Barracuda Networks (CUDA) 8-K Barracuda Announces Record Billings, Revenue and Free Cash Flow in Fourth Quarter and Fiscal Year 2014 Results

Exhibit 99.1

Barracuda Announces Record Billings, Revenue and Free Cash Flow in Fourth Quarter and Fiscal Year 2014 Results

• Q4 gross billings up 18% year-over-year to a record $82 million

• Total revenue of $60 million in Q4, including recurring subscription revenue of $42 million

• Adjusted free cash flow of $19 million, or 31% of revenue

• Adjusted EBITDA of $17 million, or 28% of revenue on non-GAAP gross margins of 80%

• Total active subscribers exceeds 205,000

• Increased the number of multi-product customers in fiscal 2014 by 26% year-over-year

CAMPBELL, Calif., April 24, 2014 – Barracuda Networks, Inc. (NYSE: CUDA), a leading provider of cloud-connected security and storage solutions, today announced results for its fourth quarter and fiscal year 2014, which ended February 28, 2014.

Fourth Quarter 2014 Financial Highlights

Billings & Revenue: For the fourth quarter of fiscal 2014, gross billings grew 18% to $82.0 million, up from $69.5 million in the fourth quarter of fiscal 2013. Total revenue increased 15% to $60.3 million, up from $52.5 million in the fourth quarter of fiscal 2013. Appliance revenue in the fourth quarter of fiscal 2014 grew to $18.3 million and recurring subscription revenue grew to $42.0 million, representing 70% of total revenue.

Net Income:GAAP net income in the fourth quarter of fiscal 2014 was $3.0 million, or $0.06 earnings per share, based on a diluted share count of 53.6 million. Non-GAAP net income for the fourth quarter of 2014 was $3.0 million, or $0.06 earnings per share, based on a diluted share count of 53.6 million. Non-GAAP net income excludes $3.3 million in stock-based compensation expense, $4.0 million in income tax benefit of non-GAAP exclusions, $1.0 million in amortization of intangibles, and $0.4 million in acquisition and other non-recurring charges. A reconciliation between GAAP and non-GAAP information is contained in the tables below.

Fiscal Year 2014 Financial Highlights

Billings & Revenue: For fiscal 2014, gross billings grew 17% to $310.0 million, up from $264.2 million in fiscal 2013. Total revenue increased 18% to $233.8 million, up from $198.9 million in fiscal 2013. Appliance revenue in fiscal 2014 grew to $71.9 million and recurring subscription revenue grew to $161.9 million, representing 69% of total revenue.

Net Income/Loss:GAAP net loss in fiscal 2014 was $3.6 million, or $0.10 loss per share, based on a share count of 35.4 million. Non-GAAP net income in 2014 was $5.1 million, or $0.10 earnings per share, based on a diluted share count of 49.1 million.

“We made good progress in the fourth quarter across all of our markets and product categories, especially our higher growth market categories of network and application security and storage, which are becoming larger portions of our overall business,” said BJ Jenkins, president and CEO. “During the quarter, we added over 7,900 new active subscribers, ending our fiscal year with more than 205,000 active subscribers. In addition to adding new customers, we also made good progress with our installed-base selling initiatives, accelerating growth in the number of multi-product customers. As Barracuda expands our product offerings and the availability of solutions in areas of growing adoption such as public cloud platforms, we are strengthening our positioning and availability of our security and storage solutions that simplify the lives of IT professionals.”

“We had strong financial performance in the fourth quarter, particularly with our cash flow metrics, which were driven by our billings growth,” said David Faugno, CFO. “Adjusted free cash flow in the fourth quarter was $18.7 million, or 31% of total revenue, and non-GAAP operating income was $3.3 million. The company closed the fourth quarter and fiscal year with total deferred revenue of $313.2 million, up from $298.8 million in the third quarter, and cash and cash equivalents of $135.9 million, up from $117.2 million in the third quarter.”

