Proofpoint, Inc.
Jan 26, 2017

Proofpoint Announces Fourth Quarter and Full Year 2016 Financial Results

Fourth Quarter Highlights

SUNNYVALE, Calif., Jan. 26, 2017 (GLOBE NEWSWIRE) -- Proofpoint, Inc. (NASDAQ:PFPT), a leading next-generation security and compliance company, today announced financial results for the fourth quarter and full year ended December 31, 2016.

"We were very pleased with our strong fourth quarter results, which capped off another record year for the company," stated Gary Steele, chief executive officer of Proofpoint.  "During the quarter, the better-than-expected results were driven by the ongoing robust demand for our advanced threat solutions, high competitive win rates, traction with new products, robust add-on activity and consistently high renewal rates.  The company remains well-positioned to maintain momentum in 2017 and beyond as enterprises continue to select Proofpoint's cloud-based advanced threat protection solution over legacy alternatives, given our proven capability in handling today's advanced security threats."

Fourth Quarter 2016 Financial Highlights

"We were very pleased with our strong fourth quarter execution, particularly our ability to surpass $100 million in quarterly revenue while generating record free cash flow," stated Paul Auvil, chief financial officer of Proofpoint.  "During 2016, we delivered billings growth of 43%, revenue growth of 41% and nearly tripled free cash flow."

Full Year 2016 Financial Highlights

A reconciliation of GAAP to non-GAAP financial measures has been provided in the financial tables included in this press release.  An explanation of these measures and how they are calculated are also included below under the heading "Non-GAAP Financial Measures."

Fourth Quarter and Recent Business Highlights:

Financial Outlook

As of January 26, 2017, Proofpoint is providing guidance for its first quarter and increasing full year 2017 guidance as follows:

Quarterly Conference Call

Proofpoint will host a conference call today at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) to review the company's financial results for the fourth quarter ended December 31, 2016.  To access this call, dial (888) 204-4517 for the U.S. or Canada and (913) 312-0644 for international callers with conference ID #7351005.  A live webcast of the conference call will be accessible from the Investors section of Proofpoint's website at investors.proofpoint.com, and a recording will be archived and accessible at investors.proofpoint.com.  An audio replay of this conference call will also be available through February 9, 2017, by dialing (844) 512-2921 for the U.S. or Canada or (412) 317-6671 for international callers, and entering passcode #7351005.

About Proofpoint, Inc.

Proofpoint Inc. (NASDAQ:PFPT) is a leading next-generation security and compliance company that provides cloud-based solutions to protect the way people work today. Proofpoint solutions enable organizations to protect their users from advanced attacks delivered via email, social media and mobile apps, protect the information their users create from advanced attacks and compliance risks, and respond quickly when incidents occur. More information is available at www.proofpoint.com.

Proofpoint is a trademark or registered trademark of Proofpoint, Inc. in the U.S. and other countries. All other trademarks contained herein are the property of their respective owners.

Forward-Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties. These forward-looking statements include statements regarding momentum in the company's business, market position, win rates and renewal rates, future growth, and future financial results. It is possible that future circumstances might differ from the assumptions on which such statements are based. Important factors that could cause results to differ materially from the statements herein include: failure to maintain or increase renewals and increased business from existing customers and failure to generate increased business through existing or new channel partner relationships; uncertainties related to continued success in sales growth and market share gains; failure to convert sales opportunities into definitive customer agreements; risks associated with successful implementation of multiple integrated software products and other product functionality; competition, particularly from larger companies with more resources than Proofpoint; risks related to new target markets, new product introductions and innovation and market acceptance thereof; the ability to attract and retain key personnel; potential changes in strategy; risks associated with management of growth; lengthy sales and implementation cycles, particularly in larger organizations; the time it takes new sales personnel to become fully productive; unforeseen delays in developing new technologies and the uncertain market acceptance of new products or features; technological changes that make Proofpoint's products and services less competitive; security breaches, which could affect our brand; the costs of litigation; the impact of changes in foreign currency exchange rates; the effect of general economic conditions, including as a result of specific economic risks in different geographies and among different industries; risks related to integrating the employees, customers and technologies of acquired businesses; assumption of unknown liabilities from acquisitions; ability to retain customers of acquired entities; and the other risk factors set forth from time to time in our filings with the SEC, including our Quarterly Report on Form 10-Q for the three months ended September 30, 2016, and the other reports we file with the SEC, copies of which are available free of charge at the SEC's website at www.sec.gov or upon request from our investor relations department.  All forward-looking statements herein reflect our opinions only as of the date of this release, and Proofpoint undertakes no obligation, and expressly disclaims any obligation, to update forward-looking statements herein in light of new information or future events.

