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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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20-1548921
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(State or other jurisdiction of
incorporation or organization) |
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(I.R.S. Employer
Identification Number)
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Title of each class
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Name of each exchange on which registered
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Common Stock, par value $0.0001 per share
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The NASDAQ Global Select Market
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Large accelerated filer
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x
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
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¨
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Emerging growth company
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¨
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the evolution of the threat landscape facing our customers and prospects;
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our ability, and the effects of our efforts, to educate the market regarding the advantages of our security solutions;
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our ability to continue to grow revenues;
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our future financial and operating results;
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our business plan and our ability to effectively manage our growth and associated investments;
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our beliefs, forecasts and objectives for future operations;
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our ability to expand our leadership position in advanced network security;
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our ability to attract and retain customers and to expand our solutions footprint within each of these customers;
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our expectations concerning customer retention rates, as well as expectations for the value of subscriptions and services renewals;
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our ability to maintain our competitive technological advantages against new entrants in our industry;
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our ability to timely and effectively scale and adapt our existing technology;
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our ability to innovate new products and solutions and bring them to market in a timely manner;
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our ability to maintain, protect, and enhance our brand and intellectual property;
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our ability to expand internationally;
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the effects of increased competition in our market and our ability to compete effectively;
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cost of revenue, including changes in costs associated with products, subscriptions, manufacturing and customer support;
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operating expenses, including changes in research and development, sales and marketing, and general and administrative expenses;
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anticipated income tax rates;
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potential attrition and other impacts associated with restructuring;
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sufficiency of cash to meet cash needs for at least the next 12 months;
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our ability to generate cash flows from operations and free cash flows;
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our ability to capture new, and renew existing, contracts with the United States and international governments;
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our expectations concerning relationships with third parties, including our manufacturers, channel and technology alliance partners and logistics providers;
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the release of new products and solutions;
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economic and industry trends or trend analysis;
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the attraction, training, integration and retention of qualified employees and key personnel;
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future acquisitions of or investments in complementary companies, products, subscriptions or technologies; and
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the effects of seasonal trends on our results of operations.
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Our technologies, including our machine-learning, behavioral-based, and rules-based threat detection, analysis and correlation technologies, combined with our proprietary Multi-vector Virtual Execution ("MVX") engine,
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Our intelligence on threats and threat actors based on the continuous flow of machine-, attacker- and victim-based attack data from our global network of threat sensors and virtual machines, as well as threat intelligence gathered by our security analysts, consultants and incident responders, and
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Our accumulated security expertise derived from responding to thousands of significant breaches over the past decade.
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Network security solutions. Our network security solutions utilize our IDA technologies and MVX engine in a two-phase approach to detect, validate and block advanced, targeted and other evasive attacks hidden in Internet traffic, as well as threats embedded in internal network traffic. Our network security solutions may be deployed at the network perimeter, in conjunction with signature- and policy-based defenses, such as network firewalls to detect and validate attacks missed by those products. Additionally, our network security solutions may be deployed at the network core, across network segments or in front of servers to detect threats embedded in internal network traffic, such as ransomware. Our network security solutions require up-to-date dynamic threat intelligence and software support to maintain high detection efficacy. Customers may choose to purchase our network security software, dynamic threat intelligence, and support in a single “all inclusive” subscription, with optional appliance hardware, or they may purchase pre-configured appliance hardware with the required dynamic threat intelligence and support subscriptions priced as a percentage of the appliance hardware. Our network security solutions integrate with our email and endpoint security solutions through our Central Management System ("CMS") or our Helix security operations platform to correlate threat intelligence and protect against multi-vector, blended attacks.
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Email security solutions. Our email security solutions detect and stop spear phishing, ransomware, sender impersonation, credential phishing, typo-squatting, and other email-based attacks. We offer our email security solution in a Server Edition with multiple deployment options, or as a cloud-based service. Both versions utilize our URL detection platform and our MVX engine to inspect emails for zero-day exploits, malicious URLs, behavioral anomalies, and other malware hidden in attachments. If an attack is confirmed, the malicious email is quarantined for further analysis and deletion. Our email security solutions integrate with FireEye network security through our CMS or our Helix security operations platform to protect against multi-vector, blended attacks.
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Endpoint security solutions. Our endpoint security solutions consist of a centralized management application, available through an on-premise appliance or as a cloud-based user interface, and lightweight endpoint agents deployed on desktops, laptops and other end-user devices. The solutions combine a signature-based endpoint protection platform with advanced endpoint detection and response capabilities to provide a comprehensive detection, protection and response solution in a single endpoint agent. The endpoint security agent also enables rapid containment and collects forensic data necessary for post-breach investigation and analysis of attacks. Our endpoint security solutions integrate with our email and endpoint security solutions through our CMS or our Helix security operations platform to correlate threat intelligence and protect against multi-vector, blended attacks.
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Customer Support and Maintenance Services. We offer technical support on our solutions. We provide multiple levels of support and have regional support centers located across the globe to help customers solve technical challenges they may encounter. In addition to post-sales support activities, our support organization works with our product management and engineering teams to ensure the attainment of defined pre-requisite quality levels for our products and services prior to release.
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Central Management System. Our Central Management System manages the overall deployment and integration of our on-premise network, email and endpoint security solutions by unifying reporting, configuration, and threat intelligence sharing. Customers generally purchase one or more CMS appliances to manage multiple FireEye detection and prevention appliances.
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FireEye Security Orchestrator. Our FireEye Security Orchestrator ("FSO") accelerates and simplifies security operations by coordinating the response to critical alerts across the security and IT infrastructure using customized workflows, granular permissions, and bi-directional command and control plug-ins for many popular security and infrastructure products. FSO also provides an investigative dashboard and is a core enabling technology for the Helix cybersecurity platform.
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FireEye Helix. Our FireEye Helix security operations platform combines security alerts generated by our network, email and endpoint security solutions, as well as third-party security and IT products, with our contextual threat intelligence, threat analytics, and orchestration capabilities within a unified cloud-based interface. Helix enriches raw security event data with our contextual threat intelligence and our built-in analytics to identify and prioritize critical alerts. Helix also serves as an investigative platform with case management and workflow tools, as well as pre-loaded playbooks to automate and orchestrate the response across an organization. Helix also provides detailed reporting for compliance purposes.
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Dynamic Threat Intelligence Cloud. Our DTI cloud is a bi-directional cloud-based service that collects, correlates and anonymizes machine-generated security data from our network, email and endpoint security solutions. DTI also distributes updated threat detection and prevention algorithms and software updates to our network, email and endpoint security solutions based on new threat intelligence and an evolving attack landscape. A subscription to our DTI cloud is required for all network, email and endpoint security solutions.
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FireEye Threat Intelligence is a subscription service based on our active monitoring of attacker personas, including nation-state sponsored groups. The resulting intelligence on adversaries is codified in reports and distributed through our Threat Intelligence portal to enable organizations to proactively defend against new and emerging cyber threats before an attack is launched.
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Managed Defense is a technology-enabled managed detection and response service that utilizes our latest adversary, machine-based, and victim threat intelligence to detect, investigate, and proactively hunt for known and previously undetected threats in our customers' environments.
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Expertise-on-Demand is a prepaid annual subscription that provides flexible, pay-per-use access to our threat intelligence and expertise as microservices. Customers purchase packages of units based on their anticipated needs and use the units to purchase threat intelligence and services at pre-determined unit values. Revenue is recognized in either the Cloud subscription and Managed services category or the Professional services category when the units are utilized, or upon expiration. Unused units expire one year after purchase.
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Incident response, compromise assessments and related security consulting services. Our cybersecurity experts help customers identify and remediate cyber breaches. Additionally, we offer security program assessments and planning, provide litigation support, and perform forensic analyses. These consulting services are marketed under the Mandiant brand.
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Cyber Threat Intelligence Services. Cyber threat intelligence services design and build cyber threat intelligence processes and solutions within customers’ security operations.
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Training. We offer training services to our customers and channel partners through our training department and authorized training partners.
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independent security vendors such as Palo Alto Networks, Proofpoint and CrowdStrike that offer products or features that claim to perform similar functions to our platform;
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small and large companies, including new market entrants, that offer niche product solutions that compete with some of the features present in our platform;
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providers of traditional signature-based security solutions, such as Symantec and McAfee; and
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other providers of incident response and compromise assessment services.
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ability to deliver the combination of technology, intelligence and expertise necessary to combat the current threat landscape;
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ability to detect and prevent known and unknown threats by overcoming the limitations of signature-based approaches, while maintaining a low rate of false-positive alerts;
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scalability, throughput and overall performance of our detection and prevention technologies;
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visibility into all stages of an attack, especially the exploit phase;
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ability to consolidate features onto a single platform, thereby reducing the complexity of maintaining solutions from multiple vendors;
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the ability to integrate with third-party IT providers to enable an orchestrated solution of products and services that detect, prevent and resolve cybersecurity threats across multiple attack vectors;
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breadth and richness of the shared threat intelligence, including dynamic and contextual threat intelligence on cyber crime, cyber espionage, hacktivism, attacks on critical infrastructure and nation-state attacks;
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flexible deployment options, including on-premise appliances, cloud-based software or a hybrid of both, as well as "as-a-service" options;
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brand awareness and reputation;
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strength and effectiveness of sales and marketing efforts;
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product extensibility and ability to integrate with other technologies in the network infrastructure;
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ease of use and customer experience; and
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price and total cost of ownership.
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greater name recognition, longer operating histories and larger customer bases;
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larger sales and marketing budgets and resources;
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broader distribution and established relationships with channel and distribution partners and customers;
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greater customer support resources;
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greater resources to make acquisitions or enter into strategic partnerships;
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lower labor and research and development costs;
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larger and more mature intellectual property portfolios; and
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substantially greater financial, technical and other resources.
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a loss of existing or potential customers or channel partners;
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delayed or lost revenue and harm to our financial condition and results of operations;
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a delay in attaining, or the failure to attain, market acceptance;
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the expenditure of significant financial and product development resources in efforts to analyze, correct, eliminate, or work around errors or defects, to address and eliminate vulnerabilities, or to identify and ramp up production with alternative third-party manufacturers;
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an increase in warranty claims, or an increase in the cost of servicing warranty claims, either of which would adversely affect our gross margins;
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harm to our reputation or brand; and
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litigation, regulatory inquiries, or investigations that may be costly and further harm our reputation.
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our ability to attract new and retain existing customers or sell additional products and subscriptions to our existing customers;
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changes in our mix of products, subscriptions and services sold, including changes in multi-year subscriptions and support;
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the timing and success of new product, subscription or service introductions by us or our competitors;
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real or perceived reductions in our product efficacy by our customers or in the marketplace;
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the budgeting cycles, seasonal buying patterns and purchasing practices of customers;
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the timing of new contracts or shipments of our products and length of our sales cycles;
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changes in customer, distributor or reseller requirements or market needs;
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changes in the growth rate of the IT security market, particularly the market for threat protection solutions like ours that target next-generation advanced cyber attacks;
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any change in the competitive landscape of the IT security market, including consolidation among our customers or competitors and strategic partnerships entered into by and between our competitors;
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the level of awareness of IT security threats, particularly advanced cyber attacks, and the market adoption of our platform;
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deferral of orders from customers in anticipation of new products or product enhancements announced by us or our competitors;
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our ability to successfully and continuously expand our business domestically and internationally;
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reductions in customer retention rates for our subscriptions and support;
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decisions by organizations to purchase IT security solutions from larger, more established security vendors or from their primary IT equipment vendors;
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changes in our pricing policies or those of our competitors;
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any disruption in, or termination of, our relationships with channel partners;
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our inability to fulfill our customers’ orders due to supply chain delays or events that impact our manufacturers or their suppliers;
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the timing and costs related to the development or acquisition of technologies or businesses or strategic partnerships;
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the lack of synergy or the inability to realize expected synergies, resulting from acquisitions or strategic partnerships;
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our inability to execute, complete or integrate efficiently any acquisition that we may undertake;
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increased expenses, unforeseen liabilities, or write-downs and any impact on our operating results from any acquisitions we consummate;
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insolvency or credit difficulties confronting our customers, affecting their ability to purchase or pay for our products, subscriptions and services, or confronting our key suppliers, particularly our sole source suppliers, which could disrupt our supply chain;
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the cost and potential outcomes of future litigation;
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seasonality or cyclical fluctuations in our business;
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political, economic and social instability;
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future accounting pronouncements or changes in our accounting policies or practices;
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the amount and timing of operating costs and capital expenditures related to the expansion of our business; and
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increases or decreases in our revenues and expenses caused by fluctuations in foreign currency exchange rates.
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maintain, renew and expand our existing customer base;
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win new customers to our solutions;
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increase revenues from existing customers through increased use of our products, subscriptions and services within their organizations;
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improve the capabilities of our products and subscriptions through research and development;
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continue to develop our cloud-based solutions;
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maintain the rate at which customers purchase our subscriptions and support;
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continue to successfully expand our business domestically and internationally; and
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successfully compete with other companies.
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diversion of management time and focus from operating our business to addressing acquisition integration challenges;
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coordination of research and development and sales and marketing functions;
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integration of product and service offerings;
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retention of key employees from the acquired company;
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changes in relationships with strategic partners as a result of product acquisitions or strategic positioning resulting from the acquisition;
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cultural challenges associated with integrating employees from the acquired company into our organization;
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integration of the acquired company’s accounting, management information, human resources and other administrative systems, as well as the acquired operations, technology and rights into our offerings, and any unanticipated expenses related to such integration;
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the need to implement or improve controls, procedures, and policies at a business that prior to the acquisition may have lacked sufficiently effective controls, procedures and policies;
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financial reporting, revenue recognition or other financial or control deficiencies of the acquired company that we don’t adequately address and that cause our reported results to be incorrect;
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liability for activities of the acquired company before the acquisition, including intellectual property infringement claims, violations of laws, commercial disputes, tax liabilities and other known and unknown liabilities;
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completing the transaction and achieving or utilizing the anticipated benefits of the acquisition within the expected timeframe, or at all;
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unanticipated write-offs or charges; and
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litigation or other claims in connection with the acquired company, including claims from terminated employees, customers, former stockholders or other third parties which may differ from or be more significant than the risks our business faces.
