"Our unmatched set of solutions and strong execution by our sales channels drove our success this quarter," said John Burris, CEO of Sourcefire. "Our results validate our Agile Security™ vision and reinforce that companies need our best-in-class solutions to be protected from the cloud to the core of the network. We offer unsurpassed protection on the industry's highest performing platform. As we look to the future, we are confident in our ability to capture our share of an expanding market opportunity, and to continue to drive meaningful levels of growth."
Total Revenue - Revenue for the first quarter of 2012 was $46.3 million compared to $30.8 million in the first quarter of 2011, an increase of 50%. GAAP Net Income - Net income was $0.1 million for the first quarter of 2012, or $0.00 per diluted share, on the basis of generally accepted accounting principles (GAAP), compared with GAAP net income of $0.5 million, or $0.02 per diluted share, in the first quarter of 2011. Adjusted Net Income - Adjusted net income for the first quarter of 2012, which excludes stock-based compensation expense, amortization of acquired intangible assets and other acquisition-related expenses, and includes an assumed tax rate of 35%, was $3.4 million, or $0.11 per diluted share. This compares to adjusted net income of $1.2 million, or $0.04 per diluted share, for the first quarter of 2011, which excludes stock-based compensation expense, amortization of acquired intangible assets and other acquisition-related expenses, and includes an assumed tax rate of 35%. Cash and Cash Flow - As of March 31, 2012, the Company's cash, cash equivalents and investments totaled $178.3 million. For the first quarter of 2012, net cash provided by operating activities was $19.7 million and the Company generated free cash flow of $17.1 million.
Recent Company Highlights Revenue Growth
Increased U.S. commercial revenue to $20.8 million, up 28% over 1Q11. Increased international revenue to $15.7 million, up 87% over 1Q11. Increased U.S. federal sector revenue to $9.8 million, up 60% over 1Q11.
Innovation & Recognition
Announced the first Next-Generation Intrusion Prevention System (NGIPS) which provides fully integrated and intelligent application control. Sourcefire is extending its Agile Security vision by providing the world's first NGIPS to incorporate real-time contextual awareness and full-stack visibility, together with intelligent security automation and granular application control. Announced that Sourcefire's Next-Generation Intrusion Prevention System (NGIPS) excels in security effectiveness, total cost of ownership and performance according to NSS Labs product analysis. FirePOWER™ appliances protected against 99 percent of all attacks, exceeding Sourcefire's previous industry record of 98 percent set in 2011. One of the appliances, the 8260 NGIPS, tested at more than 30 Gpbs for real world traffic inspection.
Second Quarter 2012 Outlook Based on information as of April 30, 2012, Sourcefire expects revenue for the second quarter of 2012 in the range of $46.5 million to $48.5 million, net income per diluted share in the range of $0.00 to $0.02 and, on an adjusted basis, net income per diluted share in the range of $0.12 to $0.14. Sourcefire's expectation of adjusted net income per diluted share excludes stock-based compensation expense of $4.9 million to $5.1 million and amortization of acquired intangible assets and other acquisition-related expenses of approximately $1.0 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 excludes certain charges and credits that are required by GAAP. Sourcefire believes 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, (ii) amortization of acquisition-related intangible assets, which does not involve the expenditure of cash, and (iii) other acquisition-related expenses, which are unrelated to the ongoing operation of the Company's business in the ordinary course. For 2012, based on its current tax structure, Sourcefire expects non-GAAP results 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.
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 Monday, April 30, 2012 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 athttp://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: (877) 712-7037 Calling from other countries: (253) 237-1122 Pass code: 70080593
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.
About Sourcefire Sourcefire, Inc. (NASDAQ: FIRE), a world leader in intelligent cybersecurity solutions, is transforming the way global large- to mid-size organizations and government agencies manage and minimize network security risks. With solutions from a next-generation network security platform to advanced malware protection, Sourcefire provides customers with Agile Security™ that is as dynamic as the real world it protects and the attackers against which it defends. Trusted for more than 10 years, Sourcefire has been consistently recognized for its innovation and industry leadership with numerous patents, world-class research, and award-winning technology. Today, the name Sourcefire has grown synonymous with innovation, security intelligence and agile end-to-end security protection. For more information about Sourcefire, please visit www.sourcefire.com.
Sourcefire, the Sourcefire logo, Snort, the Snort and Pig logo, ClamAV, FireAMP, FirePOWER, FireSIGHT and certain other trademarks and logos are trademarks or registered trademarks of Sourcefire, Inc. in the United States and other countries. Other company, product and service names may be trademarks or service marks of others.