EX-99.01 2 d64576dex9901.htm EX-99.01 EX-99.01

Exhibit 99.01

Imperva Announces Record Second Quarter 2015 Financial Results

 

  Total revenue of $53.5 million, up 39% year-over-year

 

  Services revenue growth of 35% was driven by the 98% year-over-year increase in subscription revenue

 

  Combined product and subscription revenue increased 57% year-over-year

 

  Number of deals booked valued over $100,000 increased 31% year-over-year

 

  Total deferred revenue as of June 30, 2015 increased 34% year-over-year to $86.1 million driven by 47% increase in short-term deferred revenue

 

  Increasing FY15 guidance

Redwood Shores, Calif. – August 6, 2015Imperva, Inc. (NYSE: IMPV), committed to protecting business-critical data and applications in the cloud and on-premises, today announced financial results for the second quarter ended June 30, 2015.

“Our strong second quarter results reflect the ongoing high global demand for our best-of-breed discovery, protection and compliance solutions, as well as traction from our improved go-to-market strategy,” stated Anthony Bettencourt, President and Chief Executive Officer of Imperva. “Our ability to exceed guidance across all key operating metrics was driven by record growth of both product and subscription revenue, as well as ongoing strength with deals greater than $100,000. Imperva is well positioned to maintain momentum as our message of helping enterprises protect business critical data and applications continues to resonate with enterprises globally.”

Second Quarter 2015 Financial Highlights

 

    Revenue: Total revenue for the second quarter of 2015 was $53.5 million, an increase of 39% compared to $38.4 million in the second quarter of 2014. Within total revenue, product revenue was $23.9 million, up 44% compared to $16.6 million in the same period last year. Services revenue increased 35% year-over-year to $29.6 million and accounted for 55% of total revenue. Within services revenue, overall subscription revenue grew 98% to $10.4 million, compared to the second quarter of 2014. Combined product and subscriptions revenue was $34.3 million, an increase of 57% compared to $21.8 million in the second quarter of 2014.

 

    Operating Profit (Loss): Operating loss as reported in accordance with U.S. generally accepted accounting principles (GAAP) was $(17.3) million for the second quarter compared to a loss of $(15.3) million during the second quarter in 2014. GAAP results included stock-based compensation of $14.6 million for the second quarter of 2015 and $8.7 million for the second quarter of 2014. GAAP results also included amortization of purchased intangibles of $0.4 million for each of the second quarter of 2015 and 2014. Non-GAAP operating loss for the second quarter was $(2.3) million, compared to a loss of $(6.2) million during the same period in 2014, excluding the above mentioned charges.

 

    Net Profit (Loss): GAAP net loss attributable to Imperva stockholders for the second quarter was $(17.3) million, or $(0.57) per share based on 30.3 million weighted average shares outstanding. This compares to GAAP net loss attributable to Imperva stockholders of $(15.4) million, or $(0.60) per share based on 25.8 million weighted average shares outstanding in the prior-year period.


Non-GAAP net loss attributable to Imperva stockholders for the second quarter of 2015 was $(2.4) million, or $(0.08) per share based on 30.3 million weighted average shares outstanding, excluding the above mentioned charges. This compares to non-GAAP net loss attributable to Imperva stockholders of $(6.4) million, or $(0.25) per share based on 25.8 million weighted average diluted shares outstanding in the prior-year period.

A reconciliation of GAAP to non-GAAP financial measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

 

    Balance Sheet: As of June 30, 2015, Imperva had cash, cash equivalents and investments of $244.7 million. Total deferred revenue of $86.1 million increased 34% compared to $64.1 million as of June 30, 2014. Short-term deferred revenue of $62.0 million increased 47% compared to $42.2 million as of June 30, 2014.

Second Quarter and Recent Operating Highlights

 

    During the second quarter of 2015, Imperva booked 115 deals with a value over $100,000, an increase of 31% compared to 88 deals during the second quarter of last year.

 

    During the second quarter of 2015, Imperva added 190 new customers compared to 175 during the second quarter of last year. Imperva now has over 4,100 customers in more than 90 countries around the world.

 

    Imperva announced the availability of Imperva SecureSphere Web Application Firewall (WAF) on Amazon Web Services (AWS) GovCloud (US).

