FireEye Reports Financial Results for Fourth Quarter and Full Year 2020

  • Record revenue, annualized recurring revenue, non-GAAP operating income and operating cash flow for fourth quarter and full year 20201,2
  • Revenue of $248 million, an increase of 5 percent from the fourth quarter of 2019
  • Total annualized recurring revenue of $638 million, an increase of 8 percent from the fourth quarter of 20192
  • Platform, cloud subscription and managed services annualized recurring revenue of $340 million, an increase of 20 percent from the fourth quarter of 20192
  • Non-GAAP operating margin of 12 percent, an increase of 5 points from the fourth quarter of 20191

MILPITAS, Calif. – Feb. 2, 2021 – FireEye, Inc. (NASDAQ: FEYE), the intelligence-led security company, today announced financial results for the fourth quarter and full year ended December 31, 2020.

“Our record fourth quarter and 2020 results demonstrated that we are gaining momentum in our Platform, Cloud Subscription, Managed Services and Professional services categories. The combined revenue from these two categories accounted for 55% of total revenue in 2020 and increased 23% from the full year 2019,” said Kevin Mandia, FireEye chief executive officer.

“We continue to transform our business and believe we are well-positioned as organizations shift to intelligence-led security focused on security effectiveness. Our vision is to become a seamless extension of our customers’ security operations by delivering our threat intelligence and expertise gained on the frontlines through the Mandiant Advantage platform,” added Mandia.

Fourth Quarter 2020 Financial Results

 

Q4 2020

Q4 2019

Y/Y change

Revenue

$248 million

$235 million

+5%

Annualized recurring revenue2

$638 million

$592 million

+8%

GAAP gross margin

65%

66%

-1 pt

Non-GAAP gross margin1

72%

73%

-1 pt

GAAP operating margin

(11)%

(15)%

+4 pts

Non-GAAP operating margin1

12%

7%

+5 pts

GAAP net income (loss) per share attributable to common stockholders, basic and diluted

$(0.17)

$(0.23)

+$0.06

Non-GAAP net income (loss) per share attributable to common stockholders, diluted1

$0.12

$0.07

+$0.05

Cash flow provided (used) by operating activities

$71 million

$40 million

+$31 million

Capital expenditures

$4 million

$7 million

$(3) million

2020 Financial Results

 

2020

2019

Y/Y change

Revenue

$941 million

$889 million

+6%

GAAP gross margin

64%

65%

-1 pt

Non-GAAP gross margin1

71%

73%

-2 pts

GAAP operating margin

(16)%

(24)%

+8 pts

Non-GAAP operating margin1

8%

1%

+7 pts

GAAP net income (loss) per share attributable to common stockholders, basic and diluted

$(0.93)

$(1.24)

+$0.31

Non-GAAP net income (loss) per share attributable to common stockholders, diluted1

$0.31

$0.05

+$0.26

Cash flow provided (used) by operating activities

$95 million

$68 million

+$27 million

Capital expenditures

$26 million

$46 million

$(20) 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.

First Quarter and 2021 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.

 

Q1 2021 Outlook

2021 Outlook

Revenue

$235 - $238 million

$990 - $1,010 million

Non-GAAP gross margin

70% - 71%

70.5% - 71.5%

Non-GAAP operating margin

6.5% - 7.5%

9% - 10%

Net interest income (expense)

$(1) million

$(3) - $(4) million

Provision for non-GAAP income taxes

$1 - $2 million

$4 - $6 million

Weighted average shares outstanding, diluted

238 million

240 - 245 million

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

$0.05 - $0.07

$0.35 - $0.37

Capital expenditures

~ $6 million

~ $25 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, acquisition related expenses, restructuring charges, non-cash interest expense related to the company’s convertible senior notes, discrete tax provision (benefit), dividends on Series A convertible preferred stock, other special non-recurring items, and shares issuable upon conversion of the company's convertible senior notes and Series A convertible preferred shares that are anti-dilutive. 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 first quarter of 2021 and full year 2021 will have a significant impact on the company’s GAAP operating margin and net loss per share attributable to common stockholders. 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.

