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November 11, 2015

Sophos blames IPO cost for losses, ups full-year outlook

News: Upgrade comes on the back of increased billings and revenue.

By Charlotte Henry

Sophos has released its results for the first half of fiscal year 2016, that saw profit turn to loss, butrevenue rise.

The UK software firm announced an operating loss of $13.4m for the sixth months ending September 30th, down from a profit of $12.1m in the same period last year.

The firm says this mainly down to $17.6m of exceptional items connected to the cost of its IPO, and a $7.6m year-on-year variant in unrealised foreign exchange gains.

Revenue was up to $23.42m, from $215.1m in the same period last year, a reported rise of 8.9%. Also positive was the growth in billings, which saw a rise of 12.8% to $242m. Cash EBITDA reported a rise of 8.9%, hitting $45.5m from $41.8m.

Following the results, the company has upgraded its outlook for the full year 2016. It now predicts that like-for-like billings growth will be between the high teens and 20%. It also now expects to beat predicted cash EBITDA margins for FY16. Shares in the firm are currently trading up.

"Cybersecurity remains the number one priority for IT executives across enterprises of all sizes, and within an environment of strong secular growth in IT security, Sophos continues to outperform the market in each of our core segments of enduser and network security," said chief executive Kris Hagerman.

"The first half has been marked by continued strength across all major regions and product categories, with our performance exceeding our internal expectations."

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During the period covered by the results, the firm has bought SaaS based security product Acquired Reflexion Networks. It also released new products such as unified threat management tool Sophos XG Firewall, and added support for the latest version of various operating systems.


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