"Sourcefire's strong performance this quarter was balanced across our business," said John Burris, CEO of Sourcefire. "We continued to grow top line revenue, while also expanding our operating margin. I'm particularly pleased that we achieved quarterly and year-to-date profitability on both an adjusted and a GAAP basis for the first time in the Company's history."
* Total Revenues - Revenues for 3Q09 were $27.4 million compared to $20.3 million in 3Q08, an increase of 35%. Revenues for the nine months ended September 30, 2009 were $68.2 million compared to $50.0 million for the same period last year, an increase of 37%.
* GAAP Net Income - Net income was $2.7 million for 3Q09, or $0.09 per diluted share, on the basis of generally accepted accounting principles (GAAP), compared with GAAP net loss of $1.7 million, or a loss of $0.07 per diluted share, in 3Q08. Net income for the nine months ended September 30, 2009 was $2.2 million, or $0.08 per diluted share, compared with GAAP net loss of $8.3 million, or a loss of $0.33 per diluted share, for the same period last year.
* Adjusted Net Income - Adjusted net income for 3Q09, which excludes stock-based compensation expense, was $4.6 million, or $0.16 per diluted share in 3Q09. This compares to adjusted net loss in 3Q08, which excludes stock-based compensation expense as well as costs associated with the transition to our new chief executive officer, of $0.2 million, or a loss of $0.01 per diluted share. Adjusted net income for the nine months ended September 30, 2009, which excludes stock-based compensation expense, was $6.6 million, or $0.24 per diluted share. This compares with adjusted net loss for the same period last year, which excludes stock-based compensation expense as well as CEO transition costs, of $4.2 million, or a loss of $0.17 per diluted share.
* Balance Sheet - As of September 30, 2009 the Company's cash, cash equivalents and investments totaled $112.4 million.
Recent Company Highlights
Global Expansion & Channel Development
* Achieved 80% of 3Q09 revenues through partners, compared with 71% in the year-ago period. * Increased 3Q09 international revenues to $6.1 million, up 57% over the year-ago level. * Increased 3Q09 U.S. commercial revenues to $13.3 million, up 50% over the year-ago level. * Increased 3Q09 U.S. federal sector revenues to $8.0 million up 6% over the year-ago level, and ended the quarter with a significant federal order backlog. * Launched Virtual 3D Partner Program for Virtualization and Cloud Computing Companies designed to provide hardware, software and services companies with virtual security solutions to address their customer's critical requirements.
Innovation & Recognition
* Named to InfoWorld's Open Source Hall of Fame for Snort. The list recognizes "the greatest open source software projects of all time" that have established dominant market positions and proven essential in "propelling the open source movement into the spotlight." * Led the industry in same-day patch coverage with the Sourcefire VRT (Vulnerability Research Team). * Integrated the Sourcefire 3D' System with QualysGuard'. This integration provides customers with the ability to import QualysGuard scan data into the Sourcefire RNA' (Real-time Network Awareness) host database, combining real-time network discovery information with active vulnerability scan data. With Sourcefire and Qualys working in tandem, the number of actionable network threats detected by the Sourcefire intrusion prevention system (IPS) can be vastly reduced, leading to increased security and lower total cost of ownership (TCO). * Hosted its first-ever Virtual Customer Summit drawing more than 700 attendees. The online summit included sessions by Sourcefire and Snort experts and customers who discussed leading techniques for identifying and protecting against the latest Cybersecurity threats.
Fourth Quarter and Full Year 2009 Outlook
Based on information as of October 29, 2009, Sourcefire expects revenue for 4Q09 in the range of $31.5 million to $33.0 million, net income per share in the range of $0.11 to $0.14 and, on an adjusted basis, net income per share in the range of $0.17 to $0.20. Sourcefire's expectation of adjusted net income per share excludes stock-based compensation expense for the fourth quarter in the expected range of $1.6 million to $1.8 million. For fiscal year 2009 Sourcefire expects revenue in the range of $99.7 million to $101.2 million, net income per share in the range of $0.19 to $0.22 and adjusted net income per share in the range of $0.41 to $0.44. Sourcefire's expectation of full year 2009 adjusted net income per share excludes stock-based compensation expense in the expected range of $6.0 million to $6.2 million.
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. 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 Thursday, October 29, 2009 at 8:30 a.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: 800-510-9834
Calling from other countries: 617-614-3669
Pass code: 68961121
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) 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 and Real-time Adaptive Security solution equips 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 names Sourcefire and founder Martin Roesch have grown synonymous with innovation and network security intelligence. For more information about Sourcefire, please visit http://www.sourcefire.com.