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Riverbed Reports Record Fourth Quarter and Fiscal Year 2013 Results

Riverbed Technology (NASDAQ: RVBD), the leader in application performance infrastructure, today reported record revenue for its fourth quarter (Q4'13) and fiscal year ended December 31, 2013 (FY’13).

Total GAAP revenue for Q4’13 was $283 million, up 8% compared to the third quarter of fiscal year 2013 (Q3’13) and 19% compared to the fourth quarter of fiscal year 2012 (Q4’12). For FY’13, GAAP revenue was $1.0 billion, up 24% compared to fiscal year ended December 31, 2012 (FY’12). GAAP net income for Q4’13 was $8 million, or $0.05 per diluted share. This compares to $4 million, or $0.02 per diluted share, in Q3’13 and $5 million, or $0.03 per diluted share, in Q4’12. GAAP net loss for FY’13 was $12 million, or ($0.08) per diluted share.

Non-GAAP revenue for Q4'13 was $285 million, an increase of 7% compared to Q3'13 and an increase of 19% compared to Q4'12. Non-GAAP revenue for FY’13 was $1.1 billion, an increase of 26% compared to FY’12. Non-GAAP net income for Q4'13 was $51 million, or $0.31 per diluted share. This compares to $43 million, or $0.26 per diluted share, in Q3'13 and $46 million, or $0.29 per diluted share, in Q4'12. Non-GAAP net income for FY’13 was $169 million, or $1.01 per diluted share.

“Riverbed is executing well on a strategy to create sustained growth for our business, strategic value for our customers, and profitable returns for our shareholders,” said Jerry M. Kennelly, chairman and CEO, Riverbed. “Our strong 2013 finish demonstrates progress across our major product lines and all geographies, and strength in enterprise sales. For the full year we are reporting more than $1 billion in revenue, an important milestone in the Company’s history, and a good base from which we will drive our next leg of growth.”

Kennelly continued, “As customers increasingly adopt the full breadth of the Riverbed Application Performance Platform to achieve the benefits of location-independent computing and eliminate technical constraints from their business operations, we expect to increase our share of the $11 billion application performance infrastructure market.”

Q4’13 and FY’13 Financial Highlights

  • Q4’13 non-GAAP revenue grew 7% sequentially and 19% year-over-year to $285 million
  • FY’13 non-GAAP revenue grew 26% to $1.1 billion
  • Q4’13 non-GAAP gross margin of 79.9%
  • Q4’13 non-GAAP operating margin of 25.8%
  • Q4’13 free cash flow of $82 million; FY’13 free cash flow of $192 million
  • Repurchased $75 million in shares in Q4’13; repurchased $200 million in shares in FY’13

Q4’13 Business Highlights

  • Unveiled the company’s vision and multi-product platform strategy to expand within the $11 billion Application Performance Infrastructure market
  • Named one of the top 20 Best Places to Work in the Glassdoor Employees' Choice Awards for the second consecutive year. Riverbed also ranked in the top 10 best places to work in the technology industry.
  • Ranked as one of the fastest growing companies in North America on Deloitte's 2013 Technology Fast 500™.
  • Recognized in the leaders quadrant of the Gartner Magic Quadrant for “Application Performance Monitoring” for the third consecutive time (published in December 2013).
  • Positioned by Gartner as the only vendor in the Visionaries Quadrant of the 2013 "Magic Quadrant for Application Delivery Controllers (ADC)" authored by Mark Fabbi, Neil Rickard, Bjarne Munch and Andrew Lerner, and published in October 2013.
  • Awarded InfoWorld Technology of the Year Awards for its Riverbed Granite® branch converged infrastructure and Steelhead® wide area network (WAN) optimization solutions. Granite received the InfoWorld Technology of the Year Award recognition for the second consecutive year and Steelhead has won eight consecutive times.
  • Launched general availability of Riverbed Granite 2.6, with new features that support more branches, bigger data sets (with 2x higher capacity models), and additional enterprise-class storage solutions, including IBM Storwize® V7000.
  • Introduced a single integrated WAN Optimization and Performance Management solution that brings together the Riverbed Steelhead WAN optimization product family and Riverbed Cascade® network performance management (NPM) product family to deliver application acceleration anywhere while enhancing end-user experience and visibility.
  • Released Riverbed Stingray™ Traffic Manager 9.5, a full performance software and virtual Layer 7 application delivery controller (ADC) that enables enterprises and cloud operators to create, manage, and deliver key services more quickly, more flexibly, and at a lower cost.
  • Announced important improvements to the Riverbed partner program that will simplify processes, training and competency certification to help partners capitalize on new market prospects and accelerate their growth. The new program reinforces that Riverbed is committed to the channel with increased investment and focus on its partners’ go-to-market efforts.

