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Imperva Announces First Quarter 2016 Financial ResultsImperva, Inc. (NYSE:IMPV), committed to protecting business-critical data and applications in the cloud and on-premises, today announced financial results for the first quarter ended March 31, 2016. "We had a great start to the year driven by the ongoing demand for our best-of-breed discovery, protection and compliance solutions," stated Anthony Bettencourt, President and Chief Executive Officer of Imperva. "During the first quarter, we were particularly pleased with the ongoing strong growth of our subscription revenue as well as deals over $100,000. We are confident in our ability to maintain the momentum for the remainder of the year given the growing need for enterprises to protect their business critical data and applications which has resulted in a strong pipeline of opportunities globally." First Quarter 2016 Financial Highlights
First Quarter and Recent Operating Highlights
Business Outlook The following forward-looking statements reflect expectations as of May 5, 2016. Results may be materially different and could be affected by the factors detailed in this press release and in recent Imperva SEC filings. Second Quarter Expectations - Ending June 30, 2016 Imperva expects total revenue for the second quarter of 2016 to be in the range of $65.5 million to $66.5 million. The company expects in the second quarter of 2016 non-GAAP gross margins of approximately 80%. Further, Imperva expects in the second quarter of 2016 non-GAAP operating loss to be in the range of $(0.3) million to $(1.3) million and non-GAAP net loss to be in the range of $(0.5) million to $(1.5) million, or $(0.02) to $(0.04) per share based on approximately 32.5 million weighted average shares, which excludes stock-based compensation and amortization of purchased intangibles. Full Year Expectations -Ending December 31, 2016 Imperva expects total revenue for 2016 to be in the range of $304.0 million to $307.0 million. Imperva expects 2016 non-GAAP gross margins of approximately 80%. Further, the company expects 2016 non-GAAP operating profit to be in the range of $9.0 million to $11.0 million and non-GAAP net profit to be in the range of $7.7 million to $9.7 million, or $0.23 to $0.29 per share based on approximately 33.5 million weighted average shares, which excludes stock-based compensation and amortization of purchased intangibles. Imperva expects capital expenditures for the full year to be in the range of $18.0 million to $20.0 million. Finally, the company expects to generate positive cash flows from operations in 2016. Quarterly Conference Call Imperva will host a conference call today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to review the company's financial results for the first quarter ended March 31, 2016. To access this call, dial (888) 395-3241 for the U.S. or Canada or (719) 325-2138 for international callers with conference ID #8104683. A live webcast of the conference call will be accessible from the investors page of the Imperva website at www.imperva.com, and a recording will be archived and accessible at www.imperva.com. An audio replay of this conference call will also be available through May 19, 2016, by dialing (877) 870-5176 for the U.S. and Canada, or (858) 384-5517 for international callers and entering passcode #8104683. Non-GAAP Financial Measures Imperva reports all financial information required in accordance with U.S. generally accepted accounting principles (GAAP). To supplement the Imperva unaudited condensed consolidated financial statements presented in accordance with GAAP, Imperva uses certain non-GAAP measures of financial performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the results of Imperva operations as determined in accordance with GAAP. The non-GAAP financial measures used by Imperva include historical non-GAAP operating income (loss), non-GAAP net income (loss) and non-GAAP basic and diluted loss per share. These non-GAAP financial measures exclude stock-based compensation and amortization of purchased intangibles from the Imperva unaudited condensed consolidated statement of operations. For a description of these items, including the reasons why management adjusts for them, and reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section of the accompanying tables titled "Use of Non-GAAP Financial Information" as well as the related tables that precede it. Imperva may consider whether other significant non-recurring items that arise in the future should also be excluded in calculating the non-GAAP financial measures it uses. Imperva believes that these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding the performance of Imperva by excluding certain items that may not be indicative of the company's core business, operating results or future outlook. Imperva management uses, and believes that investors benefit from referring to, these non-GAAP financial measures in assessing operating results of Imperva, as well as when planning, forecasting and analyzing future periods. These non-GAAP financial measures also facilitate comparisons of the performance of Imperva to prior periods. Forward Looking Statements This press release contains forward-looking statements, including without limitation those regarding the Imperva "Business Outlook" ("Second Quarter Expectations - Ending June 30, 2016" and "Full Year Expectations - Ending December 31, 2016"); the company's belief about its ability to maintain momentum in the growth of its business in 2016, including the growth in subscription revenue and number of deals over $100,000; and the company's belief that enterprises will continue to need products and services such as those offered by Imperva to protect their business critical data and applications leading to a strong pipeline of opportunities. These forward-looking statements are subject to material risks and uncertainties that may cause actual