Enterprise security could grow 8.0% in 2018
With the Finjan Holdings (FNJN) litigation now behind it and subscription-based revenues continuing to grow, FireEye’s (FEYE) prospects in the security market may have just brightened. FireEye is one of the ten largest pure-play cybersecurity companies in the world, according to the BVP Cyber Index. Also on this list are Check Point Software (CHKP), Symantec (SYMC), Palo Alto Networks (PANW), and Proofpoint (PFPT).
According to research firm Gartner, organizations continue to spend more on data security, and this year alone, enterprise cybersecurity spending is projected to hit $96.3 billion, an increase of 8.0% over 2017. Enterprise security spending was $89.1 billion in 2017 and $82.2 billion in 2016.
Catalysts of enterprise security spending
Regulations and awareness of emerging threats are some of the factors fueling enterprise cybersecurity spending. Last year, for instance, there were several high-profile data breaches including the much-publicized hacking of Equifax (EFX) and SEC (the US Securities and Exchange Commission) systems.
While the rise of cybersecurity threats is a nightmare for most companies, it’s an opportunity for security vendors like FireEye. For FireEye, enterprise cybersecurity budgets are swelling at a time when the company is also shifting to a recurring revenue model of subscription-based offerings.
Subscription revenue increased nearly 12%
For the full-year 2017, FireEye reported $751.1 million in revenue, an increase of 5.2% over the previous year. The top-line growth was supported by gains in subscription-based sales, where revenues rose 11.6%.
FireEye is expecting full-year 2018 revenue to come in between $815 million and $825 million. Even the low end of the guidance is above the consensus estimate of $799.3 million.