “WAN Optimization Controller Magic Quadrant” published in October 2006 and authored by Andy Rolfe and Joe Skorupa. This report positions vendors in one of four quadrants based on the companies’ vision and ability to execute on that vision.
- Riverbed launched the Riverbed Technology Alliance (RTA), validating the company’s commitment to delivering to customers the best performance for the broadest range of applications. The RTA is composed of member companies whose solutions benefit from the optimizations provided by Riverbed’s WDS solutions. Through this program, Riverbed is able to work closely with partners to deliver to customers the best performance for applications important to their businesses. Initial members of the RTA were DoubleTake, EqualLogic, Isilon and SEPATON.
- Light Reading’s Byte and Switch, the premier online storage networking publication, named Riverbed the “Best WAN Optimization Solution.”
- Computer Business Review named Riverbed one of the “10 Most Influential Companies in Storage.”
Conference Call Information
Riverbed will host a conference call for analysts and investors to discuss its third quarter results today at 5:00 p.m. Eastern Time (2:00 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 11073351. International parties can access the replay at 303-590-3000 and should enter passcode 11073351.
About Riverbed
Riverbed Technology is the performance 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.
This press release contains forward-looking statements, including 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 Registration Statement on Form S-1 filed with the SEC, including the “Risk Factors” section in our final Prospectus dated September 20, 2006. 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.
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 income for the fourth quarter of 2006 that excludes non-cash stock-based compensation expenses related to employee stock options and purchases of common stock under our Employee Stock Purchase Plan.
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.
Three months ended Nine months ended
September 30, September 30,
------------------- -------------------
2006 2005 2006 2005
--------- --------- --------- ---------
Revenue:
Product $ 19,303 $ 5,426 $ 44,169 $ 9,293
Support and services 3,595 510 7,385 1,015
Ratable product and related
support and services 1,720 1,151 4,828 2,028
--------- --------- --------- ---------
Total revenue 24,618 7,087 56,382 12,336
Cost of revenue:
Cost of product 6,211 1,812 14,576 3,259
Cost of support and services 1,304 306 2,851 732
Cost of ratable product and
related support and
services 390 474 1,446 983
--------- --------- --------- ---------
Total cost of revenue 7,905 2,592 18,873 4,974
--------- --------- --------- ---------
Gross profit 16,713 4,495 37,509 7,362
Operating expenses:
Sales and marketing 12,181 5,035 31,768 12,357
Research and development 4,930 2,050 12,712 5,348
General and administrative 2,347 955 6,014 2,093
--------- --------- --------- ---------
Total operating expenses 19,458 8,040 50,494 19,798
--------- --------- --------- ---------
Operating loss (2,745) (3,545) (12,985) (12,436)
Other income (expense) net (275) (56) (294) 37
Loss before provision for
income taxes and cumulative--------- --------- --------- ---------
effect of change in
accounting principle (3,020) (3,601) (13,279) (12,399)
Provision for income taxes 77 9 155 22
Loss before cumulative
effective of chance in --------- --------- --------- ---------
accounting principle (3,097) (3,610) (13,434) (12,421)
Cumulative effect of change
in accounting principle - 280 - 280
--------- --------- --------- ---------
Net loss $ (3,097) $ (3,890) $(13,434) $(12,701)
========= ========= ========= =========
Net loss per share, basic and
diluted $ (0.16) $ (0.39) $ (0.91) $ (1.43)
Shares used in computing basic
and diluted
net loss per share 19,034 9,937 14,705 8,869
Stock-based compensation
expense included in above:
Cost of support and services$ 93 $ 14 $ 198 $ 21
Sales and marketing 1,055 148 2,189 277
Research and development 551 140 1,178 226
General and administrative 381 132 867 207
--------- --------- --------- ---------
Total stock-based
compensation expense $ 2,080 $ 434 $ 4,432 $ 731
========= ========= ========= =========
Riverbed Technology, Inc.
