feye-20201027
0001370880FALSE00013708802020-10-272020-10-27


 
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 27, 2020

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

Delaware 001-36067 20-1548921
(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 27, 2020, FireEye, Inc. ("FireEye") issued a press release and will hold a conference call regarding its financial results for the third quarter ended September 30, 2020. 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 27, 2020
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 27, 2020By: /s/ Alexa King
Alexa King
Executive Vice President, General Counsel and Secretary



Document

Exhibit 99.1

FireEye Reports Financial Results for Third Quarter 2020

All-time record revenue of $238 million, an increase of 6 percent from the third quarter of 2019
All-time record non-GAAP operating income, net income, and earnings per share1
All-time record ending annualized recurring revenue of $612 million, an increase of 6 percent compared to the end of the third quarter of 20192
All-time record ending annualized recurring revenue of $314 million for Platform, cloud subscription and managed services, an increase of 18 percent compared to the end of the third quarter of 20192
Increased guidance ranges for 2020 revenue, non-GAAP operating margin, and earnings per share1

MILPITAS, Calif. – October 27, 2020 – FireEye, Inc. (NASDAQ: FEYE), the intelligence-led security company, today announced financial results for the third quarter ended September 30, 2020.
“Our third quarter results reflect the progress we have made transforming our business,” said Kevin Mandia, FireEye chief executive officer. "We delivered record revenue, and record non-GAAP operating income, operating margin, and earnings per share as our revenue mix continued to shift to higher growth Mandiant Solutions compared to the third quarter of 2019."
“We remain focused on innovation that builds upon our competitive advantages in threat intelligence and cyber security expertise. We released our cloud-native Mandiant Advantage platform in October, making our intelligence and expertise easily accessible and actionable to any security organization, regardless of the security controls they deploy. We also announced a collaboration with Microsoft to provide cybersecurity services based on Microsoft security products. Both announcements reflect the technology-agnostic approach of Mandiant Solutions and allow us to expand our addressable market beyond the installed base of current FireEye customers,” added Mandia.
Third Quarter 2020 Financial Results
Q3 2020Q3 2019Y/Y change
Revenue$238 million$226 million+6%
Annualized recurring revenue2
$612 million$580 million+6%
GAAP gross margin65%65%-
Non-GAAP gross margin1
71%73%-2 pts
GAAP operating margin(11)%(24)%+13 pts
Non-GAAP operating margin1
12%2%+10 pts
GAAP net income (loss) per share, basic and diluted$(0.17)$(0.31)+$0.14
Non-GAAP net income (loss) per share, diluted1
$0.11$0.02+$0.09
Cash flow provided (used) by operating activities$33 million$18 million$15 million
Capital expenditures$5 million$10 million$(5) 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.”
2 Annualized recurring revenue is defined as the annualized run-rate of active term licenses, subscriptions, and support contracts at the end of a reporting period.

Fourth Quarter and Updated 2020 Outlook
FireEye provides guidance based on current market conditions and expectations. The company emphasizes that the guidance is subject to various important cautionary factors referenced in the section entitled "Forward-Looking Statements" below, including risks and uncertainties associated with the COVID-19 pandemic.



