Imperva Announces First Quarter 2013 Financial Results

Imperva Announces First Quarter 2013 Financial Results

  • Total revenue of $28.6 million during the first quarter, up 33% year-over-year

  • First quarter services revenue growth of 52% was driven by the 205% increase in subscription revenue

  • New customers increased 66% year-over-year to 148 during the first quarter

  • GAAP EPS loss of $0.25; Non-GAAP EPS loss of $0.13

  • Total deferred revenue at March 31, 2013 increased 33% year-over-year to $46.6 million

REDWOOD SHORES, Calif.--(BUSINESS WIRE)-- Imperva, Inc. (NYS: IMPV) , a pioneer and leader of a new category of business security solutions for critical applications and high-value business data in the data center, today announced financial results for the first quarter ended March 31, 2013.

"The investments being made to our global sales and support infrastructure are beginning to pay off, evidenced by the 66% year-over-year increase in new customers during the first quarter," stated Shlomo Kramer, President and Chief Executive Officer of Imperva. "Our results highlight the underlying strength of our technology, our comprehensive, fully-integrated solution, and our global footprint as we accelerated our investments in the business to take advantage of the demand we are seeing worldwide. Looking forward, we see numerous growth opportunities to expand our geographic reach and introduce additional products to enhance our offering and extend our leadership position."


First Quarter 2013 Financial Highlights

  • Revenue: Total revenue for the first quarter of 2013 was $28.6 million, an increase of 33% compared to $21.5 million in the first quarter of 2012. Within total revenue, product revenue was $14.2 million, an increase of 17% compared to the first quarter of 2012. Services revenue increased 52% year-over-year to $14.4 million and accounted for 50% of total revenue, up from 44% in the first quarter of 2012. Within services revenue, overall subscription revenue grew 205% to $2.0 million, compared to the first quarter of 2012. Combined product and subscriptions revenue, a leading indicator of the strength of our business, grew 27% to $16.2 million, compared to the first quarter of 2012.

  • Operating Profit (Loss): Operating loss as reported in accordance with U.S. generally accepted accounting principles (GAAP) was $(6.0) million for the first quarter compared to a loss of $(3.2) million during the first quarter in 2012. GAAP results included stock-based compensation expense of $2.9 million for the first quarter of 2013 and $0.7 million for the first quarter of 2012. Non-GAAP operating loss for the first quarter was $(3.1) million, compared to a loss of $(2.5) million during the same period in 2012, excluding the above mentioned charges.

  • Net Profit (Loss): GAAP net loss attributable to Imperva stockholders for the first quarter was $(6.1) million, or $(0.25) per share based on 23.9 million weighted average diluted shares outstanding. This compares to GAAP net loss attributable to Imperva stockholders of $(3.3) million, or $(0.15) per share based on 22.3 million weighted average shares outstanding in the prior-year period.

    Non-GAAP net loss attributable to Imperva stockholders for the first quarter of 2013 was $(3.2) million, or $(0.13) per share based on 23.9 million weighted average diluted shares outstanding, excluding the above mentioned charges. This compares to non-GAAP net loss attributable to Imperva stockholders of $(2.6) million, or $(0.12) per share based on 22.3 million weighted average diluted shares outstanding in the prior-year period.

    Both GAAP and non-GAAP profit and loss per share attributable to Imperva stockholders for the first quarter ended March 31, 2013 adjust for the loss attributable to Imperva's non-controlling interest in Incapsula.

  • Balance Sheet: As of March 31, 2013, Imperva had cash, cash equivalents and investments of $109.9 million. Total deferred revenue of $46.6 million increased 33% compared to $35.2 million as of March 31, 2012.

First Quarter and Recent Operating Highlights

  • During the first quarter of 2013, Imperva added 148 new customers, up 66% compared to the first quarter of last year. Imperva now has over 2,400 customers in more than 60 countries around the world.

  • During the first quarter of 2013, Imperva booked 64 deals with a value over $100,000, compared to 57 deals in the first quarter of last year.

  • Imperva announced the release of SecureSphere 10.0, unveiled ThreatRadar Community Defense, the first cross-site information security intelligence service and enriched its File and Database Security products with SecureSphere Directory Services Monitoring (DSM), which provides the ability to audit, alert and report changes made in Active Directory.

