Document
0001370880FALSE00013708802019-10-292019-10-29


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 29, 2019

FireEye, Inc.
(Exact name of registrant as specified in its charter)

Delaware001-3606720-1548921
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)
601 McCarthy Blvd.
Milpitas, CA 95035
(Address of principal executive offices, including zip code)
(408) 321-6300
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.0001 per shareFEYEThe NASDAQ Global Select Market
          
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.




Item 2.02 Results of Operations and Financial Condition.
On October 29, 2019, FireEye, Inc. (“FireEye”) issued a press release and will hold a conference call regarding its financial results for the third quarter ended September 30, 2019. A copy of the press release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
The information set forth under this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

FireEye is making reference to non-GAAP financial measures in both the press release and the conference call. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is contained in the press release.

Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No.Description
99.1Press release dated October 29, 2019
104Cover Page Interactive Data File (embedded within the Inline XBRL document)




EXHIBIT INDEX

  
Exhibit No.Description
99.1
104Cover Page Interactive Data File (embedded within the Inline XBRL document)




SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
FIREEYE, INC.
Date: October 29, 2019By: /s/ Alexa King
Alexa King
Executive Vice President, General Counsel and Secretary



Document

Exhibit 99.1

FireEye Reports Financial Results for Third Quarter 2019

Q3 revenue of $226 million increased 7 percent from the third quarter of 2018
Q3 billings of $249 million increased 13 percent from the third quarter of 20181
Q3 ending annual recurring revenue of $576 million increased 7 percent compared to the end of the third quarter of 2018
Q3 ending platform, cloud subscription and managed services annual recurring revenue of $263 million increased 32 percent compared to the end of the third quarter of 2018

MILPITAS, Calif. – October 29, 2019 – FireEye, Inc. (NASDAQ: FEYE), the intelligence-led security company, today announced financial results for the third quarter ended September 30, 2019.
“We continued to execute on our long-term plan to transform FireEye from our origins as a network security product vendor to a comprehensive security platform company,” said Kevin Mandia, FireEye chief executive officer. “Record third quarter billings for our platform, cloud subscription and managed services as well as professional services categories demonstrate our progress."
"We are leading modern cyber defense with solutions that are intelligence-led, technology-enabled, and outcome-based. Gathered from the front lines, FireEye threat intelligence differentiates all our solutions and drives our innovation cycle. The new cloud-based solutions we introduced at our recent Cyber Defense Summit expand our opportunity by delivering our intelligence and expertise in pure cloud and hybrid environments,” added Mandia.
Third Quarter 2019 Financial Results
Revenue of $226 million increased 7 percent from the third quarter of 2018 and was above the guidance range of $217 million to $221 million.
Billings of $249 million increased 13 percent from the third quarter of 2018 and were within the guidance range of $245 million to $255 million.1
GAAP gross margin was 65 percent of revenue, compared to 68 percent of revenue in the third quarter of 2018.
Non-GAAP gross margin was 73 percent of revenue, compared to 76 percent of revenue in the third quarter of 2018, and was above the guidance of approximately 72 percent of revenue.1
GAAP operating margin was negative 24 percent of revenue, compared to negative 17 percent of revenue in the third quarter of 2018.
Non-GAAP operating margin was 2 percent of revenue, compared to 7 percent of revenue in the third quarter of 2018, and was within the guidance range of 0 percent to 2 percent of revenue.1
GAAP net loss per share was $0.31, compared to GAAP net loss per share of $0.26 in the third quarter of 2018.
Non-GAAP net income per diluted share was $0.02, compared to non-GAAP net income per diluted share of $0.06 in the third quarter of 2018, and was at the high end of the guidance range of $0.00 to $0.02.1
Cash flow provided by operating activities was $18 million, compared to cash flow provided by operating activities of $22 million in the third quarter of 2018, and was within the guidance range of $15 million to $25 million.
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.”