Q4 2020 OutlookUpdated 2020 Outlook
Revenue$237 - $241 million$930 - $934 million
Non-GAAP gross margin70% - 71%70.5% - 71.5%
Non-GAAP operating margin10% - 11%7.5% - 8.0%
Net interest income (expense)$0 - $(1) million$(2) - $(3) million
Provision for non-GAAP income taxes$1 - $2 million$4 - $5 million
Weighted average shares outstanding, diluted230 million227 million
Non-GAAP net income per share, diluted$0.09 - $0.11$0.28 - $0.30
Capital expenditures~ $6 million$27 - $29 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, restructuring charges, 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 the most directly comparable GAAP financial 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 expense in the fourth quarter of 2020 and full year 2020 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 most directly comparable GAAP financial measures for future periods is not available without unreasonable effort.
Conference Call Information
FireEye will host a conference call today, October 27, 2020, 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 2020. 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 2020, including revenue, non-GAAP gross margin, non-GAAP operating margin, net interest income and expense, provision for non-GAAP income taxes, weighted average shares outstanding, non-GAAP net income per share, and capital expenditures in the section entitled “Fourth Quarter and Updated 2020 Outlook” above, as well as statements regarding plans and 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, solutions and services; real or perceived defects, errors or vulnerabilities in FireEye's products, solutions or services; any delay in the release of FireEye's new products, solutions or services; FireEye's ability to realize the expected benefits resulting from its first half 2020 restructuring plans; the potential disruption or perception of disruption to FireEye's business due to the restructuring plans; the impact of the COVID-19 pandemic on FireEye's business, results of operations, liquidity and capital resources; 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, solutions 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 July 31, 2020, 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 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 financial measures has been provided in the financial statement tables included in this press release, and investors are encouraged to review the reconciliation.
Non-GAAP gross margin, operating income (loss), operating margin, net income (loss), and net income (loss) per basic and diluted 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 (loss) 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 diluted share in the third quarter of 2020 excluded stock-based compensation expense, amortization of stock-based compensation expense capitalized in software development costs, amortization of intangible assets, restructuring charges, and non-cash interest expense related to convertible senior notes issued in June 2015 and the second quarter of 2018. Weighted average diluted shares outstanding used to calculate non-GAAP net income per diluted share excluded shares issuable upon conversion of the company's convertible senior notes that were anti-dilutive.
Non-GAAP net loss and net loss per share in the third quarter of 2019 excluded stock-based compensation expense, amortization of stock-based compensation expense capitalized in software development costs, amortization of intangible assets, restructuring charges, non-cash interest expense related to convertible senior notes issued in June 2015 and the second quarter of 2018, and benefit from income taxes. Weighted average basic shares outstanding used to calculate non-GAAP net loss per share excluded stock options, restricted stock units, performance stock units, and shares issuable upon conversion of the company's convertible senior notes that were 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, 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, amortization of intangible assets, non-cash interest expense related to the company’s convertible senior notes, restructuring charges, and discrete tax provision (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 9,600 customers across 103 countries, including more than 50 percent of the Forbes Global 2000.
© 2020 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, 2020December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents$314,250 $334,603 
Short-term investments627,892 704,955 
Accounts receivable, net133,897 171,459 
Inventories5,371 5,892 
Prepaid expenses and other current assets97,207 96,827 
Total current assets1,178,617 1,313,736 
Property and equipment, net83,997 93,812 
Operating lease right-of-use assets, net51,604 58,758 
Goodwill1,213,454 1,205,292 
Intangible assets, net105,856 134,420 
Deposits and other long-term assets70,994 84,468 
TOTAL ASSETS$2,704,522 $2,890,486 
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable$6,095 $26,271 
Operating lease liabilities, current18,109 18,437 
Accrued and other current liabilities21,333 24,496 
Accrued compensation86,276 59,513 
Convertible senior notes, current, net— 117,288 
Deferred revenue, current567,201 603,944 
Total current liabilities699,014 849,949 
Convertible senior notes, non-current, net949,648 893,273 
Deferred revenue, non-current326,414 370,623 
Operating lease liabilities, non-current61,882 70,481 
Other long-term liabilities4,404 4,494 
Total liabilities2,041,362 2,188,820 
Stockholders' equity:
Common stock23 22 
Additional paid-in capital3,513,618 3,457,359 
Treasury stock(80,000)(150,000)
Accumulated other comprehensive income 5,114 1,180 
Accumulated deficit(2,775,595)(2,606,895)
Total stockholders’ equity663,160 701,666 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$2,704,522 $2,890,486 




