It has been about a month since the last earnings report for Mandiant . Shares have lost about 0.3% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Mandiant due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Mandiant Posts Higher-Than-Expected Q1 Loss
Mandiant posted a non-GAAP loss of 15 cents per share for first-quarter 2021, couple of cents higher than the year-ago quarter’s loss of 13 cents. The quarterly loss per share was also wider than the Zacks Consensus Estimate of a loss of 14 cents.
Mandiant’s fourth-quarter revenues of $130 million surpassed the Zacks Consensus Estimate of $129 million. Also, the top line registered a 13% increase from the year-ago quarter’s revenues of $115 million.
This was Mandiant’s third quarterly result following the divestiture of its FireEye Product business. On Oct 8, 2021, the company completed the sale of its FireEye Product business to a consortium led by the private equity firm, Symphony Technology Group, in an all-cash transaction worth $1.2 billion.
Pursuant to the asset divestiture, MNDT classified the FireEye Product business as discontinued operations and the business hasn’t been included in first-quarter financial results from continuing operations.
Quarter in Detail
Revenues from Mandiant’s platform, cloud subscription and managed services division increased 3% year over year to $57.6 million. Its professional services segment’s revenues surged 24% year over year to $72.5 million.
Mandiant’s first-quarter 2022 non-GAAP billings grew 8% year over year, primarily driven by strong billings registered in the professional services segment partially offset by decline in platform, cloud subscription and managed services billings. Professional services billings grew 19% while Platform, cloud subscription and managed services billings declined 4%.
Annualized recurring revenues increased 22% year over year to $287 million.
Non-GAAP gross margin contracted 400 basis points (bps) year over year and 500 bps sequentially to 58% in the first quarter. The company reported non-GAAP operating margin of negative 26%, compared unfavorably with negative 24% in the year-ago quarter and negative 17% in the previous quarter.
Balance Sheet & Cash Flow
Mandiant exited the first quarter with cash and cash equivalents and short-term investments of $2.13 billion, which were lower than $2.19 billion as of Dec 31, 2021.
During the quarter, the company used $23 million of cash for operational activities.
Pursuant to its Mar 8, 2022 announcement of entering into a definitive agreement to be acquired by Google LLC, Mandiant didn’t held post-earnings conference. It also not provided guidance for the second quarter and withdrew its full-year 2022 guidance as well.
During fourth-quarter 2021 earnings conference call, management anticipated revenues and annualized recurring revenues in the range of $555-$565 million and $360-$366 million, respectively, for full-year 2022.
The company had projected non-GAAP gross margin of 61.5-62.5%. Non-GAAP operating margin was estimated between negative 13% and negative 14%. Mandiant expected non-GAAP loss per share from continuing operations in the band of 36-38 cents for full-year 2022.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
Currently, Mandiant has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Mandiant has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.