ForeScout Climbing Steadily

The proliferation of devices in organization these days driven by cloud, mobility, Internet of Things (IoT), and Bring Your Own Device (BYOD) trends has exponentially increased the vulnerability points. The Cyber Security market is projected to grow at 11% CAGR to $231.94 billion by 2022. ForeScout (Nasdaq: FSCT) is a cyber security company that specializes in visibility for endpoint security. It went public about a year ago and since then has seen an uptick in its stock price and valuation.

ForeScout’s Financials

Founded in 2000 by Israeli entrepreneurs Oded Comay, Doron Shikmoni, Hezy Yeshurun, and Dror Comay, California-based ForeScout offers Global 2000 enterprises and government organizations agentless visibility and control of traditional as well as IoT devices and BYOD endpoints when they connect to the network. Its solution supports heterogeneous wired and wireless networks, virtual, and cloud infrastructures and can scale to meet the needs of globally distributed organizations. Click here for previous coverage.

In the recent second quarter results, ForeScout reported revenue of $67.6 million, up 35%. GAAP net loss was $20.4 million, or $0.50 per share increased slightly from $17.8 million, or $2.95 per share a year ago. Non-GAAP net loss was $7.5 million, or $0.18 per share, easily beating analyst estimates of a loss of $0.37 per share on revenue of $63.5 million.

Non-GAAP operating loss was $7.3 million, or 11% of total revenue, compared to $13.3 million or 27% of total revenue a year ago. GAAP gross profit was $52.9 million, or 78% of total revenue, compared to $35.9 million in or 72% of total revenue a year ago.

Net cash used in operating activities was $5.4 million, or 8% of total revenue, compared to $11.5 million or 23% of total revenue a year ago. Free cash flow was negative $7.9 million, or 12% of total revenue, compared to negative $13.1 million or 26% of total revenue a year ago.

By segment, Product revenue was $34.3 million, up 28% while Maintenance and Professional Services revenue was $33.3 million, up 44%.