Amendment No. 1 to Form S-1

Large accelerated filer

Accelerated filer

Non-accelerated filer

x (Do not check if a smaller reporting company)

Smaller reporting company

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box: ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

Gigamon LLC, the registrant whose name appears on the cover page of this registration statement, is a Delaware limited liability company. Prior to the sale and issuance of any shares of common stock subject to this registration statement, Gigamon LLC will convert into a Delaware corporation and change its name from Gigamon LLC to Gigamon Inc. Shares of the common stock of Gigamon Inc. are being offered by the prospectus that forms a part of this registration statement.

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

We are offering of the shares to be sold in this offering. The selling stockholders identified in this prospectus are offering an additional shares. We will not receive any of the proceeds from the sale of the shares being sold by the selling stockholders.

Prior to this offering, there has been no public market for the common stock. It is currently estimated that the initial public offering price per share will be between $ and $ . We intend to apply to list our common stock on the New York Stock Exchange under the symbol “GIMO.”

We are an “emerging growth company” as defined under the federal securities laws and are subject to reduced public company reporting requirements.

Investing in our common stock involves risks. See the section titled “Risk Factors” on page 12 to read about factors you should consider before buying shares of the common stock.

Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

To the extent that the underwriters sell more than shares of common stock, the underwriters have the option to purchase up to an additional shares from us and shares from the selling stockholders identified in this prospectus at the initial public offering price, in each case, less the underwriting discount.

The underwriters expect to deliver the shares against payment in New York, New York on , 2012.

Through and including , 2012 (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

Neither we, the selling stockholders, nor the underwriters have authorized anyone to provide you with information or to make any representations other than those contained in this prospectus or in any free writing prospectuses we have prepared. We take no responsibility for, and provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.

For investors outside the United States: Neither we, the selling stockholders, nor any of the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. You are required to inform yourselves about, and to observe any restrictions relating to, this offering and the distribution of this prospectus.

PROSPECTUS SUMMARY

This summary highlights selected information that is presented in greater detail elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our common stock. You should read this entire prospectus carefully, including the sections titled “Risk Factors,” “Selected Consolidated Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business,” and our consolidated financial statements and the related notes included elsewhere in this prospectus, before making an investment decision. Unless the context otherwise requires, the terms “Gigamon,” “our company,” “we,” “us,” and “our” refer, prior to the conversion discussed below, to Gigamon LLC, and, after the conversion, to Gigamon Inc., in each case together with its consolidated subsidiaries as a combined entity.

Overview

We have developed a new and innovative solution that delivers pervasive and dynamic visibility and control of traffic across networks. Our solution, which we refer to as our Traffic Visibility Fabric, consists of distributed network appliances that provide an advanced level of network traffic intelligence. Our Fabric enables IT organizations to forward traffic from network infrastructure to management, analysis, compliance and security tools in a manner that is optimized for specific uses or locations. At the heart of the Fabric is our patented Flow Mapping™ technology that identifies and directs incoming traffic to single or multiple tools based on user-defined rules implemented from a centralized management console. Our Fabric is designed to help organizations ensure the reliability, performance and security of their network infrastructure, minimize capital investment in management, analysis, compliance and security tools, reduce operating expenses and realize greater value from the existing tools that are deployed throughout their networks.

Virtualization and cloud computing, mobility and big data are reshaping the way enterprises and service providers operate and the way people communicate over IP networks in an increasingly connected world. Organizations increasingly require enhanced visibility and control of their networks through the efficient collection and analysis of network traffic flows without degrading network performance or reliability. Our Fabric provides the pervasive visibility and control over network traffic, including voice, video and data, that organizations need to successfully manage, analyze and secure their network environments.

We sell our products directly through our own sales force and indirectly through our channel partners. As of June 30, 2012, our end-user customers included 53 of the Fortune 100, and we had sold products to over 840 end-user customers across many vertical markets, including seven of the top ten U.S. retailers, four of the top five U.S. banks and financial services companies, seven of the top ten U.S. integrated telecommunication service providers, four of the top five U.S. managed healthcare providers, six of the top ten U.S. cable and satellite providers and five of the top ten global securities and commodities exchanges, based on independent industry data from S&P Capital IQ.

We were founded in 2004, and have experienced significant growth since inception. Our total revenue increased from $31.4 million in 2009 to $68.1 million in 2011, representing a compound annual growth rate, or CAGR, of 47%, and our net income was $13.1 million, $6.6 million and $16.9 million in 2009, 2010 and 2011, respectively. Our total revenue increased from $25.6 million during the six months ended June 30, 2011 to $39.2 million during the six months ended June 30, 2012, representing 53% growth, and our net income was $5.8 million in the six months ended June 30, 2011 and $1.8 million in the six months ended June 30, 2012. We have generated positive cash flows in each of the last six years.

Industry Overview

Powerful forces are transforming the traditional ways that enterprises and service providers design, operate and manage their networks. These forces include:

Virtualization and Cloud Computing. Enterprises and service providers are seeking to enhance visibility and control over their network traffic as they manage the transition from static physical architectures to dynamic virtual environments.

Mobility. Enterprises are looking for ways to improve the productivity of their increasingly mobile workforce by providing enhanced access to their network. Service providers are seeking to monetize new service offerings and improve the satisfaction and retention rates of their customers.

Big Data. As the volume of network traffic generated, transmitted and consumed grows rapidly, organizations are increasingly challenged to maintain, analyze, improve and secure the performance and reliability of networks as they scale to meet demand.

These forces are enabling significant benefits to be realized from IT innovation, but are also presenting significant challenges in how organizations manage, analyze and secure their networks to address growing network traffic volumes, security and compliance, the proliferation of mobile devices, the consumerization of IT and adoption of cloud-based IT.

Limitations of Traditional Approaches

The impact of virtualization and cloud computing, mobility and big data are combining to increase network complexity and introduce new network vulnerabilities while creating new challenges for enterprises and service providers that are struggling to maintain or improve service delivery and limit network downtime. As a result, organizations are seeking to improve visibility and control of their networks through the intelligent collection, modification and analysis of traffic without adversely impacting network performance or reliability. IT organizations have historically had access to a limited range of approaches to address these requirements, including deploying additional management, analysis, compliance and security tools, repurposing Ethernet switches, duplicating traffic via mirroring ports or dividing traffic flows via network TAPs.

Given the performance limitations, cost and complexity of traditional approaches, enterprises and service providers utilizing these approaches struggle to scale and ensure the performance, reliability and integrity of their network infrastructure. Without the ability to scale with network growth and to analyze packet contents, prioritize latency-sensitive data and intelligently direct individual packets to the relevant tools, these approaches fail to deliver a comprehensive solution that offers visibility into and control over network traffic.

Need for a Comprehensive Visibility Solution

We were founded on the belief that organizations need a fundamentally new approach to network traffic visibility to address growing demand for increased efficiency and performance, and to improve quality and breadth of service offerings. We believe a solution that can optimize the efficiency and performance of these tools by delivering pervasive visibility and control over network traffic creates a significant market opportunity. Our belief is supported by the results of an independent survey conducted by the Enterprise Strategy Group, or ESG, in which 78% of respondents indicated that a traffic visibility fabric would be a useful enhancement to their network environment.

Our Solution

The key benefits of our Traffic Visibility Fabric include:

Providing Pervasive Visibility and Control. Our Fabric inspects and intelligently filters data packets from concurrent traffic streams in accordance with a set of user-defined criteria, which provides IT organizations with pervasive visibility and intelligent control over how traffic flows from the network to management, analysis, compliance and security tools.

Enabling Rapid Response to Dynamic Change. Our Fabric significantly improves network flexibility by enabling static tools to connect to virtualized applications, dynamic infrastructure and mobile machines, which allows our end-user customers to efficiently and securely address their business needs.

Delivering Scalable, High-Throughput Capacity. Our Fabric provides increased visibility and intelligent traffic filtering without impeding the delivery of traffic to management, analysis, compliance and security tools and can scale as the network grows and performance requirements increase.

Improving Network Efficiency and Economy. Our Fabric improves the return on investment of existing tools, reduces capital and operating costs associated with deploying new or more advanced tools, limits the infrastructure footprints in space-constrained data centers and curtails the staff required to monitor and maintain the network.

Enhancing Network Reliability. By reducing the need to process non-relevant traffic, our Fabric increases the reliability of tools and the critical business processes running on production networks. Because our Fabric is deployed “out of band,” or in parallel to, the production network, modifications to the Traffic Visibility Fabric do not require network downtime.

Ease of Deployment and Use. We have designed our Fabric to be easy to install, configure and maintain. Our Fabric can be controlled remotely, enabling our end-user customers to reduce management and maintenance of unmanned, or dark, data centers.

Growth Strategy

Key elements of our growth strategy include:

Continuous Innovation. We intend to enhance the functionality and scalability of our Fabric to address new use cases, tool capabilities, deployment environments and performance levels.

Increase Awareness of Our Value Proposition. We plan to invest in our brand and develop awareness of the benefits of our Fabric in order to help us grow our business and market opportunity.

Expand Our Relationships with Existing End-User Customers. We intend to increase the depth of our relationships with our end-user customers by offering new products that help them increase the value of their new and existing management, analysis, compliance and security tools, adopt virtualization and cloud technologies and efficiently scale their network environments.

Invest in our Global Distribution Network. We plan to continue to invest in strengthening our existing relationships with channel partners and expanding our network by adding new channel partners to broaden our reach and target new end-user customers.

Risks Affecting Us

Our business is subject to numerous risks and uncertainties, including those highlighted in the section titled “Risk Factors” immediately following this prospectus summary. These risks include, but are not limited to, the following:

The network traffic visibility market is rapidly evolving and difficult to predict. If the network traffic visibility market does not evolve as we anticipate or if our target end-user customers do not adopt our Traffic Visibility Fabric, our sales will not grow as quickly as anticipated and our stock price could decline;

New or existing technologies that are perceived to address network traffic visibility or address the need for network traffic visibility in different ways could gain wide adoption and supplant our products and services, thereby weakening our sales and our financial results;

We are dependent on a single product family comprised of a limited number of products;

If we are unable to introduce new products successfully and to make enhancements to existing products, our growth rates would likely decline and our business, operating results and competitive position could suffer;

If we are unable to increase market awareness of our company and our products, our revenue may not continue to grow, or may decline;

Our quarterly and annual operating results may vary significantly and be difficult to predict, which may cause our stock price to fluctuate;

We compete in highly competitive markets, and competitive pressures from existing and new companies may adversely impact our business and operating results;

If we fail to remediate material weaknesses in our internal control over financial reporting or are unable to implement and maintain effective internal control over financial reporting in the future, the accuracy and timeliness of our financial reporting may be adversely affected;

Our limited operating history makes it difficult for you to evaluate our current business and future prospects, and may increase the risk of your investment; and

Existing directors, executive officers and principal stockholders will collectively own % of our common stock and continue to have substantial control over us after this offering, which will limit your ability to influence the outcome of key transactions, including a change of control.

Conversion to a Corporation

We are currently a Delaware limited liability company. Prior to the issuance of common stock in this offering, we will convert into a Delaware corporation and change our name from Gigamon LLC to Gigamon Inc. In connection with the conversion, all of our outstanding common units and preferred units will convert into shares of common stock and preferred stock, respectively. Immediately following our conversion to a corporation, the holder of all of our outstanding common stock, Gigamon Systems LLC, as well as certain entities affiliated with Highland Capital Partners that hold shares of our preferred stock, will be merged with and into us, and the equity holders of Gigamon Systems LLC, and the entities affiliated with Highland Capital Partners that will merge with and into us, will receive our common stock and preferred stock in exchange for their respective equity interests.

In this prospectus, we refer to all of the transactions related to our conversion to a corporation, and the mergers of the holder of our common stock and certain holders of shares of our preferred

stock with and into us, as the “LLC Conversion.” See the section titled “Certain Relationships and Related Party Transactions—LLC Conversion” for additional information.

While our outstanding equity as a limited liability company prior to the LLC Conversion is called “common units” and “preferred units,” unless otherwise indicated in this prospectus, we refer to such common units and preferred units in this prospectus as common stock and preferred stock for the periods prior to the LLC Conversion for ease of comparison.

Distribution to Members

In connection with the LLC Conversion, and as permitted by our Restated Limited Liability Company Agreement, dated as of January 20, 2010, as amended, or the LLC Agreement, we currently intend to distribute an amount of cash to our stockholders as of the date of the LLC Conversion equal to the members’ distribution payable balance on our consolidated financial statements, which was $7.7 million as of June 30, 2012.

Corporate Background and Information

Our business was founded in 2004 and originally operated by a California limited liability company, Gigamon Systems LLC. In January 2009, Gigamon Systems LLC contributed substantially all of its assets and liabilities to us in exchange for all of our common stock. In January 2010, entities affiliated with Highland Capital Partners invested in our company through the purchase of our preferred stock. As of June 30, 2012, Gigamon Systems LLC held all of our outstanding common stock and entities affiliated with Highland Capital Partners held all of our outstanding preferred stock.

Our principal executive offices are located at 598 Gibraltar Drive, Milpitas, California 95035, and our telephone number is (408) 263-2022. Our website address is www.gigamon.com. Information contained on, or that can be accessed through, our website, does not constitute part of this prospectus and the inclusion of our website address in this prospectus is an inactive textual reference only.

THE OFFERING



Common stock offered by us		shares

Common stock offered by the selling stockholders		shares

Common stock to be outstanding after this offering		shares

Option to purchase additional shares		We and the selling stockholders have granted the underwriters an option, exercisable for 30 days after the date of this prospectus, to purchase up to an additional shares from us and up to an additional shares from the selling stockholders.

Use of Proceeds		We estimate that the net proceeds from the sale of shares of our common stock that we are selling in this offering will be $ million (or $ million if the underwriters’ option to purchase additional shares in this offering is exercised in full), based upon an assumed initial public offering price of $ per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. We will not receive any proceeds from the sale of shares by the selling stockholders. We currently intend to use the net proceeds that we receive from this offering to satisfy our obligations to holders of performance units under our 2009 Performance Unit Plan, which we estimate will be $ in cash in the aggregate, and the balance for working capital and other general corporate purposes. We may also use a portion of the net proceeds that we receive from this offering to acquire or invest in complementary businesses, products, services, technologies or other assets. See the section titled “Use of Proceeds” for additional information.

Concentration of Ownership		Upon completion of this offering, the executive officers, directors and 5% stockholders of our company and their affiliates will beneficially own, in the aggregate, approximately % of our outstanding capital stock.

Proposed NYSE trading symbol		“GIMO”

The number of shares of common stock that will be outstanding after this offering is based on 73,632,640 shares outstanding as of June 30, 2012 after giving effect to the LLC Conversion described under the section titled “Certain Relationships and Related Party Transactions—LLC Conversion,” and excludes:

2,596,920 shares of common stock issuable upon the exercise of options to purchase common stock, consisting of options to be assumed from Gigamon Systems LLC in connection with the LLC Conversion, with a weighted-average exercise price of $0.01 per share;

5,741,000 shares of common stock issuable upon the exercise of options to purchase common stock under our 2012 Unit Option Plan, with a weighted-average exercise price of $2.29 per share; and

additional shares of common stock, subject to increase on an annual basis, reserved for future issuance under our 2012 Equity Incentive Plan, which will become effective in connection with the completion of this offering, consisting of:

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shares of common stock reserved for future grant or issuance under our 2012 Equity Incentive Plan, which will become effective in connection with the completion of this offering; and

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160,516 shares of common stock reserved for future issuance under our 2012 Unit Option Plan, which shares will be added to the shares of common stock to be reserved under our 2012 Equity Incentive Plan upon its effectiveness.

Except as otherwise indicated, all information in this prospectus assumes:

the consummation of the LLC Conversion described under the section titled “Certain Relationships and Related Party Transactions—LLC Conversion” prior to the completion of this offering;

the conversion of all outstanding shares of preferred stock into an aggregate of 24,329,545 shares of common stock, which will occur in connection with the completion of this offering;

the filing and effectiveness of our amended and restated certificate of incorporation in Delaware and the adoption of our amended and restated bylaws, each of which will occur in connection with the completion of this offering; and

no exercise by the underwriters of their option to purchase up to an additional shares of common stock from us and shares of common stock from the selling stockholders in this offering.

