FireEye Reports Financial Results for Second Quarter 2020

  • Record Q2 revenue of $230 million, an increase of 6 percent from the second quarter of 2019
  • All-time record non-GAAP operating income, net income, and earnings per share1
  • All-time record annualized recurring revenue of $598 million ending Q2, an increase of 8 percent compared to the end of the second quarter of 20192
  • Continued shift to cloud-based solutions as Platform, cloud subscription and managed services annualized recurring revenue of $302 million ending Q2 increased 27 percent compared to the end of the second quarter of 2019 and eclipsed Product and related subscription and support annualized recurring revenue for the first time2

MILPITAS, Calif. – July 28, 2020 – FireEye, Inc. (NASDAQ: FEYE), the intelligence-led security company, today announced financial results for the second quarter ended June 30, 2020.

“The steps we have taken to accelerate our transformation to a security-as-a-service company resulted in record second quarter revenue and our highest ever non-GAAP profitability,” said Kevin Mandia, FireEye chief executive officer. “Growing adoption of our validation platform, cloud-based security products and intelligence solutions, combined with improved net retention in our appliance-based security controls business, drove annualized recurring revenue to record levels.”

“Cyber security remains a top spending priority for organizations worldwide, and the uncertainty of the current environment is creating opportunities for solutions that allow customers to purchase exactly what they need, when they need it,” added Mandia. “We know more about cyber threats and threat actors than any other company in our industry, and we continue to invest in solutions that make our knowledge and expertise available on demand and immediately actionable for our customers.”

Second Quarter 2020 Financial Results

 

Q2 2020

Q2 2019

Y/Y change

Revenue

$230 million

$218 million

+6%

Annualized recurring revenue2

$598 million

$552 million

+8%

GAAP gross margin

65%

64%

+1 pt

Non-GAAP gross margin1

72%

72%

GAAP operating margin

(17)%

(26)%

+9 pts

Non-GAAP operating margin1

10%

(1)%

+11 pts

GAAP net income (loss) per share, basic and diluted

$(0.24)

$(0.33)

+$0.09

Non-GAAP net income (loss) per share, basic and diluted1

$0.09

$(0.01)

+$0.10

Cash flow provided (used) by operating activities

$15 million

$(15) million

$30 million

Capital expenditures

$6 million

$15 million

$(9) 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.

Third 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.

 

Q3 2020 Outlook

Updated 2020 Outlook

Revenue

$225 - $229 million

$905 - $925 million

Non-GAAP gross margin

70% - 71%

70.5% - 71.5%

Non-GAAP operating margin

7.5% - 8.5%

6.5% - 7.5%

Net interest income (expense)

$0 - $(1) million

$(2) - $(3) million

Provision for non-GAAP income taxes

$1.5 - $2.0 million

$4 - $6 million

Weighted average shares outstanding, diluted

227 million

227 million

Non-GAAP net income per share, diluted

$0.06 - $0.08

$0.22 - $0.26

Capital expenditures

~ $7 million

$30 - $35 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 third 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, July 28, 2020, at 5 p.m. Eastern time (2 p.m. Pacific time) to discuss its second quarter financial results and the company’s outlook for the third 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 third 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 “Third Quarter and Updated 2020 Outlook” above, as well as statements regarding opportunities and continued investments.

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 May 1, 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 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 second quarter of 2020 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 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 second quarter of 2019 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, and discrete provision for 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 9,300 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.

Contacts:

Media
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Investors
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FireEye, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands)

 

June 30, 2020

 

December 31, 2019

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

404,346 

 

 

$

334,603 

 

Short-term investments

509,858 

 

 

704,955 

 

Accounts receivable, net

119,842 

 

 

171,459 

 

Inventories

5,440 

 

 

5,892 

 

Prepaid expenses and other current assets

94,654 

 

 

96,827 

 

Total current assets

1,134,140 

 

 

1,313,736 

 

Property and equipment, net

87,405 

 

 

93,812 

 

Operating lease right-of-use assets, net

54,572 

 

 

58,758 

 

Goodwill

1,213,454 

 

 

1,205,292 

 

Intangible assets, net

116,864 

 

 

134,420 

 

Deposits and other long-term assets

74,998 

 

 

84,468 

 

TOTAL ASSETS

$

2,681,433 

 

 

$

2,890,486 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

CURRENT LIABILITIES:

 

 

 

Accounts payable

$

10,733 

 

 

$

26,271 

 

Operating lease liabilities, current

18,545 

 

 

18,437 

 

Accrued and other current liabilities

19,726 

 

 

24,496 

 

Accrued compensation

71,423 

 

 

59,513 

 

Convertible senior notes, current, net

— 

 

 

117,288 

 

Deferred revenue, current

563,190 

 

 

