Aruba Networks Announces Fiscal Fourth Quarter and Full Year 2007 Financial Results
Fourth Quarter Revenues Increase 20% Quarter-Over-Quarter and 74% Year-Over-Year

Aruba Networks, Inc. (NASDAQ: ARUN), a global leader in user-centric networks and secure mobility solutions, today released financial results for the fiscal fourth quarter and full year ended July 31, 2007.

Revenues for the fiscal fourth quarter of 2007 were approximately $41.7 million, an increase of 74% from $23.9 million reported in the fourth quarter of last year and 20% sequentially from $34.7 million reported in the immediately preceding fiscal third quarter. GAAP net loss for the fiscal fourth quarter of 2007 was $3.3 million, or $0.04 per share, compared to a net loss of $1.4 million, or $0.11 per share in the fiscal fourth quarter of 2006 and represented a $6.0 million improvement from a net loss of $9.3 million or a net loss of $0.26 per share, in the immediately preceding quarter. Aruba's fourth quarter of 2007 GAAP results included $4.8 million of non-cash stock-based expenses and in-process research and development expenses of $0.6 million.

Excluding the impact of stock-based and in-process research and development expenses in all periods, non-GAAP net income for the fiscal fourth quarter of 2007 was $2.0 million, or $0.02 per diluted share, compared to a non-GAAP net loss of $1.1 million, or $0.09 per share, in the fiscal fourth quarter of 2006 and represented a $1.0 million improvement from $1.0 million net income, or $0.01 per share from the immediately preceding quarter.

Revenues for the fiscal year ended July 31, 2007 were approximately $127.5 million, an increase of 76% from $72.5 million reported in the prior year. GAAP net loss for the full fiscal year 2007 was $24.4 million, or $0.70 per share, compared to a net loss of $12.0 million, or $1.07 per share in 2006. Non-GAAP net loss for the full fiscal year was $2.0 million, or $0.06 per share, compared to a net loss of $10.1 million, or $0.90 per share in 2006.

"We are pleased with our fourth quarter and fiscal year results. In our fourth quarter, revenues increased 20% sequentially and 74% year-over-year as our award winning WLAN products and unique user-centric architecture continue to resonate with customers," commented Dominic Orr, president and chief executive officer of Aruba Networks. "Demand for true mobility is increasing at the same time that CIO's struggle with maintaining the security of their network in a mobile world. Our ability to securely and seamlessly deliver enterprise networks to users wherever they work or roam is a clear competitive differentiator in a fast growing market. To capitalize on this demand, we continue to invest in our industry-leading wireless LANs and client to core security technology, strengthen our strategic partnerships, expand our sales force and create new distribution channels for our products."

"The success of these efforts and the strength of our technology is reflected in our strong competitive win rate and continued new customer growth, as we now have won over 2,850 customers worldwide since we began shipping our family of products," added Mr. Orr. "We believe our technology differentiation is greatest for mid sized to large roll-outs, which is the most attractive part of the market. For these types of deployments, our purpose built, user-centric architecture provides a host of benefits, including proven scalability, increased security and a much lower total cost of ownership."

"Fiscal fourth quarter revenues and margins were strong, which led to a significant improvement in net income compared to the third quarter of fiscal 2007, even as we continued to make robust investments in R&D and sales and marketing," said Steffan Tomlinson, chief financial officer of Aruba Networks.

Recent Highlights

Aruba's focus on providing secure mobility solutions that integrate seamlessly over the existing network infrastructure enabled the Company to accomplish several key objectives over the past year. Some highlights from the most recent quarter include:

--  Industry achievement - The Company's ArubaOS 3.1 software won the Best
    Wireless Broadband Security Innovation category at the Wireless Broadband
    Innovations Awards in London, one of the world's largest broadband wireless
    shows, sponsored by BT, Connect Spot, FON, Intel, and Trustive, among
    others.  SC Magazine awarded the Aruba 800 Mobility Controller a "Best Buy"
    rating for network wireless security.  Chosen from among a wide field of
    contenders, the Mobility Controller was found to be easy to install, easy
    to administer, and the front-runner in terms of security capabilities.

