Posted on Thursday, Oct 26th 2017
According to Gartner, the global cloud-based security services market is estimated to grow 21% this year to $5.9 billion and $9 billion by the year 2020. The growth is expected to be driven by small and mid-sized businesses as they are becoming increasingly aware of security threats. Billion Dollar Unicorn player Proofpoint is helping manage email-based attacks as part of this industry.
Proofpoint (Nasdaq:PFPT) is essentially an email security SaaS solution company that helps prevent email-based cyberattacks. It recently announced its third quarter financials with revenues growing 35% to $134.3 million, ahead of the Street’s forecast of $131.5 million. Billings for the quarter improved 33% to $166.5 million. Its non-GAAP earnings rose 32% to $0.25 per share, ahead of the Street’s forecast by $0.07 per share. On a GAAP basis, the company continued to report losses. Losses increased from $0.44 a share a year ago to $0.49 for the quarter.
By segment, subscription revenues grew 35% over the year to $131.04 million, and hardware and services revenues grew 25% to $3.27 million.
For the current quarter, Proofpoint expects its revenue to grow 29%-31% over the year and its non-GAAP earnings are expected to rise by 6%-17%. That translates to a mid-range revenue of $139 million with an EPS of $0.20 compared with the Street’s forecast of revenues of $138.5 million and an EPS of $0.18.
For the full year, it expects its revenue to rise 35%-36% to $649 million with non-GAAP earnings of $0.96-$1.03 per share. The Street had forecast revenues of $646 million for the year with an EPS of $1.01.
Proofpoint’s Expansion Plan
Proofpoint has been focused on expanding its product offerings. Earlier this year, it announced the release of the TAP SaaS Defense. The solution extends the reach of Targeted Attack Protection beyond e-mail, thus allowing customers to protect their employees from advanced threats when they interact with content and SaaS applications while operating beyond the reach of the traditional firewall. The solution already has several customers who have completed full-scale production deployments.
Late last year, Proofpoint had released Domain Discover, which enables a business to proactively identify look-alike domains and block them from being used to attack employees, customers, partners, and suppliers. Since its launch, Domain Discover has also witnessed strong customer interest, and the company has closed a few deals for this solution.
Meanwhile, Proofpoint continues to maintain and build other ecosystem partnerships that include those with Palo Alto Networks, CyberArk, Imperva, and Splunk. These relationships have helped Proofpoint win several customers in the recent past. But competition for the company remains aggressive as it competes with bigger vendors like Cisco and Microsoft along with security services providers like Symantec, Mimecast and Trend Micro.
Finally, Proofpoint is looking to make bigger progress in international markets. During the recently reported quarter, international business revenues grew 34% over the year and accounted for 17% of its total revenue. It is planning to continue to expand its presence and reach outside the US.
Proofpoint’s stock is trading at $91.42 with a market capitalization of $4 billion. It had touched a 52-week high of $97.92 earlier this month and has recovered from the 52-week low of $69.19 in December last year.
More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures./
This segment is a part in the series : Billion Dollar Unicorns
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