603,944 

 

Total current liabilities

683,617 

 

 

849,949 

 

Convertible senior notes, non-current, net

938,536 

 

 

893,273 

 

Deferred revenue, non-current

329,656 

 

 

370,623 

 

Operating lease liabilities, non-current

64,611 

 

 

70,481 

 

Other long-term liabilities

4,654 

 

 

4,494 

 

Total liabilities

2,021,074 

 

 

2,188,820 

 

Stockholders' equity:

 

 

 

Common stock

22 

 

 

22 

 

Additional paid-in capital

3,470,503 

 

 

3,457,359 

 

Treasury stock

(80,000)

 

 

(150,000)

 

Accumulated other comprehensive income (loss)

6,311 

 

 

1,180 

 

Accumulated deficit

(2,736,477)

 

 

(2,606,895)

 

Total stockholders’ equity

660,359 

 

 

701,666 

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

2,681,433 

 

 

$

2,890,486 

 

 

FireEye, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except per share amounts)

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2020

 

2019

 

2020

 

2019

Revenue:

 

 

 

 

 

 

 

Product, subscription and support

$

177,305 

 

 

$

174,102 

 

 

$

351,388 

 

 

$

344,005 

 

Professional services

52,595 

 

 

43,506 

 

 

103,234 

 

 

84,147 

 

Total revenue

229,900 

 

 

217,608 

 

 

454,622 

 

 

428,152 

 

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

 

 

 

 

 

 

 

Product, subscription and support

54,026 

 

 

53,198 

 

 

107,162 

 

 

101,666 

 

Professional services

26,967 

 

 

24,195 

 

 

55,417 

 

 

47,295 

 

Total cost of revenue

80,993 

 

 

77,393 

 

 

162,579 

 

 

148,961 

 

Total gross profit

148,907 

 

 

140,215 

 

 

292,043 

 

 

279,191 

 

Operating expenses:

 

 

 

 

 

 

 

Research and development (1)(2)(3)

60,596 

 

 

67,538 

 

 

128,099 

 

 

134,933 

 

Sales and marketing (1)(2)

90,042 

 

 

101,494 

 

 

190,242 

 

 

205,390 

 

General and administrative (1)

25,281 

 

 

27,926 

 

 

52,710 

 

 

55,302 

 

Restructuring charges (4)

12,558 

 

 

— 

 

 

23,532 

 

 

3,799 

 

Total operating expenses

188,477 

 

 

196,958 

 

 

394,583 

 

 

399,424 

 

Operating loss

(39,570)

 

 

(56,743)

 

 

(102,540)

 

 

(120,233)

 

Other expense, net (5)

(12,612)

 

 

(10,040)

 

 

(25,023)

 

 

(19,743)

 

Loss before income taxes

(52,182)

 

 

(66,783)

 

 

(127,563)

 

 

(139,976)

 

Provision for income taxes (6)

1,094 

 

 

540 

 

 

2,019 

 

 

2,722 

 

Net loss

$

(53,276)

 

 

$

(67,323)

 

 

$

(129,582)

 

 

$

(142,698)

 

Net loss per share, basic and diluted

$

(0.24)

 

 

$

(0.33)

 

 

$

(0.59)

 

 

$

(0.71)

 

Weighted average shares used in per share calculations, basic and diluted

221,352 

 

 

204,109 

 

 

219,570 

 

 

201,001 

 

 

FireEye, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

 

Six Months Ended June 30,

 

2020

 

2019

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

Net loss

$

(129,582)

 

 

$

(142,698)

 

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

Depreciation and amortization

47,738 

 

 

48,102 

 

Stock-based compensation

73,224 

 

 

80,474 

 

Non-cash interest expense related to convertible senior notes

24,367 

 

 

23,700 

 

Deferred income taxes

154 

 

 

(18)

 

Other

6,608 

 

 

637 

 

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

 

 

 

Accounts receivable

50,320 

 

 

32,860 

 

Inventories

(15)

 

 

(243)

 

Prepaid expenses and other assets

13,137 

 

 

3,959 

 

Accounts payable

(12,971)

 

 

4,415 

 

Accrued liabilities

(6,073)

 

 

(3,566)

 

Accrued compensation

11,910 

 

 

(8,704)

 

Deferred revenue

(81,721)

 

 

(24,830)

 

Other long-term liabilities

(6,862)

 

 

(4,564)

 

Net cash provided by (used in) operating activities

(9,766)

 

 

9,524 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

Purchases of property and equipment and demonstration units

(17,556)

 

 

(28,240)

 

Purchases of short-term investments

(106,631)

 

 

(258,104)

 

Proceeds from maturities of short-term investments

277,749 

 

 

311,905 

 

Proceeds from sales of short-term investments

28,208 

 

 

— 

 

