FireEye Still Operating at a Loss, Despite Revenue Growth
Enterprise security firm FireEye grows revenue by 94 percent in 2013. But that increase wasn’t enough for it to turn a profit.
There is money to be made in the security business, but profitability is never a given. Just ask FireEye.
FireEye went public in September of 2013 and was listed as one of eSecurity Planet's 13 Hot Security Startups to Watch in November of 2013.
For the fourth quarter of 2013, FireEye's revenue came in at $57.3 million, an 81 percent year-over-year gain. The company reported a net loss of $2.5 million for the quarter, a significant improvement over the $12.6 million net loss reported in 2012's fourth quarter.
For the full fiscal 2013 year, FireEye reported revenue of $161.6 million, a 94 percent year-over-year increase. That revenue wasn't enough to bring in a profit as the company reported a net loss for the year of $120.6 million, which is a steep increase from the loss of $35.8 million reported in 2012.
Looking forward, FireEye provided first quarter fiscal 2014 guidance for total revenue in the range of $70 million to $72 million. Sales and marketing expenses as a percentage of revenues for the first quarter are expected to range from 92 to 95 percent. For the full fiscal 2014, FireEye provided guidance for revenue in the range of $400 million to $410 million. Sales and maketing costs as a percent of full year revenue is expected to come in the range of 82 to 85 percent.
"During 2013, we nearly doubled our billings and revenue, built a global infrastructure to support our growth, completed our initial public offering, and extended our virtual machine-based security technology with mobile, data center, and small and midsized business solutions," said David DeWalt, FireEye chairman of the board and chief executive officer, in a statement.
Acquisition and Product Rollout
2013 was also a transformative year for FireEye in that it acquired privately-held security vendor Mandiant in a deal valued at $1 billion. Kevin Mandia, the founder of Mandiant, now serves as FireEye's chief operating officer.
The day before FireEye reported its earnings, the company announced its newest platform the MVX-IPS. Intrusion prevention systems (IPSes) are widely deployed today, though FireEye is taking a different approach with its system.
"Current IPS products are failing to keep pace with the modern threat environment because they rely on the outdated signature-based model of protection, produce distracting false positives and lack actionable threat intelligence,” said Manish Gupta, senior vice president of products at FireEye, in a statement. “With FireEye MVX-IPS, organizations can consolidate threat defenses, receive timely, validated threat notifications and actionable insights that allow security teams to focus on quickly getting to remediation."
Sean Michael Kerner is a senior editor at eSecurity Planet and InternetNews.com. Follow him on Twitter @TechJournalist.