Recent Highlights

  • Uncovered an international cyber espionage campaign with our discovery of a supply chain compromise in the SolarWinds Orion platform
  • Strengthened our management team with the addition of Bryan Palma as Executive Vice President, FireEye Products
  • Added new board members, Viral Patel, Senior Managing Director at Blackstone and Arthur Coviello, Venture Partner at Rally Ventures
  • Introduced Mandiant Advantage, a software-as-a-service (SaaS) platform for delivery of our solutions, beginning with Mandiant Intelligence; Mandiant Validation and other offerings will become available on the platform in coming months
  • Announced a $400 million strategic investment by Blackstone and ClearSky to accelerate investment in Mandiant Solutions strategic growth initiatives
  • Acquired Respond Software, an innovator in security operations automation through AI-driven eXtended Detection and Response (XDR)
  • Awarded first place by Naval Information Warfare Systems Command in a network threat detection challenge, following the March 2020 first place award for FireEye Endpoint Security
  • Recognized by CRN with a 2020 CRN Tech Innovator award in the ‘Security – Risk Assessment and Management’ category for Mandiant Security Validation

Conference Call Information

FireEye will host a conference call today, February 2, 2021, at 5 p.m. Eastern time (2 p.m. Pacific time) to discuss its fourth quarter financial results and the company’s outlook for the first quarter and full year 2021. 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 2021, 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 “First Quarter and 2021 Outlook” above, as well as statements regarding plans and opportunities, including new offerings.

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 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 October 30, 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 financial 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. 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.

Non-GAAP operating income (loss) and non-GAAP operating margin. 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.

Non-GAAP net income (loss) attributable to common stockholders. FireEye defines non-GAAP net income (loss) attributable to common stockholders 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, non-cash interest expense related to the company’s convertible senior notes, discrete tax provision (benefit), dividends on Series A convertible preferred stock, and other special or non-recurring items.

Non-GAAP net income (loss) per share attributable to common stockholders. FireEye defines non-GAAP net income per diluted share attributable to common stockholders as non-GAAP net income attributable to common stockholders divided by weighted average diluted shares outstanding. Weighted average diluted shares used to calculate non-GAAP net income per diluted share attributable to common stockholders excludes shares issuable upon conversion of the company's convertible senior notes and Series A convertible preferred shares that are anti-dilutive. FireEye defines non-GAAP net loss per share attributable to common stockholders as non-GAAP net loss attributable to common stockholders 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 and Series A convertible preferred shares that are anti-dilutive.

Non-GAAP net income attributable to common stockholders and non-GAAP net income per diluted share attributable to common stockholders in the fourth quarter and full year of 2020 excluded stock-based compensation expense, amortization of stock-based compensation expense capitalized in software development costs, amortization of intangible assets, acquisition related expenses, restructuring charges, non-cash interest expense related to convertible senior notes issued in June 2015 and the second quarter of 2018, discrete tax provision (benefit), and dividends on Series A convertible preferred stock. Weighted average diluted shares outstanding used to calculate non-GAAP net income per diluted share excluded stock options, restricted stock units, performance stock units, and shares issuable upon conversion of the company's convertible senior notes and Series A convertible preferred shares that were anti-dilutive.

Non-GAAP net income attributable to common stockholders and non-GAAP net income per diluted share attributable to common stockholders in the fourth quarter and full year of 2019 excluded stock-based compensation expense, amortization of stock-based compensation expense capitalized in software development costs, amortization of intangible assets, 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 tax provision (benefit). Weighted average diluted shares outstanding used to calculate non-GAAP net income per diluted 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, restructuring charges, non-cash interest expense related to convertible senior notes issued in June 2015 and the second quarter of 2018, discrete tax provision (benefit), dividends on Series A convertible preferred stock, 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 amortization of intangible assets, acquisition related expenses, restructuring charges, non-cash interest expense related to the company’s convertible senior notes, discrete tax provision (benefit), and dividends on Series A convertible preferred stock, 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 9,900 customers across 103 countries, including more than 50 percent of the Forbes Global 2000.

