What happened

Shares of Barracuda Networks Inc. (NYSE:CUDA) were down 10.7% as of 11:55 a.m. EDT Wednesday despite the company announcing reasonably solid fiscal second-quarter 2018 results.

More specifically for its second quarter ended August 31, 2017, Barracuda Networks' revenue climbed 7.3% year over year to $94.3 million, as a 12.8% decline in appliance revenue (to $18.3 million) was more than offset by a 13.6% growth in subscription revenue to $76 million. On the bottom line, that translated to adjusted net income of $9.1 million, or $0.17 per share, down from $11.4 million, or $0.21 per share in the same year-ago period.

By comparison, last quarter Barracuda Networks told investors to expect lower revenue in the range of $92 million to $94 million, and adjusted earnings per share of between $0.16 and $0.18.

Networking hardware with ethernet cables plugged in

IMAGE SOURCE: GETTY IMAGES.

So what

In addition, Barracuda Networks achieved core billings growth of 22% and gross billings of $108.5 million -- above the high end of its latest billings guidance for a range of $105 million to $108 million. 

But it's apparent the market wanted even more; analysts' consensus estimates predicted adjusted earnings of $0.19 per share on slightly higher revenue of $94.5 million. 

Nonetheless, Barracuda Networks CEO BJ Jenkins remained optimistic, stating:

Our performance was driven by continued traction in the areas of the market where we have been investing, especially email and public cloud security, and we are pleased to see that our efforts are generating stronger top-line results. Excluding non-core billings, we have generated four consecutive quarters of double-digit billings growth. We believe we have the right strategy in place, are focused on the right areas of the market, and provide innovative security solutions that are affordable and consumable in the form that is best suited for our customers' needs.

Now what

For the current fiscal third quarter, Barracuda Networks expects billings in the range of $107 million to $110 million, revenue of $92.5 million to $94.5 million, and adjusted earnings per share of between $0.17 and $0.19. Here again, however, Wall Street was more optimistic, with consensus estimates calling for fiscal Q3 adjusted earnings of $0.21 per share on revenue of $95.8 million.

In the end, while Barracuda Networks is rightly pleased with its performance in fiscal Q2, it simply didn't live up to analysts' demands. After combining that relative let-down with the company's seemingly conservative forward outlook, it's no surprise to see the stock pulling back today.

Steve Symington has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.