Results for the year-ended 31 March 2018

Sophos Press Release

Billings up 22%, with revenue growth of 21%; adjusted operating profit up 20%

Oxford, 17 May 2018.  Sophos Group plc (the “Group” / LSE: SOPH), a leading provider of cloud-enabled enduser and network cybersecurity solutions, today issues its audited results for the year-ended 31 March 2018 (“FY18”).

Financial highlights

  • Billings1 grew by 22% to $769 million, an increase of 18% at constant currency
  • Revenue increased by 21% to $641 million, reflecting constant currency growth of 18%, driven by 26% growth in subscription revenue in the period
  • Cloud subscription billings continued to grow strongly, with Sophos Central up 112% to $186 million, from $88 million in FY17
  • Total subscription renewal base has now surpassed the $1 billion milestone
  • Net renewal rate, including cross-sell and upsell, improved to 140% from 129% in FY17
  • Adjusted operating profit2 increased by 20% to $46 million, from $38 million in the prior-year
  • Loss before taxation increased to $52 million, from $49 million, despite the increase in adjusted operating profit, after the negative impact of financing foreign exchange losses
  • Strong growth in new business with over 300,000 customers at the end of the year, from 260,000 in FY17
  • Final dividend of 3.5 cents per share, an increase of 6.1% over the prior year; total dividend for the year of 4.9 cents, an increase of 6.5%

Financial summary

FY18

FY17

Growth

 

$M

$M

%

Billings

768.6

632.1

21.6

Revenue

640.7

529.7

21.0

Cash EBITDA3

193.7

150.1

29.0

Loss before taxation

(52.3)

(49.3)

6.1

Unlevered free cash flow4

139.6

133.4

4.6

Net cash flow from operating activities

147.7

118.5

24.6

FY19 and medium-term guidance

In the current year, we expect mid-teens per cent billings growth, including a c.200bps currency benefit, and growth in margin consistent with our medium term outlook.  We remain confident in our goal of delivering annual billings of c.$1 billion, unlevered free cash flow of $220-240 million and adjusted operating profit greater than $100 million for FY20.

Chief Executive Officer, Kris Hagerman, commented:

“FY18 was a strong year for Sophos.  Cybersecurity has never been more important for enterprises of all sizes, and the demand environment for our solutions has never been stronger.  We continue to take share in the market, as we execute a differentiated strategy of delivering advanced and highly-effective cybersecurity solutions designed to be simple to use, managed in the cloud, and sold 100% through our channel partners.  We have a massive market opportunity in front of us, and our strong and growing subscription base and growth in new customers, combined with our next-generation technology in endpoint and firewall and our Sophos Central cloud platform, position us well for FY19 and beyond.”

Please see the full results on the Sophos Investor website here:
https://polaris.brighterir.com/public/sophos/news/rns/story/rmykd9r

About Sophos

More than 100 million users in 150 countries rely on Sophos’ complete security solutions as the best protection against complex threats and data loss. Simple to deploy, manage, and use, Sophos’ award-winning encryption, endpoint security, web, email, mobile and network security solutions are backed by SophosLabs - a global network of threat intelligence centers. Sophos is headquartered in Oxford, U.K., and is publicly traded on the London Stock Exchange under the symbol “SOPH.” More information is available at www.sophos.com/company.