Procera Networks (PKT) Warns on Q3, Lowers FY Guidance

Procera Networks, Inc. (NASDAQ: PKT), the global Subscriber Experience company, today reported preliminary revenue, bookings and gross margin rate results for the third quarter ended September 30, 2014.

Revenue for the third quarter of 2014 is now expected to be approximately $16 million, a year-over-year quarterly revenue decline of approximately 25%. The ratio of bookings to revenue for the third quarter of 2014 is expected to be above 1. The company expects the gross margin rate target range in low to mid-60%s for the third quarter of 2014. Revenue for the fiscal year ending December 31, 2014 is expected to be in the range of $70 million to $75 million, compared with $74.7 million for the year ended December 31, 2013.

We now expect a non-GAAP net loss for the third quarter of 2014 and the year ending December 31, 2014.

(Street sees Q3 EPS of $0.05 on revenue of $22.64 million and FY EPS of $0.01 on revenue of $85.16 million)

"Our second half of 2014 revenue performance is expected to be below the company's plans because of large opportunities not closing as quickly as originally anticipated. The customer prospects remain in our pipeline and we hope to close a number of them," stated James Brear, President and CEO of Procera Networks. "We are disappointed by our expected revenue performance for 2014 and we are committed to improving our results in the future. Our strategy of helping Service providers improve their subscribers' experience is being well received, including our developing initiatives Network Virtualization, RAN Perspectives, and networks and subscriber analytics capabilities which are unique and will allow us to grow our addressable market in 2015."

The above information is preliminary and subject to Procera Networks' normal quarter-end accounting process and review. Therefore actual results may vary materially from these preliminary results. The date and details for the third quarter of 2014 earnings announcement and conference call will be announced in the near future.

The company will host a conference call to report the preliminary third quarter of 2014 and full year 2014 financial update in more detail today, October 9, 2014 at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Daylight Time). The call will be webcast and can be accessed via the Procera Networks' Investor Relations website at http://proceranetworks.com/investors. A replay will be available following the call on the company's Investor Relations website or for one week at the following numbers: 1-877-870-5176 (domestic), 1-858-384-5517 (international) using ID# 13593092.

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