Click here to close now.


Microsoft Cloud Authors: Jordan Sanders, Carmen Gonzalez, Pat Romanski, Keith Mayer, Jayaram Krishnaswamy

News Feed Item

Aruba Networks Reports Record Fiscal First Quarter 2013 Financial Results

Aruba Networks, Inc. (NASDAQ: ARUN) today released financial results for its first quarter of fiscal year 2013 ended October 31, 2012.

Revenue for Q1’13 of $144.5 million grew 21 percent from the $119.4 million reported in Q1’12. GAAP net loss for Q1’13 was $0.8 million, or a loss of $0.01 per share, compared with GAAP net loss of $0.5 million, or $0.00 per share, in Q1’12.

Non-GAAP net income for Q1’13 was $22.1 million, or $0.18 per share, compared with non-GAAP net income of $16.7 million, or $0.14 per share, in Q1’12. A reconciliation between GAAP and non-GAAP information is contained in the tables below.

“We delivered a strong first quarter with 21 percent revenue growth year-over-year and our fourteenth consecutive quarter of record revenue,” said Dominic Orr, Aruba’s president and chief executive officer. “During the quarter, we saw healthy growth across our major products and core verticals.”

“The proliferation of mobile devices, BYOD and new applications such as Unified Communications continue to drive demand for our solutions and make mobility a clear priority for CIOs around the world. We believe that with our industry leading technology and strong momentum in the marketplace, we are well positioned to capitalize on these trends and expand our market share.”

Commenting on the company’s financial results, Michael Galvin, Aruba’s chief financial officer, added, “In addition to achieving record revenue, we delivered strong gross margin and operating margin results. Due to solid working capital management, we generated $36.9 million in cash flow from operations and ended the quarter with $377.5 million in cash, cash equivalents and short-term investments.”

Recent Highlights

  • Introduced Controller-Less WLAN Solutions with Leading Enterprise Grade Performance. Aruba Instant Enterprise is a major new software release that delivers the first controller-less Wi-Fi solution for best-in-class security, resiliency and scale for distributed enterprises. Also as part of Aruba Instant Enterprise, Aruba unveiled Aruba Activate, a cloud-based, zero-touch provisioning service that enables enterprise IT, managed service providers and resellers to dramatically reduce the operational expenses associated with large scale, distributed Wi-Fi deployments.
  • Introduced a New Software Release to Deliver New Levels of High Availability, Resilient Connectivity, for Mobile Devices and Applications. The new Aruba OS software release for its mobility controllers will help enterprises ensure consistent, predictable performance and fast recovery for today’s challenging mobile environments.
  • Regional Medical Center at Memphis (The MED) Selected Aruba to Replace its Cisco Wireless Network with an Aruba WLAN. The existing Cisco 802.11/b/g wireless network will be replaced with an Aruba 802.11n wireless network and will expand coverage across its main hospital and four clinics. The MED also will deploy the AirWave network management system, Aruba ClearPass Policy Manager and ClearPass Guest.

Conference Call Information

Aruba will host a conference call for analysts and investors to discuss its first quarter of fiscal year 2013 results today at 4:30 p.m. Eastern time (1:30 p.m. Pacific time). Open to the public, investors may access the call by dialing +1-480-629-9808. A live webcast of the conference call will also be accessible from the “Investor Relations” section of the company’s website at Following the webcast, an archived version will be available on the website for twelve months. To hear the replay, parties in the United States and Canada should call 1-800-406-7325 and enter passcode 4573529. International parties can access the replay at +1-303-590-3030 and should enter passcode 4573529.

Forward-Looking Statements

This press release contains forward-looking statements, including statements about our expectation that the proliferation of mobile devices, BYOD and new applications will continue to drive demand for our solutions and that with our industry leading technology and strong momentum in the marketplace, we are well positioned to capitalize on these trends and expand our market share.

