Exhibit 99.01
Imperva Announces Record Second Quarter 2015 Financial Results
| • | Total revenue of $53.5 million, up 39%year-over-year |
| • | Services revenue growth of 35% was driven by the 98%year-over-year increase in subscription revenue |
| • | Combined product and subscription revenue increased 57%year-over-year |
| • | Number of deals booked valued over $100,000 increased 31%year-over-year |
| • | Total deferred revenue as of June 30, 2015 increased 34%year-over-year to $86.1 million driven by 47% increase in short-term deferred revenue |
| • | Increasing FY15 guidance |
Redwood Shores, Calif. – August 6, 2015 –Imperva, Inc. (NYSE: IMPV), committed to protectingbusiness-critical data and applications in the cloud andon-premises, today announced financial results for the second quarter ended June 30, 2015.
“Our strong second quarter results reflect the ongoing high global demand for ourbest-of-breed discovery, protection and compliance solutions, as well as traction from our improvedgo-to-market strategy,” stated Anthony Bettencourt, President and Chief Executive Officer of Imperva. “Our ability to exceed guidance across all key operating metrics was driven by record growth of both product and subscription revenue, as well as ongoing strength with deals greater than $100,000. Imperva is well positioned to maintain momentum as our message of helping enterprises protect business critical data and applications continues to resonate with enterprises globally.”
Second Quarter 2015 Financial Highlights
| • | Revenue: Total revenue for the second quarter of 2015 was $53.5 million, an increase of 39% compared to $38.4 million in the second quarter of 2014. Within total revenue, product revenue was $23.9 million, up 44% compared to $16.6 million in the same period last year. Services revenue increased 35%year-over-year to $29.6 million and accounted for 55% of total revenue. Within services revenue, overall subscription revenue grew 98% to $10.4 million, compared to the second quarter of 2014. Combined product and subscriptions revenue was $34.3 million, an increase of 57% compared to $21.8 million in the second quarter of 2014. |
| • | Operating Profit (Loss): Operating loss as reported in accordance with U.S. generally accepted accounting principles (GAAP) was $(17.3) million for the second quarter compared to a loss of $(15.3) million during the second quarter in 2014. GAAP results includedstock-based compensation of $14.6 million for the second quarter of 2015 and $8.7 million for the second quarter of 2014. GAAP results also included amortization of purchased intangibles of $0.4 million for each of the second quarter of 2015 and 2014.Non-GAAP operating loss for the second quarter was $(2.3) million, compared to a loss of $(6.2) million during the same period in 2014, excluding the above mentioned charges. |
| • | Net Profit (Loss): GAAP net loss attributable to Imperva stockholders for the second quarter was $(17.3) million, or $(0.57) per share based on 30.3 million weighted average shares outstanding. This compares to GAAP net loss attributable to Imperva stockholders of $(15.4) million, or $(0.60) per share based on 25.8 million weighted average shares outstanding in theprior-year period. |
Non-GAAP net loss attributable to Imperva stockholders for the second quarter of 2015 was $(2.4) million, or $(0.08) per share based on 30.3 million weighted average shares outstanding, excluding the above mentioned charges. This compares tonon-GAAP net loss attributable to Imperva stockholders of $(6.4) million, or $(0.25) per share based on 25.8 million weighted average diluted shares outstanding in theprior-year period.
A reconciliation of GAAP tonon-GAAP financial measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading“Non-GAAP Financial Measures.”