Conference Call

Riverbed will host a conference call today, January 30, at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) to discuss its fourth quarter and fiscal year 2013 results and outlook for the first quarter of 2014. The call will be broadcast live over the Internet at http://www.riverbed.com/investors and a replay of the webcast will also be available for 12 months.

Use of Non-GAAP Financial Information

To supplement our financial results presented in accordance with Generally Accepted Accounting Principles (GAAP), this press release and the accompanying tables contain certain non-GAAP financial measures, including non-GAAP revenue, non-GAAP gross margin, non-GAAP operating margin, non-GAAP net income and non-GAAP net income per share, which we believe are helpful in understanding our past financial performance and future results. For reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section of the accompanying tables titled, "GAAP to Non-GAAP Reconciliations." Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read in conjunction with our consolidated financial statements prepared in accordance with GAAP. Our management regularly uses our supplemental non-GAAP financial measures internally to understand and manage our business and forecast future periods; as such, we believe it is useful for investors to understand the effects of these items on our total operating expenses. Our non-GAAP financial measures include adjustments based on the following items, as well as the related income tax effects, adjustments related to our tax valuation allowance and the interim tax cost of the one-time transfer of intellectual property rights between Riverbed legal entities:

Support and services deferred revenue: Business combination accounting rules require us to account for the fair value of support and service contracts assumed in connection with our acquisitions. The book value of the acquisition deferred support and services revenue related to OPNET was reduced by $19 million in the adjustment to fair value. Because these are typically one to five year contracts, our GAAP revenues for the periods subsequent to the acquisition of a business do not reflect the full amount of service revenues on assumed support contracts that would have otherwise been recorded by the acquired entity. The non-GAAP adjustment is intended to reflect the full amount of such revenues. We believe this adjustment is useful to investors as a measure of the ongoing performance of our business because we have historically experienced high renewal rates on support contracts, although we cannot be certain that customers will renew these contracts.

Inventory and cost of product revenue: Business combination accounting rules require us to account for the fair value of inventory acquired in connection with our acquisitions. The fair value of inventory is estimated as the selling price minus the estimated cost to sell. In the period subsequent to the acquisition, the cost of product revenue includes the higher fair value of the acquired inventory.

Stock-based compensation expenses: We have excluded the effect of stock-based compensation and related payroll tax expenses from our non-GAAP operating expenses and net income measures. Although stock-based compensation is a key incentive offered to our employees, we continue to evaluate our business performance excluding stock-based compensation expenses. Stock-based compensation expenses will recur in future periods.

Amortization of intangible assets: We have excluded the effect of amortization of intangible assets from our non-GAAP net income. Amortization of intangible assets is a non-cash expense, and it is not part of our core operations. Investors should note that the use of intangible assets contributed to revenues earned during the periods presented and will contribute to future period revenues as well.

Acquisition related expenses: We incur significant expenses in connection with our acquisitions. Acquisition related expenses consist of transaction costs, costs for transitional employees, other acquired employee related retention costs, facilities consolidation and exit costs, integration related professional services, adjustments to the fair value of the acquisition related contingent consideration, the write-down of certain acquired in-progress research and development intangibles, and foreign exchange losses on the acquisition related contingent consideration.

Other expenses: Those expenses we would not otherwise have incurred in the periods presented as a part of our ongoing expenses.

