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Cybersecurity Firm FireEye’s Revenue Beats Street

August 1, 2017, 8:50 PM UTC
Fireeye Inc. Chief Executive Officer Kevin Mandia Interview
Kevin Mandia, chief executive officer of Fireeye Inc., speaks during a Bloomberg Technology television interview in San Francisco, California, U.S., on Monday, Nov. 5, 2016. Mandia discussed the company's strategy for combating cyber threats. Photographer: David Paul Morris/Bloomberg via Getty Images
David Paul Morris—Bloomberg via Getty Images

Internet security company FireEye reported better-than-expected quarterly revenue, helped by growth in its higher-margin product subscription and services business.

FireEye, amid a transition to a software-as-a-service model (SaaS) from its traditional business that centered around the sale of hardware boxes, said the subscription and services business grew 14.9% to $154.3 million in the second quarter.

Analysts on average had expected the segment revenue to be $150.7 million, according to financial data and analytics firm FactSet.

FireEye said net loss attributable to shareholders narrowed to $70.7 million, or 40 cents per share, in the quarter ended June 30, from $139.3 million, or 86 cents per share, a year earlier.

Large-scale cyber crimes have seen an uptick in 2017 with instances of ransomware such as “WannaCry” and “Petya” underscoring concerns that businesses have failed to secure their networks from increasingly aggressive hackers.

Highly publicized cyber attacks are good for business for most cyber security firms, even though experts say such attacks underscore the industry’s failings.

FireEye, which provides web, email and malware security to businesses and governments, said its total revenue rose 6% $185.5 million in the second quarter.

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Analysts on average had expected revenue of $176.4 million, according to Thomson Reuters I/B/E/S.

The company’s billings, a closely watched indicator of future business, fell 12.4% to $172 million in the second quarter.

Analysts on average had estimated billings of $167.5 million, according to FactSet.

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The company, which was founded in 2004 and taken public in 2013, has been targeting positive cash flow and an adjusted quarterly profit by the end of 2017.