Gigamon Reports Fourth Quarter and Fiscal Year 2016 Financial Results

SANTA CLARA, Calif., Feb. 2, 2017 /PRNewswire/ -- Gigamon Inc. (NYSE: GIMO), the leader in traffic visibility solutions, today released financial results for the fourth quarter and fiscal year ended December 31, 2016.

Fourth Quarter 2016 Financial Highlights:

• Revenue of $85.0 million, up 27% year-over-year.
• GAAP gross margin was 84%, compared to 82% in the fourth quarter of fiscal 2015. 
• Non-GAAP gross margin was 84%, compared to 83% in the fourth quarter of fiscal 2015.
• GAAP net income was $6.4 million, or $0.17 per diluted share, compared to GAAP net income of $2.6 million, or $0.07 per diluted share, in the fourth quarter of fiscal 2015.
• Non-GAAP net income was $14.4 million, or $0.37 per diluted share, compared to non-GAAP net income of $10.6 million, or $0.29 per diluted share, in the fourth quarter of fiscal 2015. 
• Cash and investments were $258 million, up $13 million from the third quarter of 2016, and up $48 million from the fourth quarter of fiscal 2015.

Fiscal Year 2016 Financial Highlights:

• Revenue of $310.9 million, up 40% from fiscal 2015.
• GAAP gross margin was 82%, compared to 79% in fiscal 2015. 
• Non-GAAP gross margin was 83%, compared to 80% in fiscal 2015.
• GAAP net income was $49.4 million, or $1.31 per diluted share, compared to GAAP net income of $6.2 million, or $0.17 per diluted share, in fiscal 2015.
• Non-GAAP net income was $48.0 million, or $1.26 per diluted share, compared to non-GAAP net income of $29.0 million, or $0.80 per diluted share, in fiscal 2015. 

"Gigamon delivered the second consecutive year of 40% year-over-year revenue growth as we continue to demonstrate leadership in this exciting growth market," said Paul Hooper, Chief Executive Officer of Gigamon. "Our 2016 financial performance is a testimony to our leadership, the demand for visibility to information-in-motion, and the value we deliver to our customers as they secure, manage and understand the complex world of information. During the year, we extended our addressable market by delivering the first to market solution for visibility into the Amazon Web Services cloud and enhanced our security platform in 2016. With our strong leadership in the industry, we believe our security-enabling platform for private, public and hybrid clouds has become an essential component of modern IT infrastructure."

Recent Business Highlights:

• Introduced the Gigamon Visibility Platform on Amazon Web Services (AWS), enabling consistent and elastic visibility into data-in-motion across the entire enterprise to securely manage mission-critical workloads.
• Introduced new subscriber-aware correlation capabilities advancing subscriber, traffic and network intelligence.
• Announced CME Group, the world's leading and most diverse derivatives marketplace, selected the Gigamon Visibility Platform on Amazon Web Services (AWS) to deliver pervasive visibility to data-in-motion within the exchange's Virtual Private Cloud (VPC) deployed in AWS. 
• Announced Gerard Allison joined Gigamon as Vice President of EMEA, a respected leader bringing two decades of experience to the Company's growing global operations.
• Appointed Dario Zamarian, a security and networking technology industry veteran, to its board of directors.

Conference Call Information:

Gigamon will host a conference call and live webcast for analysts and investors at 5:00 p.m. Eastern time on February 2, 2017. This news release will be accessible from the company's website prior to the conference call.  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 a period of 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.

Non-GAAP Financial Measures

In addition to disclosing financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), this press release and the accompanying tables contain certain non-GAAP financial measures that exclude stock-based compensation and related payroll taxes, the income tax effect of stock-based compensation expense, and a valuation allowance against deferred tax assets. Gigamon considers these non-GAAP financial measures to be important because they provide useful measures of the Company's operating performance, excluding unusual events or factors that do not directly affect what we consider to be our core operating performance, and the company's management uses them for that purpose. In addition, investors often use similar measures to evaluate the operating performance of a company. The Company presents Non-GAAP financial measures for supplemental informational purposes only to provide additional information in understanding the company's operating results. The non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from non-GAAP financial measures presented by other companies.  Please see the reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures attached to this release.

During the conference call to discuss these financial results, Gigamon expects to give guidance for the first quarter of fiscal 2017 on a non-GAAP basis. Gigamon does not reconcile its forward-looking non-GAAP financial measures to the corresponding GAAP measures due to the high variability and difficulty in making accurate forecasts and projections with respect to the stock-based compensation and related payroll taxes, income tax effect of stock-based compensation expense and valuation allowance against deferred tax assets, which the Company excludes from these non-GAAP measures. In particular, stock-based compensation and related taxes are impacted by future hiring and retention needs, as well as the future fair market value of Gigamon's common stock, all of which is difficult to predict and subject to constant change. The actual amounts of these excluded items will have a significant impact on Gigamon's GAAP net income (loss) per diluted share and GAAP tax provision. Accordingly, reconciliations of Gigamon's forward-looking non-GAAP financial measures to the corresponding GAAP measures are not available without unreasonable effort.

Legal Notice Regarding Forward Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements in this press release include, but are not limited to, our belief that our security-enabling, network visibility platform is an essential component of modern IT infrastructure. Our expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks include our ability to continue to deliver and improve our products and successfully develop new products; customer acceptance and purchase of our existing products and new products; our ability to retain existing customers and generate new customers; the market for network traffic visibility solutions not continuing to develop; competition from other products and services; and general market, political, economic and business conditions.  The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the period ended December 26, 2015 and our most recently available Quarterly Report on Form 10-Q. The forward-looking statements in this press release are based on information available to Gigamon as of the date hereof, and Gigamon disclaims any obligation to update any forward-looking statements, except as required by law.

Gigamon

Gigamon (NYSE: GIMO) provides active visibility into physical and virtual network traffic, enabling stronger security and superior performance. Gigamon's Visibility Fabric and GigaSECURE®, the industry's first Security Delivery Platform, deliver advanced intelligence so that security, network and application performance management solutions in enterprise, government and service provider networks operate more efficiently and effectively. See more at www.gigamon.com, the Gigamon Blog, or follow Gigamon on Twitter, LinkedIn or Facebook.

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SOURCE Gigamon Inc.