Image source: Barracuda Networks.
What: Shares of network security solutions provider Barracuda Networks soared on Friday following the company's first-quarter earnings report. At 11 a.m. ET, the stock was up about 17%.
So what: Barracuda reported first-quarter revenue of $86.7 million, up 11% year over year and nearly $3 million higher than the average analyst estimate. Recurring subscription revenue jumped 20% to $65.3 million, while appliance revenue declined 10%. The number of active subscribers rose 14% to 286,000.
Non-GAAP earnings per share (EPS) came in at $0.20, up from $0.09 during the prior-year period and $0.09 higher than analysts were expecting. On a GAAP basis, Barracuda posted EPS of $0.05, up from a loss of $0.07 during the first quarter of 2015.
Barracuda CEO BJ Jenkins explained how the company beat expectations:
Now what: Despite solid growth in its subscription business, operating expenses decreased year over year. Research and development spending was up, but sales and marketing spending declined by more than 8%. Along with higher revenue, this helped the company swing to a profit during the first quarter.
Even after Friday's gain, shares of Barracuda are down about 54% from their 52-week high. Disappointing results and guidance late last year and early this year sent the stock tumbling, and the solid first-quarter report has only undone a small portion of that decline.
The article Why Shares of Barracuda Networks Surged Today originally appeared on Fool.com.
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