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effectively hiring, training and integrating new employees, particularly members of our sales and management teams;
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further improving our key business applications, processes and IT infrastructure, including our data centers, to support our business needs;
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continuing to refine our ability to forecast our bookings, billings, revenues, expenses and cash flows;
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enhancing our information and communication systems to ensure that our employees and offices around the world are well coordinated and can effectively communicate with each other and our growing base of channel partners and customers;
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improving our internal control over financial reporting and disclosure controls and procedures to ensure timely and accurate reporting of our operational and financial results; and
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appropriately documenting and testing our IT systems and business processes.
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increased purchasing power and leverage held by large customers in negotiating contractual arrangements with us;
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more stringent or costly requirements imposed upon us in our support service contracts with such customers, including stricter support response times and penalties for any failure to meet support requirements;
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more complicated implementation processes;
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longer sales cycles and the associated risk that substantial time and resources may be spent on a potential customer that ultimately elects not to purchase our platform or purchases less than we hoped;
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closer relationships with, and dependence upon, large technology companies who offer competitive products; and
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more pressure for discounts and write-offs.
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selling to governmental agencies can be highly competitive, expensive and time consuming, often requiring significant upfront time and expense without any assurance that such efforts will generate a sale;
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government certification requirements applicable to our products may change and, in doing so, restrict our ability to sell into the U.S. federal government sector until we have attained the revised certification;
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government demand and payment for our products and services may be impacted by government shutdowns, public sector budgetary cycles, contracting requirements and funding authorizations, with funding reductions or delays adversely affecting public sector demand for our products and services;
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we sell our platform to governmental agencies through our indirect channel partners, and these agencies may have statutory, contractual or other legal rights to terminate contracts with our distributors and resellers for convenience or due to a default, and any such termination may adversely impact our future results of operations;
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governments routinely investigate and audit government contractors’ administrative processes, and any unfavorable audit could result in the government refusing to continue buying our platform, which would adversely impact our revenue and results of operations, or institute fines or civil or criminal liability if the audit were to uncover improper or illegal activities; and
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governments may require certain products purchased by it to be manufactured in the United States and other relatively high-cost manufacturing locations, and we may not manufacture all products in locations that meet these requirements, affecting our ability to sell these products to governmental agencies.
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maintain and expand our customer base and the ways in which customers use our products and services;
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expand revenue from existing customers through increased or broader use of our products and services within their organizations;
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convince customers to allocate a fixed portion of their annual IT budgets to our products and services;
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improve the performance and capabilities of our platform through research and development;
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effectively expand our business domestically and internationally, which will require that we fill key management positions, particularly internationally; and
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successfully compete with other companies that currently provide, or may in the future provide, solutions like ours that protect against next-generation advanced cyber attacks.
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develop or enhance our products and subscriptions;
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continue to expand our sales and marketing and research and development organizations;
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acquire complementary technologies, products or businesses;
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expand operations, in the United States or internationally;
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hire, train and retain employees; or
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respond to competitive pressures or unanticipated working capital requirements.
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greater difficulty in enforcing contracts and managing collections, as well as longer collection periods;
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higher costs of doing business internationally, including costs incurred in establishing and maintaining office space and equipment for our international operations;
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fluctuations in exchange rates between the U.S. dollar and foreign currencies in markets where we do business, such as the British Pound Sterling, which experienced a sharp decline in value compared to the U.S. dollar and other currencies;
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management communication and integration problems resulting from cultural and geographic dispersion;
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risks associated with trade restrictions and foreign legal requirements, including any importation, certification, and localization of our platform that may be required in foreign countries and any changes in trade relations and restrictions as a result of the 2016 U.S. presidential election;
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greater risk of unexpected changes in foreign and domestic regulatory practices, tariffs and tax laws and treaties, including regulatory and trade policy changes adopted by the current administration;
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compliance with anti-bribery laws, including, without limitation, compliance with the U.S. Foreign Corrupt Practices Act of 1977, as amended, the U.S. Travel Act and the UK Bribery Act 2010, violations of which could lead to significant fines, penalties and collateral consequences for our Company;
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heightened risk of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact financial results and result in restatements of, or irregularities in, financial statements;
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the uncertainty of protection for intellectual property rights in some countries;
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foreign exchange controls or tax regulations that might prevent us from repatriating cash earned outside the United States;
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general economic, political and social conditions in these foreign markets, including the perception of doing business with U.S. based companies and changes in regulatory requirements that impact our operating strategies, access to global markets or hiring;
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political and economic instability in some countries, such as those caused by the 2016 U.S. presidential election and the referendum on June 23, 2016, in which voters in the U.K. approved an exit from the EU ("Brexit"), and, in March 2017, began the process to leave the EU by April 2019; and
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double taxation of our international earnings and potentially adverse tax consequences due to changes in the tax laws of the United States or the foreign jurisdictions in which we operate.
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we may be more vulnerable to economic downturns, less able to withstand competitive pressures and less flexible in responding to changing business and economic conditions;
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our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, general corporate or other purposes may be limited;
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a substantial portion of our cash flows from operations in the future may be required for the payment of the principal amount of our existing indebtedness when it becomes due; and
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we may elect to make cash payments upon any conversion of the convertible notes, which would reduce our cash on hand.
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whether our results of operations, and in particular, our revenue growth rates, meet the expectations of securities analysts or investors;
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actual or anticipated changes in the expectations of investors or securities analysts, whether as a result of our forward-looking statements, our failure to meet such expectation or otherwise;
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announcements of new products, services or technologies, commercial relationships, acquisitions or other events by us or our competitors;
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changes in how customers perceive the effectiveness of our platform in protecting against advanced cyber attacks or other reputational harm;
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publicity concerning cyber attacks in general or high profile cyber attacks against specific organizations;
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price and volume fluctuations in the overall stock market from time to time;
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significant volatility in the market price and trading volume of technology and/or growth companies in general and of companies in the IT security industry in particular;
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fluctuations in the trading volume of our shares or the size of our public float;
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actual or anticipated changes or fluctuations in our results of operations;
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litigation involving us, our industry, or both;
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regulatory developments in the United States, foreign countries or both;
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general economic conditions and trends;
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natural disasters or other catastrophic events;
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sales of large blocks of our common stock or substantial future sales by our directors, executive officers, employees and significant stockholders; and
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departures of key personnel.
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a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our board of directors;
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the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquiror;
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the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors;
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a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders;
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the requirement that a special meeting of stockholders may be called only by our board of directors, the chairperson of our board of directors, our Chief Executive Officer or our President (in the absence of a Chief Executive Officer), which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors;
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the requirement for the affirmative vote of holders of at least 66 2/3% of the voting power of all of the then outstanding shares of the voting stock, voting together as a single class, to amend the provisions of our amended and restated certificate of incorporation relating to the management of our business (including our classified board structure) or certain provisions of our amended and restated bylaws, which may inhibit the ability of an acquiror to effect such amendments to facilitate an unsolicited takeover attempt;
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the ability of our board of directors to amend the bylaws, which may allow our board of directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquiror to amend the bylaws to facilitate an unsolicited takeover attempt; and
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advance notice procedures with which stockholders must comply to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of us.
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12/13
|
|
12/14
|
|
12/15
|
|
12/16
|
|
12/17
|
|
12/18
|
||||||||||||
FireEye, Inc.
|
$
|
100.00
|
|
|
$
|
72.41
|
|
|
$
|
47.56
|
|
|
$
|
27.29
|
|
|
$
|
32.56
|
|
|
$
|
37.17
|
|
S&P 500
|
$
|
100.00
|
|
|
$
|
113.69
|
|
|
$
|
115.26
|
|
|
$
|
129.05
|
|
|
$
|
157.22
|
|
|
$
|
150.33
|
|
S&P Information Technology
|
$
|
100.00
|
|
|
$
|
120.12
|
|
|
$
|
127.23
|
|
|
$
|
144.85
|
|
|
$
|
201.10
|
|
|
$
|
200.52
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2018
|
|
2017*
|
|
2016*
|
|
2015
|
|
2014
|
||||||||||
|
(In thousands, except per share data)
|
||||||||||||||||||
Consolidated Statements of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue:
|
$
|
830,950
|
|
|
$
|
779,648
|
|
|
$
|
705,995
|
|
|
$
|
622,967
|
|
|
$
|
425,662
|
|
Cost of revenue:(1)
|
272,475
|
|
|
271,647
|
|
|
271,083
|
|
|
233,204
|
|
|
175,093
|
|
|||||
Total gross profit
|
558,475
|
|
|
508,001
|
|
|
434,912
|
|
|
389,763
|
|
|
250,569
|
|
|||||
Operating expenses:(1)
|
|
|
|
|
|
|
|
|
|
||||||||||
Research and development
|
254,142
|
|
|
243,273
|
|
|
279,594
|
|
|
279,467
|
|
|
203,187
|
|
|||||
Sales and marketing
|
380,962
|
|
|
379,278
|
|
|
437,519
|
|
|
476,166
|
|
|
401,151
|
|
|||||
General and administrative
|
105,773
|
|
|
125,549
|
|
|
139,791
|
|
|
141,790
|
|
|
121,099
|
|
|||||
Restructuring charges
|
—
|
|
|
—
|
|
|
27,630
|
|
|
—
|
|
|
4,327
|
|
|||||
Total operating expenses
|
740,877
|
|
|
748,100
|
|
|
884,534
|
|
|
897,423
|
|
|
729,764
|
|
|||||
Operating loss
|
(182,402
|
)
|
|
(240,099
|
)
|
|
(449,622
|
)
|
|
(507,660
|
)
|
|
(479,195
|
)
|
|||||
Interest income
|
16,033
|
|
|
9,323
|
|
|
6,582
|
|
|
2,935
|
|
|
713
|
|
|||||
Interest expense
|
(56,426
|
)
|
|
(49,766
|
)
|
|
(47,869
|
)
|
|
(27,116
|
)
|
|
(26
|
)
|
|||||
Other expense, net
|
(14,804
|
)
|
|
(10
|
)
|
|
(3,247
|
)
|
|
(3,284
|
)
|
|
(1,936
|
)
|
|||||
Loss before income taxes
|
(237,599
|
)
|
|
(280,552
|
)
|
|
(494,156
|
)
|
|
(535,125
|
)
|
|
(480,444
|
)
|
|||||
Provision for (benefit from) income taxes
|
5,524
|
|
|
4,632
|
|
|
(8,721
|
)
|
|
4,090
|
|
|
(36,654
|
)
|
|||||
Net loss attributable to common stockholders
|
$
|
(243,123
|
)
|
|
$
|
(285,184
|
)
|
|
$
|
(485,435
|
)
|
|
$
|
(539,215
|
)
|
|
$
|
(443,790
|
)
|
Net loss per share attributable to common stockholders, basic and diluted
|
$
|
(1.27
|
)
|
|
$
|
(1.60
|
)
|
|
$
|
(2.97
|
)
|
|
$
|
(3.50
|
)
|
|
$
|
(3.12
|
)
|
Weighted-average shares used to compute net loss per share attributable to common stockholders
|
190,803
|
|
|
177,757
|
|
|
163,211
|
|
|
154,120
|
|
|
142,176
|
|
|
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Stock-Based Compensation Expense:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of revenue
|
$
|
28,362
|
|
|
$
|
32,656
|
|
|
$
|
31,903
|
|
|
$
|
31,023
|
|
|
$
|
17,925
|
|
Research and development
|
49,503
|
|
|
56,720
|
|
|
64,755
|
|
|
68,329
|
|
|
28,968
|
|
|||||
Sales and marketing
|
47,592
|
|
|
46,766
|
|
|
57,750
|
|
|
73,286
|
|
|
66,773
|
|
|||||
General and administrative
|
28,218
|
|
|
30,194
|
|
|
43,343
|
|
|
49,793
|
|
|
38,186
|
|
|||||
Restructuring
|
—
|
|
|
—
|
|
|
1,144
|
|
|
—
|
|
|
—
|
|
|||||
Total stock-based compensation expense
|
$
|
153,675
|
|
|
$
|
166,336
|
|
|
$
|
198,895
|
|
|
$
|
222,431
|
|
|
$
|
151,852
|
|
|
As of December 31,
|
||||||||||||||||||
|
2018
|
|
2017*
|
|
2016*
|
|
2015
|
|
2014
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
409,829
|
|
|
$
|
180,891
|
|
|
$
|
223,667
|
|
|
$
|
402,102
|
|
|
$
|
146,363
|
|
Total assets
|
$
|
2,696,078
|
|
|
$
|
2,458,837
|
|
|
$
|
2,526,092
|
|
|
$
|
2,441,473
|
|
|
$
|
1,758,881
|
|
Total deferred revenue
|
$
|
934,828
|
|
|
$
|
910,100
|
|
|
$
|
927,749
|
|
|
$
|
526,998
|
|
|
$
|
352,543
|
|
Total long-term debt
|
$
|
962,577
|
|
|
$
|
779,578
|
|
|
$
|
741,980
|
|
|
$
|
706,198
|
|
|
$
|
—
|
|
Total stockholders’ equity
|
$
|
650,394
|
|
|
$
|
632,216
|
|
|
$
|
710,006
|
|
|
$
|
1,044,372
|
|
|
$
|
1,250,828
|
|
|
Year Ended or as of December 31,
|
||||||||||
|
2018
|
|
2017*
|
|
2016*
|
||||||
Product, subscription and support revenue
|
$
|
687,382
|
|
|
$
|
645,965
|
|
|
$
|
584,885
|
|
Professional services revenue
|
143,568
|
|
|
133,683
|
|
|
121,110
|
|
|||
Total revenue
|
$
|
830,950
|
|
|
$
|
779,648
|
|
|
$
|
705,995
|
|
Year-over-year percentage increase
|
7
|
%
|
|
10
|
%
|
|
|
||||
Gross margin percentage
|
67
|
%
|
|
65
|
%
|
|
62
|
%
|
|||
Deferred revenue, current
|
$
|
556,815
|
|
|
$
|
546,615
|
|
|
$
|
508,718
|
|
Deferred revenue, non-current
|
$
|
378,013
|
|
|
$
|
363,485
|
|
|
$
|
419,031
|
|
Billings (non-GAAP)
|
$
|
855,678
|
|
|
$
|
761,999
|
|
|
$
|
822,787
|
|
Net cash provided by (used in) operating activities
|
$
|
17,381
|
|
|
$
|
17,640
|
|
|
$
|
(14,585
|
)
|
Free cash flow (non-GAAP)
|
$
|
10,125
|
|
|
$
|
(26,139
|
)
|
|
$
|
(50,899
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017*
|
|
2016*
|
||||||
Revenue
|
$
|
830,950
|
|
|
$
|
779,648
|
|
|
$
|
705,995
|
|
Add: Deferred revenue, end of period
|
934,828
|
|
|
910,100
|
|
|
927,749
|
|
|||
Less: Deferred revenue, beginning of period
|
910,100
|
|
|
927,749
|
|
|
789,870
|
|
|||
Less: Deferred revenue assumed through acquisitions
|
—
|
|
|
|
|
21,087
|
|
||||
Billings (non-GAAP)
|
$
|
855,678
|
|
|
$
|
761,999
|
|
|
$
|
822,787
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017*
|
|
2016*
|
||||||
Product and related subscription and support
|
$
|
451,973
|
|
|
$
|
414,809
|
|
|
$
|
499,038
|
|
Cloud subscription and Managed services
|
243,903
|
|
|
194,939
|
|
|
188,664
|
|
|||
Professional Services
|
159,802
|
|
|
152,251
|
|
|
135,085
|
|
|||
Billings (non-GAAP)
|
$
|
855,678
|
|
|
$
|
761,999
|
|
|
$
|
822,787
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flow provided by (used in) operating activities
|
$
|
17,381
|
|
|
$
|
17,640
|
|
|
$
|
(14,585
|
)
|
Add: deemed repayment of convertible senior notes attributable to accreted debt discount
|
43,575
|
|
|
—
|
|
|
—
|
|
|||
Less: purchase of property and equipment and demonstration units
|
50,831
|
|
|
43,779
|
|
|
36,314
|
|
|||
Free cash flow (non-GAAP)
|
$
|
10,125
|
|
|
$
|
(26,139
|
)
|
|
$
|
(50,899
|
)
|
Net cash used in investing activities
|
$
|
(48,517
|
)
|
|
$
|
(59,323
|
)
|
|
$
|
(189,696
|
)
|
Net cash provided by (used in) financing activities
|
$
|
260,074
|
|
|
$
|
(1,093
|
)
|
|
$
|
25,846
|
|
•
|
Product, subscription and support revenue. Our product, subscription and support revenue is generated from sales of our network, email, and endpoint security solutions deployed on the customer's premise (or in a hybrid on-premise/cloud deployment), as well as cloud subscriptions and managed services. We combine our virtual and physical appliances and software licenses with the mandatory subscriptions to our DTI cloud updates and support services as a single performance obligation. As a result, we recognize revenue for this single performance obligation ratably over the contractual term. Contracts containing this single performance obligation typically contain a material right of renewal option. For contracts that contain a material right of renewal option, the allocated value of the performance obligation is recognized ratably over the period between the end of the initial contractual term and the end of the estimated useful life of the related appliance and license. Significant judgment is required in estimating the useful life of our intelligence dependent appliances and assessing the material rights associated with such products. Revenue from our Cloud subscription and Managed services is recognized ratably over the contractual term, typically one to three years.