In this quarter, Other expenses included:

Debt refinancing costs - In December 2012 we incurred certain costs associated with our term loan financing that were recognized initially as a deferred charge and were to be amortized to interest expense over the term of the loan. Upon refinancing the debt in the fourth quarter of 2013, approximately $12.3 million of these deferred charges were recognized as Other expense net in the statement of operations. We believe that this one-time, non-recurring, accounting charge is not representative of our ongoing operating activity.

Operating lease not in service - We entered into an operating lease on a new corporate headquarters in San Francisco. The lease accounting rules require that rent expense begin on a straightline basis starting in the period that we have the right to access the new facility. We gained the right to access the facility in November 2013 to begin constructing our leasehold improvements. We plan to occupy the new facility in the second quarter of 2014. We believe that the duplicate rent of the new facility during the construction period is not representative of the ongoing operating costs of the company.

Non-routine corporate governance and shareholder matters - Beginning in the fourth quarter of 2013, we began incurring professional service fees related to non-routine corporate governance and shareholder matters. We believe these fees are not representative of the ongoing operating costs of the company.

Forward Looking Statements

This press release contains forward-looking statements, including statements relating to our business strategy and growth, adoption of our platform, and market share. These forward-looking statements involve risks and uncertainties, as well as assumptions that, if they do not fully materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. The risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward-looking statements include our ability to react to trends and challenges in our business and the markets in which we operate; our ability to anticipate market needs or develop new or enhanced products to meet those needs; the adoption rate of our products; our ability to establish and maintain successful relationships with our distribution partners; our ability to compete in our industry; fluctuations in demand, sales cycles and prices for our products and services; shortages or price fluctuations in our supply chain; our ability to protect our intellectual property rights; general political, economic and market conditions and events; and other risks and uncertainties described more fully in our documents filed with or furnished to the Securities and Exchange Commission. More information about these and other risks that may impact Riverbed's business are set forth in our Form 10-K filed with the SEC for the period ended December 31, 2012, and our subsequent quarterly reports filed with the SEC. All forward-looking statements in this press release are based on information available to us as of the date hereof, and we assume no obligation to update these forward-looking statements. Any future product, feature or related specification that may be referenced in this release are for information purposes only and are not commitments to deliver any technology or enhancement. Riverbed reserves the right to modify future product plans at any time.

About Riverbed

Riverbed is the leader in Application Performance Infrastructure, delivering the most complete platform for Location-Independent Computing. Location-Independent Computing turns location and distance into a competitive advantage by allowing IT to have the flexibility to host applications and data in the most optimal locations while ensuring applications perform as expected, data is always available when needed, and performance issues are detected and fixed before end users notice. Riverbed's 25,000 customers include 97% of the Fortune 100 and 95% of the Forbes Global 100. Learn more at www.riverbed.com.

Riverbed and any Riverbed product or service name or logo used herein are trademarks of Riverbed Technology, Inc. All other trademarks used herein belong to their respective owners.

 
Riverbed Technology
GAAP Condensed Consolidated Statements of Operations
In thousands, except per share amounts
Unaudited
  Three months ended

December 31,

Twelve months ended

December 31,

2013   2012 2013   2012
Revenue:
Product $ 169,808 $ 157,133 $ 614,498 $ 548,141
Support and services   113,453     80,249     426,535     288,719  
Total revenue 283,261 237,382 1,041,033 836,860
Cost of revenue:
Cost of product 41,639 34,994 164,774 124,406
Cost of support and services   30,137     23,300     117,157     80,412  
Total cost of revenue   71,776     58,294     281,931     204,818  
Gross profit 211,485 179,088 759,102 632,042
Operating expenses:
Sales and marketing 123,849 95,542 469,200 328,657
Research and development 40,214 40,056 189,654 146,108
General and administrative 18,175 16,584 73,339 60,594
Acquisition-related costs   2,237     13,231     18,322     726  
Total operating expenses   184,475     165,413     750,515     536,085  
Operating profit 27,010 13,675 8,587 95,957
Other expense, net   (17,816 )   (683 )   (35,152 )   (1,924 )
Income (loss) before provision for income taxes 9,194 12,992 (26,565 ) 94,033
Provision for (benefit from) income taxes   799     8,208     (14,147 )   39,436  
Net income (loss) $ 8,395   $ 4,784   $ (12,418 ) $ 54,597  
Net income (loss) per share, basic $ 0.05 $ 0.03 $ (0.08 ) $ 0.35
Net income (loss) per share, diluted $ 0.05 $ 0.03 $ (0.08 ) $ 0.33
Shares used in computing basic net income (loss) per share 160,536 155,879 162,707 156,205
Shares used in computing diluted net income (loss) per share 164,584 163,638 162,707 164,570
 
