FireEye, Inc. revenue increased on 5.8% and EBITDA Margin increased on 5.6 pp from -10.2% to -4.6%
02/02/2021 • About FireEye, Inc. (
$FEYE) • By InTwits
FireEye, Inc. reported 2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- The company operates at negative EBITDA Margin: -4.6%
- FireEye, Inc. motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2016-2020 was 12.5% while average EBITDA Margin was -16.6% for the sames years
- FireEye, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.9%. At the same time it's a lot of higher than industry average of 3.2%.
- CAPEX is quite volatile: $72m in 2020, $58m in 2019, $15m in 2018, $10m in 2017, $18m in 2016
- In the last 5 years the company invested considerably less than D&A: $203m vs. $309m
- The company has unprofitable business model: ROIC is -7.6%
- It operates with medium-size leverage: Net Debt/EBITDA is 3.1x while industry average is -1.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue increased on 5.8%. Revenue growth showed small slowdown in 20Q4 - it was 5.3% YoY. Revenue decline was accelerating on average at -2.0 pp per annum in 2016-2020. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 1.8 pp from 21.7% to 19.9% in 2020. EBITDA Margin stuck to a growing trend at 8.9 pp per annum in 2016-2020.
Gross Margin decreased slightly on 0.77 pp from 65.3% to 64.5% in 2020. During 2016-2020 Gross Margin topped in 2018 at 67.2% and was declining since that time. SG&A as a % of Revenue decreased on 5.9 pp from 57.2% to 51.3% in 2020. SG&A as a % of Revenue followed a declining trend at -6.7 pp per annum in the last 5 years.
Net Income margin increased on 6.9 pp from -28.9% to -22.0% in 2020. Net Income margin stuck to a growing trend at 9.8 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 2.8% in 2020. FireEye, Inc. showed decline in CAPEX/Revenue of 2.8 pp from 5.6% in 2017 to 2.8% in 2020. It's average CAPEX/Revenue for the last three years was 4.7%. During 2016-2020 CAPEX as a % of Revenue topped in 2018 at 6.1% and was declining since that time.
Return on investment
The company operates at negative ROIC (-7.6%) and ROE (-29.0%). ROIC increased on 4.3 pp from -11.9% to -7.6% in 2020. ROE increased on 9.0 pp from -38.1% to -29.0% in 2020. ROIC grew at 4.6 pp per annum in 2016-2020. ROE grew at 4.4 pp per annum in 2016-2020.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.1x and Debt / EBITDA is . Net Debt / EBITDA didn't change in 2020. Debt decreased on 7.3% while cash surged on 102%.
FireEye, Inc. has no short term refinancing risk: cash is higher than short term debt (4,221.5%).
Management team
Kevin R Mandia is a the company's CEO. Kevin R Mandia has spent 4 years with the company. The company's CFO Frank E Verdecanna has spent 4 years with the company.
Financial and operational results
FY ended 12/31/2020
FireEye, Inc. ($FEYE) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 714.1 | 779.6 | 831.0 | 889.2 | 940.6 | 5.8% |