|
•
|
Professional services revenue. Professional services, which includes incident response, compromise assessments, and other security consulting services, are offered on a time-and-material basis, through a fixed fee arrangement, or on a retainer basis. We recognize the associated revenue as the services are delivered. Some professional services and our Expertise-on-Demand micro-services are prepaid, and revenue is deferred until services are delivered.
|
•
|
Cost of product, subscription and support revenue. Cost of product, subscription and support revenue primarily consists of costs paid to our third-party contract manufacturers for our appliances, other costs in our manufacturing operations department, and personnel costs associated with maintaining our Dynamic Threat Intelligence updates and our global customer support operations. Personnel costs associated with our operations and global customer support organizations consist of salaries, benefits, bonuses and stock-based compensation. Overhead costs consist of certain facilities, depreciation and information technology costs. Our cost of product, subscription and support revenue also includes product testing costs, shipping costs and allocated overhead costs. If revenue from sales of product, subscriptions and support declines, the cost of product, subscription and support revenue may increase as a percentage of product, subscription and support revenue due to the fixed nature of a portion of these costs. Additionally, our appliance related cost of goods sold are capitalized and amortized on a systematic basis that is consistent with the pattern of transfer to which the asset relates.
|
•
|
Cost of professional services revenue. Cost of professional services revenue primarily consists of personnel costs for our services organization and allocated overhead costs. If sales of our professional services decline or we are unable to maintain our changeability rates, our cost of professional services revenue may increase as a percentage of professional services revenue.
|
•
|
Research and development. Research and development expense consists primarily of personnel costs and allocated overhead. Research and development expense also includes prototype related expenses. We expect research and development expense to increase in absolute dollars but to remain flat as a percentage of total revenue.
|
•
|
Sales and marketing. Sales and marketing expense consists primarily of personnel costs, incentive commission costs and allocated overhead. Commission costs are capitalized and amortized based on the useful life amortization period taking into consideration the pattern of transfer to which the asset relates and the expected renewal periods during which renewal commissions are not commensurate with the initial commissions paid. When initial commissions are higher than (not-commensurate with) renewal commissions, we recognize the incremental portion of initial commissions over an estimated renewal period. The commensurate portion will be recognized over the same period as the initial revenue arrangement to which it relates.
|
•
|
General and administrative. General and administrative expense consists of personnel costs, professional service costs and allocated overhead. General and administrative personnel include our executive, finance, human resources, facilities and legal organizations. Professional service costs consist primarily of legal, auditing, accounting and other consulting costs. We expect general and administrative expense to remain relatively flat in absolute terms, but to decrease as a percentage of total revenue.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017*
|
|
2016*
|
||||||
|
(In thousands)
|
||||||||||
Revenue:
|
|
|
|
|
|
||||||
Product, subscription and support
|
$
|
687,382
|
|
|
$
|
645,965
|
|
|
$
|
584,885
|
|
Professional services
|
143,568
|
|
|
133,683
|
|
|
121,110
|
|
|||
Total revenue
|
830,950
|
|
|
779,648
|
|
|
705,995
|
|
|||
Cost of revenue:
|
|
|
|
|
|
||||||
Product, subscription and support
|
188,301
|
|
|
190,786
|
|
|
192,659
|
|
|||
Professional services
|
84,174
|
|
|
80,861
|
|
|
78,424
|
|
|||
Total cost of revenue
|
272,475
|
|
|
271,647
|
|
|
271,083
|
|
|||
Total gross profit
|
558,475
|
|
|
508,001
|
|
|
434,912
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development
|
254,142
|
|
|
243,273
|
|
|
279,594
|
|
|||
Sales and marketing
|
380,962
|
|
|
379,278
|
|
|
437,519
|
|
|||
General and administrative
|
105,773
|
|
|
125,549
|
|
|
139,791
|
|
|||
Restructuring charges
|
—
|
|
|
—
|
|
|
27,630
|
|
|||
Total operating expenses
|
740,877
|
|
|
748,100
|
|
|
884,534
|
|
|||
Operating loss
|
(182,402
|
)
|
|
(240,099
|
)
|
|
(449,622
|
)
|
|||
Interest income
|
16,033
|
|
|
9,323
|
|
|
6,582
|
|
|||
Interest expense
|
(56,426
|
)
|
|
(49,766
|
)
|
|
(47,869
|
)
|
|||
Other expense, net
|
(14,804
|
)
|
|
(10
|
)
|
|
(3,247
|
)
|
|||
Loss before income taxes
|
(237,599
|
)
|
|
(280,552
|
)
|
|
(494,156
|
)
|
|||
Provision for (benefit from) income taxes
|
5,524
|
|
|
4,632
|
|
|
(8,721
|
)
|
|||
Net loss attributable to common stockholders
|
$
|
(243,123
|
)
|
|
$
|
(285,184
|
)
|
|
$
|
(485,435
|
)
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2018
|
|
2017*
|
|
Change
|
|||||||||||||||
|
Amount
|
|
% of Total Revenue
|
|
Amount
|
|
% of Total Revenue
|
|
Amount
|
|
%
|
|||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Product, subscription and support
|
$
|
687,382
|
|
|
83
|
%
|
|
$
|
645,965
|
|
|
83
|
%
|
|
$
|
41,417
|
|
|
6
|
%
|
Professional Services
|
143,568
|
|
|
17
|
|
|
133,683
|
|
|
17
|
|
|
9,885
|
|
|
7
|
|
|||
Total revenue
|
$
|
830,950
|
|
|
100
|
%
|
|
$
|
779,648
|
|
|
100
|
%
|
|
$
|
51,302
|
|
|
7
|
%
|
Product, subscription and services by type:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Product and related subscription and support
|
$
|
498,992
|
|
|
60
|
%
|
|
$
|
479,521
|
|
|
62
|
%
|
|
$
|
19,471
|
|
|
4
|
%
|
Cloud subscription and Managed services
|
188,390
|
|
|
23
|
|
|
166,444
|
|
|
21
|
|
|
21,946
|
|
|
13
|
|
|||
Total Product, subscription and support
|
$
|
687,382
|
|
|
83
|
%
|
|
$
|
645,965
|
|
|
83
|
%
|
|
$
|
41,417
|
|
|
6
|
%
|
Revenue by geographic region:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
United States
|
$
|
523,150
|
|
|
63
|
%
|
|
$
|
521,232
|
|
|
67
|
%
|
|
$
|
1,918
|
|
|
—
|
%
|
EMEA
|
135,736
|
|
|
16
|
|
|
116,205
|
|
|
15
|
|
|
19,531
|
|
|
17
|
|
|||
APAC
|
122,516
|
|
|
15
|
|
|
105,196
|
|
|
13
|
|
|
17,320
|
|
|
16
|
|
|||
Other
|
49,548
|
|
|
6
|
|
|
37,015
|
|
|
5
|
|
|
12,533
|
|
|
34
|
|
|||
Total revenue
|
$
|
830,950
|
|
|
100
|
%
|
|
$
|
779,648
|
|
|
100
|
%
|
|
$
|
51,302
|
|
|
7
|
%
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2018
|
|
2017*
|
|
Change
|
|||||||||||||||
|
Amount
|
|
Gross
Margin
|
|
Amount
|
|
Gross
Margin
|
|
Amount
|
|
%
|
|||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Product, subscription and support
|
$
|
188,301
|
|
|
|
|
$
|
190,786
|
|
|
|
|
$
|
(2,485
|
)
|
|
(1
|
)%
|
||
Professional services
|
84,174
|
|
|
|
|
80,861
|
|
|
|
|
3,313
|
|
|
4
|
|
|||||
Total cost of revenue
|
$
|
272,475
|
|
|
|
|
$
|
271,647
|
|
|
|
|
$
|
828
|
|
|
—
|
%
|
||
Gross margin:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Product, subscription and support
|
|
|
73
|
%
|
|
|
|
70
|
%
|
|
|
|
|
|||||||
Professional services
|
|
|
41
|
%
|
|
|
|
40
|
%
|
|
|
|
|
|||||||
Total gross margin
|
|
|
67
|
%
|
|
|
|
65
|
%
|
|
|
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2018
|
|
2017*
|
|
Change
|
|||||||||||||||
|
Amount
|
|
% of Total Revenue
|
|
Amount
|
|
% of Total Revenue
|
|
Amount
|
|
%
|
|||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Research and development
|
$
|
254,142
|
|
|
31
|
%
|
|
$
|
243,273
|
|
|
31
|
%
|
|
$
|
10,869
|
|
|
4
|
%
|
Sales and marketing
|
380,962
|
|
|
46
|
|
|
379,278
|
|
|
49
|
|
|
1,684
|
|
|
0
|
|
|||
General and administrative
|
105,773
|
|
|
13
|
|
|
125,549
|
|
|
16
|
|
|
(19,776
|
)
|
|
(16
|
)
|
|||
Total operating expenses
|
$
|
740,877
|
|
|
89
|
%
|
|
$
|
748,100
|
|
|
96
|
%
|
|
$
|
(7,223
|
)
|
|
(1
|
)%
|
Includes stock-based compensation expense of:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Research and development
|
$
|
49,503
|
|
|
|
|
$
|
56,720
|
|
|
|
|
|
|
|
|||||
Sales and marketing
|
47,592
|
|
|
|
|
46,766
|
|
|
|
|
|
|
|
|||||||
General and administrative
|
28,218
|
|
|
|
|
30,194
|
|
|
|
|
|
|
|
|||||||
Total
|
$
|
125,313
|
|
|
|
|
$
|
133,680
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
Change
|
|||||||||||
|
2018
|
|
2017
|
|
Amount
|
|
%
|
|||||||
|
(Dollars in thousands)
|
|||||||||||||
Interest expense
|
$
|
56,426
|
|
|
$
|
49,766
|
|
|
$
|
6,660
|
|
|
13
|
%
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
Provision for (benefit from) income taxes
|
$
|
5,524
|
|
|
$
|
4,632
|
|
Effective tax rate
|
(2.3
|
)%
|
|
(1.6
|
)%
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2017*
|
|
2016*
|
|
Change
|
|||||||||||||||
|
Amount
|
|
% of Total Revenue
|
|
Amount
|
|
% of Total Revenue
|
|
Amount
|
|
%
|
|||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Product, subscription and support
|
$
|
645,965
|
|
|
83
|
%
|
|
$
|
584,885
|
|
|
83
|
%
|
|
$
|
61,080
|
|
|
10
|
%
|
Professional Services
|
133,683
|
|
|
17
|
|
|
121,110
|
|
|
17
|
|
|
12,573
|
|
|
10
|
|
|||
Total revenue
|
$
|
779,648
|
|
|
100
|
%
|
|
$
|
705,995
|
|
|
100
|
%
|
|
$
|
73,653
|
|
|
10
|
%
|
Product, subscription and services by type:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Product and related subscription and support
|
$
|
479,521
|
|
|
62
|
%
|
|
$
|
437,238
|
|
|
62
|
%
|
|
$
|
42,283
|
|
|
10
|
%
|
Cloud subscription and Managed services
|
166,444
|
|
|
21
|
|
|
147,647
|
|
|
21
|
|
|
18,797
|
|
|
13
|
|
|||
Total Product, subscription and support
|
$
|
645,965
|
|
|
83
|
%
|
|
$
|
584,885
|
|
|
83
|
%
|
|
$
|
61,080
|
|
|
10
|
%
|
Revenue by geographic region:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
United States
|
$
