According to a MarketStudy Report published earlier this year, the global cyber security market is estimated to grow 12% annually to reach $300 billion by 2024. The increasing frequency of cyber attacks and the growing number of IoT devices is promoting the adoption of cyber security solutions. The research estimates that the financial losses caused due to cyber-attacks have risen by over 62% in the past few years, thus prompting organizations to adopt advanced cyber security solutions to protect their sensitive information from unsanctioned access.
Cyber Security company Forescout Technologies (Nasdaq: FSCT) recently reported its second quarter results that saw revenues grow 16% over the year to $78.3 million, ahead of the market’s estimated revenues of $77.2 million. Net loss was $30.8 million, or $0.68 a share, compared with $20.4 million, or $0.50 a share reported a year ago. Adjusted loss was $0.33 per share compared with the market’s forecast of a loss of $0.46 per share.
By segment, License revenues grew 13% to $38.8 million, Subscription revenues grew 20% to $34.8 million, and Professional Services revenue grew 8% over the year to $4.6 million.
For the third quarter, Forescout expects revenues of $98.8-$101.8 million with an adjusted earnings of $0.04-$0.06 a share. It expects to end the year with revenues of $365.3-$375.3 million and an adjusted loss of $0.41-$0.33 a share. The market was looking for revenues of $100.7 million with an EPS of $0.11 per share for the quarter and revenues of $371.1 million with an adjusted loss of $0.40 per share for the year.
Forescout is working to attract a bigger market share by tying up with several bigger technology players. Earlier this quarter, it announced an expanded partnership with Microsoft Corporation to integrate the Forescout platform with Microsoft Intune. Microsoft Intune is a leading enterprise mobility management (EMM) solution. By integrating Forescout’s eyeExtend with Microsoft Intune, Forescout will help drive mobile device onboarding and enrollment by allowing organizations to discover devices that were previously unseen by Intune. It will help remove visibility gaps on the network, thus driving greater security in the organization.
Earlier last month, it also announced an expanded partnership with VMWare to simplify and operationalize enterprise-wide IoT lifecycle and security management by integrating its solutions with VMware Pulse IoT Center. As part of the agreement, Forescout will now be the universal Pulse IoT Center gateway to automatically discover, onboard, and orchestrate management and security actions across IoT devices regardless of type or network tier. The integration will deliver real-time contextual device data from Forescout with device telemetry from VMware Pulse IoT Center to maximize IoT investments. The customers will be able to leverage Forescout’s comprehensive policy engine to drive both broad and granular management, along with automatically enforcing security policies.
Besides strengthening its partner network, Forescout is also expanding its product offering. It recently strengthened its investment in the Operational Technology (OT) security segment with the release of SilentDefense 4.0 that increases the network monitoring and intelligence capabilities. The new release offers enterprises improved productivity, lower risk profiles, and faster mitigation of threats by extending integrations and vendor partnerships with key automation vendors including ABB, Yokogawa, Emerson, and Siemens.
Till nearly two years ago, Forescout was venture funded with $121.6 million raised from investors including Wellington Management, Accel, Amadeus Capital Partners, Aspect Ventures, Cross Creek Advisors, Founders Circle Capital, ITOCHU Corporation, Meritech Capital Partners, and Pitango Venture Capital. In October 2017, Forescout went public and raised $116 million at a valuation of $800 million by pricing shares at $22 apiece.
Its stock is currently trading at $35.83 with a market capitalization of $1.6 billion. It had climbed to a 52-week high of $46.43 in March this year. The stock has recovered from the 52-week low of $22.01 that it had fallen to in December last year.