Sophos Group plc Interim results for the period-ended 30 September 2017
November 08 2017 - 9:00AM
Sophos Group plc (the “Group”) (LSE:SOPH), a leading provider of
cloud enabled enduser and network security solutions, today issues
its interim results for the six-months to 30 September 2017 (“H1”).
Financial and operational highlights
- Strong cash generation, reflecting both a strong operating
performance and good cash management- Net cash from
operations increased by 28% to $80.7 million, and unlevered free
cash flow1 grew 15% to $71.4 million
- Billings2 momentum strengthened further with growth of 22% in
H1 and 29% in Q2- Enduser delivered 39% growth in H1,
principally driven by Intercept X and Sophos
Central- Sophos Central grew more than 220% to $78.5
million in H1- Accelerating momentum in Network with
billings up 16% in Q2 driving a 10% increase in H1- Good
growth in all regions, with 25% growth in the Americas, 22% in EMEA
and 17% in APJ- Steady pace of new customer additions,
with over 280,000 customers at the end of September, compared to
240,000 a year ago and 260,000 at the prior year-end
- Subscription business further supporting long-term visibility
and sustainable growth- Revenue growth of 16% in H1 with
subscription revenue up 21%- Deferred revenue increased
by 28% over the prior-year to $654.4 million, with $372.3 million
of the balance due for recognition in less than one year (up 27% on
prior-year)
- Further progress toward margin expansion over
time- Cash EBITDA3 up 31% in H1, with margins up 130
bps- Adjusted operating profit4 declined to $15.1
million in H1, reflecting upfront costs associated with the strong
subscription billings performance, and a negative foreign exchange
charge; on a GAAP basis operating loss improved slightly to $23.8
million
- Raising FY18 outlook- For FY18 we now expect 20-22%
billings growth with a 50-100 bps improvement in Cash EBITDA margin
and modest growth in unlevered free cash flow
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Financial highlights |
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H1, FY18 |
|
H1, FY17 |
|
Increase/(decrease) |
|
GAAP
measures |
$M |
|
$M |
|
% |
|
Revenue |
298.1 |
|
256.9 |
|
16.0 |
|
Operating loss |
(23.8 |
) |
(24.6 |
) |
(3.3 |
) |
Net cash flow from
operating activities |
80.7 |
|
63.3 |
|
27.5 |
|
Non GAAP
measures |
|
|
|
Billings |
341.5 |
|
279.8 |
|
22.1 |
|
Cash EBITDA |
66.6 |
|
50.9 |
|
30.8 |
|
Adjusted operating
profit |
15.1 |
|
21.5 |
|
(29.8 |
) |
Unlevered free cash
flow |
71.4 |
|
62.2 |
|
14.8 |
|
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Kris Hagerman, Chief Executive Officer,
commented:“We continued to see strong momentum for our
industry-leading cybersecurity solutions, across all regions and
product areas, particularly in the Enduser segment where we are
establishing a market-leading position in the high-growth new
segment of next-generation endpoint. We continue to offer
cutting-edge technology, with robust third-party validation, that
is easy to deploy and manage, through a single cloud console.
We also saw solid demand in Network security, with improved growth
rates in Q2 versus Q1. We view the second half with
confidence, and we are raising our outlook for billings and
unlevered free cash flow for the full year.”
Please see the full results on the Sophos Investor website.
AboutThe 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 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 280,000 organisations and
over 100 million endusers in 150 countries, across a variety of
industries.
Forward-looking statementsCertain 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 |
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Sophos Group
plc Tel: +44 (0) 1235 559 933Kris Hagerman, Chief
Executive OfficerNick Bray, Chief Financial OfficerDerek Brown, VP
Investor Relations |
Financial Public
RelationsTulchan Communications Tel: +44 (0) 20 7353
4200 |
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- Unlevered free cash flow represents Cash EBITDA less purchases
of property, plant and equipment and intangibles, plus cash flows
in relation to changes in working capital and taxation.
- Billings represent the value of products and services invoiced
to customers after receiving a purchase order from the customer and
delivering products and services to them, or for which there is no
right to a refund. Billings does not equate to statutory
revenue.
- Cash earnings before interest, taxation, depreciation and
amortisation (“Cash EBITDA”) is defined as the Group’s operating
(loss)/ profit adjusted for depreciation and amortisation charges,
any gain or loss on the sale of tangible and intangible assets,
share option charges, unrealised foreign exchange differences and
exceptional items, with billings replacing recognised revenue.
- Adjusted operating profit represents the Group’s operating
profit / (loss) adjusted for amortisation charges, share option
charges and exceptional items.
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