Trading statement for the quarter-ended 30 June 2017

Sophos Press Release

Q1 billings growth and cash generation ahead of expectations



Oxford, 27 July 2017. Sophos Group plc (the “Group” / LSE: SOPH), a leading provider of cloud enabled enduser and network security solutions, today issues its trading update for the first quarter ended 30 June 2017.

Financial and operational highlights

  • Q1 billings1 increased by 16% (+19% at constant currency), reflecting continued strong momentum despite a demanding prior-year comparative
    • Continued strong performance in enduser security, with billings growth in excess of 30%
    • Intercept X, our next-generation endpoint solution, and Sophos Central cloud management platform both showed continued strong momentum in the quarter
    • High single-digit growth in network security, reflecting a temporary shift in our go to market effort to appropriately respond to the surge in customer interest in our next-generation anti-ransomware endpoint solutions
    • At constant currency, the Americas increased by over 25%, with mid-teens billings growth in both EMEA and APJ
  • Revenue increased 14% at constant currency with the subscription component up 20%, reflecting the contribution from prior-periods subscription billings growth now feeding into revenue
  • Adjusted operating profit2 declined to $3.4 million, reflecting a higher proportion of subscription billings in the mix, the majority of which are deferred and recognised as revenue in future periods
  • Continued strong cash generation in the period, with unlevered free cash flow3 of $30.3 million
  • Reaffirm outlook for FY18:
    • Mid to high-teens billings growth
    • 50-100 bps improvement in Cash EBITDA4 margin
    • Free cash flow broadly unchanged, from a high FY17 base

Financial highlights

 

Q1 FY18

Q1 FY17

Growth

GAAP measures

$M

$M

%

Revenue

141.8

127.4

11.3

Operating loss

(15.6)

(4.9)

218.4

Net cash flow from operating activities

30.3

29.5

2.7

 

Non GAAP measures

 

 

 

Billings

164.3

141.9

15.8

Cash EBITDA

27.3

25.6

6.6

Adjusted operating profit

3.4

9.4

(63.8)

Unlevered free cash flow

30.3

28.8

5.2



To read the full report, please go to https://otp.tools.investis.com/clients/uk/sophos/rns/regulatory-story.aspx?cid=107&newsid=895862

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.