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FireEye Reports Financial Results for Second Quarter 2014

Revenue up 184 Percent and Billings up 153 Percent From Second Quarter 2013; Operating Margin Improves Sequentially and Year-Over-Year

MILPITAS, CA -- (Marketwired) -- 08/05/14 -- FireEye, Inc. (NASDAQ: FEYE), the leader at stopping today's advanced cyber attacks, today announced financial results for the second quarter ended June 30, 2014.

"I am pleased to report strong growth in billings and revenue in the second quarter, which is reflected in our fourth increase to 2014 billings and revenue guidance ranges since our initial public offering in September 2013," said David DeWalt, chairman and chief executive officer of FireEye. "We now expect 2014 revenue in the range of $423 to $430 million and third quarter 2014 revenue to exceed $100 million for the first time."

"We believe our second quarter results demonstrate the market's endorsement of our virtual machine-based security platform and mark the beginning of the next phase in our evolution from advanced security pioneer to industry leader. This new phase, which follows our startup and hyper-growth phases, is characterized by continued high revenue growth, accompanied by continued progress toward our target long-term financial model," added DeWalt.

Second Quarter 2014 Financial Results

  • Billings(1): Second quarter billings were $113.8 million, compared to the previously issued guidance range of $108 to $112 million. Total billings included $35.6 million in product billings, $42.1 million in product subscription billings, $18.6 million in support and maintenance billings, and $17.5 million in professional services billings.

  • Revenue: Second quarter revenue was $94.5 million, compared to the previously issued guidance range of $89 to $91 million. Total revenue included $37.7 million of product revenue, $28.0 million of product subscription revenue, $11.9 million of support and maintenance revenue, and $16.9 million of professional services revenue.

  • Deferred revenue: Deferred revenue totaled $232.0 million at the end of the second quarter, an increase of $129.4 million from the end of the second quarter of 2013. Current deferred revenue was $136.8 million, an increase of $81.1 million from the end of the second quarter of 2013. Non-current deferred revenue was $95.2 million, an increase of $48.3 million from the end of the second quarter of 2013.

  • GAAP net loss: Second quarter GAAP net loss was $116.8 million, or $0.82 per share, based on 141.9 million weighted average shares outstanding. This compares to a GAAP net loss of $40.2 million, or $2.15 per basic and diluted share, based on 18.7 million weighted average shares outstanding, in the second quarter of 2013.

  • Non-GAAP net loss(1): Second quarter non-GAAP net loss was $78.5 million, or $0.55 per basic and diluted share, compared to the previously issued guidance range of $0.58 to $0.63 loss per share. Non-GAAP net loss in the second quarters of 2013 and 2014 excluded stock-based compensation expenses, amortization of intangible assets, acquisition related costs and discrete tax benefits. Non-GAAP net loss for the second quarter of 2013 also excluded changes in the fair value of preferred stock warrant liabilities.

(1)A reconciliation of GAAP to non-GAAP financial measures is provided in the financial statement tables included in this press release. An explanation of these measures also is included under the heading "Non-GAAP Financial Measures."

Recent Business Highlights
Since the second quarter of 2013, FireEye more than doubled its customer base, from 1,182 customers in the second quarter of 2013 to 2,498 customers at the end of the second quarter of 2014. The company also established a presence in 65 countries, expanded its channel partner programs worldwide, built a 24/7 round-the-clock, round-the-world customer support organization, and increased the number of employees to 2,387 from 932. Also during this period, the company expanded its advanced security platform with the release of 20 new and enhanced products and services, including new appliances, a mobile threat prevention solution, a data center threat prevention solution, cloud-based email threat protection, the Threat Analytics Platform (TAP), an Intrusion Prevention System (IPS), and new Managed Defense services.

Business highlights since the release of first quarter 2014 financial results on May 6 included:

  • General availability of the FireEye Network Threat Prevention Platform with IPS to customers worldwide as an add-on license to the FireEye Network Threat Prevention Platform (NX Series).

  • A new release of the company's email solutions, including FireEye Email Security (EX Series) and Email Threat Prevention Cloud, which added the traditional email security features of anti-spam and anti-virus protection to the advanced threat detection capabilities.

  • Certification of the FireEye Forensic Analysis (AX Series) Threat Prevention Platform by NATO for inclusion in the Information Assurance Product Catalogue (NIAPC).

  • Appointment of a chief privacy officer to create a new global privacy program to establish data protection standards and lead the industry in data protection initiatives.

