Proofpoint, Inc.
Oct 20, 2016

Proofpoint Announces Strong Third Quarter 2016 Financial Results

Non-GAAP Reconciliation Supplement Table

SUNNYVALE, Calif., Oct. 20, 2016 (GLOBE NEWSWIRE) -- Proofpoint, Inc. (NASDAQ:PFPT), a leading next-generation security and compliance company, today announced financial results for the third quarter ended September 30, 2016.

"The third quarter marked another great quarter for the company," stated Gary Steele, chief executive officer of Proofpoint.  "Our ability to exceed expectations across all key metrics was driven by the strong demand for our advanced threat solutions, ongoing high competitive win rates, robust add-on activity, and consistently high renewal rates.  The combination of our commitment to innovation, proven ability to enhance the company's next generation, cloud-based platform through recent acquisitions, and value we are creating with our expanding partner ecosystem, positions Proofpoint to maintain momentum for the remainder of the year and into 2017."

Third Quarter 2016 Financial Highlights

"Our strong third quarter results were highlighted by billings and revenue growth of 47% and 44% year-over-year, respectively," stated Paul Auvil, chief financial officer of Proofpoint.  "During the quarter, we were particularly pleased with our ability to exceed our profitability and free cash flow expectations while continuing to gain share globally."

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."

Third Quarter and Recent Business Highlights:

Financial Outlook

As of October 20, 2016, Proofpoint is providing guidance for its fourth quarter and increasing full year 2016 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 third quarter ended September 30, 2016.  To access this call, dial (800) 406-5356 for the U.S. or Canada and (913) 312-1422 for international callers with conference ID #3669528.  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 November 3, 2016, by dialing (877) 870-5176 for the U.S. or Canada or (858) 384-5517 for international callers, and entering passcode #3669528.

About Proofpoint, Inc.

Proofpoint, Inc. (NASDAQ:PFPT) is a leading next-generation security and compliance company that provides cloud-based solutions for comprehensive threat protection, incident response, secure communications, social media security, compliance, archiving and governance.  Organizations around the world depend on Proofpoint's expertise, patented technologies and on-demand delivery system. Proofpoint protects against phishing, malware and spam, while safeguarding privacy, encrypting sensitive information, and archiving and governing messages and critical enterprise information.  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 June 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.

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. 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 many 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. We believe that $0.3 million, exclusive of potential discrete items, is a reasonable estimate of the near-term non-GAAP quarterly tax expense under our current global operating structure.

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
September 30,
 Nine Months Ended
September 30,
 
    2016   2015   2016   2015  
Revenue:          
Subscription  $97,163  $67,223  $261,878  $184,857  
Hardware and services   2,621   1,926   6,813   5,601  
Total revenue   99,784   69,149   268,691   190,458  
Cost of revenue:(1)(2)          
Subscription   23,987   18,209   68,867    51,372  
Hardware and services   3,293    2,845   9,895   8,794  
Total cost of revenue   27,280   21,054   78,762   60,166  
Gross profit   72,504   48,095   189,929   130,292  
Operating expense:(1)(2)          
Research and development   24,493   20,000   70,734   54,367  
Sales and marketing   51,467   38,651   146,654   107,240  
General and administrative   8,393   9,961   41,996   25,789  
Total operating expense   84,353   68,612   259,384   187,396  
Operating loss   (11,849 )  (20,517)  (69,455)  (57,104) 
Interest expense   (5,920)  (5,903)  (17,529)  (12,088) 
Other expense, net   (228)  (375)  (528)  (1,635) 
Loss before provision for income taxes   (17,997)  (26,795)  (87,512)  (70,827) 
Provision for income taxes    (370)  (219)  (812)  (493) 
Net loss  $(18,367) $(27,014) $(88,324) $(71,320) 
Net loss per share, basic and diluted  $(0.44) $(0.67)  $(2.12) $(1.80) 
Weighted average shares outstanding, basic and diluted   42,109   40,072   41,604   39,536  
            
(1)  Includes stock‑based compensation expense as follows:           
Cost of subscription revenue  $2,080  $1,357  $5,439  $3,620  
Cost of hardware and services revenue   375   270    1,120   774  
Research and development   6,019   5,862   17,498   15,562  
Sales and marketing   7,174   5,469   20,710   15,495  
General and administrative   4,315   3,238    12,387   8,406  
Total stock-based compensation expense  $19,963  $16,196  $57,154  $43,857  
(2)  Includes intangible amortization expense as follows:          
Cost of subscription revenue  $2,223  $1,945  $6,458  $4,914  
Research and development    15   23   45   69  
Sales and marketing   1,429   1,242   3,938    3,839  
General and administrative   -   -   -   12  
Total intangible amortization expense  $3,667  $3,210  $10,441  $8,834  
           