© 2021 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.

Media Inquiries

Media.Relations@fireeye.com

Investor Inquiries

Investor.Relations@fireeye.com

Source: FireEye

 
FireEye, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands)

 

December 31, 2020

 

December 31, 2019

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

676,454 

 

 

$

334,603 

 

Short-term investments

624,824 

 

 

704,955 

 

Accounts receivable, net

153,575 

 

 

171,459 

 

Inventories

4,023 

 

 

5,892 

 

Prepaid expenses and other current assets

103,368 

 

 

96,827 

 

Total current assets

1,562,244 

 

 

1,313,736 

 

Property and equipment, net

79,770 

 

 

93,812 

 

Operating lease right-of-use assets, net

38,251 

 

 

58,758 

 

Goodwill

1,364,886 

 

 

1,205,292 

 

Intangible assets, net

126,067 

 

 

134,420 

 

Deposits and other long-term assets

74,664 

 

 

84,468 

 

Total Assets

$

3,245,882 

 

 

$

2,890,486 

 

 

 

 

 

Liabilities, Convertible preferred stock and Stockholders' equity

 

 

 

Current Liabilities:

 

 

 

Accounts payable

$

5,107 

 

 

$

26,271 

 

Operating lease liabilities, current

16,024 

 

 

18,437 

 

Accrued and other current liabilities

23,239 

 

 

24,496 

 

Accrued compensation

95,664 

 

 

59,513 

 

Convertible senior notes, current, net

— 

 

 

117,288 

 

Deferred revenue, current

613,709 

 

 

603,944 

 

Total current liabilities

753,743 

 

 

849,949 

 

Convertible senior notes, non-current, net

960,896 

 

 

893,273 

 

Deferred revenue, non-current

342,748 

 

 

370,623 

 

Operating lease liabilities, non-current

42,202 

 

 

70,481 

 

Other long-term liabilities

12,339 

 

 

4,494 

 

Total liabilities

2,111,928 

 

 

2,188,820 

 

Commitments and contingencies

 

 

 

Series A convertible preferred stock

$

401,050 

 

 

$

— 

 

Stockholders' equity:

 

 

 

Common stock

24 

 

 

22 

 

Additional paid-in capital

3,623,243 

 

 

3,457,359 

 

Treasury stock

(80,000)

 

 

(150,000)

 

Accumulated other comprehensive income

3,834 

 

 

1,180 

 

Accumulated deficit

(2,814,197)

 

 

(2,606,895)

 

Total stockholders’ equity

732,904 

 

 

701,666 

 

Total Liabilities, Convertible preferred stock and Stockholders' equity

$

3,245,882 

 

 

$

2,890,486 

 

FireEye, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except per share amounts)

 

Three Months Ended December 31,

 

Year Ended December 31,

 

2020

 

2019

 

2020

 

2019

Revenue:

 

 

 

 

 

 

 

Product, subscription and support

$

189,721 

 

 

$

185,008 

 

 

$

724,945 

 

 

$

708,836 

 

Professional services

57,781 

 

 

50,078 

 

 

215,639 

 

 

180,316 

 

Total revenue

247,502 

 

 

235,086 

 

 

940,584 

 

 

889,152 

 

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

 

 

 

 

 

 

 

Product, subscription and support

55,160 

 

 

54,494 

 

 

217,255 

 

 

210,432 

 

Professional services

31,883 

 

 

26,217 

 

 

116,772 

 

 

98,460 

 

Total cost of revenue

87,043 

 

 

80,711 

 

 

334,027 

 

 

308,892 

 

Total gross profit

160,459 

 

 

154,375 

 

 

606,557 

 

 

580,260 

 

Operating expenses:

 

 

 

 

 

 

 

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

63,009 

 

 

67,537 

 

 

252,771 

 

 

271,326 

 

Sales and marketing (1)(2)

96,796 

 

 

93,077 

 

 

380,998 

 

 

396,822 

 

General and administrative (1)

25,646 

 

 

28,862 

 

 

101,452 

 

 

111,881 

 