  • Imperva announced that it extended the fraud prevention capabilities of the Imperva SecureSphere Web Application Firewall and ThreatRadar Fraud Prevention to include integration with ReputationManager from iovation, a provider of device reputation protection against online fraud and abuse.

  • Imperva announced it was named to CRN's 2013 Partner Program Guide and was awarded a 5-Star partner rating.

Business Outlook

The following forward-looking statements reflect expectations as of May 2, 2013. Results may be materially different and could be affected by the factors detailed in this press release and in recent Imperva SEC filings.

Second Quarter Expectations - Ending June 30, 2013

Imperva expects total revenue for the second quarter of 2013 to be in the range of $31.0 million to $31.5 million, representing growth in the range of 26% to 28% compared to the same period in 2012. The company expects in the second quarter of 2013 non-GAAP gross margins of approximately 80%. Further, Imperva expects in the second quarter of 2013 non-GAAP operating loss to be in the range of $(0.5) million to $(1.0) million and non-GAAP net loss attributable to Imperva stockholders to be in the range of $(0.75) million to $(1.25) million, or a loss of $(0.03) to $(0.05) per share, which excludes stock-based compensation expense.

Full Year Expectations -Ending December 31, 2013

Imperva expects total revenue for 2013 to be in the range of $133.0 million to $137.0 million, or up 28% to 31% compared to 2012. Imperva expects 2013 non-GAAP gross margins of approximately 80%. Further, the company expects 2013 non-GAAP operating profit to be in the range of $1.0 million to $3.0 million and non-GAAP net profit attributable to Imperva stockholders to be in the range of $0.5 million to $2.5 million, or $0.02 to $0.09 per share, which excludes stock-based compensation expense. Imperva expects capital expenditures for the full year to be in the range of $2.5 million to $3.5 million. Finally, the company expects to continue to generate positive cash flows from operations in 2013.

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 first quarter ended March 31, 2013. To access this call, dial 888.801.6497 for the U.S. and Canada or 913.312.1403 for international callers with conference ID #6284652. A live webcast of the conference call will be accessible from the investors page of Imperva's website at www.imperva.com, and a recording will be archived and accessible at www.imperva.com. An audio replay of this conference call will also be available through May 16, 2013, by dialing 877.870.5176 for the U.S. and Canada, or 858.384.5517 for international callers and entering passcode #6284652.

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 certain non-GAAP measures of financial performance. The presentation of these non-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 from non-GAAP financial measures used by other companies. In addition, these non-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. The non-GAAP financial measures used by Imperva include historical non-GAAP net loss and non-GAAP basic and diluted loss per share. These non-GAAP financial measures exclude stock-based compensation 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 these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section of the accompanying tables titled "Use of Non-GAAP Financial Information" as well as the related tables that precede it. Imperva may consider whether other significant non-recurring items that arise in the future should also be excluded in calculating the non-GAAP financial measures it uses.

Imperva believes that these non-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, these non-GAAP financial measures in assessing operating results of Imperva, as well as when planning, forecasting and analyzing future periods. These non-GAAP financial measures also facilitate comparisons of the performance of Imperva to prior periods.

Forward Looking Statements

This press release contains forward-looking statements, including without limitation those regarding Imperva's "Business Outlook" ("Second Quarter Expectations - Ending June 30, 2013" and "Full Year Expectations - Ending December 31, 2013"); Imperva's belief that quarterly and annual combined product and subscriptions revenue are a leading indicator of the strength of its business; the company's belief that the investments being made to its global sales and support infrastructure will pay off; Imperva's beliefs regarding worldwide demand and that its investments in its business, the underlying strength of its technology, its comprehensive, fully-integrated solution, and its global footprint will enable it to take advantage of such demand; and the company's belief that there are numerous growth opportunities to expand its geographic reach and introduce additional products to enhance its offering and extend its leadership position. These forward-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 business 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 business 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's Form 10-K filed with the Securities and Exchange Commission, or the SEC, on March 15, 2013 and the company's other SEC filings. You can obtain copies of the company's SEC filings on the SEC's website at www.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 any forward-looking statements, whether as a result of new information, new developments or otherwise.

