Sophos Group, a provider of cloud-enabled enduser and network security solutions, has released its interim financial results for the six-months ending September 30, 2017.
The firm reported strong cash generation, reflecting both a strong operating performance and good cash management with net cash from operations increasing by 28% to US $80.7 million, and unlevered free cash flow (the money the business has before paying its financial obligations) growing by 15% to US $71.4 million.
Billings (value of products and services invoiced to customers after receiving a purchase order) momentum strengthened further with growth of 22% in the first half of the year and 29% in the second quarter of the year.
The Enduser unit delivered 39% growth in the first half of the year, principally driven by Intercept X and Sophos Central (which grew by more than 220% to US $78.5 million in the first half of the year. The firm also experienced an accelerating momentum in the Network unit with billings up by 16% in the second quarter driving a 10% increase in the first half of the year.
Commenting on the results, Kris Hagerman, CEO, Sophos said: “We continued to see strong momentum for our industry-leading cybersecurity solutions, across all regions and product areas, particularly in the Enduser segment where we are establishing a market-leading position in the high-growth new segment of next-generation endpoint. We continue to offer cutting-edge technology, with robust third-party validation, that is easy to deploy and manage, through a single cloud console. We also saw solid demand in Network security, with improved growth rates in Q2 versus Q1. We view the second half with confidence, and we are raising our outlook for billings and unlevered free cash flow for the full year.”
Moving to the regions, the company experienced good growth in all regions, with 25% growth in the Americas, 22% in Africa, Middle East and Europe (EMEA) and 17% in Asia, Pacific and Japan (APJ).
The results also indicate a steady pace of new customer additions, with over 280,000 customers at the end of September, compared to 240,000 a year ago and 260,000 at the prior year-end.
In terms of subscriptions, there was a revenue growth of 16% in the first half of the year with subscription revenues increasing by 21%. Deferred revenue increased by 28% over the prior-year to US $654.4 million, with US $372.3 million of the balance due for recognition in less than one year (up 27% on prior-year).