SUNNYVALE, Calif., July 29, 2021 (GLOBE NEWSWIRE) — Proofpoint, Inc. (the “Company” or “Proofpoint”) (NASDAQ: PFPT), a leading cybersecurity and compliance company, today announced financial results for the second quarter ended June 30, 2021.

“We were very pleased with our strong operating results for the second quarter and our team’s solid execution year-to-date,” stated Gary Steele, chief executive officer of Proofpoint. “Our unique people-centric approach to threat protection, information protection, and compliance is gaining traction in the market and increasing in its importance in protecting our customers from the risks they face in today’s active threat landscape. We look forward to completing our announced transaction to be acquired by Thoma Bravo in the third quarter, which will provide significant value for our shareholders and enable us to make further investments in protecting our customers in the years ahead.”

Second Quarter 2021 Financial Highlights

• Revenue: Total revenue for the second quarter of 2021 was $308.7 million, an increase of 19%, compared to $258.4 million for the second quarter of 2020. This result included a single customer order that resulted in a large accelerated revenue component (as prescribed under the ASC-606 accounting standard) of approximately $9.0 million, and also contributed to the income statement metrics listed below. Absent this, annual revenue growth would have been approximately 16%.
• Billings: Total billings for the second quarter of 2021 were $328.6 million, an increase of 31%, compared to $250.0 million for the second quarter of 2020. This result included a five-year prepaid transaction recorded early in the quarter that was in excess of $20.0 million. Absent this transaction, annual billings growth would have been approximately 23%.
• Gross Profit: GAAP gross profit for the second quarter of 2021 was $231.6 million, compared to $190.9 million for the second quarter of 2020. Non-GAAP gross profit for the second quarter of 2021 was $249.8 million, compared to $207.5 million for the second quarter of 2020. GAAP gross margin for the second quarter of 2021 was 75%, compared to 74% for the second quarter of 2020. Non-GAAP gross margin for the second quarter of 2021 was 81%, compared to 80% for the second quarter of 2020.
• Operating Income (Loss): GAAP operating loss for the second quarter of 2021 was $(47.4) million, compared to a loss of $(10.8) million for the second quarter of 2020. Non-GAAP operating income for the second quarter of 2021 was $52.1 million, compared to $41.2 million for the second quarter of 2020.
• Net Income (Loss): GAAP net loss for the second quarter of 2021 was $(52.9) million, or $(0.92) per share, based on 57.5 million weighted average shares outstanding. This compares to a GAAP net loss of $(15.1) million, or $(0.26) per share, based on 57.4 million weighted average shares outstanding for the second quarter of 2020. Non-GAAP net income for the second quarter of 2021 was $41.3 million, or $0.63 per share, based on 66.4 million weighted average diluted shares outstanding. Non-GAAP net income for the second quarter of 2020 was $32.8 million, or $0.51 per share, based on 65.5 million weighted diluted shares outstanding. Non-GAAP earnings per share for the second quarters of 2021 and 2020 included the 6.0 million shares associated with the company’s convertible notes, and cash interest expense (net of tax) of $0.5 million for each period were added back to net income as the “If-Converted” threshold during these periods was achieved.
• Cash and Cash Flow: As of June 30, 2021, Proofpoint had cash, cash equivalents, and short-term investments of $929.3 million. The Company generated $60.9 million in net cash from operations for the second quarter of 2021, compared to $30.6 million during the second quarter of 2020. Capital expenditures were $6.1 million for the second quarter of 2021, compared to $11.8 million for the second quarter of 2020. The Company’s free cash flow for the second quarter of 2021 was $54.8 million, compared to $18.8 million for the second quarter of 2020, and driven by strong billings linearity primarily as a result of the previously mentioned five-year prepaid transaction.
• Stock Repurchase Plan: The Company repurchased approximately 135,700 shares at an average price of $131.65 during the second quarter of 2021.

Transaction with Thoma Bravo
Under the terms of the merger agreement with Thoma Bravo, L.P. (“Thoma Bravo”) announced on April 26, 2021, Proofpoint shareholders will receive $176.00 in cash for each share of Proofpoint common stock they own. The transaction remains on track to close in the third quarter of 2021, subject to customary closing conditions, including receipt of regulatory approvals. Upon closing of the transaction, Proofpoint’s common stock will no longer be listed on any public market.

In light of this transaction, Proofpoint will not be hosting an earnings conference call to discuss these results and the Company will not be providing financial guidance for the third quarter or for the full year 2021 as a result.