After taking a break last quarter, Aruba Networks (Nasdaq: ARUN ) is returning to its earnings-rallying days. Shares are enjoying their time in the sun today, with the stock up as much as 18% today as of this writing after the wireless network equipment provider served up strong fourth-quarter results to finish off its fiscal year last night.
Fourth-quarter revenue tallied up at $113.8 million, jumping 47% from last year's $77.3 million, resulting in non-GAAP earnings per share for the quarter of $0.17. Revenue beat the Street's consensus estimate of $109.2 million while EPS was right on target.
The full-year picture is just as rosy: $396.5 million revenue, a 49% increase, turning into non-GAAP EPS of $0.59. Last quarter's concerns about gross margins should be alleviated, ticking up to 68.5% from 67.7%. The full-year gross margin showed even more of an improvement, rising to 69.1%.
Aruba CEO Dominic Orr cited growing market share at the expense of primary rival Cisco Systems (Nasdaq: CSCO ) , as well as a rapidly growing enterprise wireless LAN market, during the company's conference call with analysts. Total customer count grew by more than 1,500 -- a quarterly record -- to more than 15,500. The solid results are also attributed to particular strength in the enterprise and educational segments.
Valuation looks a little stretched with the company trading at 45 times free cash flow, compared with fellow networker Riverbed Technology's (Nasdaq: RVBD ) 27.4 and Cisco's 9.7, although there's a reason Cisco is cheap. This is the first full year the company has delivered a GAAP net profit, which is encouraging. I like where the company is going; I just wish the shares weren't quite so expensive.