Restructuring charges (5)

1,487 

 

 

(15)

 

 

26,507 

 

 

10,265 

 

Total operating expenses

186,938 

 

 

189,461 

 

 

761,728 

 

 

790,294 

 

Operating loss

(26,479)

 

 

(35,086)

 

 

(155,171)

 

 

(210,034)

 

Other expense, net (6)

(12,182)

 

 

(11,702)

 

 

(49,238)

 

 

(41,685)

 

Loss before income taxes

(38,661)

 

 

(46,788)

 

 

(204,409)

 

 

(251,719)

 

Provision (benefit) for income taxes (7)

(58)

 

 

2,428 

 

 

2,894 

 

 

5,690 

 

Net loss

$

(38,603)

 

 

$

(49,216)

 

 

$

(207,303)

 

 

$

(257,409)

 

Dividend on series A convertible preferred stock (8)

(1,050)

 

 

— 

 

 

(1,050)

 

 

— 

 

Net loss attributable to common stockholders, basic and diluted

$

(39,653)

 

 

$

(49,216)

 

 

$

(208,353)

 

 

$

(257,409)

 

Net loss per share attributable to common stockholders, basic and diluted

$

(0.17)

 

 

$

(0.23)

 

 

$

(0.93)

 

 

$

(1.24)

 

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

229,203 

 

 

214,565 

 

 

223,308 

 

 

207,234 

 

FireEye, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

 

Year Ended December 31,

 

2020

 

2019

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

Net loss

$

(207,303)

 

 

$

(257,409)

 

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

 

 

 

Depreciation and amortization

96,384 

 

 

103,305 

 

Stock-based compensation

156,107 

 

 

153,517 

 

Non-cash interest expense related to convertible senior notes

46,728 

 

 

47,983 

 

Deferred income taxes

(838)

 

 

(257)

 

Other

6,998 

 

 

945 

 

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

 

 

 

Accounts receivable

16,681 

 

 

(12,109)

 

Inventories

3,285 

 

 

51 

 

Prepaid expenses and other assets

3,607 

 

 

7,003 

 

Accounts payable

(18,931)

 

 

4,707 

 

Accrued liabilities

(6,738)

 

 

(3,074)

 

Accrued compensation

36,151 

 

 

(4,295)

 

Deferred revenue

(20,773)

 

 

36,987 

 

Other long-term liabilities

(16,463)

 

 

(9,817)

 

Net cash provided by operating activities

94,895 

 

 

67,537 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

Purchases of property and equipment and demonstration units

(26,326)

 

 

(45,605)

 

Purchases of short-term investments

(393,442)

 

 

(617,194)

 

Proceeds from maturities of short-term investments

443,396 

 

 

620,580 

 

Proceeds from sales of short-term investments

29,161 

 

 

— 

 

Business acquisitions, net of cash acquired

(123,740)

 

 

(127,249)

 

Purchase of investment in privately held company

(1,000)

 

 

— 

 

Lease deposits

(207)

 

 

432 

 

Net cash used in investing activities

(72,158)

 

 

(169,036)

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

Repurchase of convertible senior notes

(96,392)

 

 

— 

 

Series A convertible preferred stock issuance costs

(4,653)

 

 

— 

 

Series A convertible preferred stock

400,000 

 

 

— 

 

Payment related to shares withheld for taxes

(9,363)

 

 

— 

 

Proceeds from employee stock purchase plan

22,188 

 

 

22,086 

 

Proceeds from exercise of equity awards

7,334 

 

 

4,187 

 

Net cash provided by financing activities

319,114 

 

 

26,273 

 

Net change in cash and cash equivalents

341,851 

 

 

(75,226)

 

Cash and cash equivalents, beginning of period

334,603 

 

 

409,829 

 

Cash and cash equivalents, end of period

$

676,454 

 

 

$

334,603 

 

FireEye, Inc.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(Unaudited, in thousands, except per share amounts)

 

Three Months Ended December 31,

 

Year Ended December 31,

 

2020

 

2019

 

2020

 

2019

GAAP operating loss

$

(26,479)

