Gigamon Inc (NYSE:GIMO) announced preliminary results for the fourth quarter and fiscal year ended December 31, 2016.
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.
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.
Shares of Gigamon tumble nearly 21% to $34.60 in after-hours trading. GIMO has a 1-year high of $61.25 and a 1-year low of $21.23. The stock’s 50-day moving average is $47.71 and its 200-day moving average is $48.47.
On the ratings front, GIMO has been the subject of a number of recent research reports. In a report issued on December 21, Dougherty analyst Catharine Trebnick initiated coverage with a Buy rating on GIMO and a price target of $58, which represents a potential upside of 32% from last closing price. Separately, on December 9, D.A. Davidson’s Mark Kelleher upgraded the stock to Buy and has a price target of $60.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Catharine Trebnick and Mark Kelleher have a yearly average return of 4.2% and 4.8% respectively. Trebnick has a success rate of 52% and is ranked #1492 out of 4349 analysts, while Kelleher has a success rate of 53% and is ranked #1270.
Gigamon, Inc. designs, develops and sells products and services that together provide customers with visibility and control of network traffic. It serves global enterprises and service providers that seek to maintain and improve the reliability, performance and security of their network infrastructure.