--  Product integration - Aruba expanded its product line while continuing
    to ensure interoperability, allowing customers to better leverage the
    enterprise network without additional infrastructure investments.  Aruba
    started shipping two new software products in July 2007, the Mobile Access
    Point software and Mobile Voice Continuity software, designed to afford
    mobile users the same phone and secure network access they enjoy at work
    when they are away from the office.  The Company also began shipping the
    Enterprise Analyzer tool to troubleshoot Wi-Fi network problems and
    announced the acquisition of Network Chemistry's line of award-winning
    RFprotect and BlueScanner wireless security products.

--  Ramping of strategic partnerships - Aruba announced a contractual
    joint venture with Alcatel-Lucent focused on developing next-generation
    wired and wireless solutions for the enterprise.  Aruba also recently
    signed key distribution agreements with Catalyst Telecom and Avnet
    Technology Solutions, further expanding its market reach.

--  Compatibility testing - Aruba received accreditation for connecting
    the U.S. Army's new I3MP converged voice, data, and video network to
    wireless devices in tactical and garrison foxhole-to-fortress applications.
    I3MP is an enterprise information infrastructure modernization program for
    Army installations worldwide, and includes upgrades to voice, data, long-
    haul gateway, and enterprise management systems.  Aruba also completed
    interoperability testing of Apple's iPhone with its wireless LANs and has
    issued the device a Compatible Partner rating.  Finally, Aruba verified the
    interoperability of its user-centric networks with the three leading NAC
    solutions for devices managed by IT departments. Aruba simultaneously
    announced its new Endpoint Compliance System (ECS), a NAC solution that is
    especially well suited for unmanaged mobile devices, such as user-owned
    computers and PDAs, that are not as well served by the managed NAC
    solutions.

--  Customer wins - Over the past three months, Aruba announced several
    customer wins, including West Chester Public School District, the
    University of San Diego, U.S. Air Force, Air National Guard, and ICI PLC.
    

Conference Call Information

Aruba will host a conference call for analysts and investors to discuss its fiscal fourth quarter and full fiscal year 2007 results today at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). A live webcast of the conference call will also be accessible from the "Investor Relations" section of the Company's website at www.arubanetworks.com. Following the webcast, an archived version will be available on the website for twelve months. To hear the replay, parties in the United States and Canada should call 800-405-2236 and enter passcode 11094947. International parties can access the replay at 303-590-3000 and should enter passcode 11094947.

Forward-Looking Statements

This press release contains forward-looking statements, including statements relating to Aruba's business model, market positioning, momentum in the marketplace, expected future benefits of greater operating leverage and expectations regarding its strategic distribution agreement with distribution partners. These forward-looking statements involve risks and uncertainties, as well as assumptions which, if they do not fully materialize or prove incorrect, could cause Aruba's results to differ materially from those expressed or implied by such forward-looking statements. The risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward-looking statements include our ability to react to trends and challenges in our business and the markets in which we operate; the adoption rate of our products; our ability to establish and maintain successful relationships with our distribution partners; shortages or price fluctuations in our supply chain; our ability to compete in our industry; fluctuations in demand, sales cycles and prices for our products and services; and our ability to successfully market and transition customers to next generation products as well as those risks and uncertainties included under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," in Aruba's Registration Statement on Form S-1 dated March 26, 2007, which is on file with the SEC and is available on Aruba's investor relations website at www.arubanetworks.com and on the SEC website at www.sec.gov. Additional information will also be set forth in Aruba's report on Form 10-K for the year ended July 31, 2007, which will be filed with the SEC in October 2007. All forward-looking statements in this press release are based on information available to us as of the date hereof, and we assume no obligation to update these forward-looking statements.