Non-GAAP Condensed Consolidated Statements of Operations
In thousands, except per share amounts
Unaudited
Three months ended Nine months ended
September 30, September 30,
------------------- -------------------
2006 2005 2006 2005
--------- --------- --------- ---------
Revenue:
Product $ 19,303 $ 5,426 $ 44,169 $ 9,293
Support and services 3,595 510 7,385 1,015
Ratable product and related
support and services 1,720 1,151 4,828 2,028
--------- --------- --------- ---------
Total revenue 24,618 7,087 56,382 12,336
Cost of revenue:
Cost of product 6,211 1,812 14,576 3,259
Cost of support and
services 1,211 292 2,653 711
Cost of ratable product and
related support and
services 390 474 1,446 983
--------- --------- --------- ---------
Total cost of revenue 7,812 2,578 18,675 4,953
--------- --------- --------- ---------
Gross profit 16,806 4,509 37,707 7,383
Operating expenses:
Sales and marketing 11,126 4,887 29,579 12,080
Research and development 4,379 1,910 11,534 5,122
General and administrative 1,966 823 5,147 1,886
--------- --------- --------- ---------
Total operating expenses 17,471 7,620 46,260 19,088
--------- --------- --------- ---------
Operating loss (665) (3,111) (8,553) (11,705)
Other income (expense) net: (275) (56) (294) 37
Loss before provision for
income taxes and --------- --------- --------- ---------
cumulative effect of
change in accounting
principle (940) (3,167) (8,847) (11,668)
Provision for income taxes 77 9 155 22
Loss before cumulative
effective of chance in --------- --------- --------- ---------
accounting principle (1,017) (3,176) (9,002) (11,690)
Cumulative effect of change
in accounting principle - 280 - 280
--------- --------- --------- ---------
Net loss $ (1,017) $ (3,456) $ (9,002) $(11,970)
========= ========= ========= =========
Net loss per share, basic and
diluted $ (0.02) $ (0.08) $ (0.17) $ (0.27)
Shares used in computing basic
and diluted
net loss per share 54,094 45,641 52,118 44,573
Use of Non-GAAP Financial Information:
To supplement our condensed consolidated financial statements
presented on a GAAP basis, Riverbed uses non-GAAP measures of
operating results, net loss and net loss per share, which are
adjusted to exclude stock-based compensation expense and to give
effect to the conversion of preferred stock into common stock as
of the later of the date of their issuance or the beginning of
the applicable accounting period. We believe these adjustments
are appropriate to enhance an overall understanding of our past
financial performance and also our prospects for the future.
These adjustments to our current period GAAP results are made
with the intent of providing both management and investors a more
complete understanding of Riverbed's underlying operating results
and trends and our marketplace performance. The non-GAAP results
are an indication of our baseline performance that are considered
by management for purpose of making operational decisions. In
addition, these adjusted non-GAAP results are the primary
indicators management uses as a basis for our planning and
forecasting of future periods. The presentation of this
additional information is not meant to be considered in isolation
or as a substitute for net loss or basic and diluted net loss per
share prepared in accordance with generally accepted accounting
principles in the United States. Non-GAAP financial measures are
not based on a comprehensive set of accounting rules or
principles and are subject to limitations.
Riverbed Technology, Inc.