Riverbed Technology
Condensed Consolidated Balance Sheets
In thousands
Unaudited
  December 31,

2013

  December 31,

2012

ASSETS
Current assets:
Cash and cash equivalents $ 208,022 $ 280,509
Short-term investments 251,339 170,605
Trade receivables, net 93,836 113,190
Inventory 25,025 24,175
Deferred tax assets 7,222 11,185
Prepaid expenses and other current assets   49,016   50,245  
Total current assets   634,460   649,909  
Long-term investments 72,675 78,476
Fixed assets, net 57,810 49,244
Goodwill 704,305 699,785
Intangible assets, net 404,467 506,842
Deferred tax assets, non-current 74 6,457
Other assets   23,807   33,626  
Total assets $ 1,897,598 $ 2,024,339  
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 45,518 $ 50,417
Accrued compensation and related benefits 51,988 60,501
Other accrued liabilities 36,520 41,472
Current maturities of long-term borrowings 15,000 5,327
Deferred revenue   217,131   182,219  
Total current liabilities   366,157   339,936  
Deferred revenue, non-current 95,344 88,393
Long-term borrowings, non-current, net of current maturities 510,000 566,814
Deferred tax liability, non-current 48,548 109,311
Other long-term liabilities   48,910   25,663  
Total long-term liabilities   702,802   790,181  
Stockholders' equity:
Common stock 702,928 757,777
Retained earnings 125,295 137,713
Accumulated other comprehensive income (loss)   416   (1,268 )
Total stockholders' equity   828,639   894,222  
Total liabilities and stockholders' equity $ 1,897,598 $ 2,024,339  
 
Riverbed Technology
Condensed Consolidated Statements of Cash Flows
In thousands
Unaudited
  Twelve months ended

December 31,

2013   2012
Operating activities:
Net (loss) income $ (12,418 ) $ 54,597
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization 126,166 40,010
Stock-based compensation 90,557 89,294
Cost of extinguishment of debt 12,269
Deferred taxes (55,182 ) 5,557
Excess tax benefit from employee stock plans (8,636 ) (23,883 )
Other non-cash items 1,969
Changes in operating assets and liabilities:
Trade receivables 19,355 (13,386 )
Inventory (849 ) (6,238 )
Prepaid expenses and other assets 5,892 7,776
Accounts payable (10,632 ) 4,567
Accruals and other liabilities 10,015 (14,722 )
Acquisition-related contingent consideration (15,882 )
Income taxes payable (3,022 ) 20,176
Deferred revenue   41,862     91,397  
Net cash provided by operating activities 217,346 239,263
Investing activities:
Capital expenditures (25,625 ) (21,956 )
Purchase of available for sale securities (401,145 ) (444,472 )
Proceeds from maturities of available for sale securities 299,678 344,353
Proceeds from sales of available for sale securities 24,045 257,961
Acquisitions, net of cash acquired   (1,000 )   (790,269 )
Net cash used in investing activities (104,047 ) (654,383 )
Financing activities:
Proceeds from issuance of common stock under employee stock plans, net of repurchases 72,764 47,606
Cash used related to net shares settlement of equity awards (15,065 ) (27,309 )
Payments for repurchases of common stock (200,081 ) (127,144 )
Debt borrowing, net of issuance costs 521,234 560,371
Payment of borrowings (575,000 )
Excess tax benefit from employee stock plans   8,636     23,883  
Net cash (used in) provided by financing activities (187,512 ) 477,407
Effect of exchange rate changes on cash and cash equivalents   1,726     2,746  
Net (decrease) increase in cash and cash equivalents (72,487 ) 65,033
Cash and cash equivalents at beginning of period   280,509     215,476  
Cash and cash equivalents at end of period $ 208,022   $ 280,509  
 

