24% year-over-year increase in products revenues
Strengthened executive team with addition of proven sales and marketing leadership
SUNNYVALE, Calif., July 27, 2011 /PRNewswire/ — Meru Networks, Inc., (NASDAQ: MERU), the leader in 802.11n virtualized wireless LAN solutions for enterprise networking, today announced its financial results for the quarter ended June 30, 2011.
Second Quarter Financial and Operational Highlights
- Record total revenues of $23.2 million, an increase of 11% year-over-year. Products revenues grew 24% year-over-year and 23% from the previous quarter.
- Customer count now over 5,000 worldwide, an increase in the installed base of approximately 9% from the end of the prior quarter.
- Reported non-GAAP gross margin of 64.5%, an improvement of 120 basis points from the prior quarter.
- Days Sales Outstanding (DSO) was 40 days when excluding the impact of the ratable revenue element, an improvement of approximately 12 days from the prior quarter.
Second Quarter Fiscal Year 2011 Financial Results
Total revenues for the second quarter of 2011 were $23.2 million, up 11% from $20.9 million in the second quarter of 2010. Products and services revenues (excluding ratable revenues) for the second quarter of 2011 were $22.1 million, up 23% from the $18.0 million reported in the second quarter of 2010. Products revenues for the second quarter of 2011 were $19.0 million, up 24% from the $15.3 million in the second quarter of 2010.
Net loss as reported in accordance with U.S. generally accepted accounting principles (GAAP) was $9.8 million for the second quarter of 2011, or a net loss of $0.56 per basic and diluted share, compared to net income of $901,000, or $0.05 per diluted share, for the same period of 2010. GAAP results for the second quarter of 2011 included stock-based compensation expense of $1.6 million and a litigation reserve expense of $7.3 million. GAAP results for the second quarter of 2010 included stock-based compensation expense of $974,000, and $1.6 million in income related to the adjustment to fair value of the warrant liability.
Meru reported second quarter fiscal year 2011 non-GAAP net loss of $945,000, or a net loss of $0.05 per basic and diluted share, compared to non-GAAP net income of $309,000, or $0.02 per basic and diluted share, for the same period of fiscal year 2010. Non-GAAP results exclude the impact of stock-based compensation for both periods, a litigation reserve expense in the second quarter of fiscal year 2011, and adjustments to fair value of the warrant liability for the second quarter of fiscal year 2010. Please refer to the reconciliation of Meru’s GAAP to non-GAAP results provided at the end of this release.
Second Quarter Business Highlights
- During the quarter, Meru expanded its executive leadership team with the appointment of two industry veterans: Larry Vaughan, Senior Vice President of Worldwide Sales, Service & Support; and Carl Gustin, Chief Marketing Officer.
- Meru announced the AP400 mobile edge access point, an innovative product designed to deliver more than a gigabit per second data rate. IT organizations will use these access points to manage a smooth and accelerating transformation of their enterprise edge network from a wired Ethernet switch architecture to a new mobile edge.
- Notable second quarter wins and production deployments include:
- One of the top 10 largest school districts in the United States.
- A five-star 1,400 room iconic, landmark hotel in New York City.
- The parent company of some of the largest real estate brokerage networks in the world.
- A leading provider of innovative network applications to government, healthcare, education and enterprise.
- A worldwide leader in the development of advanced digital camera technology products for machine vision, industrial imaging, and computer vision applications.
“We are pleased with our performance this quarter. We achieved record revenues, surpassed 5,000 customers, and expanded our international footprint, further strengthening our competitive position,” said Ihab Abu-Hakima, president and chief executive officer of Meru Networks. ”We believe the demand for our platforms further validates our ability to meet the challenges of density, diversity and cost for environments where uncompromising wireless services are essential. We are well positioned to capitalize on what we believe will be inevitable shifts as organizations strive to support the onslaught of wireless devices and meet the expectation of ubiquitous WiFi access by mobile users.”
“We reported a solid financial performance in the second quarter delivering revenues above the high end of our guidance,” said Brett White, Chief Financial Officer of Meru Networks. “We also delivered strong quarterly sequential improvement in our gross margin and DSOs, and exited the quarter debt free.”