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Section 1: 8-K (8-K Q3 2018 PR)

Document


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
 
 
 
 
 
 
 
 
 
Form 8-K
 
 
 
 
 
 
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
October 31, 2018  
Aerohive Networks, Inc.
(Exact name of registrant as specified in its charter)
 
Delaware
 
001-36355
 
20-4524700
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
1011 McCarthy Boulevard
Milpitas, California 95035
(Address of Principal Executive Offices including Zip Code)
(408) 510-6100
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report) 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): 
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨





Item 2.02
Results of Operations and Financial Condition.
On October 31, 2018, Aerohive Networks, Inc. (the “Company”) issued a press release announcing its financial results for the third quarter of 2018. In the press release, the Company also announced that it would be holding a conference call on October 31, 2018 to discuss its financial results for the third quarter and outlook for the fourth quarter of fiscal year 2018. A copy of the press release is furnished as Exhibit 99.1 to this report.
This information furnished under Item 2.02 of Form 8-K, “Results of Operations and Financial Condition,” including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01
Financial Statements and Exhibits.
 
(d)
Exhibits.
Exhibit No.
  
Description
 
 
99.1

  
Press release issued by Aerohive Networks, Inc., dated October 31, 2018.


EXHIBIT INDEX
 
Exhibit No.
  
Description
 
 
  

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
 
 
AEROHIVE NETWORKS, INC.
 
 
 
 
 
 
By:
 
/s/ Steve Debenham
 
 
 
 
Steve Debenham
 
 
 
 
Vice President, General Counsel & Secretary
 
Date: October 31, 2018



(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit


Exhibit 99.1
Aerohive Networks Reports Q3 2018 Results, With Record EPS and Subscription and Support Revenue
MILPITAS, CA — October 31, 2018 — Aerohive Networks (NYSE: HIVE), a Cloud Networking Leader, today announced financial results for its third quarter ended September 30, 2018.
"Today we reported financially strong third quarter results with record subscription and support revenue and gross margins, as well as record high EPS and deferred revenue,” stated David Flynn, President and Chief Executive Officer. “These results demonstrate our progress moving to a SaaS-like business model and underscore our focus on profitability. We are pleased to return to growth in the second half, and while we are not yet seeing the growth levels that we aspire to, we are encouraged that our improved product offerings are bringing us into more large opportunities, suggesting progress toward our long-term goals."
Financial Summary
Total revenue for the third quarter of fiscal year 2018 was $40.6 million, compared with $39.3 million for the third quarter of 2017. Subscription and support revenue was $11.7 million, or 29% of total revenue, for the third quarter of fiscal year 2018, compared with $10.1 million, or 26% of total revenue, for the third quarter of 2017.
On a GAAP basis, net loss was $2.4 million for the third quarter of fiscal year 2018, compared with a net loss of $5.1 million for the third quarter of 2017. GAAP gross margin was 65.6% for the third quarter of fiscal year 2018, compared with 66.6% for the third quarter of 2017.
On a non-GAAP basis, net income was $1.5 million for the third quarter of fiscal year 2018, compared with a net loss of $0.1 million for the third quarter of 2017. Non-GAAP gross margin was 66.1% for the third quarter of fiscal year 2018, compared with 67.5% for the third quarter of 2017.
New Accounting Standard
The Company adopted, effective January 1, 2018, ASC 606, the new accounting standard related to revenue recognition. The Company has adjusted prior-period information to reflect the adoption of this new standard.
Conference Call Information
Aerohive Networks will host a conference call and webcast for analysts and investors to discuss its third quarter 2018 results and outlook for its fourth quarter of fiscal year 2018 at 2:00 pm Pacific Time today, October 31, 2018. The call may be accessed by dialing 323-794-2093 and providing the passcode 4522956. A live and archived audio webcast of the conference call will be accessible from the “Investor Relations” section of the Company’s website at http://ir.aerohive.com.
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 are making to address challenges in our business, including sales execution issues, our ability to deliver innovative solutions as a full-stack cloud networking company, and our ability to strengthen our financial position. 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 revenue opportunities and sales capacity and improve the effectiveness of our channel, our ability to resolve challenges related to sales execution and improve our operating and sales execution, general demand for wireless networking in the industry verticals we target 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 our 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, 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

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history, particularly as a public company, 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 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.

