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Proofpoint (PFPT) to Report Q3 Earnings: What's in Store?
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Proofpoint Inc. is set to report third-quarter 2018 results on Nov 7.
The company beat the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average positive surprise of 54.36%.
In the last reported quarter, the company reported non-GAAP earnings of 26 cents, which increased 52.9% year over year and outpaced the consensus estimate of 17 cents.
Proofpoint, Inc. Price, Consensus and EPS Surprise
Moreover, revenues of $171.9 million surged 40.5% and surpassed the Zacks Consensus Estimate of $169.8 million.
For the third quarter, Proofpoint anticipates revenues of $180-182 million and billings between $218 million and $220 million.
Also, free cash flow is forecast in the range of $45-$47 million while capital expenditure will likely be $10 million in the third quarter.
Let’s see how things are shaping up for the upcoming announcement.
Factors at Play
Proofpoint, a leading security-as-a-service provider, has been witnessing remarkable top-line growth on the back of consistent focus on launching products, acquisitions and partnerships. Customer additions, improved add-on-sales and strong renewal rate are key growth drivers for the company.
The company expects acquisitions made in the thirdquarter to contribute about 800 basis points toward growth in the soon-to-be-reported quarter.
Proofpoint’s ongoing improvements in operations and cost synergies as a result of its recent transformation to SaaS cloud system are positives. These are expected to yield a non-GAAP gross margin of approximately 77.5% in the quarter.
Proofpoint continues to benefit from increasing demand for cyber-security solutions. Overthe past few quarters, the companyhas been witnessing solid demand for its cyber-security suites from enterprises, which are transitioning to cloud, particularly to Microsoft's (MSFT - Free Report) Office 365.
Management mentioned that the new offerings have expanded the total addressable market and remain key growth catalysts. The company’s recently launched Cloud Account Defense service, in association with FireLayers, helps organizations prevent Office 365 account compromises. This is expected to expand its market further.
However, the forthcoming U.S. midterm elections have increased the demand for security solutions and services, thereby intensifying the competition faced by Proofpoint. New initiatives taken up by major competitors like FireEye and CheckPoint (CHKP - Free Report) pose a threat to itsmarket share.
Moreover, total non-GAAP operating expenses flared up 42% year over year to $117.4 million in its previous quarter, mainly due to increased spending on hiring sales personnel and acquisition of Wombat. This is likely to continue to keep margins under pressure.
Proofpoint currently carries a Zacks Rank #4 (Sell).
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Proofpoint (PFPT) to Report Q3 Earnings: What's in Store?
Proofpoint Inc. is set to report third-quarter 2018 results on Nov 7.
The company beat the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average positive surprise of 54.36%.
In the last reported quarter, the company reported non-GAAP earnings of 26 cents, which increased 52.9% year over year and outpaced the consensus estimate of 17 cents.
Proofpoint, Inc. Price, Consensus and EPS Surprise
Proofpoint, Inc. Price, Consensus and EPS Surprise | Proofpoint, Inc. Quote
Moreover, revenues of $171.9 million surged 40.5% and surpassed the Zacks Consensus Estimate of $169.8 million.
For the third quarter, Proofpoint anticipates revenues of $180-182 million and billings between $218 million and $220 million.
Also, free cash flow is forecast in the range of $45-$47 million while capital expenditure will likely be $10 million in the third quarter.
Let’s see how things are shaping up for the upcoming announcement.
Factors at Play
Proofpoint, a leading security-as-a-service provider, has been witnessing remarkable top-line growth on the back of consistent focus on launching products, acquisitions and partnerships. Customer additions, improved add-on-sales and strong renewal rate are key growth drivers for the company.
The company expects acquisitions made in the thirdquarter to contribute about 800 basis points toward growth in the soon-to-be-reported quarter.
Proofpoint’s ongoing improvements in operations and cost synergies as a result of its recent transformation to SaaS cloud system are positives. These are expected to yield a non-GAAP gross margin of approximately 77.5% in the quarter.
Proofpoint continues to benefit from increasing demand for cyber-security solutions. Overthe past few quarters, the companyhas been witnessing solid demand for its cyber-security suites from enterprises, which are transitioning to cloud, particularly to Microsoft's (MSFT - Free Report) Office 365.
Management mentioned that the new offerings have expanded the total addressable market and remain key growth catalysts. The company’s recently launched Cloud Account Defense service, in association with FireLayers, helps organizations prevent Office 365 account compromises. This is expected to expand its market further.
However, the forthcoming U.S. midterm elections have increased the demand for security solutions and services, thereby intensifying the competition faced by Proofpoint. New initiatives taken up by major competitors like FireEye and CheckPoint (CHKP - Free Report) pose a threat to itsmarket share.
Moreover, total non-GAAP operating expenses flared up 42% year over year to $117.4 million in its previous quarter, mainly due to increased spending on hiring sales personnel and acquisition of Wombat. This is likely to continue to keep margins under pressure.
Proofpoint currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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