Recent Company Highlights

• New Product Launches and Updates– Extended the Barracuda NG Firewall model range for remote offices; expanded Copy for Companies to improve security and the user experience; announced worldwide availability of our new Backup-as-a-Service offering; and launched Threatglass, a free community resource where users can browse and analyze web-based malware.

• Expanding Cloud Presence – Announced the availability of the Barracuda NG Firewall on both the Microsoft Azure and Amazon Web Services (AWS Marketplace) public cloud platforms, and the availability of the Barracuda Spam Firewall in the AWS Marketplace.

• Market Share Recognition – Again ranked number one in integrated purpose-built backup appliance units shipped worldwide by IDC’s Worldwide Quarterly PBBA Tracker, CQ4 2013; and named a leader in messaging security in the IDC Marketscape: Worldwide Messaging Security Appliance/Software 2013-2014 Vendor Assessment.

• Industry Recognition – Achieved “5-Star” rating in theCRN 2014 Partner Program Guide for the second consecutive year; namedNetwork Computing 2013 Security Product of the Year for Barracuda NG Firewall; awarded threeSC Magazine awards for Best Customer Service, Best Web Application Firewall for Barracuda Web Application Firewall and Best SME Security Solution for Barracuda Spam Firewall; received five Infosecurity Products Guide Excellence awards for Best Content Filtering Gold for Barracuda Web Filter, Best Storage & Archiving Gold for Barracuda Backup, Best Security Hardware Bronze for Barracuda Firewall, Best Cloud Security Bronze for Barracuda Web Application Firewall on Microsoft Azure, and Best Application Security Bronze for Barracuda Load Balancer ADC; and received the Reseller Choice Award for Best Cloud Backup.

Conference Call Information

Barracuda will host a conference call and corresponding live webcast at 2:00 p.m. PT today. To access the conference call, dial1-877-941-2068 for the U.S. and Canada and +1-480-629-9712 for international callers. The webcast will be available live on the investor relations section of the Company’s website at https://investors.barracuda.com, and via replay beginning approximately two hours after the completion of the call for a period of one year. An audio replay of the call will be available to investors beginning at approximately 5:00 p.m. PT today through May 30, 2014 by dialing 1-800-406-7325 in the U.S. and Canada, or+1-303-590-3030 for international callers, using passcode 4675013#. Additional information can be found in an accompanying supplemental investor slide presentation located at https://investors.barracuda.com.

Forward-Looking Statements

This announcement contains forward-looking statements related to future product performance and market growth that involve risks and uncertainties, including statements regarding the Company’s expectations regarding financial performance, the potential impact of our expanded product distribution channels, and product introduction. Actual results could differ materially

from those projected in the forward-looking statements as a result of certain risk factors, including, but not limited to: fluctuations in demand for the Company’s products and services; a highly competitive business environment for network security and storage solutions; the Company’s effectiveness in controlling expenses, the possibility that the Company might experience delays in the development of new technology and products; customer response to its new technology and products; risks related to pending or future litigation, and a dependency on third parties for certain components of the Company’s products. The Company undertakes no obligation to update the forward-looking information in this release. More information about potential factors that could affect the Company’s business and financial results is included in its filings with the Securities and Exchange Commission, including, without limitation, under the captions: “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Risk Factors,” which are on file with the Securities and Exchange Commission.

Non-GAAP Financial Measures

Barracuda provides all financial information required in accordance with generally accepted accounting principles (GAAP). To supplement our consolidated financial statements presented in accordance with GAAP, we are also providing with this press release non-GAAP net income and non-GAAP operating income. In preparing our non-GAAP information, we have excluded, where applicable, the impact of non-recurring charges, stock-based compensation, amortization of intangibles and depreciation. We believe that excluding these items provides both management and investors with additional insight into our current operations and the trends affecting the Company. In particular, management finds it useful to exclude these items in order to more readily correlate the Company’s operating activities with the Company’s ability to generate cash from operations. Accordingly, management uses these non-GAAP measures, along with the comparable GAAP information, in evaluating our historical performance and in planning our future business activities. Please note that our non-GAAP measures may be different than those used by other companies. The additional non-GAAP financial information we present should be considered in conjunction with, and not as a substitute for, our financial information presented in accordance with GAAP. We have provided a non-GAAP reconciliation of the Condensed Consolidated Statement of Operations for the periods presented in this release, which are adjusted to exclude non-recurring charges, stock-based compensation, amortization of intangibles and depreciation for these periods. These measures should only be used to evaluate the Company’s results of operations in conjunction with the corresponding GAAP measures for comparable financial information and understanding of the Company’s ongoing performance as a business. Barracuda uses both GAAP and non-GAAP measures to evaluate and manage its operations.