Fourth Quarter and Updated 2019 Outlook
FireEye provides guidance based on current market conditions and expectations.
For the fourth quarter of 2019, FireEye currently expects:
Revenue in the range of $224 million to $228 million.
Billings in the range of $285 million to $295 million.
Non-GAAP gross margin as a percent of revenue of approximately 73 percent.
Non-GAAP operating margin as a percent of revenue in the range of 3 percent to 5 percent.
Non-GAAP net income per diluted share between $0.03 and $0.05.
Cash flow provided by operating activities between $57 million and $67 million.
Capital expenditures between $10 million and $12 million.
Non-GAAP net income per diluted share for the fourth quarter assumes interest income on cash and cash equivalents and short-term investments will offset cash interest expense associated with the company’s convertible senior notes, provision for income taxes of between $1.5 million and $2.0 million, and weighted average diluted shares outstanding of approximately 220 million.
For 2019, FireEye currently expects:
Revenue in the range of $878 million to $882 million.
Billings in the range of $937 million to $947 million.
Non-GAAP gross margin as a percent of revenue of approximately 73 percent.
Non-GAAP operating margin as a percent of revenue between 0 percent and 1 percent.
Non-GAAP net income per diluted share between $0.01 and $0.03.
Cash flow provided by operating activities between $85 million and $95 million.
Capital expenditures between $48 million and $50 million.
Non-GAAP net income per diluted share for 2019 assumes provision for income taxes of between $5.5 million and $6.0 million, and weighted average diluted shares outstanding of approximately 215 million.
Guidance for non-GAAP financial measures excludes stock-based compensation, amortization of stock-based compensation expense capitalized in software development costs, amortization of intangible assets, non-cash interest expense related to the company’s convertible senior notes, and other non-recurring items. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis due to the uncertainty regarding, and the potential variability of, the amounts of stock-based compensation expense, amortization of intangible assets, and non-recurring expenses that may be incurred in the future. Stock-based compensation expense is impacted by the company’s future hiring and retention needs, as well as the future fair market value of the company’s common stock, all of which are difficult to predict and subject to constant change. The actual amount of stock-based compensation in the fourth quarter of 2019 and full year 2019 will have a significant impact on the company’s GAAP operating margin and net loss per share. Further, amortization of intangible assets, as well as other non-recurring expenses, if any, will also impact results. Accordingly, a reconciliation of the non-GAAP financial measure guidance to the corresponding GAAP measures for future periods is not available without unreasonable effort.
Conference Call Information
FireEye will host a conference call today, October 29, 2019, at 5 p.m. Eastern time (2 p.m. Pacific time) to discuss its third quarter financial results and the company’s outlook for the fourth quarter and full year 2019. Interested parties may access the conference call by dialing 877-312-5521 (domestic) or 678-894-3048 (international). A live audio webcast of the call can be accessed from the Investor Relations section of the company's website at https://investors.fireeye.com. An archived version of the webcast will be available at the same website shortly after the conclusion of the live event.