|
521,232
|
|
|
67
|
%
|
|
$
|
490,802
|
|
|
70
|
%
|
|
$
|
30,430
|
|
|
6
|
%
|
EMEA
|
116,205
|
|
|
15
|
|
|
93,832
|
|
|
13
|
|
|
22,373
|
|
|
24
|
|
|||
APAC
|
105,196
|
|
|
13
|
|
|
90,682
|
|
|
13
|
|
|
14,514
|
|
|
16
|
|
|||
Other
|
37,015
|
|
|
5
|
|
|
30,679
|
|
|
4
|
|
|
6,336
|
|
|
21
|
|
|||
Total revenue
|
$
|
779,648
|
|
|
100
|
%
|
|
$
|
705,995
|
|
|
100
|
%
|
|
$
|
73,653
|
|
|
10
|
%
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2017*
|
|
2016*
|
|
Change
|
|||||||||||||||
|
Amount
|
|
Gross
Margin
|
|
Amount
|
|
Gross
Margin
|
|
Amount
|
|
%
|
|||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Product, subscription and support
|
$
|
190,786
|
|
|
|
|
$
|
192,659
|
|
|
|
|
$
|
(1,873
|
)
|
|
(1
|
)%
|
||
Professional Services
|
80,861
|
|
|
|
|
78,424
|
|
|
|
|
2,437
|
|
|
3
|
|
|||||
Total cost of revenue
|
$
|
271,647
|
|
|
|
|
$
|
271,083
|
|
|
|
|
$
|
564
|
|
|
—
|
%
|
||
Gross margin:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Product, subscription and support
|
|
|
70
|
%
|
|
|
|
67
|
%
|
|
|
|
|
|||||||
Professional Services
|
|
|
40
|
%
|
|
|
|
35
|
%
|
|
|
|
|
|||||||
Total gross margin
|
|
|
65
|
%
|
|
|
|
62
|
%
|
|
|
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2017*
|
|
2016*
|
|
Change
|
|||||||||||||||
|
Amount
|
|
% of Total Revenue
|
|
Amount
|
|
% of Total Revenue
|
|
Amount
|
|
%
|
|||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Research and development
|
$
|
243,273
|
|
|
31
|
%
|
|
$
|
279,594
|
|
|
40
|
%
|
|
$
|
(36,321
|
)
|
|
(13
|
)%
|
Sales and marketing
|
379,278
|
|
|
49
|
|
|
437,519
|
|
|
62
|
|
|
(58,241
|
)
|
|
(13
|
)
|
|||
General and administrative
|
125,549
|
|
|
16
|
|
|
139,791
|
|
|
20
|
|
|
(14,242
|
)
|
|
(10
|
)
|
|||
Restructuring charges
|
—
|
|
|
—
|
|
|
27,630
|
|
|
4
|
|
|
(27,630
|
)
|
|
(100
|
)
|
|||
Total operating expenses
|
$
|
748,100
|
|
|
96
|
%
|
|
$
|
884,534
|
|
|
126
|
%
|
|
$
|
(136,434
|
)
|
|
(15
|
)%
|
Includes stock-based compensation expense of:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Research and development
|
$
|
56,720
|
|
|
|
|
$
|
64,755
|
|
|
|
|
|
|
|
|||||
Sales and marketing
|
46,766
|
|
|
|
|
57,750
|
|
|
|
|
|
|
|
|||||||
General and administrative
|
30,194
|
|
|
|
|
43,343
|
|
|
|
|
|
|
|
|||||||
Restructuring charges
|
—
|
|
|
|
|
1,144
|
|
|
|
|
|
|
|
|||||||
Total
|
$
|
133,680
|
|
|
|
|
$
|
166,992
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
Change
|
|||||||||||
|
2017
|
|
2016
|
|
Amount
|
|
%
|
|||||||
|
(Dollars in thousands)
|
|||||||||||||
Interest expense
|
$
|
49,766
|
|
|
$
|
47,869
|
|
|
$
|
1,897
|
|
|
4
|
%
|
|
Year Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(Dollars in thousands)
|
||||||
Provision for (benefit from) income taxes
|
$
|
4,632
|
|
|
$
|
(8,721
|
)
|
Effective tax rate
|
(1.6
|
)%
|
|
1.8
|
%
|
|
Three Months Ended
|
||||||||||||||||||||||||||||||
|
December 31, 2018
|
|
September 30, 2018
|
|
June 30, 2018
|
|
March 31, 2018
|
|
December 31, 2017*
|
|
September 30, 2017*
|
|
June 30, 2017*
|
|
March 31, 2017*
|
||||||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Product, subscription and support
|
$
|
178,827
|
|
|
$
|
175,653
|
|
|
$
|
167,429
|
|
|
$
|
165,473
|
|
|
$
|
170,965
|
|
|
$
|
163,174
|
|
|
$
|
158,097
|
|
|
$
|
153,729
|
|
Professional Services
|
38,706
|
|
|
35,998
|
|
|
35,267
|
|
|
33,597
|
|
|
34,836
|
|
|
34,192
|
|
|
33,625
|
|
|
31,030
|
|
||||||||
Total revenue
|
217,533
|
|
|
211,651
|
|
|
202,696
|
|
|
199,070
|
|
|
205,801
|
|
|
197,366
|
|
|
191,722
|
|
|
184,759
|
|
||||||||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Product, subscription and support
|
47,984
|
|
|
46,752
|
|
|
46,136
|
|
|
47,429
|
|
|
48,289
|
|
|
48,438
|
|
|
47,636
|
|
|
46,423
|
|
||||||||
Professional Services
|
21,846
|
|
|
20,682
|
|
|
21,146
|
|
|
20,500
|
|
|
20,751
|
|
|
20,628
|
|
|
20,158
|
|
|
19,324
|
|
||||||||
Total cost of revenue
|
69,830
|
|
|
67,434
|
|
|
67,282
|
|
|
67,929
|
|
|
69,040
|
|
|
69,066
|
|
|
67,794
|
|
|
65,747
|
|
||||||||
Total gross profit
|
147,703
|
|
|
144,217
|
|
|
135,414
|
|
|
131,141
|
|
|
136,761
|
|
|
128,300
|
|
|
123,928
|
|
|
119,012
|
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Research and development
|
62,251
|
|
|
62,120
|
|
|
63,575
|
|
|
66,196
|
|
|
59,858
|
|
|
64,316
|
|
|
60,747
|
|
|
58,352
|
|
||||||||
Sales and marketing
|
97,218
|
|
|
92,297
|
|
|
94,196
|
|
|
97,251
|
|
|
95,772
|
|
|
92,105
|
|
|
92,413
|
|
|
98,988
|
|
||||||||
General and administrative
|
24,935
|
|
|
26,241
|
|
|
26,179
|
|
|
28,418
|
|
|
40,306
|
|
|
29,823
|
|
|
27,805
|
|
|
27,615
|
|
||||||||
Total operating expenses
|
184,404
|
|
|
180,658
|
|
|
183,950
|
|
|
191,865
|
|
|
195,936
|
|
|
186,244
|
|
|
180,965
|
|
|
184,955
|
|
||||||||
Operating loss
|
(36,701
|
)
|
|
(36,441
|
)
|
|
(48,536
|
)
|
|
(60,724
|
)
|
|
(59,175
|
)
|
|
(57,944
|
)
|
|
(57,037
|
)
|
|
(65,943
|
)
|
||||||||
Interest income
|
5,226
|
|
|
4,484
|
|
|
3,383
|
|
|
2,940
|
|
|
2,655
|
|
|
2,468
|
|
|
2,168
|
|
|
2,032
|
|
||||||||
Interest expense
|
(15,128
|
)
|
|
(14,976
|
)
|
|
(13,605
|
)
|
|
(12,717
|
)
|
|
(12,525
|
)
|
|
(12,611
|
)
|
|
(12,385
|
)
|
|
(12,245
|
)
|
||||||||
Other income (expense), net
|
(414
|
)
|
|
(1,424
|
)
|
|
(12,690
|
)
|
|
(276
|
)
|
|
(122
|
)
|
|
—
|
|
|
(120
|
)
|
|
232
|
|
||||||||
Loss before income taxes
|
(47,017
|
)
|
|
(48,357
|
)
|
|
(71,448
|
)
|
|
(70,777
|
)
|
|
(69,167
|
)
|
|
(68,087
|
)
|
|
(67,374
|
)
|
|
(75,924
|
)
|
||||||||
Provision for income taxes
|
1,380
|
|
|
1,680
|
|
|
1,411
|
|
|
1,053
|
|
|
1,247
|
|
|
1,127
|
|
|
965
|
|
|
1,293
|
|
||||||||
Net loss attributable to common stockholders
|
$
|
(48,397
|
)
|
|
$
|
(50,037
|
)
|
|
$
|
(72,859
|
)
|
|
$
|
(71,830
|
)
|
|
$
|
(70,414
|
)
|
|
$
|
(69,214
|
)
|
|
$
|
(68,339
|
)
|
|
$
|
(77,217
|
)
|
Net loss per share attributable to common stockholders, basic and diluted
|
$
|
(0.25
|
)
|
|
$
|
(0.26
|
)
|
|
$
|
(0.38
|
)
|
|
$
|
(0.39
|
)
|
|
$
|
(0.39
|
)
|
|
$
|
(0.39
|
)
|
|
$
|
(0.39
|
)
|
|
$
|
(0.45
|
)
|
Weighted average shares used to compute net loss per share attributable to common stockholders, basic and diluted
|
194,593
|
|
|
192,359
|
|
|
189,696
|
|
|
186,456
|
|
|
182,281
|
|
|
179,732
|
|
|
176,645
|
|
|
172,236
|
|
|
Three Months Ended
|
||||||||||||||||||||||
|
December 31, 2018
|
|
September 30, 2018
|
|
June 30, 2018
|
|
March 31, 2018
|
|
December 31, 2017*
|
|
September 30, 2017*
|
|
June 30, 2017*
|
|
March 31, 2017*
|
||||||||
|
(Percent of total revenue)
|
||||||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Product, subscription and support
|
82
|
%
|
|
83
|
%
|
|
83
|
%
|
|
83
|
%
|
|
83
|
%
|
|
83
|
%
|
|
82
|
%
|
|
83
|
%
|
Professional Services
|
18
|
|
|
17
|
|
|
17
|
|
|
17
|
|
|
17
|
|
|
17
|
|
|
18
|
|
|
17
|
|
Total revenue
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Product, subscription and support
|
22
|
|
|
22
|
|
|
23
|
|
|
24
|
|
|
24
|
|
|
25
|
|
|
25
|
|
|
25
|
|
Professional Services
|
10
|
|
|
10
|
|
|
10
|
|
|
10
|
|
|
10
|
|
|
10
|
|
|
10
|
|
|
11
|
|
Total cost of revenue
|
32
|
|
|
32
|
|
|
33
|
|
|
34
|
|
|
34
|
|
|
35
|
|
|
35
|
|
|
36
|
|
Total gross profit
|
68
|
|
|
68
|
|
|
67
|
|
|
66
|
|
|
66
|
|
|
65
|
|
|
65
|
|
|
64
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Research and development
|
29
|
|
|
29
|
|
|
31
|
|
|
33
|
|
|
29
|
|
|
33
|
|
|
32
|
|
|
32
|
|
Sales and marketing
|
45
|
|
|
44
|
|
|
46
|
|
|
49
|
|
|
47
|
|
|
47
|
|
|
48
|
|
|
54
|
|
General and administrative
|
11
|
|
|
12
|
|
|
13
|
|
|
14
|
|
|
20
|
|
|
15
|
|
|
15
|
|
|
15
|
|
Total operating expenses
|
85
|
|
|
85
|
|
|
90
|
|
|
96
|
|
|
96
|
|
|
95
|
|
|
95
|
|
|
101
|
|
Operating loss
|
(17
|
)
|
|
(17
|
)
|
|
(23
|
)
|
|
(30
|
)
|
|
(30
|
)
|
|
(30
|
)
|
|
(30
|
)
|
|
(37
|
)
|
Interest income
|
2
|
|
|
2
|
|
|
2
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
Interest expense
|
(7
|
)
|
|
(7
|
)
|
|
(7
|
)
|
|
(6
|
)
|
|
(6
|
)
|
|
(6
|
)
|
|
(6
|
)
|
|
(7
|
)
|
Other income (expense), net
|
—
|
|
|
(1
|
)
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Loss before income taxes
|
(22
|
)
|
|
(23
|
)
|
|
(34
|
)
|
|
(35
|
)
|
|
(35
|
)
|
|
(35
|
)
|
|
(35
|
)
|
|
(43
|
)
|
Provision for income taxes
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
Net loss attributable to common stockholders
|
(23
|
)%
|
|
(24
|
)%
|
|
(35
|
)%
|
|
(36
|
)%
|
|
(36
|
)%
|
|
(36
|
)%
|
|
(36
|
)%
|
|
(44
|
)%
|
|
As of December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(In thousands)
|
||||||
Cash and cash equivalents
|
$
|
409,829
|
|
|
$
|
180,891
|
|
Short-term investments
|
$
|
706,691
|
|
|
$
|
715,911
|
|
|
Year Ended December 31,
|
||||||||||
2018
|
|
2017
|
|
2016
|
|||||||
|
(In thousands)
|
||||||||||
Cash provided by (used in) operating activities
|
$
|
17,381
|
|
|
$
|
17,640
|
|
|
$
|
(14,585
|
)
|
Cash used in investing activities
|
(48,517
|
)
|
|
(59,323
|
)
|
|
(189,696
|
)
|
|||
Cash provided by (used in) financing activities
|
260,074
|
|
|
(1,093
|
)
|
|
25,846
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
$
|
228,938
|
|
|
$
|
(42,776
|
)
|
|
$
|
(178,435
|
)
|
|
Payments Due by Period
|
||||||||||||||||||
|
Total
|
|
Less Than
1 Year
|
|
1 - 3 Years
|
|
3 - 5 Years
|
|
More Than
5 Years
|
||||||||||
|
|
|
(In thousands)
|
|
|
||||||||||||||
Convertible Notes
|
$
|
1,236,663
|
|
|
$
|
13,923
|
|
|
$
|
145,877
|
|
|
$
|
474,238
|
|
|
$
|
602,625
|
|
Operating leases
|
118,932
|
|
|
15,530
|
|
|
31,301
|
|
|
24,692
|
|
|
47,409
|
|
|||||
Purchase obligations
|
12,998
|
|
|
7,229
|
|
|
5,769
|
|
|
—
|
|
|
—
|
|
|||||
Contract manufacturer commitments
|
8,604
|
|
|
8,604
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
1,377,197
|
|
|
$
|
45,286
|
|
|
$
|
182,947
|
|
|
$
|
498,930
|
|
|
$
|
650,034
|
|
•
|
Fair Value of Common Stock. Because our common stock was not publicly traded until September 20, 2013, we were required to estimate the fair value of common stock for grants made prior to that date, as discussed in “Common Stock Valuations” below.
