- Record revenue, billings, and operating cash flow for fourth
quarter and full year 2019
- Q4 revenue of $235 million increased 8 percent from the fourth
quarter of 2018
- Q4 billings of $274 million increased 3 percent from the fourth
quarter of 20181
- Q4 ending annual recurring revenue of $587 million increased 6
percent compared to the end of the fourth quarter of 2018
- Q4 ending platform, cloud subscription and managed services
annual recurring revenue of $280 million increased 31 percent
compared to the end of the fourth quarter of 2018
FireEye, Inc. (NASDAQ: FEYE), the intelligence-led security
company, today announced financial results for the fourth quarter
and full year ended December 31, 2019.
“We continue to accelerate our transformation to a comprehensive
security solutions company,” said Kevin Mandia, FireEye chief
executive officer. “Our higher growth solutions, which include
Platform, Cloud Subscription, Managed Services and Mandiant
services, were 59 percent of our billings in the fourth quarter and
increased 23 percent from a year ago. We anticipate that these
solutions will continue to eclipse the on-premise portion of our
business in 2020."
Fourth Quarter 2019 Financial Results
- Revenue of $235 million increased 8 percent from the fourth
quarter of 2018 and was above the guidance range of $224 million to
$228 million.
- Billings of $274 million increased 3 percent from the fourth
quarter of 2018 and were below the guidance range of $285 million
to $295 million.1
- GAAP gross margin was 66 percent of revenue, compared to 68
percent of revenue in the fourth quarter of 2018.
- Non-GAAP gross margin was 73 percent of revenue, compared to 75
percent of revenue in the fourth quarter of 2018, and was
consistent with the guidance of approximately 73 percent of
revenue.1
- GAAP operating margin was negative 15 percent of revenue,
compared to negative 17 percent of revenue in the fourth quarter of
2018.
- Non-GAAP operating margin was 7 percent of revenue, compared to
5 percent of revenue in the fourth quarter of 2018, and was above
the guidance range of 3 percent to 5 percent of revenue.1
- GAAP net loss per share was $0.23, compared to GAAP net loss
per share of $0.25 in the fourth quarter of 2018.
- Non-GAAP net income per diluted share was $0.07, compared to
non-GAAP net income per diluted share of $0.06 in the fourth
quarter of 2018, and was above the guidance range of $0.03 to
$0.05.1
- Cash flow provided by operating activities was $40 million,
compared to cash flow provided by operating activities of $31
million in the fourth quarter of 2018, and was below the guidance
range of $57 million to $67 million.
2019 Financial Results
- Revenue of $889 million increased 7 percent from 2018 and was
above the guidance range of $878 million to $882 million.
- Billings of $926 million increased 8 percent from 2018 and were
below the guidance range of $937 million to $947 million.1
- GAAP gross margin was 65 percent of revenue, compared to 67
percent of revenue in 2018.
- Non-GAAP gross margin was 73 percent of revenue, compared to 75
percent of revenue in 2018, and was consistent with the guidance of
approximately 73 percent of revenue.1
- GAAP operating margin was negative 24 percent of revenue,
compared to negative 22 percent of revenue in 2018.
- Non-GAAP operating margin was 1 percent of revenue, compared to
3 percent of revenue in 2018, and was at the high end of the
guidance range of 0 percent to 1 percent of revenue.1
- GAAP net loss per share was $1.24, compared to GAAP net loss
per share of $1.27 in 2018.
- Non-GAAP net income per diluted share was $0.05, compared to
non-GAAP net income per diluted share of $0.08 in 2018, and was
above the guidance range of $0.01 to $0.03.1
- Cash flow provided by operating activities was $68 million,
compared to cash flow provided by operating activities of $17
million in 2018, and was below the guidance range of $85 million to
$95 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.”
“While billings, revenue, and operating cash flow were at record
levels, fourth quarter billings were impacted by a two-month
decrease in the average contract length for our subscription and
support contracts," said Frank Verdecanna, FireEye chief financial
officer and chief accounting officer. “The decrease reduced fourth
quarter total billings by approximately $15 million compared to
what they would have been at the fourth quarter 2018 average
contract length. The average contract length does not impact annual
recurring revenue, which was up six percent sequentially. Our
outlook for the first quarter and full year 2020 assumes the
average contract length for our subscription and support billings
will decline two to three months compared to 2019."