Computational Guidance on Earnings Per Share Estimates

Accounting principles require that EPS be computed based on the weighted average shares outstanding ("basic"), and also assuming the issuance of potentially issuable shares (such as those subject to stock options, convertible notes, etc.) if those potentially issuable shares would reduce EPS ("diluted").

The number of shares related to options and similar instruments included in diluted EPS is based on the "Treasury Stock Method" prescribed in Financial Accounting Standards Board ("FASB") ASC Topic 260, Earnings Per Share ("FASB ASC Topic 260"). This method assumes a theoretical repurchase of shares using the proceeds of the respective stock option exercise at a price equal to the issuer's average stock price during the related earnings period. Accordingly, the number of shares includable in the calculation of diluted EPS in respect of stock options and similar instruments is dependent on this average stock price and will increase as the average stock price increases.

The number of shares includable in the calculation of diluted EPS in respect of convertible senior notes is based on the "If Converted" method prescribed in FASB ASC Topic 260. This method assumes the conversion or exchange of these securities for shares of common stock. In determining if convertible securities are dilutive, the interest savings (net of tax) subsequent to an assumed conversion are added back to net earnings. The shares related to a convertible security are included in diluted EPS only if EPS as otherwise calculated is greater than the interest savings, net of tax, divided by the shares issuable upon exercise or conversion of the instrument. Accordingly, the calculation of diluted EPS for these instruments is dependent on the level of net earnings. Each series of convertible securities is considered individually and in sequence, starting with the series having the lowest incremental earnings per share, to determine if its effect is dilutive or anti-dilutive.

Non-GAAP Financial Measures

We have provided in this release financial information that has not been prepared in accordance with GAAP. We use these non-GAAP financial measures internally in analyzing our financial results and believe they are useful to investors, as a supplement to GAAP measures, in evaluating our ongoing operational performance. We believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial results with other companies in our industry, many of which present similar non-GAAP financial measures to investors. 

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures below. As previously mentioned, a reconciliation of our non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included below in this press release.

Non-GAAP gross profit and gross margin. We define non-GAAP gross profit as GAAP gross profit, adjusted to exclude stock-based compensation expense and the amortization of intangibles associated with acquisitions. We define non-GAAP gross margin as non-GAAP gross profit divided by GAAP revenue. We consider these non-GAAP financial measures to be useful metrics for management and investors because they exclude the effect of non-cash charges that can fluctuate for Proofpoint, based on timing of equity award grants and the size, timing and purchase price allocation of acquisitions so that our management and investors can compare our recurring core business operating results over multiple periods. There are a number of limitations related to the use of non-GAAP gross profit and non-GAAP gross margin versus gross profit and gross margin, in each case, calculated in accordance with GAAP. For example, stock-based compensation has been and will continue to be for the foreseeable future a significant recurring expense in our business. Stock-based compensation is an important part of our employees' compensation and impacts their performance. In addition, the components of the costs that we exclude in our calculation of non-GAAP gross profit and non-GAAP gross margin may differ from the components that our peer companies exclude when they report their non-GAAP results.  Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP gross profit and non-GAAP gross margin and evaluating non-GAAP gross profit and non-GAAP gross margin together with gross profit and gross margin calculated in accordance with GAAP.

Non-GAAP operating loss. We define non-GAAP operating loss as operating loss, adjusted to exclude stock-based compensation expense and the amortization of intangibles and costs associated with acquisitions and litigation. Costs associated with acquisitions include legal, accounting, and other professional fees, as well as changes in the fair value of contingent consideration obligations. We consider this non-GAAP financial measure to be a useful metric for management and investors because they exclude the effect of stock-based compensation expense and the amortization of intangibles and costs associated with acquisitions and litigation so that our management and investors can compare our recurring core business operating results over multiple periods. There are a number of limitations related to the use of non-GAAP operating loss versus operating loss calculated in accordance with GAAP. For example, as noted above, non-GAAP operating loss excludes stock-based compensation expense. In addition, the components of the costs that we exclude in our calculation of non-GAAP operating loss may differ from the components that our peer companies exclude when they report their non-GAAP results of operations, and some of these items are cash-based. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP operating loss and evaluating non-GAAP operating loss together with operating loss calculated in accordance with GAAP.