SUMMARY CONSOLIDATED FINANCIAL AND OTHER DATA

The following tables summarize our historical consolidated financial and other data. We have derived the summary consolidated statement of operations data for the years ended December 31, 2009, 2010 and 2011 from our audited consolidated financial statements included elsewhere in this prospectus. We have derived the summary consolidated statement of operations data for the six months ended June 30, 2011 and 2012, and the consolidated balance sheet data as of June 30, 2012, from our unaudited consolidated interim financial statements included elsewhere in this prospectus. The unaudited interim consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments that are necessary for the fair statement of our unaudited interim consolidated financial statements. Our historical results are not necessarily indicative of the results that may be expected in the future, and the results in the six months ended June 30, 2012 are not necessarily indicative of the results to be expected for the full year or any other period. The following summary consolidated financial and other data should be read in conjunction with the sections titled “Selected Consolidated Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included elsewhere in this prospectus.

We have restated our audited consolidated financial statements as of December 31, 2011 and for the year then ended to (i) correct errors in our provision for excess and obsolete inventory and non-cancelable future inventory purchase commitments, (ii) correct errors in our accounting for, and tax treatment of, equity award grants to certain employees in prior years, (iii) correct other errors which were not material individually or in the aggregate and (iv) adjust the members’ distribution payable and founders’ bonus pursuant to the LLC Agreement to reflect the amounts owed based on the revised financial results.

The impact of the corrections to the 2011 consolidated financial statements was a decrease in inventory by $0.6 million, an increase in prepaid expenses and other current assets by $1.4 million, a decrease in accounts payable and members’ distribution payable by $0.7 million and $3.3 million, respectively, and an increase in accrued liabilities by $4.7 million as of December 31, 2011. Additionally, the restatement resulted in an increase to cost of revenue by $2.2 million, a decrease in product revenue of $0.1 million and an increase in operating expenses by $0.8 million for the year ended December 31, 2011. The net impact of these adjustments to the 2011 consolidated financial statements was a decrease in net income of $3.1 million.

We have also restated our audited consolidated financial statements as of December 31, 2009 and 2010, and for the years then ended to (i) correct errors in our accounting for, and tax treatment of, equity award grants to certain employees in prior years, (ii) correct errors which were not material individually or in the aggregate and (iii) adjust the members’ distribution payable and founders’ bonus pursuant to the LLC Agreement to reflect the amounts owed based on the revised financial results. The net impact of these corrections was a decrease in net income of $0.2 million in each of 2009 and 2010.


	Year Ended December 31,									Six Months Ended June 30,
	2009			2010			2011			2011			2012
	(restated)			(restated)			(restated)
	(in thousands, except per share amounts)
Consolidated Statement of Operations Data:
Revenue:
Product	$	24,664		$	35,577		$	51,308		$	18,293		$	27,106
Services		6,723			10,909			16,797			7,341			12,063

Total revenue		31,387			46,486			68,105			25,634			39,169

Cost of revenue:
Product		4,826			6,122			12,528			4,388			7,451
Services		665			2,239			1,900			738			945

Total cost of revenue⁽¹⁾		5,491			8,361			14,428			5,126			8,396

Gross profit		25,896			38,125			53,677			20,508			30,773

Operating expenses:
Research and development⁽¹⁾		4,977			12,283			12,530			5,023			7,515
Sales and marketing⁽¹⁾		5,209			12,522			19,358			7,634			17,335
General and administrative⁽¹⁾		2,506			6,610			4,766			2,060			4,041

Total operating expenses		12,692			31,415			36,654			14,717			28,891

Income from operations		13,204			6,710			17,023			5,791			1,882
Interest income		65			9			4			2			6
Other income (expense), net		(7	)		(7	)		(16	)		15			(33	)

Income before provision for income taxes		13,262			6,712			17,011			5,808			1,855
Provision for income taxes		(122	)		(75	)		(80	)		(38	)		(91	)

Net income		13,140			6,637			16,931			5,770			1,764
Accretion of preferred stock to redemption value and issuance costs		—			(1,834	)		(2,078	)		(1,021	)		(1,097	)
Earnings distributable to preferred unit holders		—			(1,350	)		(4,741	)		(1,516	)		(213	)

Net income attributable to common unit holders	$	13,140		$	3,453		$	10,112		$	3,233		$	454

Net income per common share attributable to common unit holders:
Basic and Diluted⁽²⁾	$	0.17		$	0.06		$	0.19		$	0.06		$	0.01

Weighted average shares used in computing net income per common share attributable to common unit holders:
Basic and Diluted⁽²⁾		76,230			53,587			51,900			51,900			51,900

Pro forma net income per common share:
Basic and Diluted ⁽²⁾							$						$

Weighted average shares of common stock used in computing pro forma net income per common share:
Basic and Diluted ⁽²⁾

⁽¹⁾

The following table presents stock-based compensation expense included in each expense category:


	Year Ended December 31,						Six Months Ended June 30,
	2009		2010		2011		2011		2012
	(restated)		(restated)		(restated)
	(in thousands)
Cost of revenue	$	8	$	1,086	$	—	$	—	$	2
Research and development		64		4,692		8		8		32
Sales and marketing		25		2,377		2		2		86
General and administrative		13		2,212		2		2		516

Total stock-based compensation expense	$	110	$	10,367	$	12	$	12	$	636

⁽²⁾

See Notes 2 and 11 to our audited consolidated financial statements for an explanation of the calculations of our basic and diluted net income per share of common stock, and pro forma net income per share of common stock.

The pro forma as adjusted information set forth in the table below is illustrative only and will be adjusted based on the actual initial public offering price and other terms of this offering determined at pricing.


	As of June 30, 2012
	Actual			Pro Forma⁽¹⁾	Pro Forma As Adjusted⁽²⁾⁽³⁾
	(unaudited)
	(in thousands)
Consolidated Balance Sheet Data:
Cash and cash equivalents	$	19,304		$
Working capital (deficit)		(1,163	)
Total assets		45,079
Redeemable convertible preferred units		27,205
Total members deficit/stockholders’ equity (deficit)		(28,908	)

⁽¹⁾

The pro forma column reflects (i) the LLC Conversion, (ii) the conversion of all outstanding preferred units into common stock and (iii) the distribution of an amount of cash to our stockholders as of the date of the LLC Conversion equal to the members’ distribution payable balance on our consolidated financial statements, which was $7.7 million as of June 30, 2012.

⁽²⁾

The pro forma as adjusted column gives effect to the pro forma adjustments set forth above and (i) the receipt of $ in proceeds from the sale and issuance by us of shares of common stock in this offering, based on an assumed initial public offering price of $ per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us and (ii) a $ increase in accumulated deficit associated with compensation expense related to the vesting of performance units in connection with the completion of this offering.

⁽³⁾

Each $1.00 increase or decrease in the assumed initial public offering price of $ per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, would increase or decrease, as applicable, our cash and cash equivalents, additional paid-in capital, total stockholders’ equity (deficit) and total capitalization by $ million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, after deducting estimated underwriting discounts and commissions payable by us. An increase or decrease of one million shares of common stock offered by us would increase or decrease the cash and cash equivalents, additional paid-in capital, total stockholders’ equity (deficit) and total capitalization by $ , assuming an initial public offering price of $ per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, after deducting the estimated underwriting discounts and commissions payable by us.

Key Performance Indicators

We monitor the key performance indicators set forth below to help us evaluate growth trends, establish budgets, measure the effectiveness of our sales and marketing efforts and assess operational efficiencies.


	Year Ended December 31,						Six Months Ended June 30,
	2009		2010		2011		2011		2012
	(restated)		(restated)		(restated)
	(dollars in thousands)
Key Performance Indicators:
Total revenue	$	31,387	$	46,486	$	68,105	$	25,634	$	39,169
Gross margin		83%		82%		79%		80%		79%
Operating income	$	13,204	$	6,710	$	17,023	$	5,791	$	1,882
Deferred revenue	$	7,133	$	11,121	$	21,962	$	14,717	$	24,072

Total revenue. We monitor our total revenue to assess the acceptance of our products by our end-user customers and growth in the markets we serve. We discuss our total revenue further below under the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Gross margin. We monitor our gross margin to assess the impact on our current and forecasted financial results from any changes to the pricing and mix of products we are selling to our end-user customers.

Operating income. We monitor our operating income to assess how effectively we are conducting our operations as well as controlling our operating expenses, which are primarily driven by headcount. We discuss our operating expenses further below under the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Deferred revenue. Our deferred revenue consists of amounts that have been invoiced but that have not yet been recognized as revenue. The majority of our deferred revenue balance consists of the unamortized portion of services revenue from maintenance and support contracts. We also defer revenue, and the related costs of product revenue, on sales of products to a distributor who stocks inventory until that distributor reports to us that it has sold the product to an end-user customer. We monitor our deferred revenue balance because it represents a significant portion of the revenue that we will recognize in future periods. We assess the change in our deferred revenue balance which, taken together with revenue, is an indication of sales activity in a given period.

Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this prospectus, before making a decision to invest in our common stock. If any of the risks actually occurs, our business, financial condition, operating results and prospects could be materially and adversely affected. In that event, the trading price of our common stock could decline, and you could lose part or all of your investment.

We are in a new, rapidly evolving category within the network infrastructure industry that focuses on providing organizations with enhanced visibility and control over their networks through the efficient collection and analysis of network traffic. As such, it is difficult to predict important market trends, including how large the network traffic visibility market will be or when and what products end-user customers will adopt. For example, organizations that currently use traditional approaches may believe that these approaches already provide them with sufficient network traffic visibility. Therefore, they may continue spending their network infrastructure budgets on these products and may not adopt our Traffic Visibility Fabric in addition to or in place of such products.

If the market for network traffic visibility does not evolve in the way we anticipate, if organizations do not recognize the benefit our Traffic Visibility Fabric offers in addition to or in place of existing network traffic visibility products, or if we are unable to sell our family of products to end-user customers, then our revenue may not grow as expected or may decline, and our stock price could decline.

New or existing technologies that are perceived to address network traffic visibility or address the need for network traffic visibility in different ways could gain wide adoption and supplant our products, thereby weakening our sales and our financial results.

The introduction of products and services embodying new technologies could render our existing products obsolete or less attractive to end-user customers. Other network traffic visibility technologies exist or could be developed in the future, and our business could be materially negatively affected if such technologies are widely adopted. We may not be able to successfully anticipate or adapt to changing technology or customer requirements on a timely basis, or at all. If we fail to keep up with technological changes or to convince our end-user customers and potential end-user customers of the value of our solutions even in light of new technologies, our business, operating results and financial condition could be materially and adversely affected.

We are dependent on a single product family comprised of a limited number of products.

Our product offering is limited to a single product family comprised of our GigaVUE, GigaSECURE, GigaSMART and GigaTAP products. Historically, we have derived a substantial portion of our revenue from sales of our GigaVUE appliances and related services, and we expect to continue to derive a significant portion of our product revenue from sales of our GigaVUE appliances and related services for the foreseeable future. A decline in the price of these products and related services, whether due to competition or otherwise, or our inability to increase sales of these products, would harm our business and operating results more seriously than it would if we derived significant revenue from a variety of product lines and services. GigaSECURE, GigaSMART, GigaTAP and related support

services represent additional sources of revenue, however, collectively they accounted for a small portion of total revenue for 2011. We expect that this concentration of revenue from a single product family comprised of a limited number of products will continue for the foreseeable future. As a result, our future growth and financial performance will depend heavily on our ability to develop and sell enhanced versions of our GigaVUE appliances. If we fail to deliver product enhancements, new releases or new products that end-user customers want, it will be more difficult for us to succeed.

Our continued success depends on our ability to identify and develop new products and to enhance and improve our existing products, and the acceptance of those products by our existing and target end-user customers. Our growth would likely be adversely affected if:

We invest substantial amounts of time and resources in researching and developing new products and enhancing existing products by incorporating additional features, improving functionality and adding other improvements to meet end-user customers’ rapidly evolving demands in our highly competitive industry. Our research and development expenses were $7.5 million, or 19% of our revenue in the six months ended June 30, 2012, $12.5 million, or 18% of our total revenue in 2011, $12.3 million, or 27% of our total revenue in 2010 and $5.0 million, or 16% of our total revenue in 2009.

Our future plans contemplate significant investments in research and development and related product opportunities. We believe that we must continue to dedicate a significant amount of resources to our research and development efforts to maintain our competitive position. However, we often make these investments without being certain that they will result in products or enhancements that the markets will accept or that they will expand our share of those markets.

The introduction of new products or product enhancements may shorten the life cycle of our existing products, or replace sales of some of our current products, thereby offsetting the benefit of even a successful product introduction, and may cause end-user customers to defer purchasing our existing products in anticipation of the new products. This could harm our operating results by decreasing sales, increasing our inventory levels of older products and exposing us to greater risk of product obsolescence. We have also experienced, and may in the future experience, delays in developing and releasing new products and product enhancements. This has led to, and may in the future lead to, delayed sales, increased expenses and lower than anticipated quarterly revenue. In addition, complexity and difficulties in managing product transitions at the end-of-life stage of a product can create excess inventory of components associated with the outgoing products that can lead to increased expenses. Any or all of the above problems could materially harm our business and operating results.

If we are unable to increase market awareness of our company and our products, our revenue may not continue to grow, or may decline.

The network traffic visibility market is nascent and we believe that we have not yet established broad market awareness of our products and services. Market awareness of our value proposition and products and services will be essential to our continued growth and our success, particularly for the service provider and large enterprise markets. If our marketing efforts are unsuccessful in creating market awareness of our company and our products and services, then our business, financial condition and operating results will be adversely affected, and we will not be able to achieve sustained growth.

Our quarterly and annual operating results may vary significantly and be difficult to predict, which may cause our stock price to fluctuate.

Our quarterly and annual operating results have varied historically from period to period, and we expect that they will continue to fluctuate due to a variety of factors, many of which are outside of our control, including:

Any one of the factors above or the cumulative effect of some of the factors referred to above may result in significant fluctuations in our quarterly and annual operating results, including fluctuations in our key metrics. This variability and unpredictability could result in our failure to meet our internal operating plan or the expectations of securities analysts or investors for any period. In addition, a significant percentage of our operating expenses are fixed in nature and based on forecasted revenue trends. Accordingly, in the event of revenue shortfalls, we are generally unable to mitigate the negative impact on margins in the short term. If we fail to meet or exceed such expectations for these or any other reasons, the market price of our shares could fall substantially and we could face costly lawsuits, including securities class action suits.

We compete in highly competitive markets, and competitive pressures from existing and new companies may adversely impact our business and operating results.

The markets in which we compete are highly competitive. We expect competition to intensify in the future as existing competitors bundle new and more competitive offerings with their existing products and services, and as new market entrants introduce new products into our markets. This competition could result in increased pricing pressure, reduced profit margins, increased sales and marketing expenses and our failure to increase, or the loss of, market share, any of which would likely seriously harm our business, operating results and financial condition. If we do not keep pace with product and technology advances and otherwise keep our product offerings competitive, there could be a material and adverse effect on our competitive position, revenue and prospects for growth.

We compete either directly or indirectly with large Ethernet switch vendors, such as Cisco Systems, Inc. and Juniper Networks, Inc., and network management, analysis, compliance and security tool vendors that offer point solutions that address a portion of the issues that we solve. The principal competitive factors in our markets include functionality and performance, price and total cost of ownership, ease of use, flexibility and scalability of deployment, brand awareness, breadth of portfolio, product reliability and quality, interoperability with other products, the extent and speed of user adoption and quality of service, support and fulfillment.

Many of our current and potential competitors are substantially larger and have greater financial, technical, research and development, sales and marketing, manufacturing, distribution and other resources and greater name recognition. We could also face competition from new market entrants, including our joint-development partners or other current technology partners. In addition, many of our existing and potential competitors enjoy substantial competitive advantages, such as:

As a result, increased competition could result in fewer customer orders, price reductions, reduced operating margins and loss of market share. Our competitors also may be able to provide end-user customers with capabilities or benefits different from or greater than those we can provide in areas such as technical qualifications or geographic presence, or to provide end-user customers a broader range of products, services and prices. In addition, some of our larger potential competitors have substantially broader product offerings and could leverage their relationships based on other products or incorporate functionality into existing products to gain business in a manner that discourages users from purchasing our products, including through selling at zero or negative margins, product bundling or closed technology platforms. These larger potential competitors may also have more extensive relationships within existing and potential end-user customers that provide them with an advantage in competing for business with those end-user customers. In addition, to the extent that one of our competitors establishes or strengthens a cooperative relationship with, or acquires one or more of the network management, analysis, compliance and security tool vendors that we have active and ongoing joint-development relationships with, it could adversely affect our ability to compete. Our ability to compete will depend upon our ability to provide a better solution than our competitors at a competitive price. We may be required to make substantial additional investments in research, development, marketing and sales in order to respond to competition, and there is no assurance that these investments will achieve any returns for us or that we will be able to compete successfully in the future.