First Quarter and 2020 Outlook
FireEye provides guidance based on current market conditions and
expectations.
For the first quarter of 2020, FireEye currently expects:
- Revenue in the range of $222 million to $226 million.
- Billings in the range of $165 million to $175 million.
- Non-GAAP gross margin as a percent of revenue of approximately
71 percent.
- Non-GAAP operating margin as a percent of revenue in the range
of negative 3 percent to negative 5 percent.
- Non-GAAP net loss per share between $0.03 and $0.05.
- Cash flow provided by operating activities between negative $5
million and positive $5 million.
- Capital expenditures of approximately $10 million.
Non-GAAP net loss per share for the first 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 basic
shares outstanding of approximately 217 million.
For 2020, FireEye currently expects:
- Revenue in the range of $935 million to $945 million.
- Billings in the range of $930 million to $950 million.
- Non-GAAP gross margin as a percent of revenue of approximately
71 percent.
- Non-GAAP operating margin as a percent of revenue between 5
percent and 6 percent.
- Non-GAAP net income per diluted share between $0.20 and
$0.24.
- Cash flow provided by operating activities between $65 million
and $85 million.
- Capital expenditures of approximately $40 million.
Non-GAAP net income per diluted share for 2020 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 $6
million and $8 million, and weighted average diluted shares
outstanding of approximately 228 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 first 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 corresponding GAAP
measures for future periods is not available without unreasonable
effort.
Organizational Changes Announced
The company also announced that President Travis Reese will
retire as an executive of FireEye on March 1, 2020, and will
subsequently join the FireEye Advisory Board.
Kevin Mandia commented, “Travis has been a vital member of the
leadership team driving the transformation of our business. On
behalf of the Board of Directors and management team, I wish to
thank Travis for his hard work and leadership as well as his deep
insights into the cyber security industry and threat landscape.
Although we will miss Travis’ day-to-day counsel, I am grateful he
will remain a member of the FireEye family as an advisor and look
forward to his continued involvement in the company.”
Additionally, the company announced that Peter Bailey has been
appointed Executive Vice President and Chief Operating Officer and
that Bill Robbins has been appointed Chief Revenue Officer of the
company and General Manager of Products.
Conference Call Information
FireEye will host a conference call today, February 5, 2020, at
5 p.m. Eastern time (2 p.m. Pacific time) to discuss its fourth
quarter and full year 2019 financial results and the company’s
outlook for the first 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
first quarter and full year 2020, including revenue, billings,
non-GAAP gross margin, non-GAAP operating margin, non-GAAP net loss
per share, non-GAAP net income per diluted share, cash flow
provided by operating activities, interest income and expense,
provision for income taxes, weighted average basic shares
outstanding, weighted average diluted shares outstanding, and
capital expenditures in the section entitled “First Quarter and
2020 Outlook” above, as well as expectations regarding FireEye
higher growth solutions in 2020.
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 November 1, 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 diluted share in the
fourth 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 provision for income taxes. 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 are anti-dilutive.
Non-GAAP net income and net income per diluted share in the
fourth 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 diluted 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 diluted share for 2019
excluded stock-based compensation expense, amortization of
intangible assets, amortization of stock-based compensation expense
capitalized in software development costs, acquisition related
expenses, 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 diluted 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 diluted share for 2018
excluded stock-based compensation expense, amortization of
intangible assets, amortization of stock-based compensation expense
capitalized in software development costs, acquisition related
expenses, non-cash interest expense related to convertible senior
notes issued in June 2015 and the second quarter of 2018, non-cash
losses on the repurchase and retirement of $340 million principal
amount of the 1.000% Convertible Senior Notes due 2035, and
discrete benefit from income taxes. 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 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 8,800 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.