|
•
|
Risk-Free Interest Rate. We base the risk-free interest rate used in the Black-Scholes option-pricing model on the implied yield available on U.S. Treasury zero-coupon issues with a remaining term equivalent to that of the options for each option group.
|
•
|
Expected Term. The expected term represents the period that our stock-based awards are expected to be outstanding. We base the expected term assumption on our historical exercise behavior combined with estimates of the post-vesting holding period.
|
•
|
Volatility. We determine the price volatility factor based on the historical volatilities of our publicly traded peer group as we do not have a significant trading history for our common stock. Industry peers consist of several public companies in the technology industry that are similar to us in size, stage of life cycle, and financial leverage. We used the same set of peer group companies in all the relevant valuation estimates. We did not rely on implied volatilities of traded options in our industry peers’ common stock because the volume of activity was relatively low. We intend to continue to consistently apply this process using the same or similar public companies until a sufficient amount of historical information regarding the volatility of our own common stock share price becomes available, or unless circumstances change such that the identified companies are no longer similar to us, in which case, more suitable companies whose share prices are publicly available would be utilized in the calculation.
|
•
|
Dividend Yield. The expected dividend assumption is based on our current expectations about our anticipated dividend policy. Consequently, we used an expected dividend yield of zero.
|
|
Page
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017*
|
|
2016*
|
||||||
Revenue:
|
|
|
|
|
|
||||||
Product, subscription and support
|
$
|
687,382
|
|
|
$
|
645,965
|
|
|
$
|
584,885
|
|
Professional services
|
143,568
|
|
|
133,683
|
|
|
121,110
|
|
|||
Total revenue
|
830,950
|
|
|
779,648
|
|
|
705,995
|
|
|||
Cost of revenue:
|
|
|
|
|
|
||||||
Product, subscription and support
|
188,301
|
|
|
190,786
|
|
|
192,659
|
|
|||
Professional services
|
84,174
|
|
|
80,861
|
|
|
78,424
|
|
|||
Total cost of revenue
|
272,475
|
|
|
271,647
|
|
|
271,083
|
|
|||
Total gross profit
|
558,475
|
|
|
508,001
|
|
|
434,912
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development
|
254,142
|
|
|
243,273
|
|
|
279,594
|
|
|||
Sales and marketing
|
380,962
|
|
|
379,278
|
|
|
437,519
|
|
|||
General and administrative
|
105,773
|
|
|
125,549
|
|
|
139,791
|
|
|||
Restructuring charges
|
—
|
|
|
—
|
|
|
27,630
|
|
|||
Total operating expenses
|
740,877
|
|
|
748,100
|
|
|
884,534
|
|
|||
Operating loss
|
(182,402
|
)
|
|
(240,099
|
)
|
|
(449,622
|
)
|
|||
Interest income
|
16,033
|
|
|
9,323
|
|
|
6,582
|
|
|||
Interest expense
|
(56,426
|
)
|
|
(49,766
|
)
|
|
(47,869
|
)
|
|||
Other expense, net
|
(14,804
|
)
|
|
(10
|
)
|
|
(3,247
|
)
|
|||
Loss before income taxes
|
(237,599
|
)
|
|
(280,552
|
)
|
|
(494,156
|
)
|
|||
Provision for (benefit from) income taxes
|
5,524
|
|
|
4,632
|
|
|
(8,721
|
)
|
|||
Net loss attributable to common stockholders
|
$
|
(243,123
|
)
|
|
$
|
(285,184
|
)
|
|
$
|
(485,435
|
)
|
Net loss per share attributable to common stockholders, basic and diluted
|
$
|
(1.27
|
)
|
|
$
|
(1.60
|
)
|
|
$
|
(2.97
|
)
|
Weighted average shares used in computing net loss per share attributable to common stockholders, basic and diluted
|
190,803
|
|
|
177,757
|
|
|
163,211
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017*
|
|
2016*
|
||||||
Net loss
|
$
|
(243,123
|
)
|
|
$
|
(285,184
|
)
|
|
$
|
(485,435
|
)
|
Change in net unrealized gains (losses) on available-for-sale investments, net of tax
|
582
|
|
|
(1,139
|
)
|
|
483
|
|
|||
Comprehensive loss
|
$
|
(242,541
|
)
|
|
$
|
(286,323
|
)
|
|
$
|
(484,952
|
)
|
|
Common Stock
|
|
Additional Paid-In Capital
|
|
Treasury Stock
|
|
Accumulated Other Comprehensive Loss
|
|
Accumulated Deficit**
|
|
Total Stockholders’ Equity**
|
|||||||||||||||
|
Shares
|
|
Amount
|
|
||||||||||||||||||||||
Balance at January 1, 2016
|
161,643
|
|
|
16
|
|
|
2,403,088
|
|
|
(150,000
|
)
|
|
(2,225
|
)
|
|
(1,332,308
|
)
|
|
918,571
|
|
||||||
Issuance of common stock for equity awards, net of repurchases and tax withholdings
|
8,438
|
|
|
1
|
|
|
12,720
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,721
|
|
||||||
Issuance of common stock related to employee stock purchase plan
|
1,980
|
|
|
—
|
|
|
22,080
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,080
|
|
||||||
Issuance of common stock related to iSIGHT Security, Inc. acquisition
|
1,793
|
|
|
—
|
|
|
29,900
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29,900
|
|
||||||
Issuance of common stock related to Invotas International Corporation acquisition
|
742
|
|
|
—
|
|
|
11,100
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,100
|
|
||||||
Vesting of early exercise of equity awards
|
—
|
|
|
—
|
|
|
1,519
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,519
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
199,066
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
199,066
|
|
||||||
Unrealized gain on investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
483
|
|
|
—
|
|
|
483
|
|
||||||
Cumulative-effect adjustment for adoption of ASU 2016-09
|
—
|
|
|
—
|
|
|
3,436
|
|
|
—
|
|
|
—
|
|
|
(3,436
|
)
|
|
—
|
|
||||||
Net loss*
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(485,435
|
)
|
|
(485,435
|
)
|
||||||
Balance at December 31, 2016
|
174,596
|
|
|
17
|
|
|
2,682,909
|
|
|
(150,000
|
)
|
|
(1,742
|
)
|
|
(1,821,179
|
)
|
|
710,005
|
|
||||||
Issuance of common stock for equity awards, net of repurchases and tax withholdings
|
10,513
|
|
|
2
|
|
|
17,741
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,743
|
|
||||||
Issuance of common stock related to employee stock purchase plan
|
1,737
|
|
|
—
|
|
|
20,094
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,094
|
|
||||||
Issuance of common stock related to Clean Communications Limited acquisition
|
259
|
|
|
—
|
|
|
4,361
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,361
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
166,336
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
166,336
|
|
||||||
Unrealized loss on investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,139
|
)
|
|
—
|
|
|
(1,139
|
)
|
||||||
Net loss*
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(285,184
|
)
|
|
(285,184
|
)
|
||||||
Balance at December 31, 2017
|
187,105
|
|
|
19
|
|
|
2,891,441
|
|
|
(150,000
|
)
|
|
(2,881
|
)
|
|
(2,106,363
|
)
|
|
632,216
|
|
||||||
Issuance of common stock for equity awards, net of repurchases and tax withholdings
|
9,774
|
|
|
1
|
|
|
6,888
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,889
|
|
||||||
Issuance of common stock related to employee stock purchase plan
|
1,717
|
|
|
—
|
|
|
20,816
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,816
|
|
||||||
Issuance of common stock related to X15 acquisition
|
1,016
|
|
|
—
|
|
|
15,387
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,387
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
157,795
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
157,795
|
|
||||||
Unrealized gain on investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
582
|
|
|
—
|
|
|
582
|
|
||||||
Purchase of capped calls
|
—
|
|
|
—
|
|
|
(65,220
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(65,220
|
)
|
||||||
Equity component of issuance of 2024 Notes, net
|
—
|
|
|
—
|
|
|
138,064
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
138,064
|
|
||||||
Equity component of partial repurchase of Series A Notes, net
|
—
|
|
|
—
|
|
|
(13,012
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,012
|
)
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(243,123
|
)
|
|
(243,123
|
)
|
||||||
Balance at December 31, 2018
|
199,612
|
|
|
$
|
20
|
|
|
$
|
3,152,159
|
|
|
$
|
(150,000
|
)
|
|
$
|
(2,299
|
)
|
|
$
|
(2,349,486
|
)
|
|
$
|
650,394
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017*
|
|
2016*
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(243,123
|
)
|
|
$
|
(285,184
|
)
|
|
$
|
(485,435
|
)
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
86,505
|
|
|
103,417
|
|
|
119,267
|
|
|||
Stock-based compensation
|
153,675
|
|
|
166,336
|
|
|
199,066
|
|
|||
Non-cash interest expense related to convertible senior notes
|
43,273
|
|
|
37,598
|
|
|
35,782
|
|
|||
Loss on repurchase of convertible senior notes
|
10,764
|
|
|
—
|
|
|
—
|
|
|||
Deemed repayment of convertible senior notes attributable to accreted debt discount
|
(43,575
|
)
|
|
—
|
|
|
—
|
|
|||
Change in fair value of contingent earn-out liability
|
—
|
|
|
(54
|
)
|
|
2,356
|
|
|||
Deferred income taxes
|
(930
|
)
|
|
(1,287
|
)
|
|
(11,926
|
)
|
|||
Other
|
4,715
|
|
|
7,170
|
|
|
9,836
|
|
|||
Changes in operating assets and liabilities, net of business acquisitions:
|
|
|
|
|
|
||||||
Accounts receivable
|
(11,605
|
)
|
|
(14,434
|
)
|
|
57,968
|
|
|||
Inventories
|
(5,216
|
)
|
|
(3,333
|
)
|
|
1,415
|
|
|||
Prepaid expenses and other assets
|
(13,779
|
)
|
|
5,365
|
|
|
7,106
|
|
|||
Accounts payable
|
(8,205
|
)
|
|
6,040
|
|
|
(19,093
|
)
|
|||
Accrued liabilities
|
10,234
|
|
|
(3,659
|
)
|
|
(11,154
|
)
|
|||
Accrued transaction costs of acquiree
|
—
|
|
|
—
|
|
|
(7,727
|
)
|
|||
Accrued compensation
|
4,220
|
|
|
2,565
|
|
|
(24,621
|
)
|
|||
Deferred revenue
|
24,728
|
|
|
(17,649
|
)
|
|
116,792
|
|
|||
Other long-term liabilities
|
5,700
|
|
|
14,749
|
|
|
(4,217
|
)
|
|||
Net cash provided by (used in) operating activities
|
17,381
|
|
|
17,640
|
|
|
(14,585
|
)
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Purchases of property and equipment and demonstration units
|
(50,831
|
)
|
|
(43,779
|
)
|
|
(36,314
|
)
|
|||
Purchases of short-term investments
|
(479,862
|
)
|
|
(409,358
|
)
|
|
(507,073
|
)
|
|||
Proceeds from maturities of short-term investments
|
487,141
|
|
|
397,483
|
|
|
554,358
|
|
|||
Proceeds from sales of short-term investments
|
—
|
|
|
3,620
|
|
|
4,507
|
|
|||
Business acquisitions, net of cash acquired
|
(5,240
|
)
|
|
(4,300
|
)
|
|
(204,926
|
)
|
|||
Purchase of investment in private company
|
—
|
|
|
(2,500
|
)
|
|
—
|
|
|||
Lease deposits
|
275
|
|
|
(489
|
)
|
|
(248
|
)
|
|||
Net cash used in investing activities
|
(48,517
|
)
|
|
(59,323
|
)
|
|
(189,696
|
)
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Net proceeds from issuance of convertible senior notes
|
584,405
|
|
|
—
|
|
|
—
|
|
|||
Purchase of capped calls
|
(65,220
|
)
|
|
—
|
|
|
—
|
|
|||
Repurchase of convertible senior notes
|
(286,817
|
)
|
|
—
|
|
|
—
|
|
|||
Repayment of debt of acquired business
|
—
|
|
|
—
|
|
|
(8,842
|
)
|
|||
Payments for contingent earn-outs
|
—
|
|
|
(38,928
|
)
|
|
(112
|
)
|
|||
Payment related to shares withheld for taxes
|
—
|
|
|
(1,408
|
)
|
|
(1,124
|
)
|
|||
Proceeds from employee stock purchase plan
|
20,816
|
|
|
20,094
|
|
|
22,080
|
|
|||
Proceeds from exercise of equity awards
|
6,890
|
|
|
19,149
|
|
|
13,844
|
|
|||
Net cash provided by (used in) financing activities
|
260,074
|
|
|
(1,093
|
)
|
|
25,846
|
|
|||
Net change in cash and cash equivalents
|
228,938
|
|
|
(42,776
|
)
|
|
(178,435
|
)
|
|||
Cash and cash equivalents, beginning of period
|
180,891
|
|
|
223,667
|
|
|
402,102
|
|
|||
Cash and cash equivalents, end of period
|
$
|
409,829
|
|
|
$
|
180,891
|
|
|
$
|
223,667
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017*
|
|
2016*
|
||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
|
|
|
|
|
|
||||||
Cash paid for income taxes
|
$
|
4,780
|
|
|
$
|
5,360
|
|
|
$
|
5,209
|
|
Cash paid for interest
|
$
|
13,035
|
|
|
$
|
12,075
|
|
|
$
|
12,098
|
|
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Common stock issued in connection with acquisitions
|
$
|
15,387
|
|
|
$
|
4,361
|
|
|
$
|
41,000
|
|
Contingent earn-out in connection with acquisitions
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
39,088
|
|
Purchases of property and equipment and demonstration units in accounts payable and accrued liabilities
|
$
|
12,818
|
|
|
$
|
13,353
|
|
|
$
|
4,035
|
|
•
|
Our technologies, including our machine-learning, behavioral-based, and rules-based threat detection, analysis and correlation technologies, combined with our proprietary Multi-vector Virtual Execution ("MVX") engine;
|
•
|
Our intelligence on threats and threat actors, based on the continuous flow of machine-, attacker- and victim-based attack data from our global network of threat sensors and virtual machines, as well as intelligence gathered by our security analysts, consultants and incident responders; and
|
•
|
Our accumulated security expertise derived from responding to thousands of significant breaches over the past decade.
