9 Feb 2016 07:00
Sophos Group plc
Trading Statement for the third quarter-ended 31 December 2015
Oxford, U.K., 9 February 2016 Sophos Group plc (the "Group" / LSE: SOPH), a leading provider of cloud enabled enduser and network security solutions, today issues its Trading Statement for the three-month period to31 December 2015.
Highlights
· Q3 like-for-like billings1,2 were up 17.4 percent year-over-year ("YOY") with growth across all major regions and product categories, notwithstanding stronger quarterly comparatives
· Reported billings grew 10.6 percent YOY, reflecting significant currency headwinds including the devaluation of the Euro and Sterling against the US Dollar
Q3 FY16 | Q3 FY15 | Growth | ||
$M | $M | Reported% | Like-for-like % | |
Non-GAAP measures: | ||||
Billings by Region: | ||||
- Americas | 46.2 | 38.9 | 18.8 | 16.0 |
- EMEA | 72.7 | 72.6 | 0.1 | 10.9 |
- APJ | 22.4 | 16.2 | 38.3 | 48.1 |
Billings | 141.3 | 127.7 | 10.6 | 17.4 |
Billings by Product: | ||||
- Network | 72.2 | 58.2 | 24.1 | 31.6 |
- Enduser | 62.7 | 62.0 | 1.1 | 8.0 |
- Other | 6.4 | 7.5 | -14.7 | -13.5 |
Billings | 141.3 | 127.7 | 10.6 | 17.4 |
Cash EBITDA3 | 34.8 | 33.0 | 5.5 | 16.3 |
GAAP measures: | ||||
Revenue4 | 121.4 | 115.9 | 4.7 | 11.9 |
· Q3 Reported revenue of $121.4M (Q3, FY15: $115.9M) up 4.7 percent YOY, 11.9 percent growth at constant currency
· Q3 Reported cash EBITDA of $34.8M (Q3, FY15: $33.0M) up 5.5 percent YOY, 16.3 percent growth at constant currency
· LTM weighted average contract length5 closed at 28.5 months, a modest increase on the prior-year comparative of 28.0 months following a small number of longer-term deals in Japan
Kris Hagerman, Chief Executive Officer, commented:
"Strong demand for comprehensive IT security continues to drive our business. We saw sustained growth across all regions in the third quarter and continue to grow faster than the market in both our network and enduser product groups. We also delivered on several important product development initiatives, including the first step of our vision for synchronized security with Sophos Security Heartbeat™, which directly links next-generation network security with next-generation endpoint security. We are pleased to reaffirm our full-year outlook of like-for-like billings growth in the high teens to 20 percent range. The strength we experienced in the first half has continued through the third quarter as we remain focused on our strategy to be the best in the world at delivering complete, enterprise-grade IT security for mid-market organizations and the channel partners that serve them."
Acquisitions
As previously reported, on 3 December 2015, the Group acquired, for a cash consideration of $31.8M, 100 percent of the share capital of SurfRight B.V., a leader in the prevention, detection and remediation of zero-day and sophisticated attacks. This acquisition, which had an insignificant impact on the results of the quarter, enables Sophos to integrate the SurfRight technology into its line of endpoint security solutions and further enhance the effectiveness of Sophos' synchronized security strategy.
Outlook
At the time of our first-half results announcement, we upgraded our outlook for FY16 like-for-like billings growth to be in the range of high teens to 20 percent. After an encouraging third quarter, with continued strong demand for our products across all regions and major product groups, we are now pleased to reaffirm this guidance. We remain confident that full-year cash EBITDA margins will be slightly in excess of the 21.3 percent achieved in the prior period.
About
The Sophos Group is a leading global provider of cloud-enabled enduser and network security solutions, offering organisations end-to-end protection against known and unknown IT security threats through products that are easy to install, configure, update and maintain. For further information please visit: www.sophos.com. The Group has over 30 years of experience in enterprise security and has built a portfolio of products that protects over 200,000 organisations and over 100 million endusers in 150 countries across a variety of industries.
Forward-looking Statements
Certain statements in this announcement constitute "forward-looking statements". These forward-looking statements involve risks, uncertainties and other factors that may cause the Group's actual results, performance or achievements, or industry results, to be materially different from those projected in the forward-looking statements. These factors include: general economic and business conditions; changes in technology; timing or delay in signing, commencement, implementation and performance or programmes, or the delivery of products or services under them; structural change in the security industry; relationships with customers; competition; and ability to attract personnel. You are cautioned not to rely on these forward-looking statements, which speak only as of the date of this announcement. The Group undertakes no obligation to update or revise any forward-looking statement to reflect any change in expectations or any change in events, conditions or circumstances.
Contact
Sophos Group plc Tel: +44 (0) 1235 559 933 Kris Hagerman, Chief Executive Officer Nick Bray, Chief Financial Officer | Brunswick Group Tel: +44 (0) 20 7404 5959 Sarah West Katie Ioanilli |
Management will be hosting an analyst conference call to discuss the Trading Statement at 08:30am London time; dial-in number +44 (0) 2071 928000, pin code: 35154223. A replay of the call will also be available for one week after the event on the Company's website.