Non-GAAP Financial Measures
Aerohive’s results for its third quarter of fiscal year 2018 reported in this press release and the related earnings conference call include certain non-GAAP financial measures, including:
 
non-GAAP gross profit and non-GAAP gross margin;
non-GAAP product gross profit and non-GAAP product gross margin;
non-GAAP subscription and support gross profit and non-GAAP subscription and support gross margin;
non-GAAP operating income (loss) and non-GAAP operating margin;
non-GAAP net income (loss) and non-GAAP net income (loss) per share;
non-GAAP operating expenses and non-GAAP functional expenses; and
non-GAAP operating expense percentage and non-GAAP functional expense percentage.
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 restructuring.
The Company has included certain non-GAAP financial measures in this press release because the Company believes they are key measures which can be 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 investors frequently use non-GAAP financial measures 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:
 
the non-GAAP measures do not consider the expense related to stock-based compensation, which is an ongoing expense for the Company;
although amortization of internal-use software is a non-cash charge, the assets being amortized often will have to be replaced in the future, and the non-GAAP measures do not reflect any future cash requirement for such replacements;
excluding certain expenses associated with litigation in the quarter or fiscal year does not reflect the impact on our ongoing operations over these periods of the cash requirement to defend such or other litigation;
restructuring charges excluded in the quarter or fiscal year primarily relate to employee termination costs and benefits and do not reflect the cash requirement relating to the costs associated with such restructuring; and
other companies, including companies in our industry, may not exclude these as non-GAAP financial measures or may include them but calculate them differently, which reduces their usefulness as a comparative measure.
Because of these and other 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.
We have provided a description of these non-GAAP financial measures and a reconciliation of the Company's historical non-GAAP financial measures to their most-directly comparable GAAP measures in the financial statement tables included in this press release, and we encourage investors to review the reconciliation.
A reconciliation of non-GAAP guidance measures to corresponding GAAP guidance measures is not available on a forward-looking basis due to the high variability and low visibility with respect to the charges that we exclude from these non-GAAP measures.


2



About Aerohive Networks
Aerohive uses Cloud Management, Machine Learning, and Artificial Intelligence to radically simplify and secure the Access Network. Our Cloud-Managed Wireless, Switching, Routing, and Security technologies provide unrivalled flexibility in deployment, management, and licensing. Credited with pioneering Controller-less Wi-Fi and Cloud Management, Aerohive delivers continuous innovation at Cloud-speed that constantly challenges the industry norm, allowing customers to rethink what's possible. Our innovations and global cloud footprint radically simplify Access Network operation for 30,000+ customers and 10+ million daily users. See how at www.aerohive.com/customers.
Aerohive was founded in 2006 and is headquartered in Milpitas, CA. For more information, please visit www.aerohive.com, call us at 408-510-6100, follow us on Twitter @Aerohive, subscribe to our blog, or become a fan on our Facebook page.
“Aerohive” is a registered trademark and "Aerohive Networks" is a trademark of Aerohive Networks, Inc. All product and company names used herein are trademarks or registered trademarks of their respective owners. All rights reserved.
Investor Relations Contact:
Jessica Stancil
The Blueshirt Group
(408) 769-6720
ir@aerohive.com

3



AEROHIVE NETWORKS, INC.
Condensed Consolidated Statements of Operations
(unaudited, in thousands, except share and per share amounts)

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
Revenue:
 
 
(As Adjusted*)
 
 
 
(As Adjusted*)
Product
$
28,817

 
$
29,162

 
$
83,151

 
$
88,234

Subscription and support
11,735

 
10,139

 
33,643

 
29,597

Total revenue
40,552

 
39,301

 
116,794

 
117,831

Cost of revenue (1):
 
 
 
 
 
 
 
Product
10,595

 
9,880

 
29,645

 
29,165

Subscription and support
3,344

 
3,244

 
10,131

 
9,573

Total cost of revenue
13,939

 
13,124

 
39,776

 
38,738

Gross profit
26,613

 
26,177

 
77,018

 
79,093

Operating expenses:
 
 
 
 
 
 
 
Research and development (1)
8,529

 
9,260

 
26,389

 
28,032

Sales and marketing (1)
15,449

 
16,153

 
46,850

 
51,001

General and administrative (1)
5,243

 
5,700

 
16,469

 
17,486

Total operating expenses
29,221

 
31,113

 
89,708

 
96,519

Operating loss
(2,608
)
 
(4,936
)
 
(12,690
)
 
(17,426
)
Interest income
437

 
180

 
1,063

 
484

Interest expense
(196
)
 
(135
)
 
(543
)
 
(412
)
Other expense, net
(6
)
 
(90
)
 
(210
)
 
(268
)
Loss before income taxes
(2,373
)
 
(4,981
)
 
(12,380
)
 