  • Recognition of FireEye's Threat Analytics Platform (TAP) as Best of Show for the Cloud Services category at InterOp Japan.

  • A Net Promoter Score of 54, compared to an average score of 35 for the software industry.

  • Integration of Rapid7 UserInsight into the FireEye Threat Analytics Platform (TAP), adding user and account analysis to TAP's hosted incident response platform to augment the detection of advanced attacks and insider threats.

  • Appointment of John McGee as Senior Vice President, Worldwide Sales, and the expansion of sales leadership in Europe and the East and West regions of the U.S.

Leadership in Advanced Threat Intelligence
Threat intelligence is at the heart of the FireEye mission to reduce the impact of cyber threats by reducing the time to detect and remediate. With more than two million virtual machines and two million endpoint threat sensors installed in more than 2,500 customers, including governments, military intelligence organizations, global financial institutions and other frequently targeted organizations, FireEye has unparalleled visibility into the threat environment. The FireEye Labs team uses automated detection and alert technologies, combined with the expertise of security researchers and incident response teams, to investigate and analyze a wide variety of attacks, cyber-anomalies, and indicators of compromise. The FireEye security platform is updated with new threat intelligence regularly, and insights into the evolving threat environment are published on the company's blog at www.fireeye.com/blog.

Recent threat discoveries and analyses by the FireEye Labs community of threat researchers and security experts included:

  • Release of the report "Cybersecurity's Maginot Line: A Real-world Assessment of the Defense-in-Depth Model" examining attack data captured by FireEye security appliances in trials from 1,217 organizations around the world. The study revealed that today's top-selling non-FireEye security tools failed to protect 97 percent of organizations in which they were installed.

  • Discovery and analysis of a zero-day exploit targeting users of Internet Explorer versions 8 through 11 and Windows XP, 7 and 8 in a multi-vector attack campaign called "Operation Clandestine Fox."

  • Publication of "Operation Saffron Rose," a research report detailing the activities of a cyber-espionage group, dubbed by FireEye as the Ajax Security Team, likely based in Iran targeting Iranian dissidents and U.S. defense firms.

  • Discovery and analysis of the first "in-the-wild" malware reported to actively scan OPC servers, the specialized servers that control devices in critical infrastructure (e.g., water and electric utilities), energy and manufacturing sectors.

  • Discovery and analysis of multiple malicious mobile app families, including an Android app that pretends to be a "Google Service Framework" but actually executes privacy leakage, banking credential theft, and remote access commands.

  • Discovery and analysis of a new kind of mobile malware that encrypts an embedded Android application with an attachment to conceal malicious activities within a seemingly benign application.

Forward Outlook
FireEye provides guidance based on current market conditions and expectations.

For the third quarter of 2014, FireEye expects total revenue in the range of $114 to $117 million. Additionally, for the third quarter, on a non-GAAP basis, the company expects:

  • Total billings in the range of $150 to $155 million.
  • Gross margin in the range of 68 to 71 percent of total revenue.
  • Research and development expenses in the range of 41 to 44 percent of total revenue.
  • Sales and marketing expenses in the range of 76 to 79 percent of total revenue.
  • General and administrative expenses in the range of 18 to 21 percent of total revenue.
  • Loss per share of $0.52 to $0.56, based on estimated weighted average shares outstanding of approximately 144 million.

For 2014, the company currently expects total revenue in the range of $423 to $430 million, compared to the prior guidance range of $405 to $415 million. Additionally, on a non-GAAP basis, for 2014 the company expects:

  • Total billings in the range of $560 to $580 million.
  • Gross margin in the range of 69 to 72 percent of total revenue.
  • Research and development expenses in the range of 40 to 43 percent of total revenue.
  • Sales and marketing expenses in the range of 78 to 81 percent of total revenue.
  • General and administrative expenses in the range of 19 to 22 percent of total revenue.
  • Loss per share of $2.05 to $2.15, based on estimated weighted average shares outstanding of approximately 142 million.

For the fourth quarter of 2014, the company currently expects non-GAAP loss per share in the range of $0.46 to $0.50, based on estimated weighted average shares outstanding of approximately 148 million.

Guidance for non-GAAP financial measures excludes stock based compensation, amortization of intangible assets, acquisition expenses, discrete tax benefits, and other non-recurring expenses. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis.

