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Aerohive Networks Reports Fiscal Third Quarter 2016 ResultsAerohive Networks (News - Alert)® (NYSE: HIVE), a leader in cloud networking and enterprise Wi-Fi, today announced financial results for its third fiscal quarter ended September 30, 2016. Total revenue for the third fiscal quarter of 2016 was $40.4 million, a decrease of 6% compared with $42.8 million for the third quarter of 2015 and a decrease of 15% compared with $47.6 million for the second quarter of 2016. Software subscription and services revenue was $8.7 million, or 21% of total revenue for the quarter, compared with $6.7 million, or 16% of total revenue, for the third quarter of fiscal 2015. Software subscription and services revenue grew 30% year over year and 7% sequentially while Product revenue decreased 12% year over year and 20% sequentially. On a GAAP basis, net loss was $9.7 million for the third quarter of fiscal 2016, compared with a net loss of $10.6 million for the third quarter of fiscal 2015. GAAP gross margin was 67.4% for the third quarter of fiscal 2016, compared with 66.4% for the third quarter of fiscal 2015. On a non-GAAP basis, net loss was $3.3 million for the third quarter of fiscal 2016, compared with a net loss of $5.0 million for the third quarter of fiscal 2015. Non-GAAP gross margin was 68.5% for the third quarter of fiscal 2016, compared with 67.0% for the third quarter of fiscal 2015. "Revenue for the third quarter was $40.4 million, in line with our October 13th preliminary announcement," stated David Flynn, President and Chief Executive Officer. "Looking forward, we are redoubling our efforts to diversify our verticals, and we remain focused on driving toward non-GAAP operating profitability." A description of the non-GAAP financial measures is discussed below, and a reconciliation to comparable GAAP financial measures is provided in the accompanying table entitled "Reconciliation of GAAP to Non-GAAP Financial Measures." Conference Call Information Aerohive Networks will host a conference call and webcast for analysts and investors to discuss its third quarter fiscal 2016 results and outlook for its fourth quarter of fiscal 2016 at 2:00 pm Pacific Time today, November 2, 2016. The call may be accessed by dialing 1-888-430-8705 (toll free) or 1-719-457-2632 (international) and providing the passcode 1210667. A live audio webcast of the conference call will be accessible from the "Investor Relations" section of the Company's website at http://ir.aerohive.com. An audio replay of the call may be accessed at the same location after completion of the live call. Safe Harbor Statement This press release contains forward-looking statements, including statements regarding Aerohive Networks' financial expectations and operating performance and expectations for continued momentum, including statements regarding the progress we made in our business to strengthen our channels and product offerings and our continued progress toward non-GAAP operating profitability. These forward-looking statements are based on current expectations and are subject to inherent uncertainties, risks and changes in circumstances that are difficult or impossible to predict. The actual outcomes and results may differ materially from those contemplated by these forward-looking statements as a result of these uncertainties, risk and changes in circumstances, including, but not limited to, risks and uncertainties related to: our ability to continue to attract, integrate, retain and train skilled personnel, especially skilled R&D and sales personnel, in general and in specific regions, our ability to develop and expand our sales capacity and improve the effectiveness of our channel, our ability to improve our operating and sales execution, general demand for wireless networking in the industry verticals targeted or demand for Aerohive products in particular, our ability to benefit from our participation in the E-Rate program, unpredictable and changing market conditions, risks associated with the deployment, performance and adoption of new products and services, risks associated with our growth, competitive pressures from existing and new companies, including pricing pressures, changes in the mix and selling prices of Aerohive products, technological change, product development delays, reliance on third parties to manufacture, warehouse and timely deliver Aerohive products or international operations, our inability to protect Aerohive intellectual property or to predict or limit exposure to third party claims relating to its or Aerohive's intellectual property, Aerohive's limited operating history, particularly as a public company, Aerohive's ability to make appropriate, timely and beneficial decisions as to when, how, and whether to purchase shares under the stock repurchase program, alternative uses of Aerohive's capital and general market, political, regulatory, economic and business conditions in the United States and internationally. Additional risks and uncertainties that could affect Aerohive's financial and operating results are included under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," in the Company's recent annual report on Form 10-K and quarterly report on Form 10-Q. Aerohive's SEC (News - Alert) filings are available on the Investor Relations section of the Company's website at http://ir.aerohive.com and on the SEC's website at www.sec.gov. All forward-looking statements in this press release are based on information available to the Company as of the date hereof, and Aerohive Networks disclaims any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made, except as required by law. Adjustments to Comparable Periods Effective in the first quarter of 2016, Aerohive began to defer sales commission expense, recognizing sales commissions in the same period that the revenue is recognized. Previously, Aerohive recognized sales commission expense in the period in which an order was booked. The comparable periods in the accompanying financial tables reflect this change. Non-GAAP Financial Measures Aerohive's reported results for its third fiscal quarter 2016 in this press release and the related earnings conference call include certain non-GAAP financial measures, including:
The Company defines non-GAAP financial measures to exclude share-based compensation, adjustments to internal-use software amortization, and certain charges related to litigation and headquarters relocation expense. The Company has included non-GAAP financial measures in this press release because the Company believes they are key measures used to evaluate the business, measure performance, identify trends affecting the business, formulate financial projections and make strategic decisions. In particular, the exclusion of certain expenses in calculating these non-GAAP financial measures can provide a useful measure for period-to-period comparisons of the Company's core business. Although non-GAAP financial measures are frequently used by investors in their evaluations of companies, these non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with the Company's results of operations, as determined in accordance with GAAP. Some of these limitations are:
Because of these limitations, you should consider non-GAAP financial measures only together with other financial performance measures, including various cash flow metrics, net loss and other GAAP results. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis due to the high variability and low visibility with respect to the charges that are excluded from these non-GAAP measures. About Aerohive Networks Aerohive (NYSE: HIVE) enables our customers to simply and confidently connect to the information, applications, and insights they need to thrive. Our simple, scalable, and secure platform delivers mobility without limitations. For our customers worldwide, every access point is a starting point. Aerohive was founded in 2006 and is headquartered in Milpitas, CA (News - Alert). For more information, please visit http://www.aerohive.com, call us at 408-510-6100, follow us on Twitter @Aerohive, subscribe to our blog http://boundless.aerohive.com, join our community or become a fan on our Facebook page. "Aerohive" and "HiveManager" are registered trademarks of Aerohive Networks, Inc. All product and company names used herein are trademarks or registered trademarks of their respective owners. All rights reserved.
The foregoing adjustments may also be relevant to evaluating the Company's other non-GAAP final measures. View source version on businesswire.com: http://www.businesswire.com/news/home/20161102006628/en/ |