Forward-Looking Statements
This press release contains forward-looking statements, including statements related to future financial results for the fourth quarter and full year 2019, including revenue, billings, non-GAAP gross margin, non-GAAP operating margin, non-GAAP net income per diluted share, cash flow provided by operating activities, interest income and expense, provision for income taxes, weighted average diluted shares outstanding, and capital expenditures in the section entitled “Fourth Quarter and Updated 2019 Outlook” above, as well as statements regarding market opportunities.
These forward-looking statements involve risks and uncertainties, as well as assumptions which, if they do not fully materialize or prove incorrect, could cause FireEye’s results to differ materially from those expressed or implied by such forward-looking statements. The risks and uncertainties that could cause FireEye’s results to differ materially from those expressed or implied by such forward-looking statements include customer demand and adoption of FireEye’s products and services; real or perceived defects, errors or vulnerabilities in FireEye's products or services; any delay in the release of FireEye's new products or services; FireEye's ability to react to trends and challenges in its business and the markets in which it operates; FireEye's ability to anticipate market needs or develop new or enhanced products and services to meet those needs; FireEye’s ability to hire and retain key executives and employees; FireEye’s ability to attract new and retain existing customers and train its sales force; the budgeting cycles, seasonal buying patterns and length of FireEye’s sales cycle; risks associated with new offerings; sales and marketing execution risks; the failure to achieve expected synergies and efficiencies of operations between FireEye and its acquired companies; the ability of FireEye and its acquired companies to successfully integrate their respective market opportunities, technologies, products, personnel and operations; the ability of FireEye and its partners to execute their strategies, plans, objectives and expected investments with respect to FireEye’s partnerships; and general market, political, economic, and business conditions, as well as those risks and uncertainties included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in FireEye’s Form 10-Q filed with the Securities and Exchange Commission on August 2, 2019, which should be read in conjunction with these financial results and is available on the Investor Relations section of FireEye’s website at investors.fireeye.com and on the SEC website at www.sec.gov.
All forward-looking statements in this press release are based on information available to the company as of the date hereof, and FireEye does not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made, except as required by law. Any future product, service, feature, or related specification that may be referenced in this release is for informational purposes only and is not a commitment to deliver any offering, technology or enhancement. FireEye reserves the right to modify future product or service plans at any time.
Non-GAAP Financial Measures
In this release FireEye has provided financial information that has not been prepared in accordance with generally accepted accounting principles in the United States (GAAP). These non-GAAP financial measures are not based on any standardized methodology and are not necessarily comparable to similar measures used by other companies. The company uses these non-GAAP financial measures internally in analyzing its financial results and believes that the use of these non-GAAP financial measures is useful to investors as an additional tool to evaluate ongoing operating results and trends, and in comparing the company's financial results with other companies in its industry, many of which present similar non-GAAP financial measures.
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. FireEye defines billings as revenue recognized plus the change in deferred revenue from the beginning to the end of the period. FireEye excludes deferred revenue assumed in connection with acquisitions from the billings calculation. The company considers billings to be a useful metric for management and investors because billings drive deferred revenue balances, which are an important indicator of the company’s future revenues. Revenue recognized from deferred revenue represents a significant percentage of quarterly revenue. There are a number of limitations related to the use of billings versus revenue calculated in accordance with GAAP. First, billings include amounts that have not yet been recognized as revenue. Second, FireEye’s calculation of billings may be different from other companies in its industry, some of which may not use billings, may calculate billings differently, may have different billing frequencies, or may use other financial measures to evaluate their performance, all of which could reduce the usefulness of billings as a comparative measure. FireEye compensates for these limitations by providing specific information regarding GAAP revenue and evaluating billings together with revenue calculated in accordance with GAAP.



