Wednesday, October 19, 2011

Amazing Numbers From Riverbed Technology

Riverbed Technology (RVBD) just reported numbers that were truly amazing. Not for the level that they beat estimates, but more for the fact that analysts spent the 90 so days since the last earnings report downgrading the stock and lowering estimates. In turn, RVBD beat the original estimates. Makes one just wonder what analysts do all day. Apparently they sit around and dream op scenarios that just aren't true.

These results back up our theme that many stocks have been unfairly punished since July highs. RVBD in escense has a double top in July around $42 and the stock traded just north of $22 today. How does a stock drop 50% when earnings actually grew faster than expected?

RVBD reported record margins, operating profit, and net income. It earned $.24 versus the reduced estimates of $.21. Revenue came in at $191M versus $185M estimate.

Guidance for Q4 was $.24 to $.25 at revenue levels around $200M. Solid numbers generally above estimates that likely will be exceeded easily. Wouldn't expect anything less than $.26.

Worth noting is that it bought back $20M worth of shares and generated $90M of operating cash flows. Not a bad use of cash considering the weak stock prices in Q3.



Q3’11 Financial Highlights


  • Total non-GAAP revenue grew 29% year-over-year to $191 million
  • Product revenue grew 28% year-over-year to $132 million
  • Non-GAAP service revenue grew 30% year-over-year to $59 million
  • Record non-GAAP gross margin of 79.0%, compared to 78.0% in Q3’10
  • Record non-GAAP operating profit of $57 million, increased 38% year-over-year
  • Record non-GAAP operating margin of 30.1%, compared to 28.1% in Q3’10
  • Record non-GAAP net income of $40 million, increased 51% year-over-year
  • Deferred revenue grew 37% year-over-year to $148 million
  • Non-GAAP net income for Q3’11 was $40 million, or $0.24 per diluted share, as compared to non-GAAP net income for Q3’10 of $27 million, or $0.17 per diluted share. 
  • exited the period with $559 million in cash and investments after repurchasing $20 million of Riverbed shares and paying out $120 million for acquisitions           


Disclosure: Long RVBD. Please review the disclaimer page for more details. 


No comments: