FireEye Inc (NASDAQ:FEYE), the leader at stopping today’s advanced cyber attacks, today announced financial results for the fourth quarter and fiscal year ended December 31, 2015.
“We made tremendous progress in 2015 on our multi-year journey to build the world’s leading advanced threat management platform,” said David DeWalt, FireEye chairman of the board and chief executive officer. “On a year-over-year basis, we grew billings 35 percent, increased revenue 46 percent, added nearly 1,200 new customers, and expanded our international presence. We also made progress on our path to profitability, generating record annual cash flow from operations and improved operating margins.”
“These results reflect the powerful synergies that resulted from the combination of FireEye and Mandiant as we transformed our company and our industry. I am pleased to announce that, in recognition of the important role he has played in defining our intelligence-led security platform, Mandiantfounder and FireEye President Kevin Mandia has been appointed to the FireEye board of directors,” added DeWalt. “Our recent acquisitions of iSIGHT and Invotas further extend our platform and expand our addressable market, and I’m looking forward to working with Kevin, the rest of the board, and the entire FireEye team as we continue to reimagine cyber security.”
Fourth Quarter 2015 Financial Results
- Revenue of $184.8 million, an increase of 29 percent from the fourth quarter of 2014.
- Billings of $256.9 million, an increase of 21 percent from the fourth quarter of 2014.1
- GAAP operating margin of negative 67 percent, compared to negative 80 percent in the fourth quarter of 2014.
- Non-GAAP operating margin of negative 28 percent, compared to negative 40 percent in the fourth quarter of 2014.1
- GAAP net loss per share of $0.87, compared to a GAAP net loss per share of $0.72 in the fourth quarter of 2014.
- Non-GAAP net loss per share of $0.36, compared to a non-GAAP net loss per share of $0.38 in the fourth quarter of 2014.1
- Positive cash flow from operations of $9.4 million, an improvement of $9.7 million compared to cash used by operations of $0.3 million in the fourth quarter of 2014.
2015 Financial Results
- Revenue of $623.0 million, an increase of 46 percent from 2014.
- Billings of $797.4 million, an increase of 35 percent from 2014.1
- Current deferred revenue of $305.2 million, an increase of $101.3 million, or 50 percent, from the end of 2014.
- Total deferred revenue of $527.0 million, an increase of $174.5 million, or 49 percent, from the end of 2014.
- GAAP operating margin of negative 81 percent, compared to negative 113 percent in 2014.
- Non-GAAP operating margin of negative 38 percent, compared to negative 65 percent in 2014.1
- GAAP net loss per share of $3.50, compared to a GAAP net loss per share of $3.12 in 2014.
- Non-GAAP net loss per share of $1.61, compared to a non-GAAP net loss per share of $1.97 in 2014.1
- Positive cash flow from operations of $37.0 million, an improvement of $168.3 million compared to cash used by operations of $131.3 million in 2014.
1 A reconciliation of GAAP to non-GAAP financial measures is provided in the financial statement tables included in this press release. An explanation of these measures is also included under the heading “Non-GAAP Financial Measures.”
“We achieved a significant milestone on our path to profitability, with positive operating cash flow of $37.0 million for the year as billings growth exceeded growth in non-GAAP operating expenses,” said Michael Berry, FireEye senior vice president and chief financial officer. “Based on our 2016 guidance for billings and non-GAAP operating expenses, and anticipated capital expenditures, we expect to achieve positive operating and free cash flow for the year.”
First Quarter and 2016 Outlook
FireEye provides guidance based on current market conditions and expectations.
For the first quarter of 2016, FireEye expects:
- Total revenue in the range of $167 to $177 million.
- Non-GAAP billings in the range of $163 to $183 million.
- Non-GAAP operating margin in the range of negative 40 to negative 47 percent of revenue.
- Non-GAAP net loss per share of $0.49 to $0.53.
Non-GAAP net loss per share for the first quarter assumes interest expense of $3 million associated with the company’s convertible senior notes, income taxes between $1 and $2 million and shares outstanding of approximately 158 million.
For 2016, FireEye expects:
- Total revenue in the range of $815 to $845 million.
- Non-GAAP billings in the range of $975 to $1,055 million.
- Non-GAAP operating margin in the range of negative 22 to negative 24 percent of revenue.
- Non-GAAP net loss per share of $1.25 to $1.32.
- Positive cash flow from operations in the range of $70 to $80 million.
- Capital expenditures on property and equipment of approximately $50 million.
Non-GAAP net loss per share for 2016 assumes interest expense of $12.0 million associated with the company’s convertible senior notes, income taxes between $4.0 and $8.0 million and shares outstanding of approximately 162 million.
