Shares of Barracuda Networks Inc. (NYSE: CUDA) were down 10.7% as of 11:55 a.m. EDT Wednesday despite the company announcing reasonably solid fiscal second-quarter 2018 results.
More specifically for its second quarter ended August 31, 2017, Barracuda Networks' revenue climbed 7.3% year over year to $94.3 million, as a 12.8% decline in appliance revenue (to $18.3 million) was more than offset by a 13.6% growth in subscription revenue to $76 million. On the bottom line, that translated to adjusted net income of $9.1 million, or $0.17 per share, down from $11.4 million, or $0.21 per share in the same year-ago period.
By comparison, last quarter Barracuda Networks told investors to expect lower revenue in the range of $92 million to $94 million, and adjusted earnings per share of between $0.16 and $0.18.
In addition, Barracuda Networks achieved core billings growth of 22% and gross billings of $108.5 million -- above the high end of its latest billings guidance for a range of $105 million to $108 million.
But it's apparent the market wanted even more; analysts' consensus estimates predicted adjusted earnings of $0.19 per share on slightly higher revenue of $94.5 million.
Nonetheless, Barracuda Networks CEO BJ Jenkins remained optimistic, stating:
For the current fiscal third quarter, Barracuda Networks expects billings in the range of $107 million to $110 million, revenue of $92.5 million to $94.5 million, and adjusted earnings per share of between $0.17 and $0.19. Here again, however, Wall Street was more optimistic, with consensus estimates calling for fiscal Q3 adjusted earnings of $0.21 per share on revenue of $95.8 million.
In the end, while Barracuda Networks is rightly pleased with its performance in fiscal Q2, it simply didn't live up to analysts' demands. After combining that relative let-down with the company's seemingly conservative forward outlook, it's no surprise to see the stock pulling back today.
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