About Imperva

Imperva is a pioneer and leader of a new category of business security solutions for critical applications and high-value business data in the data center. Imperva's award-winning solutions protect against data theft, insider abuse, and fraud while streamlining regulatory compliance by monitoring and controlling data usage and business transactions across the data center, from storage in a database or on a file server to consumption through applications. With over 2,400 end-user customers in more than 60 countries and thousands of organizations protected through cloud-based deployments, securing your business with Imperva puts you in the company of the world's leading organizations. For more information, visit www.imperva.com, follow us on Twitter or visit our blog.

© 2013 Imperva, Inc. All rights reserved. Imperva and the Imperva logo are trademarks of Imperva, Inc.

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

March 31,

March 31,

2013

2012

Net revenue:

Products and license

$

14,154

$

12,052

Services

14,431

9,466

Total net revenue

28,585

21,518

Cost of revenue(1):

Products and license

1,876

1,854

Services

4,415

2,733

Total cost of revenue

6,291

4,587

Gross profit

22,294

16,931

Operating expenses(1):

Research and development

6,358

4,993

Sales and marketing

17,547

11,596

General and administrative

4,383

3,493

Total operating expenses

28,288

20,082

Loss from operations

(5,994)

(3,151)

Other expense, net

(47)

(70)

Loss before provision for income taxes

(6,041)

(3,221)

Provision for income taxes

154

153

Net loss

(6,195)

(3,374)

Add: Loss attributable to noncontrolling interest

136

103

Net loss attributable to Imperva, Inc. stockholders

$

(6,059)

$

(3,271)

Net loss per share of common stock attributable to

Imperva, Inc. stockholders, basic and diluted

$

(0.25)

$

(0.15)

Shares used in computing net loss per share of

common stock, basic and diluted

23,905

22,304

(1) Stock-based compensation expense as included in above:

Cost of revenue

$

211

$

55

Research and development

667

127

Sales and marketing

1,334

261

General and administrative

641

225

Total stock-based compensation expense

$

2,853

$

668

IMPERVA, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

As of

As of

March 31,

December 31,

2013

2012

Assets

Current assets:

Cash and cash equivalents

$

66,154

$

59,201

Short-term investments

43,724

43,126

Restricted cash

596

591

Accounts receivable, net

24,299

35,576

Inventory

315

328

Deferred tax assets

609

597

Prepaid expenses and other current assets

5,083

4,356

Total current assets

140,780

143,775

Property and equipment, net

5,400

5,515

Severance pay fund

3,307

3,150

Restricted cash

753

753

Other assets

772

764

Total assets

$

151,012

$

153,957

Liabilities and stockholders' equity

Current liabilities:

Accounts payable

$

2,783

$

3,789

Accrued compensation and benefits

10,060

9,258

Accrued and other current liabilities

3,547

4,323

Deferred revenue

32,999

33,609

Total current liabilities

49,389

50,979

Other liabilities

2,491

2,638

Deferred revenue

13,650

12,682

Accrued severance pay

3,695

3,427

Total liabilities

69,225

69,726

Stockholders' equity:

Common stock

2

2

Additional paid-in capital

161,670

157,989

Accumulated deficit

(79,576)

(73,517)

Accumulated other comprehensive income (loss)

931

861

Total Imperva, Inc. stockholders' equity

83,027

85,335

Noncontrolling interest

(1,240)

(1,104)

Total stockholders' equity

81,787

84,231

Total liabilities and stockholders' equity

$

151,012

$

153,957

IMPERVA, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

For the Three Months Ended

March 31,

March 31,

2013

2012

Cash flows from operating activities:

Net loss

$

(6,195)

$

(3,374)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation and amortization

626

411

Stock-based compensation

2,853

668

Amortization of premiums/accretion of discounts on short-term investments

186

76

Changes in operating assets and liabilities:

Accounts receivable, net

11,277

6,280

Inventory

13

117

Prepaid expenses and other assets

(598)

(14)

Accounts payable

(1,006)

(1,114)

Accrued compensation and benefits

802

(925)

Accrued and other liabilities

(714)

(1,359)

Severance pay, net

111

326

Deferred revenue

358

2,226

Deferred tax assets

(12)

(15)

Other

(10)

(4)

Net cash provided by operating activities

7,691

3,299

Cash flows from investing activities:

Purchase of short-term investments

(18,400)

(34,903)

Proceeds from sales/maturities of short-term investments

17,631

925

Net purchases of property and equipment