According to a Mordor Intelligence research report, the global cyber security market is estimated to grow 14.5% annually over the next few years to $267.7 billion by the year 2023. The growth in the industry is expected to be driven by the adoption of IoT, Bring-your-own-device, AI, and machine learning technologies in the coming years. San Francisco-based Proofpoint (Nasdaq: PFPT) recently announced its third quarter results that benefited from this high growth rate.
Third quarter revenues grew 23% over the year to $227.4 million, ahead of the market’s forecast of $225 million. Total billings during the quarter grew 26% over the year to $277.8 million and renewal rates soared above 90%. EPS of $0.49 was also significantly better than the market’s forecast earnings of $0.40 per share.
By segment, Subscription revenues grew 24% to $224.3 million and Hardware and services revenues grew 15% to $3.1 million.
On the basis of solutions, revenues from Advanced Threat, that includes Targeted Attack Protection offering, grew 19% to $164.2 million. Compliance revenues grew 37% to $63.2 million. Emerging products accounted for more than 33% of new and add-on businesses closed during the quarter. The growth was led by demand from Email Fraud Defense, Proofpoint Security Awareness Training (PSAT), and Threat Response offerings.
For the current year, Proofpoint forecast revenues of $882.3-$884.3 million with billings of $1.064-$1.068 billion and an EPS of $1.61-$1.64. It expects to end the fourth quarter with revenues of $237.5-$239.5 million and an EPS of $0.47-$0.50. The market expects fourth quarter revenues of $238.4 million and an EPS of $0.48.
Proofpoint’s Partnership Expansion
Proofpoint continues to expand its market reach by tying up with several key vendors. Earlier this quarter, it announced a tie-up with identity access management provider Okta. As part of the agreement, the two companies will work together to enhance the capability to protect their customers from sophisticated cyber-attacks. The integrated offering of Okta Identity Cloud and Proofpoint’s Targeted Attack Protection will offer enterprise customers with the ability to secure Office 365, G Suite, and their entire IT environment. Their customers will be able to get a security system that helps protect against phishing and credential-based attacks.
Earlier this month, Proofpoint also announced a partnership with endpoint protection vendor CrowdStrike. As part of the agreement, CrowdStrike’s endpoint protection will be integrated with TAP so that customers will be able to access security intelligence that feeds threat intelligence on malicious email attachments into CrowdStrike Falcon. The integration will strengthen device security and deter attackers. The integration will be through cloud-to-cloud APIs to ensure that joint customers are able to leverage detection engines to stop attacks.
Recently, Proofpoint also announced that it received the Authority to Operate under FedRAMP for its Protection TAP and DLP offerings to expand within the government sector. The company has already converted the certification to a win. It announced that it had added a large agency with over 200,000 users as its customer.
Its stock is trading at $115.86 with a market capitalization of $6.5 billion. It touched a 52-week high of $133.58 in July this year. Proofpoint had fallen to a 52-week low of $78.69 in December last year.