results to differ substantially from expectations. Investors should consider important risk factors, which include: the risk that demand for the company's cyber security solutions may not increase or may decrease, including as a result of global macroeconomic conditions and other economic conditions that may reduce enterprise software or security spending generally or customer perceptions about the reliability of our solutions; the risk that our sales expectations for large customers do not materialize in a particular quarter or at all; the risk that the company may not timely introduce new products or services versions of its products or services and that such products or services may not be accepted by the market or may have defects, errors, outages or failures; the risk that competitors may be perceived by customers to offer greater value or to be better positioned to help handle cyber security threats and protect their businesses from major risk; the risk that existing customers may focus their additional cyber security spending on other technologies or addressing other risks; the risk that the company's growth may be lower than anticipated; the risk that the markets that Imperva addresses may not grow as anticipated; and other risks detailed under the caption "Risk Factors" in the company's Form 10-K filed with the Securities and Exchange Commission, or the SEC, on February 26, 2016 and the company's other SEC filings. You can obtain copies of the company's SEC filings on the SEC's website at www.sec.gov. The foregoing information represents the company's outlook only as of the date of this press release, and Imperva undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, new developments or otherwise. About Imperva Imperva® (NYSE:IMPV) is a leading provider of cyber security solutions that protect business-critical data and applications. The company's SecureSphere, CounterBreach, Incapsula and Skyfence product lines enable organizations to discover assets and risks, protect information wherever it lives - in the cloud and on-premises - and comply with regulations. The Imperva Defense Center, a research team comprised of some of the world's leading experts in data and application security, continually enhances Imperva products with up-to-the minute threat intelligence, and publishes reports that provide insight and guidance on the latest threats and how to mitigate them. Imperva is headquartered in Redwood Shores, California. Learn more: www.imperva.com, our blog, on Twitter. © 2016 Imperva, Inc. All rights reserved. Imperva, the Imperva logo, SecureSphere, CounterBreach, Incapsula and Skyfence are trademarks of Imperva, Inc. and its subsidiaries.
Use of Non-GAAP Financial Information In addition to the reasons stated under "Non-GAAP Financial Measures" above, which are generally applicable to each of the items Imperva excludes from its non-GAAP financial measures, Imperva believes it is appropriate to exclude or give effect to certain items for the following reasons: Stock-Based Compensation: When evaluating the performance of its consolidated results, Imperva does not consider stock-based compensation charges. Likewise, the Imperva management team excludes stock-based compensation expense from its operating plans. In contrast, the Imperva management team is held accountable for cash-based compensation and such amounts are included in its operating plans. Further, when considering the impact of equity award grants, Imperva places a greater emphasis on overall stockholder dilution rather than the accounting charges associated with such grants. Imperva excludes stock-based compensation expense from its non-GAAP financial measures primarily because it does not consider it part of ongoing operating results when assessing the performance of its business, and the exclusion of the expense facilitates the comparison of results and business outlook for future periods with results for prior periods in order to better understand the long term performance of its business. Amortization of Purchased Intangibles. When analyzing the operating performance of an acquired entity, Imperva's management focuses on the total return provided by the investment (i.e., operating profit generated from the acquired entity as compared to the purchase price paid) without taking into consideration any allocations made for accounting purposes. Because the purchase price for an acquisition necessarily reflects the accounting value assigned to intangible assets (including acquired technology and goodwill), when analyzing the operating performance of an acquisition in subsequent periods, Imperva's management excludes the GAAP impact of acquired intangible assets to its financial results. Imperva believes that such an approach is useful in understanding the long-term return provided by an acquisition and that investors benefit from a supplemental non-GAAP financial measure that excludes the accounting expense associated with acquired intangible assets. In addition, in accordance with GAAP, Imperva generally recognizes expenses for internally-developed intangible assets as they are incurred until technological feasibility is reached, notwithstanding the potential future benefit such assets may provide. Unlike internally-developed intangible assets, however, and also in accordance with GAAP, Imperva generally capitalizes the cost of acquired intangible assets and recognizes that cost as an expense over the useful lives of the assets acquired (other than goodwill, which is not amortized, as required under GAAP). As a result of their GAAP treatment, there is an inherent lack of comparability between the financial performance of internally-developed intangible assets and acquired intangible assets. Accordingly, Imperva believes it is useful to provide, as a supplement to its GAAP operating results, a non-GAAP financial measure that excludes the amortization of acquired intangibles.
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