Conference Call Information
FireEye will host a conference call today, August 5, 2014, at 5:00 PM Eastern Time (2:00 PM Pacific Time) to discuss its second quarter financial results and outlook for 2014. Interested parties may access the conference call by dialing 877-312-5521 (domestic) or 678-894-3048 (international). A live audio webcast of the call, as well as related multi-media content, can be accessed from the Investor Relations section of the company's website at http://investors.fireeye.com. Shortly after the conclusion of the call, an archived version of the webcast will be available at the same website.

Forward-Looking Statements
This press release contains forward-looking statements, including statements related to future billings, revenue, non-GAAP gross margins, non-GAAP research and development expenses as a percent of total revenue, non-GAAP sales and marketing expenses as a percent of total revenue, non-GAAP general and administrative expenses as a percent of total revenue, weighted average shares outstanding, and non-GAAP loss per share in the section entitled "Forward Outlook" above, as well as statements related to continued high revenue growth and progress toward FireEye's target long-term target financial model.

These forward-looking statements involve risks and uncertainties, as well as assumptions which, if they do not fully materialize or prove incorrect, could cause FireEye's results to differ materially from those expressed or implied by such forward-looking statements. The risks and uncertainties that could cause FireEye's results to differ materially from those expressed or implied by such forward-looking statements include market adoption of FireEye's virtual machine-based security platform; FireEye's limited operating history, particularly as a newly public company; the failure to achieve expected synergies and efficiencies of operations between FireEye and its acquired companies; ability of FireEye and its acquired companies to successfully integrate their respective market opportunities, technology, products, personnel and operations; FireEye's ability to attract and retain new customers and expand and train its sales force; the budgeting cycles, seasonal buying patterns and length of FireEye's sales cycle; risks associated with FireEye's rapid growth; FireEye's limited experience with developing and releasing new products and services; real or perceived defects, errors or vulnerabilities in FireEye's platform; rapidly evolving technological developments in a market that is characterized by rapid changes in technology, customer requirements, industry standards, and frequent new product introductions and improvements; and general market, political, economic, and business conditions, as well as those risks and uncertainties included under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in FireEye's Form 10-Q filed with the Securities and Exchange Commission on May 14, 2014, which should be read in conjunction with these financial results and is available on the Investor Relations section of FireEye's website at investors.fireeye.com and on the SEC website at www.sec.gov.

All forward-looking statements in this press release are based on information available to the company as of the date hereof, and FireEye does not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made. Any future product, feature, or related specification that may be referenced in this release are for information purposes only and are not commitments to deliver any technology or enhancement. FireEye reserves the right to modify future product or service plans at any time.

Non-GAAP Financial Measures
FireEye has provided in this release financial information that has not been prepared in accordance with generally accepted accounting principles in the United States (GAAP). These non-GAAP financial measures are not based on any standardized methodology and are not necessarily comparable to similar measures used by other companies. The company uses these non-GAAP financial measures internally in analyzing its financial results and believes that the use of these non-GAAP financial measures is useful to investors as an additional tool to evaluate ongoing operating results and trends, and in comparing the company's financial results with other companies in its industry, many of which present similar non-GAAP financial measures.

Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable financial information prepared in accordance with GAAP, and should be read only in conjunction with the company's consolidated financial statements prepared in accordance with GAAP. A reconciliation of the company's non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included in this press release, and investors are encouraged to review the reconciliation.

Billings. FireEye defines billings as revenue recognized plus the change in deferred revenue from the beginning to the end of the period. The company considers billings to be a useful metric for management and investors because billings drive deferred revenue balances, which are an important indicator of the health and visibility of the company's business. Revenue recognized from deferred revenue represents a significant percentage of quarterly revenue. There are a number of limitations related to the use of billings versus revenue calculated in accordance with GAAP. First, billings include amounts that have not yet been recognized as revenue. Second, FireEye's calculation of billings may be different from other companies in its industry, some of which may not use billings, may calculate billings differently, may have different billing frequencies, or may use other financial measures to evaluate their performance, all of which could reduce the usefulness of billings as a comparative measure. FireEye compensates for these limitations by providing specific information regarding GAAP revenue and evaluating billings together with revenue calculated in accordance with GAAP.

Non-GAAP gross margin, operating margin, net loss and net loss per share. FireEye defines non-GAAP gross margin as total gross profit excluding stock-based compensation expenses, amortization of intangible assets, and, as applicable, other special items, divided by total revenue. FireEye defines non-GAAP operating margin as operating loss excluding stock-based compensation expense, amortization of intangible assets, acquisition related expenses, and other special or non-recurring items, divided by total revenue. FireEye defines non-GAAP net loss as net loss excluding stock-based compensation expense, amortization of intangible assets, change in fair value of preferred stock warrant liability, acquisition-related costs, and discrete tax benefits. FireEye defines non-GAAP net loss per share as non-GAAP net loss divided by the weighted average shares outstanding. Additionally, weighted average shares outstanding used to calculate non-GAAP net loss per share excludes as anti-dilutive stock options, restricted stock units and performance stock units.

