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2019 Press Releases

February 08, 2019

FireEye Reports Financial Results for Fourth Quarter and Full Year 2018

FireEye, Inc., the intelligence-led security company, announced financial results for the fourth quarter and full year ended December 31, 2018.

“The fourth quarter was a strong finish to a record year for FireEye,” said Kevin Mandia, FireEye chief executive officer. “We posted double-digit billings growth for the quarter and the year, and achieved full-year non-GAAP profitability for the first time in our history.”

Fourth Quarter 2018 Financial Results

  • Revenue of $218 million increased 6 percent from the fourth quarter of 2017 and was at the high end of the guidance range of $214 million to $218 million.

  • Billings of $265 million increased 10 percent from the fourth quarter of 2017 and were above the guidance range of $245 million to $255 million.1

  • GAAP gross margin was 68 percent of revenue, compared to 66 percent of revenue in the fourth quarter of 2017.

  • Non-GAAP gross margin was 75 percent of revenue, compared to 76 percent of revenue in the fourth quarter of 2017, and was within the guidance range of 75 percent to 76 percent of revenue.1

  • GAAP operating margin was negative 17 percent of revenue, compared to negative 29 percent of revenue in the fourth quarter of 2017.

  • Non-GAAP operating margin was 5 percent of revenue, compared to 5 percent of revenue in the fourth quarter of 2017, and was within the guidance range of 5 percent to 7 percent of revenue.1

  • GAAP net loss per share was $0.25, compared to GAAP net loss per share of $0.39 in the fourth quarter of 2017.

  • Non-GAAP diluted net income per share was $0.06, compared to non-GAAP diluted net income per share of $0.04 in the fourth quarter of 2017, and was at the high end of the guidance range of $0.04 to $0.06.1

  • Cash flow generated by operations was $31 million, compared to cash flow generated by operations of $34 million in the fourth quarter of 2017, and was within the guidance range of $30 million to $35 million.

2018 Financial Results

  • Revenue of $831 million increased 7 percent from 2017 and was at the high end of the guidance range of $827 million to $831 million.

  • Billings of $856 million increased 12 percent from 2017 and were above the guidance range of $835 million to $845 million.1

  • GAAP gross margin was 67 percent of revenue, compared to 65 percent of revenue in 2017.

  • Non-GAAP gross margin was 75 percent of revenue, compared to 75 percent of revenue in 2017.1

  • GAAP operating margin was negative 22 percent of revenue, compared to negative 31 percent of revenue in 2017.

  • Non-GAAP operating margin was 3 percent of revenue, compared to breakeven in 2017, and was within the guidance range of 2 percent to 4 percent of revenue.1

  • GAAP net loss per share was $1.27, compared to GAAP net loss per share of $1.60 in 2017.

  • Non-GAAP diluted net income per share was $0.08, compared to non-GAAP net loss per share of $0.05 in 2017, and was at the high end of the guidance range of $0.06 to $0.08.1

  • Cash flow generated by operations was $18 million, compared to cash flow generated by operations of $18 million in 2017.

  • Non-GAAP cash flow generated by operations was $62 million, compared to cash flow generated by operations of $18 million in 2017. Non-GAAP cash flow generated by operations in 2018 excludes approximately $44 million that was deemed to be repayment of accreted debt discount on $340 million principal amount of the 1.000% Convertible Senior Notes due 2035 ("Series A Notes"), which were repurchased and retired on May 24, 2018.1

“Our business continued to evolve toward a recurring subscription model,” said Frank Verdecanna, FireEye chief financial officer and chief accounting officer. "Recurring subscriptions and support billings increased more than 20 percent year over year and accounted for 82 percent of non-services billings in 2018.”

FireEye adopted Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606), effective January 1, 2018, using the full retrospective method. Certain prior period information has been adjusted to reflect the adoption of the new standard.

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.”

First Quarter and 2019 Outlook
FireEye provides guidance based on current market conditions and expectations.

For the first quarter of 2019, FireEye currently expects:

  • Revenue in the range of $208 million to $212 million.

  • Billings in the range of $170 million to $180 million.

  • Non-GAAP gross margin as a percent of revenue of approximately 74 percent.

  • Non-GAAP operating margin as a percent of revenue in the range of negative 3 percent to negative 1 percent.

  • Non-GAAP net loss per share between $0.02 and $0.04.

  • Cash flow generated by operations between $10 million and $15 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 shares outstanding of approximately 198 million.

For 2019, FireEye currently expects:

  • Revenue in the range of $880 million to $890 million.

  • Billings in the range of $910 million to $930 million.

  • Non-GAAP gross margin as a percent of revenue of approximately 75 percent.

  • Non-GAAP operating margin as a percent of revenue between 5 percent and 6 percent.

  • Non-GAAP diluted net income per share between $0.17 and $0.21.

  • Cash flow generated by operations between $90 million and $110 million.

  • Capital expenditures between $40 million and $50 million.

Non-GAAP diluted net income per share for 2019 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 diluted weighted average shares outstanding of approximately 210 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 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.