FireEye Reports Record Billings and Revenue for Fourth Quarter and Fiscal Year 2015
"We made tremendous progress in 2015 on our multi-year journey to build the world's leading advanced threat management platform," said
"These results reflect the powerful synergies that resulted from the combination of
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
First Quarter and 2016 Outlook
For the first quarter of 2016,
- 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
For 2016,
- 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
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.
Business Highlights
- 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
- 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.
- 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 throughoutthe United States andCanada , 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
Enrique Salem Appointed as Lead Independent Director
Conference Call Information
Forward-Looking Statements
This press release contains forward-looking statements, including statements related to future revenue, billings, non-GAAP operating margins, interest expense, non-GAAP net loss per share, weighted average shares outstanding, operating cash flow, and capital expenditures on property and equipment in the section entitled "First Quarter and 2016 Outlook" above, as well as statements related to
These forward-looking statements involve risks and uncertainties, as well as assumptions which, if they do not fully materialize or prove incorrect, could cause
All forward-looking statements in this press release are based on information available to the company as of the date hereof, and
Non-GAAP Financial Measures
In this release
Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable financial information prepared in accordance with GAAP, and should be read only in conjunction with the company's consolidated financial statements prepared in accordance with GAAP. A reconciliation of the company's non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included in this press release, and investors are encouraged to review the reconciliation.
Billings.
Non-GAAP operating margin, net loss and net loss per share.
Non-GAAP net loss and net loss per share in the fourth quarter 2015 excluded stock-based compensation expense, amortization of intangible assets, non-cash interest expense related to the convertible senior notes issued in
Non-GAAP net loss and net loss per share for 2015 excluded stock-based compensation expense, amortization of intangible assets, non-cash interest expense related to the convertible senior notes issued in
There are a number of limitations related to the use of these non-GAAP financial measures versus their nearest GAAP equivalents. First, these non-GAAP financial measures exclude stock-based compensation expense. Stock-based compensation expense has been and will continue to be for the foreseeable future a significant recurring expense in the company's business. Stock-based compensation is an important part of
About
© 2016
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||
| (Unaudited, in thousands) | |||||||||||
| 2015 | 2014 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 402,102 | $ | 146,363 | |||||||
| Short-term investments | 767,775 | 255,845 | |||||||||
| Accounts receivable, net | 172,752 | 193,182 | |||||||||
| Inventories | 13,747 | 7,952 | |||||||||
| Deferred tax assets, current portion | - | 25,126 | |||||||||
| Prepaid expenses and other current assets | 30,883 | 28,669 | |||||||||
| Total current assets | 1,387,259 | 657,137 | |||||||||
| Property and equipment, net | 78,368 | 82,298 | |||||||||
| 750,288 | 750,288 | ||||||||||
| Intangible assets, net | 214,560 | 261,625 | |||||||||
| Deposits and other long-term assets | 10,998 | 7,533 | |||||||||
| Total assets | $ | 2,441,473 | $ | 1,758,881 | |||||||
| Liabilities and Stockholders' Equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 43,650 | $ | 34,057 | |||||||