We also expect increased competition if our market continues to expand. Conditions in our market could change rapidly and significantly as a result of technological advancements or other factors. In addition, current or potential competitors may be acquired by third parties that have greater resources available. As a result of these acquisitions, our current or potential competitors might take advantage of the greater resources of the larger organization to compete more vigorously or broadly with us.

As of June 30, 2012, four material weaknesses continued to exist in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, that creates a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis.

In connection with the preparation of our interim unaudited consolidated financial statements for the three months ended March 31, 2012, we identified two material weaknesses in our internal control over financial reporting: (i) the lack of adequate controls surrounding the inputs used in assessing the excess and obsolete inventory and (ii) the lack of adequate controls in our contract review process led to a failure to appropriately identify and account for certain provisions within the equity compensation agreements of certain employees for stock options granted to them during the years ended December 31, 2007 and 2008. The first material weakness resulted in an error in our accounting for excess inventory write-downs, and the second resulted in an error related to our accounting for, and income tax treatment of, equity award grants for certain employees in prior periods. We concluded that each of these errors was individually material to the audited consolidated financial statements for the years ended December 31, 2009, 2010 and 2011, and thus restated our 2009, 2010 and 2011 consolidated financial statements to correct for the aforementioned errors.

Furthermore, in connection with the audits of our consolidated financial statements for 2009 and 2010, our independent registered public accounting firm identified two additional material weaknesses: (i) our lack of technically experienced accounting personnel to perform non-routine and complex transactions and (ii) our lack of adequate segregation of duties among the accounting personnel. These two additional material weaknesses continued to exist at December 31, 2011 and June 30, 2012.

We are working to remediate the material weaknesses identified above. We have begun taking steps and plan to take additional steps to remediate the underlying causes of these material weaknesses, primarily through formalizing and enhancing our review procedures. We have hired a number of individuals with appropriate knowledge and ability to fulfill our obligations to comply with the accounting and reporting requirements applicable to public companies, including a new chief financial officer in March 2012, a corporate controller in April 2012 and a general counsel in May 2012. The actions that we are taking are subject to ongoing senior management review, as well as oversight by our audit committee and board of directors. Although we plan to complete this remediation process as quickly as possible, we cannot at this time estimate how long it will take, and our initiatives may not prove to be successful in remediating these material weaknesses.

If we fail to effectively remediate deficiencies in our control environment or are unable to implement and maintain effective internal control over financial reporting to meet the demands that will be placed upon us as a public company, including the requirements of the Sarbanes-Oxley Act, we may be unable to accurately report our financial results, or report them within the timeframes required by law or exchange regulations.

Even if we are able to report our financial statements accurately and in a timely manner, or if we do not make all necessary improvements to address these material weaknesses, continued disclosure of these material weaknesses will be required in future filings with the SEC, which could cause our reputation to be harmed and our stock price to decline.

We have not performed an evaluation of our internal control over financial reporting, such as required by Section 404 of the Sarbanes-Oxley Act, or Section 404, nor have we engaged our independent registered public accounting firm to perform an audit of our internal control over financial reporting as of any balance sheet date reported in our financial statements. Had we performed such an evaluation or had our independent registered public accounting firm performed an audit of our internal control over financial reporting, control deficiencies, including material weaknesses and significant deficiencies, in addition to those discussed above, may have been identified.

Our limited operating history makes it difficult for you to evaluate our current business and future prospects, and may increase the risk of your investment.

We were founded in 2004 and sold our first products commercially in 2005. We have experienced rapid growth since our inception, and we have been increasing the breadth and scope of our product offerings. The majority of our revenue growth, however, has occurred over the past three years. In addition, some of the members of our current management team have only been working together for a short period of time. This limited operating history, as well as the early stage of our relationships with many of our channel partners, makes financial forecasting and evaluation of our business difficult. Furthermore, because we depend in part on the market’s acceptance of our products, it is difficult to evaluate trends that may affect our business. We have encountered and will continue to encounter risks and difficulties frequently experienced by growing companies in rapidly changing industries, such as the risks described in this prospectus. If we do not address these risks successfully, our business and operating results would be adversely affected, and our stock price could decline.

Some of the components and technologies used in our products are purchased and licensed from a single source or a limited number of sources. The loss of any of these suppliers might cause us to incur additional transition costs, result in delays in the manufacturing and delivery of our products, or cause us to carry excess or obsolete inventory and could require us to redesign our products.

Although supplies of our components are generally available from a variety of sources, we currently depend on a single source or a limited number of sources for most components included in our products. For example, the processors and connectors that we use in the products manufactured by Broadcom Corp., Freescale Semiconductor, Ltd. and Molex Inc. are currently available only from a limited number of sources, and neither we nor, to our knowledge, these manufacturers have entered into supply agreements with such sources. We have also entered into license agreements with some of our suppliers for technologies that are used in our products.

As there are no other sources for identical components and technologies, if we lost any of these suppliers, we might not be able to sell our products for a significant period of time, and we could incur significant costs to redesign our hardware and software to incorporate components or technologies from alternative sources or to qualify alternative suppliers. Our reliance on a single source or a limited number of suppliers involves a number of additional risks, including risks related to:

In addition, for certain components for which there are multiple sources, we are subject to potential price increases and limited availability as a result of market demand for these components. In the past, unexpected demand for computer and network products has caused worldwide shortages of certain electronic parts. If similar shortages occur in the future, our business would be adversely affected. We carry very little inventory of our products, and we and our manufacturer rely on our suppliers to deliver necessary components in a timely manner. We and our manufacturer rely on purchase orders rather than long-term contracts with these suppliers, and as a result we or our manufacturer might not be able to secure sufficient components, even if they were available, at reasonable prices or of acceptable quality to build products in a timely manner and, therefore, might not be able to meet end-user customer demands for our products, which would have a material and adverse effect on our business, operating results and financial condition.

We rely on third-party channel partners to generate a substantial portion of our revenue. If our partners fail to perform, our ability to sell our products and services would be limited, and if we fail to optimize our channel partner model going forward, our operating results would be harmed.

A substantial portion of our revenue is generated through sales by our channel partners, which include distributors and resellers. We depend upon our channel partners to generate most of our sales opportunities and manage the sales process, and in North America we rely on a single distributor, Interlink Communications Systems, Inc., or Interlink, that accounted for 37% of our total revenue in 2011 and 61% of our total revenue in the six months ended June 30, 2012. In addition, Management Communication Services, Inc., or MCS, one of our resellers, accounted for 41%, 34% and 18% of our

total revenue in 2009, 2010 and 2011, respectively. To the extent our channel partners are unsuccessful in selling our products, or we are unable to enter into arrangements with, and retain, a sufficient number of high quality channel partners in each of the regions in which we sell products, and keep them motivated to sell our products, our ability to sell our products and operating results would be harmed. The termination of our relationship with any significant channel partner may adversely impact our sales and operating results.

We provide sales channel partners with specific programs to assist them in selling our products, but there can be no assurance that these programs will be effective. Our channel partners may be unsuccessful in marketing, selling and supporting our products and services. Our channel partners generally do not have minimum purchase requirements. Our agreements with our channel partners are generally non-exclusive and so they may also market, sell and support products and services that are competitive with ours, and may devote more resources to the marketing, sales and support of such products. They may have incentives to promote our competitors’ products to the detriment of our own. As is typical in our industry, our channel partners have the ability to terminate their respective relationships with us with limited notice and with limited or no penalty and may cease selling our products altogether. We cannot assure you that we will retain these channel partners or that we will be able to secure additional or replacement channel partners. The loss of one or more of our significant channel partners could harm our operating results.

As we add additional channel partners, particularly in North America where we currently rely on a single distributor, we may not be able enter into arrangements on as favorable terms, including with respect to pricing, which could have a negative impact on our margins. In addition, any new channel partner would require comprehensive training and may take several months or more to achieve productivity. Our channel partner sales structure could subject us to lawsuits, potential liability and reputational harm if, for example, any of our channel partners misrepresents the functionality of our products or services to end-user customers or our channel partners violate laws or our corporate policies. If we fail to optimize our channel partner model or fail to manage existing sales channels, our business and operating results would be materially and adversely affected.

We currently rely on contract manufacturers to manufacture our products, and our failure to manage our relationship with our contract manufacturers successfully could negatively impact our business.

We rely on a limited number of contract manufacturers to manufacture substantially all of our products, and rely on a sole-source manufacturer for certain of our product modules. Our reliance on these contract manufacturers reduces our control over the assembly process, exposing us to risks, including reduced control over quality assurance, production costs and product supply. If we fail to manage our relationship with these contract manufacturers effectively, or if these contract manufacturers experience delays, disruptions, capacity constraints or quality control problems in their operations, our ability to ship products to our end-user customers could be impaired and our competitive position and reputation could be harmed. In addition, any adverse change in our manufacturers’ financial or business condition could disrupt our ability to supply quality products to our end-user customers. If we are required to change contract manufacturers or assume internal manufacturing operations, we may lose revenue, incur increased costs and damage our customer relationships. In addition, qualifying a new contract manufacturer and commencing production can be an expensive and lengthy process. If we experience increased demand that our contract manufacturers are unable to fulfill, or if they are unable to provide us with adequate supplies of high-quality products for any other reason, we could experience a delay in our order fulfillment, and our business, operating results and financial condition would be adversely affected.

We rely on the availability of licenses to third-party software and other intellectual property.

Many of our products and services include software or other intellectual property licensed from third parties, and we otherwise use software and other intellectual property licensed from third parties in our business. This exposes us to risks over which we may have little or no control. For example, a licensor may have difficulties keeping up with technological changes or may stop supporting the software or other intellectual property that it licenses to us. Also, it will be necessary in the future to renew licenses, expand the scope of existing licenses or seek new licenses, relating to various aspects of these products and services, or otherwise relating to our business, which may result in increased license fees. There can be no assurance that the necessary licenses will be available on acceptable terms, if at all. In addition, a third party may assert that we or our end-user customers are in breach of the terms of a license, which could, among other things, give such third party the right to terminate a license or seek damages from us, or both. The inability to obtain or maintain certain licenses or other rights or to obtain or maintain such licenses or rights on favorable terms, or the need to engage in litigation regarding these matters, could result in delays in releases of products and services, and could otherwise disrupt our business, until equivalent technology can be identified, licensed or developed, if at all, and integrated into our products and services or otherwise in the conduct of our business. Any of these events could have a material adverse effect on our business, operating results and financial condition. Moreover, the inclusion in our products and services of software or other intellectual property licensed from third parties on a nonexclusive basis may limit our ability to differentiate our products from those of our competitors.

Failure to protect our proprietary technology and intellectual property rights could substantially harm our business and operating results.

The success of our business depends on our ability to protect and enforce our trade secrets, trademarks, copyrights, patents and other intellectual property rights. We attempt to protect our intellectual property under patent, trademark, copyright and trade secret laws, and through a combination of confidentiality procedures, contractual provisions and other methods, all of which offer only limited protection.

We currently have nine issued patents in the United States, but this number is relatively small in comparison to some of our competitors and potential competitors. As of June 30, 2012, we had 22 pending U.S. patent applications, and may file additional patent applications in the future. The process of obtaining patent protection is expensive and time-consuming, and we may not be able to prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. We may choose not to seek patent protection for certain innovations and may choose not to pursue patent protection in certain jurisdictions. Furthermore, it is possible that our patent applications may not issue as granted patents, that the scope of our issued patents will be insufficient or not have the coverage originally sought, that our issued patents will not provide us with any competitive advantages, and that our patents and other intellectual property rights may be challenged by others or invalidated through administrative process or litigation. In addition, issuance of a patent does not guarantee that we have an absolute right to practice the patented invention, or that we have the right to exclude others from practicing the claimed invention. As a result, we may not be able to obtain adequate patent protection or to enforce our issued patents effectively.

In addition to patented technology, we rely on our unpatented proprietary technology and trade secrets. Despite our efforts to protect our proprietary technology and trade secrets, unauthorized parties may attempt to misappropriate, reverse engineer or otherwise obtain and use them. The contractual provisions that we enter into with employees, consultants, partners, vendors and customers may not prevent unauthorized use or disclosure of our proprietary technology or intellectual property rights and may not provide an adequate remedy in the event of unauthorized use or disclosure of our proprietary technology or intellectual property rights. Moreover, policing unauthorized use of our

technologies, products and intellectual property is difficult, expensive and time-consuming, particularly in foreign countries where the laws may not be as protective of intellectual property rights as those in the United States and where mechanisms for enforcement of intellectual property rights may be weak. We may be unable to determine the extent of any unauthorized use or infringement of our products, technologies or intellectual property rights.

From time to time, legal action by us may be necessary to enforce our patents and other intellectual property rights, to protect our trade secrets, to determine the validity and scope of the intellectual property rights of others or to defend against claims of infringement or invalidity. Such litigation could result in substantial costs and diversion of resources and could negatively affect our business, operating results, financial condition and cash flows. If we are unable to protect our intellectual property rights, we may find ourselves at a competitive disadvantage to others who need not incur the additional expense, time and effort required to create the innovative products that have enabled us to be successful to date.

Assertions by third parties of infringement or other violations by us of their intellectual property rights, or other lawsuits asserted against us, could result in significant costs and substantially harm our business and operating results.

Patent and other intellectual property disputes are common in the network infrastructure industry. Some companies in the network infrastructure industry, including some of our competitors, own large numbers of patents, copyrights, trademarks and trade secrets, which they may use to assert claims against us. Third parties may in the future assert claims of infringement, misappropriation or other violations of intellectual property rights against us. They may also assert such claims against our end-user customers or channel partners whom we typically indemnify against claims that our products infringe, misappropriate or otherwise violate the intellectual property rights of third parties. As the number of products and competitors in our market increase and overlaps occur, claims of infringement, misappropriation and other violations of intellectual property rights may increase. Any claim of infringement, misappropriation or other violation of intellectual property rights by a third party, even those without merit, could cause us to incur substantial costs defending against the claim and could distract our management from our business.

The patent portfolios of our most significant competitors and potential competitors are larger than ours. This disparity between our patent portfolio and the patent portfolios of our most significant competitors may increase the risk that they may sue us for patent infringement and may limit our ability to counterclaim for patent infringement or settle through patent cross-licenses. In addition, future assertions of patent rights by third parties, and any resulting litigation, may involve patent holding companies or other adverse patent owners who have no relevant product revenue and against whom our own patents may therefore provide little or no deterrence or protection. We cannot assure you that we are not infringing or otherwise violating any third-party intellectual property rights.

An adverse outcome of a dispute may require us to pay substantial damages including treble damages if we are found to have willfully infringed a third party’s patents or copyrights; cease making, licensing or using solutions that are alleged to infringe or misappropriate the intellectual property of others; expend additional development resources to attempt to redesign our products or services or otherwise to develop non-infringing technology, which may not be successful; enter into potentially unfavorable royalty or license agreements in order to obtain the right to use necessary technologies or intellectual property rights; and indemnify our partners and other third parties. Any damages or royalty obligations we may become subject to, and any third-party indemnity we may need to provide, as a result of an adverse outcome could harm our operating results. Royalty or licensing agreements, if required or desirable, may be unavailable on terms acceptable to us, or at all, and may require significant royalty payments and other expenditures. In addition, some licenses may be non-exclusive,

and therefore our competitors may have access to the same technology licensed to us. Any of these events could seriously harm our business, financial condition and operating results.

Under the indemnification provisions of our standard sales contracts, we agree to defend our customers against third-party claims asserting infringement of certain intellectual property rights, which may include patents, copyrights, trademarks or trade secrets, and to pay judgments entered on such claims. Our exposure under these indemnification provisions is generally limited to the total amount paid by our customer under the agreement. However, certain agreements include indemnification provisions that could potentially expose us to losses in excess of the amount received under the agreement. We have not incurred any material costs in the past as a result of such indemnification obligations, and have not accrued any liabilities related to such obligations in our consolidated financial statements.