These forward-looking statements involve risks and uncertainties, as well as assumptions which, if they do not fully materialize or prove incorrect, could cause Aruba’s 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: (1) business and economic conditions and growth trends in the networking industry, our vertical markets and various geographic regions; and (2) changes in overall information technology spending; as well as those risks and uncertainties included under the captions “Risk Factors" and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in Aruba’s Annual Report on Form 10-K for the fiscal year ended July 31, 2012, which was filed with the SEC on October 11, 2012, and is available on Aruba’s investor relations website at and on the SEC’s website at 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 to reflect events that occur or circumstances that exist after the date on which they were made.

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 the following non-GAAP financial measures: non-GAAP net income and non-GAAP earnings per share (EPS). The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

Non-GAAP net income and EPS. Aruba defines non-GAAP net income as net income plus stock-based expenses and related payroll taxes, amortization of acquired intangible assets and other acquisition related expenses, and the change in the valuation of the contingent rights liability, less the related tax effects. Aruba defines non-GAAP EPS as non-GAAP net income divided by the weighted average diluted shares outstanding. Aruba’s management regularly uses these non-GAAP financial measures to understand and manage its business and believes that these non-GAAP financial measures provide meaningful supplemental information regarding the company’s performance by excluding certain expenses that may not be indicative of Aruba’s “recurring operating results,” meaning its operating performance excluding not only stock-based expenses and related payroll taxes, but also discrete charges that are infrequent in nature. Further, Aruba’s management excludes from non-GAAP net income the tax effects of these non-GAAP financial measures, as without excluding these tax effects, investors would only see the gross effect that excluding these expenses had on the company’s operating results. Because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use, Aruba’s management believes that providing non-GAAP financial measures that exclude stock-based expenses allows investors to compare these results with those of other companies, as well as providing management with an important tool for financial and operational decision making and for evaluating the company’s operating results over different periods of time. Similarly, by excluding amortization expense of acquired intangible assets and other acquisition related expenses, and the change in the valuation of the contingent rights liability, less the related tax effects, Aruba’s management believes that investors can better understand and measure the company’s recurring operating results.

There are a number of limitations related to the use of non-GAAP net income and EPS versus net income and EPS calculated in accordance with GAAP. First, these non-GAAP financial measures exclude some costs, namely stock-based expenses and related payroll taxes, that are recurring. Stock-based expenses and related payroll taxes have been and will continue to be for the foreseeable future a significant recurring expense in Aruba’s business. Second, stock-based awards are an important part of Aruba’s employees’ compensation and impacts their performance. Third, the components of the costs that Aruba excludes in its calculation of non-GAAP net income may differ from the components that its peer companies exclude when they report their results of operations. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from these non-GAAP financial measures and evaluates these non-GAAP financial measures together with their most directly comparable financial measures calculated in accordance with GAAP. The accompanying tables provide reconciliations between these financial measures and their most directly comparable GAAP equivalents.

A copy of this press release can be found on the investor relations page of Aruba Networks’ website at

About Aruba Networks, Inc.

Aruba Networks is a leading provider of next-generation network access solutions for the mobile enterprise. The company’s Mobile Virtual Enterprise (MOVE) architecture unifies wired and wireless network infrastructures into one seamless access solution for corporate headquarters, mobile business professionals, remote workers and guests. This unified approach to access networks enables IT organizations and users to securely address the Bring Your Own Device (BYOD) phenomenon, dramatically improving productivity and lowering capital and operational costs.

Listed on the NASDAQ and Russell 2000® Index, Aruba is based in Sunnyvale, California, and has operations throughout the Americas, Europe, Middle East, Africa and Asia Pacific regions. For real-time news updates, follow Aruba on Twitter and Facebook or read our corporate blog, Aruba Atmosphere.

© 2012 Aruba Networks, Inc. Aruba Networks’ trademarks include the design mark for AirWave, Aruba Networks®, Aruba Wireless Networks®, the registered Aruba the Mobile Edge Company logo, the registered AirWave logo, Aruba Mobility Management System®, Mobile Edge Architecture®, People Move. Networks Must Follow®, RFProtect®, Green Island®. All rights reserved. All other trademarks are the property of their respective owners.