 

    Imperva announced the release of a new, integrated architecture – Imperva Skyfence, provisioned on Imperva Incapsula – for managing access to cloud data and applications that delivers high levels of security, performance and availability.

 

    Imperva announced the release of Imperva Skyfence Gateway v4.5 with Data Leak Prevention (DLP), a cloud security capability that is designed to enable customers to control, in real-time, sensitive and regulated data stored in the cloud.

Business Outlook

The following forward-looking statements reflect expectations as of August 6, 2015. Results may be materially different and could be affected by the factors detailed in this press release and in recent Imperva SEC filings.

Third Quarter Expectations – Ending September 30, 2015

Imperva expects total revenue for the third quarter of 2015 to be in the range of $55.0 million to $57.0 million, representing growth in the range of 29% to 34% compared to the same period in 2014. The company expects in the third quarter of 2015 non-GAAP gross margins of approximately 80%. Further, Imperva expects in the third quarter of 2015 non-GAAP operating loss to be in the range of $(1.5) million to $(1.0) million and non-GAAP net loss to be in the range of $(2.0) million to $(1.5) million, or a loss of $(0.06) to $(0.05) per share based on approximately 31.0 million weighted average shares, which excludes stock-based compensation and amortization of purchased intangibles.


Full Year Expectations – Ending December 31, 2015

Imperva expects total revenue for 2015 to be in the range of $215.0 million to $217.0 million, or up 31% to 32% compared to 2014. Imperva expects 2015 non-GAAP gross margins of approximately 80%. Further, the company expects 2015 non-GAAP operating loss to be in the range of $(12.0) million to $(11.0) million and non-GAAP net loss to be in the range of $(14.0) million to $(13.0) million, or a loss of $(0.46) to $(0.44) per share based on approximately 30.2 million weighted average shares, which excludes stock-based compensation and amortization of purchased intangibles. Imperva expects capital expenditures for the full year to be in the range of $6.0 million to $7.0 million. Finally, the company expects to generate positive cash flows from operations in 2015.

Quarterly Conference Call

Imperva will host a conference call today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to review the company’s financial results for the second quarter ended June 30, 2015. To access this call, dial (877) 681-3378 for the U.S. and Canada or (719) 325-4804 for international callers with conference ID #1389189. A live webcast of the conference call will be accessible from the investors page of the Imperva website at www.imperva.com, and a recording will be archived and accessible at www.imperva.com. An audio replay of this conference call will also be available through August 20, 2015, by dialing (877) 870-5176 for the U.S. and Canada, or (858) 384-5517 for international callers and entering passcode #1389189.

Non-GAAP Financial Measures

Imperva reports all financial information required in accordance with U.S. generally accepted accounting principles (GAAP). To supplement the Imperva unaudited condensed consolidated financial statements presented in accordance with GAAP, Imperva uses certain non-GAAP measures of financial performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the results of Imperva operations as determined in accordance with GAAP. The non-GAAP financial measures used by Imperva include historical non-GAAP net loss and non-GAAP basic and diluted loss per share. These non-GAAP financial measures exclude stock-based compensation, amortization of purchased intangibles and acquisition-related expenses from the Imperva unaudited condensed consolidated statement of operations.

For a description of these items, including the reasons why management adjusts for them, and reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section of the accompanying tables titled “Use of Non-GAAP Financial Information” as well as the related tables that precede it. Imperva may consider whether other significant non-recurring items that arise in the future should also be excluded in calculating the non-GAAP financial measures it uses.

Imperva believes that these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding the performance of Imperva by excluding certain items that may not be indicative of the company’s core business, operating results or future outlook. Imperva management uses, and believes that investors benefit from referring to, these non-GAAP financial measures in assessing


operating results of Imperva, as well as when planning, forecasting and analyzing future periods. These non-GAAP financial measures also facilitate comparisons of the performance of Imperva to prior periods.

