Infoblox (NYSE: BLOX), the network control company, today announced a series of actions to accelerate profitability and position the Company for long term leadership in DDI and DNS security. These actions are the result of the cost review that Infoblox management announced on the Company’s fiscal third quarter earnings call on May 25, 2016, and are designed to enable the Company to drive greater profitability without sacrificing near-term revenue growth, while positioning the Company for long-term competitiveness and leadership. Through these actions, Infoblox expects to benefit from a more productive sales and marketing effort and a more cost-effective, leveraged development organization.
The actions announced today include steps intended to optimize program-based and discretionary spending; revise hiring priorities with a goal to support customer-facing sales coverage while improving overall sales and marketing efficiency; and reduce headcount in higher cost locations and for certain identified positions. As a result of these actions, Infoblox will reduce its workforce by approximately 110 positions, or 12%. The Company estimates it will incur total restructuring costs of approximately $6.5 million under the plan, substantially all of which is expected to be incurred during the fourth quarter of fiscal 2016. The actions announced today affirm the Company’s previously-announced fiscal 2017 planning assumptions regarding revenue growth and operating margin improvement.
“The transformation of Infoblox from a point product company into a broader solutions and platform company is progressing well, and we are confident in our strategy to drive increased automation and DNS security into the enterprise market,” said Jesper Andersen, Infoblox president and chief executive officer. “The actions we are announcing today will make the Company leaner and more efficient, and we believe will best position Infoblox to extend our industry leadership. Many of the measures we are taking to streamline costs are structural. Unfortunately, a number of our valued employees will be affected, but we believe these are the right steps for us to drive more effective execution that better serves our customers and our shareholders.”
Over the past two years, Infoblox has significantly advanced and differentiated its product offerings with internal and external DNS security, extending that security to the cloud via DDI automation, such as seamless integration with Amazon AWS, OpenStack, and VMware. The Company also recently acquired IID, a global leader in threat intelligence, to offer rich real-time threat intelligence, in a machine readable format, that can be actioned via its DNS servers and security ecosystem partners. The Company believes there is significant market opportunity in DDI, DNS Security and Cloud to drive future growth.
Infoblox (NYSE: BLOX) delivers critical network services that protect Domain Name System (DNS) infrastructure, automate cloud deployments, and increase the reliability of enterprise and service provider networks around the world. As the industry leader in DNS, DHCP, and IP address management, the category known as DDI, Infoblox (www.infoblox.com) reduces the risk and complexity of networking.
All statements in this release that are not statements of historical fact, including but not limited to statements about the impact of the restructuring, including estimated costs and timing of same, statements about 2017 planning assumptions, the quotation attributable to Mr. Andersen and statements regarding market opportunity and future growth, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause our actual results to differ materially, including, but not limited to: unexpected delays in the delivery of our solutions, particularly at the end of the quarter; changes in demand for network control solutions; the market acceptance of our products; the fluctuations in our gross margins; the concentration of our customer base; competitive developments including pricing pressures; our ability to manage operating expenses effectively; and the general economic, industry or political conditions in the United States or internationally.
For a detailed discussion of these and other risk factors, please refer to our filings with the Securities and Exchange Commission, which are available on our investor relations Web site (http://ir.infoblox.com/) and on the SEC’s Web site (www.sec.gov).
All information provided in this release and in the attachments is as of June 16, 2016, and stockholders of Infoblox are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date such statements are made. Infoblox does not undertake any obligation to publicly update any forward-looking statements to reflect events, circumstances or new information after this June 16, 2016 press release, or to reflect the occurrence of unanticipated events.