FireEye Names Mandia as CEO; Its Loss Widens
Revenue is at low end of its expectations, and the cybersecurity company cut its sales view for the year
By Tess Stynes
The Wall Street Journal
May 5, 2016 5:34 p.m. ET
FireEye Inc. reported a wider loss for the first quarter and named Kevin Mandia as its new chief executive.
Shares fell 8% to $14.70 in recent after-hours trading as the cybersecurity company also projected a wider loss for the second quarter than analysts had feared and revenue that missed Wall Street’s view.
Revenue in the latest quarter was at the low end of its expectations, and the company cut its sales view for the year.
Mr. Mandia has been the company’s chief operating officer since late 2013, when FireEye acquired Mandiant, which he founded in 2004. He will take the helm at FireEye on June 15.
Current Chairman and Chief Executive David DeWalt will become executive chairman. Mr. DeWalt has been CEO since November 2012 and chairman since May of that year.
The Milpitas, Calif., company lowered 2016 revenue guidance to $780 million to $810 million, down from its previous estimate for revenue of $815 million to $845 million.
For the second quarter, the company forecast a per-share loss of 38 cents to 40 cents and revenue of $178 million to $185 million. Analysts polled by Thomson Reuters expected a per-share loss of 36 cents and revenue of $193 million.
FireEye’s main business is selling software to large organizations to detect malicious computer code, or malware. Where FireEye tries to prevent attacks with its software, its Mandiant unit, acquired in late 2013, has focused on investigating security breaches that have occurred.
In January, FireEye expanded its offerings with its $200 million acquisition of iSight Partners Inc., a Dallas company that hires intelligence agents abroad to try to spot cyberattacks before they happen. In February, FireEye added closely held Invotas International Corp., a provider of security automation technology that helps security teams identify and respond to threats more quickly.
Though FireEye, which went public in 2013, has continued to log increases in revenue and billings, the company’s spending has also grown as it has expanded. During its March analyst meeting, FireEye said it is aiming for profitability in the second half of 2017.
Over all, FireEye reported a first-quarter loss of $155.9 million, or 98 cents a share, compared with a year-earlier loss of $134 million, or 88 cents a share, a year earlier. Excluding items, the adjusted per-share loss was 47 cents, compared with a year-earlier per-share loss of 48 cents.
Revenue increased 34% to $168 million.
The company expected an adjusted per-share loss of 49 cents to 53 cents and revenue of $167 million to $177 million.
Among other leadership changes unveiled Thursday, FireEye Chief Financial Officer Mike Berry will add the role of chief operating officer. Travis Reese, president of FireEye’s Mandiant business, will become president of FireEye.
The board also named former Symantec Corp. Chief Executive Enrique Salem as lead independent director.
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