categories

HOT TOPICS

NEWSLETTER

If you are considering becoming a 1M/1M premium member and would like to join our mailing list to receive ongoing information, please sign up here.

Subscribe to our Feed

Cloud Stocks: Proofpoint Targets Insider Threats Through Acquisition

Posted on Wednesday, Feb 12th 2020

According to IDC, the global cyber security market grew 9% to $103.1 billion in 2019 and is expected to grow at 9% CAGR to reach $133.8 billion by 2022. Recently, San Francisco-based Proofpoint (Nasdaq: PFPT) announced its fourth quarter results that surpassed market expectations.

Proofpoint’s Financials
Proofpoint’s revenues grew 23% over the year to $243.3 million, ahead of the market’s forecast of $239.1 million. Billings grew 29% to $347.2 million, ahead of the Street’s expected $341.7 million. EPS of $0.52 was also significantly better than the market’s forecast earnings of $0.48 per share.

By segment, Subscription revenues grew 23% to $240.4 million. Hardware and services revenues declined 10% over the year to $3 million as the company continues to push forward on the subscription model.

Within its product portfolio, emerging products accounted for more than 33% of its total new and add-on businesses closed, driven by demand for Email Fraud Defense, Proofpoint Security Awareness Training (PSAT), and Threat Response.

For the full year 2019, revenues grew 24% to $888.2 million. Billings improved 22% to $1.07 billion. Net loss was $(130.3) million compared to a net loss of $(103.7) million last year. On an adjusted basis, it ended the year with an EPS of $1.77 compared with $1.47 in 2018.

For the first quarter, Proofpoint forecast revenues of $246-$248 million with an EPS of $0.25-$0.29. The market was looking for revenues of $244.3 million with an EPS of $0.36. Proofpoint expects to end 2020 with revenues of $1.06-$1.067 billion with an EPS of $1.42-$1.48.

Proofpoint’s Acquisition
Last quarter, Proofpoint announced the $255 million acquisition of a leading insider threat management platform ObserveIT. Boston-based ObserveIT was founded in 2006 by Avi Amos, Avi Weiss, and Gabriel Friedlander. ObserveIT is known for its security platform that identifies and eliminates insider threats within the organization. According to a McKinsey research, more than half of all data breaches within an organization involve an insider. The ObserveIT platform correlates activity and data movement to empower security teams to identify user risk, detect insider-led data breaches, and accelerate security incident response.

Proofpoint believes that as companies transition to the cloud, the traditional methods of data and intellectual property protection may not be enough. It plans to leverage ObserveIT’s acquisition to extend its email and cloud access security broker (CASB) DLP capabilities with endpoint. By integrating email and data-at-rest solutions, it will be able to deliver a pioneering enterprise DLP offering. The acquisition will allow security teams to understand and respond to data that is being mishandled either on a corporate device, or on a cloud app or over email.

Prior to the acquisition, ObserveIT was privately held and had raised $53 million from investors including Bain Capital Ventures, Spring Lake Equity Partners, NightDragon Security, and MDI Ventures. Unlike Proofpoint’s subscription-based model, ObserveIT was operating under a perpetual licensing model. Proofpoint will be transitioning it over to a subscription model.

Proofpoint was among our Top 20 Cloud Stocks for 2020. We like it for the way it is expanding through partnerships and acquisitions. 

Its stock is trading at $128.25 with a market capitalization of $7.3 billion. It touched a high of $133.58 in July last year. The stock had fallen to a year low of $102.25 in June last year.