Business acquisitions, net of cash acquired

(12,948)

 

 

(127,249)

 

Purchase of investment in privately held company

(1,000)

 

 

— 

 

Lease deposits

87 

 

 

426 

 

Net cash provided by (used in) investing activities

167,909 

 

 

(101,262)

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

Repurchase of convertible senior notes

(96,392)

 

 

— 

 

Payment related to shares withheld for taxes

(8,039)

 

 

— 

 

Proceeds from employee stock purchase plan

12,300 

 

 

12,315 

 

Proceeds from exercise of equity awards

3,731 

 

 

1,495 

 

Net cash provided by (used in) financing activities

(88,400)

 

 

13,810 

 

Net change in cash and cash equivalents

69,743 

 

 

(77,928)

 

Cash and cash equivalents, beginning of period

334,603 

 

 

409,829 

 

Cash and cash equivalents, end of period

$

404,346 

 

 

$

331,901 

 

FireEye, Inc.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(Unaudited, in thousands, except per share amounts)

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2020

 

2019

 

2020

 

2019

GAAP operating loss

$

(39,570)

 

 

$

(56,743)

 

 

$

(102,540)

 

 

$

(120,233)

 

Stock-based compensation expense (1)

37,046 

 

 

40,151 

 

 

73,224 

 

 

80,474 

 

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

1,084 

 

 

847 

 

 

2,110 

 

 

1,640 

 

Amortization of intangible assets (2)

11,245 

 

 

12,952 

 

 

23,205 

 

 

25,078 

 

Acquisition related expenses (4)

— 

 

 

597 

 

 

— 

 

 

597 

 

Restructuring charges (5)

12,558 

 

 

— 

 

 

23,532 

 

 

3,799 

 

Non-GAAP operating income (loss)

$

22,363 

 

 

$

(2,196)

 

 

$

19,531 

 

 

$

(8,646)

 

GAAP gross margin

65 

%

 

64 

%

 

64 

%

 

65 

%

Stock-based compensation expense (1)

%

 

%

 

%

 

%

Amortization of intangible assets (2)

%

 

%

 

%

 

%

Non-GAAP gross margin

72 

%

 

72 

%

 

71 

%

 

73 

%

GAAP operating margin

(17)

%

 

(26)

%

 

(23)

%

 

(28)

%

Stock-based compensation expense (1)

17 

%

 

19 

%

 

16 

%

 

19 

%

Amortization of intangible assets (2)

%

 

%

 

%

 

%

Restructuring charges (5)

%

 

— 

%

 

%

 

%

Non-GAAP operating margin

10 

%

 

(1)

%

 

%

 

(2)

%

GAAP net loss

$

(53,276)

 

 

$

(67,323)

 

 

$

(129,582)

 

 

$

(142,698)

 

Stock-based compensation expense (1)

37,046 

 

 

40,151 

 

 

73,224 

 

 

80,474 

 

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

1,084 

 

 

847 

 

 

2,110 

 

 

1,640 

 

Amortization of intangible assets (2)

11,245 

 

 

12,952 

 

 

23,205 

 

 

25,078 

 

Acquisition related expenses (4)

— 

 

 

597 

 

 

— 

 

 

597 

 

Restructuring charges (5)

12,558 

 

 

— 

 

 

23,532 

 

 

3,799 

 

Non-cash interest expense related to convertible senior notes (6)

12,002 

 

 

11,922 

 

 

24,367 

 

 

23,700 

 

Adjustment to provision (benefit) from income taxes (7)

— 

 

 

(834)

 

 

(315)

 

 

(223)

 

Non-GAAP net income (loss)

$

20,659 

 

 

$

(1,688)

 

 

$

16,541 

 

 

$

(7,633)

 

GAAP net loss per common share, basic and diluted

$

(0.24)

 

 

$

(0.33)

 

 

$

(0.59)

 

 

$

(0.71)

 

Stock-based compensation expense (1)

0.17 

 

 

0.20 

 

 

0.33 

 

 

0.40 

 

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

— 

 

 

— 

 

 

0.01 

 

 

0.01 

 

Amortization of intangible assets (2)

0.05 

 

 

0.06 

 

 

0.11 

 

 

0.12 

 

Acquisition related expenses (4)

— 

 

 

— 

 

 

— 

 

 

— 

 

Restructuring charges (5)

0.06 

 

 

— 

 

 

0.11 

 

 

0.02 

 

Non-cash interest expense related to convertible senior notes (6)

0.05 

 

 

0.06 

 

 

0.11 

 

 

0.12 

 

Adjustment to provision (benefit) from income taxes (7)

— 

 

 

— 

 

 

— 

 

 

— 

 

Non-GAAP net income (loss) per common share, basic

$

0.09 

 

 