 

Proofpoint, Inc.
Consolidated Balance Sheets
(In thousands, except per share amounts)
(Unaudited)
       
   September 30, December 31,  
    2016   2015  
Assets      
Current assets:      
Cash and cash equivalents  $374,182  $346,205  
Short-term investments   38,165   60,032  
Accounts receivable, net   69,167   54,522  
Inventory   430   485  
Deferred product costs    1,840   2,228  
Deferred commissions    18,822   19,314  
Prepaid expenses and other current assets   15,512   5,695  
Total current assets   518,118   488,481  
Property and equipment, net   47,715   34,501  
Deferred product costs   297   314  
Goodwill    140,282   133,769  
Intangible assets, net   43,089   41,330  
Long-term deferred commissions   3,613   3,488  
Other assets   5,720   3,733  
Total assets   $758,834  $705,616  
Liabilities and Stockholders' Equity      
Current liabilities:      
Accounts payable  $13,387  $14,081  
Accrued liabilities   45,315   35,053  
Capital lease obligations    33   32  
Deferred rent   558   496  
Deferred revenue    239,103   182,195  
Total current liabilities   298,396   231,857  
Convertible senior notes   361,215   345,699  
Long-term capital lease obligations   98   123  
Long-term deferred rent   1,869   2,033  
Other long-term liabilities   5,718   1,188  
Long-term deferred revenue   41,436   41,531  
Total liabilities   708,732   622,431  
       
Stockholders' equity      
       
Common stock, $0.0001 par value; 200,000 shares authorized at September 30, 2016 and December 31, 2015; 42,389 and 40,840 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively   4   4  
Additional paid-in capital   496,332   441,104  
Accumulated other comprehensive loss   (10)  (23) 
Accumulated deficit   (446,224)  (357,900) 
Total stockholders' equity   50,102   83,185  
Total liabilities and stockholders' equity  $758,834  $705,616  
       

 

Proofpoint, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
           
   Three Months Ended
September 30,
 Nine Months Ended
September 30,
 
    2016   2015   2016   2015  
Cash flows from operating activities          
Net loss   $  (18,367) $  (27,014) $  (88,324) $  (71,320) 
Adjustments to reconcile net loss to net cash provided by operating activities:          
Depreciation and amortization    8,092    6,513    22,713    17,940  
Loss on disposal of property and equipment    17    9     305    124  
Amortization of investment premiums, net of accretion of purchase discounts     17    (115)   52    91  
Recovery of allowance for doubtful accounts     (15)   (6)   (35)   (258) 
Stock‑based compensation    19,963    16,196    57,154    43,857  
Amortization of debt issuance costs and accretion of debt discount    5,248    4,949    15,516    9,911  
Foreign currency transaction loss    224    353    259    1,417  
Changes in assets and liabilities:          
Accounts receivable    (11,555)   5,806    (14,834)   3,273  
Inventory    (128)   (403)   55    (339) 
Deferred products costs    (31)   (137)   404    (478) 
Deferred commissions    (255)   (1,419)   366    (3,759) 
Prepaid expenses    (1,936)   (1,228)   (2,469)   (2,010) 
Other current assets     357    38    461    623  
Deferred income taxes    144    212    (23)   356  
Long-term assets    (3)   (64)   48    45  
Accounts payable    (3,053)   (2,998)   2,906    (2,173) 
Accrued liabilities    3,688    7,789    2,933     4,934  
Deferred rent    (91)   (108)   (103)   (329) 
Deferred revenue    24,970    15,815    55,613    36,381  
Net cash provided by operating activities    27,286    24,188    52,997    38,286  
Cash flows from investing activities          
Proceeds from sales and maturities of short-term investments    34,162    8,500    103,062    34,459  
Purchase of short-term investments    (27,491)   (48,078)   (81,233)   (48,078) 
Purchase of property and equipment    (9,333)   (7,700)   (25,527)   (18,127) 
Payment to escrow account     (9,645)   -     (9,645)   -   
Acquisitions of business, net of cash acquired    (8,351)   (8,430)   (8,351)   (40,054) 
Net cash used in investing activities    (20,658)   (55,708)   (21,694)   (71,800) 
Cash flows from financing activities          
Proceeds from issuance of common stock    4,811    2,205    15,146    11,881  
Withholding taxes related to restricted stock net share settlement    (4,443)   (4,029)   (17,015)   (12,456) 
Payments of debt issuance costs    -     (371)   -     (371) 
Proceeds from issuance of convertible senior notes
    -     -     -     223,790  
Repayments of equipment loans and capital lease obligations    (8)   (6)   (24)   (699) 
Holdback payments for prior acquisitions     -     -     (1,397)   -   
Net cash provided by (used in) financing activities    360    (2,201)   (3,290)   222,145  
Effect of exchange rate changes on cash and cash equivalents    (66)   (252)   (36)   (797) 
Net (decrease) increase in cash and cash equivalents    6,922    (33,973)   27,977     187,834  
Cash and cash equivalents          
Beginning of period    367,260    402,144    346,205    180,337  
End of period  $  374,182  $  368,171  $  374,182  $  368,171  
           