Non-GAAP gross margin, operating income, operating margin, net income (loss), and net income (loss) per share. FireEye defines non-GAAP gross margin as total gross profit excluding stock-based compensation expense, amortization of stock-based compensation expense capitalized in software development costs, amortization of intangible assets, and, as applicable, other special or non-recurring items, divided by total revenue.
FireEye defines non-GAAP operating income (loss) as operating income (loss) excluding stock-based compensation expense, amortization of stock-based compensation expense capitalized in software development costs, amortization of intangible assets, acquisition-related expenses, restructuring charges, and other special or non-recurring items. FireEye defines non-GAAP operating margin as non-GAAP operating income divided by total revenue.
FireEye defines non-GAAP net income (loss) as net income (loss) excluding stock-based compensation expense, amortization of stock-based compensation expense capitalized in software development costs, amortization of intangible assets, acquisition-related expenses, restructuring charges, other special or non-recurring items, non-cash interest expense related to the company’s convertible senior notes, and discrete tax provision (benefits). FireEye defines non-GAAP net income per diluted share as non-GAAP net income divided by weighted average diluted shares outstanding. Weighted average diluted shares used to calculate non-GAAP net income per diluted share excludes shares issuable upon conversion of the company's convertible senior notes that are anti-dilutive. FireEye defines non-GAAP net loss per share as non-GAAP net loss divided by weighted average basic shares outstanding, which excludes stock options, restricted stock units, performance stock units, and shares issuable upon conversion of the company's convertible senior notes that are anti-dilutive.
Non-GAAP net income and net income per share in the third quarter of 2019 excluded stock-based compensation expense, amortization of intangible assets, amortization of stock-based compensation expense capitalized in software development costs, restructuring charges, non-cash interest expense related to convertible senior notes issued in June 2015 and the second quarter of 2018, and discrete benefit from income taxes. Weighted average diluted shares outstanding used to calculate non-GAAP net income per share excluded shares issuable upon conversion of the company's convertible senior notes that are anti-dilutive.
Non-GAAP net income and net income per share in the third quarter of 2018 excluded stock-based compensation expense, amortization of intangible assets, amortization of stock-based compensation expense capitalized in software development costs, non-cash interest expense related to convertible senior notes issued in June 2015 and the second quarter of 2018, and discrete benefit from income taxes. Weighted average diluted shares outstanding used to calculate non-GAAP net income per share excluded shares issuable upon conversion of the company's convertible senior notes that are anti-dilutive.
FireEye considers these non-GAAP financial measures to be useful metrics for management and investors because they exclude the effect of stock-based compensation expense, amortization of stock-based compensation expense capitalized in software development costs, amortization of intangible assets, acquisition related expenses, non-cash interest expense related to the company’s convertible senior notes, amounts deemed repayment of accreted debt discount on repurchased convertible senior notes, change in fair value of contingent earn-out liability, restructuring charges, and other non-recurring and discrete items so that management and investors can compare the company's core business operating results over multiple periods.
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 is an important part of FireEye employees' overall compensation and has been, and will continue to be for the foreseeable future, a significant recurring expense in the company's business. Second, the components of the costs that FireEye excludes in its calculation of these non-GAAP financial measures, including not only stock-based compensation, but also amortization of stock-based compensation expense capitalized in software development costs, non-recurring or non-operating items such as acquisition related expenses, legal settlement costs, amortization of intangible assets, non-cash interest expense related to the company’s convertible senior notes, amounts deemed repayment of accreted debt discount on convertible senior notes, non-cash losses related to the retirement of convertible senior notes prior to maturity, change in fair value of contingent earn-out liability, restructuring charges, and discrete tax benefits, may differ from the components excluded by peer companies when they report their non-GAAP results of operations. FireEye compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP financial measures and evaluating non-GAAP financial measures together with their nearest GAAP equivalents.




About FireEye, Inc.
FireEye is the intelligence-led security company. Working as a seamless, scalable extension of customer security operations, FireEye offers a single platform that blends innovative security technologies, nation-state grade threat intelligence, and world-renowned Mandiant® consulting.  With this approach, FireEye eliminates the complexity and burden of cyber security for organizations struggling to prepare for, prevent, and respond to cyber attacks. FireEye has over 8,500 customers across 103 countries, including more than 50 percent of the Forbes Global 2000.
© 2019 FireEye, Inc. All rights reserved. FireEye and Mandiant are registered trademarks or trademarks of FireEye, Inc. in the United States and other countries. All other brands, products, or service names are or may be trademarks or service marks of their respective owners.

