FireEye has reported security services growth for the fourth quarter and full year ended 31 December 2019. Fourth quarter overall revenue increased 8% year-on-year to $235m, although the GAAP gross margin reduced from 68% to 66%.
“We continue to accelerate our transformation to a comprehensive security solutions company [from an on-premise security protection hardware firm],” said Kevin Mandia, FireEye chief executive officer. “Our higher growth solutions, which include platform, cloud subscription, managed services and Mandiant Consulting services, were 59% of our billings in the fourth quarter, and increased 23% from a year ago.
“We anticipate that these solutions will continue to eclipse the on-premise portion of our business in 2020."
For the year, revenue was $889m, a 7% annual increase, and the GAAP gross margin slipped to 65% from 67%.
“While billings, revenue and operating cash flow were at record levels, fourth quarter billings were impacted by a two-month decrease in the average contract length for our subscription and support contracts," said Frank Verdecanna, FireEye chief financial officer and chief accounting officer. “The decrease reduced fourth quarter total billings by approximately $15m compared to what they would have been at the fourth quarter 2018 average contract length.”
He said the average contract length did not impact annual recurring revenue, which was up 6% sequentially. But, he added: “Our outlook for the first quarter and full year 2020 assumes the average contract length for our subscription and support billings will decline two to three months compared to 2019."
For the full current year, the security vendor expects revenue in the range of $935m to $945m.