FireEye, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share amounts)
Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
Revenue:
Product, subscription and support$183,836 $179,823 $535,224 $523,828 
Professional services54,624 46,091 157,858 130,238 
Total revenue238,460 225,914 693,082 654,066 
Cost of revenue: (1)(2)(3)
Product, subscription and support54,933 54,272 162,095 155,938 
Professional services29,473 24,948 84,889 72,243 
Total cost of revenue84,406 79,220 246,984 228,181 
Total gross profit154,054 146,694 446,098 425,885 
Operating expenses:
Research and development (1)(2)(3)61,662 68,857 189,762 203,790 
Sales and marketing (1)(2)93,961 98,355 284,202 303,745 
General and administrative (1)23,096 27,717 75,806 83,019 
Restructuring charges (5)1,488 6,481 25,020 10,280 
Total operating expenses180,207 201,410 574,790 600,834 
Operating loss(26,153)(54,716)(128,692)(174,949)
Other expense, net (6)(12,032)(10,239)(37,056)(29,982)
Loss before income taxes(38,185)(64,955)(165,748)(204,931)
Provision for income taxes (7)933 540 2,952 3,262 
Net loss$(39,118)$(65,495)$(168,700)$(208,193)
Net loss per share, basic and diluted$(0.17)$(0.31)$(0.76)$(1.02)
Weighted average shares used in per share calculations, basic and diluted224,807 212,207 221,329 204,855 





FireEye, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
Nine Months Ended September 30,
20202019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss$(168,700)$(208,193)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization71,238 76,238 
Stock-based compensation113,593 117,162 
Non-cash interest expense related to convertible senior notes35,480 35,768 
Deferred income taxes91 (661)
Other6,836 463 
Changes in operating assets and liabilities, net of assets acquired and liabilities assumed in business acquisitions:
Accounts receivable36,148 5,929 
Inventories1,576 29 
Prepaid expenses and other assets13,476 4,824 
Accounts payable(17,292)2,127 
Accrued liabilities(4,902)1,206 
Accrued compensation26,763 2,448 
Deferred revenue(80,952)(2,172)
Other long-term liabilities(9,854)(7,146)
Net cash provided by operating activities23,501 28,022 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment and demonstration units(22,198)(38,615)
Purchases of short-term investments(305,180)(493,038)
Proceeds from maturities of short-term investments355,820 502,100 
Proceeds from sales of short-term investments28,208 — 
Business acquisitions, net of cash acquired(12,948)(127,249)
Purchase of investment in privately held company(1,000)— 
Lease deposits68 637 
Net cash provided by (used in) investing activities42,770 (156,165)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchase of convertible senior notes(96,392)— 
Payment related to shares withheld for taxes(8,802)— 
Proceeds from employee stock purchase plan12,300 12,315 
Proceeds from exercise of equity awards6,270 3,159 
Net cash provided by (used in) financing activities(86,624)15,474 
Net change in cash and cash equivalents(20,353)(112,669)
Cash and cash equivalents, beginning of period334,603 409,829 
Cash and cash equivalents, end of period$314,250 $297,160 