Aruba Networks, Inc.
Condensed Consolidated Balance Sheets
October 31, July 31,
  2012     2012  
Current assets:
Cash and cash equivalents $ 157,319 $ 133,629
Short-term investments 220,187 212,601
Accounts receivable, net 73,016 80,190
Inventory 28,164 22,202
Deferred costs 11,176 11,241
Prepaids and other 19,513 18,996
Deferred income tax assets, current   35,328     34,584  
Total current assets 544,703 513,443
Property and equipment, net 22,688 19,901
Goodwill 56,947 56,947
Intangible assets, net 25,115 27,036
Deferred income tax assets, non-current 19,794 20,664
Other non-current assets   9,446     10,905  
Total non-current assets   133,990     135,453  
Total assets $ 678,693   $ 648,896  
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 69,178 $ 74,879
Income taxes payable 4,553 2,032
Deferred revenue, current   88,230     80,602  
Total current liabilities 161,961 157,513
Deferred revenue, non-current 25,670 22,375
Other non-current liabilities   1,391     2,118  
Total non-current liabilities   27,061     24,493  
Total liabilities   189,022     182,006  
Stockholders' equity
Common stock 11 11
Additional paid-in capital 605,693 582,077
Accumulated other comprehensive loss (1,414 ) (1,405 )
Accumulated deficit   (114,619 )   (113,793 )
Total stockholders' equity   489,671     466,890  
Total liabilities and stockholders' equity $ 678,693   $ 648,896  
Aruba Networks, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
Three months ended
October 31,   October 31,
  2012     2011  
Product $ 119,222 $ 101,131
Professional services and support   25,260     18,220  
Total revenue 144,482 119,351
Cost of revenue:
Product 36,161 32,068
Professional services and support   5,957     4,546  
Total cost of revenue   42,118     36,614  
Gross profit   102,364     82,737  
Operating expenses:
Research and development 31,963 24,468
Sales and marketing 53,919 45,615
General and administrative   11,951     11,100  
Total operating expenses   97,833     81,183  
Operating income 4,531 1,554
Other income (expense), net
Interest income 316 276
Other income (expense), net   276     827  
Total other income (expense), net   592     1,103  
Income before income taxes 5,123 2,657
Provision for income taxes   5,949     3,124  
Net loss $ (826 ) $ (467 )
Shares used in computing net loss per common share, basic 111,976 105,937
Net loss per common share, basic $ (0.01 ) $ (0.00 )
Shares used in computing net loss per common share, diluted 111,976 105,937
Net loss per common share, diluted $ (0.01 ) $ (0.00 )
Note: Certain prior year amounts have been reclassified to conform to the current year presentation.

Aruba Networks, Inc.

Consolidated Statements of Operations
(GAAP to Non-GAAP Reconciliation)
(In thousands, except per share data)
Three months ended
October 31,   October 31,
  2012     2011  
GAAP net loss $ (826 ) $ (467 )
a) Stock-based compensation expenses 22,562 19,265
b) Payroll taxes on stock-based compensation expenses 636 505
c) Amortization expense of acquired intangible assets and other acquisition related expenses 2,664 1,988
d) Change in valuation of contingent rights liability (401 ) (918 )
e) Income tax effect of non-GAAP exclusions (2,547 ) (3,658 )
Non-GAAP net income $ 22,088   $ 16,715  
GAAP net loss per common share $ (0.01 ) $ (0.00 )