(17,622
)
Provision for income taxes
60

 
75

 
202

 
369

Net loss
$
(2,433
)
 
$
(5,056
)
 
$
(12,582
)
 
$
(17,991
)
Net loss per share, basic and diluted
$
(0.04
)
 
$
(0.09
)
 
$
(0.23
)
 
$
(0.34
)
Weighted-average shares used in computing net loss per share, basic and diluted
55,381,268

 
53,683,727

 
54,851,435

 
53,070,863

 
 
 
 
 
 
 
 
(1) Includes stock-based compensation as follows:
 
 
 
 
 
 
 
Cost of revenue
$
170

 
$
313

 
$
672

 
$
860

Research and development
1,094

 
1,329

 
3,108

 
3,082

Sales and marketing
1,152

 
1,566

 
3,259

 
4,361

General and administrative
1,415

 
1,756

 
4,047

 
4,658

Total stock-based compensation
$
3,831

 
$
4,964

 
$
11,086

 
$
12,961

 
 
 
 
 
 
 
 
* The Company has adjusted certain amounts for the retrospective change in accounting policy for revenue recognition.



4



AEROHIVE NETWORKS, INC.
Condensed Consolidated Balance Sheets
(unaudited, in thousands, except share and per share amounts)
 
September 30,
 
December 31,
 
2018
 
2017
ASSETS
 
 
(As Adjusted*)
CURRENT ASSETS:
 
 
 
Cash and cash equivalents
$
32,473

 
$
27,249

Short-term investments
62,270

 
57,675

Accounts receivable, net
14,810

 
17,662

Inventories
13,690

 
13,495

Prepaid expenses and other current assets
6,430

 
6,396

Total current assets
129,673

 
122,477

Property and equipment, net
6,529

 
6,381

Goodwill
513

 
513

Other assets
5,244

 
4,900

Total assets
$
141,959

 
$
134,271

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
CURRENT LIABILITIES:
 
 
 
Accounts payable
$
15,117

 
$
11,946

Accrued liabilities
8,568

 
8,602

Debt, current
20,000

 

Deferred revenue, current
38,183

 
33,279

Total current liabilities
81,868

 
53,827

Debt, non-current

 
20,000

Deferred revenue, non-current
37,642

 
33,761

Other liabilities
1,612

 
1,769

Total liabilities
121,122

 
109,357

Stockholders’ equity:
 
 
 
Preferred stock

 

Common stock
56

 
55

Additional paid–in capital
289,383

 
278,528

Treasury stock
(8,572
)
 
(6,216
)
Accumulated other comprehensive loss
(25
)
 
(30
)
Accumulated deficit
(260,005
)
 
(247,423
)
Total stockholders’ equity
20,837

 
24,914

Total liabilities and stockholders’ equity
$
141,959

 
$
134,271

 
 
 
 
* The Company has adjusted certain amounts for the retrospective change in accounting policy for revenue recognition.

5



AEROHIVE NETWORKS, INC.
Condensed Consolidated Statements of Cash Flows
(unaudited, in thousands)

 
Nine Months Ended September 30,
 
2018
 
2017
Cash flows from operating activities
 
 
(As Adjusted*)
Net loss
$
(12,582
)
 
$
(17,991
)
Adjustments to reconcile net loss to net cash provided by operating activities:
 
 
 
Depreciation and amortization
2,277

 
2,371

Stock-based compensation
11,086

 
12,961

Other
(494
)
 
(45
)
Changes in operating assets and liabilities:
 
 
 
Accounts receivable, net
2,852

 
9,004

Inventories
(195
)
 
(577
)
Prepaid expenses and other current assets
(34
)
 
(1,054
)
Other assets
(344
)
 
(183
)
Accounts payable
2,874

 
(911
)
Accrued liabilities
(30
)
 
(329
)
Other liabilities
(20
)
 
93

Deferred revenue
8,785

 
4,476

Net cash provided by operating activities
14,175

 
7,815

Cash flows from investing activities
 
 
 
Purchases of property and equipment
(2,129
)
 
(510
)
Maturities of short-term investments
60,551

 
29,600

Purchases of short-term investments
(64,647
)
 
(36,189
)
Net cash used in investing activities
(6,225
)
 
(7,099
)
Cash flows from financing activities
 
 
 
Proceeds from exercise of vested stock options and employee stock purchase plan
1,659

 
3,113

Payment for shares withheld for tax withholdings on vesting of restricted stock units
(1,888
)
 
(1,070
)
Payment to repurchase common stock
(2,356
)
 
(3,030
)
Payment on capital lease obligations
(141
)
 
(126
)
Net cash used in financing activities
(2,726
)
 
(1,113
)
Net increase (decrease) in cash and cash equivalents
5,224

 
(397
)
Cash and cash equivalents at beginning of period
27,249

 
34,346

Cash and cash equivalents at end of period
$
32,473

 
$
33,949

 
 
 
 
* The Company has adjusted certain amounts for the retrospective change in accounting policy for revenue recognition.