Non-GAAP Financial Measures

In addition to disclosing financial measures prepared in accordance with Generally Accepted Accounting Principles (GAAP), this press release and the accompanying tables contain the following non-GAAP financial measures: non-GAAP net income and non-GAAP earnings per share (EPS). The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

Non-GAAP net income and EPS. Aruba defines non-GAAP net income as net income plus stock-based and in-process research and development expenses. Aruba defines non-GAAP EPS as non-GAAP net income divided by the weighted average diluted shares outstanding as of July 31, 2007. Aruba's management believes that these non-GAAP financial measures provide meaningful supplemental information regarding the company's performance by excluding certain non-cash expenses, such as stock-based and in-process research and development expenses. Because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use under FAS 123R, Aruba's management believes that providing these non-GAAP financial measures allows investors to compare these results with those of other companies, as well as providing management with an important tool for financial and operational decision making and for evaluating the company's operating results (excluding the impact of non-cash charges) over different periods of time.

There are a number of limitations related to the use of non-GAAP net income and EPS versus net income and EPS calculated in accordance with GAAP. First, these non-GAAP financial measures exclude some costs, namely, stock-based expenses, that are recurring. Stock-based expenses have been and will continue to be for the foreseeable future a significant recurring expense in Aruba's business. Second, stock-based awards are an important part of Aruba's employees' compensation and impacts their performance. Third, the components of the costs that Aruba excludes in its calculation of non-GAAP net income may differ from the components that its peer companies exclude when they report their results of operations. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from these non-GAAP financial measures and evaluating these non-GAAP financial measures together with their most directly comparable financial measures calculated in accordance with GAAP. The accompanying tables have more details on these non-GAAP financial measures, including reconciliations between these financial measures and their most directly comparable GAAP equivalents.

A copy of this press release can be found on the investor relations page of Aruba Networks' website at www.arubanetworks.com.

About Aruba Networks, Inc.

Aruba securely delivers the enterprise network to users, wherever they work or roam, with user-centric networks that significantly expand the reach of traditional port-centric networks. User-centric networks integrate adaptive WLANs, identity-based security, and application continuity services into a cohesive, high-performance system that can be easily deployed as an overlay on top of existing network infrastructure. Adaptive WLANs deliver high-performance, follow-me connectivity so users are always within reach of mission-critical information. Identity-based security associates access policies with users, not ports, to enable follow-me security that is enforced regardless of access method or location. Application continuity services enable follow-me applications that can be seamlessly accessed across WLAN and cellular networks. The cost, convenience, and security benefits of user-centric networks are fundamentally changing how and where we work. Listed on the NASDAQ and Russell 2000® Index, Aruba is based in Sunnyvale, California, and has operations throughout the Americas, Europe, Middle East, and Asia Pacific regions. To learn more, visit http://www.arubanetworks.com.

Aruba Networks is a registered trademark, and Aruba The Mobile Edge Company and Mobile Edge Architecture are trademarks of Aruba Networks, Inc. All other trademarks or registered trademarks are the property of their respective holders. Portions © 2007 Aruba Networks, Inc. All rights reserved. Specifications are subject to change without notice.

                           Aruba Networks, Inc.
                        Consolidated Balance Sheets
                  (In thousands, except per share data)
                                (Unaudited)

                                                      July 31,   July 31,
                                                        2007       2006
                                                      ---------  ---------
Assets

Current assets:
   Cash and cash equivalents                          $  42,570  $   9,263
   Short-term investments                                62,430          -
   Accounts receivable, net                              23,722     13,296
   Inventory                                              8,991      6,093
   Deferred costs                                         3,217      3,360
   Prepaids and other                                     2,432      1,758
                                                      ---------  ---------

      Total current assets                              143,362     33,770

Property and equipment, net                               3,709      1,971
Intangible assets, net                                    3,912          -
Deferred costs                                              722      1,960
Other assets                                                428        316
                                                      ---------  ---------

      Total other assets                                  8,771      4,247
                                                      ---------  ---------

      Total assets                                    $ 152,133  $  38,017
                                                      =========  =========

Liabilities, Redeemable Convertible Preferred Stock
 and Stockholders' Equity (Deficit)

Current liabilities:
   Accounts payable                                   $   2,201  $   4,385
   Accrued liabilities                                   15,317      8,062
   Income taxes payable                                     281        216
   Equipment loans payable                                    -        613
   Deposit for Series D redeemable convertible
    preferred stock                                           -     19,329
   Deferred revenue                                      16,067     11,637
                                                      ---------  ---------

