FireEye (NASDAQ: FEYE) posted third-quarter revenue above management's guidance. Also, given the strong growth of its cloud business, the cybersecurity vendor seems to be successfully shifting away from the secular decline of its legacy hardware business to a growing cloud-based subscription model. But the company has an important issue: Despite its revenue growth, it's still generating significant losses under generally accepted accounting principles (GAAP).
Since FireEye had communicated a preview of its third-quarter results during its Analyst Day a few weeks ago, its top line above management's guidance range of $217 million to $221 million didn't surprise investors. Revenue reached $226 million, up 7% year over year.
Billings of $249 million stayed slightly below the midpoint of the guidance range of $245 million to $255 million, which still represented a solid 13% increase compared to last year. Since billing is a leading indicator of revenue, its double-digit growth indicates the company is poised to keep on growing revenue over the next several quarters.