SOURCE: FireEye

FireEye

February 11, 2016 16:01 ET

FireEye Reports Record Billings and Revenue for Fourth Quarter and Fiscal Year 2015

Expanding Platform Adoption Drives Record Annual Operating Cash Flow, While Recent iSIGHT Partners and Invotas Acquisitions Extend Addressable Market for 2016

MILPITAS, CA--(Marketwired - Feb 11, 2016) - FireEye, Inc. (NASDAQ: FEYE), the leader at stopping today's advanced cyber attacks, today announced financial results for the fourth quarter and fiscal year ended December 31, 2015.

"We made tremendous progress in 2015 on our multi-year journey to build the world's leading advanced threat management platform," said David DeWalt, FireEye chairman of the board and chief executive officer. "On a year-over-year basis, we grew billings 35 percent, increased revenue 46 percent, added nearly 1,200 new customers, and expanded our international presence. We also made progress on our path to profitability, generating record annual cash flow from operations and improved operating margins."

"These results reflect the powerful synergies that resulted from the combination of FireEye and Mandiant as we transformed our company and our industry. I am pleased to announce that, in recognition of the important role he has played in defining our intelligence-led security platform, Mandiant founder and FireEye President Kevin Mandia has been appointed to the FireEye board of directors," added DeWalt. "Our recent acquisitions of iSIGHT and Invotas further extend our platform and expand our addressable market, and I'm looking forward to working with Kevin, the rest of the board, and the entire FireEye team as we continue to reimagine cyber security."

Fourth Quarter 2015 Financial Results

  • Revenue of $184.8 million, an increase of 29 percent from the fourth quarter of 2014.
  • Billings of $256.9 million, an increase of 21 percent from the fourth quarter of 2014.1
  • GAAP operating margin of negative 67 percent, compared to negative 80 percent in the fourth quarter of 2014.
  • Non-GAAP operating margin of negative 28 percent, compared to negative 40 percent in the fourth quarter of 2014.1
  • GAAP net loss per share of $0.87, compared to a GAAP net loss per share of $0.72 in the fourth quarter of 2014.
  • Non-GAAP net loss per share of $0.36, compared to a non-GAAP net loss per share of $0.38 in the fourth quarter of 2014.1
  • Positive cash flow from operations of $9.4 million, an improvement of $9.7 million compared to cash used by operations of $0.3 million in the fourth quarter of 2014.

2015 Financial Results

  • Revenue of $623.0 million, an increase of 46 percent from 2014.
  • Billings of $797.4 million, an increase of 35 percent from 2014.1
  • Current deferred revenue of $305.2 million, an increase of $101.3 million, or 50 percent, from the end of 2014.
  • Total deferred revenue of $527.0 million, an increase of $174.5 million, or 49 percent, from the end of 2014.
  • GAAP operating margin of negative 81 percent, compared to negative 113 percent in 2014.
  • Non-GAAP operating margin of negative 38 percent, compared to negative 65 percent in 2014.1
  • GAAP net loss per share of $3.50, compared to a GAAP net loss per share of $3.12 in 2014.
  • Non-GAAP net loss per share of $1.61, compared to a non-GAAP net loss per share of $1.97 in 2014.1
  • Positive cash flow from operations of $37.0 million, an improvement of $168.3 million compared to cash used by operations of $131.3 million in 2014.

1 A reconciliation of GAAP to non-GAAP financial measures is provided in the financial statement tables included in this press release. An explanation of these measures is also included under the heading "Non-GAAP Financial Measures."

"We achieved a significant milestone on our path to profitability, with positive operating cash flow of $37.0 million for the year as billings growth exceeded growth in non-GAAP operating expenses," said Michael Berry, FireEye senior vice president and chief financial officer. "Based on our 2016 guidance for billings and non-GAAP operating expenses, and anticipated capital expenditures, we expect to achieve positive operating and free cash flow for the year."

First Quarter and 2016 Outlook
FireEye provides guidance based on current market conditions and expectations.