 

Reconciliation of Non-GAAP Measures 
(In thousands, except per share amounts) 
(Unaudited) 
            
    Three Months Ended   Nine Months Ended   
     September 30,   September 30,   
     2016   2015    2016   2015   
            
GAAP gross profit  $  72,504  $  48,095  $  189,929  $  130,292   
GAAP gross margin   73%  70%  71%  68%  
Plus:                   
Stock-based compensation expense     2,455     1,627     6,559     4,394    
Intangible amortization expense     2,223     1,945     6,458     4,914   
Non-GAAP gross profit     77,182     51,667     202,946     139,600   
Non-GAAP gross margin   77%  75%  76%  73%  
                     
GAAP operating loss   (11,849)  (20,517)  (69,455)  (57,104)  
Plus:           
Stock-based compensation expense     19,963     16,196     57,154     43,857   
Intangible amortization expense     3,667     3,210     10,441     8,834   
Acquisition-related expenses     464     190     586     551   
Litigation-related (income) expenses     (1,716)    1,404     12,941     2,532   
Non-GAAP operating income (loss)     10,529     483     11,667     (1,330)  
                    
GAAP net loss   (18,367)  (27,014)  (88,324)  (71,320)  
Plus:                   
Stock-based compensation expense   19,963   16,196   57,154   43,857   
Intangible amortization expense     3,667   3,210     10,441   8,834   
Acquisition-related expenses     464     190     586     551   
Litigation-related (income) expenses     (1,716)    1,404     12,941     2,532   
Interest expense - debt discount and issuance costs     5,248     4,949     15,516     9,911   
Income tax (expense) benefit     118     (24)    73      (209)  
Non-GAAP net income (loss)     9,377     (1,089)    8,387     (5,844)  
                    
Non-GAAP net income (loss) per share - diluted   $  0.19  $  (0.03) $  0.18  $  (0.15)  
                     
GAAP weighted-average shares used to compute net loss per share, diluted     42,109     40,072     41,604     39,536   
Weighted-average effect of potentially dilutive securities     11,966     -      3,820     -    
Non-GAAP weighted-average shares used to compute net income (loss) per share, diluted     54,075     40,072      45,424     39,536   
             
            
            
Reconciliation of Net Loss to Adjusted EBITDA 
(In thousands) 
(Unaudited) 
            
    Three Months Ended   Nine Months Ended   
    September 30,   September 30,   
    2016   2015   2016   2015   
            
Net loss  $  (18,367) $  (27,014) $  (88,324) $  (71,320)  
Depreciation     4,425     3,303     12,272     9,106   
Amortization of intangible assets     3,667     3,210     10,441     8,834   
Interest expense     5,920     5,903     17,529     12,088   
Provision for income taxes     370     219     812     493   
EBITDA  $  (3,985) $  (14,379) $  (47,270) $  (40,799)  
            
Stock-based compensation expense  $  19,963  $  16,196   $  57,154  $  43,857   
Acquisition-related expenses     464     190     586     551   
Litigation-related (income) expenses     (1,716)    1,404     12,941     2,532   
Other expense, net     228     375     528     1,635   
Adjusted EBITDA  $  14,954  $  3,786  $  23,939  $  7,776   
            
            
            
Reconciliation of Total Revenue to Billings 
(In thousands) 
(Unaudited) 
             