| Accrued and other current liabilities | 29,820 | 24,596 | |||||||||
| Accrued compensation | 79,294 | 64,551 | |||||||||
| Deferred revenue, current portion | 305,169 | 203,877 | |||||||||
| Total current liabilities | 457,933 | 327,081 | |||||||||
| Convertible senior notes, net | 706,198 | - | |||||||||
| Deferred revenue, non-current portion | 221,829 | 148,666 | |||||||||
| Deferred tax liabilities, non-current portion | - | 24,903 | |||||||||
| Other long-term liabilities | 11,141 | 7,403 | |||||||||
| Total liabilities | 1,397,101 | 508,053 | |||||||||
| Stockholders' equity: | |||||||||||
| Common stock | 16 | 15 | |||||||||
| Additional paid-in capital | 2,403,088 | 1,918,546 | |||||||||
| (150,000 | ) | - | |||||||||
| Accumulated other comprehensive loss | (2,225 | ) | (441 | ) | |||||||
| Accumulated deficit | (1,206,507 | ) | (667,292 | ) | |||||||
| Total stockholders' equity | 1,044,372 | 1,250,828 | |||||||||
| Total liabilities and stockholders' equity | $ | 2,441,473 | $ | 1,758,881 | |||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||
| (Unaudited, in thousands, except per share amounts) | |||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||||
| Revenue: | |||||||||||||||||
| Product | $ | 66,598 | $ | 67,936 | $ | 216,632 | $ | 178,246 | |||||||||
| Subscription and services | 118,176 | 75,046 | 406,335 | 247,416 | |||||||||||||
| Total revenue | 184,774 | 142,982 | 622,967 | 425,662 | |||||||||||||
| Cost of revenue: (1)(2) | |||||||||||||||||
| Product | 20,915 | 19,465 | 74,481 | 58,980 | |||||||||||||
| Subscription and services | 42,260 | 33,827 | 158,723 | 116,113 | |||||||||||||
| Total cost of revenue | 63,175 | 53,292 | 233,204 | 175,093 | |||||||||||||
| Total gross profit | 121,599 | 89,690 | 389,763 | 250,569 | |||||||||||||
| Operating expenses: (1)(2) | |||||||||||||||||
| Research and development | 71,690 | 53,102 | 279,467 | 203,187 | |||||||||||||
| Sales and marketing | 135,432 | 118,081 | 476,166 | 401,151 | |||||||||||||
| General and administrative (3) | 37,978 | 31,949 | 141,790 | 121,099 | |||||||||||||
| Restructuring Charges (4) | - | 1,558 | - | 4,327 | |||||||||||||
| Total operating expenses | 245,100 | 204,690 | 897,423 | 729,764 | |||||||||||||
| Operating loss | (123,501 | ) | (115,000 | ) | (507,660 | ) | (479,195 | ) | |||||||||
| Other expense, net (5) | (11,097 | ) | (670 | ) | (27,465 | ) | (1,249 | ) | |||||||||
| Loss before income taxes | (134,598 | ) | (115,670 | ) | (535,125 | ) | (480,444 | ) | |||||||||
| Provision for (benefit from) income taxes (6) | 1,550 | (9,944 | ) | 4,090 | (36,654 | ) | |||||||||||
| Net loss attributable to common stockholders | $ | (136,148 | ) | $ | (105,726 | ) | $ | (539,215 | ) | $ | (443,790 | ) | |||||
| Net loss per share attributable to common stockholders, basic and diluted | $ | (0.87 | ) | $ | (0.72 | ) | $ | (3.50 | ) | $ | (3.12 | ) | |||||
| Weighted average shares used in per share calculations, basic and diluted | 156,137 | 147,746 | 154,120 | 142,176 | |||||||||||||
| CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS | |||||||||||
| (Unaudited, in thousands) | |||||||||||
| Twelve Months Ended | |||||||||||
| 2015 | 2014 | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
| Net loss | $ | (539,215 | ) | $ | (443,790 | ) | |||||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||||||
| Depreciation and amortization | 111,956 | 94,136 | |||||||||
| Stock-based compensation expense | 222,432 | 151,852 | |||||||||
| Non-cash interest expense related to convertible senior notes | 20,069 | - | |||||||||
| Deferred income taxes | (1,353 | ) | (39,869 | ) | |||||||
| Other | 4,672 | 2,261 | |||||||||
| Changes in operating assets and liabilities, net of assets acquired and liabilities assumed in business combinations: | |||||||||||
| Accounts receivable | 19,126 | (97,165 | ) | ||||||||