For the first quarter of 2016, FireEye expects:

  • Total revenue in the range of $167 to $177 million.
  • Non-GAAP billings in the range of $163 to $183 million.
  • Non-GAAP operating margin in the range of negative 40 to negative 47 percent of revenue.
  • Non-GAAP net loss per share of $0.49 to $0.53.

Non-GAAP net loss per share for the first quarter assumes interest expense of $3 million associated with the company's convertible senior notes, income taxes between $1 and $2 million and shares outstanding of approximately 158 million.

For 2016, FireEye expects:

  • Total revenue in the range of $815 to $845 million.
  • Non-GAAP billings in the range of $975 to $1,055 million.
  • Non-GAAP operating margin in the range of negative 22 to negative 24 percent of revenue.
  • Non-GAAP net loss per share of $1.25 to $1.32.
  • Positive cash flow from operations in the range of $70 to $80 million.
  • Capital expenditures on property and equipment of approximately $50 million.

Non-GAAP net loss per share for 2016 assumes interest expense of $12.0 million associated with the company's convertible senior notes, income taxes between $4.0 and $8.0 million and shares outstanding of approximately 162 million.

Guidance for non-GAAP financial measures excludes stock based compensation, amortization of intangible assets, non-cash interest expense related to the company's convertible senior notes, and other non-recurring expenses. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis as a result of the uncertainty regarding, and the potential variability of, the amounts of stock-based compensation expense, amortization of intangible assets, and other non-recurring expenses that may be incurred in the future.

Business Highlights
FireEye continues to enhance its Global Threat Management Platform and expand its addressable market with product introductions, enhancements and innovations. Business highlights since the release of third quarter 2015 financial results on November 4, 2015, included:

  • The acquisition of privately held iSIGHT Partners, one of the world's leading providers of cyber threat intelligence to global enterprises. The acquisition expands the FireEye threat intelligence infrastructure, with the addition of a global network of experts who monitor a broad range of threat actors and threat development in 17 countries and 29 languages.

  • The acquisition of privately held Invotas International Corporation, a provider of security automation and orchestration technology. FireEye will leverage the technologies of Invotas® Security Orchestrator to unify cyber attack detection results, threat intelligence and incident response elements of an organization's security program into a single console, giving enterprises the ability to respond more quickly to attacks through automation.

  • The expansion of the FireEye Global Threat Management Platform with the introduction of two new editions -- FireEye Power™ and FireEye Essentials™ -- which offer high quality FireEye threat detection and response solutions tailored for organizations at different stages in their security maturity.

Recent accolades and awards for FireEye's technology and security solutions included:

  • Recognition as the fastest growing cyber security firm in North America in Deloitte's 2015 Technology Fast 500™, with revenue growth of nearly 1,165 percent from 2011 through 2014.

  • Selection as a CDW 2015 Partner of the Year for providing exemplary products, programs, services and support to CDW and its customers throughout the year.

  • Top position in the Cybersecurity 500 ranking, published by Cybersecurity Ventures, for the fourth consecutive quarter.

FireEye continued to expand its market by offering the risk reduction benefits of its Global Threat Management Platform through innovative new partnerships and strategic alliances, including:

  • Enhancements to the FireEye Fuel partner program designed to increase partner go-to-market opportunities with the new Power and Essentials platform editions and help partners expand their security practices with new products, services and threat intelligence offerings.

  • An agreement with Ingram Micro Inc. to market, sell and support FireEye security products throughout the United States and Canada, making FireEye's advanced threat management platform available to thousands of Ingram Micro channel partners who purchase or specialize in security solutions.

  • A strategic partnership with technology-driven engineering firm Parsons to provide customers with enhanced protection for industrial control systems (ICS) through advanced technologies, intelligence and services aimed at reducing risk and strengthening overall security postures.

Kevin Mandia Appointed to FireEye Board of Directors
FireEye announced the appointment of Kevin Mandia, FireEye president and founder of Mandiant, to the FireEye board of directors, effective February 9, 2016. Mandia joined FireEye when FireEye acquired Mandiant, a leading provider of advanced endpoint security products and security incident response management solutions, in December 2013.