FireEye, Inc.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited, in
thousands)
December 31, 2019
December 31, 2018
Assets
Current assets:
Cash and cash equivalents
$
334,603
$
409,829
Short-term investments
704,955
706,691
Accounts receivable, net
171,459
157,817
Inventories
5,892
6,548
Prepaid expenses and other current
assets
96,827
100,295
Total current assets
1,313,736
1,381,180
Property and equipment, net
93,812
89,163
Operating right-of-use assets, net
58,758
—
Goodwill
1,205,292
999,804
Intangible assets, net
134,420
143,162
Deposits and other long-term assets
84,468
82,769
Total assets
$
2,890,486
$
2,696,078
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
$
26,271
$
26,944
Operating lease liabilities, current
18,437
—
Accrued and other current liabilities
24,496
29,797
Accrued compensation
59,513
63,808
Convertible senior notes, current, net
117,288
—
Deferred revenue, current
603,944
556,815
Total current liabilities
849,949
677,364
Convertible senior notes, non-current,
net
893,273
962,577
Deferred revenue, non-current
370,623
378,013
Operating lease liabilities,
non-current
70,481
—
Other long-term liabilities
4,494
27,730
Total liabilities
2,188,820
2,045,684
Stockholders' equity:
Common stock
22
20
Additional paid-in capital
3,457,359
3,152,159
Treasury stock
(150,000
)
(150,000
)
Accumulated other comprehensive loss
1,180
(2,299
)
Accumulated deficit
(2,606,895
)
(2,349,486
)
Total stockholders’ equity
701,666
650,394
Total liabilities and stockholders'
equity
$
2,890,486
$
2,696,078
FireEye, Inc.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited, in thousands,
except per share amounts)
Three Months Ended December
31,
Year Ended December
31,
2019
2018
2019
2018
Revenue:
Product, subscription and support
$
185,008
$
178,827
$
708,836
$
687,382
Professional services
50,078
38,706
180,316
143,568
Total revenue
235,086
217,533
889,152
830,950
Cost of revenue: (1)(2)(3)
Product, subscription and support
54,494
47,984
210,432
188,301
Professional services
26,217
21,846
98,460
84,174
Total cost of revenue
80,711
69,830
308,892
272,475
Total gross profit
154,375
147,703
580,260
558,475
Operating expenses: (1)
Research and development (2)(3)
67,537
62,251
271,326
254,142
Sales and marketing (2)
93,077
97,218
396,822
380,962
General and administrative (4)
28,862
24,935
111,881
105,773
Restructuring charges (5)
(15
)
—
10,265
—
Total operating expenses
189,461
184,404
790,294
740,877
Operating loss
(35,086
)
(36,701
)
(210,034
)
(182,402
)
Other expense, net (6)(7)
(11,702
)
(10,316
)
(41,685
)
(55,197
)
Loss before income taxes
(46,788
)
(47,017
)
(251,719
)
(237,599
)
Provision for income taxes (8)
2,428
1,380
5,690
5,524
Net loss
$
(49,216
)
$
(48,397
)
$
(257,409
)
$
(243,123
)
Net loss per share, basic and diluted
$
(0.23
)
$
(0.25
)
$
(1.24
)
$
(1.27
)
Weighted average shares used in per share
calculations, basic and diluted
214,565
194,593
207,234
190,803
FireEye, Inc.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited, in
thousands)
Year Ended December
31,
2019
2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss
$
(257,409
)
$
(243,123
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
103,305
86,505
Stock-based compensation
153,517
153,675
Non-cash interest expense related to
convertible senior notes
47,983
43,273
Loss on repurchase of convertible senior
notes
—
10,764
Deemed repayment of convertible senior
notes attributable to accreted debt discount
—
(43,575
)
Deferred income taxes
(257
)
(930
)
Other
945
4,715
Changes in operating assets and
liabilities, net of assets acquired and liabilities assumed in
business acquisitions:
Accounts receivable
(12,109
)
(11,605
)
Inventories
51
(5,216
)
Prepaid expenses and other assets
7,003
(13,779
)
Accounts payable
4,707
(8,205
)
Accrued liabilities
(3,074
)
10,234
Accrued compensation
(4,295
)
4,220
Deferred revenue
36,987
24,728
Other long-term liabilities
(9,817
)
5,700
Net cash provided by operating
activities
67,537
17,381
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment and
demonstration units
(45,605
)
(50,831
)
Purchases of short-term investments
(617,194
)
(479,862
)
Proceeds from maturities of short-term
investments
620,580
487,141
Business acquisitions, net of cash
acquired
(127,249
)
(5,240
)
Lease deposits
432
275
Net cash used in investing activities
(169,036
)
(48,517
)
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
plan
22,086
20,816
Proceeds from exercise of equity
awards
4,187
6,890
Net cash provided by financing
activities
26,273
260,074
Net change in cash and cash
equivalents
(75,226
)
228,938
Cash and cash equivalents, beginning of
period
409,829
180,891
Cash and cash equivalents, end of
period
$
334,603
$
409,829
FireEye, Inc.
