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FireEye Reports Financial Results for Third Quarter 2019

MILPITAS, Calif.--(BUSINESS WIRE)--

  • 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

FireEye, Inc. (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.

 

FireEye, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands)

 

 

 

 

 

September 30,
2019

 

December 31,
2018

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

297,160

 

$

409,829

Short-term investments

699,817

 

706,691

Accounts receivable, net

153,912

 

157,817

Inventories

5,970

 

6,548

Prepaid expenses and other current assets

97,576

 

100,295

Total current assets

1,254,435

 

1,381,180

Property and equipment, net

95,220

 

89,163

Operating right-of-use assets, net

61,402

 

Goodwill

1,205,336

 

999,804

Intangible assets, net

148,830

 

143,162

Deposits and other long-term assets

85,424

 

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, current

18,347

 

Accrued and other current liabilities

28,776

 

29,797

Accrued compensation

66,256

 

63,808

Convertible senior notes, current, net

115,789

 

Deferred revenue, current

568,032

 

556,815

Total current liabilities

820,065

 

677,364

Convertible senior notes, non-current, net

882,555

 

962,577

Deferred revenue, non-current

367,375

 

378,013

Operating lease liabilities, non-current

73,365

 

Other long-term liabilities

4,377

 

27,730

Total liabilities

2,147,737

 

2,045,684

Stockholders' equity:

 

 

 

Common stock

22

 

20

Additional paid-in capital

3,409,490

 

3,152,159

Treasury stock

(150,000)

 

(150,000)

Accumulated other comprehensive loss

1,077

 

(2,299)

Accumulated deficit

(2,557,679)

 

(2,349,486)

Total stockholders’ equity

702,910

 

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,

 

2019

 

2018

 

2019

 

2018

Revenue:

 

 

 

 

 

 

 

Product, subscription and support

$

179,823

 

$

175,653

 

$

523,828

 

$

508,555

Professional services

46,091

 

35,998

 

130,238

 

104,862

Total revenue

225,914

 

211,651

 

654,066

 

613,417

Cost of revenue: (1)(2)(3)

 

 

 

 

 

 

 

Product, subscription and support

54,272

 

46,752

 

155,938

 

140,317

Professional services

24,948

 

20,682

 

72,243

 

62,328

Total cost of revenue

79,220

 

67,434

 

228,181

 

202,645

Total gross profit

146,694

 

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 expenses

201,410

 

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 diluted

212,207

 

192,359

 

204,855

 

189,526

 

FireEye, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

 

 

 

Nine Months Ended
September 30,

 

2019

 

2018

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 amortization

76,238

 

66,688

Stock-based compensation

117,162

 

118,366

Non-cash interest expense related to convertible senior notes

35,768

 

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)

Other

463

 

3,762

Changes in operating assets and liabilities, net of assets acquired and liabilities assumed in business acquisitions:

 

 

 

Accounts receivable

5,929

 

15,969

Inventories

29

 

(4,146)

Prepaid expenses and other assets

4,824

 

(3,014)

Accounts payable

2,127

 

(6,615)

Accrued liabilities

1,206

 

8,419

Accrued compensation

2,448

 

4,364

Deferred revenue

(2,172)

 

(22,946)

Other long-term liabilities

(7,146)

 

1,982

Net cash provided by (used in) operating activities

28,022

 

(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 investments

502,100

 

370,128

Business acquisitions, net of cash acquired

(127,249)

 

(5,945)

Lease deposits

637

 

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 plan

12,315

 

10,993

Proceeds from exercise of equity awards

3,159

 

5,432

Net cash provided by financing activities

15,474

 

248,793

Net change in cash and cash equivalents

(112,669)

 

216,406

Cash and cash equivalents, beginning of period

409,829

 

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,

 

2019

 

2018

 

2019

 

2018

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 margin

65

%

 

68

%

 

65

%

 

67

%

Stock-based compensation expense (1)

3

%

 

4

%

 

4

%

 

4

%

Amortization of stock-based compensation capitalized in software development costs (3)

%

 

%

 

%

 

%

Amortization of intangible assets (2)

5

%

 

4

%

 

4

%

 

4

%

Non-GAAP gross margin

73

%

 

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)

1

%

 

%

 

%

 

%

Amortization of intangible assets (2)

6

%

 

6

%

 

6

%

 

6

%

Acquisition related expenses (4)

%

 

%

 

%

 

%

Restructuring charges (5)

3

%

 

%

 

2

%

 

%

Non-GAAP operating margin

2

%

 

7

%

 

(1)

%

 

2

%

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)

0.17

 

0.19

 

0.57

 

0.62

Amortization of stock-based compensation capitalized in software development costs (3)

 

 

0.01

 

0.01

Amortization of intangible assets (2)

0.07

 

0.07

 

0.19

 

0.2

Acquisition related expenses (4)

 

 

 

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

 

0.06

 

0.18

 

0.17

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 diluted

212,207

 

192,359

 

204,855

 

189,526

Weighted average shares used in per share calculation for Non-GAAP, basic

212,207

 

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 revenue

3,289

 

3,491

 

10,639

 

10,841

Research and development expense

10,718

 

11,480

 

35,031

 

38,251

Sales and marketing expense

12,252

 

11,678

 

38,019

 

36,878

General and administrative expense

6,839

 

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 expense

109

 

134

 

336

 

425

Sales and marketing expense

4,090

 

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 revenue

97

 

98

 

296

 

192

Research and development expense

626

 

330

 

1,668

 

545

Total amortization of stock-based compensation capitalized in software development costs

$

916

 

$

624

 

$

2,556

 

$

1,121

 

 

 

 

 

 

 

 

(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,

 

2019

 

2018

 

2019

 

2018

GAAP revenue

$

225,914

 

$

211,651

 

$

654,066

 

$

613,417

Add change in deferred revenue

22,658

 

7,599

 

579

 

(22,945)

Subtotal

248,572

 

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,

 

2019

 

2018

 

2019

 

2018

Product and related subscription and support billings

$

108,621

 

$

120,502

 

$

321,910

 

$

317,892

Platform, cloud subscription and managed services billings

84,637

 

59,360

 

190,931

 

166,087

Professional services billings

55,314

 

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,

 

2019

 

2018

 

2019

 

2018

Product and related subscription and support revenue

$

117,835

 

$

127,011

 

$

353,773

 

$

370,495

Platform, cloud subscription and managed services revenue

61,988

 

48,642

 

170,055

 

138,060

Professional services revenue

46,091

 

35,998

 

130,238

 

104,862

Total revenue

$

225,914

 

$

211,651

 

$

654,066

 

$

613,417

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20191029005962/en/