According to a Grand View Research report published earlier this year, the global cyber security market is estimated to grow 11% annually through to 2025. The researcher estimates the industry to have generated $116.5 billion in revenues last year. Enterprise email security, e-discovery and compliance service provider, Proofpoint (Nasdaq: PFPT), recently announced its second quarter results that continued to surpass market expectations.
For the second quarter revenues grew 25% over the year to $214.4 million, ahead of the market’s forecast of $212 million. Total billings grew 17% to $232.1 million. Non-GAAP earnings of $0.41 per share grew from $0.26 per share a year ago and was significantly ahead of the Street’s forecast of $0.36 per share.
By segment, Subscription revenues grew 25% to $210.8 million and hardware and services revenues grew 28% to $3.7 million.
By solutions, revenues from Advanced Threat includes Targeted Attack Protection or TAP, grew 21% to $156.6 million. Compliance revenues grew 36% to $57.9 million.
For the current year, Proofpoint forecast revenues of $878.5-$880.5 million with billings of $1.064-$1.068 billion and an EPS of $1.61-$1.64. It expects to end the third quarter with revenues of $223-$225 million and an EPS of $0.37-$0.40. The market was looking for revenues of $876.97 million for the year with an EPS of $1.48 and revenues of $224 million and an EPS of $0.36 for the quarter.
Proofpoint’s Product Focus
After last quarter’s acquisition of Meta, Proofpoint focused on expanding its product portfolio. During the second quarter, its emerging products accounted for more than a third of its new revenues with the growth being led by demand for Email Fraud Defense (EFD) and Threat Response offerings. It continues to build its product offerings to cater to this growth.
It recently announced a significant enhancement to its email and browser isolation offerings called TAP Isolation. The upgrade enables seamless integration between its TAP advanced threat detection system and the browser isolation solution to further enhance the protection of every end user. The feature will provide security teams with the ability to establish policies and customize when the isolation system is involved. Security teams will be able to deploy a risk-based approach to selectively isolate a user’s URL clicks based on individual risk factors. The new isolation solution will also provide an additional zero trust adaptive control to protect the customer’s environment by redirecting the higher-risk users to an isolated environment.
It is also changing its go-to-market strategy by launching solutions bundles, P0, P1, P2, and P3. P0 and P1 are entry level bundles, and P2 and P3 are more advanced service offerings. Proofpoint has categorized its solutions into bundles to simplify the product selection process for customers. Customers will be able to consume these broad capabilities, thus reducing multiple sales cycles and simplifying the selling process for the sales and channel teams. The categorization of offerings is still in its early stages, but the company is seeing strong customer interest in the approach.
Proofpoint’s products are being received well by the market. Recently, it was ranked as the leader in the 2019 Gartner Magic Quadrant for Security Awareness Computer-Based Training for Sixth Consecutive Year.
Its stock is trading at $117.58 with a market capitalization of $6.6 billion. It touched a high of $132.85 in July this year. Like other tech stocks, Proofpoint too had fallen to a 52-week low of $75.92 in December last year.