a) Stock-based compensation expenses

0.18 0.16
b) Payroll taxes on stock-based compensation expenses 0.01 -
c) Amortization expense of acquired intangible assets and other acquisition related expenses 0.02 0.02
d) Change in valuation of contingent rights liability - (0.01 )
e) Income tax effect of non-GAAP exclusions (0.02 ) (0.03 )
Non-GAAP net income per common share $ 0.18   $ 0.14  
Shares used in computing diluted GAAP net loss per common share   111,976     105,937  
Shares used in computing diluted non-GAAP net income per common share   122,355     118,470  
Aruba Networks, Inc.
Condensed Consolidated Statements of Operations
As a Percentage of Total Revenue
Three months ended
October 31,   October 31,
2012   2011  
Product 82.5 % 84.7 %
Professional services and support 17.5 % 15.3 %
Total revenue 100.0 % 100.0 %
Cost of revenue:
Product 25.0 % 26.9 %
Professional services and support 4.2 % 3.8 %
Total cost of revenue 29.2 % 30.7 %
Gross profit 70.8 % 69.3 %
Operating expenses:
Research and development 22.1 % 20.5 %
Sales and marketing 37.3 % 38.2 %
General and administrative 8.3 % 9.3 %
Total operating expenses 67.7 % 68.0 %
Operating income 3.1 % 1.3 %
Other income (expense), net
Interest income 0.2 % 0.2 %
Other income (expense), net 0.2 % 0.7 %
Total other income (expense), net 0.4 % 0.9 %
Income before income taxes 3.5 % 2.2 %
Provision for income taxes 4.1 % 2.6 %
Net loss (0.6 %) (0.4 %)
Note: Certain prior year amounts have been reclassified to conform to the current year presentation.
Aruba Networks, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
Three Months Ended
October 31,
  2012     2011  
Cash flows from operating activities
Net loss $ (826 ) $ (467 )
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation and amortization 5,051 4,079
Provision for doubtful accounts 117 12
Write downs for excess and obsolete inventory 1,868 1,403
Stock-based compensation expenses 22,562 19,265
Accretion of purchase discounts on short-term investments 263 308
Change in carrying value of contingent rights liability (401 ) (918 )
Deferred income taxes 126 13,362
Recovery of escrow funds - (702 )
Excess tax benefit associated with stock-based compensation (925 ) (8,318 )
Changes in operating assets and liabilities:
Accounts receivable 7,057 590
Inventory (8,602 ) 2,345
Prepaids and other 208 (6,849 )
Deferred costs 65 (3,990 )
Other assets 1,459 (14,727 )
Deferred revenue 10,923 22,830
Accounts payable and other liabilities (5,198 ) (20,899 )
Income taxes payable   3,163     9,220  
Net cash provided by operating activities   36,910     16,544  
Cash flows from investing activities
Purchases of short-term investments (67,037 ) (53,351 )
Proceeds from sales of short-term investments 20,252 7,523
Proceeds from maturities of short-term investments 38,166 14,000
Purchases of property and equipment   (5,357 )   (3,417 )
Net cash used in investing activities   (13,976 )   (35,245 )
Cash flows from financing activities
Proceeds from issuance of common stock 11,336 10,856
Repurchase of common stock (11,524 ) -
Excess tax benefit associated with stock-based compensation   925     8,318  
Net cash provided by financing activities   737     19,174  
Effect of exchange rate changes on cash and cash equivalents   19     (5 )
Net increase in cash and cash equivalents 23,690 468
Cash and cash equivalents, beginning of period   133,629     80,773  
Cash and cash equivalents, end of period $ 157,319   $ 81,241  
Supplemental disclosure of cash flow information
Income taxes paid $ 1,180   $ 453  

