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Proofpoint's (PFPT) Q2 Earnings and Revenues Beat Estimates

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Proofpoint PFPT delivered second-quarter 2021 non-GAAP earnings of 63 cents per share, handily outpacing the Zacks Consensus Estimate of 48 cents. Moreover, the figure is approximately 24% higher than the year-ago quarter’s earnings of 51 cents per share.

Top Line Details

Revenues came in at $308.7 million in the second quarter, which beat the consensus mark of $295.5 and increased 19% year over year as well.

This upside in the top-line number can be attributed to the exponential demand for the firm’s next-generation cloud security and compliance platform, ongoing migration to the cloud, solid international growth, and high renewal rates.

Total billings during the reported quarter grew 31% year on year to $328.6 million.

Subscription revenues came in at $303.5 million, up a whopping 19.1% from the year-ago period. Hardware and service revenues jumped 45% year over year to $5.1 million.

YTD Price Performance

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Operating Details

Non-GAAP gross profit climbed 20.4% from the year-ago quarter to $249.8 million. Non-GAAP gross margin expanded 100 basis points (bps) to 81% on an impressive revenue performance.

Proofpoint’s non-GAAP operating income jumped 26.5% to $52.1 million.

Balance Sheet & Cash Flow

As of Jun 30, 2021, the company’s cash, cash equivalents and short-term investments were $929.3 million compared with $882.6 million as of Mar 31, 2021.

The company generated operating cash flow of $60.9 million compared with the $30.6 million reported in the year-ago period. Free cash flow was $54.8 million compared with the prior-year quarter’s $18.8 million.

Pursuant to its acquisition by Thoma Bravo, the company hasn’t issued any guidance for the third quarter and full-year 2021. Notably, the two companies announced an acquisition agreement in late April this year, wherein Thoma Bravo agreed to pay $176 in cash for each share of Proofpoint. Proofpoint stated during the second-quarter earnings conference call that the transaction is on track to be closed in the third quarter.

Zacks Rank and Key Picks

Proofpoint currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the broader technology sector include Digital Turbine APPS, Zoom Video Communications ZM and Salesforce CRM. While Digital Turbine and Zoom sport a Zacks Rank #1 (Strong Buy), Salesforce carries a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term earnings growth rate for Digital Turbine, Zoom and Salesforce is currently pegged at 50%, 16.6% and 18.4%, respectively.


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