| • | Balance Sheet: As of June 30, 2015, Imperva had cash, cash equivalents and investments of $244.7 million. Total deferred revenue of $86.1 million increased 34% compared to $64.1 million as of June 30, 2014. Short-term deferred revenue of $62.0 million increased 47% compared to $42.2 million as of June 30, 2014. |
Second Quarter and Recent Operating Highlights
| • | During the second quarter of 2015, Imperva booked 115 deals with a value over $100,000, an increase of 31% compared to 88 deals during the second quarter of last year. |
| • | During the second quarter of 2015, Imperva added 190 new customers compared to 175 during the second quarter of last year. Imperva now has over 4,100 customers in more than 90 countries around the world. |
| • | Imperva announced the availability of Imperva SecureSphere Web Application Firewall (WAF) on Amazon Web Services (AWS) GovCloud (US). |
| • | Imperva announced the release of a new, integrated architecture – Imperva Skyfence, provisioned on Imperva Incapsula – for managing access to cloud data and applications that delivers high levels of security, performance and availability. |
| • | Imperva announced the release of Imperva Skyfence Gateway v4.5 with Data Leak Prevention (DLP), a cloud security capability that is designed to enable customers to control, inreal-time, sensitive and regulated data stored in the cloud. |
Business Outlook
The followingforward-looking statements reflect expectations as of August 6, 2015. Results may be materially different and could be affected by the factors detailed in this press release and in recent Imperva SEC filings.
Third Quarter Expectations – Ending September 30, 2015
Imperva expects total revenue for the third quarter of 2015 to be in the range of $55.0 million to $57.0 million, representing growth in the range of 29% to 34% compared to the same period in 2014. The company expects in the third quarter of 2015non-GAAP gross margins of approximately 80%. Further, Imperva expects in the third quarter of 2015non-GAAP operating loss to be in the range of $(1.5) million to $(1.0) million andnon-GAAP net loss to be in the range of $(2.0) million to $(1.5) million, or a loss of $(0.06) to $(0.05) per share based on approximately 31.0 million weighted average shares, which excludesstock-based compensation and amortization of purchased intangibles.
Full Year Expectations – Ending December 31, 2015
Imperva expects total revenue for 2015 to be in the range of $215.0 million to $217.0 million, or up 31% to 32% compared to 2014. Imperva expects 2015non-GAAP gross margins of approximately 80%. Further, the company expects 2015non-GAAP operating loss to be in the range of $(12.0) million to $(11.0) million andnon-GAAP net loss to be in the range of $(14.0) million to $(13.0) million, or a loss of $(0.46) to $(0.44) per share based on approximately 30.2 million weighted average shares, which excludesstock-based compensation and amortization of purchased intangibles. Imperva expects capital expenditures for the full year to be in the range of $6.0 million to $7.0 million. Finally, the company expects to generate positive cash flows from operations in 2015.
Quarterly Conference Call
Imperva will host a conference call today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to review the company’s financial results for the second quarter ended June 30, 2015. To access this call, dial(877) 681-3378 for the U.S. and Canada or(719) 325-4804 for international callers with conference ID #1389189. A live webcast of the conference call will be accessible from the investors page of the Imperva website atwww.imperva.com, and a recording will be archived and accessible atwww.imperva.com. An audio replay of this conference call will also be available through August 20, 2015, by dialing(877) 870-5176 for the U.S. and Canada, or(858) 384-5517 for international callers and entering passcode #1389189.
Non-GAAP Financial Measures
Imperva reports all financial information required in accordance with U.S. generally accepted accounting principles (GAAP). To supplement the Imperva unaudited condensed consolidated financial statements presented in accordance with GAAP, Imperva uses certainnon-GAAP measures of financial performance. The presentation of thesenon-GAAP financial measures is not intended to be considered in isolation from, as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and may be different fromnon-GAAP financial measures used by other companies. In addition, thesenon-GAAP measures have limitations in that they do not reflect all of the amounts associated with the results of Imperva operations as determined in accordance with GAAP. Thenon-GAAP financial measures used by Imperva include historicalnon-GAAP net loss andnon-GAAP basic and diluted loss per share. Thesenon-GAAP financial measures excludestock-based compensation, amortization of purchased intangibles andacquisition-related expenses from the Imperva unaudited condensed consolidated statement of operations.
For a description of these items, including the reasons why management adjusts for them, and reconciliations of thesenon-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section of the accompanying tables titled “Use ofNon-GAAP Financial Information” as well as the related tables that precede it. Imperva may consider whether other significantnon-recurring items that arise in the future should also be excluded in calculating thenon-GAAP financial measures it uses.