      Total current liabilities                          33,866     44,242

Deferred revenue                                          5,780      6,803
Other long-term liabilities                                   -      1,963
                                                      ---------  ---------

      Total liabilities                                  39,646     53,008
                                                      ---------  ---------

Redeemable convertible preferred stock: $0.0001 par
 value; 0 and 46,445 shares authorized at July 31,
 2007 and 2006; 0 and 45,108 shares issued and
 outstanding at July 31, 2007 and 2006; liquidation
 preference: $0 and $58,213 at July 31, 2007 and 2006         -     58,009
                                                      ---------  ---------

Stockholders' equity (deficit)
   Preferred Stock: $0.0001 par value; 10,000 and 0
    shares authorized at July 31, 2007 and 2006; no
    shares issued and outstanding at July 31, 2007
    and 2006                                                  -          -
   Common Stock: $0.0001 par value;  350,000 and
    95,440 shares authorized at July 31, 2007
    and 2006; 76,927 and 15,257 shares issued and
    outstanding at July 31, 2007 and 2006                     8          2
   Additional paid-in capital                           213,545      6,075
   Deferred stock-based compensation                          -     (2,364)
   Accumulated other comprehensive income                    29          -
   Accumulated deficit                                 (101,095)   (76,713)
                                                      ---------  ---------

      Total stockholders' equity (deficit)              112,487    (73,000)
                                                      ---------  ---------

      Total liabilities, redeemable convertible
       preferred stock and stockholders' equity
       (deficit)                                      $ 152,133  $  38,017
                                                      =========  =========




                           Aruba Networks, Inc.
                  Consolidated Statements of Operations
                            (On a GAAP basis)
                  (In thousands, except per share data)
                                (Unaudited)


                                 Three months ended       Years ended
                                      July 31,              July 31,
                                --------------------  --------------------
                                  2007       2006       2007       2006
                                ---------  ---------  ---------  ---------
Revenues:
   Product                      $  36,394  $  16,819  $ 107,939  $  43,171
   Professional services and
    support                         4,254      1,576     12,847      2,985
   Ratable product and related
    professional services and
    support                         1,038      5,503      6,713     26,347
                                ---------  ---------  ---------  ---------

      Total revenues               41,686     23,898    127,499     72,503

Cost of revenues:
   Product                         11,251      6,476     36,035     16,904
   Professional services and
    support                         1,420        825      4,863      2,409
   Ratable product and related
    professional services and
    support                           382      1,904      2,470     10,572
                                ---------  ---------  ---------  ---------

      Total cost of revenues       13,053      9,205     43,368     29,885
                                ---------  ---------  ---------  ---------

         Gross profit              28,633     14,693     84,131     42,618
                                ---------  ---------  ---------  ---------

Operating expenses:
   Research and development         7,902      3,753     25,654     14,130
   Sales and marketing             20,921     10,180     60,115     33,765
   General and administrative       3,703      1,934     14,600      5,963
   In-process research and
    development                       632          -        632          -
                                ---------  ---------  ---------  ---------

      Total operating expenses     33,158     15,867    101,001     53,858
                                ---------  ---------  ---------  ---------

      Operating loss               (4,525)    (1,174)   (16,870)   (11,240)

Other income (expense), net
   Interest income                  1,344         99      2,221        551
   Interest expense                    (3)       (61)       (88)      (315)
   Other expense, net                 (85)       (91)    (9,270)      (765)
                                ---------  ---------  ---------  ---------

      Total other income
       (expense), net               1,256        (53)    (7,137)      (529)

      Loss before income tax
       provision and cumulative
       effect of change in
       accounting principle        (3,269)    (1,227)   (24,007)   (11,769)

Income tax provision                   81        218        375        306
                                ---------  ---------  ---------  ---------

      Loss before cumulative
       effect of change in
       accounting principle        (3,350)    (1,445)   (24,382)   (12,075)

   Cumulative effect of change
    in accounting principle             -          -          -         66
                                ---------  ---------  ---------  ---------

