Cloud Stocks: Proofpoint In The Cyber Attack Aftermath

According to a recent Verified Market Research report, the global email encryption market in the post-COVID-19 scenario is estimated to grow 24% annually to $19.27 billion by 2027 driven by the Bring Your Own Device (BYOD) trend and the continued adoption of cloud services, which has accelerated due to the global pandemic. San Francisco-based Proofpoint (Nasdaq: PFPT) recently announced its third-quarter results that surpassed market expectations for the quarter.

Proofpoint’s Financials

Proofpoint’s Q3 revenues grew 17% over the year to $266.7 million, ahead of the market’s forecast of $261.54 million. EPS of $0.59 was also significantly better than the market’s forecast of $0.39 per share.

By segment, Subscription revenues grew 16.2% to $260.7 million. Hardware and services revenues grew 92.8% to $6 million. Billings grew 6% to $294.4 million.

For the fourth quarter, Proofpoint forecast revenues of $268-$270 million. It expects to end the year with revenues of $1024.9-$1044.9 million. Its EPS guidance is $1.88-$1.91 for the year.

Proofpoint’s Product Expansion in Cyber Attack Aftermath

The recent cyber attack news in the US has sent shockwaves down both cybersecurity providers and consumers. Recent news of the attack claims that as many as 250 organizations were impacted by the attack. According to a recent New York Times report, the US government has spent billions of dollars over the past few years to build its cyber-offensive capabilities. These include a giant war room at Fort Meade, Maryland for United States Cyber Command and the installation of a defensive sensor system named Einstein all around the country. But the Russian hack appears to have sailed past these efforts without even alerting Einstein.

While the federal agencies continue to chase after the hackers, the attack has opened up a big market opportunity for cybersecurity vendors. Some analysts believe that the data breach could lead to a $200 billion growth opportunity among cybersecurity vendors in the next five years. Threat intelligence players like Proofpoint are cashing in on this growth by releasing several new products.

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Disclosure: All investors should make their own assessments based on their own research, informed interpretations, and risk appetite. This article expresses my own opinions based on my own ...

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