Forward Looking Statements

This press release contains forward-looking statements, including without limitation those regarding the Imperva “Business Outlook” (“Third Quarter Expectations – Ending September 30, 2015” and “Full Year Expectations – Ending December 31, 2015”); and Imperva’s beliefs related to ongoing high global demand for its discovery, protection and compliance solutions, traction from its go-to-market strategy and strength with deals greater than $100,000, as well as Imperva’s expected momentum resulting from its message of helping enterprises protect business critical data and applications. These forward-looking statements are subject to material risks and uncertainties that may cause actual results to differ substantially from expectations. Investors should consider important risk factors, which include: the risk that demand for our cyber security solutions may not increase and may decrease; the risk that we may not timely introduce new products or versions of our products and that they may not be accepted by the market; the risk that competitors may be perceived by customers to be better positioned to help handle cyber security threats and protect their businesses from major risk; the risk that the growth of Imperva may be lower than anticipated; and other risks detailed under the caption “Risk Factors” in the company’s Form 10-Q filed with the Securities and Exchange Commission, or the SEC, on May 11, 2015 and the company’s other SEC filings. You can obtain copies of the company’s SEC filings on the SEC’s website at www.sec.gov.

The foregoing information represents the company’s outlook only as of the date of this press release, and Imperva undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, new developments or otherwise.

About Imperva

Imperva® (NYSE:IMPV), is a leading provider of cyber security solutions that protect business-critical data and applications. The company’s SecureSphere, Incapsula and Skyfence product lines enable organizations to discover assets and risks, protect information wherever it lives – in the cloud and on-premises – and comply with regulations. The Imperva Application Defense Center, a research team comprised of some of the world’s leading experts in data and application security, continually enhances Imperva products with up-to-the minute threat intelligence, and publishes reports that provide insight and guidance on the latest threats and how to mitigate them. Imperva is headquartered in Redwood Shores, California. Learn more: www.imperva.com, our blog, on Twitter.

© 2015 Imperva, Inc. All rights reserved. Imperva, the Imperva logo, SecureSphere, Incapsula and Skyfence are trademarks of Imperva, Inc. and its subsidiaries.

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IMPERVA, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(On a GAAP basis)

(In thousands, except per share amounts)

(Unaudited)

 

     For the Three Months Ended     For the Six Months Ended  
     Jun 30
2015
    Jun 30
2014
    Jun 30
2015
    Jun 30
2014
 

Net revenue:

        

Products and license

   $ 23,895      $ 16,586      $ 40,999      $ 28,557   

Services

     29,583        21,856        57,236        41,401   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total net revenue

     53,478        38,442        98,235        69,958   

Cost of revenue(1, 2):

        

Products and license

     2,796        2,075        4,794        3,807   

Services

     8,770        6,959        17,102        12,979   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of revenue

     11,566        9,034        21,896        16,786   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     41,912        29,408        76,339        53,172   

Operating expenses(1, 2):

        

Research and development

     13,112        11,618        25,790        21,579   

Sales and marketing

     34,071        25,065        65,324        48,100   

General and administrative

     11,637        7,621        21,380        16,026   

Amortization of purchased intangibles

     352        362        704        566   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     59,172        44,666        113,198        86,271   
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from operations

     (17,260     (15,258     (36,859     (33,099

Other expense, net

     (224     (215     (304     (369
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss before provision (benefit) for income taxes

     (17,484     (15,473     (37,163     (33,468

Provision (Benefit) for income taxes

     (160     (35     191        (406
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

     (17,324     (15,438     (37,354     (33,062

Add: Loss attributable to noncontrolling interest

     —          —          —          213   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss attributable to Imperva, Inc. stockholders

   $ (17,324   $ (15,438   $ (37,354   $ (32,849
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per share of common stock attributable to Imperva, Inc. stockholders, basic and diluted

   $ (0.57   $ (0.60   $ (1.30   $ (1.29
  

 

 

   

 

 

   

 

 

   

 

 

 

Shares used in computing net loss per share of common stock, basic and diluted

     30,287        25,782        28,639        25,545   
  

 

 

   

 

 

   

 

 

   

 

 

 

(1) Stock-based compensation expense as included in above:

        

Cost of revenue

   $ 963      $ 529      $ 1,877      $ 903   

Research and development

     3,483        2,190        6,811        3,982   

Sales and marketing

     5,045        3,209        9,510        5,639   

General and administrative

     5,102        2,737        8,941        4,807   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total stock-based compensation expense

   $ 14,593      $ 8,665      $ 27,139      $ 15,331   
  

 

 

   

 

 

   

 

 

   

 

 

 

(2) Acquisition-related expense as included in above:

        

Cost of revenue

   $ —        $ —        $ —        $ 156   

General and administrative

     —          —          —          1,243   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total acquisition-related expense

   $ —        $ —        $ —        $ 1,399   
  

 

 

   