About Barracuda Networks Inc. (NYSE: CUDA)

Barracuda provides cloud-connected security and storage solutions that simplify IT. These powerful, easy-to-use, and affordable solutions are trusted by more than 150,000 organizations worldwide and are delivered in appliance, virtual appliance, cloud, and hybrid deployments. Barracuda’s customer-centric business model focuses on delivering high-value, subscription-based IT solutions that provide end-to-end network and data security. For additional information, please visitwww.barracuda.com.

Barracuda Networks, Barracuda and the Barracuda Networks logo are registered trademarks or trademarks of Barracuda Networks, Inc. in the US and other countries.

Contacts:

Investor Relations: Adam Carson; +1-408-342-5480; ir@barracuda.com

Corporate Communications: Mary Catherine Petermann; +1 404-307-6290;mc@barracuda.com

###

Barracuda Networks, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(Unaudited)

	February 28, 2014			February 28, 2013
Assets
Current assets:
Cash and cash equivalents	$	135,879		$	30,095
Marketable securities		—			1,550
Accounts receivable, net of allowance for doubtful accounts		27,836			24,066
Inventories		5,648			5,138
Deferred costs		25,707			20,119
Deferred income taxes		30,156			26,158
Other current assets		4,900			4,336
Total current assets		230,126			111,462
Property and equipment, net		20,558			16,972
Deferred costs, non-current		24,572			19,351
Deferred income taxes, non-current		28,515			21,065
Other non-current assets		1,851			1,637
Intangible assets, net		8,420			7,983
Goodwill		36,014			33,778
Total assets	$	350,056		$	212,248
Liabilities, redeemable convertible preferred stock, and stockholders’ deficit
Current liabilities:
Accounts payable	$	13,743		$	12,756
Accrued payroll and related benefits		8,494			9,967
Other accrued liabilities		9,374			9,925
Deferred revenue		167,562			146,257
Deferred income taxes		260			132
Note payable		237			222
Total current liabilities		199,670			179,259
Long-term liabilities:
Deferred revenue, non-current		145,595			114,986
Deferred income taxes, non-current		84			660
Note payable, non-current		4,635			4,872
Other long-term liabilities		5,727			4,537
Redeemable convertible preferred stock		—			167,554
Stockholders’ deficit:
Common stock		52			28
Additional paid-in capital		278,551			23,080
Accumulated other comprehensive loss		(817	)		(1,112	)
Accumulated deficit		(283,441	)		(279,131	)
Total stockholders’ deficit controlling interest		(5,655	)		(257,135	)
Total stockholders’ deficit non-controlling interest		—			(2,485	)
Total stockholders’ deficit		(5,655	)		(259,620	)
Total liabilities, redeemable convertible preferred stock, and stockholders’ deficit	$	350,056		$	212,248

Barracuda Networks, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share information)

(Unaudited)

