Blue Coat CEO quits

Web security firm boss falls on sword after underwhelming quarterly performance

Tags: Blue Coat Systems IncorporatedUSAWAN optimization
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Blue Coat CEO quits Blue Coat's CEO had been in the job less than a year
By  Daniel Shane Published  August 17, 2011

The CEO of web security and WAN optimisation provider Blue Coat has resigned following a disappointing showing in the US firm's latest financial quarter.

Michael Borman, who had been in the role for less than a year, will be replaced by Gregory Clark, who will take up the job from September 15.

In 1Q11, which closed July 31, total revenue was $58.6 million, down from $75.6 million in the same quarter in 2010. Net income plummeted from $13.9 million in 1Q10 to $2.7 million.

"Our first quarter results were disappointing as they came in below our expectations," said David Hanna, chairman of the board of directors, in a prepared statement. "We are taking the necessary actions to reinforce our leadership position in the web security market, while capitalising on opportunities in the WAN optimisation market based on our strong competitive advantages."

Blue Coat blamed its underwhelming performance partly on government spending cuts in the US. "While we continue to address our go-to-market challenges, product revenue was also impacted by weakness in the US Federal vertical," said Gordon Brooks, CFO. "This weakness in product revenue reduced our profitability for the quarter."

Following the announcements, Blue Coat shares plunged 19% to $17.68.

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