Enrique Salem Appointed as Lead Independent Director
FireEye also announced the appointment of Enrique Salem, an independent director of the company, to serve as the lead independent director of the FireEye board of directors. A FireEye board member since February 2013, Salem is a managing director of Bain Capital Ventures and was previously president, chief executive officer and a director of Symantec Corporation.

Conference Call Information
FireEye will host a conference call today, February 11, 2016, at 5 p.m. Eastern time (2 p.m. Pacific time) to discuss its fourth quarter and 2015 financial results and the company's outlook for 2016. Interested parties may access the conference call by dialing 877-312-5521 (domestic) or 678-894-3048 (international). A live audio webcast of the call, as well as related multi-media content, can be accessed from the Investor Relations section of the company's website at http://investors.fireeye.com. Shortly after the conclusion of the call, an archived version of the webcast will be available at the same website.

Forward-Looking Statements
This press release contains forward-looking statements, including statements related to future revenue, billings, non-GAAP operating margins, interest expense, non-GAAP net loss per share, weighted average shares outstanding, operating cash flow, and capital expenditures on property and equipment in the section entitled "First Quarter and 2016 Outlook" above, as well as statements related to FireEye's path to profitability, the continued momentum in FireEye's business and its threat prevention platform, the expanding market for FireEye's products and services, FireEye's competitive position, FireEye's ability to expand its leadership, market share gains and, as a result of its recent acquisitions, its product and service offerings, and the capabilities of partnership offerings and jointly-developed solutions.

These forward-looking statements involve risks and uncertainties, as well as assumptions which, if they do not fully materialize or prove incorrect, could cause FireEye's results to differ materially from those expressed or implied by such forward-looking statements. The risks and uncertainties that could cause FireEye's results to differ materially from those expressed or implied by such forward-looking statements include customer demand and adoption of FireEye's products and services; FireEye's limited operating history, particularly as a public company; real or perceived defects, errors or vulnerabilities in FireEye's products or services; FireEye's ability to react to trends and challenges in its business and the markets in which it operates; FireEye's ability to anticipate market needs or develop new or enhanced products and services to meet those needs; the failure to achieve expected synergies and efficiencies of operations between FireEye and its acquired companies; the ability of FireEye and its acquired companies to successfully integrate their respective market opportunities, technology, products, personnel and operations; FireEye's ability to hire and retain critical executives and key employees; FireEye's ability to attract new and retain existing customers and expand and train its sales force; the budgeting cycles, seasonal buying patterns and length of FireEye's sales cycle; risks associated with FireEye's rapid growth; the ability of FireEye and its partners to execute their strategies, plans, objectives and expected investments with respect to FireEye's partnerships; and general market, political, economic, and business conditions, as well as those risks and uncertainties included under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in FireEye's Form 10-Q filed with the Securities and Exchange Commission on November 5, 2015, which should be read in conjunction with these financial results and is available on the Investor Relations section of FireEye's website at investors.fireeye.com and on the SEC website at www.sec.gov.

All forward-looking statements in this press release are based on information available to the company as of the date hereof, and FireEye does not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made. Any future product, service, feature, or related specification that may be referenced in this release is for informational purposes only and is not a commitment to deliver any offering, technology or enhancement. FireEye reserves the right to modify future product or service plans at any time.

Non-GAAP Financial Measures
In this release FireEye has provided financial information that has not been prepared in accordance with generally accepted accounting principles in the United States (GAAP). These non-GAAP financial measures are not based on any standardized methodology and are not necessarily comparable to similar measures used by other companies. The company uses these non-GAAP financial measures internally in analyzing its financial results and believes that the use of these non-GAAP financial measures is useful to investors as an additional tool to evaluate ongoing operating results and trends, and in comparing the company's financial results with other companies in its industry, many of which present similar non-GAAP financial measures.

Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable financial information prepared in accordance with GAAP, and should be read only in conjunction with the company's consolidated financial statements prepared in accordance with GAAP. A reconciliation of the company's non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included in this press release, and investors are encouraged to review the reconciliation.