FireEye considers these non-GAAP financial measures to be useful metrics for management and investors because they exclude the effect of stock-based compensation expense, amortization of intangible assets, acquisition related expenses, change in fair value of preferred stock warrant liability and other non-recurring and discrete items so that management and investors can compare the company's "core business operating results," over multiple periods.

There are a number of limitations related to the use of these non-GAAP financial measures versus their nearest GAAP equivalents. First, these non-GAAP financial measures exclude stock-based compensation expense. Stock-based compensation expense has been and will continue to be for the foreseeable future a significant recurring expense in the company's business. Second, stock-based compensation is an important part of FireEye employees' overall compensation. Third, the components of the costs that FireEye excludes in its calculation of these non-GAAP financial measures, including not only stock-based compensation but also non-recurring items such as acquisition related costs, amortization of intangible assets, changes in fair value of preferred stock warrant liability and discrete tax benefits, may differ from the components excluded by peer companies when they report their non-GAAP results of operations. FireEye compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP financial measures and evaluating non-GAAP financial measures together with their nearest GAAP equivalents.

About FireEye, Inc.
FireEye has invented a purpose-built, virtual machine-based security platform that provides real-time threat protection to enterprises and governments worldwide against the next generation of cyber attacks. These highly sophisticated cyber attacks easily circumvent traditional signature-based defenses, such as next-generation firewalls, IPS, anti-virus, and gateways. The FireEye Threat Prevention Platform provides real-time, dynamic threat protection without the use of signatures to protect an organization across the primary threat vectors and across the different stages of an attack life cycle. The core of the FireEye platform is a virtual execution engine, complemented by dynamic threat intelligence, to identify and block cyber attacks in real time. FireEye has over 2,500 customers across 65 countries, including over 150 of the Fortune 500.

© 2014 FireEye, Inc. All rights reserved. FireEye is a registered trademark or trademark of FireEye, Inc. in the United States and other countries. Android is a trademark of Google Inc. Internet Explorer and Windows are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries. All other brands, products, or service names are or may be trademarks or service marks of their respective owners.


                               FireEye, Inc.
                   CONDENSED CONSOLIDATED BALANCE SHEETS
                         (Unaudited, in thousands)

                                                  June 30,     December 31,
                                                    2014           2013
                                               -------------  -------------

Assets
Current assets:
  Cash and cash equivalents                    $     171,620  $     173,918
  Short-term investments                             292,874              -
  Accounts receivable, net                           108,039         95,772
  Inventories                                          5,198          5,663
  Deferred tax assets, current portion                21,712         14,584
  Prepaid expenses and other current assets           31,879         25,230
                                               -------------  -------------
    Total current assets                             631,322        315,167

Property and equipment, net                           78,390         64,765
Goodwill                                             750,132        706,327
Intangible assets                                    284,793        281,377
Deposits and other long-term assets                   10,035          8,677
                                               -------------  -------------
    Total assets                               $   1,754,672  $   1,376,313
                                               =============  =============

Liabilities and Stockholders' Equity
Current liabilities:
  Accounts payable                             $      36,343  $      34,128
  Accrued and other current liabilities               23,273         17,677
  Accrued compensation                                52,728         41,625
  Deferred revenue, current portion                  136,808        110,535
                                               -------------  -------------
    Total current liabilities                        249,152        203,965

Deferred revenue, non-current portion                 95,199         76,979
Deferred tax liabilities, non-current portion         41,044         45,147
Other long-term liabilities                            5,580          2,120
                                               -------------  -------------
    Total liabilities                                390,975        328,211

Stockholders' equity:
  Common stock                                            15             14
  Additional paid-in capital                       1,805,328      1,271,590
  Accumulated other comprehensive income
   (loss)                                               (110)             -
  Accumulated deficit                               (441,536)      (223,502)
                                               -------------  -------------
    Total stockholders' equity                     1,363,697      1,048,102
                                               -------------  -------------
    Total liabilities and stockholders' equity $   1,754,672  $   1,376,313
                                               =============  =============



