Revenue growth of 8% and Billings growth of 9% at constant currency ("CC") year-on-year ("YOY"); Progress in next-gen transition and growth in Sophos Central

Oxford, UK — Novembre 6, 2019 —

Sophos Group plc (the "Group" / LSE: SOPH), a leading provider of next-generation cloud-enabled enduser and network cybersecurity solutions, today issues its interim results for the six-months to 30 September 2019 ("H1 FY20").

Financial highlights

  • Reported Group revenue of $365.8 million grew 5% YOY (+8% CC)
    • Subscription revenue remained the principal driver of YOY growth, increasing by 8% (+11% CC), and offsetting an 8% reduction in revenue from hardware (-5% CC)
  • Reported Group billings(1) of $372.0 million increased by 5% YOY (+9% CC)
    • Next-gen(2) billings grew 40% CC to $208.6 million (H1 FY19: $148.6 million); Sophos Central grew 47% CC to $134.8 million (H1 FY19: $92.0 million)
    • Group net renewal rate improved to 121% (H1 FY19: 118%)
    • Enduser billings (+14% CC) benefited from cross-sell and recent product launches
    • Growth in Network subscription billings (+8% CC) was partially offset by a decline in hardware (-5% CC)
    • Annual-recurring revenue ("ARR"(3)) from MSP(4) grew by 79% at CC to $32.5 million (H1 FY19: $18.1 million)
    • New customer billings (+6% CC) benefited from MSP, closing with 409K total customers (FY19: 382K)
  • Loss before tax of $1.5 million (H1 FY19: profit before tax of $26.0 million)
    • Reflects combination of the negative impact from exceptional restructuring and legal costs in the current period versus an exceptional credit which benefited the prior-year comparator
    • Adjusted operating profit(5) was broadly flat at $49.4 million, reflecting further planned investment
    • Cash EBITDA(6) increased by 24%, from $54.0 million to $66.8 million, with the rate of growth benefiting from the introduction of IFRS 16 - Leases ("IFRS 16") (+10% pre IFRS 16)
  • Net cash flow from operating activities increased by 15% YOY to $93.8 million
    • Helped by the expected phasing of some costs toward the second-half of the year and the introduction of IFRS 16 (+6% pre IFRS 16)

Financial summary

 

H1 FY20

H1 FY19

Growth

Growth pre-IFRS 16(7)

Statutory measures

$M

$M

%

%

Revenue

365.8

349.5

5

5

(Loss) / Profit before tax

(1.5)

26.0

(106)

(103)

Net cash flow from operating activities

93.8

81.5

15

6

Alternative performance measures

Billings

372.0

352.7

5

5

Cash EBITDA

66.8

54.0

24

10

Adjusted operating profit

49.4

49.9

(1)

(2)

Unlevered free cash flow(8)

90.4

71.6

26

16

 

Note: On 14 October 2019, the Group announced a recommended cash offer of US$7.40 per Sophos Share from Surf Buyer Limited, a company owned by funds managed and/or advised by Thoma Bravo LLC. The details of the offer are set out in the announcement, which is available at investors.sophos.com. Consequently, as indicated at the time of the announcement, no interim dividend is proposed.

Chief Executive Officer, Kris Hagerman, commented:

"Our performance in H1 FY20 shows the continued progress we are making towards fully transitioning our business to next-generation cybersecurity. As we pursue this strategy, we are benefiting from our advanced capabilities and investments in the cloud, machine-learning, APIs, synchronized security, automation, managed threat response and more, to deliver enterprise-grade protection to organisations of any size."

For the full report, please go to Sophos’ Investor page on Sophos.com.

End Notes

  1. Billings represents the value of products and services invoiced to customers after receiving a purchase order from the customer and delivering products and services to them, or for which there is no right to a refund. Billings does not equate to statutory revenue.
  2. The next-gen product portfolio consists of the Group's most advanced products, managed in Sophos Central, notably including Sophos Intercept X for endpoint protection and the Sophos XG Firewall.
  3. Annual Recurring Revenue is defined as the annualised equivalent of term licenses, subscription agreements and maintenance contracts including OEM and MSP but excluding perpetual licenses.
  4. MSP Billings exclude Reflexion.
  5. Adjusted Operating Profit represents the Group's operating profit / (loss) adjusted for amortisation charges, share option charges and exceptional items.
  6. Cash earnings before interest, taxation, depreciation and amortisation ("Cash EBITDA") is defined as the Group's operating profit/ (loss) adjusted for depreciation and amortisation charges, any gain or loss on the sale of tangible and intangible assets, share option charges, unrealised foreign exchange differences and exceptional items, with billings replacing recognised revenue.
  7. Growth adjusted to eliminate the impact of IFRS 16 - Leases in the current period; see note 2 of the Financial Statements for further details.
  8. Unlevered free cash flow represents Cash EBITDA less purchases of property, plant and equipment and intangibles, plus cash flows in relation to changes in working capital and taxation.

Informazioni su Sophos

Sophos, leader mondiale nelle soluzioni di sicurezza innovative per neutralizzare i cyberattacchi, mette a disposizione delle aziende un’ampia gamma di soluzioni di sicurezza per endpoint, network, email e cloud al fine di supportarle nella lotta ai cyberattacchi. In quanto uno dei principali provider di cybersecurity, Sophos protegge oltre 500.000 realtà e più di 100 milioni di utenti a livello globale da potenziali minacce, ransomware, phishing, malware e altro. I servizi e le soluzioni di Sophos vengono gestiti attraverso la console Sophos Central, basata su cloud, e si basano su Sophos X-Ops, l'unità di threat intelligence cross-domain dell'azienda. Sophos X-Ops ottimizza l’intero ecosistema adattivo di cybersecurity di Sophos, che include un data lake centralizzato che si avvale di una ricca serie di API aperti, resi disponibili ai clienti, ai partner, agli sviluppatori e ad altri fornitori di cyber security e information technology. Sophos fornisce cybersecurity as a service alle aziende che necessitano di soluzioni chiavi in mano interamente gestite. I clienti possono scegliere di gestire la propria cybersecurity direttamente con la piattaforma di Sophos per le operazioni di sicurezza o di adottare un approccio ibrido, integrando i propri servizi con quelli di Sophos, come il threat huting e la remediation. Sophos distribuisce i propri prodotti attraverso partner e fornitori di servizi gestiti (MSP) in tutto il mondo La sede centrale di Sophos è situata a Oxford, nel Regno Unito. Ulteriori informazioni sono disponibile alla pagina www.sophos.it.