 

 

$

(35,086)

 

 

$

(155,172)

 

 

$

(210,034)

 

Stock-based compensation expense (1)

42,514 

 

 

36,355 

 

 

156,107 

 

 

153,517 

 

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

1,065 

 

 

968 

 

 

4,128 

 

 

3,524 

 

Amortization of intangible assets (2)

11,669 

 

 

14,531 

 

 

45,882 

 

 

53,943 

 

Acquisition related expenses (4)

425 

 

 

— 

 

 

425 

 

 

597 

 

Restructuring charges (5)

1,487 

 

 

(15)

 

 

26,507 

 

 

10,265 

 

Non-GAAP operating income (loss)

$

30,681 

 

 

$

16,753 

 

 

$

77,877 

 

 

$

11,812 

 

GAAP gross margin

65 

%

 

66 

%

 

64 

%

 

65 

%

Stock-based compensation expense (1)

%

 

%

 

%

 

%

Amortization of intangible assets (2)

%

 

%

 

%

 

%

Non-GAAP gross margin

72 

%

 

73 

%

 

71 

%

 

73 

%

GAAP operating margin

(11)

%

 

(15)

%

 

(16)

%

 

(24)

%

Stock-based compensation expense (1)

17 

%

 

16 

%

 

16 

%

 

17 

%

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

— 

%

 

— 

%

 

— 

%

 

— 

%

Amortization of intangible assets (2)

%

 

%

 

%

 

%

Restructuring charges (5)

%

 

— 

%

 

%

 

%

Non-GAAP operating margin

12 

%

 

%

 

%

 

%

GAAP net loss attributable to common stockholders

$

(39,653)

 

 

$

(49,216)

 

 

$

(208,354)

 

 

$

(257,409)

 

Stock-based compensation expense (1)

42,514 

 

 

36,355 

 

 

156,107 

 

 

153,517 

 

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

1,065 

 

 

968 

 

 

4,128 

 

 

3,524 

 

Amortization of intangible assets (2)

11,669 

 

 

14,531 

 

 

45,882 

 

 

53,943 

 

Acquisition related expenses (4)

425 

 

 

— 

 

 

425 

 

 

597 

 

Restructuring charges (5)

1,487 

 

 

(15)

 

 

26,507 

 

 

10,265 

 

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

11,248 

 

 

12,215 

 

 

46,728 

 

 

47,983 

 

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

(1,545)

 

 

43 

 

 

(1,861)

 

 

(861)

 

Dividend on series A convertible preferred stock (8)

1,050 

 

 

— 

 

 

1,050 

 

 

— 

 

Non-GAAP net income attributable to common stock holders

$

28,260 

 

 

$

14,881 

 

 

$

70,612 

 

 

$

11,559 

 

GAAP net loss per common share attributable to common stockholders, basic and diluted

$

(0.17)

 

 

$

(0.23)

 

 

$

(0.93)

 

 

$

(1.24)

 

Stock-based compensation expense (1)

0.19 

 

 

0.17 

 

 

0.70 

 

 

0.74 

 

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

— 

 

 

— 

 

 

0.02 

 

 

0.02 

 

Amortization of intangible assets (2)

0.05 

 

 

0.07 

 

 

0.21 

 

 

0.26 

 

Acquisition related expenses (4)

— 

 

 

— 

 

 

— 

 

 

— 

 

Restructuring charges (5)

0.01 

 

 

— 

 

 

0.12 

 

 

0.05 

 

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

0.05 

 

 

0.06 

 

 

0.21 

 

 

0.23 

 

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

(0.01)

 

 

— 

 

 

(0.01)

 

 

— 

 

Dividend on series A convertible preferred stock (8)

— 

 

 

— 

 

 

— 

 

 

— 

 

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

$

0.12 

 

 

$

0.07 

 

 

$

0.32 

 

 

$

0.06 

 

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

$

0.12 

 

 

$

0.07 

 

 

$

0.31 

 

 

$

0.05 

 

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

229,203 

 

 

214,565 

 

 

223,308 

 

 