Non-GAAP net loss. We define non-GAAP net loss as net loss, adjusted to exclude stock-based compensation expense, amortization of intangibles, costs associated with acquisitions and litigation, non-cash interest expense related to the convertible debt discount and issuance costs for the convertible debt offering, and tax effects associated with these items. We consider this non-GAAP financial measure to be a useful metric for management and investors for the same reasons that we use non-GAAP operating loss. However, in order to provide a complete picture of our recurring core business operating results, we also exclude from non-GAAP net loss the tax effects associated with stock-based compensation and the amortization of intangibles and costs associated with acquisitions and litigation, and non-cash interest expense related to the convertible debt discount and issuance costs for the convertible debt offering.

Billings. We define billings as revenue recognized plus the change in deferred revenue from the beginning to the end of the period, but excluding additions to deferred revenue from acquisitions. We consider billings to be a useful metric for management and investors because billings drive deferred revenue, which is an important indicator of the health and visibility of our business, and has historically represented a majority of the quarterly revenue that we recognize. There are a number of limitations related to the use of billings versus revenue calculated in accordance with GAAP. Billings include amounts that have not yet been recognized as revenue, but exclude additions to deferred revenue from acquisitions. We may also calculate billings in a manner that is different from other companies that report similar financial measures. Management compensates for these limitations by providing specific information regarding GAAP revenue and evaluating billings together with revenues calculated in accordance with GAAP.

Adjusted EBITDA. We define adjusted EBITDA as net loss, adjusted to exclude: depreciation, amortization of intangibles, interest income (expense), net, provision for income taxes, stock-based compensation, acquisition- and litigation-related expense, other income (expense), net. We believe that the use of adjusted EBITDA is useful to investors and other users of our financial statements in evaluating our operating performance because it provides them with an additional tool to compare business performance across companies and across periods. We use adjusted EBITDA in conjunction with traditional GAAP operating performance measures as part of our overall assessment of our performance, for planning purposes, including the preparation of our annual operating budget, to evaluate the effectiveness of our business strategies and to communicate with our board of directors concerning our financial performance. We do not place undue reliance on adjusted EBITDA as our only measure of operating performance. Adjusted EBITDA should not be considered as a substitute for other measures of financial performance reported in accordance with GAAP. There are limitations to using this non-GAAP financial measure, including that other companies may calculate this measure differently than we do, that it does not reflect our capital expenditures or future requirements for capital expenditures and that it does not reflect changes in, or cash requirements for, our working capital and excluding some items that are cash based.

Free cash flow. We define free cash flow as net cash provided by operating activities minus capital expenditures. We consider free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that, after the acquisition of property and equipment, can be used for strategic opportunities, including investing in our business, making strategic acquisitions, and strengthening the balance sheet. Analysis of free cash flow facilitates management's comparisons of our operating results to competitors' operating results. A limitation of using free cash flow versus the GAAP measure of net cash provided by operating activities as a means for evaluating our company is that free cash flow does not represent the total increase or decrease in the cash balance from operations for the period because it excludes cash used for capital expenditures during the period. Management compensates for this limitation by providing information about our capital expenditures on the face of the cash flow statement and in the "Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources" section of our quarterly and annual reports filed with the SEC.

 
Proofpoint, Inc.
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
           
            
    Three Months Ended
December 31,
 Twelve Months Ended
December 31,
     2016   2015   2016   2015 
Revenue:          
Subscription   $104,082  $72,472  $365,960  $257,329 
Hardware and services    2,723   2,467    9,536   8,068 
Total revenue    106,805   74,939   375,496    265,397 
Cost of revenue:(1)(2)          
Subscription    25,849   20,374   94,716   71,746 
Hardware and services    3,982   3,518   13,877   12,312 
Total cost of revenue    29,831   23,892    108,593   84,058  
Gross profit    76,974   51,047   266,903   181,339 
Operating expense:(1)(2)          
Research and development    27,772   20,092   98,506    74,459 
Sales and marketing    54,550   41,174   201,204   148,414 
General and administrative    10,778   10,827   52,774   36,616 
Total operating expense    93,100   72,093   352,484   259,489 
Operating loss    (16,126)  (21,046)  (85,581)  (78,150)
Interest expense    (6,009)  (5,912)  (23,538)  (18,000)
Other expense, net    (575)  (292)   (1,103)  (1,927)
Loss before provision for income taxes    (22,710)  (27,250)  (110,222)  (98,077)
Provision for income taxes    (174)  (142)  (986)  (635)
Net loss   $(22,884) $(27,392) $(111,208) $(98,712)
Net loss per share, basic and diluted   $(0.54) $(0.68) $(2.66) $(2.48)
Weighted average shares outstanding, basic and diluted    42,616   40,531   41,859   39,787 
            