Media inquiries:
Media.Relations@fireeye.com

Investor inquiries:
Investor.Relations@fireeye.com


Source: FireEye



FireEye, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)
September 30, 2019December 31, 2018
Assets
Current assets:
Cash and cash equivalents$297,160  $409,829  
Short-term investments699,817  706,691  
Accounts receivable, net  153,912  157,817  
Inventories5,970  6,548  
Prepaid expenses and other current assets97,576  100,295  
Total current assets1,254,435  1,381,180  
Property and equipment, net95,220  89,163  
Operating right-of-use assets, net61,402  —  
Goodwill1,205,336  999,804  
Intangible assets, net148,830  143,162  
Deposits and other long-term assets85,424  82,769  
Total assets$2,850,647  $2,696,078  
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable$22,865  $26,944  
Operating lease liabilities, current18,347  —  
Accrued and other current liabilities28,776  29,797  
Accrued compensation66,256  63,808  
Convertible senior notes, current, net115,789  —  
Deferred revenue, current568,032  556,815  
Total current liabilities820,065  677,364  
Convertible senior notes, non-current, net882,555  962,577  
Deferred revenue, non-current367,375  378,013  
Operating lease liabilities, non-current73,365  —  
Other long-term liabilities4,377  27,730  
Total liabilities2,147,737  2,045,684  
Stockholders' equity:
Common stock22  20  
Additional paid-in capital3,409,490  3,152,159  
Treasury stock(150,000) (150,000) 
Accumulated other comprehensive loss1,077  (2,299) 
Accumulated deficit(2,557,679) (2,349,486) 
Total stockholders’ equity702,910  650,394  
Total liabilities and stockholders' equity$2,850,647  $2,696,078  




FireEye, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share amounts)
Three Months Ended September 30,Nine Months Ended September 30,
2019201820192018
Revenue:
Product, subscription and support$179,823  $175,653  $523,828  $508,555  
Professional services46,091  35,998  130,238  104,862  
Total revenue225,914  211,651  654,066  613,417  
Cost of revenue: (1)(2)(3)
Product, subscription and support54,272  46,752  155,938  140,317  
Professional services24,948  20,682  72,243  62,328  
Total cost of revenue79,220  67,434  228,181  202,645  
Total gross profit146,694  144,217  425,885  410,772  
Operating expenses: (1)
Research and development (2)(3)68,857  62,120  203,790  191,891  
Sales and marketing (2)98,355  92,297  303,745  283,744  
General and administrative (4)27,717  26,241  83,019  80,838  
Restructuring charges (5)6,481  —  10,280  —  
Total operating expenses201,410  180,658  600,834  556,473  
Operating loss(54,716) (36,441) (174,949) (145,701) 
Other expense, net (6)(7)(10,239) (11,916) (29,982) (44,881) 
Loss before income taxes(64,955) (48,357) (204,931) (190,582) 
Provision for income taxes (8)540  1,680  3,262  4,144  
Net loss$(65,495) $(50,037) $(208,193) $(194,726) 
Net loss per share, basic and diluted$(0.31) $(0.26) $(1.02) $(1.03) 
Weighted average shares used in per share calculations, basic and diluted212,207  192,359  204,855  189,526  





FireEye, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
Nine Months Ended September 30,
20192018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss$(208,193) $(194,726) 
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization76,238  66,688  
Stock-based compensation117,162  118,366  
Non-cash interest expense related to convertible senior notes35,768  31,638  
Loss on repurchase of convertible senior notes—  10,764  
Deemed repayment of convertible senior notes attributable to accreted debt discount (9)—  (43,575) 
Deferred income taxes(661) (131) 
Other463  3,762  
Changes in operating assets and liabilities, net of assets acquired and liabilities assumed in business acquisitions:
Accounts receivable5,929  15,969  
Inventories29  (4,146) 
Prepaid expenses and other assets4,824  (3,014) 
Accounts payable2,127  (6,615) 
Accrued liabilities1,206  8,419  
Accrued compensation2,448  4,364  
Deferred revenue(2,172) (22,946) 
Other long-term liabilities(7,146) 1,982  
Net cash provided by (used in) operating activities28,022  (13,201) 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment and demonstration units(38,615) (37,020) 
Purchases of short-term investments(493,038) (346,588) 
Proceeds from maturities of short-term investments502,100  370,128  
Business acquisitions, net of cash acquired(127,249) (5,945) 
Lease deposits637  239  
Net cash used in investing activities(156,165) (19,186) 
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of convertible senior notes—  584,405  
Purchase of capped calls—  (65,220) 
Repurchase of convertible senior notes—  (286,817) 
Proceeds from employee stock purchase plan12,315  10,993  
Proceeds from exercise of equity awards3,159  5,432  
Net cash provided by financing activities15,474  248,793  
Net change in cash and cash equivalents(112,669) 216,406  
Cash and cash equivalents, beginning of period409,829  180,891  
Cash and cash equivalents, end of period$297,160  $397,297  