                               FireEye, Inc.
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
            (Unaudited, in thousands, except per share amounts)

                                 --------------------  --------------------
                                  Three Months Ended     Six Months Ended
                                       June 30,              June 30,
                                 --------------------  --------------------
                                    2014       2013       2014       2013
                                 ---------  ---------  ---------  ---------

Revenue:
  Product                        $  37,683  $  17,240  $  61,935  $  32,228
  Subscription and services         56,806     15,982    106,534     29,410
                                 ---------  ---------  ---------  ---------
    Total revenue                   94,489     33,222    168,469     61,638

Cost of revenue: (1)(2)
  Product                           13,749      5,804     24,075     10,766
  Subscription and services         27,831      4,482     52,798      6,402
                                 ---------  ---------  ---------  ---------
    Total cost of revenue           41,580     10,286     76,873     17,168

Total gross profit                  52,909     22,936     91,596     44,470

Operating expenses:(1)(2)
  Research and development          53,408     14,016     95,378     24,078
  Sales and marketing               94,591     37,594    171,445     66,163
  General and administrative (3)    31,931     10,370     59,031     17,681
                                 ---------  ---------  ---------  ---------
    Total operating expenses       179,930     61,980    325,854    107,922

Operating loss                    (127,021)   (39,044)  (234,258)   (63,452)

Other expense, net (4)                (150)      (807)      (166)    (3,147)
                                 ---------  ---------  ---------  ---------
Loss before income taxes          (127,171)   (39,851)  (234,424)   (66,599)
Provision for (benefit from)
 income taxes (5)                  (10,348)       384    (16,390)       597
                                 ---------  ---------  ---------  ---------
Net loss attributable to common
 stockholders                    $(116,823) $ (40,235) $(218,034) $ (67,196)
                                 =========  =========  =========  =========

Net loss per share attributable
 to common stockholders, basic
 and diluted                     $   (0.82) $   (2.15) $   (1.58) $   (3.98)
                                 =========  =========  =========  =========

Weighted average shares used in
 per share calculations, basic
 and diluted                       141,895     18,704    137,939     16,877
                                 =========  =========  =========  =========



                               FireEye, Inc.
               CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                         (Unaudited, in thousands)

                                                     ----------------------
                                                        Six Months Ended
                                                            June 30,
                                                     ----------------------
                                                        2014        2013
                                                     ----------  ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                           $ (218,034) $  (67,196)
  Adjustments to reconcile net loss to net cash used
   in operating activities:
    Depreciation and amortization                        42,726       7,095
    Stock-based compensation expense                     63,447       7,530
    Deferred income taxes                               (18,960)          -
    Other                                                   183       3,017
  Changes in operating assets and liabilities, net
   of assets acquired and liabilities assumed in
   business combinations:
    Accounts receivable, net                            (11,660)      2,052
    Inventories                                             729      (1,168)
    Prepaid expenses and other assets                    (2,287)     (4,569)
    Deferred costs of revenue                              (797)       (444)
    Accounts payable                                     (7,103)      8,207
    Accrued liabilities                                   8,747       1,310
    Accrued compensation                                 10,834       4,949
    Deferred revenue                                     44,193      26,180
    Other long-term liabilities                           3,460         338
                                                     ----------  ----------
      Net cash used in operating activities             (84,522)    (12,699)
                                                     ----------  ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Acquisition of business, net of cash acquired         (55,058)          -
  Purchase of property and equipment and
   demonstration units                                  (31,469)    (22,055)
  Purchase of short-term investments                   (302,531)          -
  Maturities of short-term investments                    8,000           -
  Lease deposits                                           (403)     (1,597)
                                                     ----------  ----------
      Net cash used in investing activities            (381,461)    (23,652)
                                                     ----------  ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Net proceeds from follow-on public offering           445,280         330
  Borrowing from line of credit                               -      10,000
  Repayment of term loan                                      -      (2,147)
  Net proceeds from issuance of convertible
   preferred stock                                            -       9,988
  Proceeds from exercise of equity awards                18,405       4,771
  Repayment of notes receivable from stockholders             -       7,294
                                                     ----------  ----------
      Net cash provided by financing activities         463,685      30,236
                                                     ----------  ----------
Net change in cash and cash equivalents                  (2,298)     (6,115)
Cash and cash equivalents, beginning of year            173,918      60,200
                                                     ----------  ----------
Cash and cash equivalents, end of year               $  171,620  $   54,085
                                                     ==========  ==========



