Sophos Group plc Results for the year-ended 31 March 2018

Billings up 22%, with revenue growth of 21%; adjusted operating profit up 20%

OXFORD, United Kingdom, May 17, 2018 (GLOBE NEWSWIRE) —

Sophos Group plc (the “Group”) (LSE:SOPH), a leading provider of cloud-enabled enduser and network cybersecurity solutions, today issues its audited results for the year-ended 31 March 2018 (“FY18”).

Financial highlights

  • Billings1 grew by 22% to $769 million, an increase of 18% at constant currency
  • Revenue increased by 21% to $641 million, reflecting constant currency growth of 18%, driven by 26% growth in subscription revenue in the period
  • Cloud subscription billings continued to grow strongly, with Sophos Central up 112% to $186 million, from $88 million in FY17
  • Total subscription renewal base has now surpassed the $1 billion milestone
  • Net renewal rate, including cross-sell and upsell, improved to 140% from 129% in FY17
  • Adjusted operating profit2 increased by 20% to $46 million, from $38 million in the prior-year
  • Loss before taxation increased to $52 million, from $49 million, despite the increase in adjusted operating profit, after the negative impact of financing foreign exchange losses
  • Strong growth in new business with over 300,000 customers at the end of the year, from 260,000 in FY17
  • Final dividend of 3.5 cents per share, an increase of 6.1% over the prior year; total dividend for the year of 4.9 cents, an increase of 6.5%

Financial summary

  FY18 FY17 Growth
  $M $M %
Billings 768.6 632.1 21.6
Revenue 640.7 529.7 21.0
Cash EBITDA3 193.7 150.1 29.0
Loss before taxation (52.3) (49.3) 6.1
Unlevered free cash flow4 139.6 133.4 4.6
Net cash flow from operating activities 147.7 118.5 24.6

FY19 and medium-term guidance
In the current year, we expect mid-teens per cent billings growth, including a c.200bps currency benefit, and growth in margin consistent with our medium term outlook.  We remain confident in our goal of delivering annual billings of c.$1 billion, unlevered free cash flow of $220-240 million and adjusted operating profit greater than $100 million for FY20.

Chief Executive Officer, Kris Hagerman, commented:
“FY18 was a strong year for Sophos.  Cybersecurity has never been more important for enterprises of all sizes, and the demand environment for our solutions has never been stronger.  We continue to take share in the market, as we execute a differentiated strategy of delivering advanced and highly-effective cybersecurity solutions designed to be simple to use, managed in the cloud, and sold 100% through our channel partners.  We have a massive market opportunity in front of us, and our strong and growing subscription base and growth in new customers, combined with our next-generation technology in endpoint and firewall and our Sophos Central cloud platform, position us well for FY19 and beyond.”

Please see the full results on the Sophos Investor website here:

The Sophos Group is a leading global provider of cloud-enabled enduser and network security solutions, offering organisations end-to-end protection against known and unknown IT security threats through products that are easy to install, configure, update and maintain.  For further information please visit:  The Group has over 30 years of experience in enterprise security and has built a portfolio of products that protects over 300,000 organisations and over 100 million endusers in 150 countries, across a variety of industries.

Forward-looking statements
Certain statements in this announcement constitute “forward-looking statements”.  These forward-looking statements involve risks, uncertainties and other factors that may cause the Group’s actual results, performance or achievements, or industry results, to be materially different from those projected in the forward-looking statements.  These factors include: general economic and business conditions; changes in technology; timing or delay in signing, commencement, implementation and performance or programmes, or the delivery of products or services under them; structural change in the security industry; relationships with customers; competition; and ability to attract personnel.  You are cautioned not to rely on these forward-looking statements, which speak only as of the date of this announcement.  The Group undertakes no obligation to update or revise any forward-looking statement to reflect any change in expectations or any change in events, conditions or circumstances.

Sophos Group plc
Tel: +44 (0) 1235 559 933
Kris Hagerman, Chief Executive Officer
Nick Bray, Chief Financial Officer
Derek Brown, Vice President Investor Relations
Financial Public Relations
James Macey White / Mat Low
Tulchan Communications
Tel: +44 (0) 20 7353 4200
  1. Billings represents the value of products and services invoiced to customers after receiving a purchase order from the customer and delivering products and services to them, or for which there is no right to a refund.  Billings does not equate to statutory revenue.
  2. Adjusted operating profit represents the Group’s operating profit / (loss) adjusted for amortisation charges, share option charges and exceptional items.
  3. Cash earnings before interest, taxation, depreciation and amortisation (“Cash EBITDA”) is defined as the Group’s operating profit/ (loss) adjusted for depreciation and amortisation charges, any gain or loss on the sale of tangible and intangible assets, share option charges, unrealised foreign exchange differences and exceptional items, with billings replacing recognised revenue.
  4. Unlevered free cash flow represents Cash EBITDA less purchases of property, plant and equipment and intangibles, plus cash flows in relation to changes in working capital and taxation.


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