| Gross Profit | 442.2 | 508.0 | 558.5 | 580.3 | 606.6 | 4.5% |
| SG&A | 579.3 | 504.8 | 486.7 | 508.7 | 482.4 | -5.2% |
| EBITDA | -325.0 | -136.7 | -95.9 | -90.6 | -42.8 | |
| EBIT | -444.3 | -240.1 | -182.4 | | | |
| Interest expence | 47.9 | 49.8 | 56.4 | | | |
| Tax | -8.7 | 4.6 | 5.5 | | | |
| Net Income | -480.1 | -285.2 | -243.1 | -257.4 | -207.3 | |
| Stock Based Compensation | 199.1 | 166.3 | 153.7 | | | |
Balance Sheet
|
|---|
| Cash | 223.7 | 180.9 | 409.8 | 334.6 | 676.5 | 102.2% |
| Accounts Receivable | 121.2 | 146.3 | 157.8 | | | |
| Inventory | 6.0 | 5.7 | 6.5 | | | |
| Accounts Payable | 20.3 | 35.7 | 26.9 | | | |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 135.7 | 16.0 | -88.2% |
| Long Term Debt | 742.0 | 779.6 | 962.6 | 963.8 | 1,003.1 | 4.1% |
Cash flow
|
|---|
| Capex | 36.3 | 43.8 | 50.8 | 45.6 | 26.3 | -42.3% |
| Acquisitions | 204.9 | 4.3 | 5.2 | | | |
Ratios
|
|---|
| Revenue growth | 14.6% | 9.2% | 6.6% | 7.0% | 5.8% | |
| EBITDA growth | -17.9% | -58.0% | -29.8% | -5.6% | -52.7% | |
|
|---|
| Gross Margin | 61.9% | 65.2% | 67.2% | 65.3% | 64.5% | -0.8% |
| EBITDA Margin | -45.5% | -17.5% | -11.5% | -10.2% | -4.6% | 5.6% |
| EBIT Margin | -62.2% | -30.8% | -22.0% | | |
| SG&A, % of revenue | 81.1% | 64.8% | 58.6% | 57.2% | 51.3% | -5.9% |
| SBC, % of revenue | 27.9% | 21.3% | 18.5% | | |
| Net Income Margin | -67.2% | -36.6% | -29.3% | -28.9% | -22.0% | 6.9% |
| CAPEX, % of revenue | 5.1% | 5.6% | 6.1% | 5.1% | 2.8% | -2.3% |
|
|---|
| ROIC | -28.7% | -16.0% | -12.0% | -11.9% | -7.6% | 4.3% |
| ROE | -50.9% | -38.7% | -37.9% | -38.1% | -29.0% | 9.0% |
| Interest expence / Average debt | 6.5% | 6.5% | 6.5% | | | |
People
|
|---|
| Insider ownership | 3.2% | 3.2% | 3.2% | | | |
| Employees | 2,900 | 2,960 | 3,200 | | | |
| Revenue/Employee, th. $ | 246 | 263 | 260 | | | |
FireEye, Inc. ($FEYE) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 225 | 230 | 238 | 248 | | 6.7% | 5.6% | 5.6% | 5.3% |
| EBITDA | -35 | -12 | 1 | 2 | | - | - | - | - |
| Net Income | -76 | -53 | -39 | -39 | | - | - | - | - |
Balance Sheet
|
|---|
| Cash | 284 | 404 | 314 | 676 | | -30.1% | 21.8% | 5.8% | 102.2% |
| Short Term Debt | 138 | 19 | 18 | 16 | | 795.7% | -85.9% | -86.5% | -88.2% |
| Long Term Debt | 972 | 1,003 | 1,012 | 1,003 | | -7.3% | 5.8% | 5.8% | 4.1% |
Ratios
|
|---|
| Gross Margin | 63.7% | 64.8% | 64.6% | 64.8% | | -2.3% | 0.3% | -0.3% | -0.8% |
| EBITDA Margin | -15.4% | -5.2% | 0.6% | 0.9% | | 1.3% | 8.1% | 10.4% | 2.7% |
| Net Income Margin | -34.0% | -23.2% | -16.4% | -15.6% | | 1.8% | 7.8% | 12.6% | 5.3% |
Peers in Systems Software
Below you can find FireEye, Inc. benchmarking vs. other companies in Systems Software industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Zscaler, Inc. ($ZS) | - | 56.5% | 51.3% | 59.2% | 42.4% |
| ServiceNow, Inc. ($NOW) | - | 38.0% | 36.0% | 32.6% | 30.6% |
| SailPoint Technologies Holdings, Inc. ($SAIL) | - | 40.5% | 33.8% | 15.9% | 26.6% |