6



AEROHIVE NETWORKS, INC.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited, in thousands, except share and per share amounts)
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2018
 
2017
 
2018
 
2017
 
 
 
 
 
(As Adjusted*)
 
 
 
 
(As Adjusted*)
 
 
Amount
Margin
 
Amount
Margin
 
Amount
Margin
 
Amount
Margin
Gross Profit and Gross Margin Reconciliations:
 
 
 
 
 
 
 
 
 
 
GAAP gross profit
 
$
26,613

65.6
 %
 
$
26,177

66.6
 %
 
$
77,018

65.9
 %
 
$
79,093

67.1
 %
Stock-based compensation
 
170

0.4
 %
 
313

0.8
 %
 
672

0.6
 %
 
860

0.8
 %
Amortization of internal-use software
 
35

0.1
 %
 
35

0.1
 %
 
105

0.1
 %
 
105

0.1
 %
Restructuring charges
 

 %
 

 %
 

 %
 
51

 %
Non-GAAP gross profit
 
$
26,818

66.1
 %
 
$
26,525

67.5
 %
 
$
77,795

66.6
 %
 
$
80,109

68.0
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
Product Gross Profit and Product Gross Margin Reconciliations:
 
 
 
 
 
 
 
 
 
 
GAAP product gross margin
 
$
18,222

63.2
 %
 
$
19,282

66.1
 %
 
$
53,506

64.3
 %
 
$
59,069

66.9
 %
Stock-based compensation
 
28

0.1
 %
 
62

0.2
 %
 
90

0.2
 %
 
165

0.2
 %
Restructuring charges
 

 %
 

 %
 

 %
 
51

0.1
 %
Non-GAAP product gross margin
 
$
18,250

63.3
 %
 
$
19,344

66.3
 %
 
$
53,596

64.5
 %
 
$
59,285

67.2
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
Subscription and Support Gross Profit and Subscription and Support Gross Margin Reconciliations:
 
 
 
 
 
 
 
 
 
 
GAAP subscription and support gross margin
 
$
8,391

71.5
 %
 
$
6,895

68.0
 %
 
$
23,512

69.9
 %
 
$
20,024

67.7
 %
Stock-based compensation
 
142

1.2
 %
 
251

2.5
 %
 
582

1.7
 %
 
695

2.3
 %
Amortization of internal-use software
 
35

0.3
 %
 
35

0.3
 %
 
105

0.3
 %
 
105

0.4
 %
Non-GAAP subscription and support gross margin
 
$
8,568

73.0
 %
 
$
7,181

70.8
 %
 
$
24,199

71.9
 %
 
$
20,824

70.4
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Income (Loss) and Operating Margin Reconciliations:
 
 
 
 
 
 
 
 
 
 
GAAP operating loss
 
$
(2,608
)
(6.4
)%
 
$
(4,936
)
(12.6
)%
 
$
(12,690
)
(10.9
)%
 
$
(17,426
)
(14.8
)%
Stock-based compensation
 
3,831

9.4
 %
 
4,964

12.7
 %
 
11,086

9.5
 %
 
12,961

11.0
 %
Amortization of internal-use software
 
35

0.1
 %
 
35

0.1
 %
 
105

0.1
 %
 
105

0.1
 %
Restructuring charges
 

 %
 

 %
 

 %
 
1,327

1.1
 %
Charges related to securities litigation
 
45

0.1
 %
 

 %
 
198

0.2
 %
 

 %
Non-GAAP operating income (loss)
 
$
1,303

3.2
 %
 
$
63

0.2
 %
 
$
(1,301
)
(1.1
)%
 
$
(3,033
)
(2.6
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amount
Per share
 
Amount
Per share
 
Amount
Per share
 
Amount
Per share
Net Income (Loss) and Net Income (Loss) per Share Reconciliations:
 
 
 
 
 
 
 
 
 
 
GAAP net loss
 
$
(2,433
)
$
(0.04
)
 
$
(5,056
)
$
(0.09
)
 
$
(12,582
)
$
(0.23
)
 