Riverbed Technology
Supplemental Financial Information
In thousands
Unaudited

  Three months ended   Twelve months ended
December 31,

2013

  September 30,

2013

  December 31,

2012

December 31,

2013

  December 31,

2012

Revenue by Geography
Americas $ 170,764 $ 164,015 $ 140,059 $ 649,820 $ 494,907
Europe, Middle East and Africa $ 76,912 $ 64,179 $ 66,450 $ 258,357 $ 225,652
Asia Pacific $ 35,585   $ 33,529   $ 30,873   $ 132,856   $ 116,301  
Total revenue $ 283,261   $ 261,723   $ 237,382   $ 1,041,033   $ 836,860  
As a percentage of total revenues:
Americas 60 % 63 % 59 % 62 % 59 %
Europe, Middle East and Africa 27 % 25 % 28 % 25 % 27 %
Asia Pacific   13 %   12 %   13 %   13 %   14 %
Total revenue   100 %   100 %   100 %   100 %   100 %
Revenue by Sales Channel
Direct $ 38,103 $ 28,654 $ 16,477 $ 158,714 $ 43,526
Indirect $ 245,158   $ 233,069   $ 220,905   $ 882,319   $ 793,334  
Total revenue $ 283,261   $ 261,723   $ 237,382   $ 1,041,033   $ 836,860  
As a percentage of total revenues:
Direct 13 % 11 % 7 % 15 % 5 %
Indirect   87 %   89 %   93 %   85 %   95 %
Total revenue   100 %   100 %   100 %   100 %   100 %
 
Riverbed Technology
GAAP to Non-GAAP Reconciliation
In thousands, except per share amounts
Unaudited
  Three months ended   Twelve months ended
GAAP to Non-GAAP Reconciliations: December 31,

2013

  September 30,

2013

  December 31,

2012

December 31,

2013

  December 31,

2012

Reconciliation of Total revenue:
U.S. GAAP as reported $ 283,261 $ 261,723 $ 237,382 $ 1,041,033 $ 836,860
Adjustments:
Deferred revenue adjustment (6)   1,568     3,250     1,292     16,139     2,818  
As adjusted $ 284,829   $ 264,973   $ 238,674   $ 1,057,172   $ 839,678  
Reconciliation of Gross margin:
U.S. GAAP as reported 74.7 % 72.9 % 75.4 % 72.9 % 75.5 %
Adjustments:
Stock-based compensation (1) 0.8 % 0.6 % 0.9 % 0.6 % 0.8 %
Amortization on intangibles (3) 3.9 % 4.3 % 2.0 % 4.1 % 1.9 %
Inventory fair value adjustment (4) % % 0.3 % 0.1 %

0.1

%

Acquisition-related costs (5) %

%

0.1 %

%

%

Deferred revenue adjustment (6)   0.5 %   0.9 %   0.2 %   1.2 %   0.2 %
As adjusted   79.9 %   78.7 %   78.9 %   78.9 %   78.5 %
Reconciliation of Operating margin:
U.S. GAAP as reported 9.5 % 1.0 % 5.7 % 0.8 % 11.4 %
Adjustments:
Stock-based compensation (1) 5.4 % 9.5 % 9.7 % 8.5 % 10.6 %
Payroll tax on stock-based compensation (2) 0.2 %