This segment is a part in the series : Cloud Stocks


. Smartsheet Acquiring Bootstrapped Startups to Drive Growth
. Bootstrapped Unicorn Atlassian is Acquiring Capital Efficient Startups
. Netflix Price Hike Ruffles Competition
. How Will Carbon Black Differentiate?
. ServiceNow Grows Through Addition of Capital-Efficient Startups
. Zendesk and Freshworks Follow Different Acquisition Strategies
. Tableau Grows Through Small Acquisitions
. Open Platform Strategy Stands Intuit in Good Stead
. Will GoDaddy Follow the PaaS Route?
. Adobe Delivers Via PaaS
. A Look at Oracle’s 2018 M&A Activity
. What Apps Will Drive More Traction for Cloudera?
. Slack's App Focus Will Be Key to Post-IPO Success
. IBM Counts on its Cloud and Platform for the Turnaround
. Atlassian Acquires From its PaaS Marketplace
. What Should SAP Acquire to Triple its Value by 2023?
. Expect ServiceNow to Acquire From App Marketplace
. Should Alarm.com Follow a PaaS Strategy?
. How Upwork Can Leverage the Virtual Company Trend
. Qualys Scouting For Acquisitions
. Should SAP Acquire Zendesk or Freshworks?
. HubSpot Counts on its API Strategy
. SurveyMonkey Eyes Acquisitions for Growth
. Workday Wants to Disrupt Cloud Computing Using Machine Learning
. Einstein and Open-Source Platform Lead the Charge for Salesforce
. DocuSign Prepares to Beat Rival Adobe
. Veeva Soars, But Dassault Acquires Medidata for $5.8 Billion
. Tableau Acquisition Signals Massive Analytics Push for Salesforce
. Oracle Joins Hands with Microsoft to Take on Amazon
. GoDaddy is Making Strategic Acquisitions for the Next Level of Growth
. Alteryx Sees Strong Momentum
. Adobe Leveraging Magento and Marketo to Deliver Blockbuster Performance
. Is Slack Overvalued?
. How Will Cloudera Address the Competition?
. Zoom is Not Bothered by Cisco or Microsoft
. Domo Counts on Enterprise Revenue for Growth
. Netflix Plays with Pricing and Games to Attract Subscribers
. CrowdStrike Has a Successful IPO
. Atlassian Crosses the Billion Dollar Revenue Milestone
. ServiceNow Believes Strength Lies in Tie-ups
. Partnerships are the Mantra for BlackLine
. SurveyMonkey Counts on Enterprise Segment for Growth
. HubSpot Soars to a New High
. Intuit Pushes AI to Simplify Tax Filing
. Splunk Sees Strong Cloud Momentum
. Forescout Partners with Big Names
. Smartsheet Tapping into the Government Sector
. Salesforce Continues its Shopping Spree
. Palo Alto Networks Targets the IoT Security Market
. DocuSign Focuses on the Mortgage Sector
. Oracle Brags About Autonomous Database
. Blackbaud Acquires YourCause to Grow Addressable Market
. The Market Expects a Lot More from Adobe
. Anaplan Makes its First Acquisition Post IPO
. Activist Investor Drives Market Interest in Box
. MongoDB's Formula for Success
. Coupa Aims for $1B Revenue
. Dropbox on a Rocky Road
. Medallia Banks on Acquisitions
. IBM Banks on AI
. Time For Skepticism with Netflix
. SAP Riding High on the Cloud
. Amazon's Faster Shipping Hurting its Earnings
. ServiceNow CEO Change Signals Focus on Acquisitions
. Will Google Acquire Fitbit?
. HubSpot Focuses on Its Platform
. BlackLine Partners with Google Cloud
. Rapid7’s Focus on Cloud SIEM Pays Off
. Splunk Bets Big on Data Streaming
. Intuit's QBO Scores Big
. VMware Builds Up With Acquisitions
. Palo Alto Targets $5B Revenue by 2022
. Workday Targeting Procure-to-Pay Cycle
. Will Salesforce Acquire DocuSign?
. Okta Targets Enterprise Customers
. MongoDB Eyeing China With Alibaba Partnership
. Twilio Counts on API Upgrades for Growth
. Adobe Revs up its Experience Platform
. Top 20 for 2020
. Anaplan Sees Expanding Use Cases
. Dropbox Gears Up to Regain Lost Valuation
. Forescout Fails to Deliver
. Enterprise Bet Pays Off for SurveyMonkey
. SAP Bets Big on Experience Management
. Twilio Steps up Investment in 2020 to Preserve Growth Momentum
. Zendesk, Freshworks Focus on Marketplaces and Integrations
. Proofpoint Targets Insider Threats Through Acquisition
. RingCentral's Powerful Partner Strategy Would Augment with PaaS
. Qualys Counts on Google and Microsoft for Growth
. Shopify Soars on Improved Merchant Offerings

Hacker News
() Comments

Featured Videos