In addition, we may, from time to time, be a party to other lawsuits in the normal course of our business. Litigation in general, and intellectual property and securities litigation in particular, can be expensive, lengthy and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict. Responding to lawsuits is likely to be expensive and time consuming for us, and could divert our management’s attention from our business. An unfavorable resolution of any lawsuit could adversely affect our business, operating results or financial condition.

Our use of open source and third-party technology could impose limitations on our ability to commercialize our software.

We use open source software in our products, and although we monitor our use of open source software to avoid subjecting our products to conditions we do not intend, the terms of many open source licenses have not been interpreted by U.S. courts. As a result, there is a risk that these licenses could be construed in a way that could impose unanticipated conditions or restrictions on our ability to commercialize our products. In such an event, we could be required to seek licenses from third parties to continue offering our products, to make our proprietary code generally available in source code form, to re-engineer our products or to discontinue the sale of our products if re-engineering could not be accomplished on a timely basis, any of which could adversely affect our business, operating results and financial condition.

Adverse economic conditions or reduced information technology and network infrastructure spending may adversely impact our business and operating results.

Our business depends on the overall demand for information technology, network infrastructure and the market for network analysis, compliance and security tools. In addition, the purchase of our products and services is often discretionary and may involve a significant commitment of capital and other resources. Weak global economic conditions, or a reduction in information technology and network infrastructure spending even if economic conditions improve, could adversely impact our business, financial condition and operating results in a number of ways, including longer sales cycles, lower prices for our products and services, higher default rates among our distributors, reduced unit sales and lower or no growth. For example, recent economic uncertainty in Europe that has been caused in part by the European debt crisis could adversely impact spending for IT, network infrastructure and network analysis, compliance and security tools. Although we do not believe that our business and operating results have been adversely affected by the economic uncertainty in Europe through June 30, 2012, continued uncertainty or a further decline in economic conditions in Europe may harm our business and operating results in the future.

We depend on growth in markets relating to network security, management and analysis, and lack of growth or contraction in one or more of these markets could have a material adverse effect on our sales and financial condition.

Demand for our products is linked to, among other things, growth in the size and complexity of network infrastructures and the demand for networking technologies addressing the security, management and analysis of such infrastructures. If this demand declines, our sales, profitability and financial condition would be materially adversely affected. Segments of the network infrastructure industry have in the past experienced significant economic downturns. The occurrence of any of these factors in the markets relating to network security, management and analysis could materially adversely affect our sales, profitability and financial condition. Furthermore, these markets are dynamic and evolving. Our future financial performance will depend in large part on continued growth in the number of organizations investing in their network infrastructure and the amount they commit to such investments. The market for network infrastructure may not continue to grow at historic rates, or at all. If this market fails to grow, or grows more slowly than we currently anticipate, our sales and profitability could be adversely affected.

The average selling price of our products has decreased from time to time, and may decrease in the future, which may negatively impact gross profits.

From time to time, the average selling price of our products has decreased. In the future, it is possible that the average selling prices of our products will decrease in response to competitive pricing pressures, increased sales discounts, new product introductions by us or our competitors or other factors. Such pricing pressures may also be dependent upon the mix of products sold, the mix of revenue between products and services and the degree to which products and services are bundled and sold together for a package price. Therefore, in order to maintain our profitability, we must develop and introduce new products and product enhancements on a timely basis and continually reduce our product costs. Our failure to do so would cause our net revenue and gross profits to decline, which would harm our business and operating results. In addition, we may experience substantial period-to-period fluctuations in future operating results in the event we experience an erosion of our average selling prices.

Managing inventory of our products and product components is complex. Insufficient inventory may result in lost sales opportunities or delayed revenue, while excess inventory may harm our gross margins.

Our channel partners may increase orders during periods of product shortages, cancel orders if their inventory is too high, return product or take advantage of price protection (if any) or delay orders in anticipation of new products. They also may adjust their orders in response to the supply of our products and the products of our competitors that are available to them and in response to seasonal fluctuations in customer demand. Furthermore, if the time required to manufacture certain products or ship products increases for any reason, this could result in inventory shortfalls. In addition, for those channel partners that have rights of return, inventory held by such channel partners affects our operating results. Our inventory management systems and related supply chain visibility tools may be inadequate to enable us to effectively manage inventory. Inventory management remains an area of focus as we balance the need to maintain inventory levels that are sufficient to ensure competitive lead times against the risk of inventory obsolescence because of rapidly changing technology and customer requirements. For example, we identified a lack of adequate controls over the process for accounting for inventory write-downs and inventory purchase commitments as of December 31, 2011 and March 31, 2012, and as we adopted new processes to review our inventory reserves in May 2012, we identified that our inventory balances were overstated as of December 31, 2011. If we ultimately determine that we have excess inventory, we may have to reduce our prices and write-down inventory, which in turn could result in lower gross margins. Alternatively, insufficient inventory levels may lead to

shortages that result in delayed revenue or loss of sales opportunities altogether as potential end-user customers turn to competitors’ products that are readily available. If we are unable to effectively manage our inventory and that of our distribution partners, our operating results could be adversely affected.

We rely on revenue from support services which may decline, and because we recognize revenue from support services over the term of the relevant service period, downturns or upturns in sales of support services are not immediately reflected in full in our operating results.

Although our services revenue has historically accounted for a small percentage of our total revenue, it may become a more meaningful part of revenue over time. Sales of new or renewal services contracts may decline and fluctuate as a result of a number of factors, including end-user customers’ level of satisfaction with our products and services, the prices of our products and services, the prices of products and services offered by our competitors or reductions in our end-user customers’ spending levels. If our sales of new or renewal services contracts decline, our revenue and revenue growth may decline and our business will suffer. In addition, we recognize services revenue over the term of the relevant service period, which is typically twelve months. As a result, some of the revenue we report each quarter is the recognition of deferred revenue from services contracts entered into during previous quarters. Consequently, a decline in new or renewed service contracts in any one quarter will not be fully reflected in revenue in that quarter but will negatively affect our revenue in future quarters. Accordingly, the effect of significant downturns in new or renewed sales of our services is not reflected in full in our operating results until future periods. Our services revenue also makes it difficult for us to rapidly increase our revenue through additional service sales in any period, as revenue from new and renewal service contracts must be recognized over the applicable service period. Furthermore, increases in the average term of services contracts would result in revenue for services contracts being recognized over longer periods of time.

Our sales cycles can be long and unpredictable, and our sales efforts require considerable time and expense.

Our sales efforts involve educating our end-user customers about the use and benefits of our products, including their technical capabilities. End-user customers often undertake an evaluation and testing process that can result in a lengthy sales cycle. Also, as our distribution strategy has evolved into more of a channel model, utilizing distributors, the level of variability in the length of sales cycle across transactions has increased and made it more difficult to predict the timing of many of our sales transactions. We spend substantial time and resources on our sales efforts without any assurance that our efforts will produce any sales. In addition, product purchases are frequently subject to budget constraints, multiple approvals and unplanned administrative, processing and other delays. These factors, among others, could result in long and unpredictable sales cycles. We sell our Traffic Visibility Fabric primarily to enterprise IT departments and service providers. The length of our products’ sales cycles typically ranges from three to six months but can be more than six months, with sales cycles involving service providers taking significantly longer to complete. To the extent that the mix of our future sales shifts in the direction of service providers, the average length of our sales cycles will increase. As a result of these lengthy and uncertain sales cycles of our products, it is difficult for us to predict when end-user customers may purchase and accept products from us and as a result, our operating results may vary significantly and may be adversely affected.

Our business and operations have experienced rapid growth, and if we do not appropriately manage any future growth, or are unable to improve our systems and processes, our operating results will be negatively affected.

We have experienced rapid growth over the last several years, which has placed a strain on our management, administrative, operational and financial infrastructure. In addition, some of the members of our current management team have only been working together for a short period of time. We also

anticipate that additional investments in key channel partnerships and direct-sales personnel, as well as infrastructure and research and development spending, will be required to:

Our success will depend in part upon our ability to manage our growth effectively. To do so, we must continue to increase the productivity of our existing employees and to hire, train and manage new employees as needed. To manage domestic and international growth of our operations and personnel, we will need to continue to improve our operational, financial and management controls and our reporting processes and procedures, and implement more extensive and integrated financial and business information systems. These additional investments will increase our operating costs, which will make it more difficult for us to offset any future revenue shortfalls by reducing expenses in the short term. Moreover, if we fail to scale our operations successfully, our business and operating results could be materially and adversely affected.

We are dependent on the continued services and performance of our senior management and other key employees, the loss of any of whom could adversely affect our business, operating results and financial condition.

Our future performance depends on the continued services and contributions of our senior management and other key employees to execute on our business plan, and to identify and pursue new opportunities and product innovations. The loss of services of senior management or other key employees, particularly Ted C. Ho, one of our founders and our chief executive officer, could significantly delay or prevent the achievement of our development and strategic objectives. In addition, some of the members of our current management team have only been working together for a short period of time. The loss of the services of our senior management or other key employees for any reason could adversely affect our business, financial condition and operating results.

If we are unable to hire, retain and motivate qualified personnel, our business would suffer.

Our future success depends, in part, on our ability to continue to attract and retain highly skilled personnel. The loss of the services of any of our key personnel, the inability to attract or retain qualified personnel or delays in hiring required personnel, particularly in engineering and sales, may seriously harm our business, financial condition and operating results. None of our key employees has an employment agreement for a specific term, and any of our employees may terminate their employment at any time. Our ability to continue to attract and retain highly skilled personnel will be critical to our future success. Competition for highly skilled personnel is frequently intense, especially in the San Francisco Bay Area, the location in which we have a substantial presence and need for highly-skilled personnel. In addition, a large portion of our employee base is substantially vested in significant stock option grants and performance units under our 2009 Performance Unit Plan. The ability to either exercise those options and sell their stock in a public market after the completion of this offering, or the fact that the performance units will be paid out following the closing of the offering, may lead to a larger than normal turnover rate. We intend to issue stock options as a key component of our overall compensation and employee attraction and retention efforts. In addition, we are required under U.S. generally accepted accounting principles, or GAAP, to recognize compensation expense in our operating results for employee stock-based compensation under our equity grant programs, which may negatively impact our operating results and may increase the pressure to limit share-based

compensation. We may not be successful in attracting, assimilating or retaining qualified personnel to fulfill our current or future needs. Also, to the extent we hire personnel from competitors, we may be subject to allegations that they have been improperly solicited or divulged proprietary or other confidential information.

Our products are complex and have contained and may contain undetected defects or errors, especially when first introduced or when new versions are released. Defects in our products may impede or block network traffic or cause our products to fail to provide network traffic visibility as intended. Further, defects in our products may lead to the impairment of tools that rely on data. Defects in our products may lead to product returns and require us to implement design changes or software updates.

Any defects or errors in our products, or the perception of such defects or errors, could result in:

Although we have limitation of liability provisions in our standard terms and conditions of sale, they may not fully or effectively protect us from claims as a result of federal, state or local laws or ordinances or unfavorable judicial decisions in the United States or other countries. The sale and support of our products also entail the risk of product liability claims. We maintain insurance to protect against certain claims associated with the use of our products, but our insurance coverage may not adequately cover any claim asserted against us. In addition, even claims that ultimately are unsuccessful could result in our expenditure of funds in litigation and divert management’s time and other resources.

Our long-term success depends, in part, on our ability to expand the sales of our products to end-user customers located outside of the United States, and therefore our business will be susceptible to risks associated with international operations.

While we currently maintain limited operations outside of the United States, we intend to expand these operations in the future. We have limited experience operating in foreign jurisdictions. Our inexperience in operating our business outside of the United States increases the risk that any international expansion efforts we may undertake will not be successful. In addition, conducting and expanding international operations subjects us to new risks that we have not generally faced in the United States. These include:

The occurrence of any one of these risks could negatively affect our international business and, consequently, our business, operating results and financial condition.

We are dependent on various IT systems, and failures of or interruptions to those systems could harm our business.

Many of our business processes depend upon our IT systems, the systems and processes of third parties and on interfaces with the systems of third parties. For example, we rely on Salesforce.com, Inc. for our customer relationship management system. If those systems fail or are interrupted, or if our ability to connect to or interact with one or more networks is interrupted, our processes may function at a diminished level or not at all. This would harm our ability to ship products, and our financial results would likely be harmed.

In addition, reconfiguring our IT systems or other business processes in response to changing business needs may be time consuming and costly. To the extent this impacted our ability to react timely to specific market or business opportunities, our financial results would likely be harmed.

Our business is subject to regulation by various federal, state, local and foreign governmental agencies, including agencies responsible for monitoring and enforcing employment and labor laws, workplace safety, product safety, environmental laws, consumer protection laws, anti-bribery laws, import/export controls, federal securities laws and tax laws and regulations. In certain jurisdictions, these regulatory requirements may be more stringent than in the United States. Noncompliance with applicable regulations or requirements could subject us to investigations, sanctions, mandatory product recalls, enforcement actions, disgorgement of profits, fines, damages, civil and criminal penalties or injunctions. If any governmental sanctions are imposed, or if we do not prevail in any possible civil or criminal litigation, our business, operating results and financial condition could be materially adversely affected. In addition, responding to any action will likely result in a significant diversion of management’s attention and resources and an increase in professional fees. Enforcement actions and sanctions could harm our business, operating results and financial condition.

Governmental regulations affecting the import or export of products could negatively affect our revenue.

The U.S. and various foreign governments have imposed controls, export license requirements and restrictions on the import or export of some technologies, especially encryption technology. In addition, from time to time, governmental agencies have proposed additional regulation of encryption technology, such as requiring the escrow and governmental recovery of private encryption keys. Governmental regulation of encryption technology and regulation of imports or exports, or our failure to obtain required import or export approval for our products, could harm our international and domestic

sales and adversely affect our revenue. In addition, failure to comply with such regulations could result in penalties, costs and restrictions on export privileges, which would harm our operating results.

Due to the global nature of our business, we could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act, or similar anti-bribery laws in other jurisdictions in which we operate, and various international trade and export laws.

The global nature of our business creates various domestic and local regulatory challenges. The U.S. Foreign Corrupt Practices Act, or the FCPA, the U.K. Bribery Act 2010, or the U.K. Bribery Act, and similar anti-bribery laws in other jurisdictions generally prohibit U.S.-based companies and their intermediaries from making improper payments to non-U.S. officials for the purpose of obtaining or retaining business. In addition, U.S. based companies are required to maintain records that accurately and fairly represent their transactions and have an adequate system of internal accounting controls. We operate in areas of the world that experience corruption by government officials to some degree and, in certain circumstances, compliance with anti-bribery laws may conflict with local customs and practices. Our global operations require us to import and export to and from several countries, which geographically stretches our compliance obligations. In addition, changes in such laws could result in increased regulatory requirements and compliance costs which could adversely affect our business, financial condition and results of operations. We cannot assure that our employees or other agents will not engage in prohibited conduct and render us responsible under the FCPA or the U.K. Bribery Act. If we are found to be in violation of the FCPA, the U.K. Bribery Act or other anti-bribery laws (either due to acts or inadvertence of our employees, or due to the acts or inadvertence of others), we could suffer criminal or civil penalties or other sanctions, which could have a material adverse effect on our business.

We may expand through acquisitions of, or investments in, other companies, each of which may divert our management’s attention, resulting in additional dilution to our stockholders and consumption of resources that are necessary to sustain and grow our business.

Our business strategy may, from time to time, include acquiring complementary products, technologies or businesses. We also may enter into relationships with other businesses in order to expand our product offerings, which could involve preferred or exclusive licenses, additional channels of distribution or discount pricing or investments in other companies. Negotiating these transactions can be time consuming, difficult and expensive, and our ability to close these transactions may be subject to third-party approvals, such as government regulation, which are beyond our control. Consequently, we can make no assurance that these transactions, once undertaken and announced, will close.

An acquisition or investment may result in unforeseen operating difficulties and expenditures. In particular, we may encounter difficulties assimilating or integrating the businesses, technologies, products, personnel or operations of the acquired companies, particularly if the key personnel of the acquired business choose not to work for us, and we may have difficulty retaining the customers of any acquired business. Acquisitions may also disrupt our ongoing business, divert our resources and require significant management attention that would otherwise be available for development of our business. Any acquisition or investment could expose us to unknown liabilities. Moreover, we cannot assure you that the anticipated benefits of any acquisition or investment would be realized or that we would not be exposed to unknown liabilities. An acquisition could also result in dilutive issuances of our equity securities, the incurrence of debt, contingent liabilities, amortization expenses or the write-off of goodwill. These challenges related to acquisitions or investments could adversely affect our business, operating results and financial condition.