GAAP to Non-GAAP Reconciliation
In thousands, except per share amounts
Unaudited
Three months ended
September 30, 2006
--------------------------------
GAAP Adjustments Non-GAAP
--------------------- ---------
Revenue:
Product $ 19,303 $ - $ 19,303
Support and services 3,595 - 3,595
Ratable product and related
support and services 1,720 - 1,720
--------------------- ---------
Total revenue 24,618 - 24,618
Cost of revenue:
Cost of product 6,211 - 6,211
Cost of support and services 1,304 (93) a 1,211
Cost of ratable product and
related support and services 390 - 390
--------------------- ---------
Total cost of revenue 7,905 (93) 7,812
--------------------- ---------
Gross profit 16,713 93 16,806
Operating expenses:
Sales and marketing 12,181 (1,055) a 11,126
Research and development 4,930 (551) a 4,379
General and administrative 2,347 (381) a 1,966
--------------------- ---------
Total operating expenses 19,458 (1,987) 17,471
--------------------- ---------
Operating loss (2,745) 2,080 (665)
Other income (expense) net: (275) - (275)
Loss before provision for
income taxes and cumulative --------------------- ---------
effect of change in
accounting principle (3,020) 2,080 (940)
Provision for income taxes 77 - 77
Loss before cumulative
effective of chance in --------------------- ---------
accounting principle (3,097) 2,080 (1,017)
Cumulative effect of change
in accounting principle - - -
--------------------- ---------
Net loss $ (3,097)$ 2,080 $ (1,017)
===================== =========
Net loss per common share, basic and
diluted $ (0.16) $ (0.02)
Shares used in computing basic and
diluted
net loss per common share 19,034 35,060 b 54,094
(a) Excluded amount represents stock-based compensation expense.
Stock-based compensation is a non-cash expense accounted for
in accordance with the intrinsic value method under Accounting
Principles Board No. 25 through December 31, 2005 and with the
fair value recognition provisions of Statement of Financial
Accounting Standards No. 123(R) effective January 1, 2006.
While a large component of our expense, we believe investors
want to exclude the effects of stock-based compensation
expense in order to compare our financial performance with
that of other companies and between time periods.
(b) Represents common shares from the conversion of convertible
preferred shares as if the shares were converted as of the
later of their issuance or the beginning of the applicable
period. Convertible preferred shares were converted into
common shares as of September 20, 2006, the effective date of
our IPO. We believe investors want to give effect to the
conversion for prior periods in order to compare our financial
performance with that of other companies and between time
periods.
Riverbed Technology, Inc.
GAAP to Non-GAAP Reconciliation
In thousands, except per share amounts
Unaudited
Nine months ended
September 30, 2006
-----------------------------------------
GAAP Adjustments Non-GAAP
----------------------------- ----------
Revenue:
Product $ 44,169 $ - $ 44,169
Support and services 7,385 - 7,385
Ratable product and
related support and
services 4,828 - 4,828
----------------------------- ----------
Total revenue 56,382 - 56,382
Cost of revenue:
Cost of product 14,576 - 14,576
Cost of support and
services 2,851 (198) a 2,653
Cost of ratable product
and related support and
services 1,446 - 1,446
----------------------------- ----------
Total cost of revenue 18,873 (198) 18,675
----------------------------- ----------
Gross profit 37,509 198 37,707
Operating expenses:
Sales and marketing 31,768 (2,189) a 29,579
Research and development 12,712 (1,178) a 11,534
General and
administrative 6,014 (867) a 5,147
----------------------------- ----------
Total operating expenses 50,494 (4,234) 46,260
----------------------------- ----------
Operating loss (12,985) 4,432 (8,553)
Other income (expense) net: (294) - (294)
Loss before provision for
income taxes and ----------------------------- ----------
cumulative effect of
change in accounting
principle (13,279) 4,432 (8,847)
Provision for income
taxes 155 - 155
Loss before cumulative
effective of chance in ----------------------------- ----------
accounting principle (13,434) 4,432 (9,002)
Cumulative effect of
change in accounting
principle - - -
----------------------------- ----------
Net loss $ (13,434) $ 4,432 $ (9,002)
============================= ==========
Net loss per common share,
basic and diluted $ (0.91) $ (0.17)
Shares used in computing
basic and diluted
net loss per common share 14,705 37,413 b 52,118
(a) Excluded amount represents stock-based compensation
expense. Stock-based compensation is a non-cash
expense accounted for in accordance with the
intrinsic value method under Accounting Principles
Board No. 25 through December 31, 2005 and with the
fair value recognition provisions of Statement of
Financial Accounting Standards No. 123(R) effective
January 1, 2006. While a large component of our
expense, we believe investors want to exclude the
effects of stock-based compensation expense in order
to compare our financial performance with that of
other companies and between time periods.