      Net loss                  $  (3,350) $  (1,445) $ (24,382) $ (12,009)
                                =========  =========  =========  =========

Shares used in computing net
 loss per common share, basic      75,612     12,726     34,808     11,211
Net loss per common share,
 basic                          $   (0.04) $   (0.11) $   (0.70) $   (1.07)

Shares used in computing net
 loss per common share, diluted    75,612     12,726     34,808     11,211
Net loss per common share,
 diluted                        $   (0.04) $   (0.11) $   (0.70) $   (1.07)




                           Aruba Networks, Inc.
                  Consolidated Statements of Operations
                    (GAAP to Non-GAAP Reconciliation)
                  (In thousands, except per share data)
                                (Unaudited)


                                 Three months ended       Years ended
                                      July 31,              July 31,
                                --------------------  --------------------
                                  2007       2006       2007       2006
                                ---------  ---------  ---------  ---------

GAAP net loss                   $  (3,350) $  (1,445) $ (24,382) $ (12,009)

Plus:
   a) Stock-based expenses          4,754        279     12,717      1,255
   b) Revaluation of warrants
      to fair value                     -         61      8,992        667
   c) In-process research and
      development                     632          -        632          -
                                ---------  ---------  ---------  ---------

Non-GAAP net income (loss)      $   2,036  $  (1,105) $  (2,041) $ (10,087)
                                =========  =========  =========  =========


GAAP net loss per common share  $   (0.04) $   (0.11) $   (0.70) $   (1.07)

Plus:
   a) Stock-based expenses           0.05       0.02       0.36       0.11
   b) Revaluation of warrants
      to fair value                     -          -       0.26       0.06
   c) In-process research and
      development                    0.01          -       0.02          -
                                ---------  ---------  ---------  ---------

Non-GAAP net income (loss) per
 common share                   $    0.02  $   (0.09) $   (0.06) $   (0.90)
                                =========  =========  =========  =========

Shares used in computing
 diluted GAAP net loss per
 common share                      75,612     12,726     34,808     11,211

Shares used in computing
 diluted Non-GAAP net income
 (loss) per common share           93,496     12,726     34,808     11,211




                           Aruba Networks, Inc.
                  Consolidated Statements of Operations
                    As a Percentage of Total Revenues
                            (On a GAAP Basis)
                               (Unaudited)


                                 Three months ended       Years ended
                                      July 31,              July 31,
                                --------------------  --------------------
                                  2007       2006       2007       2006
                                ---------  ---------  ---------  ---------
Revenues:
   Product                          87.3%      70.4%      84.6%      59.6%
   Professional services and
    support                         10.2%       6.6%      10.1%       4.1%
   Ratable product and related
    professional services and
    support                          2.5%      23.0%       5.3%      36.3%
                                ---------  ---------  ---------  ---------

      Total revenues               100.0%     100.0%     100.0%     100.0%

Cost of revenues:
   Product                          27.0%      27.1%      28.3%      23.3%
   Professional services and
    support                          3.4%       3.4%       3.8%       3.3%
   Ratable product and related
    professional services and
    support                          0.9%       8.0%       1.9%      14.6%
                                ---------  ---------  ---------  ---------

      Total cost of revenues        31.3%      38.5%      34.0%      41.2%
                                ---------  ---------  ---------  ---------

         Gross profit               68.7%      61.5%      66.0%      58.8%
                                ---------  ---------  ---------  ---------

Operating expenses:
   Research and development         18.9%      15.7%      20.1%      19.5%
   Sales and marketing              50.2%      42.6%      47.1%      46.6%
   General and administrative        8.9%       8.1%      11.5%       8.2%
   In-process research and
    development                      1.5%          -       0.5%          -
                                ---------  ---------  ---------  ---------

      Total operating expenses      79.5%      66.4%      79.2%      74.3%
                                ---------  ---------  ---------  ---------

      Operating loss               (10.8%)     (4.9%)    (13.2%)    (15.5%)

Other income (expense), net
   Interest income                   3.2%       0.4%       1.7%       0.8%
   Interest expense                    -       (0.2%)     (0.1%)     (0.4%)
   Other expense, net               (0.2%)     (0.4%)     (7.2%)     (1.1%)
                                ---------  ---------  ---------  ---------