Imperva believes that thesenon-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding the performance of Imperva by excluding certain items that may not be indicative of the company’s core business, operating results or future outlook. Imperva management uses, and believes that investors benefit from referring to, thesenon-GAAP financial measures in assessing
operating results of Imperva, as well as when planning, forecasting and analyzing future periods. Thesenon-GAAP financial measures also facilitate comparisons of the performance of Imperva to prior periods.
Forward Looking Statements
This press release containsforward-looking statements, including without limitation those regarding the Imperva “Business Outlook” (“Third Quarter Expectations – Ending September 30, 2015” and “Full Year Expectations – Ending December 31, 2015”); and Imperva’s beliefs related to ongoing high global demand for its discovery, protection and compliance solutions, traction from its go-to-market strategy and strength with deals greater than $100,000, as well as Imperva’s expected momentum resulting from its message of helping enterprises protect business critical data and applications. Theseforward-looking statements are subject to material risks and uncertainties that may cause actual results to differ substantially from expectations. Investors should consider important risk factors, which include: the risk that demand for our cyber security solutions may not increase and may decrease; the risk that we may not timely introduce new products or versions of our products and that they may not be accepted by the market; the risk that competitors may be perceived by customers to be better positioned to help handle cyber security threats and protect their businesses from major risk; the risk that the growth of Imperva may be lower than anticipated; and other risks detailed under the caption “Risk Factors” in the company’sForm 10-Q filed with the Securities and Exchange Commission, or the SEC, on May 11, 2015 and the company’s other SEC filings. You can obtain copies of the company’s SEC filings on the SEC’s website atwww.sec.gov.
The foregoing information represents the company’s outlook only as of the date of this press release, and Imperva undertakes no obligation to update or revise anyforward-looking statements, whether as a result of new information, new developments or otherwise.
About Imperva
Imperva® (NYSE:IMPV), is a leading provider of cyber security solutions that protectbusiness-critical data and applications. The company’s SecureSphere, Incapsula and Skyfence product lines enable organizations to discover assets and risks, protect information wherever it lives – in the cloud andon-premises – and comply with regulations. The Imperva Application Defense Center, a research team comprised of some of the world’s leading experts in data and application security, continually enhances Imperva products withup-to-the minute threat intelligence, and publishes reports that provide insight and guidance on the latest threats and how to mitigate them. Imperva is headquartered in Redwood Shores, California. Learn more:www.imperva.com, ourblog, onTwitter.
© 2015 Imperva, Inc. All rights reserved. Imperva, the Imperva logo, SecureSphere, Incapsula and Skyfence are trademarks of Imperva, Inc. and its subsidiaries.
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IMPERVA, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(On a GAAP basis)
(In thousands, except per share amounts)
(Unaudited)
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| Jun 30 2015 | Jun 30 2014 | Jun 30 2015 | Jun 30 2014 | |||||||||||||
Net revenue: | ||||||||||||||||
Products and license | $ | 23,895 | $ | 16,586 | $ | 40,999 | $ | 28,557 | ||||||||
Services | 29,583 | 21,856 | 57,236 | 41,401 | ||||||||||||
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Total net revenue | 53,478 | 38,442 | 98,235 | 69,958 | ||||||||||||
Cost of revenue(1, 2): | ||||||||||||||||
Products and license | 2,796 | 2,075 | 4,794 | 3,807 | ||||||||||||
Services | 8,770 | 6,959 | 17,102 | 12,979 | ||||||||||||
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Total cost of revenue | 11,566 | 9,034 | 21,896 | 16,786 | ||||||||||||
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Gross profit | 41,912 | 29,408 | 76,339 | 53,172 | ||||||||||||
Operating expenses(1, 2): | ||||||||||||||||
Research and development | 13,112 | 11,618 | 25,790 | 21,579 | ||||||||||||