(b) Represents common shares from the conversion of
convertible preferred shares as if the shares were
converted as of the later of their issuance or the
beginning of the applicable period. Convertible
preferred shares were converted into common shares as
of September 20, 2006, the effective date of our IPO.
We believe investors want to give effect to the
conversion for prior periods in order to compare our
financial performance with that of other companies
and between time periods.
Riverbed Technology, Inc.
GAAP to Non-GAAP Reconciliation
In thousands, except per share amounts
Unaudited
Three months ended
September 30, 2005
-------------------------------------
GAAP Adjustments Non-GAAP
------------ ------------ ----------
Revenue:
Product $ 5,426 $ - $ 5,426
Support and services 510 - 510
Ratable product and related
support and services 1,151 - 1,151
------------ ------------ ----------
Total revenue 7,087 - 7,087
Cost of revenue:
Cost of product 1,812 - 1,812
Cost of support and services 306 (14) a 292
Cost of ratable product and
related support and services 474 - 474
------------ ------------ ----------
Total cost of revenue 2,592 (14) 2,578
------------ ------------ ----------
Gross profit 4,495 14 4,509
Operating expenses:
Sales and marketing 5,035 (148) a 4,887
Research and development 2,050 (140) a 1,910
General and administrative 955 (132) a 823
------------ ------------ ----------
Total operating expenses 8,040 (420) 7,620
------------ ------------ ----------
Operating loss (3,545) 434 (3,111)
Other income (expense) net: (56) - (56)
Loss before provision for
income taxes and cumulative ------------ ------------ ----------
effect of change in
accounting principle (3,601) 434 (3,167)
Provision for income taxes 9 - 9
Loss before cumulative
effective of chance in ------------ ------------ ----------
accounting principle (3,610) 434 (3,176)
Cumulative effect of change
in accounting principle 280 - 280
------------ ------------ ----------
Net loss $ (3,890) $ 434 $ (3,456)
============ ============ ==========
Net loss per common share, basic
and diluted $ (0.39) $ (0.08)
Shares used in computing basic
and diluted
net loss per common share 9,937 35,704 b 45,641
(a) Excluded amount represents stock-based compensation expense.
Stock-based compensation is a non-cash expense accounted for in
accordance with the intrinsic value method under Accounting
Principles Board No. 25 through December 31, 2005.
While a large component of our expense, we believe investors want
to exclude the effects of stock-based compensation expense in
order to compare our financial performance with that of other
companies and between time periods.
(b) Represents common shares from the conversion of convertible
preferred shares as if the shares were converted as of the later
of their issuance or the beginning of the applicable period.
Convertible preferred shares were converted into common shares as
of September 20, 2006, the effective date of our IPO. We believe
investors want to give effect to the conversion for prior periods
in order to compare our financial performance with that of other
companies and between time periods.
Riverbed Technology, Inc.