If our estimates or judgments relating to our critical accounting policies are based on assumptions that change or prove to be incorrect, our operating results could fall below expectations of securities analysts and investors, resulting in a decline in our stock price.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as provided in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the results of which form the basis for making judgments about the carrying values of assets, liabilities and equity, and the amount of revenue and expenses that are not readily apparent from other sources. Our operating results may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our operating results to fall below the expectations of securities analysts and investors, resulting in a decline in our stock price. Significant assumptions and estimates used in preparing our consolidated financial statements include, or may in the future include, those related to revenue recognition, stock-based compensation expense, long-lived assets, excess and obsolete inventory write-downs, warranty reserves and accounting for income taxes including deferred tax assets and liabilities.

If we fail to comply with environmental requirements, our business, financial condition, operating results and reputation could be adversely affected.

We are subject to various environmental laws and regulations including laws governing the hazardous material content of our products and laws relating to the collection of and recycling of electrical and electronic equipment. Examples of these laws and regulations include the European Union, or EU, Restrictions of Hazardous Substances Directive, or RoHS, and the EU Waste Electrical and Electronic Equipment Directive, or WEEE, as well as the implementing legislation of the EU member states. Similar laws and regulations have been passed or are pending in China, South Korea, Norway and Japan and may be enacted in other regions, including in the United States, and we are, or may in the future be, subject to these laws and regulations.

The EU RoHS and the similar laws of other jurisdictions ban the use of certain hazardous materials such as lead, mercury and cadmium in the manufacture of electrical equipment, including our products. We do not currently have the policies and procedures in place to ensure that the manufacturer of our physical appliances and major component part suppliers comply with the EU RoHS requirements. In addition, if there are changes to this or other laws (or their interpretation) or if new similar laws are passed in other jurisdictions, we may be required to reengineer our products to use components compatible with these regulations. This reengineering and component substitution could result in additional costs to us or disrupt our operations or logistics.

The WEEE Directive requires electronic goods producers to be responsible for the collection, recycling and treatment of such products. Changes in interpretation of the directive may cause us to incur costs or have additional regulatory requirements to meet in the future in order to comply with this directive, or with any similar laws adopted in other jurisdictions.

Our failure to comply with past, present and future similar laws could result in reduced sales of our products, substantial product inventory write-offs, reputational damage, penalties and other sanctions, which could harm our business and financial condition. We also expect that our products will be affected by new environmental laws and regulations on an ongoing basis. To date, our expenditures for environmental compliance have not had a material impact on our results of operations or cash flows and, although we cannot predict the future impact of such laws or regulations, they will likely result in additional costs and may increase penalties associated with violations or require us to change the content of our products or how they are manufactured, which could have a material adverse effect on our business, operating results and financial condition.

Our business is subject to the risks of earthquakes, fire, power outages, floods and other catastrophic events, and to interruption by manmade problems such as terrorism.

A significant natural disaster, such as an earthquake, fire or a flood, or a significant power outage could have a material adverse impact on our business, operating results and financial condition. Our corporate headquarters are located in the San Francisco Bay Area, a region known for seismic activity. In addition, natural disasters could affect our manufacturing vendors or logistics providers’ ability to perform services such as manufacturing products on a timely basis and assisting with shipments on a timely basis. In the event our service providers’ information technology systems or manufacturing or logistics abilities are hindered by any of the events discussed above, shipments could be delayed, resulting in missing financial targets, such as revenue and shipment targets, for a particular quarter. Further, if a natural disaster occurs in a region from which we derive a significant portion of our revenue, end-user customers in that region may delay or forego purchases of our products, which may materially and adversely impact our operating results for a particular period. In addition, acts of terrorism could cause disruptions in our business or the business of our manufacturer, logistics providers, partners, end-user customers or the economy as a whole. Given our typical concentration of sales at each quarter end, any disruption in the business of our manufacturer, logistics providers, partners or customers that impacts sales at the end of our quarter could have a significant adverse impact on our quarterly results. All of the aforementioned risks may be augmented if the disaster recovery plans for us and our suppliers prove to be inadequate. To the extent that any of the above results in delays or cancellations of customer orders, or delays in the manufacture, deployment or shipment of our products, our business, financial condition and operating results would be adversely affected.

If our end-user customers are not satisfied with our technical support or professional services, they may choose not to purchase our products and services or to renew service contracts, either of which would adversely impact our business and operating results.

Our business relies, in part, on our end-user customers’ satisfaction with the technical support and professional consulting services we provide to support our products. If we fail to provide technical support services that are responsive, satisfy our end-user customers’ expectations and resolve issues that they encounter with our products and services, then they may elect not to purchase or renew annual maintenance and support contracts and they may choose not to purchase additional products and services from us. Accordingly, our failure to provide satisfactory technical support or professional services could have a material and adverse effect on our business and operating results.

An active trading market for our common stock may never develop or be sustained.

We intend to apply to list our common stock on the New York Stock Exchange under the symbol “GIMO.” However, we cannot assure you that our common stock will be approved for listing on the New York Stock Exchange or, if approved, that an active trading market for our common stock will develop on that exchange or elsewhere or, if developed, that any market will be sustained. Accordingly, we cannot assure you of the likelihood that an active trading market for our common stock will develop or be maintained, the liquidity of any trading market, your ability to sell your shares of common stock when desired or the prices that you may obtain for your shares.

Our share price may be volatile, and you may be unable to sell your shares at or above the offering price.

Technology stocks have historically experienced high levels of volatility. The trading price of our common stock is likely to be highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control and may not be related to our operating

performance. These fluctuations could cause you to lose all or part of your investment in our common stock. Factors that may cause the market price of our common stock to fluctuate include:

In addition, if the market for technology stocks or the stock market in general experience a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, operating results or financial condition. The trading price of our common stock might also decline in reaction to events that affect other companies in our industry even if these events do not directly affect us.

In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company. If our stock price is volatile, we may become the target of securities litigation. Securities litigation could result in substantial costs and divert our management’s attention and resources from our business, and this could have a material adverse effect on our business, operating results and financial condition.

Sales of outstanding shares of our common stock into the market in the future could cause the market price of our common stock to drop significantly.

If our existing stockholders sell, or indicate an intent to sell, substantial amounts of our common stock in the public market after the contractual lock-up and other legal restrictions on resale lapse, the trading price of our common stock could decline. After this offering, approximately shares of common stock will be outstanding. Of these shares, the shares of our common stock to be sold in this offering will be freely tradable, unless such shares are held by “affiliates,” as that term is defined in Rule 144 of the Securities Act of 1933, as amended, or the Securities Act.

Our directors, officers and holders of substantially all of our capital stock and securities convertible into capital stock are subject to a 180-day contractual lock-up that prevents them from selling their shares prior to the expiration of this lock-up period. Goldman, Sachs & Co. may, in its sole discretion, permit shares subject to this lock-up to be sold prior to its expiration. See the section titled “Shares Eligible for Future Sale — Lock-Up Agreements” for additional information.

At various times after the lock-up agreements pertaining to this offering expire, up to an additional shares will be eligible for sale in the public market, of which are, based on the number of shares outstanding as of June 30, 2012 and after giving effect to the exercise of options and the sale of shares by the selling stockholders in connection with the completion of this offering, held by directors, executive officers and other affiliates and will be subject to volume limitations under Rule 144 under the Securities Act, as amended, and various vesting agreements.

In addition, as of June 30, 2012, 160,516 shares of common stock were reserved for future issuance under our 2012 Unit Option Plan and upon the consummation of this offering options to purchase approximately shares of our common stock will be reserved for future issuance under our 2012 Equity Incentive Plan. If these additional shares are sold, or if it is perceived that they will be sold, in the public market, the trading price of our common stock could decline. See the section titled “Shares Eligible for Future Sale” for additional information.

If you purchase shares of our common stock in this offering, you will experience substantial and immediate dilution.

If you purchase shares of our common stock in this offering, you will experience substantial and immediate dilution of $ per share, based on an assumed initial public offering price of $ per share, which is the midpoint of the range as reflected on the cover page of this prospectus, because the price that you pay will be substantially greater than the net tangible book value per share of the common stock that you acquire. This dilution is due in large part to the fact that our founders and earlier investors paid substantially less than the initial public offering price when they purchased their shares of our capital stock. In addition, investors who purchase shares in this offering will contribute approximately % of the total amount of equity capital raised by us through the date of this offering, but will only own approximately % of our outstanding shares. In addition, we have issued options to acquire our common stock at prices significantly below the initial public offering price. To the extent outstanding options are ultimately exercised, there will be further dilution to investors in this offering.

If securities analysts do not publish research or reports about our business, or if they downgrade our stock, the price of our stock could decline.

The trading market for our common stock could be influenced by any research and reports that securities or industry analysts publish about us or our business. We do not currently have, and may never obtain research coverage by securities and industry analysts. If no securities or industry analysts commence coverage of our company, the trading price for our stock would be negatively impacted. In the event securities or industry analysts cover our company and one or more of these analysts downgrade our stock or publish inaccurate or unfavorable research about our business, our stock price would likely decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our stock could decrease, which could cause our stock price and trading volume to decline.

The concentration of ownership among our existing directors, executive officers and principal stockholders will provide them, collectively, with substantial control over us after this offering, which could limit your ability to influence the outcome of key transactions, including a change of control.

Our directors, executive officers and each of our stockholders who own greater than 5% of our outstanding common stock and their affiliates, in the aggregate, will own approximately % of the outstanding shares of our common stock after this offering, based on the number of shares outstanding as of June 30, 2012 and after giving effect to the exercise of options and the sale of shares by the selling stockholders in connection with this offering. As a result, these stockholders, if acting together, will be able to influence or control matters requiring approval by our stockholders, including the election

of directors and the approval of mergers, acquisitions or other extraordinary transactions. They may also have interests that differ from yours and may vote in a way with which you disagree and which may be adverse to your interests. This concentration of ownership may have the effect of delaying, preventing or deterring a change of control of our company, could deprive our stockholders of an opportunity to receive a premium for their common stock as part of a sale of our company and might ultimately affect the market price of our common stock.

We have broad discretion in the use of the net proceeds that we receive in this offering.

The principal purposes of this offering are to raise additional capital, to create a public market for our common stock and to facilitate our future access to the public equity markets. We have not yet determined the specific allocation of the net proceeds that we receive in this offering. Rather, we intend to use the net proceeds that we receive in this offering for working capital and general corporate purposes, including to satisfy our obligations to holders of performance units under our 2009 Performance Unit Plan, expansion of our sales organization, further development and expansion of our product offerings and possible acquisitions of, or investments in, businesses, technologies or other assets. Accordingly, our management will have broad discretion over the specific use of the net proceeds that we receive in this offering and might not be able to obtain a significant return, if any, on investment of these net proceeds. Investors in this offering will need to rely upon the judgment of our management with respect to the use of proceeds. If we do not use the net proceeds that we receive in this offering effectively, our business, operating results and financial condition could be harmed.

The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain executive management and qualified board members.

As a public company, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, the listing requirements of the New York Stock Exchange and other applicable securities rules and regulations. Compliance with these rules and regulations will increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources, particularly after we are no longer an “emerging growth company,” as defined in the Jumpstart our Business Startups Act, or the JOBS Act. The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and operating results. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. In order to maintain and, if required, improve our disclosure controls and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight may be required. As a result, management’s attention may be diverted from other business concerns, which could adversely affect our business and operating results. Although we have already hired additional employees to comply with these requirements, we may need to hire more employees in the future or engage outside consultants, which will increase our costs and expenses.

In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time consuming. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws,

regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us and our business may be adversely affected.

However, for as long as we remain an “emerging growth company,” we may take advantage of certain exemptions from various reporting requirements that are applicable to public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We may take advantage of these reporting exemptions until we are no longer an “emerging growth company.”

We would cease to be an “emerging growth company” upon the earliest of: (i) the first fiscal year following the fifth anniversary of this offering, (ii) the first fiscal year after our annual gross revenues are $1.0 billion or more, (iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt securities or (iv) as of the end of any fiscal year in which the market value of our common stock held by non-affiliates exceeded $700 million as of the end of the second quarter of that fiscal year.

We also expect that being a public company and these new rules and regulations will make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee and compensation committee, and qualified executive officers.

As a result of disclosure of information in this prospectus and in filings required of a public company, our business and financial condition will become more visible, which we believe may result in threatened or actual litigation, including by competitors and other third parties. If such claims are successful, our business and operating results could be adversely affected, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and adversely affect our business and operating results.

As a result of becoming a public company, we will be obligated to develop and maintain proper and effective internal control over financial reporting. We may not complete our analysis of our internal control over financial reporting in a timely manner, or these internal controls may not be determined to be effective, which may adversely affect investor confidence in our company and, as a result, the value of our common stock.

We may be required, pursuant to Section 404 to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting for the first fiscal year beginning after the completion of this offering. This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting.

We are in the very early stages of the costly and challenging process of compiling the system and processing documentation necessary to perform the evaluation needed to comply with Section 404. We may not be able to complete our evaluation, testing and any required remediation in a timely fashion. During the evaluation and testing process, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal controls are effective.

If we are unable to assert that our internal control over financial reporting is effective, we could lose investor confidence in the accuracy and completeness of our financial reports, which would cause the price of our common stock to decline, and we may be subject to investigation or sanctions by the SEC.

We will be required to disclose changes made in our internal control and procedures on a quarterly basis. However, our independent registered public accounting firm will not be required to report on the effectiveness of our internal control over financial reporting pursuant to Section 404 until the later of the year following our first annual report required to be filed with the SEC, or the date we are no longer an “emerging growth company” as defined in the JOBS Act, if we take advantage of the exemptions contained in the JOBS Act. To comply with the requirements of being a public company, we may need to undertake various actions, such as implementing new internal controls and procedures and hiring accounting or internal audit staff.

Our independent registered public accounting firm is not required to report on the effectiveness of our internal control over financial reporting until the later of the year following our first annual report required to be filed with the SEC, or the date we are no longer an “emerging growth company.” At such time, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed or operating. Our remediation efforts may not enable us to avoid a material weakness in the future.

We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.

We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, we are choosing to “opt out” of such extended transition period, and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

We do not intend to pay dividends following the completion of this offering.

Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” for additional information.

Following the completion of this offering, we intend to retain any earnings to finance the operation and expansion of our business, and we do not anticipate paying any cash dividends on our common stock for the foreseeable future. In addition, our revolving line of credit restricts our ability to pay dividends. As a result, you may only receive a return on your investment in our common stock if the market price of our common stock increases.

As a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. In addition, rules implemented by the SEC and the New York Stock Exchange require changes in corporate governance practices of public companies. We expect these rules and regulations to increase our legal and financial compliance costs and to make some activities more time-consuming and costly. We will also incur additional costs associated with our public company reporting requirements. We expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified people to serve on our board of directors or as executive officers.

Provisions in our certificate of incorporation and bylaws and under Delaware law might discourage, delay or prevent a change of control of our company or changes in our management and, therefore, depress the trading price of our common stock.

Our certificate of incorporation and bylaws contain provisions that could depress the trading price of our common stock by acting to discourage, delay or prevent a change of control of our company or changes in our management that the stockholders of our company may deem advantageous. These provisions:

Additionally, we are subject to Section 203 of the Delaware General Corporation Law, which generally prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any “interested” stockholder for a period of three years following the date on which the stockholder became an “interested” stockholder and which may discourage, delay or prevent a change of control of our company.

Any provision of our certificate of incorporation or bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock.

This prospectus contains forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this prospectus include, but are not limited to, statements about:

We caution you that the foregoing list may not contain all of the forward-looking statements made in this prospectus.

You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this prospectus primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section titled “Risk Factors” and elsewhere in this prospectus. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this prospectus. We cannot assure you that the results, events and

circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

The forward-looking statements made in this prospectus relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this prospectus to reflect events or circumstances after the date of this prospectus or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.

