Fourth Quarter 2010:
Revenue: $38.0 million, an increase of 8% year-over-year
GAAP Net Income: $4.4 million, or $0.15 per diluted share
Adjusted Net Income: $5.0 million, or $0.17 per diluted share
Full Year 2010:
Revenue: $130.6 million, an increase of 26% year-over-year
GAAP Net Income: $20.0 million, or $0.69 per diluted share
Adjusted Net Income: $15.4 million, or $0.53 per diluted share
Sourcefire, Inc. (Nasdaq:FIRE), the creator of Snort' and a leader in intelligent cybersecurity solutions, today announced financial results for its fiscal fourth quarter and full year ended December 31, 2010.
"2010 was another strong year for Sourcefire. We grew revenue 26 percent driven by significant gains in both our Commercial and International businesses, as well as an increase in the contribution from our partner channels," said John Burris, CEO of Sourcefire. "We look forward to 2011 and the roll out of our expanded security platform including our Next Generation Firewall and our endpoint control solution, Immunet. These solutions are complementary with our industry leading IPS, providing our customers with better protection and significantly expanding our addressable market."
Total Revenues - Revenues for 4Q10 were $38.0 million compared to $35.3 million in 4Q09, an increase of 8%. Revenues for the twelve months ended December 31, 2010 were $130.6 million compared to $103.5 million for 2009, an increase of 26%.
GAAP Net Income - Net income was $4.4 million for 4Q10, or $0.15 per diluted share, on the basis of generally accepted accounting principles (GAAP), compared with GAAP net income of $6.7 million, or $0.23 per diluted share, in 4Q09.
GAAP net income for the twelve months ended December 31, 2010 was $20.0 million, or $0.69 per diluted share, compared with GAAP net income of $8.9 million, or $0.32 per diluted share, for 2009.
Adjusted Net Income - Adjusted net income for 4Q10, which excludes stock-based compensation expense and costs related to the Immunet acquisition and includes an assumed tax rate of 35%, was $5.0 million, or $0.17 per diluted share. This compares to adjusted net income in 4Q09, which excludes stock-based compensation expense and includes an assumed tax rate of 35%, of $5.6 million, or $0.19 per diluted share. Adjusted net income for the twelve months ended December 31, 2010, which excludes stock-based compensation expense, costs related to the Immunet acquisition and the benefit from the release of the valuation allowance on the Company’s deferred tax asset and includes an assumed tax rate of 35%, was $15.4 million, or $0.53 per diluted share. This compares to adjusted net income for 2009, which excludes stock-based compensation expense and includes an assumed tax rate of 35%, of $10.0 million, or $0.36 per diluted share.
Balance Sheet - As of December 31, 2010, the Company's cash, cash equivalents and investments totaled $153.7 million.
Recent Company Highlights
Global Expansion & Channel Development
Increased channel-influenced revenue worldwide to 39%, up from 23% in 2009.
Increased 2010 international revenues to $32.8 million, up 38% over 2009.
Increased 2010 U.S. commercial revenues to $65.0 million, up 31% over 2009.
Increased 2010 U.S. federal sector revenues to $32.8 million, up 9% over 2009.
Innovation & Recognition
Acquired Immunet, a leading provider of advanced cloud-based anti-malware technologies. The acquisition expands Sourcefire's security solutions portfolio - adding an advanced cloud platform for delivery of malware protection - and extends the Company's real-time detection and prevention leadership to the cloud.
Positioned as a Leader in the Gartner, Inc. “Magic Quadrant for Network Intrusion Prevention Systems.”
Announced plans for expansion into the Next- Generation Firewall (NGFW) market and introduced three new Defense Center Awareness Bundles for Next-Generation Intrusion Prevention System (NGIPS). The combined solutions will provide organizations comprehensive threat protection - securing the perimeter, data center and cloud.
Sourcefire Intrusion Prevention System (IPS) achieved Common Criteria certification, verifying its ability to address the stringent security requirements of the Federal Government.
Selected for the fourth consecutive year to the Deloitte Technology Fast 500. The Deloitte Fast 500 program lists the fastest growing technology, media, telecommunications, life sciences and clean technology companies in North America based on their percentage revenue growth over a five-year period.
First Quarter 2011 Outlook
Based on information as of February 23, 2011, Sourcefire expects revenue for the first quarter of 2011 in the range of $28.7 million to $30.7 million, net loss per share in the range of ($0.02) to ($0.04) and, on an adjusted basis, net income per diluted share in the range of $0.01 to $0.03. Sourcefire's expectation of adjusted net income per share excludes stock-based compensation expense of $3.1 million to $3.3 million and amortization of acquired intangible assets and acquisition-related costs of approximately $1.1 million and includes an assumed 35% tax rate.
Adjusted Net Income, Adjusted Net Income per Share, Adjusted Income from Operations and Adjusted Income from Operations as a Percentage of Revenue: In evaluating the operating performance of its business, Sourcefire's management excludes certain charges and credits that are required by GAAP. These non-GAAP results provide useful information to both management and investors by excluding (i) stock-based compensation, which does not involve the expenditure of cash, and (ii) items that Sourcefire believes may not be indicative of the Company's operating performance, because either they are unusual and Sourcefire does not expect them to recur in the ordinary course of its business or they are unrelated to the ongoing operation of the business in the ordinary course. For all of 2011 the Company expects that non-GAAP results will continue to be adjusted to reflect the effect of an assumed tax rate of 35%. Sourcefire believes this adjustment provides useful information to both management and investors because it is expected to normalize and approximate the Company’s full year GAAP tax rate.
Free Cash Flow: Sourcefire defines free cash flow as net cash provided by operating activities minus capital expenditures. The Company considers free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that, after the purchase of property and equipment, can be used for strategic opportunities, including investing in the business, making strategic acquisitions and strengthening the balance sheet.
These measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. The non-GAAP measures included in this press release have been reconciled to the nearest GAAP measure in the table following the financial statements attached to this press release.
Conference Call and Webcast
On Wednesday, February 23, 2011 at 5:00 p.m. Eastern Time, Sourcefire will host a conference call to review these results. A listen-only web cast of the session will be available at http://investor.sourcefire.com. Those wishing to participate in the live session should use the following numbers to dial in:
Calling from the United States or Canada: 888-396-2298
Calling from other countries: 617-847-8708
Pass code: 45372115
An online replay will be available at http://investor.sourcefire.com following the completion of the live call and will remain available for at least 90 days.
Sourcefire, Inc. (Nasdaq:FIRE), is a world leader in intelligent cybersecurity solutions. Sourcefire is transforming the way Global 2000 organizations and government agencies manage and minimize network security risks. Sourcefire’s IPS, Real-time Network Awareness and Real-time Adaptive Security solutions equip customers with an efficient and effective layered security defense – protecting network assets before, during and after an attack. Through the years, Sourcefire has been consistently recognized for its innovation and industry leadership by customers, media and industry analysts alike – with more than 50 awards and accolades. Today, the name Sourcefire has grown synonymous with innovation and network security intelligence. For more information about Sourcefire, please visit http://www.sourcefire.com.