FireEye CEO: As We Grow, We See More Opportunities To Leverage Partners

As the security vendor continues to grow its sales and push towards profitability, FireEye CEO Dave DeWalt said, its partners will be important keys to success.

FireEye's partner ecosystem has expanded, with an acceleration of partner registration by 70 percent to 80 percent, DeWalt said on the company's first-quarter earnings call Thursday. DeWalt said he sees an opportunity to leverage partners more to create more opportunity for both parties going forward.

"We feel that our sales capacity and partner-leveraged model will continue for the company," DeWalt said.

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That continued emphasis on partners comes as the Milpitas, Calif.-based company looks to build its margins toward profitability. For the company's first quarter ended March 31, sales were $125.4 million, up 69 percent from the same quarter last year. Net loss for the quarter was $134 million, compared with a net loss of $101.2 million in the same period in 2014.

"FireEye had a very strong start to the year," DeWalt said on the earnings call. "All in all, a very strong quarter across the board," he continued.

As the threat landscape continues to evolve, DeWalt said, the company is seeing increasing demand for its advanced threat-management platform. Billings for the quarter were up 53 percent year over year, to $151.6 million, he said. Helping build that growth is what DeWalt called the "Mandiant effect," through which FireEye's $1 billion January 2014 acquisition of the advanced threat-detection company has "created many opportunities," most notably the rollout of 100,000 machines to a single client and the company's certification by the U.S. Department of Homeland Security as the first security company under the SAFETY Act.

This opens a variety of opportunities for FireEye's channel partners, DeWalt said. First, he said, he sees managed security service providers (MSSPs) adding the alert monitoring and detection capabilities into their current managed security offerings. Second, he said, some MSSPs are taking the technology to the "next level" and creating an independent advanced threat service to manage and proactively hunt down threats. From there, DeWalt said, MSSPs can engage Mandiant for proactive hygiene checking and FireEye can help them build a security operations center.

"We see strategic relationships not just using our technology but also our services, Security-as-a-Service and new horizons, such as mobile," DeWalt said.

DeWalt said he doesn't expect the growth to slow soon, as a large number of Forbes' global 2,000 companies, FireEye's target customer base, are untapped.

"We think there's a lot of green field to go in that size," DeWalt said. "We're winning there. We're winning strong in that market and we've created more defensible moats from the competition. ... We think we can really continue to grow just focused primarily on that space. ... I feel pretty good about what I've seen."

Going into the second quarter, FireEye predicted revenues of $140 million to $144 million, with gross margin of 70 percent to 73 percent of total revenue. That puts total revenues for the year at an estimated $615 million to $635 million, the company predicted.

PUBLISHED APRIL 30, 2015