 

 

   

 

 

   

 

 

 


IMPERVA, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

     As of
Jun 30
2015
    As of
Dec 31
2014
 

Assets

    

Current assets:

    

Cash and cash equivalents

   $ 158,569      $ 68,096   

Short-term investments

     86,123        41,624   

Restricted cash, current

     77        62   

Accounts receivable, net

     40,085        47,446   

Inventory

     993        259   

Deferred tax assets

     452        408   

Prepaid expenses and other current assets

     4,934        3,927   
  

 

 

   

 

 

 

Total current assets

     291,233        161,822   

Property and equipment, net

     8,182        7,618   

Goodwill

     34,972        34,972   

Purchased intangible assets, net

     8,695        9,399   

Severance pay fund

     4,507        3,980   

Restricted cash

     1,665        1,665   

Deferred tax assets

     329        329   

Other assets

     848        860   
  

 

 

   

 

 

 

Total assets

   $ 350,431      $ 220,645   
  

 

 

   

 

 

 

Liabilities and stockholders’ equity

    

Current liabilities:

    

Accounts payable

   $ 3,869      $ 5,376   

Accrued compensation and benefits

     17,521        15,749   

Accrued and other current liabilities

     13,605        6,376   

Deferred revenue

     62,022        56,077   
  

 

 

   

 

 

 

Total current liabilities

     97,017        83,578   

Other liabilities

     3,467        10,408   

Deferred revenue

     24,092        25,098   

Accrued severance pay

     4,774        4,318   
  

 

 

   

 

 

 

Total liabilities

     129,350        123,402   

Stockholders’ equity:

    

Common stock

     3        2   

Additional paid-in capital

     417,064        256,388   

Accumulated deficit

     (195,012     (157,658

Accumulated other comprehensive loss

     (974     (1,489
  

 

 

   

 

 

 

Total Imperva, Inc. stockholders’ equity

     221,081        97,243   

Noncontrolling interest

     —          —     
  

 

 

   

 

 

 

Total stockholders’ equity

     221,081        97,243   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 350,431      $ 220,645   
  

 

 

   

 

 

 


IMPERVA, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

     For the Six Months Ended  
     Jun 30
2015
    Jun 30
2014
 

Cash flows from operating activities:

    

Net loss

   $ (37,354   $ (33,062

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

    

Depreciation and amortization

     2,184        1,688   

Stock-based compensation

     27,139        15,331   

Amortization of acquired intangible assets

     704        566   

Amortization of premiums/accretion of discounts on short-term investments

     260        217   

Excess tax benefits from share-based compensation

     (43     —     

Other

     (48     (1

Changes in operating assets and liabilities:

    

Accounts receivable, net

     7,361        10,842   

Inventory

     (734     188   

Prepaid expenses and other assets

     (995     1,207   

Accounts payable

     (1,420     (928

Accrued compensation and benefits

     1,772        (884

Accrued and other liabilities

     997        (88

Severance pay, net

     (71     234   

Deferred revenue

     4,939        1,090   

Deferred tax assets

     (44     (33
  

 

 

   

 

 

 

Net cash provided by (used in) operating activities

     4,647        (3,633

Cash flows from investing activities:

    

Purchase of short-term investments

     (64,025     (11,615

Proceeds from sales/maturities of short-term investments

     19,169        13,585   

Acquisitions, net of cash acquired

     —          (12,083

Net purchases of property and equipment

     (2,835     (2,845

Change in restricted cash

     (15     (346
  

 

 

   

 

 

 

Net cash used in investing activities

     (47,706     (13,304

Cash flows from financing activities:

    

Proceeds from follow-on public offering, net of offering costs

     127,854        —     

Proceeds from issuance of common stock, net of repurchases

     9,789        4,517   

Excess tax benefits from share-based compensation

     43        —     

Shares withheld for tax withholding on vesting of restricted stock units

     (4,203     (1,294
  

 

 

   

 

 

 

Net cash provided by financing activities

     133,483        3,223   

Effect of exchange rate changes on cash and cash equivalents

     49        —     
  

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     90,473        (13,714

Cash and cash equivalents at beginning of period

     68,096        76,704   
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 158,569      $ 62,990   
  

 

 

   

 

 

 


IMPERVA, INC. AND SUBSIDIARIES

(Reconciliation of GAAP to Non-GAAP Measures)

