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Aruba Networks CEO Discusses F4Q2010 Results - Earnings Call Transcript

Aruba Networks CEO Discusses F4Q2010 Results - Earnings Call Transcript

Aruba Networks, Inc. (ARUN)

F4Q2010 Earnings Call Transcript

August 26, 2010 5:00 pm ET


Jill Isenstadt – IR, The Blueshirt Group

Dominic Orr – President & CEO

Steffan Tomlinson – CFO

Hitesh Sheth – COO


Stephen Patel – Gleacher & Company

Simona Jankowski – Goldman Sachs

Ryan Hutchinson – Lazard Capital Markets

Bill Choi – Jefferies

Mark Sue – RBC Capital Markets

Jonathan Ruykhaver – ThinkEquity

Sanjiv Wadhwani – Stifel Nicolaus

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Erik Suppiger – Signal Hill

Greg Mesniaeff – Needham & Company

Rohit Chopra – Wedbush Securities

Lynn Um – Barclays Capital



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Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Aruba Networks Q4 and full-year earnings results conference call. During today’s presentation all parties will be in a listen only mode. And following the presentation the conference will be opened for questions. (Operator instructions) And now I’d like to hand the conference over to Jill Isenstadt from Investor Relations. Please go ahead, ma’am.

Jill Isenstadt

Good afternoon, and thank you for joining us on today’s conference call to discuss Aruba Networks fiscal fourth quarter and full year 2010 results. This call is also being broadcast live over the Web and can be accessed in the Investor Relations section of the Aruba Networks website at

With me on today’s call are Dominic Orr, Aruba’s President and Chief Executive Officer; Steffan Tomlinson, Chief Financial Officer; Keerti Melkote, Aruba’s Co-Founder and Chief Technology Officer; and Hitesh Sheth, Aruba’s Chief Operating Officer.

After the market closed today, Aruba Networks issued a press release announcing results for its fiscal fourth quarter and full year ended July 31st, 2010. If you would like a copy of the release you can access it online at the Company’s website or you can call the Blueshirt Group at 415-217-7722 and we will fax or email you a copy.

We’d like to remind you that during the course of this conference call Aruba Network’s management will make forward-looking statements including statements regarding the Company’s revenue and EPS guidance for the first quarter of fiscal 2011, the Company’s belief that the trend towards mobility and the adoption of wireless networking is accelerating, and that the Company will continue to gain market share and derive significant traction from its 802.11n products, and its VBN and mesh initiatives; the Company’s expectations, beliefs, financial plans, intentions, and strategies relating to its proposed acquisition of Azalea Networks, and its partnership with Alcatel-Lucent Shanghai Bell and Dell, and statements as to the Company’s future economic performance, pipelines, financial conditions or results of operations.

These forward-looking statements involve a number of risks and uncertainties, some of which are beyond our control that could cause actual results to differ materially from those anticipated by these statements. These forward-looking statements apply as of today and you should not rely on them as representing our views in the future and we undertake no obligation to update these statements after this call.

Also please note that Aruba’s application of US Generally Accepted Accounting Principles or US GAAP requires disclosure that the availability of new products, planned features and upgrades discussed during this call are subject to change or cancellation. For a more detailed description of these risks and uncertainties that may affect our results please refer to the risks and uncertainties described under the caption Risk Factors and managements’ discussion of analysis of financial conditions and results of operations in our quarterly report on Form 10-Q filed with the SEC on June 4


, 2010 as well as our earnings release posted a few minutes ago on our website.

Copies of these documents may be obtained from the SEC or by visiting the Investor Relations section of our website. Also, please note that certain financial measures we use on this call are expressed on a non-GAAP basis and have been adjusted to exclude certain charges including stock-based expenses and related payroll taxes, amortization of expense of acquired intangible assets, restructuring expenses and litigation settlement expense. We are providing reconciliations of these non-GAAP measures to GAAP financial measures in the Investor Relations section of our website located at and in our earnings press release.

Now, I’d like to introduce Dominic Orr, President and Chief Executive Officer of Aruba Networks. Dominic?

Dominic Orr

Thank you, Jill. Good afternoon, and thank you for taking the time to attend our fiscal fourth quarter and full year 2010 conference call. I am pleased to announce another record quarter and fiscal year for Aruba Networks. New customer growth was exceptional as value proposition, technology, and initiatives are gaining traction with customers.

The economy over the last two years has cleared shifted the focus to solutions that increase productivity and saved money. Furthermore, we believe the trend towards mobility and adoption of wireless networking is rapidly accelerating. This trend has allowed us [ph] to capture increasing mind share and market share with our delivery of network architectures and solutions designed for next generation access networks. These networks are centered around enabling seamless roaming, secure mobile access to enterprise data and applications.

This success is evident in our continued revenue growth. Q4 revenues increased by over 12% sequentially and 45% year-over-year to $77.3 million with product revenues growing even faster than our overall revenue at 51% year-over-year growth. Our demand has been broad based on both a vertical and (inaudible) basis. All of our major geographies were up more than 45% year-over-year and demand was strong in each of these areas.

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