FireEye, Inc.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Unaudited, in thousands, except per share amounts)

Three Months Ended September 30,Nine Months Ended September 30,
2019201820192018
GAAP operating loss$(54,716) $(36,441) $(174,949) $(145,701) 
Stock-based compensation expense (1)36,688  37,326  117,162  118,366  
Amortization of stock-based compensation capitalized in software development costs (3)916  624  2,556  1,121  
Amortization of intangible assets (2)14,334  12,644  39,412  37,904  
Acquisition related expenses (4)—  —  597  264  
Restructuring charges (5)6,481  —  10,280  —  
Non-GAAP operating income (loss)$3,703  $14,153  $(4,942) $11,954  
GAAP gross margin65 %68 %65 %67 %
Stock-based compensation expense (1)%%%%
Amortization of stock-based compensation capitalized in software development costs (3)— %— %— %— %
Amortization of intangible assets (2)%%%%
Non-GAAP gross margin73 %76 %73 %75 %
GAAP operating margin(24)%(17)%(27)%(24)%
Stock-based compensation expense (1)16 %18 %18 %20 %
Amortization of stock-based compensation capitalized in software development costs (3)%— %— %— %
Amortization of intangible assets (2)%%%%
Acquisition related expenses (4)— %— %— %— %
Restructuring charges (5)%— %%— %
Non-GAAP operating margin%%(1)%%
GAAP net loss$(65,495) $(50,037) $(208,193) $(194,726) 
Stock-based compensation expense (1)36,688  37,326  117,162  118,366  
Amortization of stock-based compensation capitalized in software development costs (3)916  624  2,556  1,121  
Amortization of intangible assets (2)14,334  12,644  39,412  37,904  
Acquisition related expenses (4)—  —  597  264  
Restructuring charges (5)6,481  —  10,280  —  
Loss on repurchase of convertible senior notes (7)—  —  —  10,764  
Non-cash interest expense related to convertible senior notes (6)12,068  11,494  35,768  31,638  
Adjustment to provision (benefit) from income taxes (8)(681) (196) (904) (480) 
Non-GAAP net income (loss)$4,311  $11,855  $(3,322) $4,851  
GAAP net loss per common share, basic and diluted$(0.31) $(0.26) $(1.02) $(1.03) 
Stock-based compensation expense (1)0.170.190.570.62
Amortization of stock-based compensation capitalized in software development costs (3)—  —  0.010.01  
Amortization of intangible assets (2)0.070.070.190.2
Acquisition related expenses (4)—  —  —  —  



