Proofpoint (PFPT) Tops Q3 EPS by 7c, Beats on Revenues; FY17 EPS/Revenue Guidance Above Consensus, FY18 EPS/Revenue Mid-Point Guidance Below Consensus

Proofpoint (NASDAQ: PFPT) reported Q3 EPS of $0.25, $0.07 better than the analyst estimate of $0.18. Revenue for the quarter came in at $134.3 million versus the consensus estimate of $131.5 million.

Financial Outloo kAs of October 19, 2017, Proofpoint is providing guidance for its fourth quarter and increasing full year 2017 guidance as follows:

• Fourth Quarter 2017 Guidance: Total revenue is expected to be in the range of $138.0 million to $140.0 million. Billings are expected to be in the range of $180.0 million to $182.0 million. GAAP gross margin is expected to be 72%. Non-GAAP gross margin is expected to be 77.5%. GAAP net loss is expected to be in the range of $(28.6) million to $(25.7) million, or $(0.64) to $(0.57) per share, based on approximately 44.9 million weighted average diluted shares outstanding. Non-GAAP net income is expected to be in the range of $9.5 to $10.5 million, or $0.19 to $0.21 per share, using 55.7 million weighted average diluted shares outstanding, and adding back the $1.1 million in cash interest expense as prescribed under the “If-Converted” method. Free cash flow during the quarter is expected to be in the range of $25.0 million to $27.0 million, which assumes capital expenditures of approximately $13.0 million. In addition, the company has decided to transfer the intellectual property related to the FireLayers acquisition from Israel to the United States which will result in a one-time tax payment of approximately $4.0 million, which is included in our fourth quarter free cash flow guidance.
• Full Year 2017 Guidance: Total revenue is expected to be in the range of $508.0 million to $510.0 million. Billings are expected to be in the range of $630.0 million to $632.0 million. GAAP gross margin is expected to be 72%. Non-GAAP gross margin is expected to be 77%. GAAP net loss is expected to be in the range of $(102.0) million to $(98.9) million, or $(2.31) to $(2.24) per share, based on approximately 44.1 million weighted average diluted shares outstanding. Non-GAAP net income is expected to be in the range of $36.1 million to $37.1 million, or $0.73 to $0.75 per share, using 55.4 million weighted average diluted shares outstanding, and adding back the $4.2 million in cash interest expense as prescribed under the “If-Converted” method. Free cash flow for the full year is expected to be in the range of $101.5 million to $103.5 million, which assumes capital expenditures of approximately $48.0 million. In addition, our free cash flow guidance includes the approximate $4.0 million impact from the intellectual property tax payment mentioned above which was not included in our previous guidance range.
• Full Year 2018 Guidance: Total revenue is expected to be in the range of $644.0 million to $648.0 million. Billings are expected to be in the range of $798.0 million to $802.0 million. Non-GAAP net income is expected to be in the range of $50.0 million to $54.0 million, or $0.96 to $1.03 per share, using 56.3 million weighted average diluted shares outstanding, and adding back the $4.2 million in cash interest expense as prescribed under the “If-Converted” method. Free cash flow is expected to be approximately $135.0 million, which assumes capital expenditures of approximately $45.0 million for the full year.

GUIDANCE:

Proofpoint sees FY2017 EPS of $0.73-$0.75, versus the consensus of $0.65. Proofpoint sees FY2017 revenue of $508-510 million, versus the consensus of $505.94 million.

• Total revenue of $134.3 million, up 35% year-over-year
• Billings of $166.5 million, up 33% year-over-year
• GAAP EPS of $(0.49) per share, Non-GAAP EPS of $0.25 per share
• Generated operating cash flow of $44.2 million and free cash flow of $32.3 million
• Increasing FY17 billings, revenue and profitability guidance

Proofpoint sees FY2018 EPS of $0.96-$1.03, versus the consensus of $1.01. Proofpoint sees FY2018 revenue of $644-648 million, versus the consensus of $649.12 million.

For earnings history and earnings-related data on Proofpoint (PFPT) click here.

You May Also Be Interested In

• Freightos Limited (CRGO) Tops Q2 EPS by 3c ; Offers Guidance
• Analog Devices (ADI) Reiterated at Overweight by Cantor Fitzgerald: Beat and Raise Expected
• The LGL Group (LGL) Misses Q2 EPS by 8c