Infoblox Inc (NYSE:BLOX) is set to report its quarterly earnings on Nov.26, and host the conference call on the same day at 1.30 pacific time to discuss the operating results.
Santa Clara, California-based Infoblox delivers automated network control solutions that enable enterprises and service providers to transform and scale complex networks. Infoblox helps take the burden of complex network control out of human hands, reduce costs, and increase accuracy and uptime.
Wall Street expects Infoblox to earn 9 cents a share, according to analysts polled by Thomson Reuters. The consensus view implies a 50 percent rise from 6 cents it earned in the same quarter last year. The company sees non-GAAP earnings in the range of 8 to 9 cents a share.
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In the past three quarters, the company's earnings have managed to edge past the Street's view by a wide margin in the range of 50 to 83.3 percent. Perhaps, another nice surprise is on its way.
Quarterly revenue is expected to rise 28.2 percent to $63.49 million from $49.50 million versus the corresponding quarter prior year. Infoblox, which grew quarterly sales by more than 25 percent in the first four quarters of fiscal 2013, sees total net revenue in the range of $62.5 million to $63.5 million.
Margins will be key metric to watch. Infoblox expects gross margin to be approximately 78 percent while operating margin should range between 8 and 9 percent. The Government vertical is expected to be in the low- to mid-teens as a percentage of total revenue.
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Sterne Agee analyst Alex Kurtz sees a positive setup for Infoblox into their October quarter earnings with a low hurdle rate on product revenue growth of 34 percent versus 52 percent last quarter.
Nowadays, customers increasingly recognize the need for a foolproof management and security system for their DNS ! assets, and this trend bodes well for the company.
The Street will look the customer traction. The company has been adding about 200 clients/quarter and currently has 6.7k clients to-date in a total available market of 45k clients. As a result, there is a lot of growth potential ahead.
Investors could focus on new product traction, especially with the lower-ASP Trinzic 100, suitable for branch deployments, and the security-focused DNS firewall to upsell into the installed base and to address rising DNS security.
The market would also look for demand metrics for the new DNS Firewall – FireEye Adapter, which combines Infoblox DNS Firewall and the malware protection system from FireEye Inc. (NASDAQ:FEYE) to protect against Advanced Persistent Threats (APTs).
In addition, investors will watch the company's outlook for the second quarter and any changes in the full year view The stock may move depending on how they fare with the consensus expectations. Street expects earnings of 12 cents a share on revenue of $67.04 million for the second quarter, and 53 cents on revenue of $276.91 million for the full year.
Kurtz continues to believe there is room for multiple expansion as the company should continue to post above market growth rates of 20-25 percent for the next several years. Checks suggest a strengthening pipeline along with early growth into a few larger National value added resellers.
For the fourth quarter, the company reported earnings of a net income of $1.5 million, or 3 cents a share, compared with a net loss of $4.3 million, or 10 cents a share for the fourth quarter of fiscal 2012. Excluding items, it earned 14 cents a share. Total net revenue for the fourth quarter rose 40 percent to $63.1 million.
Shares of Infoblox have surged 123 percent year-to-date and 98 percent since its trading debut in April 2012. They trade 51 times its forward earnings. The company should deliver sales of growth of at least 25 percent to sustain the current momentum.
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