This prospectus contains statistical data, estimates and forecasts that are based on independent industry publications, including reports from Gartner, Inc., the Enterprise Strategy Group and International Data Corporation, data from S&P Capital IQ, or other publicly available information, while other information is based on our internal sources. While we are not aware of any misstatements regarding any third party information presented in this prospectus, their estimates, in particular, as they relate to projections, involve numerous assumptions, are subject to risks and uncertainties, and are subject to change based on various factors, including those discussed under the section titled “Risk Factors” and elsewhere in this prospectus.

The reports from Gartner described herein represent data, research opinions or viewpoints published as part of a syndicated subscription service, by Gartner, and are not representations of fact. Each of the Gartner reports described herein, “Security Management Strategy Planning Best Practices,” dated January 26, 2012, by Tom Scholtz, and “SWOT: Google’s Android Business, Worldwide,” dated January 25, 2012, by Roberta Cozza, speaks as of its original publication date (and not as of the date of this prospectus) and the opinions expressed in the Gartner reports are subject to change without notice.

We estimate that the net proceeds to us from the sale of shares of our common stock in this offering will be $ million, based on an assumed initial public offering price of $ per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. If the underwriters’ option to purchase additional shares from us is exercised in full, we estimate that our net proceeds would be $ million, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. We will not receive any proceeds from the sale of shares of our common stock by the selling stockholders.

Each $1.00 increase or decrease in the assumed initial public offering price of $ per share would increase or decrease the net proceeds that we receive from this offering by $ million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, after deducting estimated underwriting discounts and commissions payable by us. Similarly, each increase or decrease of one million in the number of shares of common stock offered by us would increase or decrease the net proceeds that we receive from this offering by $ million, assuming the assumed initial public offering price remains the same and after deducting estimated underwriting discounts and commissions payable by us.

The principal purposes of this offering are to increase our financial flexibility, to create a public market for our common stock and to facilitate our future access to the public equity markets.

We currently intend to use the net proceeds that we will receive from this offering to satisfy our obligations to holders of performance units under our 2009 Performance Unit Plan, who are primarily our employees, which we estimate will be $ in cash in the aggregate, based on an assumed initial public offering price of $ per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus. Payments pursuant to our 2009 Performance Unit Plan will be recorded as compensation charges. We currently intend to use the balance of the net proceeds that we will receive from this offering for working capital and other general corporate purposes. We may also use a portion of the net proceeds that we receive to acquire or invest in complementary businesses, products, services, technologies or other assets. We have not entered into any agreements or commitments with respect to any acquisitions or investments at this time.

We cannot specify with certainty all of the particular uses of the net proceeds that we will receive from this offering. Accordingly, we will have broad discretion in using these proceeds. Furthermore, the amount and timing of our actual expenditures will depend on numerous factors, including the cash used in or generated by our operations, the status of our development, the level of our sales and marketing activities and our investments and acquisitions. Pending the use of proceeds from this offering as described above, we plan to invest the net proceeds that we receive in this offering in short-term and intermediate-term interest-bearing obligations, investment-grade investments, certificates of deposit or direct or guaranteed obligations of the U.S. government. We cannot predict whether the invested proceeds will yield a favorable return.

We currently intend to retain any future earnings and do not anticipate paying any cash dividends on our common stock in the foreseeable future following the completion of this offering. Any future determination to declare cash dividends following the completion of this offering will be made at the discretion of our board of directors, subject to applicable laws, and will depend on our financial condition, results of operations, capital requirements, general business conditions and other factors that our board of directors may deem relevant. In addition, the terms of our revolving line of credit with Silicon Valley Bank limit our ability to pay cash dividends on our capital stock.

Historically, we have made tax distributions to our stockholders to the extent we have had taxable net income attributable to our stockholders. In addition, to the extent we have had sufficient cash and cash equivalents, we have made distributions to our stockholders equal to our adjusted net income for the preceding year, less amounts previously distributed as tax distributions for the applicable year. In accordance with our Restated Limited Liability Company Agreement, dated as of January 20, 2010, as amended, or the LLC Agreement, we may distribute our available cash and cash equivalents from time to time to the holders of our units pro rata based upon the number of units held. However, under the LLC Agreement, we are not permitted to make any such distribution if, upon completion thereof, our cash and cash equivalents would be less than $2.5 million. The distribution payable is based on adjusted net income, which is the sum of the net income for the year plus stock-based compensation expense, less any distributions made to the date of the proposed distribution. The distribution payable recorded on the consolidated balance sheets reflects the adjusted net income less any distributions that were previously made. Such balances as of December 31, 2011 and June 30, 2012 were $12.7 million and $7.7 million, respectively.

See the section titled “Capitalization” for additional information. In addition, upon the completion of this offering, we intend to distribute an amount of cash to our stockholders as of the date of the LLC Conversion equal to the members’ distribution payable balance on our consolidated financial statements as of that date. See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” for additional information.

The following table sets forth our cash and cash equivalents, as well as our capitalization, as of June 30, 2012 as follows:

The pro forma as adjusted information set forth in the table below is illustrative only and will be adjusted based on the actual initial public offering price and other final terms of this offering. You should read this table together with our consolidated financial statements and related notes, and the sections titled “Selected Consolidated Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” that are included elsewhere in this prospectus.

The number of shares of our common stock set forth in the table above is based on the number of shares outstanding as of June 30, 2012 after giving effect to the LLC Conversion described under the section titled “Certain Relationships and Related Party Transactions—LLC Conversion,” and excludes:

Pursuant to our Restated Limited Liability Company Agreement, dated January 20, 2010, as amended, or the LLC Agreement, we are required to make tax distributions to our stockholders to the extent we have taxable net income attributable to our stockholders. In addition, to the extent we have had sufficient cash and cash equivalents, we have made distributions to our stockholders equal to our adjusted net income for the preceding year, less amounts previously distributed as tax distributions for the applicable year. Accordingly, we paid distributions to our stockholders in 2010, 2011 and in the six months ended June 30, 2012, in aggregate amounts equal to $13.9 million, $12.2 million and $7.4 million, respectively. In addition, we currently intend to distribute an amount of cash to our stockholders as of the date of the LLC Conversion equal to the members’ distribution payable balance on our consolidated financial statements as of that date. As of June 30, 2012, the members’ distribution payable balance was $7.7 million.

If you invest in our common stock in this offering, your interest will be diluted to the extent of the difference between the initial public offering price per share of our common stock and the pro forma as adjusted net tangible book value per share of our common stock immediately after this offering. Net tangible book value dilution per share to new investors represents the difference between the amount per share paid by purchasers of shares of common stock in this offering and the pro forma as adjusted net tangible book value per share of common stock immediately after completion of this offering.

Net tangible book value per share is determined by dividing our total tangible assets less our total liabilities and preferred units by the number of shares of common stock outstanding. Our historical net tangible book deficit as of June 30, 2012 was ($30.3) million, or ($0.58) per share. Our pro forma net tangible book value as of June 30, 2012 was $ , or $ per share, based on the total number of shares of our common stock outstanding as of June 30, 2012, after giving effect to (i) the LLC Conversion and (ii) the conversion of all outstanding shares of preferred stock into shares of common stock, which will occur in connection with the completion of this offering.

After giving effect to the sale by us of shares of our common stock in this offering at the assumed initial public offering price of $ per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of June 30, 2012 would have been approximately $ million, or $ per share. This represents an immediate increase in pro forma net tangible book value of $ per share to our existing stockholders and an immediate dilution of $ per share to investors purchasing shares of common stock in this offering at the assumed initial public offering price.

Each $1.00 increase or decrease in the assumed initial public offering price of $ per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, would increase or decrease, as applicable, our pro forma as adjusted net tangible book value per share to new investors by $ , and would increase or decrease, as applicable, dilution per share to new investors in this offering by $ , assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, after deducting estimated underwriting discounts and commissions payable by us. In addition, to the extent any outstanding options to purchase common stock are exercised, new investors will experience further dilution.

If the underwriters exercise their option to purchase additional shares from us in full, the pro forma as adjusted net tangible book value per share of our common stock immediately after this offering would be $ per share, and the dilution in pro forma net tangible book value per share to new investors in this offering would be $ per share.

The following table presents on a pro forma as adjusted basis as of June 30, 2012, after giving effect to (i) the LLC Conversion and (ii) the conversion of all outstanding shares of preferred stock into shares of common stock in connection with the completion of this offering, the differences between the existing stockholders and the new investors purchasing shares of our common stock in this offering, with respect to the number of shares purchased from us, the total consideration paid or to be paid to us, which includes net proceeds received from the issuance of common stock and convertible preferred stock, cash received from the exercise of stock options and the average price per share paid or to be paid to us at an assumed initial public offering price of $ per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, before deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

Each $1.00 increase or decrease in the assumed initial public offering price of $ per share would increase or decrease the total consideration paid by new investors and total consideration paid by all stockholders by approximately $ million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. In addition, to the extent any outstanding options to purchase common stock are exercised, new investors will experience further dilution.

If the underwriters exercise their option to purchase additional shares from us and the selling stockholders in full, our existing stockholders would own % and our new investors would own % of the total number of shares of our common stock outstanding upon the completion of this offering.

We have derived the following selected consolidated statement of operations data for the years ended December 31, 2009, 2010 and 2011 and the selected consolidated balance sheet data as of December 31, 2010 and 2011 from our audited consolidated financial statements included elsewhere in this prospectus. We have derived the selected consolidated statement of operations data for the years ended December 31, 2007 and 2008 and the selected consolidated balance sheet data as of December 31, 2007, 2008 and 2009 from our audited consolidated financial statements which are not included in this prospectus. We have derived the selected unaudited consolidated statement of operations data for the six months ended June 30, 2011 and 2012 and the selected unaudited consolidated balance sheet data as of June 30, 2012 from our unaudited consolidated financial statements included elsewhere in this prospectus. The unaudited consolidated interim financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments that are necessary for the fair statement of our financial statements. Our historical results are not necessarily indicative of the results that may be expected in the future, and the results in the six months ended June 30, 2012 are not necessarily indicative of the results to be expected for the full year ending December 31, 2012 or any other period. You should read the following selected consolidated financial and other data in conjunction with the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included elsewhere in this prospectus.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the section titled “Selected Financial and Other Data” and our consolidated financial statements and related notes included elsewhere in this prospectus. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those identified below and those discussed above in the section titled “Risk Factors” and elsewhere in this prospectus.

In 2005, we introduced GigaVUE-MP, which offers powerful, intelligent traffic filtration and management capabilities. In 2007, we launched enhancements to these capabilities and introduced our broader Flow Mapping technology. In 2008, we began shipping a 10 Gigabit Fabric solution. In 2010, we introduced next generation packet inspection to enable improved Fabric performance. In addition, in 2011, we launched a 1 Terabit chassis Fabric solution, the GigaVUE H Series chassis, which was the first Terabit capacity Traffic Visibility Fabric appliance for high throughput environments.

We generate product revenue primarily from sales of perpetual software licenses installed on physical appliances for our Traffic Visibility Fabric solutions to channel partners, including distributors and resellers, as well as directly to end-user customers. We market and sell our products through a hybrid sales model, which combines a high-touch sales organization and an overlay channel sales team that actively assists our extensive network of channel partners throughout the sales process. We also provide our channel partners with marketing assistance, technical training and support.

We generate services revenue primarily from the sale of maintenance and support services for our products. A one-year contract for our maintenance and support services is bundled with the initial contract to purchase our products. Following expiration of this one-year contract, our end-user customers typically purchase maintenance and support contracts that generally have one-year terms.

As of June 30, 2012, our end-user customers included 53 of the Fortune 100, and we had sold products to over 840 end-user customers across many vertical markets, including seven of the top ten U.S. retailers, four of the top five U.S. banks and financial services companies, seven of the top ten U.S. integrated telecommunication service providers, four of the top five U.S. managed healthcare providers, six of the top ten U.S. cable and satellite providers and five of the top ten global securities and commodities exchanges, based upon independent industry data from S&P Capital IQ. The loyalty of our customer base is evidenced by the fact that many of our end-user customers purchase additional products from us within six month periods of their initial deployments and continue with similar frequency.

We have restated our previously issued consolidated financial statements as of December 31, 2009, 2010 and 2011 and for the years then ended. The determination to restate these financial statements was made by us upon identification of errors after the issuance of those financial statements. See Note 3 to our consolidated financial statements, which are included elsewhere in this prospectus.

The growth of our business and our future success are dependent upon many factors, including our ability to maintain our technology leadership, up-sell to our growing customer base, add new end-user customers, leverage our channel partners and participate in the continued growth in the network traffic visibility market. While these areas represent significant opportunities for us, they also represent notable challenges and risks that we must successfully address in order to continue the growth of our business and improve our results of operations.

Increasing Need for Network Traffic Visibility. We believe that the impact of virtualization and cloud computing, mobility and big data are combining to increase network complexity and potentially introduce new network vulnerabilities. The combination of these factors is creating new challenges for enterprises and service providers who are struggling to maintain or improve service delivery and limit network downtime, including growing traffic volumes, increasing security and compliance initiatives, proliferation of connected devices, the consumerization of IT and adoption of cloud-based IT. We expect that our Traffic Visibility Fabric will continue to replace traditional approaches to collecting and analyzing network traffic in order to improve the visibility and control of their networks.

Need for Continued Innovation. We are a pioneer and leader in the market for intelligent traffic visibility solutions, and we believe we will benefit from the expected growth in this market. We principally rely on a single product family comprised of our GigaVUE, GigaSECURE, GigaSMART and GigaTAP products. If we fail to continue to innovate and diversify our product offerings, our market position, our gross margin and our revenue growth rate may decline. Accordingly, we expect to continue to invest heavily in research and development in order to expand the capabilities of our solution and to develop additional products.

Up-Selling to Our Growing End-User Customer Base. We expect that a substantial portion of our future sales will be follow-on sales to existing end-user customers. One of our sales strategies is to target new end-user customers with initial deployments of our solution so that they can experience the operational and economic benefits of our Fabric, thereby building internal support and demand to allow us to up-sell additional products and significant follow-on purchases. Our future growth will depend on our ability to sell additional products to our growing base of end-user customers.

Adding New End-User Customers. We intend to target new end-user customers by continuing to invest in our sales force and extending the relationships with our channel partners. We also plan to increase the awareness of our technology leadership and the value proposition of our Traffic Visibility

Fabric among potential end-user customers. Our business and results of operations will depend on our ability to continually add new end-user customers.

Leveraging Channel Partners. We expect to continue to derive the majority of our sales through our channel partners. Our channel partners will play a significant role in our growth as they develop new end-user customers and expand our sales to existing end-user customers. We plan to continue to invest in our network of channel partners to increase sales to existing end-user customers, empower them to reach new end-user customers, and provide services and support effectively. We believe that leveraging our channel partners could help us grow revenue more quickly and reduce our sales and support costs as a percentage of revenue.

Relying on Continued Growth in Network Traffic Visibility Market. We believe that the market for Traffic Visibility Fabric solutions is still in its infancy, and we expect that this market will grow as organizations identify the need for increased visibility and control over the traffic traversing their networks. If we successfully execute our growth strategies, we expect to benefit from the anticipated increased spending in the market for traffic visibility fabric solutions. Our results of operations will be substantially dependent on the pace of growth in this market, if any.

We monitor a variety of key performance indicators to help us evaluate growth trends, establish budgets, measure the effectiveness of our sales and marketing efforts and assess operational efficiencies. These key performance indicators include the following:

Total revenue. We monitor our total revenue to assess the acceptance of our products by our end-user customers and growth in the markets we serve. We discuss our total revenue further below under the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Gross margin. We monitor our gross margin to assess the impact on our current and forecasted financial results from any changes to the pricing and mix of products we are selling to our end-user customers.

Operating income. We monitor our operating income to assess how effectively we are conducting our operations as well as controlling our operating expenses, which are primarily driven by headcount. We discuss our operating expenses further below under the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Deferred revenue. Our deferred revenue consists of amounts that have been invoiced but that have not yet been recognized as revenue. The majority of our deferred revenue balance consists of the unamortized portion of services revenue from maintenance and support contracts. We also defer revenue, and the related costs of product revenue, on sales of products to a distributor who stocks

inventory until that distributor reports to us that it has sold the product to an end-user customer. We monitor our deferred revenue balance because it represents a significant portion of the revenue that we will recognize in future periods. We assess the change in our deferred revenue balance which, taken together with revenue, is an indication of sales activity in a given period.

