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2. company
3. merger and acquisition

Q1 FY2016 Earnings Results
Suresh Vasudevan, Chief Executive Officer
Anup Singh, Chief Financial Officer
May 26, 2015
Safe Harbor
This presentation and the accompanying oral presentation contain “forward-looking” statements that are based on our management’s beliefs and assumptions and on information currently
available to management. We intend for such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the U.S. Private Securities
Litigation Reform Act of 1995. Forward-looking statements include all statements other than statements of historical fact contained in this presentation, including information concerning our
financial outlook, business plans and objectives, potential growth opportunities, competitive position, industry environment and potential market opportunities.
Forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other factors including, but not limited to, those related to our future financial performance,
market acceptance of our solutions, our ability to increase sales of our solutions, including to attract and retain customers and to selling additional solutions to our existing customers, our ability
to develop new solutions and bring them to market in a timely manner, pricing pressure (as a result of competition or otherwise), our ability to maintain, protect and enhance our brand and
intellectual property, global economic conditions and our ability to continue to expand our business and manage our growth. Moreover, we operate in very competitive and rapidly changing
environments, and new risks may emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to
which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Further information on these and
other factors that could affect our financial results are included in our filings we make with the Securities and Exchange Commission, and may cause our actual results, performance or
achievements to differ materially and adversely from those anticipated or implied by our forward-looking statements.
You should not rely upon forward-looking statements as predictions of future events. Although our management believes that the expectations reflected in our forward-looking statements are
reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances described in the forward-looking statements will be achieved or occur.
Moreover, neither we, nor any other person, assume responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to publicly update any
forward-looking statements for any reason after the date of this presentation to conform these statements to actual results or to changes in our expectations, except as required by law.
In addition to GAAP financial information, this presentation includes certain non-GAAP financial measures. The non-GAAP measures have limitations and you should not consider them in
isolation or as a substitute for our GAAP financial information. There are limitations to the use of non-GAAP measures. For example, bookings and free cash flow are not substitutes for
revenues or cash provided by operations. In addition, non-GAAP operating expenses exclude the impact of stock-based compensation expense, which is a recurring expense for us. See the
Appendix for a reconciliation of these non-GAAP financial measures to their nearest GAAP equivalent.
2
Q1 Fiscal Year 2016 Financial Results
Q1FY16
Company Q1FY16
Guidance
Q1FY15
Y/Y Increase
Revenue
$71.3M*
$68M ~ $70M
$46.5M
+53%*
Operating Income
($7.9M)
($9.0M) ~ $10.0M)
($10.1M)
+21%
EPS
($0.10)
($0.13) ~ ($0.14)
($0.14)
+4 cents
* Excluding fluctuations in foreign currency, revenue would have been $73.4M, representing a 58% increase over Q1FY15.
