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Aruba Networks reports record revenue, but losses up

Aruba Networks, Inc. had record revenue of $160.9 million for the most recent quarter, up 11% year-over-year — however, the company’s losses increased as well, with a net loss of $7.8 million recorded for the quarter, compared to a $0.8 million loss during the same period last year.

Aruba’s operating expenses were up as it put more money into research and development ($8 million increase year-over-year) and sales and marketing ($10 million more in the most recent period), putting its operating income in the negative about $5 million compared to $4.5 million on the positive side in the same quarter of 2013.

“In the first quarter, we surpassed our revenue expectations and executed well on our initiatives to grow our sales and channel engine,” said Dominic Orr, Aruba’s president and chief executive officer, in a statement. “The early strong performance of our 802.11ac solutions validate our technology leadership position in the industry. Additionally, we expanded our addressable market with the launch of our Aruba Central cloud-based management service, bringing Aruba’s enterprise-class performance, manageability and reliability to the cloud. Our competitive position continues to grow as IT teams recognize that upgrading their wired closet will not solve their most pressing needs brought about by an increasingly wireless world and the proliferation of devices needing access to their networks.”

In a call with investors, Orr added that no particular large deals drove revenue during the quarter. He noted that Aruba expects to see continued demand for its products with the ramp-up of the 802.11ac standard, and serving the BYOD market to manage those devices.

“With 11ac now certified by the Wi-Fi Alliance and a growing number of devices coming to market, we believe the ramp in demand for 11.ac is just getting started,” Orr said on the call. Later, he added that “the expectation for the industry is that over the Christmas period and next January in CES in Las Vegas, there will be a flood of ac-enabled mobile devices hitting the market,” and that businesses tend to see no more than a 45-to-60 day lag before consumer devices start being used for BYOD.

CFO Michael Galvin called the results a “solid quarter,” and noted that the company repurchased $113 million in stock in the period.

ABOUT AUTHOR

Kelly Hill
Kelly Hill
Kelly reports on network test and measurement, as well as the use of big data and analytics. She first covered the wireless industry for RCR Wireless News in 2005, focusing on carriers and mobile virtual network operators, then took a few years’ hiatus and returned to RCR Wireless News to write about heterogeneous networks and network infrastructure. Kelly is an Ohio native with a masters degree in journalism from the University of California, Berkeley, where she focused on science writing and multimedia. She has written for the San Francisco Chronicle, The Oregonian and The Canton Repository. Follow her on Twitter: @khillrcr