Billings. FireEye defines billings as revenue recognized plus the change in deferred revenue from the beginning to the end of the period. The company considers billings to be a useful metric for management and investors because billings drive deferred revenue balances, which are an important indicator of the health and visibility of the company's business. Revenue recognized from deferred revenue represents a significant percentage of quarterly revenue. There are a number of limitations related to the use of billings versus revenue calculated in accordance with GAAP. First, billings include amounts that have not yet been recognized as revenue. Second, FireEye's calculation of billings may be different from other companies in its industry, some of which may not use billings, may calculate billings differently, may have different billing frequencies, or may use other financial measures to evaluate their performance, all of which could reduce the usefulness of billings as a comparative measure. FireEye compensates for these limitations by providing specific information regarding GAAP revenue and evaluating billings together with revenue calculated in accordance with GAAP.

Non-GAAP operating margin, net loss and net loss per share. FireEye defines non-GAAP operating margin as operating loss excluding stock-based compensation expense, amortization of intangible assets, acquisition related expenses, restructuring charges and other special or non-recurring items, divided by total revenue. FireEye defines non-GAAP net loss as net loss excluding stock-based compensation expense, amortization of intangible assets, acquisition-related expenses, non-cash interest expense related to the company's convertible senior notes, restructuring charges and discrete tax benefits. FireEye defines non-GAAP net loss per share as non-GAAP net loss divided by the weighted average shares outstanding. Additionally, weighted average shares outstanding used to calculate non-GAAP net loss per share excludes stock options, restricted stock units and performance stock units that are anti-dilutive.

Non-GAAP net loss and net loss per share in the fourth quarter 2015 excluded stock-based compensation expense, amortization of intangible assets, non-cash interest expense related to the convertible senior notes issued in June 2015, and acquisition related expenses. Non-GAAP net loss and net loss per share for the fourth quarter of 2014 excluded stock-based compensation expense, amortization of intangible assets, discrete tax benefits related to the acquisition of Mandiant, and restructuring costs.

Non-GAAP net loss and net loss per share for 2015 excluded stock-based compensation expense, amortization of intangible assets, non-cash interest expense related to the convertible senior notes issued in June 2015, and acquisition related expenses. Non-GAAP net loss and net loss per share in 2014 excluded stock-based compensation expense, amortization of intangible assets, acquisition related expenses, discrete tax benefits related to the acquisition of Mandiant, and restructuring costs.

FireEye considers these non-GAAP financial measures to be useful metrics for management and investors because they exclude the effect of stock-based compensation expense, amortization of intangible assets, acquisition related expenses, non-cash interest expense related to the company's convertible senior notes, restructuring charges, and other non-recurring and discrete items so that management and investors can compare the company's "core business operating results," over multiple periods.

There are a number of limitations related to the use of these non-GAAP financial measures versus their nearest GAAP equivalents. First, these non-GAAP financial measures exclude stock-based compensation expense. Stock-based compensation expense has been and will continue to be for the foreseeable future a significant recurring expense in the company's business. Stock-based compensation is an important part of FireEye employees' overall compensation. Second, the components of the costs that FireEye excludes in its calculation of these non-GAAP financial measures, including not only stock-based compensation but also non-recurring items such as acquisition related expenses, amortization of intangible assets, non-cash interest expense related to the company's convertible senior notes, restructuring charges, and discrete tax benefits, may differ from the components excluded by peer companies when they report their non-GAAP results of operations. FireEye compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP financial measures and evaluating non-GAAP financial measures together with their nearest GAAP equivalents.

About FireEye, Inc.
FireEye has invented a purpose-built, virtual machine-based security platform that provides real-time threat protection to enterprises and governments worldwide against the next generation of cyber attacks. These highly sophisticated cyber attacks easily circumvent traditional signature-based defenses, such as next-generation firewalls, IPS, anti-virus, and gateways. The FireEye Threat Prevention Platform provides real-time, dynamic threat protection without the use of signatures to protect an organization across the primary threat vectors and across the different stages of an attack life cycle. The core of the FireEye platform is a virtual execution engine, complemented by dynamic threat intelligence, to identify and block cyber attacks in real time. FireEye has over 4,400 customers across 67 countries, including more than 680 of the Forbes Global 2000.

