Aruba Networks, Inc. (NASDAQ: ARUN) today announced its Q3 2014 financial results and below is the full commentary by Dominic Orr, Aruba’s president and chief executive officer, on the quarter….
Thank you, Maria. Good afternoon and thank you for joining us to review our fiscal Q3 results.
I am excited to report, we delivered a record quarter, growing revenue 28% year-over-year to $188.8 million, well above our guidance and achieving the goal we set nine months ago to return to over 20% year over year growth by the second half of fiscal 2014.
We believe our exceptional top line performance this quarter reflects the strength of our differentiated architecture and product portfolio and the incremental investment we made in extending our sales and channel capacity.
Momentum accelerated both sequentially and year over year. We performed well across a broad set of verticals. And in an encouraging sign for market share gains, we saw particular strength in enterprise. We’re seeing Aruba’s stories and value proposition resonate in all levels of our customer’s organizations, extending to vice president and CIO levels.
These executives are increasingly asking us how they can deliver a secure mobile environment for the rapidly emerging GenMobile. They want to know how their IT organization can be a key partner for the business to attract and retain this talent [ph].
Our role is to introduce the innovations to make this business outcome easy and affordable. Mobility is about data and information in the air. So we asked our customers if they believe the air is stable, secure, simple and smart enough to meet GenMobile requirement.
I will now discuss our business performance this quarter in the context of this four Aruba value proposition. First, we asked our customers if the air is stable enough to handle the proliferation of mobile users, their multiplying devices and the application.
This is all about 11ac.
We beat our competitors to market with our 11ac solution and the momentum has continued even as others have tried to catch up. In Q3, demand for 11ac solution exceeded our expectations and outpaced our forecast. Our flagship 11ac access point 225 is the fastest ramping access point in Aruba’s history. And we believe we have captured and gained market share.
In Q3, we took 11ac beyond our traditional early adopter companies to the broad enterprise market and fast follow-on market such as K-12. We worked hard with this momentum as we believe these early design wins represented tremendous long term opportunity to generate repeat business as customers expanded AC’s footprint and implement additional Aruba solutions.
We also asked customers if the air is secure enough to keep up with the new realities of BYOD, cloud, and mobile. Our ClearPass access management platform enables self-service counter [ph] for employees and guests to securely connect to their business.
ClearPass is also addressing an upgrade cycle where customers are looking to replace an offline authentication product from our largest competitor. Driven by this trend, ClearPass bookings again grew in the high double-digit year-over-year. [On this SAP] is integrate with top MDM vendors, so customers can look to a single approach to manage device, access, policy and control.
We also asked customers if the air is simple. Is deploying for race of wireless to support mobile application easy for IT? On this front, Aruba instant bookings again grew in excess of 100% year over year. We believe we are gaining significant shares in mid market and we are excited to see this business scale as we ramp up our small to medium enterprise channel.
Finally, we asked our customers if the air is smart. This is about Aruba’s core differentiation, leveraging 4 to 7 user device application and location context to bring to life new employee and customer mobile experiences. Here we’re starting to have discussions that bridge IT organizations with the emerging role of a chief digital officer who is focused on delivering such experiences.
There are two key areas to highlight on the smart air front. The first is mobile customer engagement solutions for public facing enterprises where we are seeing strong interest. Across a variety of verticals, marketing and technology are converging and delivering deeper levels of customer engagement and loyalty.
We entered into a number of new engagements for our solutions during the quarter, including a gaming management company that deploy the Meridian customer engagement application and an international cruise line.
The second is the all wireless workplace which is particularly exciting for Aruba as it strikes at the heart of our largest competitor’s latency portfolio of switching IP telephony and expensive video conferencing system. Our collaboration with Microsoft Lync significantly alters the networking infrastructure landscape, increasing the need for 11ac wireless. We are seeing this all wireless workplace effect across the industry, particularly in larger enterprise deal.
Notable wins include multinational technology company and major financial service firm, a leading cloud software company and a global management consulting and IT services company.
In summary, Q3 was a pivotal quarter for Aruba. We executed successfully on our sales expansion plan. Our new hires are meeting our productivity expectations, our headstart in 11ac gives us a front-runner position.
Finally, Q3 was about winning and grabbing market share. I want to thank the entire Aruba team, including our employees and partners for all their hard work.
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