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
As organizations realize the scope of the Internet of Things, gaining key insights from Big Data, through the use of advanced analytics, becomes crucial. However, IoT also creates the need for petabyte scale storage of data from millions of devices. A new type of Storage is required which seamlessly integrates robust data analytics with massive scale. These storage systems will act as “smart systems” provide in-place analytics that speed discovery and enable businesses to quickly derive meaningful and actionable insights. In his session at @ThingsExpo, Paul Turner, Chief Marketing Officer at...
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
In his General Session at 17th Cloud Expo, Bruce Swann, Senior Product Marketing Manager for Adobe Campaign, explored the key ingredients of cross-channel marketing in a digital world. Learn how the Adobe Marketing Cloud can help marketers embrace opportunities for personalized, relevant and real-time customer engagement across offline (direct mail, point of sale, call center) and digital (email, website, SMS, mobile apps, social networks, connected objects).
We all know that data growth is exploding and storage budgets are shrinking. Instead of showing you charts on about how much data there is, in his General Session at 17th Cloud Expo, Scott Cleland, Senior Director of Product Marketing at HGST, showed how to capture all of your data in one place. After you have your data under control, you can then analyze it in one place, saving time and resources.
The Internet of Everything is re-shaping technology trends–moving away from “request/response” architecture to an “always-on” Streaming Web where data is in constant motion and secure, reliable communication is an absolute necessity. As more and more THINGS go online, the challenges that developers will need to address will only increase exponentially. In his session at @ThingsExpo, Todd Greene, Founder & CEO of PubNub, exploreed the current state of IoT connectivity and review key trends and technology requirements that will drive the Internet of Things from hype to reality.
Two weeks ago (November 3-5), I attended the Cloud Expo Silicon Valley as a speaker, where I presented on the security and privacy due diligence requirements for cloud solutions. Cloud security is a topical issue for every CIO, CISO, and technology buyer. Decision-makers are always looking for insights on how to mitigate the security risks of implementing and using cloud solutions. Based on the presentation topics covered at the conference, as well as the general discussions heard between sessions, I wanted to share some of my observations on emerging trends. As cyber security serves as a fou...
With all the incredible momentum behind the Internet of Things (IoT) industry, it is easy to forget that not a single CEO wakes up and wonders if “my IoT is broken.” What they wonder is if they are making the right decisions to do all they can to increase revenue, decrease costs, and improve customer experience – effectively the same challenges they have always had in growing their business. The exciting thing about the IoT industry is now these decisions can be better, faster, and smarter. Now all corporate assets – people, objects, and spaces – can share information about themselves and thei...
Continuous processes around the development and deployment of applications are both impacted by -- and a benefit to -- the Internet of Things trend. To help better understand the relationship between DevOps and a plethora of new end-devices and data please welcome Gary Gruver, consultant, author and a former IT executive who has led many large-scale IT transformation projects, and John Jeremiah, Technology Evangelist at Hewlett Packard Enterprise (HPE), on Twitter at @j_jeremiah. The discussion is moderated by me, Dana Gardner, Principal Analyst at Interarbor Solutions.
Too often with compelling new technologies market participants become overly enamored with that attractiveness of the technology and neglect underlying business drivers. This tendency, what some call the “newest shiny object syndrome” is understandable given that virtually all of us are heavily engaged in technology. But it is also mistaken. Without concrete business cases driving its deployment, IoT, like many other technologies before it, will fade into obscurity.
Discussions of cloud computing have evolved in recent years from a focus on specific types of cloud, to a world of hybrid cloud, and to a world dominated by the APIs that make today's multi-cloud environments and hybrid clouds possible. In this Power Panel at 17th Cloud Expo, moderated by Conference Chair Roger Strukhoff, panelists addressed the importance of customers being able to use the specific technologies they need, through environments and ecosystems that expose their APIs to make true change and transformation possible.
The Internet of Things is clearly many things: data collection and analytics, wearables, Smart Grids and Smart Cities, the Industrial Internet, and more. Cool platforms like Arduino, Raspberry Pi, Intel's Galileo and Edison, and a diverse world of sensors are making the IoT a great toy box for developers in all these areas. In this Power Panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists discussed what things are the most important, which will have the most profound effect on the world, and what should we expect to see over the next couple of years.
