Riverbed Technology Continues Strong Growth

Even during the Great Recession, Riverbed Technology (RVBD) as able to post strong double digit revenue growth in 2009. For Q4 they posted 23% revenue growth and reported $.21 vs a $.18 estimate. Very solid numbers though it's not likely to push the stock price higher as the market seems to favor stocks that got rocked in 2008 and now have bounced back a little. Though it seems to not be noticed that RVBD peaked out over $50 so it has hardly rebounded even though they are reporting record numbers.

The really impressive number was the generation of $96M in cash during 2009. Cash now totals $326M or nearly 20% of the stock valuation. On a EV basis, RVBD now trades at roughly 13x cash flow (EV of $1.3B/96M cash flow). Its been stuck in the low $20s for a while so the valuation is becoming more and more compelling. Maybe 10x a $125M estimate for 2010. Cheap, cheap, cheap!

Introducing 3 new products for cloud computing. Interesting to hear that Amazon (AMZN) is a customer for these products.

Q4’09 and FY’09 Financial Highlights

  • Q4’09 non-GAAP revenue increased 10% sequentially and 23% year-over-year, with FY’09 non-GAAP revenue increasing 19% (sure didn't experience a recession)
  • Q4’09 non-GAAP gross margin was 77.3%, FY’09 non-GAAP gross margin was 76.9%
  • Q4’09 non-GAAP operating margin was 21.3%, FY’09 non-GAAP operating margin was 19.0% (very high operating margins... mentioned 25% as the goal)
  • Q4’09 non-GAAP net income increased 11% sequentially and 18% year-over-year
  • Days sales outstanding decreased to 39 days from 42 days in the prior quarter
  • Deferred revenue increased 14% sequentially
  • Q4’09 cash flow from operations of $23.1 million, and FY’09 cash flow from operations of $96.5 million (impressive cash flow)
  • Cash, cash equivalents, and marketable securities totaled $325.7 million and no debt as of December 31, 2009


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