207,234 

 

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

233,287 

 

 

220,421 

 

 

226,549 

 

 

213,043 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

Cost of product, subscription and support revenue

$

4,356 

 

 

$

3,404 

 

 

$

16,393 

 

 

$

14,905 

 

Cost of professional services revenue

5,329 

 

 

3,333 

 

 

18,695 

 

 

13,972 

 

Research and development expense

12,631 

 

 

10,445 

 

 

45,867 

 

 

45,476 

 

Sales and marketing expense

13,460 

 

 

11,179 

 

 

49,662 

 

 

49,198 

 

General and administrative expense

6,738 

 

 

7,994 

 

 

25,176 

 

 

29,966 

 

Restructuring charges

— 

 

 

— 

 

 

314 

 

 

— 

 

Total stock-based compensation expense

$

42,514 

 

 

$

36,355 

 

 

$

156,107 

 

 

$

153,517 

 

 

 

 

 

 

 

 

 

(2) Includes amortization of intangible assets as follows:

 

 

 

 

 

 

 

Cost of product, subscription and support revenue

$

7,228 

 

 

$

10,332 

 

 

$

28,739 

 

 

$

37,643 

 

Research and development expense

22 

 

 

109 

 

 

349 

 

 

445 

 

Sales and marketing expense

4,419 

 

 

4,090 

 

 

16,794 

 

 

15,855 

 

Total amortization of intangible assets

$

11,669 

 

 

$

14,531 

 

 

$

45,882 

 

 

$

53,943 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

Cost of product, subscription and support revenue

$

48 

 

 

$

190 

 

 

$

200 

 

 

$

782 

 

Cost of professional services revenue

24 

 

 

95 

 

 

100 

 

 

391 

 

Research and development expense

993 

 

 

683 

 

 

3,828 

 

 

2,350 

 

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

$

1,065 

 

 

$

968 

 

 

$

4,128 

 

 

$

3,523 

 

 

 

 

 

 

 

 

 

(4) Includes acquisition related expenses as follows:

 

 

 

 

 

 

 

General and administrative expense

$

425 

 

 

$

— 

 

 

$

425 

 

 

$

597 

 

 

 

 

 

 

 

 

 

(5) Includes restructuring charges as follows:

 

 

 

 

 

 

 

Restructuring charges

$

1,487 

 

 

$

(15)

 

 

$

26,507 

 

 

$

10,265 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

Other income, net

$

11,248 

 

 

$

12,215 

 

 

$

46,728 

 

 

$

47,983 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

Provision (benefit) from income taxes

$

(1,545)

 

 

$

43 

 

 

$

(1,861)

 

 

$

(861)

 

 

 

 

 

 

 

 

 

(8) Dividend on series A convertible preferred stock

$

1,050 

 

 

$

— 

 

 

$

1,050 

 

 

$

— 

 

 

 

 

 

 

 

 

 

FireEye, Inc.
REVENUE BREAKOUT

(Unaudited, in thousands)

 

Three Months Ended December 31,

 

Year Ended December 31,

 

2020

 

2019

 

2020

 

2019

Product and related subscription and support revenue

$

104,589 

 

 

$

114,050 

 

 

$

422,812 

 

 

$

467,823 

 

Platform, cloud subscription and managed services revenue

85,132 

 

 

70,958 

 

 

302,133 

 

 

241,013 

 

Product, subscription and support revenue

189,721 

 

 

185,008 

 

 

724,945 

 

 

708,836 

 

Professional services revenue

57,781 

 

 

50,078 

 

 

215,639 

 

 

180,316 

 

Total revenue

$

247,502 

 

 

$

235,086 

 

 

$

940,584 

 

 

$

889,152 

 

ANNUALIZED RECURRING REVENUE BREAKOUT

(Unaudited, in thousands)

 

As of December 31,

 

2020

 

2019

Product and related subscription and support

$

297,530 

 

 

$

307,718 

 

Platform, cloud subscription and managed services

340,080 

 

 

284,205 

 

Total annualized recurring revenue

$

637,610 

 

 

$

591,923