In a remarkable turnaround, a prominent cyber security firm has reported substantial profits for the final quarter of 2018. This significant achievement marks a departure from the losses incurred in the same period the previous year.
The company’s impressive performance is attributed to a notable increase in subscription revenue and a growing customer base. However, despite this financial success, there are concerns regarding the firm’s future growth potential.
Financial Performance
The cyber security company reported a profit of $23.9 million for the last three months of 2018, a stark contrast to the $1.6 million operating loss experienced during the same period in 2017. This turnaround is largely due to a 15 per cent growth in subscription revenue.
Revenue and Billings Growth
Revenue for the nine-month period ending 31st December 2018 increased by 14 per cent. This growth contributed to an impressive 157 per cent leap in profitability, with the company generating a profit of $51 million compared to a loss of $25 million in 2017.
Despite these positive figures, the company experienced a modest 2 per cent growth in constant currency billings for both the three- and nine-month periods.
Market Response
Following the announcement of the firm’s financial results, shares in the company fell by 25 per cent. This decline was influenced by the company’s warning of tepid billings growth for the nine-month period ending 31st December.
The market’s reaction highlights concerns about continued subdued performance, despite the substantial profit growth.
Customer Base Expansion
The company has significantly expanded its customer base, adding more than 25,000 new customers in the year-to-date. This brings the total number of customers to 327,000.
The CEO expressed confidence in the company’s strengthening product platform and its strategic positioning for future growth.
Statements from Leadership
CEO Kris Hagerman stated, ‘The company remains strongly positioned from a technology, product, and strategic perspective. We are confident in our strengthening product platform and how it positions us for the future.’
Leadership’s optimistic outlook suggests that the company is focused on leveraging its current success to drive future growth.
Challenges Ahead
Despite the positive financial results, there are challenges on the horizon. The modest growth in constant currency billings and the market’s reaction to the financial report underscore the uncertainty surrounding future performance.
The company’s ability to sustain its profitability and continue its growth trajectory will be closely watched by investors and industry analysts.
In conclusion, the cyber security giant’s swing to profitability is a noteworthy achievement. However, concerns about future growth and market performance remain.
The company’s leadership remains optimistic, underscoring their confidence in the strategic positioning and the potential for continued success.