|
Property and Equipment
|
|
Useful Life
|
Computer equipment and software
|
|
2 to 5 years
|
Leasehold improvements
|
|
Shorter of estimated useful life or remaining lease term
|
Furniture and fixtures
|
|
5 years
|
Machinery and equipment
|
|
2 to 5 years
|
|
As of December 31, 2017
|
|||||||||
Balance Sheet:
|
As Previously Reported
|
|
Impact of Adoption
|
|
As Adjusted
|
|||||
Accounts receivable, net
|
$
|
140,049
|
|
|
6,268
|
|
|
$
|
146,317
|
|
Prepaid expenses and other current assets
|
$
|
34,541
|
|
|
59,258
|
|
|
$
|
93,799
|
|
Deposits and other long-term assets
|
$
|
11,537
|
|
|
61,230
|
|
|
$
|
72,767
|
|
Deferred revenue, current portion
|
$
|
443,064
|
|
|
103,551
|
|
|
$
|
546,615
|
|
Deferred revenue, non-current portion
|
$
|
227,680
|
|
|
135,805
|
|
|
$
|
363,485
|
|
Stockholders' equity
|
$
|
744,816
|
|
|
(112,600
|
)
|
|
$
|
632,216
|
|
|
Year Ended December 31, 2017
|
|||||||||
Consolidated Statement of Operations
|
As Previously Reported
|
|
Impact of Adoption
|
|
As Adjusted
|
|||||
Total revenue
|
$
|
751,086
|
|
|
28,562
|
|
|
$
|
779,648
|
|
Total cost of revenue
|
$
|
268,887
|
|
|
2,760
|
|
|
$
|
271,647
|
|
Operating expenses:
|
|
|
|
|
|
|||||
Sales and marketing
|
$
|
371,935
|
|
|
7,343
|
|
|
$
|
379,278
|
|
Total operating expenses
|
$
|
740,805
|
|
|
7,295
|
|
|
$
|
748,100
|
|
Operating loss
|
$
|
(258,606
|
)
|
|
18,507
|
|
|
$
|
(240,099
|
)
|
Net loss attributable to common stockholders
|
$
|
(303,691
|
)
|
|
18,507
|
|
|
$
|
(285,184
|
)
|
Net loss per share attributable to common stockholders, basic and diluted
|
$
|
(1.71
|
)
|
|
0.11
|
|
|
$
|
(1.60
|
)
|
|
Year ended December 31, 2016
|
|||||||||
Consolidated Statement of Operations
|
As Previously Reported
|
|
Impact of Adoption
|
|
As Adjusted
|
|||||
Total revenue
|
$
|
714,114
|
|
|
(8,119
|
)
|
|
$
|
705,995
|
|
Total cost of revenue
|
$
|
271,868
|
|
|
(785
|
)
|
|
$
|
271,083
|
|
Operating expenses:
|
|
|
|
|
|
|||||
Sales and marketing
|
$
|
439,499
|
|
|
(1,980
|
)
|
|
$
|
437,519
|
|
Total operating expenses
|
$
|
886,562
|
|
|
(2,028
|
)
|
|
$
|
884,534
|
|
Operating loss
|
$
|
(444,316
|
)
|
|
(5,306
|
)
|
|
$
|
(449,622
|
)
|
Net loss attributable to common stockholders
|
$
|
(480,129
|
)
|
|
(5,306
|
)
|
|
$
|
(485,435
|
)
|
Net loss per share attributable to common stockholders, basic and diluted
|
$
|
(2.94
|
)
|
|
(0.03
|
)
|
|
$
|
(2.97
|
)
|
|
Year Ended December 31, 2017
|
|||||||||
Consolidated Statement of Cash flows
|
As Previously Reported
|
|
Impact of Adoption
|
|
As Adjusted
|
|||||
Cash flows from operating activities:
|
|
|
|
|
|
|||||
Net loss
|
$
|
(303,691
|
)
|
|
18,507
|
|
|
$
|
(285,184
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities
|
|
|
|
|
|
|||||
Other
|
$
|
7,217
|
|
|
(47
|
)
|
|
$
|
7,170
|
|
Changes in operating assets and liabilities, net of business acquisitions:
|
|
|
|
|
|
|||||
Accounts receivable
|
$
|
(20,749
|
)
|
|
6,315
|
|
|
$
|
(14,434
|
)
|
Prepaid expenses and other assets
|
$
|
(4,736
|
)
|
|
10,101
|
|
|
$
|
5,365
|
|
Deferred revenue
|
$
|
17,227
|
|
|
(34,876
|
)
|
|
$
|
(17,649
|
)
|
|
Year ended December 31, 2016
|
|||||||||
Consolidated Statement of Cash flows
|
As Previously Reported
|
|
Impact of Adoption
|
|
As Adjusted
|
|||||
Cash flows from operating activities:
|
|
|
|
|
|
|||||
Net loss
|
$
|
(480,129
|
)
|
|
(5,306
|
)
|
|
$
|
(485,435
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities
|
|
|
|
|
|
|||||
Changes in operating assets and liabilities, net of business acquisitions:
|
|
|
|
|
|
|||||
Accounts receivable
|
$
|
61,785
|
|
|
(3,817
|
)
|
|
$
|
57,968
|
|
Prepaid expenses and other assets
|
$
|
9,344
|
|
|
(2,238
|
)
|
|
$
|
7,106
|
|
Deferred revenue
|
$
|
105,431
|
|
|
11,361
|
|
|
$
|
116,792
|
|
•
|
Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
|
•
|
Level 2: Inputs that reflect quoted prices for identical assets or liabilities in less active markets; quoted prices for similar assets or liabilities in active markets; benchmark yields, reported trades, broker/dealer quotes, inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means.
|
•
|
Level 3: Unobservable inputs that reflect our own assumptions incorporated in valuation techniques used to measure fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available.
|
|
As of December 31, 2018
|
|
As of December 31, 2017
|
||||||||||||||||||||||||||||
Description
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Money market funds
|
$
|
25,748
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
25,748
|
|
|
$
|
208
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
208
|
|
U.S. Treasuries
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,098
|
|
|
—
|
|
|
—
|
|
|
3,098
|
|
||||||||
Total cash equivalents
|
$
|
25,748
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
25,748
|
|
|
$
|
3,306
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,306
|
|
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial paper
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,987
|
|
|
—
|
|
|
4,987
|
|
||||||||
Corporate notes and bonds
|
—
|
|
|
448,323
|
|
|
—
|
|
|
448,323
|
|
|
—
|
|
|
438,024
|
|
|
—
|
|
|
438,024
|
|
||||||||
U.S. Treasuries
|
—
|
|
|
112,700
|
|
|
—
|
|
|
112,700
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
U.S. Government agencies
|
—
|
|
|
145,668
|
|
|
—
|
|
|
145,668
|
|
|
—
|
|
|
272,900
|
|
|
—
|
|
|
272,900
|
|
||||||||
Total short-term investments
|
$
|
—
|
|
|
$
|
706,691
|
|
|
$
|
—
|
|
|
$
|
706,691
|
|
|
$
|
—
|
|
|
$
|
715,911
|
|
|
$
|
—
|
|
|
$
|
715,911
|
|
Total assets measured at fair value
|
$
|
25,748
|
|
|
$
|
706,691
|
|
|
$
|
—
|
|
|
$
|
732,439
|
|
|
$
|
3,306
|
|
|
$
|
715,911
|
|
|
$
|
—
|
|
|
$
|
719,217
|
|
|
As of December 31, 2018
|
||||||||||||||||||||||
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Estimated Fair Value
|
|
Cash and Cash Equivalents
|
|
Short-Term Investments
|
||||||||||||
Corporate notes and bonds
|
$
|
450,097
|
|
|
$
|
44
|
|
|
$
|
(1,818
|
)
|
|
$
|
448,323
|
|
|
$
|
—
|
|
|
$
|
448,323
|
|
U.S. Treasuries
|
112,783
|
|
|
2
|
|
|
(85
|
)
|
|
112,700
|
|
|
—
|
|
|
112,700
|
|
||||||
U.S. Government agencies
|
146,110
|
|
|
—
|
|
|
(442
|
)
|
|
145,668
|
|
|
—
|
|
|
145,668
|
|
||||||
Total
|
$
|
708,990
|
|
|
$
|
46
|
|
|
$
|
(2,345
|
)
|
|
$
|
706,691
|
|
|
$
|
—
|
|
|
$
|
706,691
|
|
|
As of December 31, 2017
|
||||||||||||||||||||||
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Estimated Fair Value
|
|
Cash and Cash Equivalents
|
|
Short-Term Investments
|
||||||||||||
Commercial paper
|
$
|
4,989
|
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
4,987
|
|
|
$
|
—
|
|
|
$
|
4,987
|
|
Corporate notes and bonds
|
439,851
|
|
|
2
|
|
|
(1,829
|
)
|
|
438,024
|
|
|
—
|
|
|
438,024
|
|
||||||
U.S. Treasuries
|
3,098
|
|
|
—
|
|
|
—
|
|
|
3,098
|
|
|
3,098
|
|
|
—
|
|
||||||
U.S. Government agencies
|
273,950
|
|
|
—
|
|
|
(1,050
|
)
|
|
272,900
|
|
|
—
|
|
|
272,900
|
|
||||||
Total
|
$
|
721,888
|
|
|
$
|
2
|
|
|
$
|
(2,881
|
)
|
|
$
|
719,009
|
|
|
$
|
3,098
|
|
|
$
|
715,911
|
|
|
As of December 31, 2018
|
||||||||||||||||||||||
|
Less Than 12 Months
|
|
Greater Than 12 Months
|
|
Total
|
||||||||||||||||||
|
Fair Value
|
|
Unrealized Loss
|
|
Fair Value
|
|
Unrealized Loss
|
|
Fair Value
|
|
Unrealized Loss
|
||||||||||||
Corporate notes and bonds
|
$
|
420,548
|
|
|
$
|
(1,817
|
)
|
|
$
|
1,526
|
|
|
$
|
(2
|
)
|
|
$
|
422,074
|
|
|
$
|
(1,819
|
)
|
U.S. Treasuries
|
105,525
|
|
|
(85
|
)
|
|
—
|
|
|
—
|
|
|
105,525
|
|
|
(85
|
)
|
||||||
U.S. Government agencies
|
137,416
|
|
|
(441
|
)
|
|
—
|
|
|
—
|
|
|
137,416
|
|
|
(441
|
)
|
||||||
Total
|
$
|
663,489
|
|
|
$
|
(2,343
|
)
|
|
$
|
1,526
|
|
|
$
|
(2
|
)
|
|
$
|
665,015
|
|
|
$
|
(2,345
|
)
|
|
As of December 31, 2017
|
||||||||||||||||||||||
|
Less Than 12 Months
|
|
Greater Than 12 Months
|
|
Total
|
||||||||||||||||||
|
Fair Value
|
|
Unrealized Loss
|
|
Fair Value
|
|
Unrealized Loss
|
|
Fair Value
|
|
Unrealized Loss
|
||||||||||||
Commercial paper
|
$
|
4,987
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,987
|
|
|
$
|
(2
|
)
|
Corporate notes and bonds
|
284,499
|
|
|
(1,484
|
)
|
|
153,525
|
|
|
(345
|
)
|
|
438,024
|
|
|
(1,829
|
)
|
||||||
U.S. Treasuries
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
U.S. Government agencies
|
117,132
|
|
|
(486
|
)
|
|
155,768
|
|
|
(564
|
)
|
|
272,900
|
|
|
(1,050
|
)
|
||||||
Total
|
$
|
406,618
|
|
|
$
|
(1,972
|
)
|
|
$
|
309,293
|
|
|
$
|
(909
|
)
|
|
$
|
715,911
|
|
|
$
|
(2,881
|
)
|
|
Amortized Cost
|
|
Fair Value
|
||||
Due within one year
|
$
|
460,480
|
|
|
$
|
458,749
|
|
Due within one to three years
|
248,510
|
|
|
247,942
|
|
||
Total
|
$
|
708,990
|
|
|
$
|
706,691
|
|
|
As of December 31,
|
||||||
|
2018
|
|
2017
|
||||
Computer equipment and software
|
$
|
171,078
|
|
|
$
|
144,438
|
|
Leasehold improvements
|
62,832
|
|
|
67,451
|
|
||
Furniture and fixtures
|
13,835
|
|
|
16,665
|
|
||
Machinery and equipment
|
447
|
|
|
447
|
|
||
Total property and equipment
|
$
|
248,192
|
|
|
$
|
229,001
|
|
Less: accumulated depreciation
|
(159,029
|
)
|
|
(157,644
|
)
|
||
Total property and equipment, net
|
$
|
89,163
|
|
|
$
|
71,357
|
|
|
Amount
|
||
Balance as of December 31, 2016
|
$
|
978,260
|
|
Goodwill acquired
|
6,401
|
|
|
Balance as of December 31, 2017
|
$
|
984,661
|
|
Goodwill acquired
|
15,143
|
|
|
Balance as of December 31, 2018
|
$
|
999,804
|
|
|
As of December 31,
|
||||||
|
2018
|
|
2017
|
||||
Developed technology
|
$
|
110,003
|
|
|
$
|
103,903
|
|
Content
|
158,700
|
|
|
158,700
|
|
||
Customer relationships
|
111,090
|
|
|
111,090
|
|
||
Contract backlog
|
12,500
|
|
|
12,500
|
|
||
Trade names
|
15,560
|
|
|
15,560
|
|
||
Non-competition agreements
|
1,400
|
|
|
1,400
|
|
||
Total intangible assets
|
$
|
409,253
|
|
|
403,153
|
|
|
Less: accumulated amortization
|
(266,091
|
)
|
|
(215,765
|
)
|
||
Total net intangible assets
|
$
|
143,162
|
|
|
$
|
187,388
|
|
Years Ending December 31,
|
Amount
|
||
2019
|
$
|
48,441
|
|
2020
|
33,903
|
|
|
2021
|
29,337
|
|
|
2022
|
18,209
|
|
|
2023
|
13,105
|
|
|
2024 and thereafter
|
167
|
|
|
Total
|
$
|
143,162
|
|
|
Severance and related costs
|
|
Facilities costs
|
|
Total costs
|
||||||
Balance, December 31, 2016
|
$
|
1,221
|
|
|
$
|
2,246
|
|
|
$
|
3,467
|
|
Provision for restructuring charges
|
—
|
|
|
—
|
|
|
—
|
|
|||
Cash payments
|
(752
|
)
|
|
(1,046
|
)
|
|
(1,798
|
)
|
|||
Other adjustments
|
(469
|
)
|
|
(265
|
)
|
|
(734
|
)
|
|||
Balance, December 31, 2017
|
$
|
—
|
|
|
935
|
|
|
$
|
935
|
|
|
Provision for restructuring charges
|
—
|
|
|
—
|
|
|
—
|
|
|||
Cash payments
|
—
|
|
|
(175
|
)
|
|
(175
|
)
|
|||
Other adjustments
|
—
|
|
|
390
|
|
|
390
|
|
|||
Balance, December 31, 2018
|
$
|
—
|
|
|
$
|
1,150
|
|
|
$
|
1,150
|
|
|
Year Ended December 31, 2018
|
||
As of December 31, 2016
|
$
|
94,124
|
|
Commissions capitalized
|
42,323