| Inventories | (7,820 | ) | (2,024 | ) | |||||||
| Prepaid expenses and other assets | (675 | ) | 1,450 | ||||||||
| Accounts payable | 7,705 | (3,193 | ) | ||||||||
| Accrued liabilities | 7,495 | 11,403 | |||||||||
| Accrued compensation | 14,429 | 23,658 | |||||||||
| Deferred revenue | 174,455 | 164,728 | |||||||||
| Other long-term liabilities | 3,739 | 5,283 | |||||||||
| Net cash provided by (used in) operating activities | 37,015 | (131,270 | ) | ||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
| Purchase of property and equipment and demonstration units | (54,549 | ) | (67,715 | ) | |||||||
| Purchase of short-term investments | (769,097 | ) | (390,360 | ) | |||||||
| Maturities of short-term investments | 249,923 | 131,118 | |||||||||
| Acquisition of business, net of cash acquired | - | (55,058 | ) | ||||||||
| Purchase of investment in private company | (1,800 | ) | - | ||||||||
| Lease deposits | (1,226 | ) | (496 | ) | |||||||
| Net cash used in investing activities | (576,749 | ) | (382,511 | ) | |||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
| Net proceeds from follow-on public offering | - | 444,338 | |||||||||
| Net proceeds from convertible debt offering | 896,530 | - | |||||||||
| Prepaid forward stock purchase | (150,000 | ) | - | ||||||||
| Proceeds from exercise of equity awards | 48,943 | 41,888 | |||||||||
| Net cash provided by financing activities | 795,473 | 486,226 | |||||||||
| Net change in cash and cash equivalents | 255,739 | (27,555 | ) | ||||||||
| Cash and cash equivalents, beginning of year | 146,363 | 173,918 | |||||||||
| Cash and cash equivalents, end of year | $ | 402,102 | $ | 146,363 | |||||||
| RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | ||||||||||||||||
| (Unaudited, in thousands, except per share amounts) | ||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| GAAP operating loss | $ | (123,501 | ) | $ | (115,000 | ) | $ | (507,660 | ) | $ | (479,195 | ) | ||||
| Stock-based compensation expense (1) | 57,780 | 45,245 | 222,431 | 151,852 | ||||||||||||
| Amortization of intangible assets (2) | 11,766 | 11,689 | 47,064 | 45,152 | ||||||||||||
| Acquisition related expenses (3) | 1,431 | - | 1,431 | 1,559 | ||||||||||||
| Restructuring charges (4) | - | 1,558 | - | 4,327 | ||||||||||||
| Non-GAAP operating loss | $ | (52,524 | ) | $ | (56,508 | ) | $ | (236,734 | ) | $ | (276,305 | ) | ||||
| GAAP operating margin | -67 | % | -80 | % | -81 | % | -113 | % | ||||||||
| Stock-based compensation expense (1) | 31 | % | 32 | % | 36 | % | 36 | % | ||||||||
| Amortization of intangible assets (2) | 6 | % | 8 | % | 8 | % | 11 | % | ||||||||
| Acquisition related expenses (3) | 1 | % | 0 | % | 0 | % | 0 | % | ||||||||
| Restructuring charges (4) | 0 | % | 1 | % | 0 | % | 1 | % | ||||||||
| Non-GAAP operating margin | -28 | % | -40 | % | -38 | % | -65 | % | ||||||||
| GAAP net loss | $ | (136,148 | ) | $ | (105,726 | ) | $ | (539,215 | ) | $ | (443,790 | ) | ||||
| Stock-based compensation expense (1) | 57,780 | 45,245 | 222,431 | 151,852 | ||||||||||||
| Amortization of intangible assets (2) | 11,766 | 11,689 | 47,064 | 45,152 | ||||||||||||
| Acquisition related expenses (3) | 1,431 | - | 1,431 | 1,559 | ||||||||||||
| Restructuring charges (4) | - | 1,558 | - | 4,327 | ||||||||||||
| Non-cash interest expense related to convertible senior notes (5) | 8,672 | - | 20,069 | - | ||||||||||||
| Non-recurring benefit from income taxes (6) | - | (9,373 | ) | - | (39,472 | ) | ||||||||||
| Non-GAAP net loss | $ | (56,499 | ) | $ | (56,607 | ) | $ | (248,220 | ) | $ | (280,372 | ) | ||||
| GAAP net loss per common share, basic and diluted | $ | (0.87 | ) | $ | (0.72 | ) | $ | (3.50 | ) | $ | (3.12 | ) | ||||
| Stock-based compensation expense (1) | 0.37 | 0.31 | 1.44 | 1.07 | ||||||||||||
| Amortization of intangible assets (2) | 0.08 | 0.08 | 0.31 | 0.32 | ||||||||||||
| Acquisition related expenses (3) | 0.01 | - | 0.01 | 0.01 | ||||||||||||