	Three months ended February 28,						Twelve months ended February 28,
	2014			2013			2014			2013
Revenue:
Appliance	$	18,331			16,329		$	71,914		$	59,528
Subscription		42,003			36,142			161,873			139,403
Total revenue		60,334			52,471			233,787			198,931
Cost of revenue		13,270			12,408			53,768			45,088
Gross profit		47,064			40,063			180,019			153,843
Operating expenses:
Research and development		12,579			10,152			47,142			35,167
Sales and marketing		28,011			27,556			114,024			102,329
General and administrative		7,838			6,697			29,856			28,777
Total operating expenses		48,428			44,405			191,022			166,273
Loss from operations		(1,364	)		(4,342	)		(11,003	)		(12,430	)
Other income (expense), net		380			(313	)		51			(839	)
Loss before income taxes and non-controlling interest		(984	)		(4,655	)		(10,952	)		(13,269	)
Benefit for income taxes		3,830			2,715			6,565			5,084
Consolidated net income (loss)		2,846			(1,940	)		(4,387	)		(8,185	)
Net loss attributable to non-controlling interest		200			182			761			794
Net income (loss) attributable to Barracuda Networks, Inc.	$	3,046		$	(1,758	)	$	(3,626	)	$	(7,391	)
Net income (loss) attributable to common stockholders	$	3,046		$	(1,758	)	$	(3,626	)	$	(9,203	)
Net income (loss) per share attributable to common stockholders:
Basic	$	0.06		$	(0.06	)	$	(0.10	)	$	(0.29	)
Diluted	$	0.06		$	(0.06	)	$	(0.10	)	$	(0.29	)
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders:
Basic		50,883			27,936			35,355			32,031
Diluted		53,557			27,936			35,355			32,031

Barracuda Networks, Inc.

Reconciliation of Selected GAAP to Non-GAAP Financial Measures

(in thousands)

(Unaudited)

	Three months ended February 28,				Twelve months ended February 28,
	2014		2013		2014		2013
GAAP cost of revenue	$	13,270	$	12,408	$	53,768	$	45,088
Amortization of intangible assets (1)		672		905		3,690		3,619
Depreciation expense (2)		623		486		2,558		1,680
Stock-based compensation expense (3)		55		17		201		146
Non-GAAP cost of revenue	$	11,920	$	11,000	$	47,319	$	39,643
GAAP sales and marketing expense	$	28,011	$	27,556	$	114,024	$	102,329
Amortization of intangible assets (1)		300		444		1,641		1,859
Depreciation expense (2)		40		48		212		191
Stock-based compensation expense (3)		789		369		2,067		1,182
Acquisition and other non-recurring charges (4)		—		1,055		—		1,063
Non-GAAP sales and marketing expense	$	26,882	$	25,640	$	110,104	$	98,034
GAAP research and development expense	$	12,579	$	10,152	$	47,142	$	35,167
Amortization of intangible assets (1)		—		—		—		—
Depreciation expense (2)		139		215		549		520
Stock-based compensation expense (3)		900		573		2,374		2,059
Acquisition and other non-recurring charges (4)		372		1,159		1,247		1,440
Non-GAAP research and development expense	$	11,168	$	8,205	$	42,972	$	31,148
GAAP general and administrative expense	$	7,838	$	6,697	$	29,856	$	28,777
Amortization of intangible assets (1)		—		14		23		40
Depreciation expense (2)		220		215		688		424
Stock-based compensation expense (3)		1,542		1,471		6,195		5,400
Acquisition and other non-recurring charges (4)		19		1,084		598		7,290
Non-GAAP general and administrative expense	$	6,057	$	3,913	$	22,352	$	15,623
GAAP total expense	$	61,698	$	56,813	$	244,790	$	211,361
Amortization of intangible assets (1)		972		1,363		5,354		5,518
Depreciation expense (2)		1,022		964		4,007		2,815
Stock-based compensation expense (3)		3,286		2,430		10,837		8,787
Acquisition and other non-recurring charges (4)		391		3,298		1,845		9,793
Non-GAAP total expense	$	56,027	$	48,758	$	222,747	$	184,448
Depreciation expense (2)	$	1,022	$	964	$	4,007	$	2,815
Non-GAAP total expense including depreciation	$	57,049	$	49,722	$	226,754	$	187,263

Barracuda Networks, Inc.