Sales and marketing | 34,071 | 25,065 | 65,324 | 48,100 | ||||||||||||
General and administrative | 11,637 | 7,621 | 21,380 | 16,026 | ||||||||||||
Amortization of purchased intangibles | 352 | 362 | 704 | 566 | ||||||||||||
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Total operating expenses | 59,172 | 44,666 | 113,198 | 86,271 | ||||||||||||
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Loss from operations | (17,260 | ) | (15,258 | ) | (36,859 | ) | (33,099 | ) | ||||||||
Other expense, net | (224 | ) | (215 | ) | (304 | ) | (369 | ) | ||||||||
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Loss before provision (benefit) for income taxes | (17,484 | ) | (15,473 | ) | (37,163 | ) | (33,468 | ) | ||||||||
Provision (Benefit) for income taxes | (160 | ) | (35 | ) | 191 | (406 | ) | |||||||||
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Net loss | (17,324 | ) | (15,438 | ) | (37,354 | ) | (33,062 | ) | ||||||||
Add: Loss attributable to noncontrolling interest | — | — | — | 213 | ||||||||||||
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Net loss attributable to Imperva, Inc. stockholders | $ | (17,324 | ) | $ | (15,438 | ) | $ | (37,354 | ) | $ | (32,849 | ) | ||||
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Net loss per share of common stock attributable to Imperva, Inc. stockholders, basic and diluted | $ | (0.57 | ) | $ | (0.60 | ) | $ | (1.30 | ) | $ | (1.29 | ) | ||||
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Shares used in computing net loss per share of common stock, basic and diluted | 30,287 | 25,782 | 28,639 | 25,545 | ||||||||||||
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(1) Stock-based compensation expense as included in above: | ||||||||||||||||
Cost of revenue | $ | 963 | $ | 529 | $ | 1,877 | $ | 903 | ||||||||
Research and development | 3,483 | 2,190 | 6,811 | 3,982 | ||||||||||||
Sales and marketing | 5,045 | 3,209 | 9,510 | 5,639 | ||||||||||||
General and administrative | 5,102 | 2,737 | 8,941 | 4,807 | ||||||||||||
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Total stock-based compensation expense | $ | 14,593 | $ | 8,665 | $ | 27,139 | $ | 15,331 | ||||||||
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(2) Acquisition-related expense as included in above: | ||||||||||||||||
Cost of revenue | $ | — | $ | — | $ | — | $ | 156 | ||||||||
General and administrative | — | — | — | 1,243 | ||||||||||||
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Total acquisition-related expense | $ | — | $ | — | $ | — | $ | 1,399 | ||||||||
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IMPERVA, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
| As of Jun 30 2015 | As of Dec 31 2014 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 158,569 | $ | 68,096 | ||||
Short-term investments | 86,123 | 41,624 | ||||||
Restricted cash, current | 77 | 62 | ||||||
Accounts receivable, net | 40,085 | 47,446 | ||||||
Inventory | 993 | 259 | ||||||
Deferred tax assets | 452 | 408 | ||||||
Prepaid expenses and other current assets | 4,934 | 3,927 | ||||||
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Total current assets | 291,233 | 161,822 | ||||||
Property and equipment, net | 8,182 | 7,618 | ||||||
Goodwill | 34,972 | 34,972 | ||||||
Purchased intangible assets, net | 8,695 | 9,399 | ||||||
Severance pay fund | 4,507 | 3,980 | ||||||
Restricted cash | 1,665 | 1,665 | ||||||
Deferred tax assets | 329 | 329 | ||||||
Other assets | 848 | 860 | ||||||
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Total assets | $ | 350,431 | $ | 220,645 | ||||
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Liabilities and stockholders’ equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 3,869 | $ | 5,376 | ||||
Accrued compensation and benefits | 17,521 | 15,749 | ||||||
Accrued and other current liabilities | 13,605 | 6,376 | ||||||
Deferred revenue | 62,022 | 56,077 | ||||||
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Total current liabilities | 97,017 | 83,578 | ||||||
Other liabilities | 3,467 | 10,408 | ||||||
Deferred revenue | 24,092 | 25,098 | ||||||
Accrued severance pay | 4,774 | 4,318 | ||||||
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Total liabilities | 129,350 | 123,402 | ||||||
Stockholders’ equity: | ||||||||
Common stock | 3 | 2 | ||||||
Additional paid-in capital | 417,064 | 256,388 | ||||||
Accumulated deficit | (195,012 | ) | (157,658 | ) | ||||
