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Cyber Security Firm FireEye Reports Weakest Quarterly Revenue; CFO To Leave

Cyber Security Firm FireEye Reports Weakest Quarterly Revenue; CFO To Leave

by Elliot MarasAugust 1, 2015
Davide DeWalt FireEye

Davide DeWalt // FireEye

FireEye Inc., the Milpitas, a Calif.-based cyber security firm, reported its weakest quarterly revenue growth since the company went public in 2013, according to Reuters. The company also reported that its chief financial officer, Michael Sheridan, will resign.

FireEye Inc.’s shares fell 6.5 percent to $44.64 Thursday in after-market trading.

David DeWalt, the company’s chief executive, attributed the price drop to the CFO transition. “People would be nervous about a CFO transition, typically,” DeWalt told Reuters.

Chief Executive: Why Investors Shouldn’t Worry

He said investors should not worry, adding that it was natural for a CFO to leave a startup once its market value reaches $1 billion. “We are going to add a very strong CFO shortly,” he said.

The company noted that Sheridan, who served as CFO since June 2011, will join a private technology company. Frank Verdecanna, vice president of finance, will assume the role of interim CFO.

FireEye has not reported a profit since its IPO. The company uses cloud-based technologies to help businesses and government departments counter viruses that can breach older antivirus software.

FireEye’s revenue rose 55.8 percent in the three months ending June 30 – much lower than the previously typical average of over 90 percent growth.

Analysts had expected $143.2 million in revenue, according to Thomson Reuters I/B/E/S.

“Given the pristine valuation that FireEye gets, the company must continue to deliver monster ‘home run’ quarters and I would characterize this as a ‘triple,’” FBR Capital Markets analyst Daniel Ives told Reuters.

Also read: Canadian technology giant CGI to seek cyber security acquisitions

Company Boosts Full-Year Revenue Forecast

FireEye boosted its full-year revenue forecast for the second time this year to $630 million-$645 million from $615 million-$635 million.

Analysts were expecting $631.6 million in revenue.

The company’s net loss attributable to shareholders grew to $133.6 million (87 cents per share) in the second quarter from $116.8 million (82 cents per share) a year earlier.

Excluding items, FireEye lost 41 cents per share, which was less than analysts’ average estimate of 48 cents.

The company’s stock had increased about 51 percent this year up to Thursday’s close.

 Featured image from Shutterstock.

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