Sophos trading statement for the nine-month period ended 31 December 2017
09 February 2018 - 1:00AM
Sophos Group plc (the “Group”) (LSE:SOPH), a leading provider of
cloud enabled enduser and network security solutions, today issues
its trading update for the third-quarter and nine-months ended 31
December 2017.
Financial and operational highlights
- Billings1 for the nine-month period (year-to-date: “YTD”)
increased by 21%, or 20% at constant currency ("CC")- Continued
strong growth in Q3, with billings +19% (+14% CC), as we lapped the
anniversary of the launch of Intercept X- Subscription billings
increased by 25% YTD, with growth of 20% in Q3- Sophos Central and
Enduser Security remained the principal drivers, with Enduser
billings +34% YTD and +27% in Q3- Network security billings +12%
YTD and +15% in Q3- Good growth across all regions, with Americas
and EMEA +22%, and APJ +14% YTD
- Further acceleration in revenue with growth of 19% YTD (18%
CC), and 23% in Q3 (19% CC)- Driven by subscription element of
prior-period bookings, with subscription revenue +23% YTD and +27%
in Q3- Deferred revenue increased by 33% year-over-year to $687.6
million
- Strong cash flow performance, with net cash flow from
operations up by 21% to $98.2 million and an improvement in
unlevered free cash flow2 YTD to $88.2 million, following planned
investment in recent new product releases
Financial highlights
|
Q3 FY18 |
|
Q3 FY17 |
Growth |
|
9-monthsFY18 |
|
9-monthsFY17 |
|
Growth |
|
GAAP
measures |
$M |
|
$M |
% |
|
$M |
|
$M |
|
% |
|
Revenue |
166.4 |
|
134.8 |
23.4 |
|
464.5 |
|
391.7 |
|
18.6 |
|
Operating
profit/(loss) |
(2.8 |
) |
1.7 |
NM |
|
(26.6 |
) |
(22.9 |
) |
16.2 |
|
Net cash flow from
operations |
17.5 |
|
17.9 |
(2.2 |
) |
98.2 |
|
81.2 |
|
20.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non GAAP
measures |
|
|
|
|
|
|
Billings |
194.8 |
|
164.1 |
18.7 |
|
536.3 |
|
443.9 |
|
20.8 |
|
Cash EBITDA3 |
46.7 |
|
49.3 |
(5.3 |
) |
113.3 |
|
100.2 |
|
13.1 |
|
Adjusted operating
profit4 |
15.3 |
|
16.3 |
(6.1 |
) |
30.4 |
|
37.8 |
|
(19.6 |
) |
Unlevered free cash
flow |
16.8 |
|
18.1 |
(7.2 |
) |
88.2 |
|
80.3 |
|
9.8 |
|
Kris Hagerman, Chief Executive Officer, commented:“The strong
demand for our industry-leading cybersecurity solutions continued
in Q3. Customer reaction to XG Firewall v17 has been very
positive, and we are delighted to have recently launched a major
new release of Intercept X, incorporating for the first time our
neural network-based deep learning technology into our leading
endpoint product. Consequently, as our business continues to post
strong growth the Board is confident both in the outlook for the
full-year and the longer-term prospects of the Group.”
AboutThe Sophos Group is a leading global
provider of cloud-enabled enduser and network security solutions,
offering organisations end-to-end protection against known and
unknown IT security threats through products that are easy to
install, configure, update and maintain. For further
information please visit: www.sophos.com. The Group has over
30 years of experience in enterprise security and has built a
portfolio of products that protects over 280,000 organisations and
over 100 million endusers in 150 countries, across a variety of
industries.
Forward-looking statementsCertain statements in
this announcement constitute “forward-looking statements”.
These forward-looking statements involve risks, uncertainties and
other factors that may cause the Group’s actual results,
performance or achievements, or industry results, to be materially
different from those projected in the forward-looking
statements. These factors include: general economic and
business conditions; changes in technology; timing or delay in
signing, commencement, implementation and performance or
programmes, or the delivery of products or services under them;
structural change in the security industry; relationships with
customers; competition; and ability to attract personnel. You
are cautioned not to rely on these forward-looking statements,
which speak only as of the date of this announcement. The
Group undertakes no obligation to update or revise any
forward-looking statement to reflect any change in expectations or
any change in events, conditions or circumstances.
Contact
Sophos Group
plcTel: +44 (0) 1235 559 933Kris Hagerman, Chief Executive
OfficerNick Bray, Chief Financial OfficerDerek Brown, VP Investor
Relations |
Financial
Public RelationsJames Macey White / Mat LowTulchan
Communications Tel: +44 (0) 20 7353 4200 |
Conference call and
webcastSophos management will host a conference call and
audio-webcast, for registered participants, at 09:30 (GMT)
today. A replay of the audio-webcast will be also accessible
via the Sophos investor website following the presentation.
To register for the webcast and access the presentation
materials please visit:
https://investors.sophos.com/events-and-presentations
Please dial into the conference call 5-10 minutes prior to the
start time using the number/conference ID below:
Telephone:+44 (0) 330 336 9612 (UK) / 0800 279 7204 (toll
free)+1 323 994 2083 (US) / 800 289 0438 (toll free)Conference call
confirmation code: 1711608
Participants are advised to visit the website at least 15
minutes prior to the commencement of the call in order to register
and, for those accessing the webcast, in order to download and
install any audio software that may be required.
NB: Conference call participants will be able
to ask questions during the Q&A session, but those on the
webcast will be in a listen-only mode.
- Billings represents the value of products and services invoiced
to customers after receiving a purchase order from the customer and
delivering products and services to them, or for which there is no
right to a refund. Billings does not equate to statutory
revenue.
- Unlevered free cash flow represents Cash EBITDA less purchases
of property, plant and equipment and intangibles, plus cash flows
in relation to changes in working capital and taxation.
- Cash earnings before interest, taxation, depreciation and
amortisation (“Cash EBITDA”) is defined as the Group’s operating
profit/ (loss) adjusted for depreciation and amortisation charges,
any gain or loss on the sale of tangible and intangible assets,
share option charges, unrealised foreign exchange differences and
exceptional items, with billings replacing recognised revenue.
- Adjusted operating profit represents the Group’s operating
profit / (loss) adjusted for amortisation charges, share option
charges and exceptional items.
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