Three Months Ended September 30,Nine Months Ended September 30,
2019201820192018
Restructuring charges (5)0.03  —  0.05  —  
Loss on repurchase of convertible senior notes (7)—  —  —  0.06  
Non-cash interest expense related to convertible senior notes (6)0.06  0.060.180.17
Adjustment to provision for (benefit from) income taxes (8)—  —  —  —  
Non-GAAP net income (loss) per common share, basic$0.02  $0.06  $(0.02) $0.03  
Non-GAAP net income (loss) per common share, diluted$0.02  $0.06  $(0.02) $0.02  
Weighted average shares used in per share calculation for GAAP, basic and diluted212,207  192,359  204,855  189,526  
Weighted average shares used in per share calculation for Non-GAAP, basic212,207  192,359  204,855  189,526  
Weighted average shares used in per share calculation for Non-GAAP, diluted 217,037  199,598  204,855  197,307  
GAAP net cash provided by (used in) operating activities$18,498  $21,899  $28,022  $(13,201) 
Deemed repayment of convertible senior notes attributable to accreted debt discount (9)—  —  —  43,575  
Non-GAAP net cash provided by (used in) operating activities$18,498  $21,899  $28,022  $30,374  
(1) Includes stock-based compensation expense as follows:
Cost of product, subscription and support revenue$3,590  $3,552  $11,501  $10,732  
Cost of professional services revenue3,289  3,491  10,639  10,841  
Research and development expense10,718  11,480  35,031  38,251  
Sales and marketing expense12,252  11,678  38,019  36,878  
General and administrative expense6,839  7,125  21,972  21,664  
Total stock-based compensation expense$36,688  $37,326  $117,162  $118,366  
(2) Includes amortization of intangible assets as follows:
Cost of product, subscription and support revenue$10,135  $8,716  $27,311  $26,095  
Cost of professional services revenue—  —  —  —  
Research and development expense109  134  336  425  
Sales and marketing expense4,090  3,794  11,765  11,384  
Total amortization of intangible assets$14,334  $12,644  $39,412  $37,904  
(3) Includes amortization of stock-based compensation capitalized in software development costs as follows:
Cost of product, subscription and support revenue$193  $196  $592  $384  
Cost of professional services revenue97  98  296  192  
Research and development expense626  330  1,668  545  
Total amortization of stock-based compensation capitalized in software development costs$916  $624  $2,556  $1,121  



Three Months Ended September 30,Nine Months Ended September 30,
2019201820192018
(4) Includes acquisition related expenses as follows:
General and administrative expense$—  $—  $597  $264  
(5) Includes restructuring charges as follows:
Restructuring charges$6,481  $—  $10,280  $—  
(6) Includes non-cash interest expense related to convertible senior notes as follows:
Other expense, net$12,068  $11,494  $35,768  $31,638  
(7) Includes non-cash loss on repurchase of convertible senior notes as follows:
Other expense, net$—  $—  $—  $10,764  
(8) Includes income tax effect of non-GAAP adjustments as follows:
Benefit from income taxes$(681) $(196) $(904) $(480) 
(9) Includes deemed repayment of convertible senior notes attributable to accreted debt discount as follows:
Net cash used in operating activities$—  $—  $—  $(43,575) 




FireEye, Inc.
RECONCILIATION OF NON-GAAP BILLINGS TO REVENUE
(Unaudited, in thousands)

Three Months Ended September 30,Nine Months Ended September 30,
2019201820192018
GAAP revenue$225,914  $211,651  $654,066  $613,417  
Add change in deferred revenue22,658  7,599  579  (22,945) 
Subtotal248,572  219,250  654,645  590,472  
Less Verodin deferred revenue assumed—  —  (2,750) —  
Non-GAAP billings$248,572  $219,250  $651,895  $590,472  

FireEye, Inc.
BILLINGS BREAKOUT
(Unaudited, in thousands)

Three Months Ended September 30,Nine Months Ended September 30,
2019201820192018
Product and related subscription and support billings$108,621  $120,502  $321,910  $317,892  
Platform, cloud subscription and managed services billings84,637  59,360  190,931  166,087  
Professional services billings55,314  39,388  139,054  106,493  
Non-GAAP billings$248,572  $219,250  $651,895  $590,472  

FireEye, Inc.
REVENUE BREAKOUT
(Unaudited, in thousands)

Three Months Ended September 30,Nine Months Ended September 30,
2019201820192018
Product and related subscription and support revenue$117,835  $127,011  $353,773  $370,495  
Platform, cloud subscription and managed services revenue61,988  48,642  170,055  138,060  
Professional services revenue46,091  35,998  130,238  104,862  
Total revenue$225,914  $211,651  $654,066  $613,417