Accumulated other comprehensive loss | (974 | ) | (1,489 | ) | ||||
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Total Imperva, Inc. stockholders’ equity | 221,081 | 97,243 | ||||||
Noncontrolling interest | — | — | ||||||
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Total stockholders’ equity | 221,081 | 97,243 | ||||||
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Total liabilities and stockholders’ equity | $ | 350,431 | $ | 220,645 | ||||
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IMPERVA, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
| For the Six Months Ended | ||||||||
| Jun 30 2015 | Jun 30 2014 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (37,354 | ) | $ | (33,062 | ) | ||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||
Depreciation and amortization | 2,184 | 1,688 | ||||||
Stock-based compensation | 27,139 | 15,331 | ||||||
Amortization of acquired intangible assets | 704 | 566 | ||||||
Amortization of premiums/accretion of discounts on short-term investments | 260 | 217 | ||||||
Excess tax benefits from share-based compensation | (43 | ) | — | |||||
Other | (48 | ) | (1 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable, net | 7,361 | 10,842 | ||||||
Inventory | (734 | ) | 188 | |||||
Prepaid expenses and other assets | (995 | ) | 1,207 | |||||
Accounts payable | (1,420 | ) | (928 | ) | ||||
Accrued compensation and benefits | 1,772 | (884 | ) | |||||
Accrued and other liabilities | 997 | (88 | ) | |||||
Severance pay, net | (71 | ) | 234 | |||||
Deferred revenue | 4,939 | 1,090 | ||||||
Deferred tax assets | (44 | ) | (33 | ) | ||||
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Net cash provided by (used in) operating activities | 4,647 | (3,633 | ) | |||||
Cash flows from investing activities: | ||||||||
Purchase of short-term investments | (64,025 | ) | (11,615 | ) | ||||
Proceeds from sales/maturities of short-term investments | 19,169 | 13,585 | ||||||
Acquisitions, net of cash acquired | — | (12,083 | ) | |||||
Net purchases of property and equipment | (2,835 | ) | (2,845 | ) | ||||
Change in restricted cash | (15 | ) | (346 | ) | ||||
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Net cash used in investing activities | (47,706 | ) | (13,304 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from follow-on public offering, net of offering costs | 127,854 | — | ||||||
Proceeds from issuance of common stock, net of repurchases | 9,789 | 4,517 | ||||||
Excess tax benefits from share-based compensation | 43 | — | ||||||
Shares withheld for tax withholding on vesting of restricted stock units | (4,203 | ) | (1,294 | ) | ||||
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Net cash provided by financing activities | 133,483 | 3,223 | ||||||
Effect of exchange rate changes on cash and cash equivalents | 49 | — | ||||||
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Net increase (decrease) in cash and cash equivalents | 90,473 | (13,714 | ) | |||||
Cash and cash equivalents at beginning of period | 68,096 | 76,704 | ||||||
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Cash and cash equivalents at end of period | $ | 158,569 | $ | 62,990 | ||||
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IMPERVA, INC. AND SUBSIDIARIES
(Reconciliation of GAAP to Non-GAAP Measures)
(In thousands, except per share amounts)
(Unaudited)
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| Jun 30 2015 | Jun 30 2014 | Jun 30 2015 | Jun 30 2014 | |||||||||||||
GAAP operating loss | $ | (17,260 | ) | $ | (15,258 | ) | $ | (36,859 | ) | $ | (33,099 | ) | ||||
Plus: | ||||||||||||||||
Stock-based compensation expense | 14,593 | 8,665 | 27,139 | 15,331 | ||||||||||||
Acquisition-related expense | — | — | — | 1,399 | ||||||||||||
Amortization of purchased intangibles | 352 | 362 | 704 | 566 | ||||||||||||
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Non-GAAP operating loss | $ | (2,315 | ) | $ | (6,231 | ) | $ | (9,016 | ) | $ | (15,803 | ) | ||||
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GAAP net loss attributable to Imperva, Inc. stockholders | $ | (17,324 | ) | $ | (15,438 | ) | $ | (37,354 | ) | $ | (32,849 | ) | ||||
Plus: | ||||||||||||||||
Stock-based compensation expense | 14,593 | 8,665 | 27,139 | 15,331 | ||||||||||||
Acquisition-related expense | — | — | — | 1,399 | ||||||||||||
Amortization of purchased intangibles | 352 | 362 | 704 | 566 | ||||||||||||
