FireEye posts slowest revenue growth since debut; CFO quits

Reuters News
Posted: Jul 30, 2015 4:11 PM

By Abhirup Roy and Arathy S Nair

(Reuters) - Cybersecurity company FireEye Inc reported its slowest quarterly revenue growth since going public in 2013, and said Chief Financial Officer Michael Sheridan will step down.

The company's shares fell 6.5 percent to $44.64 in after-market trading on Thursday.

"People would be nervous about a CFO transition, typically," Chief Executive David DeWalt told Reuters, offering an explanation for the drop in share price.

DeWalt said it was natural for a startup CFO to leave once a company's market value reaches $1 billion and investors should not worry.

"We are going to add a very strong CFO shortly," he said.

Sheridan, CFO since June 2011, will join a private technology company, FireEye said. Frank Verdecanna, vice president of finance, will be interim CFO.

FireEye, which has yet to post a profit since its IPO, uses cloud-based technologies to help businesses and government departments fight viruses that manage to breach older antivirus software.

The company's revenue grew 55.8 percent in three months to June 30 - much lower than the over 90 percent growth it typically averages - to $147.2 million.

Analysts had expected revenue of $143.2 million, according to Thomson Reuters I/B/E/S.

"Given the pristine valuation that FireEye gets, the company must continue to deliver monster 'home run' quarters and I would characterize this as a 'triple'," FBR Capital Markets analyst Daniel Ives told Reuters.

FireEye raised its full-year revenue forecast for the second time this year to $630 million-$645 million from $615 million-$635 million.

Analysts were expecting revenue of $631.6 million.

FireEye's net loss attributable to shareholders widened to $133.6 million, or 87 cents per share, in the second quarter from $116.8 million, or 82 cents per share, a year earlier.

Excluding items, FireEye lost 41 cents per share, smaller than analysts' average estimate of 48 cents.

Up to Thursday's close, the stock had risen about 51 percent this year.

(Additional reporting by Jim Finkle in Boston; Editing by Sriraj Kalluvila)