Guidance for non-GAAP financial measures excludes stock based compensation, amortization of intangible assets, non-cash interest expense related to the company’s convertible senior notes, and other non-recurring expenses. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis as a result of the uncertainty regarding, and the potential variability of, the amounts of stock-based compensation expense, amortization of intangible assets, and other non-recurring expenses that may be incurred in the future.
FireEye continues to enhance its Global Threat Management Platform and expand its addressable market with product introductions, enhancements and innovations. Business highlights since the release of third quarter 2015 financial results on November 4, 2015, included:
- The acquisition of privately held iSIGHT Partners, one of the world’s leading providers of cyber threat intelligence to global enterprises. The acquisition expands the FireEye threat intelligence infrastructure, with the addition of a global network of experts who monitor a broad range of threat actors and threat development in 17 countries and 29 languages.
- The acquisition of privately held Invotas International Corporation, a provider of security automation and orchestration technology. FireEye will leverage the technologies of Invotas® Security Orchestrator to unify cyber attack detection results, threat intelligence and incident response elements of an organization’s security program into a single console, giving enterprises the ability to respond more quickly to attacks through automation.
- The expansion of the FireEye Global Threat Management Platform with the introduction of two new editions — FireEye Power™ and FireEye Essentials™ — which offer high quality FireEye threat detection and response solutions tailored for organizations at different stages in their security maturity.
Recent accolades and awards for FireEye’s technology and security solutions included:
- Recognition as the fastest growing cyber security firm in North America in Deloitte’s 2015 Technology Fast 500™, with revenue growth of nearly 1,165 percent from 2011 through 2014.
- Selection as a CDW 2015 Partner of the Year for providing exemplary products, programs, services and support to CDW and its customers throughout the year.
- Top position in the Cybersecurity 500 ranking, published by Cybersecurity Ventures, for the fourth consecutive quarter.
FireEye continued to expand its market by offering the risk reduction benefits of its Global Threat Management Platform through innovative new partnerships and strategic alliances, including:
- Enhancements to the FireEye Fuel partner program designed to increase partner go-to-market opportunities with the new Power and Essentials platform editions and help partners expand their security practices with new products, services and threat intelligence offerings.
- An agreement with Ingram Micro Inc. to market, sell and support FireEye security products throughout the United States and Canada, makingFireEye’s advanced threat management platform available to thousands of Ingram Micro channel partners who purchase or specialize in security solutions.
- A strategic partnership with technology-driven engineering firm Parsons to provide customers with enhanced protection for industrial control systems (ICS) through advanced technologies, intelligence and services aimed at reducing risk and strengthening overall security postures.
Kevin Mandia Appointed to FireEye Board of Directors
FireEye announced the appointment of Kevin Mandia, FireEye president and founder of Mandiant, to the FireEye board of directors, effective February 9, 2016. Mandia joined FireEye when FireEye acquired Mandiant, a leading provider of advanced endpoint security products and security incident response management solutions, in December 2013.
Enrique Salem Appointed as Lead Independent Director
FireEye also announced the appointment of Enrique Salem, an independent director of the company, to serve as the lead independent director of theFireEye board of directors. A FireEye board member since February 2013, Salem is a managing director of Bain Capital Ventures and was previously president, chief executive officer and a director of Symantec Corporation. (Original Source)
Shares of FireEye are down nearly 1% in after-hours trading. FEYE has a 1-year high of $55.33 and a 1-year low of $11.53. The stock’s 50-day moving average is $16.73 and its 200-day moving average is $28.13.
On the ratings front, FireEye has been the subject of a number of recent research reports. In a report released yesterday, BTIG analyst Joel Fishbein upgraded FEYE to Buy, with a price target of $15, which represents a potential upside of 23.4% from where the stock is currently trading. Separately, on February 2, Oppenheimer’s Shaul Eyal reiterated a Buy rating on the stock and has a price target of $39.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Joel Fishbein and Shaul Eyal have a total average return of 13.3% and 5.9% respectively. Fishbein has a success rate of 63.2% and is ranked #278 out of 3569 analysts, while Eyal has a success rate of 51.3% and is ranked #198.
The street is mostly Bullish on FEYE stock. Out of 15 analysts who cover the stock, 10 suggest a Buy rating and 5 recommend to Hold the stock. The 12-month average price target assigned to the stock is $29.00, which implies an upside of 138.5% from current levels.
FireEye Inc provides cybersecurity solution for detecting, preventing and resolving cyber-attacks that evade legacy signature-based security products. Its solutions include traditional and next-generation firewalls, IPS, anti-virus, and gateways.