We generate revenue from the sale of products and related services, including maintenance and support. Our revenue is comprised of the following:

Product revenue. We generate product revenue primarily from sales of perpetual software licenses installed on physical appliances for our Traffic Visibility Fabric solutions. We generally recognize product revenue at the time of product delivery, provided all other revenue recognition criteria have been met. As a percentage of revenue, we expect our product revenue to vary from quarter-to-quarter based on, among other things, the timing of orders and delivery of products, seasonal and cyclical factors discussed under the section titled “—Quarterly Results of Operations.” We expect our product revenue to increase in absolute dollars as we continue to add new channel partners and end-user customers, expand the volume of shipments to our current end-user customers and introduce new products.

Services revenue. We generate service revenue from sales of maintenance and support contracts, which are bundled with sales of products, and from subsequent renewals of those contracts. We offer tiered maintenance and support services under our renewable, fee-based maintenance and support contracts, which includes technical support, hardware repair and replacement parts, bug fixes, patches and unspecified upgrades on a when-and-if-available basis. We recognize services revenue ratably over the duration of the contract, which is typically one year and can be up to five years; as a result, the impact on services revenue will lag any shift in product revenue because product revenue is recognized when a product is sold and revenue criteria are satisfied, whereas services revenue is recognized ratably over the contract term. We expect our services revenue to increase in absolute dollars as we increase our installed base by selling more products and adding more end-user customers.

Cost of product revenue. Cost of product revenue is comprised primarily of the cost associated with manufacturing our products, including third-party hardware manufacturing costs, as well as personnel costs for salary, benefits, bonuses and stock-based compensation expense, shipping costs, allocated costs of facilities and information technology, and warranty costs and other related expenses. We expect cost of product revenue to increase in absolute dollars in connection with the anticipated increase in product revenue.

Cost of services revenue. Cost of services revenue is comprised primarily of personnel costs for salary, benefits, bonuses and stock-based compensation expense related to our customer support organization, as well as allocated costs of facilities and information technology. We expect cost of services revenue to increase with the anticipated increase in services revenue.

Gross profit has been and will continue to be affected by a variety of factors including shipment volumes, changes in the mix of products and services sold, new product introductions and upgrades to

existing products, changes in customer mix, changes in pricing, the extent of customer rebates and incentive programs and changes in our product costs including any excess inventory write-offs. We expect our gross margin to fluctuate over time depending on a variety of factors, including those described above.

Operating expenses consist of research and development, sales and marketing and general and administrative expenses. Personnel costs comprise a significant component of our operating expenses, and consist of salary, benefits, bonuses and stock-based compensation expense; and with respect to our sales organization, personnel costs also include sales commissions. During the periods from January 1, 2009 through June 30, 2012, we increased headcount attributable to our operating expenses from 20 to 182. We expect to continue to hire new employees to support our anticipated growth. We expect operating expenses to increase in absolute dollars as we continue to grow.

Research and development. Our research and development efforts are focused on new product development and on developing additional functionality for our existing products. Research and development expenses consist primarily of personnel costs, and to a lesser extent, prototype materials, allocated costs of facilities and information technology and product certification. We expense research and development costs as incurred, except for certain software development costs, which have been insignificant to date. We expect our research and development expenses to increase in absolute dollars as we continue to develop new products and enhance our existing products.

Sales and marketing. Sales and marketing expenses are the largest component of our operating expenses and consist primarily of personnel costs, as well as travel expenses, trade shows, marketing and promotional activities, and allocated costs of facilities and information technology. We sell our products through our global sales organization, which is divided into three geographic regions: North America, Europe and Asia Pacific. We expect our sales and marketing expenses to increase in absolute dollars as we expand our sales and marketing efforts domestically and internationally to help drive increased revenue.

General and administrative. General and administrative expenses consist of personnel costs and allocated costs of facilities and information technology related to our executive, finance, human resources and legal functions, as well as professional services costs. Professional services costs consist primarily of outside legal and accounting services. Following the completion of this offering, we expect to incur additional expenses as a result of operating as a public company, including costs to comply with the rules and regulations applicable to companies listed on a national securities exchange and costs related to compliance and reporting obligations pursuant to the rules and regulations of the SEC. In addition, as a public company, we expect to incur increased expenses such as insurance, investor relations and professional services.

Interest income consists primarily of income earned on our invested cash balances. We expect interest income will vary each reporting period depending on our average invested balances during the period and market interest rates.

Other income (expense), net consists primarily of foreign currency exchange gains (losses) related to transactions denominated in currencies other than the U.S. dollar, which have not been material to date.

For all periods presented, we have conducted our U.S. operations through Gigamon LLC, a pass through entity for tax purposes that files its income tax return as a partnership for federal and state income tax purposes. As a result, we have not been subject to U.S. federal or state income taxes as the related tax consequences have been reported by our individual members. We may be subject to state taxes in certain states that may assess capital taxes or taxes based on gross receipts. We also have a subsidiary in a foreign jurisdiction, which is subject to local income taxes.

In connection with the offering and as a result of the LLC Conversion, we will change our status from a limited liability company to a corporation, and accordingly, we will become taxable as a corporation for U.S. federal and state tax purposes.

Prior to the formation of our company in 2009, our majority stockholder, Gigamon Systems LLC, issued options to purchase its common units to some of its employees. As these employees became our employees upon the contribution of all of the assets and liabilities of Gigamon Systems LLC to us in January 2009, we assumed all of the necessary tax obligations and recorded a relatively small stock-based compensation expense related to these options in our consolidated statement of operations. Between January 1, 2009 and December 31, 2011, instead of granting stock options to our employees, we granted performance units under our 2009 Performance Unit Plan to our employees. These performance units vest and will be satisfied by us with a cash payment to the holders of performance units in connection with the completion of our initial public offering, or IPO. Accordingly, the grant of performance units has not resulted in historical stock-based compensation expense nor compensation charges, but the cash payments we expect to make to the holders of performance units in connection with the completion of this offering will be recorded as compensation charges upon the completion of the offering. We estimate that the aggregate amount of these cash payments will be $ , based on an assumed initial public offering price of $ per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus.

Notwithstanding the fact that, prior to April 2012, we did not grant stock options to our employees, our consolidated statement of operations for 2010 reflects a stock-based compensation expense of $10.3 million related to the repurchase of shares of common stock from Gigamon Systems LLC, and the related repurchase by Gigamon Systems LLC of its membership interests from certain of our employees. In January 2010, we repurchased 24,329,545 shares of our common stock from Gigamon Systems LLC at a purchase price of $0.94 per share. Gigamon Systems LLC then used the proceeds from this transaction to repurchase common units from its equity holders, who, with the exception of one investor, were employees of our company. The January 2010 repurchase of shares of common stock held by Gigamon Systems LLC, and the repurchase by Gigamon Systems LLC of its common units is referred to in this prospectus as the “Repurchase.” Because the price paid by us for shares of common stock held by Gigamon Systems LLC, and the price paid by Gigamon Systems LLC for common units held by its equity holders, exceeded the fair value of one share of our common stock, and one common unit of Gigamon Systems LLC, respectively, the amount paid in excess of estimated fair value was accounted for as compensation expense. As a result, we recorded stock-based compensation expense, which is included in our 2010 consolidated statement of operations.

Beginning in April 2012, we began to grant options under our 2012 Unit Option Plan, including performance-based awards. As of June 30, 2012, we had 5,741,000 shares subject to outstanding options under the 2012 Unit Option Plan, of which 3,303,100 do not begin to vest until the completion of an IPO. Additionally, 184,000 of these option awards are performance-based, and vest based on the achievement of certain sales-based goals.

The following tables set forth our results of operations for the periods presented in dollars and as a percentage of our revenue:

Product revenue increased $8.8 million in the six months ended June 30, 2012 compared to the same period in 2011 primarily due to the introduction of our new high-density products and to a lesser extent from the sales of our existing product portfolio. Revenue from our new high-density products in the six months ended June 30, 2012 increased to $6.8 million from $0.6 million in the same period of 2011. Additionally, revenue from our existing products increased due to a higher average selling price resulting from changes in our product mix.

Services revenue increased $4.7 million in the six months ended June 30, 2012 compared to the same period in 2011, primarily due to an increase in the total number of end-user customers under maintenance and support contracts, which was driven by higher sales of our products.

Total gross margin decreased to 79% for the six months ended June 30, 2012 from 80% for the same period in 2011 due to lower product gross margin. Product gross margin decreased to 73% for the six months ended June 30, 2012 from 76% for the same period in 2011, primarily due to a $1.4 million excess inventory write-off during the six months ended June 30, 2012, as compared to a $0.8 million excess inventory write-off for the same period in 2011 and to a lesser extent due to a change in product mix.

Services gross margin increased to 92% for the six months ended June 30, 2012 from 90% for the same period in 2011, primarily due to the utilization of our existing cost infrastructure to manage a higher number of maintenance and support contracts.

Research and development expenses increased $2.5 million in the six months ended June 30, 2012 compared to the same period in 2011. The increase in research and development expenses in absolute dollars for the six months ended June 30, 2012 compared to the same period in 2011 was primarily due to a $1.2 million increase in personnel costs primarily as a result of increased headcount,

a $0.9 million increase in allocated costs of facilities associated with our move to our new corporate headquarters and a $0.4 million increase in other development expenses.

Sales and marketing expenses increased $9.7 million in the six months ended June 30, 2012 compared to the same period in 2011. The increase in sales and marketing expenses for the six months ended June 30, 2012 compared to the same period in 2011 was primarily due to a $6.5 million increase in personnel costs, primarily as a result of increased headcount and additional commissions related to higher sales of our products and services, a $1.9 million increase in trade show, marketing and promotional activities and a $1.0 million increase in travel-related expenses.

General and administrative expenses increased $2.0 million in the six months ended June 30, 2012 compared to the same period in 2011. The increase in general and administrative expenses for the six months ended June 30, 2012 compared to the same period in 2011 was primarily due to increases in personnel costs of $1.4 million, resulting from increased headcount and a $0.9 million increase in professional services costs, partially offset by a reduction of various other expenses of $0.3 million.

Product revenue increased $15.7 million in 2011 compared to 2010. Product revenue increased in 2011 compared to 2010 primarily due to larger shipment volumes across our existing product portfolio and the introduction of a new high-density product, partially offset by a lower average selling price due to changes in our product mix.

Services revenue increased $5.9 million in 2011 compared to 2010. Services revenue increased in 2011 compared to 2010 primarily due to an increase in the total number of end-user customers under maintenance and support contracts, which was driven by higher sales of our products.

Total gross margin decreased to 79% for 2011 from 82% in 2010 due to lower product gross margin. The decrease in product gross margin for 2011 to 76% from 83% in 2010 was primarily due to a $3.2 million excess inventory charge during 2011 that increased our cost of product revenue. The excess inventory charge in 2011 reduced our product gross margin by six percentage points.

The increase in the services gross margin for 2011 to 89% from 79% for 2010 was primarily due to a decrease of $1.1 million in stock-based compensation expense related to the Repurchase; partially offset by higher personnel costs of $0.5 million as we increased headcount to meet the support requirements of our larger installed base of end-user customers and increases in other related expenses of $0.3 million.

Research and development expenses increased $0.2 million in 2011 compared to 2010. The increase in research and development expenses in absolute dollars for 2011 compared to 2010 reflects increases in personnel costs of $2.0 million primarily as a result of increased headcount, a $1.5 million increase in allocated costs of facilities as we experienced a full year of expenses associated with our move to our new corporate headquarters, a $0.9 million increase in prototype materials and a $0.3 million increase in product certification expenses. These increases were substantially offset by a decrease in stock-based compensation expense of $4.7 million in connection with the Repurchase in 2010 that did not recur in 2011.

Sales and marketing expenses increased $6.8 million in 2011 compared to 2010. The increase in sales and marketing expenses in absolute dollars for 2011 compared to 2010 was primarily due to a $6.2 million increase in personnel costs as a result of increased headcount, commissions and travel expenses, a $1.4 million increase in allocated costs of facilities as we experienced a full year of expenses associated with our move to our new corporate headquarters and a $1.1 million increase in tradeshow, marketing and promotional activities. These increases were partially offset by a reduction in stock-based compensation expense of $2.4 million in connection with the Repurchase in 2010 that did not recur in 2011.

General and administrative expenses decreased $1.8 million in 2011 compared to 2010. The decrease in general and administrative expenses for 2011 compared to 2010 was primarily due to a decrease in stock-based compensation expense of $2.2 million in connection with the Repurchase in 2010 that did not recur in 2011; partially offset by increases in personnel costs of $0.5 million primarily as a result of increased headcount.

Stock-based compensation expense for 2010 reflects a charge of $10.3 million, including $1.1 million included within cost of services revenue, related to the Repurchase.

Product revenue increased $10.9 million in 2010 compared to 2009 primarily due to larger shipment volumes across our existing product portfolio and to a lesser extent due to the introduction of a new product.

Services revenue increased $4.2 million in 2010 compared to 2009, due to an increase in the total number of end-user customers under maintenance and support contracts, which was driven by higher sales of our products.

Total gross margin decreased to 82% for 2010 from 83% in 2009 as services gross margin was impacted by stock-based compensation expense related to the Repurchase.

Product gross margins increased to 83% in 2010 from 80% in 2009 due to higher volumes of product shipments and better cost containment of related costs.

Services gross margin decreased to 79% in 2010 from 90% in 2009, primarily due to a $1.1 million charge for stock-based compensation expense related to the Repurchase in 2010 and a $0.4 million increase in personnel costs as we increased headcount to meet the support requirements of our larger installed base of end-user customers.

Research and development expenses increased $7.3 million in 2010 compared to 2009. The increase in research and development expenses for 2010 compared to 2009 was primarily due to a $6.8 million increase in personnel costs as we increased headcount, including a $4.7 million increase in stock-based compensation expense incurred in connection with the Repurchase, and a $0.3 million increase in prototype materials.

Sales and marketing expenses increased $7.3 million in 2010 compared to 2009. The increase in sales and marketing expenses for 2010 compared to 2009 was primarily due to a $4.0 million increase in personnel costs, including commissions, as well as travel expenses, a $2.4 million increase in stock-based compensation expense incurred in connection with the Repurchase and a $0.7 million increase in tradeshow, marketing and promotional activities.

General and administrative expenses increased $4.1 million in 2010 compared to 2009. The increase in general and administrative expenses for 2010 compared to 2009 was primarily due to a $2.2 million increase in stock-based compensation expense incurred in connection with the Repurchase, a $1.2 million increase in personnel costs as we increased headcount, a $0.3 million increase in legal and accounting fees and a $0.3 million increase in allocated costs of facilities as we experienced a partial year of expenses associated with our move to our new corporate headquarters.

Stock-based compensation expense for 2010 reflects a total charge of $10.3 million, including $1.1 million included in cost of services revenue, related to the Repurchase.

The following table sets forth our unaudited consolidated statement of operations data for each of the six quarters in the period ended June 30, 2012. The unaudited consolidated statement of operations data set forth below have been prepared on the same basis as our audited consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, that are necessary for the fair statement of such data. Our historical results are not necessarily indicative of the results that may be expected for the full year or any other period. You should read this unaudited consolidated statement of operations data in conjunction with our consolidated financial statements and the related notes included elsewhere in this prospectus.

The following table presents the unaudited consolidated statement of operations data as a percentage of revenue:

Our revenue increased sequentially in absolute dollars in all quarters presented, except for the first quarter of 2012, as end-user customer demand for our products continued to increase. Over the quarters presented, we continued to sell products to new end-user customers and also increased sales to our existing installed base of end-user customers, which drove sequential increases in product revenue in all quarters presented except the first quarter of 2012. Services revenue increased sequentially in all quarters presented as we expanded our installed base of end-user customers.

The first quarter of each year is usually our lowest revenue quarter during the year and product revenue typically declines sequentially from the prior fourth quarter. We believe that comparisons of our year-over-year quarterly revenue are more meaningful than comparisons of our sequential quarterly revenue due to seasonality in the sale of our products and services. We generally expect an increase in sales in the second half of the year, primarily due to the buying habits of many of our end-user customers as budgets for annual capital purchases are being fully utilized.

Our gross profit has generally increased quarter over quarter, except for the first quarter of 2012 as a result of the impact of seasonality, and our gross margin has remained relatively consistent over

the quarters presented. Fluctuations in gross margin are primarily the result of changes in volume of products and services sold, changes in the mix of products sold, new product introductions and any excess and obsolete inventory write-offs.