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,
2020201920202019
GAAP operating loss$(26,153)$(54,716)$(128,693)$(174,949)
Stock-based compensation expense (1)40,369 36,688 113,593 117,162 
Amortization of stock-based compensation capitalized in software development costs (3)1,034 916 3,063 2,556 
Amortization of intangible assets (2)11,008 14,334 34,213 39,412 
Acquisition related expenses (4)— — — 597 
Restructuring charges (5)1,488 6,481 25,020 10,280 
Non-GAAP operating income (loss)$27,746 $3,703 $47,196 $(4,942)
GAAP gross margin65 %65 %64 %65 %
Stock-based compensation expense (1)%%%%
Amortization of intangible assets (2)%%%%
Non-GAAP gross margin71 %73 %71 %73 %
GAAP operating margin(11)%(24)%(19)%(27)%
Stock-based compensation expense (1)17 %16 %17 %18 %
Amortization of stock-based compensation capitalized in software development costs (3)— %%— %— %
Amortization of intangible assets (2)%%%%
Restructuring charges (5)%%%%
Non-GAAP operating margin12 %%%(1)%
GAAP net loss$(39,118)$(65,495)$(168,700)$(208,193)
Stock-based compensation expense (1)40,369 36,688 113,593 117,162 
Amortization of stock-based compensation capitalized in software development costs (3)1,034 916 3,063 2,556 
Amortization of intangible assets (2)11,008 14,334 34,213 39,412 
Acquisition related expenses (4)— — — 597 
Restructuring charges (5)1,488 6,481 25,020 10,280 
Non-cash interest expense related to convertible senior notes (6)11,113 12,068 35,480 35,768 
Adjustment to provision (benefit) from income taxes (7)— (681)(315)(904)
Non-GAAP net income (loss)$25,894 $4,311 $42,354 $(3,322)
GAAP net loss per common share, basic and diluted$(0.17)$(0.31)$(0.76)$(1.02)
Stock-based compensation expense (1)0.18 0.17 0.51 0.57 
Amortization of stock-based compensation capitalized in software development costs (3)— — 0.01 0.01 
Amortization of intangible assets (2)0.05 0.07 0.15 0.19 
Acquisition related expenses (4)— — — — 
Restructuring charges (5)0.01 0.03 0.11 0.05 
Non-cash interest expense related to convertible senior notes (6)0.05 0.06 0.16 0.18 
Adjustment to provision (benefit) from income taxes (7)— — — — 
Non-GAAP net income (loss) per common share, basic$0.12 $0.02 $0.18 $(0.02)
Non-GAAP net income (loss) per common share, diluted$0.11 $0.02 $0.19 $(0.02)
Weighted average shares used in per share calculation for GAAP, basic and diluted224,807 212,207 221,329 204,855 
Weighted average shares used in per share calculation for Non-GAAP, basic224,807 212,207 221,329 204,855 
Weighted average shares used in per share calculation for Non-GAAP, diluted 227,496 217,037 224,286 204,855 



Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
(1) Includes stock-based compensation expense as follows:
Cost of product, subscription and support revenue$4,245 $3,590 $12,037 $11,501 
Cost of professional services revenue5,015 3,289 13,366 10,639 
Research and development expense11,830 10,718 33,236 35,031 
Sales and marketing expense13,306 12,252 36,202 38,019 
General and administrative expense5,952 6,839 18,438 21,972 
Restructuring charges21 — 314 — 
Total stock-based compensation expense$40,369 $36,688 $113,593 $117,162 
(2) Includes amortization of intangible assets as follows:
Cost of product, subscription and support revenue$6,772 $10,135 $21,511 $27,311 
Research and development expense109 109 327 336 
Sales and marketing expense4,127 4,090 12,375 11,765 
Total amortization of intangible assets$11,008 $14,334 $34,213 $39,412 
(3) Includes amortization of stock-based compensation capitalized in software development costs as follows:
Cost of product, subscription and support revenue$44 $193 $152 $592 
Cost of professional services revenue22 97 76 296 
Research and development expense968 626 2,835 1,668 
Total amortization of stock-based compensation capitalized in software development costs$1,034 $916 $3,063 $2,556 
(4) Includes acquisition related expenses as follows:
General and administrative expense$— $— $— $597 
(5) Includes restructuring charges as follows:
Restructuring charges$1,488 $6,481 $25,020 $10,280 
(6) Includes non-cash interest expense related to convertible senior notes as follows:
Other income, net$11,113 $12,068 $35,480 $35,768 
(7) Includes income tax effect of non-GAAP adjustments as follows:
Benefit from income taxes$— $(681)$(315)$(904)





FireEye, Inc.
REVENUE BREAKOUT
(Unaudited, in thousands)
Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
Product and related subscription and support revenue$108,731 $117,835 $318,223 $353,773 
Platform, cloud subscription and managed services revenue75,105 61,988 217,001 170,055 
Product, subscription and support revenue183,836 179,823 535,224 523,828 
Professional services revenue54,624 46,091 157,858 130,238 
Total revenue$238,460 $225,914 $693,082 $654,066 


ANNUALIZED RECURRING REVENUE BREAKOUT
(Unaudited, in thousands)
As of September 30,
20202019
Product and related subscription and support$298,040 $313,035 
Platform, cloud subscription and managed services313,869 266,762 
Total annualized recurring revenue$611,909 $579,797