|
|
|
Commissions recognized
|
(49,668
|
)
|
|
As of December 31, 2017
|
$
|
86,779
|
|
Commissions capitalized
|
77,319
|
|
|
Commissions recognized
|
(63,441
|
)
|
|
As of December 31, 2018
|
$
|
100,657
|
|
|
As of December 31, 2018
|
|
As of December 31, 2017*
|
||||
Product, subscription and support, current
|
$
|
492,109
|
|
|
$
|
496,218
|
|
Professional services, current
|
64,706
|
|
|
50,397
|
|
||
Total deferred revenue, current
|
$
|
556,815
|
|
|
$
|
546,615
|
|
Product, subscription and support, non-current
|
375,915
|
|
|
363,313
|
|
||
Professional services, non-current
|
2,098
|
|
|
172
|
|
||
Total deferred revenue, non-current
|
$
|
378,013
|
|
|
$
|
363,485
|
|
Total deferred revenue
|
$
|
934,828
|
|
|
$
|
910,100
|
|
|
Deferred Revenue
|
||
As of December 31, 2016*
|
$
|
927,749
|
|
Billings for the period
|
761,999
|
|
|
Revenue recognized
|
(779,648
|
)
|
|
As of December 31, 2017*
|
$
|
910,100
|
|
Billings for the period
|
855,678
|
|
|
Revenue recognized
|
(830,950
|
)
|
|
As of December 31, 2018
|
$
|
934,828
|
|
|
Total
|
|
Less than 1 year
|
|
1-2 years
|
|
2-3 years
|
|
More than 3 years
|
Deferred revenue
|
100%
|
|
60%
|
|
25%
|
|
12%
|
|
3%
|
Backlog
|
100%
|
|
37%
|
|
34%
|
|
21%
|
|
8%
|
•
|
during any calendar quarter commencing after the calendar quarter ended on September 30, 2018 (and only during such calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price of the 2024 Notes on each applicable trading day;
|
•
|
during the five business day period after any five consecutive trading day period (the "measurement period") in which the trading price per $1,000 principal amount of the 2024 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate for the notes on each such trading day;
|
•
|
if we call any or all of the 2024 Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the relevant redemption date; or
|
•
|
upon the occurrence of specified corporate events, as specified in each indenture governing the 2024 Notes.
|
|
As of December 31, 2018
|
||
|
2024 Notes
|
||
Liability component:
|
|
||
Principal
|
$
|
600,000
|
|
Less: 2024 Notes debt discounts and issuance costs, net of amortization
|
(140,239
|
)
|
|
Net carrying amount
|
$
|
459,761
|
|
|
|
||
Equity component, net of issuance costs
|
$
|
138,064
|
|
|
Year Ended December 31, 2018
|
||
|
2024 Notes
|
||
Coupon interest
|
$
|
3,145
|
|
Amortization of 2024 Notes debt discounts and issuance costs
|
13,420
|
|
|
Total interest expense recognized
|
$
|
16,565
|
|
|
|
||
Effective interest rate on the liability component
|
5.6
|
%
|
•
|
during any calendar quarter commencing after the calendar quarter ended on September 30, 2015 (and only during such calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price for the 2035 Notes of the relevant series on each applicable trading day;
|
•
|
during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of Series A Notes or Series B Notes, as applicable, for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate for the notes of the relevant series on each such trading day;
|
•
|
if we call any or all of the 2035 Notes of a series for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the relevant redemption date; or
|
•
|
upon the occurrence of specified corporate events, as specified in each indenture governing the 2035 Notes.
|
|
|
As of December 31,
|
||||||||||||||
|
|
2018
|
|
2017
|
||||||||||||
|
|
Series A Notes
|
|
Series B Notes
|
|
Series A Notes
|
|
Series B Notes
|
||||||||
Liability component:
|
|
|
|
|
|
|
|
|
||||||||
Principal
|
|
$
|
119,828
|
|
|
$
|
460,000
|
|
|
$
|
460,000
|
|
|
$
|
460,000
|
|
Less: 2035 Notes discounts and issuance costs, net of amortization
|
|
(8,420
|
)
|
|
(68,592
|
)
|
|
(53,762
|
)
|
|
(86,660
|
)
|
||||
Net carrying amount
|
|
$
|
111,408
|
|
|
$
|
391,408
|
|
|
$
|
406,238
|
|
|
$
|
373,340
|
|
|
|
|
|
|
|
|
|
|
||||||||
Equity component, net of issuance costs
|
|
$
|
79,555
|
|
|
$
|
117,834
|
|
|
$
|
92,567
|
|
|
$
|
117,834
|
|
Years Ending December 31,
|
Amount
|
||
2019
|
$
|
15,530
|
|
2020
|
16,325
|
|
|
2021
|
14,976
|
|
|
2022
|
12,766
|
|
|
2023
|
11,926
|
|
|
2024 and thereafter
|
47,409
|
|
|
Total
|
$
|
118,932
|
|
|
As of December 31,
|
||||
|
2018
|
|
2017
|
||
Reserved under stock award plans
|
35,743
|
|
|
35,838
|
|
Convertible Senior Notes
|
35,442
|
|
|
15,141
|
|
ESPP
|
3,015
|
|
|
2,985
|
|
Total
|
74,200
|
|
|
53,964
|
|
|
Options Outstanding
|
|||||||||||||||
|
Number of
Shares |
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average Grant Date Fair Value (per share) |
|
Weighted-
Average Contractual Life (years) |
|
Aggregate
Intrinsic Value |
|||||||
Balance — December 31, 2015
|
11,494
|
|
|
$
|
10.67
|
|
|
|
|
|
|
|
||||
Granted
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|||
Exercised
|
(2,459
|
)
|
|
5.64
|
|
|
|
|
|
|
$
|
23,343
|
|
|||
Cancelled
|
(950
|
)
|
|
23.40
|
|
|
|
|
|
|
|
|||||
Balance — December 31, 2016
|
8,085
|
|
|
$
|
10.70
|
|
|
|
|
|
|
|
||||
Granted
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|||
Exercised
|
(3,295
|
)
|
|
5.81
|
|
|
|
|
|
|
26,716
|
|
||||
Cancelled
|
(357
|
)
|
|
35.89
|
|
|
|
|
|
|
|
|||||
Balance — December 31, 2017
|
4,433
|
|
|
$
|
12.31
|
|
|
|
|
|
|
|
||||
Granted
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|||
Exercised
|
(946
|
)
|
|
7.28
|
|
|
|
|
|
|
9,588
|
|
||||
Cancelled
|
(178
|
)
|
|
35.78
|
|
|
|
|
|
|
|
|||||
Balance — December 31, 2018
|
3,309
|
|
|
$
|
12.49
|
|
|
|
|
4.1
|
|
$
|
27,300
|
|
||
Options exercisable — December 31, 2018
|
3,309
|
|
|
$
|
12.49
|
|
|
|
|
4.1
|
|
$
|
27,300
|
|
|
Number of
Shares |
|
Weighted-
Average Grant Date Fair Value (per share) |
|
Weighted-
Average Contractual Life (years) |
|
Aggregate
Intrinsic Value |
|||||
Unvested balance — December 31, 2015
|
20,054
|
|
|
$
|
33.68
|
|
|
|
|
|
||
Granted
|
12,711
|
|
|
13.76
|
|
|
|
|
|
|||
Vested
|
(6,222
|
)
|
|
33.99
|
|
|
|
|
|
|||
Cancelled
|
(6,660
|
)
|
|
27.17
|
|
|
|
|
|
|||
Unvested balance — December 31, 2016
|
19,883
|
|
|
$
|
22.23
|
|
|
|
|
|
||
Granted
|
13,727
|
|
|
12.59
|
|
|
|
|
|
|||
Vested
|
(7,316
|
)
|
|
21.56
|
|
|
|
|
|
|||
Cancelled
|
(6,277
|
)
|
|
17.10
|
|
|
|
|
|
|||
Unvested balance — December 31, 2017
|
20,017
|
|
|
$
|
17.09
|
|
|
|
|
|
||
Granted
|
12,209
|
|
|
15.42
|
|
|
|
|
|
|||
Vested
|
(8,828
|
)
|
|
18.11
|
|
|
|
|
|
|||
Cancelled
|
(3,117
|
)
|
|
16.81
|
|
|
|
|
|
|||
Unvested balance — December 31, 2018
|
20,281
|
|
|
$
|
15.53
|
|
|
1.2
|
|
$
|
328,761
|
|
Unvested awards for which the requisite service period has not been rendered and vesting is subject to the achievement of a performance condition — December 31, 2018
|
4,041
|
|
|
$
|
15.68
|
|
|
0.67
|
|
$
|
65,500
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Cost of product, subscription and support revenue
|
$
|
14,178
|
|
|
$
|
18,249
|
|
|
$
|
16,684
|
|
Cost of professional services revenue
|
14,184
|
|
|
14,407
|
|
|
15,219
|
|
|||
Research and development
|
49,503
|
|
|
56,720
|
|
|
64,755
|
|
|||
Sales and marketing
|
47,592
|
|
|
46,766
|
|
|
57,750
|
|
|||
General and administrative
|
28,218
|
|
|
30,194
|
|
|
43,343
|
|
|||
Restructuring
|
—
|
|
|
—
|
|
|
1,144
|
|
|||
Total
|
$
|
153,675
|
|
|
$
|
166,336
|
|
|
$
|
198,895
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017*
|
|
2016*
|
||||||
United States
|
$
|
(119,886
|
)
|
|
$
|
(110,011
|
)
|
|
$
|
(283,875
|
)
|
Foreign
|
(117,713
|
)
|
|
(170,541
|
)
|
|
(210,281
|
)
|
|||
Total
|
$
|
(237,599
|
)
|
|
$
|
(280,552
|
)
|
|
$
|
(494,156
|
)
|
|
As of December 31,
|
||||||
|
2018
|
|
2017*
|
||||
Deferred tax assets:
|
|
|
|
||||
Net operating loss carryforwards
|
$
|
133,484
|
|
|
$
|
143,791
|
|
Accruals and reserves
|
14,783
|
|
|
8,289
|
|
||
Stock-based compensation
|
14,238
|
|
|
22,345
|
|
||
Fixed assets
|
—
|
|
|
7,727
|
|
||
Deferred revenue
|
97,863
|
|
|
82,419
|
|
||
Research and development credits
|
44,695
|
|
|
37,474
|
|
||
Other deferred tax assets
|
1,494
|
|
|
1,325
|
|
||
Gross deferred tax assets
|
306,557
|
|
|
303,370
|
|
||
Valuation allowance
|
(193,265
|
)
|
|
(202,336
|
)
|
||
Total deferred tax assets
|
113,292
|
|
|
101,034
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Accruals and reserves
|
(5,447
|
)
|
|
(5,382
|
)
|
||
Acquisition related intangibles
|
(34,293
|
)
|
|
(45,521
|
)
|
||
Fixed Assets
|
(4,981
|
)
|
|
—
|
|
||
Convertible senior notes
|
(48,786
|
)
|
|
(31,877
|
)
|
||
Other deferred tax liabilities
|
—
|
|
|
—
|
|
||
Deferred Commissions
|
(17,089
|
)
|
|
(15,867
|
)
|
||
Total deferred tax liabilities
|
(110,596
|
)
|
|
(98,647
|
)
|
||
Total net deferred tax assets
|
$
|
2,696
|
|
|
$
|
2,387
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Unrecognized tax benefits at the beginning of the period
|
$
|
39,387
|
|
|
$
|
43,637
|
|
|
$
|
31,902
|
|
Additions for tax positions related to the current year
|
2,651
|
|
|
10,780
|
|
|
12,435
|
|
|||
Increases related to prior year tax positions
|
501
|
|
|
—
|
|
|
561
|
|
|||
Decreases related to prior year tax positions
|
—
|
|
|
(14,955
|
)
|
|
(1,213
|
)
|
|||
Decreases based on settlements with taxing authorities
|
—
|
|
|
—
|
|
|
(48
|
)
|
|||
Lapse of statute of limitations
|
(49
|
)
|
|
(75
|
)
|
|
—
|
|
|||
Unrecognized tax benefits at the end of the period
|
$
|
42,490
|
|
|
$
|
39,387
|
|
|
$
|
43,637
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017*
|
|
2016*
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(243,123
|
)
|
|
$
|
(285,184
|
)
|
|
$
|
(485,435
|
)
|
Denominator:
|
|
|
|
|
|
||||||
Weighted average number of shares outstanding—basic and diluted
|
190,803
|
|
177,757
|
|
|
163,211
|
|
||||
Net loss per share—basic and diluted
|
$
|
(1.27
|
)
|
|
$
|
(1.60
|
)
|
|
$
|
(2.97
|
)
|
|
As of December 31,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
Options to purchase common stock
|
3,309
|
|
|
4,433
|
|
|
8,085
|
|
Unvested restricted stock awards and units
|
20,281
|
|
|
20,017
|
|
|
19,883
|
|
Convertible senior notes
|
35,442
|
|
|
15,141
|
|
|
15,141
|
|
iSIGHT earn-out contingently issuable shares
|
—
|
|
|
—
|
|
|
1,793
|
|
ESPP shares
|
160
|
|
|
166
|
|
|
314
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017*
|
|
2016*
|
||||||
Revenue by Category
|
|
|
|
|
|
|
||||||
Product and related subscription and support
|
|
$
|
498,992
|
|
|
$
|
479,521
|
|
|
$
|
437,238
|
|
Cloud subscription and managed services
|
|
188,390
|
|
|
166,444
|
|
|
147,647
|
|
|||
Professional services
|
|
143,568
|
|
|
133,683
|
|
|
121,110
|
|
|||
Total revenue
|
|
$
|
830,950
|
|
|
$
|
779,648
|
|
|
$
|
705,995
|
|
|
As of December 31,
|
||||||
|
2018
|
|
2017
|
||||
Property and Equipment, net:
|
|
|
|
||||
United States
|
$
|
80,313
|
|
|
$
|
60,202
|
|
International
|
8,850
|
|
|
11,155
|
|
||
Total property and equipment, net
|
$
|
89,163
|
|
|
$
|
71,357
|
|
|
|
Incorporated by Reference
|
|||
Exhibit No.