(1) Includes stock‑based compensation expense as follows:          
Cost of subscription revenue   $1,988  $1,408  $7,427  $5,028 
Cost of hardware and services revenue    374   324   1,494   1,098 
Research and development     6,844   5,110   24,342   20,672 
Sales and marketing    7,897   6,016   28,607   21,511 
General and administrative    4,439   3,379   16,826   11,785 
Total stock-based compensation expense   $21,542  $16,237  $78,696  $60,094 
(2) Includes intangible amortization expense as follows:          
Cost of subscription revenue   $2,965  $2,165  $9,423  $7,079 
Research and development    15   22   60   91 
Sales and marketing     1,000   1,235   4,938   5,074 
General and administrative    -   -   -   12 
Total intangible amortization expense   $3,980  $3,422  $14,421  $12,256 
           

 

Proofpoint, Inc.
Consolidated Balance Sheets
(In thousands, except per share amounts)
(Unaudited)
       
    December 31,  December 31,
     2016   2015 
Assets      
Current assets:      
Cash and cash equivalents   $345,426  $ 346,205 
Short-term investments    51,325   60,032 
Accounts receivable, net    72,951   54,522 
Inventory    598   485 
Deferred product costs    1,829   2,228 
Deferred commissions    21,168   19,314 
Prepaid expenses and other current assets    17,498   5,695 
Total current assets    510,795   488,481 
Property and equipment, net    52,523   34,501 
Deferred product costs    310   314 
Goodwill    167,270    133,769 
Intangible assets, net    61,708   41,330 
Long-term deferred commissions    4,496   3,488 
Other assets    4,558   3,733 
Total assets   $801,660   $705,616 
Liabilities and Stockholders' Equity      
Current liabilities:      
Accounts payable   $15,297   $14,081 
Accrued liabilities    51,177   35,053 
Capital lease obligations    32   32 
Deferred rent    409   496 
Deferred revenue    259,109   182,195 
Total current liabilities    326,024   231,857 
Convertible senior notes    366,541    345,699 
Long-term capital lease obligations    91   123 
Long-term deferred rent    2,413    2,033 
Other long-term liabilities    9,008   1,188 
Long-term deferred revenue    53,072   41,531 
Total liabilities    757,149   622,431 
Stockholders' equity      
Common stock, $0.0001 par value; 200,000 shares authorized; 43,015 and 40,840 shares issued and outstanding at December 31, 2016 and 2015, respectively    4   4 
Additional paid-in capital    513,622   441,104 
Accumulated other comprehensive loss    (7)  (23)
Accumulated deficit    (469,108)   (357,900)
Total stockholders' equity    44,511   83,185 
Total liabilities and stockholders' equity   $801,660  $705,616 
       

 

