It’s worth noting that last year the company benefitted from a few large deals (greater than $5 million) signed in the first quarter. Despite the tough comps, sales growth in the first quarter was aided by a strong performance from the cloud and professional services lines.
The company is in the process of transitioning from products-based model to the subscription-based model, which is expected to augur well in the long-term. The shift is expected to bring in stable revenues and improved profitability.
Billings improved 4% to $182 million coming within the outlook provided by the firm. However, sequentially this is a huge reduction of 31%. However, excluding $10 million deals signed last year, billings grew 11% continuing the double-digit growth from last quarter. The decrease in billings was primarily due to a drop in cloud-based billings offset by an increase in product and professional services.
FireEye added 237 new customers in the quarter including 33 clients signing deals more than $1 million. However, this is a huge drop from last quarter where the company added 354 clients with 60 of them were $1 million clients. This is a concern for investors as the company is facing tough competition from its peers on winning new clients despite the shift in the business model.
Q2 Outlook
The cybersecurity provider expects second-quarter revenue to be between $212-216 million and adjusted EPS in the range of $0.01 and $0.03. Billings is expected to come in at $205 million to $220 million. Analysts are expecting revenues of $216 million and earnings of $0.04 per share. The high-end of the earnings guidance range provided by the firm is 1 cent lesser than the street expectations.
Full-Year Outlook
FireEye retained the outlook provided last quarter for the top and bottom line. Sales is anticipated to come at $880 million to 890 million, while Non-GAAP earnings expected at $0.17-0.21 per share. The company increased billings guidance to $915-935 million compared to prior guidance of $910-930 million. The street is expecting EPS of $0.19 on revenues of $886.25 million for the fiscal year.