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Earnings Results: Mandiant’s first results as standalone company mixed compared with Street view; CFO retiring

Mandiant Inc. reported its first results as a standalone cybersecurity software and services company in the extended session Thursday, and they were mixed compared with the Wall Street consensus, and the company also announced its financial chief was retiring.

Mandiant
MNDT,
+1.34%

shares fell 5.5% in after-hours trading following the release of the results, after closing the regular session with a 1.3% gain at $18.18.

Mandiant is the result of FireEye spinning off its legacy products business on Oct. 8 and concentrating on its cloud-based services and intelligence consulting business.

FireEye Chief Executive Kevin Mandia told MarketWatch it was an exciting time now that the spinoff makes Mandiant “vendor agnostic,” meaning customers now don’t need to buy FireEye equipment to run Mandiant software and services, and that opens up a huge opportunity for more customers and served to build partnerships with companies like Splunk Inc.
SPLK,
+0.11%

and Microsoft Corp.
MSFT,
+0.73%

“Our true differentiator wasn’t the controls that we had, it was our expertise in intelligence that powered them,” Mandia told MarketWatch, likening cyberthreats to a needle in a customer’s haystack of a network.

“Why just power FireEye products with them, let’s actually power a lot of other products with them, and ultimately help address the shortage of cybersecurity experts by providing a technology that automates what we do every day for our customers, which is find the needle in the haystack,” Mandia said. “Mandiant unencumbered by FireEye can partner effectively, period, and that was something we couldn’t use to leverage in the past.”

Excluding discontinued operations, Mandiant reported a third-quarter loss of $101.2 million, or 45 cents a share, compared with a loss of $81.6 million, or 36 cents a share, in the year-ago period. Including discontinued operations, the company reported a net loss of $62.2 million, or 31 cents a share, compared with $39.1 million, or 17 cents a share in the year ago period.

Adjusted earnings pre-spinoff, which excludes expenses for stock-based compensation and other items, were 6 cents a share, compared with 11 cents from the year-ago quarter.

Revenue rose to $122 million from $100 million in the year-ago quarter, while billings rose to $139.3 million compared with $99.6 million a year ago.

Analysts surveyed by FactSet had forecast adjusted earnings of 6 cents a share on revenue of $120.2 million and billings of $162.3 million.

Last earnings report, Mandiant had forecast pre-spinoff earnings of 5 cents to 7 cents a share, while forecasting post-spinoff revenue between $118 million to $122 million. Mandiant Chief Financial Officer Frank Verdecanna told MarketWatch that this mix of pre-split and post-split numbers is required under accounting regulations.

Using post-spinoff numbers, Mandiant expects an adjusted fourth quarter loss of 12 cents to 13 cents a share on revenue of $129 million to $133 million. Analysts polled by FactSet are showing a forecast of 9 cents a share on revenue of $129.6 million.

Mandiant announced that CFO Verdecanna will retire some time in 2022 after nearly 10 years with the company. The company said Verdecanna will step down once his replacement is hired. 

The company also said it bought back about $32 million in stock during the third quarter.

Shares of Mandiant are up 23% over the past 12 months, compared with a 39% gain on the ETFMG Prime Cyber Security ETF
HACK,
+0.88%
,
and a 36% rise on the S&P 500 index
SPX,
+0.42%
.

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