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FireEye’s Shares Soar 14% on Strong Billings

November 3, 2016, 8:42 PM UTC
FireEye logo is seen outside the company's offices in Milpitas, California
The FireEye logo is seen outside the company's offices in Milpitas, California, December 29, 2014. FireEye is the security firm hired by Sony to investigate last month's cyberattack against Sony Pictures. Picture taken December 29. REUTERS/Beck Diefenbach (UNITED STATES - Tags: BUSINESS SCIENCE TECHNOLOGY CRIME LAW LOGO) - RTR4JTRG
Beck Diefenbach—Reuters

Cybersecurity firm FireEye reported a 12.6% rise in quarterly revenue, topping both its own and analysts’ estimates, helped by strong demand for its cloud-based products.

FireEye’s shares (FEYE) were up nearly 14% in after-hours trading on Thursday.

The company said billings, a closely watched indicator of future business, rose 2.3% to $215.4 million in the third quarter ended Sept. 30.

That came in above analysts average estimate of $206.2 million, according to research firm FactSet StreetAccount.

FireEye, which provides web, email and malware security to businesses and governments, said revenue rose to $186.4 million in the quarter from $165.6 million a year earlier.

Analysts’ on average had expected revenue of $182.6 million, according to Thomson Reuters I/B/E/S.

FireEye is moving to a software-as-a-service based model (SaaS) from its traditional business that centered around the sale of physical boxes.

Revenue from the subscription and services business jumped 35.1% to $142.6 million in the quarter.

The company also marginally lowered the top end of its revenue forecast for the full year. It now expects $716-$722 million, compared with its prior forecast of $716-$728 million.

The company had lowered its revenue expectations in the last two quarters.

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Cybersecurity spending has been more cautious this year as the threat and size of cyber attacks have diminished in comparison to those seen over the last two years, which were marked by massive attacks such as the one on Sony Pictures Entertainment.

Rival Fortinet Inc lowered its revenue and earnings forecast earlier this month as its customers continued to delay purchases.

Net loss attributable to FireEye shareholders narrowed to $123.4 million, or 75 cents per share, in the third quarter from $135.5 million, or 88 cents per share.

Excluding items, it lost 18 cents per share.

Up to Thursday’s close of $11.01, the company’s shares had fallen 46.9% this year.