(In thousands, except per share amounts)

(Unaudited)

 

     For the Three Months Ended     For the Six Months Ended  
     Jun 30
2015
    Jun 30
2014
    Jun 30
2015
    Jun 30
2014
 

GAAP operating loss

   $ (17,260   $ (15,258   $ (36,859   $ (33,099

Plus:

        

Stock-based compensation expense

     14,593        8,665        27,139        15,331   

Acquisition-related expense

     —          —          —          1,399   

Amortization of purchased intangibles

     352        362        704        566   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP operating loss

   $ (2,315   $ (6,231   $ (9,016   $ (15,803
  

 

 

   

 

 

   

 

 

   

 

 

 

GAAP net loss attributable to Imperva, Inc. stockholders

   $ (17,324   $ (15,438   $ (37,354   $ (32,849

Plus:

        

Stock-based compensation expense

     14,593        8,665        27,139        15,331   

Acquisition-related expense

     —          —          —          1,399   

Amortization of purchased intangibles

     352        362        704        566   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net loss

   $ (2,379   $ (6,411   $ (9,511   $ (15,553
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding, basic and diluted

     30,287        25,782        28,639        25,545   

Non-GAAP net loss, basic and diluted

   $ (0.08   $ (0.25   $ (0.33   $ (0.61


Use of Non-GAAP Financial Information

In addition to the reasons stated above, which are generally applicable to each of the items Imperva excludes from its non-GAAP financial measures, Imperva believes it is appropriate to exclude or give effect to certain items for the following reasons:

Stock-Based Compensation: When evaluating the performance of its consolidated results, Imperva does not consider stock-based compensation charges. Likewise, the Imperva management team excludes stock-based compensation expense from its operating plans. In contrast, the Imperva management team is held accountable for cash-based compensation and such amounts are included in its operating plans. Further, when considering the impact of equity award grants, Imperva places a greater emphasis on overall stockholder dilution rather than the accounting charges associated with such grants.

Acquisition-Related Charges: GAAP requires expenses to be recognized for various types of events associated with a business acquisition, such as legal, accounting, advisory and other deal related expenses. These expenses vary significantly and are unique to each transaction. Additionally, Imperva does not acquire businesses on a predictable cycle. Imperva records these acquisition and other transaction costs as operating expenses when they are incurred. Imperva believes that these acquisition and other transaction costs affect comparability from period to period and that investors benefit from a supplemental non-GAAP financial measure that excludes these expenses.

Imperva excludes stock-based compensation and acquisition-related charges from its non-GAAP financial measures primarily because they are expenses that it does not consider part of ongoing operating results when assessing the performance of its business, and the exclusion of these expenses facilitates the comparison of results and business outlook for future periods with results for prior periods in order to better understand the long term performance of its business.

Amortization of Purchased Intangibles. When analyzing the operating performance of an acquired entity, Imperva’s management focuses on the total return provided by the investment (i.e., operating profit generated from the acquired entity as compared to the purchase price paid) without taking into consideration any allocations made for accounting purposes. Because the purchase price for an acquisition necessarily reflects the accounting value assigned to intangible assets (including acquired technology and goodwill), when analyzing the operating performance of an acquisition in subsequent periods, Imperva’s management excludes the GAAP impact of acquired intangible assets to its financial results. Imperva believes that such an approach is useful in understanding the long-term return provided by an acquisition and that investors benefit from a supplemental non-GAAP financial measure that excludes the accounting expense associated with acquired intangible assets.

In addition, in accordance with GAAP, Imperva generally recognizes expenses for internally-developed intangible assets as they are incurred until technological feasibility is reached, notwithstanding the potential future benefit such assets may provide. Unlike internally-developed intangible assets, however, and also in accordance with GAAP, Imperva generally capitalizes the cost of acquired intangible assets and recognizes that cost as an expense over the useful lives of the assets acquired (other than goodwill, which is not amortized, as required under GAAP). As a result of their GAAP treatment, there is an inherent lack of comparability between the financial performance of internally-developed intangible assets and acquired intangible assets. Accordingly, Imperva believes it is useful to provide, as a supplement to its GAAP operating results, a non-GAAP financial measure that excludes the amortization of acquired intangibles.


Investor Relations Contact Information

Seth Potter

646.277.1230

IR@imperva.com

Seth.Potter@icrinc.com