Proofpoint, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
           
    Three Months Ended
December 31,
 Twelve Months Ended
December 31,
     2016   2015   2016   2015 
Cash flows from operating activities          
Net loss   $(22,884)  $(27,392) $(111,208) $(98,712 )
Adjustments to reconcile net loss to net cash provided by operating activities:          
Depreciation and amortization    8,839   6,960   31,552   24,900 
Loss on disposal of property and equipment    129   38   434   162 
Amortization of investment premiums, net of accretion of purchase discounts    (48)  12   4   103 
Allowance (recovery) for doubtful accounts    52   27   17   (231)
Stock‑based compensation    21,542   16,237   78,696   60,094 
Change in fair value of contingent consideration     (669)  -   (669)  - 
Amortization of debt issuance costs and accretion of debt discount    5,326   5,022   20,842   14,933 
Foreign currency transaction loss    593   240   852   1,657 
Changes in assets and liabilities:          
Accounts receivable    (3,920)  (16,084)  (18,754)  (12,811)
Inventory    (168)  353   (113)  14 
Deferred products costs    (2)  90   402   (388)
Deferred commissions    (3,228)  (3,983)  (2,862)  (7,742)
Prepaid expenses    (191)  181   (2,660)  (1,829)
Other current assets    (1,933)  (519)  (1,472)  104 
Deferred income taxes    22   153   (1)  509 
Long-term assets    911   2    959   47 
Accounts payable    1,365   4,633   4,271   2,460 
Accrued liabilities    3,465   (486)  6,398   4,448 
Deferred rent    395    164   292   (165)
Deferred revenue    31,642   22,570   87,255   58,951 
Net cash provided by operating activities    41,238   8,218   94,235   46,504 
Cash flows from investing activities           
Proceeds from sales and maturities of short-term investments    20,343   4,597   123,405   39,056 
Purchase of short-term investments    (33,453)  (16,459)  (114,686)  (64,537)
Purchase of property and equipment    (8,880)  (7,700)  (34,407)  (25,827)
Payment to escrow account    -   -   (9,645)  - 
Receipts from escrow account    260   -   260   - 
Acquisitions of business, net of cash acquired    (45,807)  (11,499)  (54,158)  (51,553)
Net cash used in investing activities    (67,537)  (31,061)  (89,231)  (102,861)
Cash flows from financing activities          
Proceeds from issuance of common stock    6,633   6,702   21,779   18,583 
Withholding taxes related to restricted stock net share settlement    (8,573)  (5,652)  (25,588)  (18,108)
Payments of debt issuance costs    -   -   -   (371)
Proceeds from issuance of convertible senior notes
    -    -   -   223,790 
Repayments of equipment loans and capital lease obligations    (8)  (7)  (32)  (706)
Holdback payments for prior acquisitions    -   -   (1,397)  - 
Net cash (used in) provided by financing activities    (1,948)  1,043   (5,238)  223,188 
Effect of exchange rate changes on cash and cash equivalents     (509)  (166)  (545)  (963)
Net (decrease) increase in cash and cash equivalents    (28,756)  (21,966)  (779)  165,868 
Cash and cash equivalents          
Beginning of period    374,182   368,171   346,205   180,337 
End of period   $345,426  $346,205  $345,426  $346,205 
           

 

Reconciliation of Non-GAAP Measures
(In thousands, except per share amounts)
(Unaudited)
           
     Three Months Ended   Twelve Months Ended 
     December 31,   December 31,  
     2016   2015   2016   2015 
           
GAAP gross profit   $76,974  $51,047  $266,903  $181,339 
GAAP gross margin     72%  68%  71%  68%
Plus:          
Stock-based compensation expense    2,362   1,732   8,921   6,126 
Intangible amortization expense    2,965   2,165   9,423   7,079 
Non-GAAP gross profit    82,301   54,944   285,247   194,544 
Non-GAAP gross margin    77%  73%  76%  73%
           
GAAP operating loss    (16,126)  (21,046)  (85,581)  (78,150)
Plus:          
Stock-based compensation expense     21,542   16,237   78,696   60,094 
Intangible amortization expense    3,980   3,422   14,421   12,256 
Acquisition-related expenses    494   360   1,080   911 
Litigation-related expenses    9   2,045   12,950   4,577 
Non-GAAP operating income (loss)    9,899   1,018   21,566   (312)
           
GAAP net loss    (22,884)  (27,392)  (111,208)  (98,712)
Plus:          
Stock-based compensation expense    21,542   16,237   78,696   60,094 
Intangible amortization expense     3,980   3,422   14,421   12,256 
Acquisition-related expenses    494   360   1,080   911 
Litigation-related expenses    9   2,045   12,950   4,577 
Interest expense - debt discount and issuance costs    5,326   5,022   20,842   14,933 
Income tax benefit (expense)    26   (70)  99   (181)
Non-GAAP net income (loss)   $8,493  $(376) $16,880  $(6,122)
Add interest expense of convertible senior notes, net of tax (1)    1,060   -   -   - 
Numerator for non-GAAP EPS calculation   $9,553  $(376) $16,880  $(6,122)
Non-GAAP net income (loss) per share - diluted   $0.18  $(0.01) $0.37  $(0.15)
           
GAAP weighted-average shares used to compute net loss per share, diluted    42,616   40,531   41,859   39,787 
Dilutive effect of convertible senior notes (1)    7,989   -   -   - 
Dilutive effect of employee equity incentive plan awards (2)    3,802   -   3,908   - 
Non-GAAP weighted-average shares used to compute net income (loss) per share, diluted    54,407   40,531   45,767   39,787 
           
(1) The Company uses the if-converted method to compute diluted earnings per share with respect to its convertible senior notes. There was no add-back of interest expense or additional dilutive shares related to the convertible senior notes where the effect was anti-dilutive.
(2) The Company uses the treasury method to compute the dilutive effect of employee equity incentive plan awards.
           
