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Sourcefire Announces Q1 2009 Results

Demand for cybersecurity solutions drives growth, according to the Snort creator
Columbia, MD -- April 30, 2009 -- Open source innovator and Snort' creator, Sourcefire, Inc. (Nasdaq: FIRE), a leader in Enterprise Threat Management, today announced financial results for its fiscal first quarter ended March 31, 2009.

"Against the backdrop of a challenging global economy, customers are responding well to Sourcefire's network security innovations, as we deliver leading solutions for protecting today's dynamic networks from cyber threats," stated John Burris, Sourcefire's CEO. "I am very pleased with our strong results on all key financial metrics this quarter, particularly the fact that we achieved modest profitability on an adjusted basis."

Financial Summary

  • Total Revenues - Revenues for 1Q09 were $18.6 million compared to $13.7 million in 1Q08, an increase of 36%.

  • Gross Profit - Gross profit for 1Q09 increased 36% to $14.5 million, or 78% of revenues, compared to $10.6 million, or 78% of revenues, in 1Q08.

  • GAAP Earnings " Net loss was $1.1 million in 1Q09, or a loss of $0.04 per share, on the basis of generally accepted accounting principles (GAAP), compared with GAAP net loss of $3.5 million, or a loss of $0.14 per share, in 1Q08.

  • Adjusted Net Income/Loss - Adjusted net income, which excludes stock-based compensation expense, was $0.1 million, or $0.00 per share, in 1Q09. This compared to adjusted net loss of $2.3 million, or a loss of $0.09 per share, in 1Q08, which excludes stock-based compensation expense as well as severance expenses incurred in connection with our CEO transition during 2008.

  • Balance Sheet - As of March 31, 2009 the Company's cash, cash equivalents and investments totaled $105.3 million.

    Recent Company Highlights Global Expansion & Channel Development

  • Grew international revenues to $6.4 million (34% of total revenues) in 1Q09, up 56% over the 1Q08 level of $4.1 million (30% of total revenues).
  • Increased U.S. federal sector revenues to $2.6 million in 1Q09 (14% of total revenues), up 143% over the 1Q08 level of $1.1 million (8% of total revenues) driven by emphasis on Cyber Security initiatives.
  • Expanded Symantec partnership with new bundled IPS offering sold by Symantec MSSP (managed security services provider) sales team.
  • Won first opportunity to protect Cloud Computing initiative at a leading provider of infrastructure technology.

    Innovation & Recognition

  • Positioned in the Leaders Quadrant of the Gartner Magic Quadrant for Network Intrusion Prevention System Appliances report (G00167303) published on April 14, 2009*. This is the fourth time that Sourcefire has been named to the Leaders Quadrant.
  • Named Best Intrusion Detection/Prevention Solution at the 2009 SC Magazine Awards and Highly Commended by SC Magazine Awards 2009 Europe for Best Network Security overall.
  • Led the industry in same-day patch coverage, as well as key research around an Adobe PDF vulnerability and the Conficker worm with the Sourcefire VRT (Vulnerability Research Team). The VRT continues to gain international recognition for their cyber research.
  • Engineered major new release of the Snort engine for the open source community and the Sourcefire 3D System commercial offering. Already the de facto standard in intrusion prevention with more than 3.7 million downloads and over 240,000 registered users, the new release of Snort (v2.8.4) brings improved performance and manageability, and extends our ability to detect attacks over IPv6 networks " a capability critical to U.S. federal government users.
  • Delivered a new multi-gig 3D sensor with 10G interfaces to extend our 10G family of offerings to meet the expanding needs of the enterprise market. First to market with a 10G product, Sourcefire has experienced solid momentum for our 10G family of offerings.
  • Extended customer value with Microsoft Forefront "Stirling" integration through a strategic relationship with Microsoft Corp. Through this relationship, Sourcefire integrates its Sourcefire Defense Center' eStreamer interface with Forefront "Stirling", offering customers interoperability, context and improved insight into their network security environments.

    Second Quarter 2009 Outlook Based on information as of April 30, 2009, Sourcefire expects revenue for 2Q09 in the range of $18.7 million to $20.2 million, net loss per share in the range of $0.04 to $0.01 and, on an adjusted basis, net income per share in the range of $0.00 to $0.03. Our expectation of adjusted net income per share excludes stock-based compensation expense in the expected range of $1.2 million to $1.3 million.

    Non-GAAP Measures 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 items that we believe may not be indicative of the Company's operating performance. These items share one or more of the following characteristics: they are unusual and Sourcefire does not expect them to recur in the ordinary course of its business; they do not involve the expenditure of cash; 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, April 30, 2009 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: 866-770-7120 Calling from other countries: 617-213-8065 Pass code: 52162322

    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), Snort creator and open source innovator, is a world leader in Enterprise Threat Management (ETM) solutions. Sourcefire is transforming the way Global 2000 organizations and government agencies manage and minimize network security risks with its 3D Approach " Discover, Determine, Defend " to securing real networks. This ETM approach 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 40 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.

    SOURCEFIRE', SNORT', the Sourcefire logo, the Snort and Pig logo, SECURITY FOR THE REAL WORLD, SOURCEFIRE DEFENSE CENTER', SOURCEFIRE 3D', RNA', DAEMONLOGGER, CLAMAV', SOURCEFIRE SOLUTIONS NETWORK, 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.

    *The Magic Quadrant is copyrighted April 14, 2009 by Gartner, Inc. and is reused with permission. The Magic Quadrant is a graphical representation of a marketplace at and for a specific time period. It depicts Gartner's analysis of how certain vendors measure against criteria for that marketplace, as defined by Gartner. Gartner does not endorse any vendor, product or service depicted in the Magic Quadrant, and does not advise technology users to select only those vendors placed in the "Leaders" quadrant. The Magic Quadrant is intended solely as a research tool, and is not meant to be a specific guide to action. Gartner disclaims all warranties, express or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

    Cautionary Language Concerning Forward-Looking Statements The statements contained in this release that are not historical facts are "forward-looking statements" (as such term is defined in the Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties. These statements include our expectations regarding our financial results for the second quarter of 2009 and the Company's future profitability on an adjusted basis. Management cautions the reader that these forward-looking statements are only predictions and are subject to a number of both known and unknown risks and uncertainties, and actual results, performance, and/or achievements of Sourcefire, Inc. may differ materially from the future results, performance, and/or achievements expressed or implied by these forward-looking statements as a result of a number of factors. These factors include, without limitation, the fact that our outlook for the second quarter of 2009 could change, and also include, without limitation, those risks and uncertainties described from time to time in the reports filed by Sourcefire, Inc. with the U.S. Securities and Exchange Commission. Sourcefire, Inc. undertakes no obligation to update any forward-looking statements.