FireEye announced the acquisition of Verodin for USD 250 million in cash and stock. The Verodin Security Instrumentation Platform adds a new way to validate cybersecurity, identifying gaps in security effectiveness due to equipment misconfiguration, changes in the IT environment, evolving attacker tactics, and other dynamics. FireEye said it can use its own data on security attacks and threats to further strengthen the system and reinforce customer security.
Equipped with FireEye frontline intelligence, the Verodin platform will measure and test security environments against both known and newly discovered threats, empowering organizations to identify risks in their security controls before a breach occurs, and rapidly adapt their defenses to the evolving threat landscape. FireEye expects the takeover to add around USD 20 million in billings this year and over USD 70 million in 2020, while also contributing to revenue, cash flow from operations and adjusted operating income in 2020.
Verodin will integrate with FireEye Helix security orchestration capabilities to help customers prioritize and automate continuous improvement of security controls. Customers will also be able to implement Verodin cyber security measurement and validation solutions as-a-service through the FireEye Managed Defense service and as an Expertise On Demand automated service.
Verodin products will continue to be available on a standalone basis through Verodin resellers, as well as through the global community of FireEye channel partners.
FireEye updated its Q2 and full-year guidance to take account of the acquisition. For Q2, the company now expects slightly higher revenues of USD 213-217 million, and billings of USD 207-222 million, also up on its previous outlook. The adjusted operator margin forecast was lowered slightly to 0-2 percent from 1-3 percent, and adjusted EPS was lowered 0-2 cents. Operating cash flow is expected to be a negative USD 7-12 million.
For the full year, revenues are expected at USD 890-900 million, and FireEye increased the forecast for billings to USD 935-955 million. The adjusted operating margin is forecast to improve to 4-5 percent, and adjusted EPS will reach USD 0.12-0.16. Operating cash flow should still be a positive USD 95-115 million over the year.