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Non-GAAP net loss | $ | (2,379 | ) | $ | (6,411 | ) | $ | (9,511 | ) | $ | (15,553 | ) | ||||
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Weighted average shares outstanding, basic and diluted | 30,287 | 25,782 | 28,639 | 25,545 | ||||||||||||
Non-GAAP net loss, basic and diluted | $ | (0.08 | ) | $ | (0.25 | ) | $ | (0.33 | ) | $ | (0.61 | ) | ||||
Use ofNon-GAAP Financial Information
In addition to the reasons stated above, which are generally applicable to each of the items Imperva excludes from itsnon-GAAP financial measures, Imperva believes it is appropriate to exclude or give effect to certain items for the following reasons:
Stock-Based Compensation: When evaluating the performance of its consolidated results, Imperva does not considerstock-based compensation charges. Likewise, the Imperva management team excludesstock-based compensation expense from its operating plans. In contrast, the Imperva management team is held accountable forcash-based compensation and such amounts are included in its operating plans. Further, when considering the impact of equity award grants, Imperva places a greater emphasis on overall stockholder dilution rather than the accounting charges associated with such grants.
Acquisition-Related Charges:GAAP requires expenses to be recognized for various types of events associated with a business acquisition, such as legal, accounting, advisory and other deal related expenses. These expenses vary significantly and are unique to each transaction. Additionally, Imperva does not acquire businesses on a predictable cycle. Imperva records these acquisition and other transaction costs as operating expenses when they are incurred. Imperva believes that these acquisition and other transaction costs affect comparability from period to period and that investors benefit from a supplementalnon-GAAP financial measure that excludes these expenses.
Imperva excludesstock-based compensation andacquisition-related charges from itsnon-GAAP financial measures primarily because they are expenses that it does not consider part of ongoing operating results when assessing the performance of its business, and the exclusion of these expenses facilitates the comparison of results and business outlook for future periods with results for prior periods in order to better understand the long term performance of its business.
Amortization of Purchased Intangibles. When analyzing the operating performance of an acquired entity, Imperva’s management focuses on the total return provided by the investment (i.e., operating profit generated from the acquired entity as compared to the purchase price paid) without taking into consideration any allocations made for accounting purposes. Because the purchase price for an acquisition necessarily reflects the accounting value assigned to intangible assets (including acquired technology and goodwill), when analyzing the operating performance of an acquisition in subsequent periods, Imperva’s management excludes the GAAP impact of acquired intangible assets to its financial results. Imperva believes that such an approach is useful in understanding thelong-term return provided by an acquisition and that investors benefit from a supplementalnon-GAAP financial measure that excludes the accounting expense associated with acquired intangible assets.
In addition, in accordance with GAAP, Imperva generally recognizes expenses forinternally-developed intangible assets as they are incurred until technological feasibility is reached, notwithstanding the potential future benefit such assets may provide. Unlikeinternally-developed intangible assets, however, and also in accordance with GAAP, Imperva generally capitalizes the cost of acquired intangible assets and recognizes that cost as an expense over the useful lives of the assets acquired (other than goodwill, which is not amortized, as required under GAAP). As a result of their GAAP treatment, there is an inherent lack of comparability between the financial performance ofinternally-developed intangible assets and acquired intangible assets. Accordingly, Imperva believes it is useful to provide, as a supplement to its GAAP operating results, anon-GAAP financial measure that excludes the amortization of acquired intangibles.
Investor Relations Contact Information
Seth Potter
646.277.1230
IR@imperva.com
Seth.Potter@icrinc.com