Gigamon, Inc. (GIMO) Prelim. Q4 Revenue Falls Short of Consensus

Gigamon (NYSE: GIMO), the industry leader in traffic visibility solutions, today announced preliminary results for the fourth quarter and fiscal year ended December 31, 2016.

Gigamon currently expects:

Fiscal Fourth Quarter 2016 Preliminary Results

• Revenue of $84.5 million to $85.0 million, compared to the company's prior guidance of $91 million to $93 million.
• GAAP gross margin between 83 percent and 84 percent.
• Non-GAAP gross margin between 83 percent and 84 percent, compared to the company's prior guidance of 82 percent to 83 percent.
• GAAP earnings per share of $0.18 to $0.20.
• Non-GAAP earnings per share of $0.35 to $0.37 compared to the company's prior guidance of $0.36 to $0.38.

(Street sees Q4 EPS of 37c on revenue of $92.2 million)

Fiscal Year 2016 Preliminary Results

• Revenue of $310.3 million to $310.8 million, an increase of approximately 40 percent year-over-year.
• GAAP gross margin between 81 percent and 82 percent, at the fourth quarter midpoint an approximate 280 basis point improvement year-over-year.
• Non-GAAP gross margin between 82 percent and 83 percent, at the fourth quarter midpoint an approximate 250 basis point improvement year-over-year.
• GAAP operating margin between 9 percent and 10 percent, at the fourth quarter midpoint an approximate 440 basis point expansion year-over-year.
• Non-GAAP operating margin between 22 percent and 23 percent, at the fourth quarter midpoint an approximate 340 basis point expansion year-over-year.
• GAAP earnings per share of $1.32 to $1.34, at the fourth quarter midpoint an approximate 680 percent year-over-year increase.
• Non-GAAP earnings per share of $1.22 to $1.25, at the fourth quarter midpoint an approximate 50 percent year-over-year increase.

"We are disappointed our fourth quarter revenue was below our prior guidance, but we are pleased with our overall financial performance in 2016, our second consecutive year of 40 percent year-over-year revenue growth," said Paul Hooper, CEO of Gigamon. "Fourth quarter revenue fell short primarily due to lower than expected product bookings in our North America West region, as several significant existing customer accounts deferred purchasing decisions into 2017.

"Our business remains fundamentally strong with our performance in 2016 demonstrating that we continue to capture market share with our leading technology, solutions and partnerships. Specifically, in the fourth quarter we saw:

• A record 126 new customer accounts.
• The successful launch of our smaller form-factor new GigaVUE-HC1 product, specifically designed to create opportunities with new customers. In the quarter, 30 percent of the customers for the HC1 were new Gigamon accounts.
• A strong quarter in EMEA, soon followed by the addition of Gerard Allison, a new leader we expect will drive stronger Gigamon performance in the region.
• The signing of our first Fortune 1000 customer for the Amazon Web Services solution we launched in November.

"Looking ahead to 2017, we are convinced this is an exciting market and we remain focused on the delivery of innovative products for the enterprise, service provider and federal markets. We will continue to invest in sales, marketing and research and development to capitalize on our opportunities in security, mobility and the cloud," Mr. Hooper said.

These preliminary, unaudited results are based on management's initial review of operations for the quarter and fiscal year ended December 31, 2016, and remain subject to completion of the company's customary closing procedures.

Fourth Quarter and Full Year 2016 Financial Results Conference Call Scheduled for February 2, 2017

Gigamon also announced today it will issue a press release reporting financial results for the fourth quarter and fiscal year ended December 31, 2016 after the close of market on February 2, 2017. Gigamon will host a conference call and live webcast at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) on February 2, 2017. Parties in the United States and Canada can access the call by dialing +1 (888)-455-2311, using conference code 6714156. International parties can access the call by dialing +1 (719)-325-2159, using conference code 6714156. The webcast will be accessible on Gigamon's investor relations website at http://investor.gigamon.com for one year. A telephonic replay of the conference call will be available through Thursday, February 9, 2017. To access the replay, parties in the United States and Canada should call +1 (866)-375-1919 and enter conference code 6714156. International parties should call +1 (719)-457-0820 and enter conference code 6714156.

You May Also Be Interested In

• Walmart (WMT) PT Lowered to $130 at UBS on Investment Narrative's Competing Dynamics
• RenovoRx regains Nasdaq minimum bid price compliance
• Vireo Growth completes acquisition of C21 Investments