Riding High: Proofpoint Inc.

(RTTNews) - Shares of Proofpoint Inc. (PFPT) are up nearly 23% year-to-date while the NASDAQ-100 Technology Sector Index has grown 18.5% during the same period.

Proofpoint is a next-generation security and compliance company, providing solutions for email, social and mobile threats.

The growth of business-to-business collaboration and the use of social media for mass communication, as well as the consumerization of IT and the associated adoption of mobile devices and unmanaged Internet-based applications, have lead to a growing number of cyber attacks. The number of U.S. data breaches increased 40%, hitting an all-time record high of 1,093 in 2016 compared to 780 reported in 2015, according to a report by the Identity Theft Resource Center and CyberScout.

The situation this year is no better. Several companies have been affected by the WannaCry ransomware attack in May and Petya ransomware attack in June. There is going to be a 50 percent increase in ransomware attacks compared to last year, warns the Verizon 2017 Data Breach Investigations Report.

Proofpoint's unique SaaS security model, built on a cloud-based architecture, provides a secure email gateway, advanced threat protection, threat intelligence, email encryption, data loss prevention, digital risk, archiving, eDiscovery, and threat response capabilities.

The Company serves more than 5,300 customers globally. The customer list reads like "Who's Who" across all major verticals including aerospace and defense, education, financial services, government, healthcare, manufacturing and retail. Nearly 34% of Fortune 1000 companies are Proofpoint's customers. Besides serving leading clients, the Company also has an impressive client retention rate of over 90%.

Proofpoint's GAAP net loss has widened over the years while its revenue has increased year-over year. Since 2012, the Company's revenue has grown at a CAGR (compound annual growth rate) of 35%.

Let's take a look at how Proofpoint fared over the past 5 years, in terms of its top line and bottom line.

In the first quarter ended March 31, 2017, the Company's GAAP net loss narrowed to $25.5 million or $0.59 per share on total revenue of $113.3 million. This compared with a GAAP net loss of $31.7 million or $0.77 per share and total revenue of $79.0 million for the first quarter of 2016.

Recent events:

-- Proofpoint won two 2017 SC Awards for Best Email Security Solution and Best Regulatory Compliance Solution in February of 2017.

-- The 2017 SC Media Awards Europe in June of this year recognised two of the Company's solutions for Best Fraud Prevention and Best SME solution.

-- Last month, the Company announced that its Proofpoint cloud Email Protection and Information Protection solutions have achieved in-process status for the Federal Risk and Authorization Management Program (FedRAMP), under the sponsorship of the Federal Communications Commission (FCC).

Additionally, the Proofpoint Email Protection appliance is undergoing testing with a national information assurance partnership (NIAP)-approved Common Criteria Testing Laboratory (CCTL), to achieve Common Criteria certification with the network device collaborative protection profile (NDcPP).

Q2, 2017 Guidance Vs. Q2, 2016 Actual EPS, Revenue

For the second quarter of 2017, GAAP net loss is expected to be in the range of $26.9 million to $30.1 million, or $0.61 to $0.69 per share and non-GAAP net income is forecast in the range of $5.0 to $6.0 million, or $0.11 to $0.13 per share. Total revenue for Q2, 2017 is anticipated to range between $118.0 million and $120.0 million.

In the second quarter of 2016, Proofpoint's GAAP net loss was $38.3 million or $0.92 per share; non-GAAP net profit was $2.5 million or $0.06 per share and total revenue was $89.9 million.

Looking ahead...

For full year 2017, the Company expects GAAP net loss to be in the range of $109.2 million to $117.6 million or $2.48 to $2.67 per share; non-GAAP net income to be in the range of $26.5 million to $28.5 million or $0.56 to $0.59 per share and total revenue to range between $496.0 million and $500.0 million.

The company has set a target of more than doubling its revenue to about $1 billion by 2020.

Shares of Proofpoint touched an all-time intraday high of $94.33 on June 7, 2017. In the last 1 year, the stock has traded in a range of $63.01 to $94.33.

PFPT closed Friday's (June 30, 2017) trading at $86.83, up 0.68%.