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
(Unaudited, in thousands,
except per share amounts)
Three Months Ended December
31,
Year Ended December
31,
2019
2018
2019
2018
GAAP operating loss
$
(35,086
)
$
(36,701
)
$
(210,034
)
$
(182,402
)
Stock-based compensation expense (1)
36,355
35,309
153,517
153,675
Amortization of stock-based compensation
capitalized in software development costs (3)
968
707
3,524
1,828
Amortization of intangible assets (2)
14,531
12,424
53,943
50,328
Acquisition related expenses (4)
—
—
597
264
Restructuring charges (5)
(15
)
—
10,265
—
Non-GAAP operating income (loss)
$
16,753
$
11,739
$
11,812
$
23,693
GAAP gross margin
66
%
68
%
65
%
67
%
Stock-based compensation expense (1)
3
%
3
%
4
%
4
%
Amortization of stock-based compensation
capitalized in software development costs (3)
—
%
—
%
—
%
—
%
Amortization of intangible assets (2)
4
%
4
%
4
%
4
%
Non-GAAP gross margin
73
%
75
%
73
%
75
%
GAAP operating margin
(15
)%
(17
)%
(24
)%
(22
)%
Stock-based compensation expense (1)
16
%
16
%
17
%
19
%
Amortization of stock-based compensation
capitalized in software development costs (3)
—
%
—
%
—
%
—
%
Amortization of intangible assets (2)
6
%
6
%
6
%
6
%
Acquisition related expenses (4)
—
%
—
%
—
%
—
%
Restructuring charges (5)
—
%
—
%
2
%
—
%
Non-GAAP operating margin
7
%
5
%
1
%
3
%
GAAP net loss
$
(49,216
)
$
(48,397
)
$
(257,409
)
$
(243,123
)
Stock-based compensation expense (1)
36,355
35,309
153,517
153,675
Amortization of stock-based compensation
capitalized in software development costs (3)
968
707
3,524
1,828
Amortization of intangible assets (2)
14,531
12,424
53,943
50,328
Acquisition related expenses (4)
—
—
597
264
Restructuring charges (5)
(15
)
—
10,265
—
Loss on repurchase of convertible senior
notes (7)
—
—
—
10,764
Non-cash interest expense related to
convertible senior notes (6)
12,215
11,635
47,983
43,273
Adjustment to provision (benefit) from
income taxes (8)
43
(142
)
(861
)
(622
)
Non-GAAP net income (loss)
$
14,881
$
11,536
$
11,559
$
16,387
GAAP net loss per common share, basic and
diluted
$
(0.23
)
$
(0.25
)
$
(1.24
)
$
(1.27
)
Stock-based compensation expense (1)
0.17
0.19
0.74
0.8
Amortization of stock-based compensation
capitalized in software development costs (3)
—
—
0.02
0.01
Amortization of intangible assets (2)
0.07
0.06
0.26
0.26
Acquisition related expenses (4)
—
—
—
—
Restructuring charges (5)
—
—
0.05
—
Loss on repurchase of convertible senior
notes (7)
—
—
—
0.06
Non-cash interest expense related to
convertible senior notes (6)
0.06
0.06
0.23
0.23
Adjustment to provision for (benefit from)
income taxes (8)
—
—
—
—
Non-GAAP net income (loss) per common
share, basic
$
0.07
$
0.06
$
0.06
$
0.09
Non-GAAP net income (loss) per common
share, diluted
$
0.07
$
0.06
$
0.05
$
0.08
Weighted average shares used in per share
calculation for GAAP, basic and diluted
214,565
194,593
207,234
190,803
Weighted average shares used in per share
calculation for Non-GAAP, basic
214,565
194,593
207,234
190,803
Weighted average shares used in per share
calculation for Non-GAAP, diluted
220,421
203,440
213,043
198,851
(1) Includes stock-based compensation