|
Description of Exhibit
|
Form
|
File No.
|
Exhibit
|
Filing Date
|
8-K
|
001-36067
|
3.1
|
September 25, 2013
|
||
|
|
|
|
|
|
8-K
|
001-36067
|
3.1
|
August 4, 2016
|
||
|
|
|
|
|
|
S-1/A
|
333-190338
|
4.1
|
September 9, 2013
|
||
|
|
|
|
|
|
8-K
|
001-36067
|
4.1
|
June 5, 2015
|
||
|
|
|
|
|
|
8-K
|
001-36067
|
4.2
|
June 5, 2015
|
||
|
|
|
|
|
|
8-K
|
001-36067
|
4.3
|
June 5, 2015
|
||
|
|
|
|
|
|
8-K
|
001-36067
|
4.4
|
June 5, 2015
|
||
|
|
|
|
|
|
8-K
|
001-36067
|
4.1
|
May 25, 2018
|
||
|
|
|
|
|
|
8-K
|
001-36067
|
4.2
|
May 25,2018
|
||
|
|
|
|
|
|
10.1†
|
S-1
|
333-190338
|
10.1
|
August 2, 2013
|
|
|
|
|
|
|
|
10.2†
|
S-1
|
333-190338
|
10.17
|
August 2, 2013
|
|
|
|
|
|
|
|
10.3†
|
S-1/A
|
333-190338
|
10.27
|
August 21, 2013
|
|
|
|
|
|
|
|
10.4†
|
S-1/A
|
333-190338
|
10.6
|
September 9, 2013
|
|
|
|
|
|
|
|
10.5†
|
S-1/A
|
333-193717
|
10.6
|
March 3, 2014
|
|
|
|
|
|
|
|
10.6†
|
10-Q
|
001-36067
|
10.1
|
November 4, 2016
|
|
|
|
|
|
|
|
10.7†
|
S-1
|
333-193717
|
10.8
|
February 3, 2014
|
|
|
|
|
|
|
|
10.8†
|
10-Q
|
001-36067
|
10.2
|
May 4, 2017
|
|
|
|
|
|
|
|
S-1
|
333-190338
|
10.11
|
August 2, 2013
|
||
|
|
|
|
|
|
S-1
|
333-190338
|
10.12
|
August 2, 2013
|
||
|
|
|
|
|
|
8-K
|
001-36067
|
10.1
|
January 8, 2015
|
||
|
|
|
|
|
|
8-K
|
001-36067
|
10.1
|
June 17, 2015
|
||
|
|
|
|
|
|
8-K
|
001-36067
|
10.1
|
September 13, 2017
|
||
|
|
|
|
|
|
8-K
|
001-36067
|
10.1
|
February 6, 2019
|
||
|
|
|
|
|
|
S-1/A
|
333-190338
|
10.16
|
August 21, 2013
|
||
|
|
|
|
|
|
8-K
|
001-36067
|
10.1
|
January 2, 2014
|
||
|
|
|
|
|
|
10-Q
|
001-36067
|
10.3
|
August 5, 2016
|
||
|
|
|
|
|
|
10-K
|
001-36067
|
10.21
|
February 24, 2017
|
||
|
|
|
|
|
|
10-K/A
|
001-36067
|
10.21
|
March 1, 2018
|
||
|
|
|
|
|
|
8-K
|
001-36067
|
10.3
|
January 2, 2014
|
||
|
|
|
|
|
|
10-Q
|
001-36067
|
10.4
|
August 5, 2016
|
||
|
|
|
|
|
|
8-K
|
001-36067
|
10.1
|
August 16, 2016
|
||
|
|
|
|
|
|
10-K/A
|
001-36067
|
10.26
|
March 1, 2018
|
||
|
|
|
|
|
|
10-K/A
|
001-36067
|
10.27
|
March 1, 2018
|
||
|
|
|
|
|
|
10.25††
|
S-1/A
|
333-190338
|
10.19
|
September 9, 2013
|
|
|
|
|
|
|
|
10-Q
|
001-36067
|
10.3
|
November 5, 2014
|
||
|
|
|
|
|
|
10-Q
|
001-36067
|
10.4
|
November 5, 2014
|
||
|
|
|
|
|
|
10-Q
|
001-36067
|
10.2
|
August 3, 2018
|
||
|
|
|
|
|
|
10-Q
|
001-36067
|
10.1
|
November 2, 2018
|
||
|
|
|
|
|
|
8-K
|
001-36067
|
10.1
|
May 29, 2015
|
||
|
|
|
|
|
|
8-K
|
001-36067
|
10.2
|
May 29, 2015
|
||
|
|
|
|
|
|
8-K
|
001-36067
|
10.3
|
May 29, 2015
|
||
|
|
|
|
|
|
8-K
|
001-36067
|
10.1
|
May 25, 2018
|
||
|
|
|
|
|
|
21.1*
|
|
|
|
|
|
|
|
|
|
|
|
23.1*
|
|
|
|
|
|
|
|
|
|
|
|
24.1*
|
|
|
|
|
|
|
|
|
|
|
|
31.1*
|
|
|
|
|
|
|
|
|
|
|
|
31.2*
|
|
|
|
|
|
|
|
|
|
|
|
32.1**
|
|
|
|
|
|
|
|
|
|
|
|
101.INS*
|
XBRL Instance Document- the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
|
|
|
|
|
|
|
|
|
|
101.SCH*
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
|
|
|
|
|
|
|
101.CAL*
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
|
|
|
|
|
|
|
101.DEF*
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
|
|
|
|
|
|
|
101.LAB*
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
|
|
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101.PRE*
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XBRL Taxonomy Extension Presentation Linkbase Document.
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Allowance for doubtful accounts receivable
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Balance at beginning of period
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Charged to cost and expenses
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Write-offs, net of recoveries
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Balance at end of period
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Year ended December 31, 2016
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$
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2,021
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$
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1,512
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$
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(1,943
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)
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$
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1,590
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Year ended December 31, 2017
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1,590
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1,972
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(1,059
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)
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2,503
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Year ended December 31, 2018
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$
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2,503
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$
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105
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$
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(83
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)
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$
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2,525
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FIREEYE, INC.
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By:
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/s/ KEVIN R. MANDIA
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Kevin R. Mandia
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Chief Executive Officer
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Signature
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Title
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Date
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/S/ KEVIN R. MANDIA
Kevin R. Mandia
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Chief Executive Officer and Director
(Principal Executive Officer)
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February 22, 2019
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/S/ FRANK E. VERDECANNA
Frank E. Verdecanna
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Executive Vice President, Chief Financial Officer and Chief Accounting Officer
(Principal Financial and Accounting Officer)
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February 22, 2019
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/S/ KIMBERLY ALEXY
Kimberly Alexy
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Director
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February 22, 2019
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__________________
Ronald E. F. Codd
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Director
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/S/ ADRIAN McDERMOTT
Adrian McDermott |
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Director
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February 22, 2019
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/S/ STEPHEN PUSEY
Stephen Pusey
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Director
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February 22, 2019
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/S/ ENRIQUE SALEM
Enrique Salem
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Director
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February 22, 2019
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/S/ ROBERT E. SWITZ
Robert E. Switz
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Director
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February 22, 2019
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Name of Subsidiary
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State or Other Jurisdiction of Incorporation or Organization
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Clean Communication Limited
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Ireland
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FireEye Australia Pty Ltd
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Australia
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FireEye Canada Limited
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British Columbia
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FireEye Cybersecurity Private Limited
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India
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FireEye Deutschland GmbH
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Germany
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FireEye Hong Kong Limited
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Hong Kong
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FireEye International, LLC
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Delaware
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FireEye Ireland Limited
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Ireland
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FireEye Israel Ltd
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Israel
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FireEye Italy, SrL
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Italy
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FireEye K.K.
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Japan
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FireEye Korea Limited
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Republic of Korea
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FireEye Mexico S.A. de C.V.
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Mexico
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FireEye Netherlands B.V.
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Netherlands
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FireEye Philippines Corporation
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Philippines
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FireEye Saudi Arabia Limited
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Kingdom of Saudi Arabia
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FireEye Singapore Private Limited
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Singapore
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FireEye Software (Shanghai) Company Limited
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China
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FireEye South Africa (Pty) Ltd
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South Africa
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FireEye Spain, S.L.
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Spain
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FireEye Sweden Aktiebolag
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Sweden
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FireEye Taiwan Ltd.
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Taiwan
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FireEye Technologie Deutschland GmbH
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Germany
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FireEye Technologies India Private Limited
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India
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FireEye Technologies Malaysia SDN BHD
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Malaysia
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FireEye Technology Limited
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Ireland
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FireEye UK Ltd.
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United Kingdom
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iSIGHT Partners Europe Holdings B.V.
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Netherlands
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iSIGHT Partners Ukraine LLC
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Ukraine
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iSIGHT Risk Management Private Limited
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India
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iSIGHT Security, LLC
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Delaware
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Mandiant, LLC
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Delaware
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X15 Software LLC
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Delaware
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X15 Software India Private Limited
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India
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1.
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I have reviewed this Annual Report on Form 10-K of FireEye, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: February 22, 2019
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/s/ Kevin R. Mandia
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Kevin R. Mandia
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Chief Executive Officer
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(Principal Executive Officer)
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1.
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I have reviewed this Annual Report on Form 10-K of FireEye, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: February 22, 2019
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/s/ Frank E. Verdecanna
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Frank E. Verdecanna
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Executive Vice President, Chief Financial Officer and Chief Accounting Officer
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(Principal Financial and Accounting Officer)
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Date: February 22, 2019
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/s/ Kevin R. Mandia
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Kevin R. Mandia
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Chief Executive Officer
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(Principal Executive Officer)
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Date: February 22, 2019
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/s/ Frank E. Verdecanna
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Frank E. Verdecanna
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Executive Vice President, Chief Financial Officer and Chief Accounting Officer
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(Principal Financial and Accounting Officer)
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