% 0.6 % 0.2 % 0.4 %
Amortization on intangibles (3) 8.8 % 9.7 % 4.0 % 9.7 % 3.1 %
Acquisition-related costs (5) 0.8 % 1.8 % 5.6 % 1.8 % 0.4 %
Inventory fair value adjustment (4) % % 0.3 % 0.2 % 0.1 %
Deferred revenue adjustment (6) 0.6 % 1.1 % 0.5 % 1.5 % 0.3 %
Other expense (7)   0.5 %   %   %   0.1 %   %
As adjusted   25.8 %   23.2 %   26.5 %   23.0 %   26.4 %
Reconciliation of Net income (loss):
U.S. GAAP as reported $ 8,395 $ 3,818 $ 4,784 $ (12,418 ) $ 54,597
Adjustments:
Stock-based compensation (1) 15,398 25,104 23,124 90,557 89,294
Payroll tax on stock-based compensation (2) 712 64 1,523 2,244 3,177
Amortization on intangibles (3) 25,029 25,817 9,553 102,974 25,888
Acquisition-related costs (credits) (5) 2,255 4,902 13,484 19,472 3,469
Inventory fair value adjustment (4) 699 1,700 699
Deferred revenue adjustment (6) 1,568 3,250 1,292 16,139 2,818
Other expense (7) 13,667 6 13,667 2,618
Income tax adjustments (8)   (16,184 )   (19,698 )   (8,006 )   (65,021 )   (19,224 )
As adjusted $ 50,840   $ 43,257   $ 46,459   $ 169,314   $ 163,336  
Reconciliation of Net income (loss) per share, diluted:
U.S. GAAP as reported $ 0.05 $ 0.02 $ 0.03 $ (0.08 ) $ 0.33
Adjustments:
Stock-based compensation (1) 0.09 0.15 0.15 0.54 0.54
Payroll tax on stock-based compensation (2) 0.01 0.01 0.02
Amortization on intangibles (3) 0.15 0.15 0.06 0.61 0.16
Acquisition-related costs (credits) (5) 0.01 0.03 0.08 0.12 0.02
Inventory fair value adjustment (4) 0.01

Deferred revenue adjustment (6) 0.02 0.03 0.01 0.10 0.02
Other expense (7) 0.09 0.09 0.02
Income tax adjustments (8)   (0.10 )   (0.12 )   (0.05 )   (0.39 )   (0.12

)

As adjusted $ 0.31   $ 0.26   $ 0.29   $ 1.01   $ 0.99  
Non-GAAP Net income per share, basic $ 0.32 $ 0.27 $ 0.30 $ 1.04 $ 1.05
Non-GAAP Net income per share, diluted $ 0.31 $ 0.26 $ 0.29 $ 1.01 $ 0.99

Shares used in computing basic net income per share (9)

160,536 162,929 154,818 162,707 155,940

Shares used in computing diluted net income per share (9)

164,584 167,692 162,578

167,454

164,305
Non-GAAP adjustments:
Product revenue $ 41 $ 87 $

$ 128 $

Support and services revenue 1,527

 

3,163 1,292 16,011 2,818
Cost of product 11,944 12,201 5,840 50,155 17,422
Cost of support and services 2,563 2,209 2,059 9,015 7,205
Sales and marketing 23,771 24,236 14,344 97,998 47,603
Research and development 474 8,697 8,264 26,255 31,541
General and administrative 3,805 3,662 4,645 15,202 18,030
Acquisition-related costs (credits) 2,237 4,882 13,231 18,322 726
Other income (expense), net 12,267 6 12,267 2,618
Provision for income taxes   (16,184 )   (19,698 )   (8,006 )   (65,021 )   (19,224 )
Total Non-GAAP adjustments $ 42,445   $ 39,439   $ 41,675   $ 180,332   $ 108,739  
 
