PROOFPOINT COMPLETES THE ACQUISITION OF WOMBAT SECURITY

Proofpoint, Inc., (NASDAQ: PFPT), a leading cybersecurity company, today announced it has completed its acquisition of Wombat Security Technologies, Inc., a leader for phishing simulation and security awareness computer-based training. By collecting data from Wombat’s PhishAlarm solution, Proofpoint will have access to data on phishing campaigns as seen by non-Proofpoint customers, providing broader visibility and insight to the Proofpoint Nexus platform.

“As cybercriminals continue to look for new ways to exploit employees, companies need to be vigilant about changing end-user behavior and reducing risk with cybersecurity education solutions,” said Gary Steele, Proofpoint CEO. “The acquisition of Wombat gives us greater ability to help protect our customers from today’s people-centric, social engineering-driven cyberattacks, and we are thrilled to welcome Wombat’s employees to the Proofpoint team.”

With the completion of the acquisition, organizations will be able to leverage the industry’s first solution combining market-leading phishing protection with market-leading awareness. Uniquely with the combined solutions, organizations will be able to:

  • Use real detected phishing attacks for simulations, assessing users based on the threats that are actually targeting them
  • Both investigate and take action on user-reporting phishing, leveraging orchestration and automation to find real attacks, quarantine emails in users’ inboxes, and lock user accounts to limit risk
  • Train users in the moment immediately after they click for both simulated and real phishing attacks

Financial Impact

Proofpoint expects the acquisition of Wombat Security to have the following impact to its financial outlook for the first quarter, and full year 2018, as previously provided on February 6, 2018:

For the full year 2018:

  • Increase the billings range to $864 – $869 million as compared to the previous range of $828 – $833 million
  • Increase the revenue range to $691 – $696 million as compared to the previous range of $660 – $665 million
  • Reduce the non-GAAP net income range to $46 – $50 million as compared to the previous range of $52 – $56 million
  • Increase the free cash flow range to $140 – $142 million as compared to the previous range of $138 – $140 million

For the first quarter of 2018:

  • Increase the billings range to $182 – $184 million as compared to the previous range of $180 – $182 million
  • Increase the revenue range to $151 – $153 million as compared to the previous range of $149 – $151 million
  • Reduce the non-GAAP net income range to $7.5 – $8.5 million as compared to the previous range of $8 – $9 million
  • No material impact to the previous range of $22 – $24 million of free cash flow

Additional commentary on Wombat’s contribution to Proofpoint’s 2018 financial outlook:

  • For both billings and revenue, Proofpoint expects a modest ramp over the three remaining quarters of fiscal year 2018
  • For non-GAAP net income, Proofpoint expects the largest negative impact to be realized during the second quarter, with gradual moderation over the remainder of the year, and the business achieving break-even in the first quarter of 2019
  • For free cash flow, Proofpoint expects the favorable impact to be realized during the fourth quarter of 2018

Note that all of these guidance assumptions are in accordance with ASC 606, which Proofpoint adopted effective January 1, 2018, as were its original guidance metrics provided on February 6, 2018.

For more information on Proofpoint Nexus, please visit https://www.proofpoint.com/us/technology-platform.