| Restructuring charges (4) | - | 0.01 | - | 0.03 | ||||||||||||
| Non-cash interest expense related to convertible senior notes (5) | 0.06 | - | 0.13 | - | ||||||||||||
| Non-recurring benefit from income taxes (6) | - | (0.06 | ) | - | (0.28 | ) | ||||||||||
| Non-GAAP net loss per common share, basic and diluted | $ | (0.36 | ) | $ | (0.38 | ) | $ | (1.61 | ) | $ | (1.97 | ) | ||||
| Weighted average shares used in per share calculations for GAAP and Non-GAAP, basic and diluted | 156,137 | 147,746 | 154,120 | 142,176 | ||||||||||||
| (1) includes stock-based compensation expense as follows: | ||||||||||||||||
| Cost of product revenue | $ | 374 | $ | 263 | $ | 1,588 | $ | 888 | ||||||||
| Cost of subscription and services revenue | 7,673 | 6,583 | 29,435 | 17,037 | ||||||||||||
| Research and development | 16,917 | 8,914 | 68,329 | 28,968 | ||||||||||||
| Sales and marketing | 18,862 | 19,619 | 73,286 | 66,773 | ||||||||||||
| General and administrative | 13,954 | 9,866 | 49,793 | 38,186 | ||||||||||||
| Total stock-based compensation expense | $ | 57,780 | $ | 45,245 | $ | 222,431 | $ | 151,852 | ||||||||
| (2) includes amortization of intangible assets as follows: | ||||||||||||||||
| Cost of product revenue | $ | 3,064 | $ | 2,987 | $ | 12,256 | $ | 10,942 | ||||||||
| Cost of subscription and services revenue | 5,475 | 5,475 | 21,900 | 21,659 | ||||||||||||
| Sales and marketing | 3,227 | 3,227 | 12,908 | 12,551 | ||||||||||||
| Total amortization of intangible assets | $ | 11,766 | $ | 11,689 | $ | 47,064 | $ | 45,152 | ||||||||
| (3) includes acquisition related expenses as follows: | ||||||||||||||||
| General and administrative | $ | 1,431 | $ | - | $ | 1,431 | $ | 1,559 | ||||||||
| (4) includes restructuring charges as follows: | ||||||||||||||||
| Restructuring charges | $ | - | $ | 1,558 | $ | - | $ | 4,327 | ||||||||
| (5) Includes non-cash interest expense related to convertible senior notes as follows: | ||||||||||||||||
| Other expense, net | $ | 8,672 | $ | - | $ | 20,069 | $ | - | ||||||||
| (6) includes discrete benefit from income taxes as follows: | ||||||||||||||||
| Provision for (benefit from) income taxes | $ | - | $ | (9,373 | ) | $ | - | $ | (39,472 | ) | ||||||
| RECONCILIATION OF NON-GAAP BILLINGS TO REVENUE | ||||||||||||
| (Unaudited, in thousands) | ||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||
| GAAP revenue | $ | 184,774 | $ | 142,982 | $ | 622,967 | $ | 425,662 | ||||
| Add change in deferred revenue | 72,131 | 69,622 | 174,455 | 165,029 | ||||||||
| Non-GAAP billings | $ | 256,905 | $ | 212,604 | $ | 797,422 | $ | 590,691 | ||||
| BILLINGS BREAKOUT | ||||||||||||
| (Unaudited, in thousands) | ||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||
| Product billings | $ | 66,379 | $ | 67,554 | $ | 212,233 | $ | 173,323 | ||||
| Product subscription billings | 108,701 | 80,242 | 327,372 | 233,688 | ||||||||
| Product billings and product subscription billings | 175,080 | 147,796 | 539,605 | 407,011 | ||||||||
| Support and maintenance billings | 47,790 | 39,796 | 137,447 | 104,790 | ||||||||
| Professional services billings | 34,035 | 25,012 | 120,370 | 78,890 | ||||||||
| Non-GAAP billings | $ | 256,905 | $ | 212,604 | $ | 797,422 | $ | 590,691 | ||||
| REVENUE BREAKOUT | ||||||||||||
| (Unaudited, in thousands) | ||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||
| Product revenue | $ | 66,598 | $ | 67,936 | $ | 216,632 | $ | 178,246 | ||||
| Product subscription revenue | 59,825 | 38,320 | 205,303 | 121,907 | ||||||||
| Product revenue and product subscription revenue | 126,423 | 106,256 | 421,935 | 300,153 | ||||||||
| Support and maintenance revenue | 26,042 | 16,583 | 89,800 | 53,406 | ||||||||
| Professional services revenue | 32,309 | 20,143 | 111,232 | 72,103 | ||||||||
| Total revenue | $ | 184,774 | $ | 142,982 | $ | 622,967 | $ | 425,662 | ||||
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