FireEye cloud subscription pivot pays off

FireEye cloud subscription pivot pays off

FireEye has been pivoting to a subscription-based model from selling hardware boxes used to detect malicious software to boost its revenue and profit margins

Credit: Dreamstime

Cyber security vendor FireEye has raised its annual revenue guidance and forecast fourth-quarter revenue above analysts' estimates, helped by a rise in cloud subscriptions.

Cyber attacks have been in focus after a virus spread from Ukraine wreak havoc around the globe in 2017, crippling thousands of computers and disrupting ports from Mumbai to Los Angeles.

Highlighting the potential for cybersecurity firms to grow, governments have repeatedly warned about the risks private businesses face from such attacks, both those carried out by foreign governments and financially motivated criminals.

Global insurers that cover cyber attacks are also facing more claims, specially related to ransom-demanding hackers who cripple businesses' technology systems, and only stop after receiving substantial payments.

FireEye has been pivoting to a subscription-based model from selling hardware boxes used to detect malicious software to boost its revenue and profit margins.

"Record third quarter billings for our platform, cloud subscription and managed services as well as professional services categories demonstrate our progress," Chief Executive Officer Kevin Mandia said in a statement.

The company raised its 2019 revenue guidance to between US$878 million and US$882 million, ahead of analysts' estimate of US$872.47 million.

FireEye said it expects billings in the final quarter at between US$285 million to US$295 million, compared to estimates of US$291.88 million.

Billings include revenue recognized plus the change in deferred revenue.

The company forecast revenue of between US$224 million and US$228 million for the fourth quarter, while analysts on average were expecting US$224.14 million, according to IBES data from Refinitiv.

The company posted an adjusted profit of 2 cents (US) per share for the third quarter ended Sept. 30, above the average analyst estimate of 1 cent (US).

Business Insider reported earlier this month that FireEye has hired Goldman Sachs Group Inc for a potential sale, citing three sources familiar with the discussions, adding that private equity firms appear to be the most likely buyers.

FireEye's shares have been lower since earlier in the day following a media report that it was struggling to find buyers for the whole company and was trying to sell its products units, which accounts for around 50 per cent to 60 per cent of revenue.

(Reporting by Noor Zainab Hussain in Bengaluru; Editing by Maju Samuel)

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