| Rapid7, Inc. ($RPD) | - | 27.6% | 21.5% | 33.9% | 25.9% |
| Tenable Holdings, Inc. ($TENB) | - | 50.9% | 42.4% | 32.6% | 24.2% |
| |
|---|
| Median (23 companies) | 12.9% | 16.6% | 20.4% | 19.4% | 15.1% |
|---|
| FireEye, Inc. ($FEYE) | - | 9.2% | 6.6% | 7.0% | 5.8% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Check Point Software Technologies Ltd. ($CHKP) | 88.5% | 88.6% | 89.6% | 89.5% | 89.4% |
| Progress Software Corporation ($PRGS) | 83.8% | 82.6% | 83.1% | 81.8% | 86.0% |
| Varonis Systems, Inc. ($VRNS) | 90.5% | 90.4% | 89.8% | 86.2% | 84.9% |
| Vmware, Inc. ($VMW) | 85.2% | - | 85.5% | 83.9% | 83.4% |
| Tenable Holdings, Inc. ($TENB) | 88.6% | 86.4% | 83.9% | 82.8% | 82.4% |
| |
|---|
| Median (23 companies) | 73.6% | 74.1% | 75.0% | 76.6% | 77.8% |
|---|
| FireEye, Inc. ($FEYE) | 61.9% | 65.2% | 67.2% | 65.3% | 64.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Check Point Software Technologies Ltd. ($CHKP) | 49.8% | 50.7% | 48.8% | 46.0% | 45.1% |
| Qualys, Inc. ($QLYS) | 23.8% | 25.1% | 28.4% | 36.5% | 40.3% |
| SolarWinds Corporation ($SWI) | -8.0% | 44.0% | 44.8% | 44.7% | 39.8% |
| Progress Software Corporation ($PRGS) | 2.4% | 28.6% | 32.9% | 23.4% | 34.4% |
| Fortinet, Inc. ($FTNT) | 7.2% | 11.1% | 15.9% | 19.8% | 23.9% |
| |
|---|
| Median (23 companies) | -8.0% | -3.6% | -3.9% | 0.2% | 3.0% |
|---|
| FireEye, Inc. ($FEYE) | -45.5% | -17.5% | -11.5% | -10.2% | -4.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Zscaler, Inc. ($ZS) | 7.8% | 6.5% | 8.0% | 9.5% | 12.0% |
| ServiceNow, Inc. ($NOW) | 7.6% | 7.8% | 8.6% | 7.7% | 9.3% |
| Qualys, Inc. ($QLYS) | 11.7% | 16.4% | 8.2% | 8.6% | 8.3% |
| Zuora, Inc. ($ZUO) | 3.4% | 3.3% | 2.8% | 5.7% | 7.8% |
| Proofpoint, Inc. ($PFPT) | 9.2% | 9.0% | 4.1% | 4.0% | 6.9% |
| |
|---|
| Median (23 companies) | 2.0% | 2.2% | 2.5% | 3.4% | 3.4% |
|---|
| FireEye, Inc. ($FEYE) | 5.1% | 5.6% | 6.1% | 5.1% | 2.8% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Fortinet, Inc. ($FTNT) | 5.3% | 15.0% | 28.0% | 29.0% | 46.3% |
| Check Point Software Technologies Ltd. ($CHKP) | 24.7% | 26.8% | 25.5% | 24.2% | 25.6% |
| Qualys, Inc. ($QLYS) | 13.7% | 12.3% | 14.3% | 18.7% | 22.0% |
| Vmware, Inc. ($VMW) | 15.9% | - | - | 18.1% | 19.6% |
| Progress Software Corporation ($PRGS) | -4.9% | 13.5% | 18.5% | 7.6% | 16.0% |
| |
|---|
| Median (23 companies) | 0.0% | -2.7% | -0.9% | -6.3% | -6.4% |
|---|
| FireEye, Inc. ($FEYE) | -28.7% | -16.0% | -12.0% | -11.9% | -7.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| SolarWinds Corporation ($SWI) | - | 6.2x | 4.1x | 4.4x | 4.1x |
| Proofpoint, Inc. ($PFPT) | - | - | - | -27.4x | 2.5x |
| Progress Software Corporation ($PRGS) | -7.5x | -0.1x | 0.1x | 1.5x | 2.1x |
| Vmware, Inc. ($VMW) | -0.7x | - | -0.8x | 0.3x | 1.5x |
| CyberArk Software Ltd. ($CYBR) | -4.1x | -5.7x | -4.5x | -3.6x | 0.9x |
| |
|---|
| Median (12 companies) | -1.2x | -0.6x | -0.4x | -0.3x | 0.4x |
|---|