Reconciliation of Selected GAAP to Non-GAAP Financial Measures

(in thousands, except per share information)

(Unaudited)

	Three months ended February 28,						Twelve months ended February 28,
	2014			2013			2014			2013
GAAP operating loss	$	(1,364	)	$	(4,342	)	$	(11,003	)	$	(12,430	)
Amortization of intangible assets (1)		972			1,363			5,354			5,518
Stock-based compensation expense (3)		3,286			2,430			10,837			8,787
Acquisition and other non-recurring charges (4)		391			3,298			1,845			9,793
Non-GAAP operating income	$	3,285		$	2,749		$	7,033		$	11,668
GAAP net income (loss) attributable to Barracuda Networks, Inc.	$	3,046		$	(1,758	)	$	(3,626	)	$	(7,391	)
Amortization of intangible assets (1)		972			1,363			5,354			5,518
Stock-based compensation expense (3)		3,286			2,430			10,837			8,787
Acquisition and other non-recurring charges (4)		391			3,298			1,845			9,793
Income tax benefit of non-GAAP exclusions (5)		(3,982	)		(2,307	)		(7,967	)		(7,633	)
Other income adjustments (6)		(508	)		159			(602	)		515
Non-controlling interest (7)		(200	)		(182	)		(761	)		(794	)
Non-GAAP net income	$	3,005		$	3,003		$	5,079		$	8,795
Non-GAAP diluted earnings per share (8)	$	0.06		$	0.07		$	0.10		$	0.19
Weighted average shares used to compute diluted earnings per share		53,557			46,129			49,051			45,835

(1) Amortization of Intangible Assets. We provide non-GAAP information which excludes expenses for the amortization of intangible assets which primarily relate to purchased intangible assets associated with our acquisitions. We believe that eliminating this expense from our non-GAAP measures is useful to investors, because the amortization of intangible assets can be inconsistent in amount and frequency and is significantly impacted by the timing and magnitude of our acquisition transactions, which also vary in frequency from period to period. Accordingly, we analyze the performance of our operations in each period without regard to such expenses.

(2) Depreciation of property and equipment. We provide non-GAAP information which excludes depreciation expense related to the amortization of property and equipment, as well as certain losses on disposal of fixed assets. We believe that eliminating this expense from our non-GAAP measures is useful to investors, because the acquisition of property and equipment, and the corresponding depreciation expense, can be inconsistent in amount and can vary from period to period.

(3) Stock-Based Compensation Expense. We provide non-GAAP information which excludes expenses for stock-based compensation. We believe the exclusion of this item allows for financial results that are more indicative of our continuing operations. We believe that the exclusion of stock-based compensation expense provides for a better comparison of our operating results to prior periods and to our peer companies as the calculations of stock-based compensation vary from period to period and company to company due to different valuation methodologies, subjective assumptions and the variety of award types.

(4) Acquisition and Other Non-Recurring Related Adjustments. We exclude certain expense items resulting from acquisitions and other non-recurring charges, which we do not expect to recur in our continuing operating results. We believe that adjusting for these charges allows us to better compare results from period to period in order to assess the ongoing operating results of our business. The charges include: (i) costs associated with our CEO transition, (ii) costs associated with an internal investigation of export control compliance, and (iii) legal, accounting and advisory fees, to the extent associated with acquisitions, as well as contingent consideration payments under the terms of certain acquisition agreements.

(5) Income Tax Effect of Non-GAAP Exclusions. We believe providing financial information with and without the income tax effect of excluding items related to our non-GAAP financial measures provide our management and users of the financial statements with better clarity regarding the ongoing performance and future liquidity of our business. Excluded items include: (i) amortization expense of intangible assets, (ii) stock-based compensation expense, (iii) acquisition and other non-recurring charges, and (iv) a tax benefit related to a legal entity rationalization.

(6) Other Income Adjustments. We provide non-GAAP information that excludes the effect of certain other income and losses. These adjustments most significantly consist of foreign currency re-measurement gains and losses. For all non-functional currency account balances, the re-measurement of such balances to the functional currency will result in either a foreign exchange gain or a loss which is recorded in other income (expense), net. We believe that eliminating these items from our non-GAAP measures is useful to investors, because foreign currency re-measurement adjustments can be inconsistent in amount and can vary from period to period.

(7) Non-Controlling Interest. We provide non-GAAP information that includes the results related to entities in which we hold a minority interest. We believe that adjusting for these amounts allows us to better compare results from period to period in order to assess the ongoing operating results of our business, including entities for which we own a minority interest.