© 2016 FireEye, Inc. All rights reserved. FireEye, iSIGHT, Invotas, Power, Essentials and Mandiant are registered trademarks or trademarks of FireEye, Inc. in the United States and other countries. All other brands, products, or service names are or may be trademarks or service marks of their respective owners.

   
FireEye, Inc.  
CONDENSED CONSOLIDATED BALANCE SHEETS  
(Unaudited, in thousands)  
   
           
  December 31,     December 31,  
  2015     2014  
               
Assets              
Current assets:              
  Cash and cash equivalents $ 402,102     $ 146,363  
  Short-term investments   767,775       255,845  
  Accounts receivable, net   172,752       193,182  
  Inventories   13,747       7,952  
  Deferred tax assets, current portion   -       25,126  
  Prepaid expenses and other current assets   30,883       28,669  
    Total current assets   1,387,259       657,137  
               
Property and equipment, net   78,368       82,298  
Goodwill   750,288       750,288  
Intangible assets, net   214,560       261,625  
Deposits and other long-term assets   10,998       7,533  
      Total assets $ 2,441,473     $ 1,758,881  
               
Liabilities and Stockholders' Equity              
Current liabilities:              
  Accounts payable $ 43,650     $ 34,057  
  Accrued and other current liabilities   29,820       24,596  
  Accrued compensation   79,294       64,551  
  Deferred revenue, current portion   305,169       203,877  
    Total current liabilities   457,933       327,081  
               
Convertible senior notes, net   706,198       -  
Deferred revenue, non-current portion   221,829       148,666  
Deferred tax liabilities, non-current portion   -       24,903  
Other long-term liabilities   11,141       7,403  
    Total liabilities   1,397,101       508,053  
               
Stockholders' equity:              
  Common stock   16       15  
  Additional paid-in capital   2,403,088       1,918,546  
  Treasury stock   (150,000 )     -  
  Accumulated other comprehensive loss   (2,225 )     (441 )
  Accumulated deficit   (1,206,507 )     (667,292 )
        Total stockholders' equity   1,044,372       1,250,828  
        Total liabilities and stockholders' equity $ 2,441,473     $ 1,758,881  
                       
                       
                 
FireEye, Inc.  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
(Unaudited, in thousands, except per share amounts)  
                       
                 
  Three Months Ended     Twelve Months Ended  
  December 31,     December 31,  
  2015     2014     2015     2014  
                               
Revenue:                              
  Product $ 66,598     $ 67,936     $ 216,632     $ 178,246  
  Subscription and services   118,176       75,046       406,335       247,416  
    Total revenue   184,774       142,982       622,967       425,662  
                               
Cost of revenue: (1)(2)                              
  Product   20,915       19,465       74,481       58,980  
  Subscription and services   42,260       33,827       158,723       116,113  
    Total cost of revenue   63,175       53,292       233,204       175,093  
                               
Total gross profit   121,599       89,690       389,763       250,569  
                               
Operating expenses: (1)(2)                              
  Research and development   71,690       53,102       279,467       203,187  
  Sales and marketing   135,432       118,081       476,166       401,151  
  General and administrative (3)   37,978       31,949       141,790       121,099  
  Restructuring Charges (4)   -       1,558       -       4,327  
    Total operating expenses   245,100       204,690       897,423       729,764  
                               
Operating loss   (123,501 )     (115,000 )     (507,660 )     (479,195 )
                               
Other expense, net (5)   (11,097 )     (670 )     (27,465 )     (1,249 )
Loss before income taxes   (134,598 )     (115,670 )     (535,125 )     (480,444 )
Provision for (benefit from) income taxes (6)   1,550       (9,944 )     4,090       (36,654 )
Net loss attributable to common stockholders $ (136,148 )   $ (105,726 )   $ (539,215 )   $ (443,790 )
                               
Net loss per share attributable to common stockholders, basic and diluted $ (0.87 )   $ (0.72 )   $ (3.50 )   $ (3.12 )
                               
Weighted average shares used in per share calculations, basic and diluted   156,137       147,746       154,120       142,176  
                               
                               
     
FireEye, Inc.  
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS  
(Unaudited, in thousands)  
           