                               FireEye, Inc.
               RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
            (Unaudited, in thousands, except per share amounts)


                                 --------------------  --------------------
                                  Three Months Ended     Six Months Ended
                                       June 30,              June 30,
                                 --------------------  --------------------
                                    2014       2013       2014       2013
                                 ---------  ---------  ---------  ---------

GAAP operating loss              $(127,021) $ (39,044) $(234,258) $ (63,452)
Stock-based compensation expense
 (1)                                38,253      4,278     63,447      7,530
Amortization of intangible
 assets (2)                         11,187        262     21,985        524
Acquisition related expenses (3)       512          -      1,559          -
                                 ---------  ---------  ---------  ---------
Non-GAAP operating loss          $ (77,069) $ (34,504) $(147,267) $ (55,398)

GAAP net loss                    $(116,823) $ (40,235) $(218,034) $ (67,196)
Stock-based compensation expense
 (1)                                38,253      4,278     63,447      7,530
Amortization of intangible
 assets (2)                         11,187        262     21,985        524
Acquisition related expenses (3)       512          -      1,559          -
Change in fair value of
 preferred stock warrant
 liability (4)                           -        811          -      2,978
Non-recurring benefit from
 income taxes (5)                  (11,610)         -    (18,852)         -
                                 ---------  ---------  ---------  ---------
Non-GAAP net loss                $ (78,481) $ (34,884) $(149,895) $ (56,164)

GAAP net loss per common share,
 basic and diluted               $   (0.82) $   (2.15) $   (1.58) $   (3.98)
Stock-based compensation expense
 (1)                                  0.27       0.23       0.46       0.45
Amortization of intangible
 assets (2)                           0.08       0.01       0.16       0.03
Acquisition related expenses (3)      0.00          -       0.01          -
Change in fair value of
 preferred stock warrant
 liability (4)                           -       0.04          -       0.18
Non-recurring benefit from
 income taxes (5)                    (0.08)         -      (0.14)         -
                                 ---------  ---------  ---------  ---------
Non-GAAP net loss per common
 share, basic and diluted        $   (0.55) $   (1.87) $   (1.09) $   (3.33)

Weighted average shares used in
 per share calculations for GAAP
 and Non-GAAP, basic and diluted   141,895     18,704    137,939     16,877

(1) includes stock-based
 compensation expense as
 follows:
Cost of product revenue          $     236  $      73  $     381  $     136
Cost of subscription and
 services revenue                    3,605        401      7,025        568
Research and development             7,803      1,118     12,406      2,075
Sales and marketing                 15,923      1,254     24,611      2,094
General and administrative          10,686      1,432     19,024      2,657
                                 ---------  ---------  ---------  ---------
  Total stock-based compensation
   expense                       $  38,253  $   4,278  $  63,447  $   7,530

(2) includes amortization of
 intangible assets as follows:
Cost of product revenue          $   2,672  $     262  $   5,103  $     524
Cost of subscription and
 services revenue                    5,394          -     10,784          -
Sales and marketing                  3,121          -      6,098          -
                                 ---------  ---------  ---------  ---------
  Total amortization of
   intangible assets             $  11,187  $     262  $  21,985  $     524

(3) includes acquisition related
 expenses as follows:
General and administrative       $     512  $       -  $   1,559  $       -

(4) includes change in fair
 value of preferred stock
 warrant liability as follows:
Other expense, net               $       -  $     811  $       -  $   2,978

(5) includes discrete benefit
 from income taxes as follows:
Provision for (benefit from)
 income taxes                    $ (11,610) $       -  $ (18,852) $       -



                                FireEye, Inc.
               RECONCILIATION OF NON-GAAP BILLINGS TO REVENUE
                          (Unaudited, in thousands)

                                     ------------------- -------------------
                                      Three Months Ended   Six Months Ended
                                           June 30,            June 30,
                                     ------------------- -------------------
                                        2014      2013      2014      2013
                                     --------- --------- --------- ---------

GAAP revenue                         $  94,489 $  33,222 $ 168,469 $  61,638
  Add change in deferred revenue        19,286    11,791    44,494    26,179
                                     --------- --------- --------- ---------
Non-GAAP billings                    $ 113,775 $  45,013 $ 212,963 $  87,817



                                FireEye, Inc.
                              BILLINGS BREAKOUT
                          (Unaudited, in thousands)

                                     ------------------- -------------------
                                      Three Months Ended   Six Months Ended
                                           June 30,            June 30,
                                     ------------------- -------------------
                                        2014      2013      2014      2013
                                     --------- --------- --------- ---------