GAAP to Non-GAAP Reconciliation
In thousands, except per share amounts
Unaudited
Nine months ended
September 30, 2005
---------------------------------------
GAAP Adjustments Non-GAAP
-------------- ------------ ----------
Revenue:
Product $ 9,293 $ - $ 9,293
Support and services 1,015 - 1,015
Ratable product and
related support and
services 2,028 - 2,028
-------------- ------------ ----------
Total revenue 12,336 - 12,336
Cost of revenue:
Cost of product 3,259 - 3,259
Cost of support and
services 732 (21) a 711
Cost of ratable product
and related support
and services 983 - 983
-------------- ------------ ----------
Total cost of revenue 4,974 (21) 4,953
-------------- ------------ ----------
Gross profit 7,362 21 7,383
Operating expenses:
Sales and marketing 12,357 (277) a 12,080
Research and
development 5,348 (226) a 5,122
General and
administrative 2,093 (207) a 1,886
-------------- ------------ ----------
Total operating
expenses 19,798 (710) 19,088
-------------- ------------ ----------
Operating loss (12,436) 731 (11,705)
Other income (expense) net: 37 - 37
Loss before provision
for income taxes and -------------- ------------ ----------
cumulative effect of
change in accounting
principle (12,399) 731 (11,668)
Provision for income
taxes 22 - 22
Loss before cumulative
effective of chance in -------------- ------------ ----------
accounting principle (12,421) 731 (11,690)
Cumulative effect of
change in accounting
principle 280 - 280
-------------- ------------ ----------
Net loss $ (12,701) $ 731 $ (11,970)
============== ============ ==========
Net loss per common share,
basic and diluted $ (1.43) $ (0.27)
Shares used in computing
basic and diluted
net loss per common share 8,869 35,704 b 44,573
(a) Excluded amount represents stock-based compensation
expense. Stock-based compensation is a non-cash
expense accounted for in accordance with the
intrinsic value method under Accounting Principles
Board No. 25 through December 31, 2005.
While a large component of our expense, we believe
investors want to exclude the effects of stock-based
compensation expense in order to compare our
financial performance with that of other companies
and between time periods.
(b) Represents common shares from the conversion of
convertible preferred shares as if the shares were
converted as of the later of their issuance or the
beginning of the applicable period. Convertible
preferred shares were converted into common shares
as of September 20, 2006, the effective date of our
IPO. We believe investors want to give effect to the
conversion for prior periods in order to compare our
financial performance with that of other companies
and between time periods.
Riverbed Technology, Inc.
Condensed Consolidated Balance Sheets
In thousands
September 30, December 31,
2006 2005
--------------- ---------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 108,260 $ 10,410
Trade receivables, net 11,321 5,357
Other receivables 228 128
Inventory 6,772 3,530
Prepaid expense and other current
assets 3,930 1,650
--------------- ---------------
Total current assets 130,511 21,075
Fixed assets, net 4,866 2,324
Other assets 1,696 245
--------------- ---------------
Total assets $ 137,073 $ 23,644
=============== ===============
LIABILITIES, CONVERTIBLE PREFERRED
STOCK AND STOCKHOLDERS' EQUITY
(DEFICIT)
Current liabilities:
Accounts payable $ 6,235 $ 3,970
Current portion of long-term debt 1,250 1,250
Accrued compensation and related
benefits 4,808 2,880
Other accrued liabilities 2,581 1,079
Preferred stock warrant liability - 594
Deferred revenue 13,147 4,891
--------------- ---------------
Total current liabilities 28,021 14,664
Long term debt, net of current portion 288 1,211
Deferred revenue non-current 1,936 708
Other long-term liabilities 462 587
Convertible preferred stock - 36,385
Stockholders' equity (deficit):
Common stock 157,661 10,130
Deferred stock-based compensation (6,333) (8,495)
Accumulated deficit (44,922) (31,488)
Accumulated other comprehensive
loss (40) (58)
--------------- ---------------
Total stockholders' equity
(deficit) 106,366 (29,911)
Total liabilities, convertible
preferred stock --------------- ---------------
and stockholders' equity (deficit) $ 137,073 $ 23,644
=============== ===============
Riverbed Technology, Inc.
