Aerohive Networks cuts Q3 adjusted EPS view to (7c)-(6c) from (7c)-(1c)
Consensus (4c). Cuts Q3 revenue view to $40M from $46M-$50M, consensus $47.96M. On a GAAP basis, the company expects gross margin for the third fiscal quarter to be between 66.3%-66.8%. On a non-GAAP basis, the company expects gross margin to be between 67.5%-68%, at the upper end of the company's previously stated guidance. "The pace of E-Rate funding approval letters slowed significantly in the last weeks of the third quarter. As of the end of the quarter, funding approvals for the program were running nearly 70 percent below the pace of last year," stated David Flynn, President and Chief Executive Officer. "This significant decline in approvals was the primary driver of our weaker-than-expected order volume in the quarter, resulting in revenues below our prior guidance. Lower variable operating expenses in the quarter partially offset the revenue weakness and allowed us to be cash flow positive."