Capping off a turnaround year, FireEye (NASDAQ: FEYE) posted solid fourth-quarter results, which gave the stock a post-earnings bump. The cybersecurity company has been under the microscope lately, with the stock down 55% in the last three years, and a new CEO, Kevin Mandia, who has a plan to right the ship.
As you'll see below, Mandia had a lot to say about the record-setting quarter and what's going right. Read on for details of the record results, new product sales, and how its marketing message and sales force are improving to give management confidence that growth will continue into 2018.
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1. It had a record quarter
Any way you measure it, FireEye had a great quarter. The company has been focused on its turnaround since Mandia became CEO in June 2016, and this quarter's results show that the momentum from all the changes has materialized. Combined with its 9.5% revenue growth for the quarter, the company projected over 9% growth for 2018 (at guidance midpoint), which shows that management is confident growth has returned.
2. Its flagship product's growth is accelerating
FireEye's newest product, Helix, brought together all the company's disparate products that it had built over the years from numerous acquisitions and product development efforts and put them into a single platform in the cloud. Since release at the end of Q1-2017, the product has seen widespread customer adoption despite the efforts required to upgrade. The company went on to say that 20% of the $1 million deals in the quarter had Helix as a significant revenue contributor. It's an encouraging sign that not only are customers buying the new product, but it also is becoming a meaningful revenue contributor.
3. Its marketing is better
With FireEye's transition to a single comprehensive cloud-based service, it is a great opportunity to simplify its go-to-market message. Mandia said that the company's customers are saying, "Hey, listen: Take care of this security problem for me ..." A more concise message about how FireEye can help deliver a comprehensive security solution allows the sales team to talk with more than just the customer's tech team. This new go-to-market strategy has already shown benefits for the sales force.
4. The sales team is more productive
FireEye made a number of key changes in its sales leadership in the past year, and it's paying off. Frank Verdecanna, chief financial officer, pointed to the record number of $1 million sales transactions in the quarter as evidence that sales productivity has improved. Additionally, the company met or exceeded its sales goals in every region around the world. This "energized" sales team will be crucial for the company to maintain the growth momentum into 2018.
To put a cherry on the fourth-quarter sundae, FireEye met its commitment to post a non-GAAP operating profitability. This was the first time in company history that it achieved that result. Investors have been waiting a long time to see this kind of quarter from FireEye and will be looking for a repeat performance in Q1.
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