FireEye CEO Kevin Mandia said streamlining the company's go-to-market strategy around pricing, packaging and messaging has paid dividends for the company's channel community.
The Milpitas, Calif.-based security vendor has enjoyed continued strengthening of its channel thanks to the commitments FireEye has made around product, price and process, according to Mandia. Improvement in FireEye's channel relationships has enabled the company to reach new markets and achieve gains in its operating leverage, Mandia said.
"We're adhering to a consistent process with our channel and partners to provide better enablement and make doing business with FireEye simpler, more profitable and consistent," Mandia told Wall Street analysts Thursday.
The company's channel pipeline has been bolstered by the September release of FireEye Endpoint 4.0, which Mandia said is the most channel-ready product the company has ever released. Mandia said FireEye has also built consistency around its process of engaging with the channel in a manner that emphasizes teamwork and makes the company "a little bit less direct."
"We continue to innovate to provide better products to the channel," Mandia said. "We continue to price more appropriately for the channel."
Since taking over as CEO in June 2016, Mandia has focused on repairing FireEye's contentious relationship with the channel, which stemmed from confusion around services competition dating back to the December 2013 acquisition of Mandiant. Partners at the time complained about an unclear delineation between solution provider and direct sales.
Mandia responded by hiring Bill Robbins as the new head of worldwide sales in November 2016. Over the past year, Robbins has made changes to how FireEye works with partners, including creating clear swim lanes, a new pricing structure, and plans for channel-ready products.
Ten months later, Mandia brought Vasu Jakkal on as CMO and tasked her with simplifying FireEye's messaging and getting the company's story out to customers, partners and prospects. FireEye plans to share more details about the new messaging at the company's analyst day next month.
"We've been saying for quite a while that we want to simplify our go-to-market, our pricing, our packaging, and our positioning," Mandia said. "I believe their initiatives are already getting results, and we're just getting started."
From a packaging standpoint, Mandia said the company's message would focus on having email, endpoint and network security capabilities all bound together by a hub called Helix. Positioning the company's line card in a simple, straightforward manner should pay dividends throughout the year, according to Mandia.
"That sounds a heck of a lot easier to me than NX [network security], EX [email security], IX [integration and automation], PX [network forensics platform], HX [endpoint security], name and X – I think we ran out of the alphabet," Mandia said. "We are simplifying how we package; we are absolutely simplifying just the whole dialogue about FireEye."
FireEye sales for the quarter ended Dec. 31 climbed to a record $202.3 million, up 9.5 percent from $184.7 million the year prior. That edged out Seeking Alpha projections of $193.6 million and was the first quarter in FireEye's 14-year history that quarterly revenues were above $200 million.
The company recorded a net loss of $77 million, or $0.42 per share, improved from a net loss of $61.5 million, or $0.37 per share, last year. On a non-GAAP basis, net income came in at $1.3 million, or $0.01 per share, better than a net loss of $4.8 million, or $0.03 per share, the year before. That beat Seeking Alpha projections of a net loss of $0.01 per share.
FireEye's stock soared $1.83 (12.96%) to $14.12 in after-hours trading. Earnings were released after the market closed Thursday.
Subscription and services revenue for the quarter jumped to $164 million, up 8.5 percent from $151.1 million last year. And product revenue leapfrogged to $38.3 million, up 14 percent from $33.6 million the year before. FireEye enjoyed record sales in its endpoint security, Helix integrated platform, iSIGHT threat intelligence and Mandiant services businesses, according to the company.
For the full year, FireEye's sales jumped to $751.1 million, up 5.2 percent from $714.1 million the year before. Net loss, meanwhile, came in at $303.7 million, or $1.71 per share, improved from $480.1 million, or $2.94 per share, the year before.
For the coming quarter, FireEye expects to record a non-GAAP net loss of between $0.03 and $0.06 per share on sales of between $192 million and $197 million. Seeking Alpha had been projecting a non-GAAP loss of $0.05 per share on sales of $187.2 million.