Hours before Aruba Networks
Aruba develops security products for corporate mobile environments. The company saw its revenue spike 74% in Q4 to $41.7 million, a sequential increase of a hefty 20%. Its customer count is now about 2,850, compared to 2,400 in the prior quarter, including major accounts such as Google
The company's heady growth rate appears sustainable, for now. Aruba's full-year guidance for fiscal 2008 calls for revenue of $205 million-$215 million, compared to 2007's $127.5 million.
In Q4 net income, Aruba posted a loss of $3.3 million, or $0.04 per share. But excluding stock compensation expenses and in-process R&D charges, the company actually realized a gain of $2 million, or $0.02 per share.
The company is seeing improvement in gross margin, which was 69% in Q4. The business has benefited both from a better product mix, and economies of scale in its supply chain.
On the conference call, Aruba's CEO, Dominic Orr, said his company was picking up "significant" market share from competitors, and he named Motorola as one of the laggards. In July, Aruba launched two new products that help with home security and Wi-Fi networks. The company even completed its interoperability testing of Apple's
Given those gains, I'm not surprised that Motorola is moving the battlefield to the courtroom. Its lawsuit alleges that Aruba violated four patents for complex WLAN (wireless local area network) technologies.
Patent litigation is a fact of life in the tech world, and its results are rarely predictable. But keep in mind that Aruba also has its own set of patents, and could possibly make counterclaims. It's still early in the process, and the uncertainty surrounding the lawsuit could weigh on Aruba's stock. For now, Foolish investors should probably wait on the sidelines for Aruba.
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Fool contributor Tom Taulli, author of The Complete M&A Handbook, does not own shares mentioned in this article. He is currently ranked 2,509 out of more than 60,000 players in CAPS. The Fool's disclosure policy would love another mojito.
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