     
  Twelve Months Ended  
December 31,  
  2015     2014  
CASH FLOWS FROM OPERATING ACTIVITIES:              
  Net loss $ (539,215 )   $ (443,790 )
  Adjustments to reconcile net loss to net cash provided by (used in) operating activities:              
    Depreciation and amortization   111,956       94,136  
    Stock-based compensation expense   222,432       151,852  
    Non-cash interest expense related to convertible senior notes   20,069       -  
    Deferred income taxes   (1,353 )     (39,869 )
    Other   4,672       2,261  
  Changes in operating assets and liabilities, net of assets acquired and liabilities assumed in business combinations:              
    Accounts receivable   19,126       (97,165 )
    Inventories   (7,820 )     (2,024 )
    Prepaid expenses and other assets   (675 )     1,450  
    Accounts payable   7,705       (3,193 )
    Accrued liabilities   7,495       11,403  
    Accrued compensation   14,429       23,658  
    Deferred revenue   174,455       164,728  
    Other long-term liabilities   3,739       5,283  
      Net cash provided by (used in) operating activities   37,015       (131,270 )
CASH FLOWS FROM INVESTING ACTIVITIES:              
  Purchase of property and equipment and demonstration units   (54,549 )     (67,715 )
  Purchase of short-term investments   (769,097 )     (390,360 )
  Maturities of short-term investments   249,923       131,118  
  Acquisition of business, net of cash acquired   -       (55,058 )
  Purchase of investment in private company   (1,800 )     -  
  Lease deposits   (1,226 )     (496 )
      Net cash used in investing activities   (576,749 )     (382,511 )
CASH FLOWS FROM FINANCING ACTIVITIES:              
  Net proceeds from follow-on public offering   -       444,338  
  Net proceeds from convertible debt offering   896,530       -  
  Prepaid forward stock purchase   (150,000 )     -  
  Proceeds from exercise of equity awards   48,943       41,888  
        Net cash provided by financing activities   795,473       486,226  
Net change in cash and cash equivalents   255,739       (27,555 )
Cash and cash equivalents, beginning of year   146,363       173,918  
Cash and cash equivalents, end of year $ 402,102     $ 146,363  
               
               
               
FireEye, Inc.  
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES  
(Unaudited, in thousands, except per share amounts)  
                       
                       
  Three Months Ended     Twelve Months Ended  
  December 31,     December 31,  
  2015     2014     2015     2014  
                               
GAAP operating loss $ (123,501 )   $ (115,000 )   $ (507,660 )   $ (479,195 )
Stock-based compensation expense (1)   57,780       45,245       222,431       151,852  
Amortization of intangible assets (2)   11,766       11,689       47,064       45,152  
Acquisition related expenses (3)   1,431       -       1,431       1,559  
Restructuring charges (4)   -       1,558       -       4,327  
Non-GAAP operating loss $ (52,524 )   $ (56,508 )   $ (236,734 )   $ (276,305 )
                               
GAAP operating margin   -67 %     -80 %     -81 %     -113 %
Stock-based compensation expense (1)   31 %     32 %     36 %     36 %
Amortization of intangible assets (2)   6 %     8 %     8 %     11 %
Acquisition related expenses (3)   1 %     0 %     0 %     0 %
Restructuring charges (4)   0 %     1 %     0 %     1 %
Non-GAAP operating margin   -28 %     -40 %     -38 %     -65 %
                               
GAAP net loss $ (136,148 )   $ (105,726 )   $ (539,215 )   $ (443,790 )
Stock-based compensation expense (1)   57,780       45,245       222,431       151,852  
Amortization of intangible assets (2)   11,766       11,689       47,064       45,152  
Acquisition related expenses (3)   1,431       -       1,431       1,559  
Restructuring charges (4)   -       1,558       -       4,327  
Non-cash interest expense related to convertible senior notes (5)   8,672       -       20,069       -  
Non-recurring benefit from income taxes (6)   -       (9,373 )     -       (39,472 )
Non-GAAP net loss $ (56,499 )   $ (56,607 )   $ (248,220 )   $ (280,372 )
                               
