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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
"Matrix is an ambitious open standard and implementation that's set up to break down the fragmentation problems that exist in IP messaging and VoIP communication," explained John Woolf, Technical Evangelist at Matrix, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
We are reaching the end of the beginning with WebRTC, and real systems using this technology have begun to appear. One challenge that faces every WebRTC deployment (in some form or another) is identity management. For example, if you have an existing service – possibly built on a variety of different PaaS/SaaS offerings – and you want to add real-time communications you are faced with a challenge relating to user management, authentication, authorization, and validation. Service providers will want to use their existing identities, but these will have credentials already that are (hopefully) i...
Connected devices and the Internet of Things are getting significant momentum in 2014. In his session at Internet of @ThingsExpo, Jim Hunter, Chief Scientist & Technology Evangelist at Greenwave Systems, examined three key elements that together will drive mass adoption of the IoT before the end of 2015. The first element is the recent advent of robust open source protocols (like AllJoyn and WebRTC) that facilitate M2M communication. The second is broad availability of flexible, cost-effective storage designed to handle the massive surge in back-end data in a world where timely analytics is e...
How do APIs and IoT relate? The answer is not as simple as merely adding an API on top of a dumb device, but rather about understanding the architectural patterns for implementing an IoT fabric. There are typically two or three trends: Exposing the device to a management framework Exposing that management framework to a business centric logic Exposing that business layer and data to end users. This last trend is the IoT stack, which involves a new shift in the separation of what stuff happens, where data lives and where the interface lies. For instance, it's a mix of architectural styles ...
The Internet of Things will put IT to its ultimate test by creating infinite new opportunities to digitize products and services, generate and analyze new data to improve customer satisfaction, and discover new ways to gain a competitive advantage across nearly every industry. In order to help corporate business units to capitalize on the rapidly evolving IoT opportunities, IT must stand up to a new set of challenges. In his session at @ThingsExpo, Jeff Kaplan, Managing Director of THINKstrategies, will examine why IT must finally fulfill its role in support of its SBUs or face a new round of...
Cultural, regulatory, environmental, political and economic (CREPE) conditions over the past decade are creating cross-industry solution spaces that require processes and technologies from both the Internet of Things (IoT), and Data Management and Analytics (DMA). These solution spaces are evolving into Sensor Analytics Ecosystems (SAE) that represent significant new opportunities for organizations of all types. Public Utilities throughout the world, providing electricity, natural gas and water, are pursuing SmartGrid initiatives that represent one of the more mature examples of SAE. We have s...
The Internet of Things will greatly expand the opportunities for data collection and new business models driven off of that data. In her session at @ThingsExpo, Esmeralda Swartz, CMO of MetraTech, discussed how for this to be effective you not only need to have infrastructure and operational models capable of utilizing this new phenomenon, but increasingly service providers will need to convince a skeptical public to participate. Get ready to show them the money!
One of the biggest challenges when developing connected devices is identifying user value and delivering it through successful user experiences. In his session at Internet of @ThingsExpo, Mike Kuniavsky, Principal Scientist, Innovation Services at PARC, described an IoT-specific approach to user experience design that combines approaches from interaction design, industrial design and service design to create experiences that go beyond simple connected gadgets to create lasting, multi-device experiences grounded in people's real needs and desires.
P2P RTC will impact the landscape of communications, shifting from traditional telephony style communications models to OTT (Over-The-Top) cloud assisted & PaaS (Platform as a Service) communication services. The P2P shift will impact many areas of our lives, from mobile communication, human interactive web services, RTC and telephony infrastructure, user federation, security and privacy implications, business costs, and scalability. In his session at @ThingsExpo, Robin Raymond, Chief Architect at Hookflash, will walk through the shifting landscape of traditional telephone and voice services ...
Scott Jenson leads a project called The Physical Web within the Chrome team at Google. Project members are working to take the scalability and openness of the web and use it to talk to the exponentially exploding range of smart devices. Nearly every company today working on the IoT comes up with the same basic solution: use my server and you'll be fine. But if we really believe there will be trillions of these devices, that just can't scale. We need a system that is open a scalable and by using the URL as a basic building block, we open this up and get the same resilience that the web enjoys.
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, discussed single-value, geo-spatial, and log time series data. By focusing on enterprise applications and the data center, he will use OpenTSDB as an example t...
The Domain Name Service (DNS) is one of the most important components in networking infrastructure, enabling users and services to access applications by translating URLs (names) into IP addresses (numbers). Because every icon and URL and all embedded content on a website requires a DNS lookup loading complex sites necessitates hundreds of DNS queries. In addition, as more internet-enabled ‘Things' get connected, people will rely on DNS to name and find their fridges, toasters and toilets. According to a recent IDG Research Services Survey this rate of traffic will only grow. What's driving t...
Enthusiasm for the Internet of Things has reached an all-time high. In 2013 alone, venture capitalists spent more than $1 billion dollars investing in the IoT space. With "smart" appliances and devices, IoT covers wearable smart devices, cloud services to hardware companies. Nest, a Google company, detects temperatures inside homes and automatically adjusts it by tracking its user's habit. These technologies are quickly developing and with it come challenges such as bridging infrastructure gaps, abiding by privacy concerns and making the concept a reality. These challenges can't be addressed w...
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 Internet of @ThingsExpo, James Kirkland, Chief Architect for the Internet of Things and Intelligent Systems at Red Hat, described how to revolutioniz...
Bit6 today issued a challenge to the technology community implementing Web Real Time Communication (WebRTC). To leap beyond WebRTC’s significant limitations and fully leverage its underlying value to accelerate innovation, application developers need to consider the entire communications ecosystem.
The definition of IoT is not new, in fact it’s been around for over a decade. What has changed is the public's awareness that the technology we use on a daily basis has caught up on the vision of an always on, always connected world. If you look into the details of what comprises the IoT, you’ll see that it includes everything from cloud computing, Big Data analytics, “Things,” Web communication, applications, network, storage, etc. It is essentially including everything connected online from hardware to software, or as we like to say, it’s an Internet of many different things. The difference ...
Cloud Expo 2014 TV commercials will feature @ThingsExpo, which was launched in June, 2014 at New York City's Javits Center as the largest 'Internet of Things' event in the world.
SYS-CON Events announced today that Windstream, a leading provider of advanced network and cloud communications, has been named “Silver Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York, NY. Windstream (Nasdaq: WIN), a FORTUNE 500 and S&P 500 company, is a leading provider of advanced network communications, including cloud computing and managed services, to businesses nationwide. The company also offers broadband, phone and digital TV services to consumers primarily in rural areas.
"There is a natural synchronization between the business models, the IoT is there to support ,” explained Brendan O'Brien, Co-founder and Chief Architect of Aria Systems, in this SYS-CON.tv interview at the 15th International Cloud Expo®, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
The major cloud platforms defy a simple, side-by-side analysis. Each of the major IaaS public-cloud platforms offers their own unique strengths and functionality. Options for on-site private cloud are diverse as well, and must be designed and deployed while taking existing legacy architecture and infrastructure into account. Then the reality is that most enterprises are embarking on a hybrid cloud strategy and programs. In this Power Panel at 15th Cloud Expo (http://www.CloudComputingExpo.com), moderated by Ashar Baig, Research Director, Cloud, at Gigaom Research, Nate Gordon, Director of T...