Strong Revenue Growth
Quarterly Revenue ($M)
$ 68.3
$ 71.3
$ 59.1
§ Total Revenue $71.3M
$ 53.8
§ Product $60M / 84% of total
$ 46.5
§ Support $11M / 16% of total
§ Deferred Revenue $86M, up 105% y/y
§ International Revenue up 59% y/y
§ Excluding fluctuations in foreign currency,
international revenue would have increased
84% over Q1FY15
Q1FY15
Q2FY15
Product Revenue
Q3FY15
Q4FY15
Q1FY16
Support and Service Revenue
4
Growth Drivers: New Customers, International, Increasing ASP’s, Repeat Business
New Customers & International Expansion
Cumulative Customer Base
% Bookings > $100K
5,521
3,097
55%
70%
1,372
Q1FY14
Increasing Average Deal Size
45%
30%
Q1FY15
Q1FY16
International Bookings
Q1FY15
Strong Repeat Business
% New vs. Existing Customer Bookings
Existing
customers
Bookings Under
$100K
Bookings Over
$100K
Q1FY16
New
customers
36%
64%
$ Bookings > $100K
+81%
12months thru Q1FY15
+142%
44%
56%
12 months thru Q1FY16
Q1FY15
Q1FY16
Q1FY15
Q1FY16
5
Strong Growth in Enterprise and Cloud Service Provider Bookings
Global 5000 Enterprise Bookings
Cloud Service Provider Bookings
103%
111%
Q1FY15
Q1FY16
Global 5000 Enterprise Repeat Bookings
Q1FY15
Cloud Service Provider Repeat Bookings
3.1X
3.2X
1X
1X
Initial Sale
Q1FY16
Total: Year 1 and 2
Initial Sale
Total: Year 1 and 2
6
Industry Leading Gross Margins
69.0%
66.2%
69.4%
68.9%
69.1%
69.1%
67.4%
67.1%
67.2%
67.6%
59.5%
56.0%
56.0%
v
52.9%
44.8%
Q1FY15
Q2FY15
Total Gross Margin
*Reflects
Q3FY15
Product Margin
Q4FY15
Q1FY16
Support & Service Margin
Non-GAAP Gross Margin, which excludes stock based compensation expense. See slide 12 for reconciliation
7
Improving Operating Leverage
Operating Expenses as % of Revenue
R&D, Sales & Marketing, G&A Leverage
98%
62%
52%
48%
88%
79%
Q1FY14
Q1FY15
Q1FY16
25%
27%
v
9%
10%
Q1FY14
Q1FY15
R&D
*Reflects
Sales & Marketing
23%
8%
Q1FY16
G&A
Non-GAAP Operating Expenses, which excludes stock based compensation expense. See slide 12 for reconciliation
8
On Track to Profitability
Q1FY15
Q2FY15
Q3FY15
Q4FY15
Q1FY16
-6%
-10%
-11%
-16%
-17%
-22%
-16%
v
-20%
Operating Margin
*Reflects
-12%
-15%
Adjusted EBITDA Margin
Non-GAAP Operating Margin, which excludes stock based compensation expense. See slide 12 for reconciliation
9
Q2 Fiscal Year 2016 Guidance
Q2 FY16 Guidance
Revenue
$77.0M ~ $79.0M
Operating Income
($8.0M) ~ ($9.0M)
EPS
($0.11) ~ ($0.12)
Weighted Average Basic Shares Outstanding
78.0M
Target Operating Model
FY13
FY14
FY15
Q1 FY16
Gross Margin*
62%
65%
67%
68%
Currently operating above target model
63%–65%
R&D as % of
Revenue*
28%
26%
24%
23%
Leverage from investments we have made in our rich product
roadmap
11%–13%
28%–31%
5%–6%
How We Get There
S&M as % of
Revenue*
72%
57%
51%
48%
Improved sales productivity driven by higher ASPs, maturity
of enterprise and international sales teams, growth in repeat
business and increase in channel leverage
G&A as % of
Revenue*
9%
9%
9%
8%
Continuous efficiency and economies of scale
-47%
-27%
-17%
-11%
Non-GAAP
Operating
Margin
Long-Term Model
16%–20%
*Reflects Non-GAAP Gross Margin, R&D, S&M, G&A and Operating Margin, see slide 12 for reconciliation
Note: due to rounding, numbers presented above may not sum to total.
11
GAAP to Non-GAAP Reconciliation
($ in thousands)
FY12
FY13
FY14
FY15
Q1FY14
Q2FY14
Q3FY14
Q4FY14
Q1FY15
Q2FY15
Q3FY15
Q4FY15
Q1FY16
GAAP Product Gross Profit
% GAAP Product Gross Margin
(+) Stock-based Compensation
Non-GAAP Product Gross Profit
Non-GAAP Product Gross Margin
7,880
60.1%
10
7,890
60.2%
32,499
65.3%
48
32,547
65.4%
76,581
67.9%
232
76,813
68.1%
135,349
68.3%
1,508
136,857
69.1%
13,151
65.6%
40
13,191
65.8%
17,240
67.0%
38
17,278
