Infoblox (BLOX) Beats, Raises and Institutes New $100M Buyback - William Blair

William Blair analyst, Jason Ader, published an earnings review on Infoblox (NYSE: BLOX) highlighting the benefit from the Dash-A upgrade cycle and Security products increasing deal sizes. In addition to the beat and raise results, management announced a $100 million buyback program, exhibiting its confidence in the company’s longer-term business prospects.

Infoblox turned in a stellar start to the fiscal year, topping consensus by more than $6 million on revenue and $0.07 on non-GAAP EPS for the quarter. Revenue growth was led by continued upgrade related business and robust security growth (11% of revenue, up 138% year-over-year), which is significantly increasing deal sizes. Deals with security are typically three times as large as those without.

Geographically, all regions were up substantially, with EMEA leading the way (up 51% year-over-year), despite typical soft seasonality in southern Europe, followed by APAC (up 46% year-over-year), albeit on easy comparisons, and the United States (up 37% year-over-year).

For the fiscal second quarter, revenue is expected to come in between $93 million and $95 million, ahead of the Street at $91.1 million. In addition, citing reasonable assumptions beyond the second quarter, management provided full fiscal-year guidance, with revenue expected to be between $370 million and $380 million, implying 22.5% growth for the fiscal year at the midpoint.

The Dash-A upgrade cycle will be a material contributor to product revenue for the fiscal second quarter, with the impact tapering off in the second half of the fiscal year.

The company currently trades at an enterprise value of roughly 1.8 times the calendar 2016 revenue estimate, below the networking peer group median of 2.1 times. No change to Outperform rating

For an analyst ratings summary and ratings history on Infoblox click here. For more ratings news on Infoblox click here.

Shares of Infoblox closed at $15.04 yesterday.

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