Microservices are a very exciting architectural approach that many organizations are looking to as a way to accelerate innovation. Microservices promise to allow teams to move away from monolithic "ball of mud" systems, but the reality is that, in the vast majority of organizations, different projects and technologies will continue to be developed at different speeds. How to handle the dependencies between these disparate systems with different iteration cycles? Consider the "canoncial problem" in this scenario: microservice A (releases daily) depends on a couple of additions to backend B (re...
The cloud. Like a comic book superhero, there seems to be no problem it can’t fix or cost it can’t slash. Yet making the transition is not always easy and production environments are still largely on premise. Taking some practical and sensible steps to reduce risk can also help provide a basis for a successful cloud transition. A plethora of surveys from the likes of IDG and Gartner show that more than 70 percent of enterprises have deployed at least one or more cloud application or workload. Yet a closer inspection at the data reveals less than half of these cloud projects involve production...
Growth hacking is common for startups to make unheard-of progress in building their business. Career Hacks can help Geek Girls and those who support them (yes, that's you too, Dad!) to excel in this typically male-dominated world. Get ready to learn the facts: Is there a bias against women in the tech / developer communities? Why are women 50% of the workforce, but hold only 24% of the STEM or IT positions? Some beginnings of what to do about it! In her Day 2 Keynote at 17th Cloud Expo, Sandy Carter, IBM General Manager Cloud Ecosystem and Developers, and a Social Business Evangelist, wil...
PubNub has announced the release of BLOCKS, a set of customizable microservices that give developers a simple way to add code and deploy features for realtime apps.PubNub BLOCKS executes business logic directly on the data streaming through PubNub’s network without splitting it off to an intermediary server controlled by the customer. This revolutionary approach streamlines app development, reduces endpoint-to-endpoint latency, and allows apps to better leverage the enormous scalability of PubNub’s Data Stream Network.
Container technology is shaping the future of DevOps and it’s also changing the way organizations think about application development. With the rise of mobile applications in the enterprise, businesses are abandoning year-long development cycles and embracing technologies that enable rapid development and continuous deployment of apps. In his session at DevOps Summit, Kurt Collins, Developer Evangelist at, examined how Docker has evolved into a highly effective tool for application delivery by allowing increasingly popular Mobile Backend-as-a-Service (mBaaS) platforms to quickly crea...
Apps and devices shouldn't stop working when there's limited or no network connectivity. Learn how to bring data stored in a cloud database to the edge of the network (and back again) whenever an Internet connection is available. In his session at 17th Cloud Expo, Ben Perlmutter, a Sales Engineer with IBM Cloudant, demonstrated techniques for replicating cloud databases with devices in order to build offline-first mobile or Internet of Things (IoT) apps that can provide a better, faster user experience, both offline and online. The focus of this talk was on IBM Cloudant, Apache CouchDB, and ...
Today air travel is a minefield of delays, hassles and customer disappointment. Airlines struggle to revitalize the experience. GE and M2Mi will demonstrate practical examples of how IoT solutions are helping airlines bring back personalization, reduce trip time and improve reliability. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Dr. Sarah Cooper, M2Mi’s VP Business Development and Engineering, explored the IoT cloud-based platform technologies driving this change including privacy controls, data transparency and integration of real time context with p...
I recently attended and was a speaker at the 4th International Internet of @ThingsExpo at the Santa Clara Convention Center. I also had the opportunity to attend this event last year and I wrote a blog from that show talking about how the “Enterprise Impact of IoT” was a key theme of last year’s show. I was curious to see if the same theme would still resonate 365 days later and what, if any, changes I would see in the content presented.
Cloud computing delivers on-demand resources that provide businesses with flexibility and cost-savings. The challenge in moving workloads to the cloud has been the cost and complexity of ensuring the initial and ongoing security and regulatory (PCI, HIPAA, FFIEC) compliance across private and public clouds. Manual security compliance is slow, prone to human error, and represents over 50% of the cost of managing cloud applications. Determining how to automate cloud security compliance is critical to maintaining positive ROI. Raxak Protect is an automated security compliance SaaS platform and ma...