(8) Non-GAAP Diluted Earnings Per Share. We provide non-GAAP diluted earnings per share. The non-GAAP diluted earnings per share amount is calculated based on our non-GAAP net income divided by the weighted-average diluted shares outstanding for the period.

Barracuda Networks, Inc.

Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA

(in thousands)

(Unaudited)

	Three months ended February 28,						Twelve months ended February 28,
	2014			2013			2014			2013
GAAP net income (loss) attributable to Barracuda Networks, Inc.	$	3,046		$	(1,758	)	$	(3,626	)	$	(7,391	)
Deferred revenue, end of period		313,157			261,243			313,157			261,243
Less: Deferred revenue, beginning of period		(298,823	)		(250,163	)		(261,243	)		(217,209	)
Less: Deferred costs, end of period		(50,279	)		(39,470	)		(50,279	)		(39,470	)
Deferred costs, beginning of period		48,270			37,299			39,470			29,254
Other (income) expense, net		(380	)		313			(51	)		839
Benefit for income taxes		(3,830	)		(2,715	)		(6,565	)		(5,084	)
Acquisition and other non-recurring charges		391			3,298			1,845			9,793
Stock-based compensation		3,286			2,430			10,837			8,787
Amortization of intangible assets		972			1,363			5,354			5,518
Depreciation expense		1,022			964			4,007			2,815
Adjusted EBITDA (1)	$	16,832		$	12,804		$	52,906		$	49,095

(1) Adjusted EBITDA. We define adjusted EBITDA as net income (loss) plus increases in deferred revenue and increases in the associated deferred costs, plus non-cash and non-operating charges which include: (i) other (income) expense, net, (ii) provision (benefit) for income taxes, (iii) acquisition and other non-recurring charges, (iv) stock-based compensation expense, (v) amortization of intangible assets, and (vi) depreciation expense, including certain losses on disposal of fixed assets. We believe adjusted EBITDA provides an indication of profitability from our operations, and provides a consistent measure of our performance from period to period.

Barracuda Networks, Inc.

Reconciliation of GAAP Cash Flows from Operating Activities to Free Cash Flow

(in thousands)

(Unaudited)

	Three months ended February 28,						Twelve months ended February 28,
	2014			2013			2014			2013
GAAP cash flows from operating activities	$	19,534		$	8,764		$	42,210		$	39,375
Purchase of property and equipment		(1,759	)		(1,671	)		(7,616	)		(4,722	)
Acquisition and other non-recurring charges (1)		902			3,036			4,818			6,432
Adjusted free cash flow (2)	$	18,677		$	10,129		$	39,412		$	41,085

(1) Acquisition and Other Non-Recurring Related Adjustments. We exclude the cash flow impact resulting from acquisitions and other non-recurring charges, which we do not expect to recur in our continuing operating results. We believe that adjusting for these cash outflows allows us to better compare results from period to period in order to assess the ongoing operating results of our business. The cash flows include: (i) payments associated with our CEO transition, (ii) payments associated with an internal investigation of export control compliance, and (iii) legal, accounting and advisory fee payments, to the extent associated with acquisitions, as well as contingent consideration payments under the terms of certain acquisition agreements.

(2) Adjusted Free Cash Flow. We define free cash flow as cash flows from operating activities less the purchases of property and equipment plus the cash flow effect of acquisition and other non-recurring charges. We believe that adjusting free cash flow to exclude these charges allows us to better compare results from period to period in order to assess the ongoing free cash flow of our business. We believe free cash flow is an important liquidity measure that reflects the cash generated by the business after the purchase of property and equipment that can then be used for, among other things, strategic acquisitions, investments in the business and funding ongoing operations.

Barracuda Networks, Inc.