$

(0.01)

 

 

$

0.08 

 

 

$

(0.04)

 

Non-GAAP net income (loss) per common share, diluted

$

0.09 

 

 

$

(0.01)

 

 

$

0.07 

 

 

$

(0.04)

 

Weighted average shares used in per share calculation for GAAP, basic and diluted

221,352 

 

 

204,109 

 

 

219,570 

 

 

201,001 

 

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

221,352 

 

 

204,109 

 

 

219,570 

 

 

201,001 

 

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

223,263 

 

 

204,109 

 

 

222,664 

 

 

201,001 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes stock-based compensation expense as follows:

 

 

 

 

 

 

 

Cost of product, subscription and support revenue

$

4,051 

 

 

$

3,964 

 

 

$

7,792 

 

 

$

7,911 

 

Cost of professional services revenue

4,450 

 

 

3,641 

 

 

8,351 

 

 

7,350 

 

Research and development expense

9,861 

 

 

11,889 

 

 

21,406 

 

 

24,313 

 

Sales and marketing expense

11,410 

 

 

13,227 

 

 

22,896 

 

 

25,767 

 

General and administrative expense

6,981 

 

 

7,430 

 

 

12,486 

 

 

15,133 

 

Restructuring charges

293 

 

 

— 

 

 

293 

 

 

— 

 

Total stock-based compensation expense

$

37,046 

 

 

$

40,151 

 

 

$

73,224 

 

 

$

80,474 

 

 

 

 

 

 

 

 

 

(2) Includes amortization of intangible assets as follows:

 

 

 

 

 

 

 

Cost of product, subscription and support revenue

$

7,009 

 

 

$

8,947 

 

 

$

14,739 

 

 

$

17,176 

 

Research and development expense

109 

 

 

109 

 

 

218 

 

 

227 

 

Sales and marketing expense

4,127 

 

 

3,896 

 

 

8,248 

 

 

7,675 

 

Total amortization of intangible assets

$

11,245 

 

 

$

12,952 

 

 

$

23,205 

 

 

$

25,078 

 

 

 

 

 

 

 

 

 

(3) Includes amortization of stock-based compensation capitalized in software development costs as follows:

 

 

 

 

 

 

 

Cost of product, subscription and support revenue

$

60 

 

 

$

196 

 

 

$

114 

 

 

$

399 

 

Cost of professional services revenue

30 

 

 

97 

 

 

57 

 

 

199 

 

Research and development expense

994 

 

 

554 

 

 

1,939 

 

 

1,042 

 

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

$

1,084 

 

 

$

847 

 

 

$

2,110 

 

 

$

1,640 

 

 

 

 

 

 

 

 

 

(4) Includes acquisition related expenses as follows:

 

 

 

 

 

 

 

General and administrative expense

$

— 

 

 

$

597 

 

 

$

— 

 

 

$

597 

 

 

 

 

 

 

 

 

 

(5) Includes restructuring charges as follows:

 

 

 

 

 

 

 

Restructuring charges

$

12,558 

 

 

$

— 

 

 

$

23,532 

 

 

$

3,799 

 

 

 

 

 

 

 

 

 

(6) Includes non-cash interest expense related to convertible senior notes as follows:

 

 

 

 

 

 

 

Other expense, net

$

12,002 

 

 

$

11,922 

 

 

$

24,367 

 

 

$

23,700 

 

 

 

 

 

 

 

 

 

(7) Includes income tax effect of non-GAAP adjustments as follows:

 

 

 

 

 

 

 

Benefit from income taxes

$

— 

 

 

$

(834)

 

 

$

(315)

 

 

$

(223)

 

 

 

FireEye, Inc.

REVENUE BREAKOUT

(Unaudited, in thousands)

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2020

 

2019

 

2020

 

2019

Product and related subscription and support revenue

$

103,804 

 

 

$

117,490 

 

 

$

209,492 

 

 

$

235,938 

 

Platform, cloud subscription and managed services revenue

73,501 

 

 

56,612 

 

 

141,896 

 

 

108,067 

 

Product, subscription and support revenue

177,305 

 

 

174,102 

 

 

351,388 

 

 

344,005 

 

Professional services revenue

52,595 

 

 

43,506 

 

 

103,234 

 

 

84,147 

 

Total revenue

$

229,900 

 

 

$

217,608 

 

 

$

454,622 

 

 

$

428,152 

 

 

 

ANNUALIZED RECURRING REVENUE BREAKOUT

(Unaudited, in thousands)

 

As of June 30,

 

2020

 

2019

Product and related subscription and support

$

295,850 

 

 

$

313,135 

 

Platform, cloud subscription and managed services

302,231 

 

 

238,724 

 

Total annualized recurring revenue

$

598,081 

 

 

$

551,859