Product billings                     $  35,573 $  18,883 $  61,649 $  35,164
Product subscription billings           42,086    15,541    81,521    32,239
                                     --------- --------- --------- ---------
Product billings and product
 subscription billings                  77,659    34,424   143,170    67,403
Support and maintenance billings        18,582     9,702    34,277    19,283
Professional services billings          17,534       887    35,516     1,131
                                     --------- --------- --------- ---------
Non-GAAP billings                    $ 113,775 $  45,013 $ 212,963 $  87,817



                                FireEye, Inc.
                              REVENUE BREAKOUT
                          (Unaudited, in thousands)

                                     ------------------- -------------------
                                      Three Months Ended   Six Months Ended
                                           June 30,            June 30,
                                     ------------------- -------------------
                                        2014      2013      2014      2013
                                     --------- --------- --------- ---------

Product revenue                      $  37,683 $  17,240 $  61,935 $  32,228
Product subscription revenue            28,025     9,608    50,844    17,625
                                     --------- --------- --------- ---------
Product revenue and product
 subscription revenue                   65,708    26,848   112,779    49,853
Support and maintenance revenue         11,874     6,031    22,625    11,168
Professional services revenue           16,907       343    33,065       617
                                     --------- --------- --------- ---------
Total revenue                        $  94,489 $  33,222 $ 168,469 $  61,638