67.2%
20,564
68.8%
52
20,616
69.0%
25,626
69.0%
102
25,728
69.2%
28,224
68.4%
231
28,455
69.0%
32,326
68.6%
374
32,700
69.4%
34,716
67.9%
486
35,202
68.9%
40,083
68.3%
417
40,500
69.1%
41,052
68.2%
545
41,597
69.1%
GAAP Support and Service Gross Profit
% GAAP Support and Service Gross Margin
(+) Stock-based Compensation
Non-GAAP Support and Service Gross Profit
Non-GAAP Support and Service Gross Margin
(145)
-16.1%
31
(114)
-12.7%
891
21.9%
114
1,005
24.7%
4,941
38.2%
468
5,409
41.9%
13,371
45.3%
2,380
15,751
53.3%
430
20.7%
43
473
22.8%
940
34.1%
88
1,028
37.3%
1,458
41.3%
127
1,585
44.9%
2,113
46.4%
210
2,323
51.0%
1,988
37.4%
393
2,381
44.8%
2,919
44.0%
593
3,512
52.9%
3,716
46.6%
749
4,465
56.0%
4,748
49.3%
645
5,393
56.0%
5,443
49.1%
1,157
6,600
59.5%
GAAP Gross Profit
% GAAP Gross Margin
(+) Stock-based Compensation
Non-GAAP Gross Profit
% Non-GAAP Gross Margin
7,735
55.2%
41
7,776
55.5%
33,390
62.0%
162
33,552
62.3%
81,522
64.8%
700
82,222
65.4%
148,720
65.3%
3,888
152,608
67.0%
13,581
61.4%
83
13,664
61.8%
18,180
63.8%
126
18,306
64.3%
22,022
65.9%
179
22,201
66.4%
27,739
66.5%
312
28,051
67.2%
30,212
64.9%
624
30,836
66.2%
35,245
65.6%
967
36,212
67.4%
38,432
65.0%
1,235
39,667
67.1%
44,831
65.7%
1,062
45,893
67.2%
46,495
65.2%
1,702
48,197
67.6%
GAAP Research and Development
(-) Stock-based Compensation
Non-GAAP Research and Development
7,903
268
7,635
16,135
874
15,261
35,247
3,049
32,198
70,338
15,137
55,201
6,318
367
5,951
8,058
547
7,511
9,361
781
8,580
11,510
1,354
10,156
14,217
2,440
11,777
17,417
3,692
13,725
19,679
4,595
15,084
19,025
4,410
14,615
21,709
5,431
16,278
GAAP Sales and Marketing
(-) Stock-based Compensation
Non-GAAP Sales and Marketing
12,863
244
12,619
39,851
1,029
38,822
75,107
3,674
71,433
143,575
27,752
115,823
14,160
498
13,662
17,268
623
16,645
19,902
850
19,052
23,777
1,703
22,074
29,202
4,921
24,281
36,639
8,664
27,975
36,994
7,575
29,419
40,740
6,592
34,148
44,443
10,111
34,332
GAAP General and Administrative
(-) Stock-based Compensation
Non-GAAP General and Administrative
3,756
267
3,489
5,168
539
4,629
13,737
1,726
12,011
30,884
10,290
20,594
2,301
207
2,094
3,041
331
2,710
3,130
455
2,675
5,265
733
4,532
6,437
1,572
4,865
7,101
1,846
5,255
8,887
4,001
4,886
8,459
2,871
5,588
9,261
3,741
5,520
GAAP Operating Expenses
(-) Stock-based Compensation
Non-GAAP Operating Expenses
24,522
779
23,743
61,154
2,442
58,712
124,091
8,449
115,642
244,797
53,179
191,618
22,779
1,072
21,707
28,367
1,501
26,866
32,393
2,086
30,307
40,552
3,790
36,762
49,856
8,933
40,923
61,157
14,202
46,955
65,560
16,171
49,389
68,224
13,873
54,351
75,413
19,283
56,130
GAAP Operating Loss
% of Revenue
(+) Stock-based Compensation
Non-GAAP Operating Loss
% of Revenue
(16,787)
-120%
820
(15,967)
-114%
(27,764)
-52%
2,604
(25,160)
-47%
(42,569)
-34%
9,149
(33,420)
-27%
(96,077)
-42%
57,067
(39,010)
-17%
(9,198)
-42%
1,155
(8,043)
-36%
(10,187)
-36%
1,627
(8,560)
-30%
(10,371)
-31%
2,265
(8,106)
-24%
(12,813)
-31%
4,102
(8,711)
-21%
(19,644)
-42%
9,557
(10,087)
-22%
(25,912)
-48%
15,169
(10,743)
-20%
(27,128)
-46%
17,406
(9,722)
-16%
(23,393)
-34%
14,935
(8,458)
-12%
(28,918)
-41%
20,985
(7,933)
-11%
Net Cash Provided by (Used in) Operating Activities
% of Revenue
(-) Property and Equipment, Net
Free Cash Flow
% of Revenue
(14,841)
-105.9%
1,303
(16,144)
-115.2%
(18,754)
-35%
3,954
(22,708)
-42%
(6,742)
-5%
13,613
(20,355)
-16%
5,376
2%
20,820
(15,444)
-7%
(4,876)
-22%
1,884
(6,760)
-31%
(3,780)
-13%
1,542
(5,322)
-19%
(271)
-1%
4,726
(4,997)
-15%
2,185
5%
5,461
(3,276)
-8%
452
1%
3,728
(3,276)
-7%
2,837
5%
4,179
(1,342)
-2%
(6,522)
-11%
4,933
(11,455)
-19%
8,609
13%
7,980
629
1%
(8,307)
-12%
8,057
(16,364)
-23%
12