Aerohive Networks™ (NYSE:HIVE), a Cloud Networking Leader, today
announced financial results for its second quarter ended June 30, 2018.
“We’re pleased with our performance in the second quarter, as we
continue to improve our execution and strengthen our financial
foundation. We grew our Enterprise business by double digits, which has
further lowered our dependence on the U.S. K-12 market,” stated David
Flynn, President and Chief Executive Officer. “We’re excited to continue
the momentum created by our recent new product introductions and are
pleased with the strong interest in A3, our first standalone security
product.”
Financial Summary
Total revenue for the second quarter of fiscal year 2018 was $40.5
million, compared with $42.2 million for the second quarter of 2017.
Subscription and support revenue was $11.2 million, or 28% of total
revenue, for the second quarter of fiscal year 2018, compared with $10.1
million, or 24% of total revenue, for the second quarter of 2017.
On a GAAP basis, net loss was $2.8 million for the second quarter of
fiscal year 2018, compared with a net loss of $3.8 million for the
second quarter of 2017. GAAP gross margin was 66.0% for the second
quarter of fiscal year 2018, compared with 67.7% for the second quarter
of 2017.
On a non-GAAP basis, net income was $0.9 million for the second quarter
of fiscal year 2018, compared with a net income of $0.7 million for the
second quarter of 2017. Non-GAAP gross margin was 66.7% for the second
quarter of fiscal year 2018, compared with 68.5% for the second quarter
of 2017.
New Accounting Standard
The Company adopted ASC 606, the new accounting standard related to
revenue recognition, effective January 1, 2018. The Company has adjusted
prior-period information to reflect the adoption of this new standard.
Conference Call Information
Aerohive Networks will host a conference call and webcast for analysts
and investors to discuss its second quarter 2018 results and outlook for
its third quarter of fiscal year 2018 at 2:00 pm Pacific Time today,
August 1, 2018. The call may be accessed by dialing 323-794-2093 and
providing the passcode 5791281. A live and archived audio webcast of the
conference call will be accessible from the “Investor Relations” section
of the Company’s website at http://ir.aerohive.com.
Safe Harbor Statement
This press release contains forward-looking statements, including
statements regarding Aerohive Networks’ financial expectations and
operating performance and expectations for continued momentum, including
statements regarding the progress we are making to address challenges in
our business, including sales execution issues, our ability to deliver
innovative solutions as a full-stack cloud networking company, and our
ability to strengthen our financial position. These forward-looking
statements are based on current expectations and are subject to inherent
uncertainties, risks and changes in circumstances that are difficult or
impossible to predict. The actual outcomes and results may differ
materially from those contemplated by these forward-looking statements
as a result of these uncertainties, risk and changes in circumstances,
including, but not limited to, risks and uncertainties related to: our
ability to continue to attract, integrate, retain and train skilled
personnel, especially skilled R&D and sales personnel, in general and in
specific regions, our ability to develop and expand our revenue
opportunities and sales capacity and improve the effectiveness of our
channel, our ability to resolve challenges related to sales execution
and improve our operating and sales execution, general demand for
wireless networking in the industry verticals we target or demand for
Aerohive® products in particular, our ability to benefit from our
participation in the E-Rate program, unpredictable and changing market
conditions, risks associated with the deployment, performance and
adoption of our new products and services, risks associated with our
growth, competitive pressures from existing and new companies, including
pricing pressures, changes in the mix and selling prices of Aerohive
products, technological change, product development delays, reliance on
third parties to manufacture, warehouse and timely deliver Aerohive
products, our inability to protect Aerohive intellectual property or to
predict or limit exposure to third-party claims relating to its or
Aerohive’s intellectual property, Aerohive’s limited operating history,
particularly as a public company, uses of Aerohive’s capital and general
market, political, regulatory, economic and business conditions in the
United States and internationally.
Additional risks and uncertainties that could affect Aerohive’s
financial and operating results are included under the captions “Risk
Factors” and “Management’s Discussion and Analysis of Financial
Condition and Results of Operations,” in the Company’s recent annual
report on Form 10-K and quarterly report on Form 10-Q. Aerohive’s SEC
filings are available on the Investor Relations section of the Company’s
website at http://ir.aerohive.com
and on the SEC’s website at www.sec.gov.
All forward-looking statements in this press release are based on
information available to the Company as of the date hereof, and Aerohive
Networks disclaims any obligation to update the forward-looking
statements provided to reflect events that occur or circumstances that
exist after the date on which they were made, except as required by law.
Non-GAAP Financial Measures
Aerohive’s results for its second quarter of fiscal year 2018 reported
in this press release and the related earnings conference call include
certain non-GAAP financial measures, including:
The Company defines non-GAAP financial measures to exclude share-based
compensation, adjustments to internal-use software amortization, and
certain charges related to litigation and restructuring.
The Company has included certain non-GAAP financial measures in this
press release because the Company believes they are key measures which
can be used to evaluate the business, measure performance, identify
trends affecting the business, formulate financial projections and make
strategic decisions. In particular, the exclusion of certain expenses in
calculating these non-GAAP financial measures can provide a useful
measure for period-to-period comparisons of the Company’s core business.
Although investors frequently use non-GAAP financial measures in their
evaluations of companies, these non-GAAP financial measures have
limitations in that they do not reflect all of the amounts associated
with the Company’s results of operations, as determined in accordance
with GAAP. Some of these limitations are:
Because of these and other limitations, you should consider non-GAAP
financial measures only together with other financial performance
measures, including various cash flow metrics, net loss and other GAAP
results.
We have provided a description of these non-GAAP financial measures and
a reconciliation of the Company’s historical non-GAAP financial measures
to their most directly comparable GAAP measures in the financial
statement tables included in this press release, and we encourage
investors to review the reconciliation.
A reconciliation of non-GAAP guidance measures to corresponding GAAP
guidance measures is not available on a forward-looking basis due to the
high variability and low visibility with respect to the charges that we
exclude from these non-GAAP measures.
About Aerohive Networks
Aerohive (NYSE: HIVE) enables our customers to simply and confidently
connect to the information, applications, and insights they need to
thrive. Our simple, scalable, and secure platform delivers mobility
without limitations. For our customers worldwide, every access point is
a starting point. Aerohive was founded in 2006 and is headquartered in
Milpitas, CA. For more information, please visit www.aerohive.com,
call us at 408-510-6100, follow us on Twitter @Aerohive,
subscribe to our blog,
or become a fan on our Facebook
page.
“Aerohive” is a registered trademark and “Aerohive Networks” a trademark
of Aerohive Networks, Inc. All product and company names used herein are
trademarks or registered trademarks of their respective owners. All
rights reserved.
AEROHIVE NETWORKS, INC.
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