(1) Stock-based compensation expense is calculated in accordance with the fair value recognition provisions of Financial Accounting Standards Board Accounting Standards Codification (ASC) Topic 718, Compensation - Stock Compensation effective January 1, 2006.
(2) Payroll tax on stock-based compensation represents the incremental cost for employer payroll taxes on stock option exercises and restricted stock units vested and released.
(3) The intangible assets recorded at fair value as a result of our acquisition are amortized over the estimated useful life of the respective asset.
(4) The inventory fair value adjustment recorded pursuant to our acquisition is excluded from our non-GAAP operating expenses as this cost would not have otherwise occurred in the period presented.
(5) We incurred expenses in connection with our acquisitions, which would not have otherwise occurred in the period presented as part of our operating expenses; therefore, these costs (credits), including transaction costs, integration costs, employee retention and severance costs, restructuring costs, write-down of certain acquired in-process research and development intangibles, and revaluation of the fair value of contingent consideration, are excluded from our non-GAAP operating expenses.
(6) Business combination accounting rules require us to account for the fair value of deferred revenue assumed in connection with an acquisition. The non-GAAP adjustment is intended to reflect the full amount of support and service revenue that would have otherwise been recorded by the acquired entity.
(7) Other expense, net, includes one-time costs associated with the extinguishment of debt in December 2013 and foreign exchange losses on the acquisition related contingent consideration in 2012. In 2013, Other also includes expenses associated with non-routine corporate governance and shareholder matters and rent expense related to the new corporate headquarters, which is the amount of straightline rent expense incurred from the date we gained the right to access to the facility for construction purposes prior to the date of occupancy and the start of rental payments.
(8) The non-GAAP tax rate excludes the income tax effects of non-GAAP adjustments. Additionally, the non-GAAP tax rate includes adjustments to our tax valuation allowance on deferred tax assets and excludes the interim tax cost of the one-time transfer of intellectual property rights between our legal entities.

(9) Shares used in computing basic and diluted net income per share for the December 31, 2012 periods exclude shares issued in connection with the acquisition of OPNET Technologies, Inc.

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It's easy to assume that your app will run on a fast and reliable network. The reality for your app's users, though, is often a slow, unreliable network with spotty coverage. What happens when the network doesn't work, or when the device is in airplane mode? You get unhappy, frustrated users. An offline-first app is an app that works, without error, when there is no network connection. In his session at 18th Cloud Expo, Bradley Holt, a Developer Advocate with IBM Cloud Data Services, discussed...
Data is the fuel that drives the machine learning algorithmic engines and ultimately provides the business value. In his session at 20th Cloud Expo, Ed Featherston, director/senior enterprise architect at Collaborative Consulting, will discuss the key considerations around quality, volume, timeliness, and pedigree that must be dealt with in order to properly fuel that engine.
Between 2005 and 2020, data volumes will grow by a factor of 300 – enough data to stack CDs from the earth to the moon 162 times. This has come to be known as the ‘big data’ phenomenon. Unfortunately, traditional approaches to handling, storing and analyzing data aren’t adequate at this scale: they’re too costly, slow and physically cumbersome to keep up. Fortunately, in response a new breed of technology has emerged that is cheaper, faster and more scalable. Yet, in meeting these new needs they...
In addition to all the benefits, IoT is also bringing new kind of customer experience challenges - cars that unlock themselves, thermostats turning houses into saunas and baby video monitors broadcasting over the internet. This list can only increase because while IoT services should be intuitive and simple to use, the delivery ecosystem is a myriad of potential problems as IoT explodes complexity. So finding a performance issue is like finding the proverbial needle in the haystack.
When it comes to cloud computing, the ability to turn massive amounts of compute cores on and off on demand sounds attractive to IT staff, who need to manage peaks and valleys in user activity. With cloud bursting, the majority of the data can stay on premises while tapping into compute from public cloud providers, reducing risk and minimizing need to move large files. In his session at 18th Cloud Expo, Scott Jeschonek, Director of Product Management at Avere Systems, discussed the IT and busin...
According to Forrester Research, every business will become either a digital predator or digital prey by 2020. To avoid demise, organizations must rapidly create new sources of value in their end-to-end customer experiences. True digital predators also must break down information and process silos and extend digital transformation initiatives to empower employees with the digital resources needed to win, serve, and retain customers.
"We are the public cloud providers. We are currently providing 50% of the resources they need for doing e-commerce business in China and we are hosting about 60% of mobile gaming in China," explained Yi Zheng, CPO and VP of Engineering at CDS Global Cloud, in this SYS-CON.tv interview at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.