Reconciliation of GAAP Revenue to Gross Billings

(in thousands)

(Unaudited)

	Three months ended February 28,						Twelve months ended February 28,
	2014			2013			2014			2013
GAAP Revenue	$	60,334		$	52,471		$	233,787		$	198,931
Total deferred revenue, end of period		313,157			261,243			313,157			261,243
Less: total deferred revenue, beginning of period		(298,823	)		(250,163	)		(261,243	)		(217,209	)
Deferred revenue adjustments		7,371			5,974			24,297			21,260
Total change in deferred revenue and adjustments		21,705			17,054			76,211			65,294
Gross billings (1)	$	82,039		$	69,525		$	309,998		$	264,225

(1) Gross Billings. We define gross billings as total revenue plus the change in deferred revenue and other adjustments, which primarily consist of returns and reserves with respect to the 30-day right of return we provide to customers, as well as rebates for certain channel partner activities. We believe that gross billings provides insight into the sales of our solutions and performance of our business.

Barracuda Networks, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

	Three months ended February 28,						Twelve months ended February 28,
	2014			2013			2014			2013
Operating activities
Consolidated net income (loss)	$	2,846		$	(1,940	)	$	(4,387	)	$	(8,185	)
Adjustments to reconcile consolidated net income (loss) to net cash provided by operating activities:
Depreciation and amortization		1,994			2,327			9,109			8,333
Stock-based compensation		3,286			2,430			10,837			8,787
Excess tax benefits from equity incentive plan		(1,139	)		—			(1,513	)		(1,687	)
Loss (gain) on disposal of property and equipment		8			(53	)		304			60
Loss (gain) on sale of marketable securities		(61	)		25			(61	)		25
Deferred income taxes		(4,293	)		(13,739	)		(12,633	)		(13,374	)
Changes in operating assets and liabilities:
Accounts receivable		910			(1,703	)		(3,631	)		(1,582	)
Inventory		718			(24	)		(509	)		278
Income taxes, net		149			10,582			2,696			4,403
Deferred costs		(2,008	)		(2,169	)		(10,809	)		(10,214	)
Other current assets		(473	)		1,832			(456	)		(60	)
Other non-current assets		(275	)		141			108			(61	)
Accounts payable		3,490			5,698			1,183			3,206
Accrued payroll and related benefits		1,217			(2,978	)		(212	)		2,791
Other accrued liabilities		(1,229	)		(2,772	)		(18	)		2,349
Other long-term liabilities		74			26			405			114
Deferred revenue		14,320			11,081			51,797			44,192
Net cash provided by operating activities		19,534			8,764			42,210			39,375
Investing activities
Proceeds from sales of marketable securities		1,516			187			1,516			575
Purchase of property and equipment		(1,759	)		(1,671	)		(7,616	)		(4,722	)
Purchase of intangible assets		—			—			(28	)		—
Purchase of investment in non-marketable equity and debt securities		—			—			(310	)		—
Business combinations, net of cash acquired		—			—			(8,475	)		(4,357	)
Net cash used in investing activities		(243	)		(1,484	)		(14,913	)		(8,504	)
Financing activities
Net proceeds from initial public offering		(2,517	)		—			75,490			—
Proceeds from issuance of common stock		(1,720	)		(249	)		209			2,203
Proceeds from issuance of Series B preferred stock, net of issuance costs		—			—			—			125,732
Issuance costs on line of credit		—			—			—			(313	)
Repurchase of common stock		—			—			(723	)		(127,613	)
Dividends paid		—			—			(1,419	)		(128,385	)
Repayment of employee loans, net of loans extended		2,460			—			3,655			—
Excess tax benefits from equity incentive plan		1,139			—			1,513			1,687
Purchase of non-controlling interest		—			(200	)		—			(200	)
Repayment of note payable		(56	)		(83	)		(222	)		(222	)
Net cash provided by (used in) financing activities		(694	)		(532	)		78,503			(127,111	)
Effect of exchange rate changes on cash and cash equivalents		33			(100	)		(16	)		(172	)
Net increase (decrease) in cash and cash equivalents		18,630			6,648			105,784			(96,412	)
Cash and cash equivalents at beginning of period		117,249			23,447			30,095			126,507
Cash and cash equivalents at end of period	$	135,879		$	30,095		$	135,879		$	30,095