Condensed Consolidated Statements of Cash Flows
In thousands
Unaudited
Nine months ended
September 30,
------------------------
2006 2005
------------ -----------
Operating activities:
Net loss $ (13,434) $ (12,701)
Adjustments to reconcile net loss to
net cash used in operating activities
Depreciation 1,261 496
Stock-based compensation 4,432 731
Amortization of warrants 15 14
Revaluation of warrants to fair value 644 120
Cumulative effect of change in
accounting principle - 280
Provision of trade receivable allowances 271 45
Changes in operating assets and
liabilities
(Increase) in trade receivables (6,235) (2,693)
(Increase) in inventory (3,305) (1,464)
(Increase) in prepaid expenses and other
assets (2,438) (1,261)
Increase in accounts payable and other
current liabilities 5,671 2,511
Increase in deferred revenue 9,483 3,948
------------ -----------
Net cash used in operating activities (3,635) (9,974)
Investing activities:
Capital expenditures (3,690) (1,623)
Increase in other assets (1,400) (50)
------------ -----------
Net cash used in investing activities (5,090) (1,673)
Financing activities:
Proceeds from issuance of convertible
preferred stock, net of issuance costs 19,915 -
Proceeds from initial public offering,
net of issuance costs 87,412 -
Proceeds from issuance of common stock,
net of repurchases 167 771
Proceeds from issuance of debt - 1,066
Payments of debt (938) -
------------ -----------
Net cash provided by financing
activities 106,556 1,837
Effect of exchange rate changes on cash and
cash equivalents 19 (40)
------------ -----------
Net increase (decrease) in cash and cash
equivalents 97,850 (9,850)
Cash and cash equivalents at beginning of
period 10,410 23,380
------------ -----------
Cash and cash equivalents at end of period $ 108,260 $ 13,530
============ ===========
Riverbed Technology, Inc.
GAAP to Non-GAAP Reconciliation
Percent of Total Revenue
Unaudited
Three months ended
September 30, 2006
------------------------------------
GAAP Adjustments Non-GAAP
------------- ------------ --------
Revenue: 100% 0% 100%
Cost of revenue: 32% 0% 32%
------------- ------------ --------
Gross margin 68% 0% 68%
Operating expenses:
Sales and marketing 49% -4%a 45%
Research and development 20% -2%a 18%
General and administrative 10% -2%a 8%
------------- ------------ --------
Total operating expenses 79% -8% 71%
------------- ------------ --------
Operating margin -11% 8% -3%
============= ============ ========
(a) Excluded amount represents stock-based compensation expense.
Stock-based compensation is a non-cash expense accounted for in
accordance with the intrinsic value method under Accounting
Principles Board No. 25 through December 31, 2005 and with the
fair value recognition provisions of Statement of Financial
Accounting Standards No. 123(R) effective January 1, 2006. While
a large component of our expense, we believe investors want to
exclude the effects of stock-based compensation expense in order
to compare our financial performance with that of other
companies and between time periods.
Riverbed Technology, Inc.
GAAP to Non-GAAP Reconciliation
Percent of Total Revenue
Unaudited
Three months ended
June 30, 2006
-------------------------------------
GAAP Adjustments Non-GAAP
-------------- ----------- --------
Revenue: 100% 0% 100%
Cost of revenue: 34% 0% 34%
-------------- ----------- --------
Gross margin 66% 0% 66%
Operating expenses:
Sales and marketing 64% -4%a 60%
Research and development 24% -2%a 22%
General and administrative 12% -2%a 10%
-------------- ----------- --------
Total operating expenses 100% -8% 92%
-------------- ----------- --------
Operating margin -34% 8% -26%
============== =========== ========
(a) Excluded amount represents stock-based compensation
expense. Stock-based compensation is a non-cash
expense accounted for in accordance with the
intrinsic value method under Accounting Principles
Board No. 25 through December 31, 2005 and with the
fair value recognition provisions of Statement of
Financial Accounting Standards No. 123(R) effective
January 1, 2006. While a large component of our
expense, we believe investors want to exclude the
effects of stock-based compensation expense in order
to compare our financial performance with that of
other companies and between time periods.
Contact:
Randy Gottfried
Chief Financial Officer
Riverbed Technology, Inc.
415-247-8800
Chris Danne
The Blueshirt Group
chris@blueshirtgroup.com
415-217-7722
###