    Three Months Ended   Nine Months Ended   
    September 30,   September 30,   
    2016   2015   2016   2015   
            
Total revenue   $  99,784  $  69,149  $  268,691  $  190,458   
            
Deferred revenue           
Ending     280,539     199,756     280,539     199,756   
Beginning     254,370     183,941      223,726     162,675   
Net Change     26,169     15,815     56,813     37,081   
Less:           
Deferred revenue contributed by acquisitions     (1,200)    -      (1,200)    (700)  
Billings   $  124,753  $  84,964  $  324,304  $  226,839   
            

 

            
Reconciliation of GAAP Cash Flows from Operations to Free Cash Flows
(In thousands)
(Unaudited)
           
    Three Months Ended   Nine Months Ended  
    September 30,  September 30,  
    2016   2015   2016   2015  
           
GAAP cash flows provided by operating activities  $27,286  $24,188  $52,997  $38,286  
Less:           
Purchases of property and equipment   (9,333)  (7,700)  (25,527)  (18,127) 
Non-GAAP free cash flows  $17,953  $16,488  $27,470   $20,159  
           

 

           
Revenue by Solution 
(In thousands) 
(Unaudited) 
           
  Three Months Ended  
 September 30,
2016
 June 30, 2016  March 31, 2016 December 31,
2015
 September 30,
2015
 
           
Protection and Advanced Threat$72,664  $ 64,797  $56,462  $53,544  $47,920  
Archiving, Privacy and Governance 27,120   25,107   22,541   21,395   21,229  
Total revenue$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   Year Ending
   December 31,    December 31,   December 31, 
  2016 2016 2017
       
GAAP Net Loss $(26.3) - $(23.8) $(114.9) - $(112.3) $(121.2) - $(111.8)
Depreciation 4.9 - 4.6 17.2 - 16.9 25.0 - 24.0
Amortization of intangible assets 3.1 13.5 16.0 - 14.5
Interest expense 5.9 23.5 24.6 - 24.4
Provision for income taxes 0.5 - 0.4 1.4 - 1.3 1.8 - 1.6
EBITDA $(11.9) - $(9.8) $(59.3) - $(57.1) $(53.8) - $(47.3)
       
Stock-based compensation expense $22.0 - $21.5 $79.2 - $78.7 $103.0- $98.0
Acquisition-related expenses 0.4 1.0 -
Litigation-related expenses - 13.1 -
Other expense, net 0.5 - 0.4 1.0 - 0.8 0.3
Adjusted EBITDA $11.0 - $12.5 $35.0 - $36.5 $49.5 - $51.0
       
   Three Months Ending    Year Ending   Year Ending 
   December 31,   December 31,   December 31, 
  2016 2016 2017
       
GAAP net loss $(26.3) - $(23.8) $(114.9) - $(112.3) $(121.2) - $(111.8)
Plus:      
Stock-based compensation expense $22.0 - $21.5  $79.2 - $78.7 $103.0- $98.0
Intangible amortization expense 3.1 13.5 16.0 - 14.5
Acquisition-related expenses 0.4 1.0 -
Litigation-related expenses - 13.1 -
Interest expense - debt discount and issuance costs5.2 20.8 22.6 - 21.9
Income tax expense 0.1 0.3 - 0.2 0.6 - 0.4
Non-GAAP net income $4.5 - $6.5 $13.0 - $15.0 $21.0 - $23.0
Non-GAAP net income per share - diluted$0.10 - $0.14 $0.28 - $0.33 $0.45 - $0.49
Non-GAAP weighted-average shares used to compute net income per share, diluted 54.4 45.9 55.8
       
   Three Months Ending   Year Ending  Year Ending 
   December 31,   December 31,   December 31, 
  2016 2016 2017
       
GAAP cash flows provided by operating activities $18.0 - $22.5 $72.0 - $76.0 $130.0 - $142.0
Less:      
Purchases of property and equipment 6.5 - 9.0 33.0 - 35.0 40.0 - 42.0
Non-GAAP free cash flows $11.5 - $13.5 $39.0 - $41.0 $90.0 - $100.0
       


MEDIA CONTACT:

KRISTY CAMPBELL

PROOFPOINT, INC.

408-517-4710

KCAMPBELL@PROOFPOINT.COM



INVESTOR CONTACT:

SETH POTTER

ICR, INC. FOR PROOFPOINT, INC.

646-277-1230

SETH.POTTER@ICRINC.COM

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Source: Proofpoint, Inc.

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