$
(17,991
)
$
(0.34
)
Stock-based compensation
 
3,831

0.07

 
4,964

0.09

 
11,086

0.21

 
12,961

0.24

Amortization of internal-use software
 
35


 
35


 
105


 
105


Restructuring charges
 


 


 


 
1,327

0.03

Charges related to securities litigation
 
45


 


 
198


 


Non-GAAP net income (loss), basic and diluted
 
$
1,478

$
0.03

 
$
(57
)
$
0.00

 
$
(1,193
)
$
(0.02
)
 
$
(3,598
)
$
(0.07
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares Used in Computing non-GAAP Basic and Diluted Net Income (Loss) per Share:
 
 
 
 
 
 
 
 
 
 
Weighted average shares used in computing net income (loss) per share, basic
 
55,381,268

 
 
53,683,727

 
 
54,851,435

 
 
53,070,863

 
Weighted average shares used in computing net income (loss) per share, diluted
 
56,807,296

 
 
53,683,727

 
 
54,851,435

 
 
53,070,863

 
 
 
 
 
 
 
 
 
 
 
 
 
 
* The Company has adjusted certain amounts for the retrospective change in accounting policy for revenue recognition.

7




AEROHIVE NETWORKS, INC.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited, in thousands, except share and per share amounts)
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2018
 
2017
 
2018
 
2017
 
 
 
 
 
(As Adjusted*)
 
 
 
 
(As Adjusted*)
 
 
Amount
% of Revenue
 
Amount
% of Revenue
 
Amount
% of Revenue
 
Amount
% of Revenue
Operating and Functional Expenses and Expenses Percentages Reconciliations:
 
 
 
 
 
 
 
 
 
 
 
 
GAAP research and development
 
$
8,529

21.0
 %
 
$
9,260

23.6
 %
 
$
26,389

22.6
 %
 
28,032

23.8
 %
Stock-based compensation
 
(1,094
)
(2.7
)%
 
(1,329
)
(3.4
)%
 
(3,108
)
(2.7
)%
 
(3,082
)
(2.6
)%
Restructuring charges
 

 %
 

 %
 

 %
 
(838
)
(0.7
)%
Non-GAAP research and development
 
$
7,435

18.3
 %
 
$
7,931

20.2
 %
 
$
23,281

19.9
 %
 
$
24,112

20.5
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP sales and marketing
 
$
15,449

38.1
 %
 
$
16,153

41.1
 %
 
$
46,850

40.1
 %
 
$
51,001

43.3
 %
Stock-based compensation
 
(1,152
)
(2.8
)%
 
(1,566
)
(4.0
)%
 
(3,259
)
(2.8
)%
 
(4,361
)
(3.7
)%
Restructuring charges
 

 %
 

 %
 

 %
 
(243
)
(0.2
)%
Non-GAAP sales and marketing
 
$
14,297

35.3
 %
 
$
14,587

37.1
 %
 
$
43,591

37.3
 %
 
$
46,397

39.4
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP general and administrative
 
$
5,243

12.9
 %
 
$
5,700

14.5
 %
 
$
16,469

14.1
 %
 
$
17,486

14.8
 %
Stock-based compensation
 
(1,415
)
(3.5
)%
 
(1,756
)
(4.5
)%
 
(4,047
)
(3.5
)%
 
(4,658
)
(4.0
)%
Restructuring charges
 

 %
 

 %
 

 %
 
(195
)
(0.1
)%
Charges related to securities litigation
 
(45
)
(0.1
)%
 

 %
 
(198
)
(0.1
)%
 

 %
Non-GAAP general and administrative
 
$
3,783

9.3
 %
 
$
3,944

10.0
 %
 
$
12,224

10.5
 %
 
$
12,633

10.7
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP operating expenses
 
$
29,221

72.1
 %
 
$
31,113

79.2
 %
 
$
89,708

76.8
 %
 
$
96,519

81.9
 %
Stock-based compensation
 
(3,661
)
(9.1
)%
 
(4,651
)
(11.9
)%
 
(10,414
)
(8.9
)%
 
(12,101
)
(10.2
)%
Restructuring charges
 

 %
 

 %
 

 %
 
(1,276
)
(1.1
)%
Charges related to securities litigation
 
(45
)
(0.1
)%
 

 %
 
(198
)
(0.2
)%
 

 %
Non-GAAP operating expenses
 
$
25,515

62.9
 %
 
$
26,462

67.3
 %
 
$
79,096

67.7
 %
 
$
83,142

70.6
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
* The Company has adjusted certain amounts for the retrospective change in accounting policy for revenue recognition.












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