      Total other income
       (expense), net                3.0%      (0.2%)     (5.6%)     (0.7%)

      Loss before income tax
       provision and cumulative
       effect of change in
       accounting principle         (7.8%)     (5.1%)    (18.8%)    (16.2%)

Income tax provision                 0.2%       0.9%       0.3%       0.4%
                                ---------  ---------  ---------  ---------

      Loss before cumulative
       effect of change in
       accounting principle         (8.0%)     (6.0%)    (19.1%)    (16.6%)

   Cumulative effect of change
    in accounting principle            -           -          -       0.1%
                                ---------  ---------  ---------  ---------

      Net loss                      (8.0%)     (6.0%)    (19.1%)    (16.5%)
                                =========  =========  =========  =========




                           Aruba Networks, Inc.
                  Consolidated Statements of Cash Flows
                              (In thousands)
                                (Unaudited)


                                                          Years ended
                                                            July 31,
                                                      --------------------
                                                        2007       2006
                                                      ---------  ---------
Cash flows from operating activities
Net loss                                              $ (24,382) $ (12,009)

Adjustments to reconcile net loss to net cash
 used in operating activities:
    Depreciation and amortization                         2,008      1,549
    Provision for doubtful accounts                         483        435
    Write downs for excess and obsolete inventory         1,110        939
    Compensation related to stock options and share
     awards                                              11,302      1,255
    Net realized gains on short-term investments              -         (1)
    Stock issued to charitable foundation                 1,415          -
    Non-cash interest (income) expense                     (344)       167
    Change in carrying value of preferred stock
     warrant liability                                    8,992        601
    Loss on disposal of fixed assets                          5          6
    In-process research and development                     632          -
    Changes in operating assets and liabilities:
       Accounts receivable                              (10,834)    (4,918)
       Inventory                                         (3,955)    (3,110)
       Prepaids and other                                  (774)      (650)
       Deferred costs                                     1,381      4,479
       Other assets                                        (112)      (216)
       Accounts payable                                  (2,184)       147
       Deferred revenue                                   3,322     (3,921)
       Other current and noncurrent accrued
        liabilities                                       7,522      1,528
       Income taxes payable                                  65        200
                                                      ---------  ---------

          Net cash used in operating activities          (4,348)   (13,519)
                                                      ---------  ---------

Cash flows from investing activities
    Purchases of short-term investments                 (67,757)         -
    Proceeds from sales and maturities of short-term
     investments                                          5,744        900
    Purchases of property and equipment                  (3,737)    (2,092)
    Cash paid in purchase acquisition                    (4,600)         -
                                                      ---------  ---------

          Net cash used in investing activities         (70,350)    (1,192)
                                                      ---------  ---------

Cash flows from financing activities
    Repayments on equipment loan obligations               (654)    (1,358)
    Deposit for Series D redeemable convertible
     preferred stock, net                                     -     19,232
    Cash received under stock issuance agreement          2,130      1,354
    Proceeds from issuance of redeemable convertible
     preferred stock, net                                10,597          -
    Proceeds from initial public offering, net           91,809          -
    Proceeds from issuance of common stock                4,038        450
                                                      ---------  ---------

          Net cash provided by financing activities     107,920     19,678
                                                      ---------  ---------

Effect of exchange rate changes on cash and cash
 equivalents                                                 85          3
                                                      ---------  ---------

          Net increase in cash and cash equivalents      33,307      4,970

Cash and cash equivalents, beginning of period            9,263      4,293
                                                      ---------  ---------

Cash and cash equivalents, end of period              $  42,570  $   9,263
                                                      =========  =========



Supplemental disclosure of cash flow information
Income taxes paid                                     $     294  $     161
Interest paid                                                37        136

Supplemental disclosure of non-cash investing and
 financing activities
Reclassification of warrant liability to equity upon
 initial public offering                                  9,933          -
Reclassification of non-current liability to equity
 upon initial public offering                             3,500          -
Reclassification of preferred stock warrants to
 liability                                                    -        340

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