Barracuda Networks (CUDA 19.60, -3.81) has tumbled 16.3% despite beating earnings expectations for the fourth quarter.
The security, networking, and data storage company reported above-consensus fourth quarter earnings of $0.19 per share on revenue of $89.26 million, which increased 6.6% year-over-year and was just ahead of market expectations and the company's guidance for revenue between $87 and $89 million.
While the company's results beat market expectations, its stock has not responded accordingly. The apprehension could be related to a lower renewal rate, which declined to 89.0% from 96.0% one year ago. The annualized renewal rate checked in at 93.0%. Barracuda's management has previously noted that the retirement of legacy products is leading to shorter renewal periods.
Gross billings increased 7.7% to $103.20 million with billings for core products growing 21.0% to $63.80 million. Active subscriber count increased 15.0% year-over-year to 321,000.
Shares of Barracuda Networks traded in sideways fashion through the first quarter of 2017, but today's slide has sent the stock back to levels not seen since the middle of July 2016.