FireEye CEO Dodges Questions on Possible Exit Strategy On Q3 Earnings Call
After rumors swirled in recent months about the possible sale of FireEye, CEO Dave DeWalt dodged blunt questions on the company's Q3 earnings call from investors asking if the security vendor was pursuing an exit strategy.
"I've said this before publicly -- we will do what's right for shareholders," DeWalt said, without elaborating further.
In May, rumors spiked FireEye's stock price in May as reports said Cisco had put in a $9 billion bid for the company; the rumors were later shot down by former CEO John Chambers. Other recent rumors about a possible suitor have included IBM.
DeWalt has a strong background of selling the companies he leads, helping sell McAfee to Intel in 2010 for $7.68 billion. He also helped lead the sale of Documentum, which sold to EMC in 2003 for $1.7 billion.
Revenue for the quarter, which ended Sept. 30, was up 45 percent year over year, to $165.6 million. FireEye continues to remain unprofitable as a company, notching a net loss of $123.3 million, down from a loss of $129.9 million in the same quarter last year.
"Our performance this quarter reinforces our confidence in our journey on the path to profitability," said CFO Michael Berry -- who joined FireEye in September after the departure of former CFO Michael Sheridan -- in the earnings call.
FireEye stock plummeted more than 14 percent in after-hours trading, to $28.21, as the company missed its estimates for billings, which came in at $210.6 million, compared with estimates of between $225 million and $230 million. DeWalt attributed much of the shortfall to weak European business and macroeconomic factors.
DeWalt said FireEye continues to see "strong win rates" over the competition, with a 35 percent year-over-year growth in the number of transactions and a 70 percent growth in new customers. However, he said that the company is starting to see a shift in buying patterns, away from what he called "emergency services" toward a more proactive, solutions-based approach. What's more, he said, he sees customers looking to pivot away from disparate best-of-breed solutions to a consolidated list of integrated solutions with few vendors or a single vendor.
"With our platform expansion combined with our Mandiant expertise, I believe that were well-positioned to take advantage of that shift," DeWalt said.
However, in order to do that, DeWalt said, FireEye needs to "execute better as a company" overall, putting particular emphasis on investing in its channel and its partners. "We have to be a better channel company" DeWalt said.
Going forward, FireEye said it expects billings for Q4 to be in the range of $240 million to $260 million. It expects its losses to continue, with a loss per share of between 36 cents and 38 cents. For the full fiscal 2015, FireEye said it expects total billings to be between $780 million and $800 million, with a net loss per share between $1.61 and $1.63.
PUBLISHED NOV. 4, 2015