Mandiant customers will benefit from more strategic technology partnerships and a more focused sales force following the $1.2 billion sale of the FireEye products business.
The Milpitas, Calif.-based cyber defense and response vendor expects to roll out one new technology partnership each quarter following April’s deal to wrap Mandiant’s managed detection and response around Microsoft’s endpoint security tool and October’s deal to layer Mandiant’s threat intelligence on top of Splunk’s analytics. Mandiant’s services were historically wedded to FireEye’s security products.
“We were surrounded as FireEye,” Mandiant CEO Kevin Mandia told investors Thursday. “We were in every single business, and it made it very hard for us to have frictionless partners.”
Mandiant has for the first time since 2015 begun receiving inbound calls from other vendors wishing to forge partnerships, Mandia said. The company had operated independently for nearly a decade under the Mandiant name before being acquired by FireEye for $1 billion in December 2013.
Joining FireEye and Mandiant meant that salespeople had to champion nine distinct products ranging from network, endpoint and email security tools to consulting, professional and managed services. The buyers for these products were different, with network security products typically procured by the network operations team while the desktop team typically handled endpoint security technology.
“For the first time in our history, we can actually invest in everything we’re doing,” Mandia said. “Because when we had nine products, we were funding three at the expense of the other six sometimes and had tradeoffs with resourcing.”
Mandiant sales personnel will be incented to sell FireEye products through the end of 2021 and vice versa, Mandia said. But once January hits, Mandia said the company has an aggressive retraining effort planned for its sales kickoff to drive more efficiency and better message alignment. All the company’s subscriptions and services feed into the Mandiant Advantage platform since it debuted last fall, he said.
“Efficiency of sales starts with maniacal focus,” Mandia said. “It can’t go backwards when you’re this focused. Period. You will now have a dedicated sales force with one message and one platform. That is absolutely advantageous, and better than nine.”
Mandiant sales for the quarter ended Sept. 30 surged to $122 million, up 21.9 percent from $100.1 million a year earlier. That edged out Seeking Alpha’s revenue projection of $120.8 million.
The company’s net loss increased to $105.9 million, or $0.45 per diluted share, 29.7 percent worse than a net loss of $81.6 million, or $0.36 per diluted share, the year prior. On a non-GAAP basis, net loss worsened to $0.15 per diluted share from $0.13 per diluted share the year prior. That fell short of Seeking Alpha projections of non-GAAP net loss of $0.07 per diluted share.
Mandiant’s stock remain unchanged at $18.18 per share in after-hours trading. Earnings were announced after the market closed Thursday.
Revenue for FireEye’s product business fell to $132.8 million, down 4 percent from $138.4 million the year prior. Net income for the FireEye product business dipped to $33 million, or $0.14 per diluted share, down 22.3 percent from $42.5 million, or $0.19 per diluted share, last year. The $1.2 billion sale of the FireEye products business to private equity firm Symphony Technology Group closed Oct. 8.
Meanwhile, Mandiant’s professional services revenue surged to $61.7 million, up 20 percent from $51.4 million last year. And Mandiant’s platform, cloud subscriptions and managed services revenue climbed to $60.2 million, up 23.9 percent from $48.6 million the year prior.
In the current quarter, Mandiant expects a non-GAAP net loss of between $0.12 and $0.13 per share on sales of between $129 million and $133 million. Analysts had a projected non-GAAP net loss of $0.07 per share on sales of $130.4 million, according to Seeking Alpha.