To support the growth of our business, we have continued to add employees across all functional areas, with the increase in headcount and the resulting increase in personnel costs as the primary contributing factor to the sequential increases in our operating expenses for the quarters presented. Headcount attributable to our operating expenses increased from 71 as of December 31, 2010 to 182 as of June 30, 2012.

As of June 30, 2012, our principal sources of liquidity were our cash and cash equivalents of $19.3 million, all of which was held in the United States, and amounts available under our revolving line of credit with Silicon Valley Bank of up to $10.0 million. Our liquidity requirements are primarily to fund our working capital and operating expenses. As of June 30, 2012, we had no material commitments for capital expenditures.

As permitted by the LLC Agreement, we currently intend to distribute an amount of cash to our stockholders as of the date of the LLC Conversion equal to the members’ distribution payable balance on our consolidated financial statements, which was $7.7 million as of June 30, 2012. The actual amount we will distribute to our stockholders will depend on the amount of the members’ distribution payable as of such date. Following the completion of this offering, we intend to retain any future earnings to finance the operations and expansion of our business, and we do not anticipate paying any cash dividends on our common stock in the future.

We currently intend to use a portion of the net proceeds that we will receive from this offering to satisfy our obligations to holders of performance units under our 2009 Performance Unit Plan, which we estimate will be $ in cash in the aggregate, based on an assumed initial public offering price of $ per share, which is the midpoint of the estimated offering price range. Each $1.00 increase or decrease in the assumed initial public offering price of $ per share would increase or decrease the amount that we will pay to the holders of performance units by approximately $ million. This payment will be made within 60 days following the completion of this offering.

Our future capital requirements will depend on many factors, including our results of operations and the expansion of our research and development, sales and marketing and general and administrative functions. Based on our current operating plan, we believe our existing cash and cash equivalents and amounts available under our revolving line of credit, combined with cash generated from operations, will be sufficient to fund our working capital and operating expenses for at least the next 12 months. If we require additional capital resources to grow our business internally or to acquire complementary technologies and businesses at any time in the future, we may seek to sell additional equity, or raise funds through debt financing or other sources. The sale of additional equity could result in additional dilution to our stockholders. If we raise additional funds by obtaining loans from third parties, the terms of those financing arrangements may include negative covenants or other restrictions on our business that could impair our operating flexibility, and would also require us to incur interest expense. We can provide no assurance that additional financing will be available at all or, if available, that we would be able to obtain financing on terms favorable to us.

Our revolving line of credit is governed by a Loan and Security Agreement, as amended, with Silicon Valley Bank, under which we may, from time to time, borrow up to $10.0 million due April 2013

at a floating annual interest rate equal to the greater of 3.5% or the prime rate plus 0.25%. Borrowings under the revolving line of credit are secured by a first priority security interest in all of our assets granted to Silicon Valley Bank. To borrow amounts under the revolving line of credit, we must be in compliance with certain negative and affirmative covenants, including financial covenants, and covenants relating to our ability to incur other indebtedness, material adverse changes to our company, our maintenance of depository accounts with Silicon Valley Bank, our selling assets or entering into change of control transactions, liens on our assets and our ability to pay dividends to our stockholders. As of June 30, 2012, no balance was outstanding under the revolving line of credit and we were in compliance with all covenants.

Our cash provided by operating activities is generated from sales of our products and sales of maintenance and support contracts. Our primary uses of cash from operating activities have been for personnel costs and costs related to marketing and promotional activities. Our cash flows from operating activities will continue to be affected principally by our working capital requirements and increased spending on personnel to meet our anticipated business growth.

For the six months ended June 30, 2012, we generated cash from operating activities of $14.9 million. The cash flows during this six month period resulted from net income of $1.8 million which included non-cash charges of $2.6 million due to the write down of inventory, stock-based compensation and depreciation and amortization as well as due to a decrease in accounts receivable of $6.0 million; an increase of accrued and other liabilities of $3.9 million primarily from an increase in employee related accruals; and a $2.1 million increase in deferred revenue due to higher service billings as we increased our installed base. The $6.0 million reduction in accounts receivable during the period was due to linearity in shipments to customers thus resulting in a decrease in our days sales outstanding, or DSO, from 69 days as of December 31, 2011 to 47 days as of June 30, 2012. This increase in cash from operations was partially offset by a decrease in accounts payable of $1.3 million due to the timing of payments to vendors.

For the six months ended June 30, 2011, operating activities provided cash of $9.8 million as a result of our net income of $5.8 million and non-cash charges of $1.2 million from the write-down of inventory and depreciation and amortization, a $3.6 million increase in deferred revenue due to higher service business billings as we added new end-user customers and increased our installed base, and a $2.9 million increase in accrued and other liabilities primarily due to an accrual for year-end bonuses and sales commissions offset by a $2.3 million increase in our accounts receivable due to an increase in our DSO to 57 days from 49 days as of December 31, 2010 and an increase in prepaid expenses and other current assets of $1.5 million primarily due to the employee receivable related to equity compensation agreements with certain employees in prior years.

For the year ended December 31, 2011, operating activities provided cash of $21.6 million as a result of our net income of $16.9 million and non-cash charges of $4.0 million for provision of inventory reserve and depreciation and amortization, a $10.8 million increase in deferred revenue due to higher service business billings as we added new end-user customers and increased our installed base, and a $7.5 million increase in accrued and other liabilities and accounts payable primarily due to an accrual for non-cancelable future commitments related to excess inventories; partially offset by higher accounts receivable of $10.2 million due to higher sales and an increase in our days sales outstanding to 69 days from 49 days as compared to December 31, 2010, a $2.7 million increase in prepaid expenses and other current assets primarily due to an increase in employee receivables related to equity compensation agreements with certain employees in prior years, and a $4.8 million increase in inventory to support the growth in our product sales.

For the year ended December 31, 2010, operating activities provided cash of $7.7 million as a result of our net income of $6.6 million and a $3.7 million increase in deferred revenue due to higher service business billings as we added new end-user customers and increased our installed base; partially offset by a $3.3 million increase in inventory to support the growth in our product sales and a $1.3 million increase in accounts receivable as revenue increased year over year.

For the year ended December 31, 2009, operating activities provided cash of $11.9 million as a result of our net income of $13.1 million and a $2.6 million increase in deferred revenue due to higher service business billings as we added new end-user customers and increased our installed base; partially offset by a $2.9 million increase in accounts receivable as fourth quarter revenue increased year over year and a $1.4 million increase in inventory to support the growth in our product sales.

Cash used in investing activities for the six months ended June 30, 2012 and 2011 was $1.2 million and $0.8 million, respectively, and for the years ended December 31, 2011, 2010 and 2009 was $2.1 million, $0.8 million and $0.4 million, respectively, and was for capital expenditures for property and equipment to support the growth of our business.


	Per Share	Total

Initial public offering price	$	$

Underwriting discount	$	$

Proceeds, before expenses, to Gigamon	$	$

Proceeds, before expenses, to selling stockholders	$	$


Goldman, Sachs & Co.	BofA Merrill Lynch	Credit Suisse

	Barclays

	Raymond James


	As of June 30, 2012
	Actual			Pro Forma ⁽¹⁾		Pro Forma as Adjusted⁽¹⁾⁽²⁾
	(unaudited)
	(in thousands, except unit/share and per unit/share data)
Cash and cash equivalents	$	19,304		$		$

Redeemable convertible Series A preferred units—$0.94 per unit value: 24,329,545 units authorized, 24,329,545 issued and outstanding, actual; no units authorized, issued and outstanding, pro forma and pro forma as adjusted		27,205		$		$
Members/Stockholders’ equity (deficit):
Common units—no par value per unit, 100,000,000 units authorized, 51,900,015 units issued and outstanding, actual; no units authorized, issued or outstanding, pro forma and pro forma as adjusted		1,625			—		—

Preferred stock—$0.0001 par value; no shares authorized, issued or outstanding, actual or pro forma; shares authorized, no shares issued or outstanding, pro forma as adjusted		—			—		—

Common stock—$0.0001 par value; no shares authorized, issued or outstanding, actual; shares authorized, shares issued and outstanding, pro forma; and shares authorized, shares issued and outstanding, pro forma as adjusted		—

Treasury shares		(12,469	)
Additional paid-in capital		795
Accumulated deficit		(18,859	)

Total members/stockholders’ equity (deficit)		(28,908	)

Total capitalization	$	(1,703	)	$		$


Assumed initial public offering price per share		$
Pro forma net tangible book deficit per share as of June 30, 2012	$
Increase in pro forma net tangible book value per share attributable to new investors in this offering

Pro forma as adjusted net tangible book value per share immediately after this offering		$

Dilution in pro forma net tangible book value per share to new investors in this offering		$


	Page
Prospectus Summary		1
Risk Factors		12
Special Note Regarding Forward-Looking Statements		37
Industry and Market Data		39
Use of Proceeds		40
Dividend Policy		41
Capitalization		42
Dilution		44
Selected Consolidated Financial Data		46
Management’s Discussion and Analysis of Financial Condition and Results of Operations		49
Business		81
Management		99
Executive Compensation		107
Certain Relationships and Related Party Transactions		115
Principal and Selling Stockholders		120
Description of Capital Stock		122
Shares Eligible for Future Sale		127
Material U.S. Federal Income Tax Consequences to Non-U.S. Holders		130
Underwriters		134
Legal Matters		140
Experts		140
Where You Can Find Additional Information		140
Index to Consolidated Financial Statements		F-1


	Shares Purchased				Total Consideration				Average Price Per Share
	Number	Percent			Amount	Percent			Average Price Per Share
Existing stockholders				%	$			%	$
New investors

Total			100.0	%	$		100.0	%


	Year Ended December 31,															Six Months Ended June 30,
	2007			2008			2009			2010			2011			2011			2012
							(restated)			(restated)			(restated)
	(in thousands, except per share amounts)
Consolidated Statement of Operations Data:
Revenue:
Product	$	10,359		$	16,365		$	24,664		$	35,577		$	51,308		$	18,293		$	27,106
Services		1,987			3,881			6,723			10,909			16,797			7,341			12,063

Total revenue		12,346			20,246			31,387			46,486			68,105			25,634			39,169
Cost of revenue:
Product		2,625			3,840			4,826			6,122			12,528			4,388			7,451
Services		195			473			665			2,239			1,900			738			945

Total cost of revenue⁽¹⁾		2,820			4,313			5,491			8,361			14,428			5,126			8,396

Gross profit		9,526			15,933			25,896			38,125			53,677			20,508			30,773

Operating expenses:
Research and development⁽¹⁾		1,415			3,456			4,977			12,283			12,530			5,023			7,515
Sales and marketing⁽¹⁾		1,629			2,767			5,209			12,522			19,358			7,634			17,335
General and administrative⁽¹⁾		1,095			1,960			2,506			6,610			4,766			2,060			4,041

Total operating expenses		4,139			8,183			12,692			31,415			36,654			14,717			28,891

Income from operations		5,387			7,750			13,204			6,710			17,023			5,791			1,882
Interest income		52			140			65			9			4			2			6
Other income (expense), net		(47	)		(6	)		(7	)		(7	)		(16	)		15			(33	)

Income before provision for income taxes		5,392			7,884			13,262			6,712			17,011			5,808			1,855
Provision for income taxes		—			(174	)		(122	)		(75	)		(80	)		(38	)		(91	)

Net income		5,392			7,710			13,140			6,637			16,931			5,770			1,764
Accretion of preferred units to redemption value and issuance costs		—			—			—			(1,834	)		(2,078	)		(1,021	)		(1,097	)
Earnings distributable to preferred unit holders		—			—			—			(1,350	)		(4,741	)		(1,516	)		(213	)

Net income attributable to common unit holders	$	5,392		$	7,710		$	13,140		$	3,453		$	10,112		$	3,233		$	454

Net income per share attributable to common unit holders:
Basic and Diluted ⁽²⁾	$	0.07		$	0.10		$	0.17		$	0.06		$	0.19		$	0.06		$	0.01

Weighted average shares of common units outstanding used in computing net income per share attributable to common unit holders:
Basic ⁽²⁾		75,127			75,659			76,230			53,587			51,900			51,900			51,900

Diluted ⁽²⁾		79,138			79,217			76,230			53,587			51,900			51,900			51,900

Pro forma net income per common share:
Basic and Diluted⁽²⁾													$						$

Weighted average shares of common stock used in computing pro forma net income per common share:
Basic and Diluted⁽²⁾


	Year Ended December 31,										Six months ended June 30,
	2007		2008		2009		2010		2011		2011		2012
					(restated)		(restated)		(restated)
	(in thousands)
Cost of revenue	$	31	$	12	$	8	$	1,086	$	—	$	—	$	2
Research and development		234		114		64		4,692		8		8		32
Sales and marketing		73		105		25		2,377		2		2		86
General and administrative		67		18		13		2,212		2		2		516

Total stock-based compensation expense	$	405	$	249	$	110	$	10,367	$	12	$	12	$	636


	December 31,														June 30, 2012
	2007		2008			2009			2010			2011			June 30, 2012
						(restated)			(restated)			(restated)
Consolidated Balance Sheet Data:		(in thousands)
Cash and cash equivalents	$	2,186	$	2,648		$	3,122		$	5,804		$	13,102		$	19,304
Working capital (deficit)		1,191		60			(96	)		(555	)		91			(1,163	)
Total assets		5,201		7,075			12,809			20,876			43,995			45,079
Redeemable convertible preferred units		—		—			—			24,030			26,108			27,205
Total members’ deficit		580		(847	)		(1,097	)		(25,731	)		(27,809	)		(28,908	)


	Six Months Ended June 30,				Increase/ (Decrease)		% Increase/ (Decrease)
	2011		2012		Increase/ (Decrease)		% Increase/ (Decrease)
	(dollars in thousands)
Revenue:
Product	$	18,293	$	27,106	$	8,813		48	%
Services		7,341		12,063		4,722		64

Total revenue	$	25,634	$	39,169	$	13,535		53	%


	Six Months Ended June 30,						Increase / (Decrease)		% Increase / (Decrease)
	2011			2012			Increase / (Decrease)		% Increase / (Decrease)
	(dollars in thousands)
Cost of revenue:
Product	$	4,388		$	7,451		$	3,063		70	%
Services		738			945			207		28

Total cost of revenue	$	5,126		$	8,396		$	3,270		64	%

Gross margin:
Product		76	%		73	%
Services		90	%		92	%
Total gross margin		80	%		79	%
Stock-based compensation expense included in:
Cost of revenue		—		$	2		$	2		*


	Year Ended December 31,				Increase / (Decrease)		% Increase / (Decrease)
	2010		2011		Increase / (Decrease)		% Increase / (Decrease)
	(dollars in thousands)
Revenue:
Product	$	35,577	$	51,308	$	15,731		44	%
Services		10,909		16,797		5,888		54

Total revenue	$	46,486	$	68,105	$	21,619		47	%


	Three Months Ended
	March 31, 2011			June 30, 2011			September 30, 2011			December 31, 2011			March 31, 2012			June 30, 2012
	(in thousands)
Consolidated Statement of Operations Data:
Revenue:
Product	$	6,720		$	11,573		$	16,099		$	16,916		$	10,893		$	16,213
Services		3,353			3,988			4,275			5,181			5,809			6,254

Total revenue		10,073			15,561			20,374			22,097			16,702			22,467

Cost of revenue:
Product		1,569			2,819			4,260			3,880			3,365			4,086
Services		306			432			523			639			492			453

Total cost of revenue		1,875			3,251			4,783			4,519			3,857			4,539

Gross profit		8,198			12,310			15,591			17,578			12,845			17,928

Research and development		2,103			2,920			3,253			4,254			3,945			3,570
Sales and marketing		3,543			4,091			5,406			6,318			8,223			9,112
General and administrative		893			1,167			1,286			1,420			1,306			2,735

Total operating expenses		6,539			8,178			9,945			11,992			13,474			15,417

Income (loss) from operations		1,659			4,132			5,646			5,586			(629	)		2,511
Interest income		2			—			—			2			3			3
Other income (expense), net		(1	)		16			(23	)		(8	)		(26	)		(7	)

Income (loss) before provision for income		1,660			4,148			5,623			5,580			(652	)		2,507
Provision for income taxes		—			(38	)		(27	)		(15	)		(63	)		(28	)

Net income (loss)	$	1,660		$	4,110		$	5,596		$	5,565		$	(715	)	$	2,479