           
           
Reconciliation of Net Loss to Adjusted EBITDA
(In thousands)
(Unaudited)
           
     Three Months Ended   Twelve Months Ended 
     December 31,   December 31, 
     2016   2015   2016   2015 
           
Net loss   $(22,884) $(27,392) $(111,208) $(98,712)
Depreciation    4,859   3,537   17,131   12,644 
Amortization of intangible assets    3,980   3,422   14,421   12,256 
Interest expense    6,009   5,912   23,538   18,000 
Provision for income taxes    174    142   986   635 
EBITDA   $(7,862) $(14,379) $(55,132) $(55,177)
           
Stock-based compensation expense   $21,542  $16,237  $78,696  $60,094 
Acquisition-related expenses    494   360   1,080   911 
Litigation-related expenses    9   2,045   12,950   4,577 
Other expense, net    575    292   1,103   1,927 
Adjusted EBITDA   $14,758  $4,555  $38,697  $12,332 
           
           
           
Reconciliation of Total Revenue to Billings
(In thousands)
(Unaudited)
            
     Three Months Ended   Twelve Months Ended 
     December 31,    December 31, 
     2016   2015   2016   2015 
           
Total revenue   $106,805  $74,939  $375,496  $265,397 
           
Deferred revenue          
Ending    312,181   223,726   312,181   223,726 
Beginning    280,539   199,756   223,726   162,675 
Net Change    31,642   23,970   88,455   61,051 
Less:          
Deferred revenue contributed by acquisitions    -   (1,400)  (1,200)  (2,100)
Billings   $138,447  $97,509   $462,751  $324,348 
           

 

Reconciliation of GAAP Cash Flows from Operations to Free Cash Flows
(In thousands)
(Unaudited)
           
     Three Months Ended   Twelve Months Ended 
     December 31,   December 31, 
     2016   2015   2016   2015 
           
GAAP cash flows provided by operating activities   $ 41,238  $8,218  $94,235  $46,504 
Less:          
Purchases of property and equipment    (8,880)  (7,700)  (34,407)  (25,827)
Non-GAAP free cash flows   $32,358  $518  $59,828  $20,677 
           

 

Revenue by Solution
(In thousands)
(Unaudited)
               
    Three Months Ended 
   December 31,
2016
 September 30,
2016
 June 30, 2016 March 31, 2016 December 31,
2015
 September 30,
2015
              
Protection and Advanced Threat  $78,698 $72,664 $64,797 $56,462 $53,544 $47,920
Archiving, Privacy and Governance   28,107  27,120  25,107  22,541  21,395  21,229
Total revenue  $106,805 $99,784 $89,904 $79,003 $74,939 $69,149
              

 

Reconciliation of Non-GAAP Measures to Guidance
(In millions, except per share amount)
(Unaudited)
     
   Three Months Ending   Year Ending 
   March 31,   December 31, 
  2017 2017
     
GAAP net loss $(31.6) - $(28.5) $(121.4) - $(113.3)
Plus:    
Stock-based compensation expense 25.0 - 23.0 106.0- 100.0
Intangible amortization expense 4.2 16.4
Acquisition-related expenses - -
Litigation-related expenses - -
Interest expense - debt discount and issuance costs 5.4 22.1
Income tax expense (0.0) - (0.1) (0.1) - (0.2)
Non-GAAP net income $3.0 - $4.0 $23.0 - $25.0
Add interest expense of convertible senior notes, net of tax (if dilutive) 1.1 4.2
Numerator for non-GAAP EPS calculation $4.1 - $5.1 $27.2 - $29.2
Non-GAAP net income per share - diluted $0.07 - $0.09 $0.49 - $0.52
Non-GAAP weighted-average shares used to compute net income per share, diluted 54.7 55.7
     
     
     
     
   Three Months Ending   Year Ending 
   March 31,   December 31, 
  2017 2017
     
GAAP cash flows provided by operating activities $27.5 - $33.5 $135.0 - $147.0
Less:    
Purchases of property and equipment 12.5 - 13.5 40.0 - 42.0
Non-GAAP free cash flows $15.0 - $20.0 $95.0 - $105.0
     


Media Contact

Kristy Campbell

Proofpoint, Inc.

408-517-4710

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Investor Contacts

Jason Starr

Proofpoint, Inc.

408-585-4351

jstarr@proofpoint.com



Seth Potter

ICR for Proofpoint, Inc.

646-277-1230

seth.potter@icrinc.com

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Source: Proofpoint, Inc.

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