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@ThingsExpo Stories
While many app developers are comfortable building apps for the smartphone, there is a whole new world out there. In his session at @ThingsExpo, Narayan Sainaney, Co-founder and CTO of Mojio, will discuss how the business case for connected car apps is growing and, with open platform companies having already done the heavy lifting, there really is no barrier to entry.
As more intelligent IoT applications shift into gear, they’re merging into the ever-increasing traffic flow of the Internet. It won’t be long before we experience bottlenecks, as IoT traffic peaks during rush hours. Organizations that are unprepared will find themselves by the side of the road unable to cross back into the fast lane. As billions of new devices begin to communicate and exchange data – will your infrastructure be scalable enough to handle this new interconnected world?
SYS-CON Events announced today that Micron Technology, Inc., a global leader in advanced semiconductor systems, will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Micron’s broad portfolio of high-performance memory technologies – including DRAM, NAND and NOR Flash – is the basis for solid state drives, modules, multichip packages and other system solutions. Backed by more than 35 years of technology leadership, Micron's memory solutions enable the world's most innovative computing, consumer,...
SYS-CON Events announced today that Pythian, a global IT services company specializing in helping companies leverage disruptive technologies to optimize revenue-generating systems, has been named “Bronze Sponsor” of SYS-CON's 17th Cloud Expo, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Founded in 1997, Pythian is a global IT services company that helps companies compete by adopting disruptive technologies such as cloud, Big Data, advanced analytics, and DevOps to advance innovation and increase agility. Specializing in designing, imple...
SYS-CON Events announced today that HPM Networks will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. For 20 years, HPM Networks has been integrating technology solutions that solve complex business challenges. HPM Networks has designed solutions for both SMB and enterprise customers throughout the San Francisco Bay Area.
Consumer IoT applications provide data about the user that just doesn’t exist in traditional PC or mobile web applications. This rich data, or “context,” enables the highly personalized consumer experiences that characterize many consumer IoT apps. This same data is also providing brands with unprecedented insight into how their connected products are being used, while, at the same time, powering highly targeted engagement and marketing opportunities. In his session at @ThingsExpo, Nathan Treloar, President and COO of Bebaio, will explore examples of brands transforming their businesses by t...
Through WebRTC, audio and video communications are being embedded more easily than ever into applications, helping carriers, enterprises and independent software vendors deliver greater functionality to their end users. With today’s business world increasingly focused on outcomes, users’ growing calls for ease of use, and businesses craving smarter, tighter integration, what’s the next step in delivering a richer, more immersive experience? That richer, more fully integrated experience comes about through a Communications Platform as a Service which allows for messaging, screen sharing, video...
With the proliferation of connected devices underpinning new Internet of Things systems, Brandon Schulz, Director of Luxoft IoT – Retail, will be looking at the transformation of the retail customer experience in brick and mortar stores in his session at @ThingsExpo. Questions he will address include: Will beacons drop to the wayside like QR codes, or be a proximity-based profit driver? How will the customer experience change in stores of all types when everything can be instrumented and analyzed? As an area of investment, how might a retail company move towards an innovation methodolo...
The Internet of Things (IoT) is about the digitization of physical assets including sensors, devices, machines, gateways, and the network. It creates possibilities for significant value creation and new revenue generating business models via data democratization and ubiquitous analytics across IoT networks. The explosion of data in all forms in IoT requires a more robust and broader lens in order to enable smarter timely actions and better outcomes. Business operations become the key driver of IoT applications and projects. Business operations, IT, and data scientists need advanced analytics t...
A producer of the first smartphones and tablets, presenter Lee M. Williams will talk about how he is now applying his experience in mobile technology to the design and development of the next generation of Environmental and Sustainability Services at ETwater. In his session at @ThingsExpo, Lee Williams, COO of ETwater, will talk about how he is now applying his experience in mobile technology to the design and development of the next generation of Environmental and Sustainability Services at ETwater.
WebRTC has had a real tough three or four years, and so have those working with it. Only a few short years ago, the development world were excited about WebRTC and proclaiming how awesome it was. You might have played with the technology a couple of years ago, only to find the extra infrastructure requirements were painful to implement and poorly documented. This probably left a bitter taste in your mouth, especially when things went wrong.
SYS-CON Events announced today that IceWarp will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. IceWarp, the leader of cloud and on-premise messaging, delivers secured email, chat, documents, conferencing and collaboration to today's mobile workforce, all in one unified interface
As more and more data is generated from a variety of connected devices, the need to get insights from this data and predict future behavior and trends is increasingly essential for businesses. Real-time stream processing is needed in a variety of different industries such as Manufacturing, Oil and Gas, Automobile, Finance, Online Retail, Smart Grids, and Healthcare. Azure Stream Analytics is a fully managed distributed stream computation service that provides low latency, scalable processing of streaming data in the cloud with an enterprise grade SLA. It features built-in integration with Azur...
Too often with compelling new technologies market participants become overly enamored with that attractiveness of the technology and neglect underlying business drivers. This tendency, what some call the “newest shiny object syndrome,” is understandable given that virtually all of us are heavily engaged in technology. But it is also mistaken. Without concrete business cases driving its deployment, IoT, like many other technologies before it, will fade into obscurity.
Akana has announced the availability of the new Akana Healthcare Solution. The API-driven solution helps healthcare organizations accelerate their transition to being secure, digitally interoperable businesses. It leverages the Health Level Seven International Fast Healthcare Interoperability Resources (HL7 FHIR) standard to enable broader business use of medical data. Akana developed the Healthcare Solution in response to healthcare businesses that want to increase electronic, multi-device access to health records while reducing operating costs and complying with government regulations.
For IoT to grow as quickly as analyst firms’ project, a lot is going to fall on developers to quickly bring applications to market. But the lack of a standard development platform threatens to slow growth and make application development more time consuming and costly, much like we’ve seen in the mobile space. In his session at @ThingsExpo, Mike Weiner, Product Manager of the Omega DevCloud with KORE Telematics Inc., discussed the evolving requirements for developers as IoT matures and conducted a live demonstration of how quickly application development can happen when the need to comply wit...
The Internet of Everything (IoE) brings together people, process, data and things to make networked connections more relevant and valuable than ever before – transforming information into knowledge and knowledge into wisdom. IoE creates new capabilities, richer experiences, and unprecedented opportunities to improve business and government operations, decision making and mission support capabilities.
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at @ThingsExpo, James Kirkland, Red Hat's Chief Architect for the Internet of Things and Intelligent Systems, described how to revolutionize your archit...
MuleSoft has announced the findings of its 2015 Connectivity Benchmark Report on the adoption and business impact of APIs. The findings suggest traditional businesses are quickly evolving into "composable enterprises" built out of hundreds of connected software services, applications and devices. Most are embracing the Internet of Things (IoT) and microservices technologies like Docker. A majority are integrating wearables, like smart watches, and more than half plan to generate revenue with APIs within the next year.
Growth hacking is common for startups to make unheard-of progress in building their business. Career Hacks can help Geek Girls and those who support them (yes, that's you too, Dad!) to excel in this typically male-dominated world. Get ready to learn the facts: Is there a bias against women in the tech / developer communities? Why are women 50% of the workforce, but hold only 24% of the STEM or IT positions? Some beginnings of what to do about it! In her Opening Keynote at 16th Cloud Expo, Sandy Carter, IBM General Manager Cloud Ecosystem and Developers, and a Social Business Evangelist, d...