GAAP net loss per common share, basic and diluted $ (0.87 )   $ (0.72 )   $ (3.50 )   $ (3.12 )
Stock-based compensation expense (1)   0.37       0.31       1.44       1.07  
Amortization of intangible assets (2)   0.08       0.08       0.31       0.32  
Acquisition related expenses (3)   0.01       -       0.01       0.01  
Restructuring charges (4)   -       0.01       -       0.03  
Non-cash interest expense related to convertible senior notes (5)   0.06       -       0.13       -  
Non-recurring benefit from income taxes (6)   -       (0.06 )     -       (0.28 )
Non-GAAP net loss per common share, basic and diluted $ (0.36 )   $ (0.38 )   $ (1.61 )   $ (1.97 )
                               
Weighted average shares used in per share calculations for GAAP and Non-GAAP, basic and diluted   156,137       147,746       154,120       142,176  
                               
(1) includes stock-based compensation expense as follows:                              
Cost of product revenue $ 374     $ 263     $ 1,588     $ 888  
Cost of subscription and services revenue   7,673       6,583       29,435       17,037  
Research and development   16,917       8,914       68,329       28,968  
Sales and marketing   18,862       19,619       73,286       66,773  
General and administrative   13,954       9,866       49,793       38,186  
  Total stock-based compensation expense $ 57,780     $ 45,245     $ 222,431     $ 151,852  
                               
(2) includes amortization of intangible assets as follows:                              
Cost of product revenue $ 3,064     $ 2,987     $ 12,256     $ 10,942  
Cost of subscription and services revenue   5,475       5,475       21,900       21,659  
Sales and marketing   3,227       3,227       12,908       12,551  
  Total amortization of intangible assets $ 11,766     $ 11,689     $ 47,064     $ 45,152  
                               
(3) includes acquisition related expenses as follows:                              
General and administrative $ 1,431     $ -     $ 1,431     $ 1,559  
                               
(4) includes restructuring charges as follows:                              
Restructuring charges $ -     $ 1,558     $ -     $ 4,327  
                               
(5) Includes non-cash interest expense related to convertible senior notes as follows:                              
Other expense, net $ 8,672     $ -     $ 20,069     $ -  
                               
(6) includes discrete benefit from income taxes as follows:                              
Provision for (benefit from) income taxes $ -     $ (9,373 )   $ -     $ (39,472 )
           
           
           
FireEye, Inc.
RECONCILIATION OF NON-GAAP BILLINGS TO REVENUE
(Unaudited, in thousands)
           
  Three Months Ended   Twelve Months Ended
  December 31,   December 31,
  2015   2014   2015   2014
                       
GAAP revenue $ 184,774   $ 142,982   $ 622,967   $ 425,662
  Add change in deferred revenue   72,131     69,622     174,455     165,029
Non-GAAP billings $ 256,905   $ 212,604   $ 797,422   $ 590,691
                       
                       
FireEye, Inc.
BILLINGS BREAKOUT
(Unaudited, in thousands)
               
  Three Months Ended   Twelve Months Ended
  December 31,   December 31,
  2015   2014   2015   2014
                       
Product billings $ 66,379   $ 67,554   $ 212,233   $ 173,323
Product subscription billings   108,701     80,242     327,372     233,688
Product billings and product subscription billings   175,080     147,796     539,605     407,011
Support and maintenance billings   47,790     39,796     137,447     104,790
Professional services billings   34,035     25,012     120,370     78,890
Non-GAAP billings $ 256,905   $ 212,604   $ 797,422   $ 590,691
                       
             
FireEye, Inc.
REVENUE BREAKOUT
(Unaudited, in thousands)
               
  Three Months Ended   Twelve Months Ended
  December 31,   December 31,
  2015   2014   2015   2014
                       
Product revenue $ 66,598   $ 67,936   $ 216,632   $ 178,246
Product subscription revenue   59,825     38,320     205,303     121,907
Product revenue and product subscription revenue   126,423     106,256     421,935     300,153
Support and maintenance revenue   26,042     16,583     89,800     53,406
Professional services revenue   32,309     20,143     111,232     72,103
Total revenue $ 184,774   $ 142,982   $ 622,967   $ 425,662