expense as follows:
Cost of product, subscription and support
revenue
$
3,404
$
3,446
$
14,905
$
14,178
Cost of professional services revenue
3,333
3,343
13,972
14,184
Research and development expense
10,445
11,252
45,476
49,503
Sales and marketing expense
11,179
10,714
49,198
47,592
General and administrative expense
7,994
6,554
29,966
28,218
Total stock-based compensation expense
$
36,355
$
35,309
$
153,517
$
153,675
(2) Includes amortization of intangible
assets as follows:
Cost of product, subscription and support
revenue
$
10,332
$
8,505
$
37,643
$
34,600
Cost of professional services revenue
—
—
—
—
Research and development expense
109
135
445
560
Sales and marketing expense
4,090
3,784
15,855
15,168
Total amortization of intangible
assets
$
14,531
$
12,424
$
53,943
$
50,328
(3) Includes amortization of stock-based
compensation capitalized in software development costs as
follows:
Cost of product, subscription and support
revenue
$
190
$
198
$
783
$
582
Cost of professional services revenue
95
100
391
292
Research and development expense
683
409
2,350
954
Total amortization of stock-based
compensation capitalized in software development costs
$
968
$
707
$
3,524
$
1,828
(4) Includes acquisition related expenses
as follows:
General and administrative expense
$
—
$
—
$
597
$
264
(5) Includes restructuring charges as
follows:
Restructuring charges
$
(15
)
$
—
$
10,265
$
—
(6) Includes non-cash interest expense
related to convertible senior notes as follows:
Other expense, net
$
12,215
$
11,635
$
47,983
$
43,273
(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
$
43
$
(142
)
$
(861
)
$
(622
)
FireEye, Inc.
RECONCILIATION OF NON-GAAP
BILLINGS TO REVENUE
(Unaudited, in
thousands)
Three Months Ended December
31,
Year Ended December
31,
2019
2018
2019
2018
GAAP revenue
$
235,086
$
217,533
$
889,152
$
830,950
Add change in deferred revenue
39,160
47,673
39,739
24,728
Subtotal
274,246
265,206
928,891
855,678
Less Verodin deferred revenue assumed
—
—
(2,750
)
—
Non-GAAP billings
$
274,246
$
265,206
$
926,141
$
855,678
FireEye, Inc.
BILLINGS BREAKOUT
(Unaudited, in
thousands)
Three Months Ended December
31,
Year Ended December
31,
2019
2018
2019
2018
Product and related subscription and
support billings
$
112,623
$
134,081
$
434,533
$
451,973
Platform, cloud subscription and managed
services billings
91,307
77,816
282,238
243,903
Professional services billings
70,316
53,309
209,370
159,802
Non-GAAP billings
$
274,246
$
265,206
$
926,141
$
855,678
FireEye, Inc.
REVENUE BREAKOUT
(Unaudited, in
thousands)
Three Months Ended December
31,
Year Ended December
31,
2019
2018
2019
2018
Product and related subscription and
support revenue
$
114,050
$
128,497
$
467,823
$
498,992
Platform, cloud subscription and managed
services revenue
70,958
50,330
241,013
188,390
Professional services revenue
50,078
38,706
180,316
143,568
Total revenue
$
235,086
$
217,533
$
889,152
$
830,950
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200205005827/en/
Media inquiries: Media.Relations@fireeye.com
Investor inquiries: Investor.Relations@fireeye.com
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