FireEye, Inc. (NASDAQ:FEYE)
Q4 2015 Earnings Conference Call
February 11, 2016 5:00 p.m. ET
Kate Patterson - VP, IR
David DeWalt - Chairman and CEO
Michael Berry - CFO
Gur Talpaz - Stifel Nicolaus & Co.
Shaul Eyal - Oppenheimer
Joel Fishbein - BTIG
Robert Breza - Wunderlich Securities
Walter Pritchard - Citi
John Lucia - JMP Securities
Saket Kalia - Barclays
Keith Weiss - Morgan Stanley
Brent Thill - UBS
Ken Talanian - Evercore
Good day everyone and welcome to the FireEye's Fourth Quarter 2015 Earnings Results Conference Call. This call is being recorded.
With us today from the Company is Chairman and Chief Executive Officer Dave DeWalt, Chief Financial Officer Mike Berry, and Vice President of Investor Relations Kate Patterson.
At this time I would like to turn the call over to Kate Patterson. Please go ahead.
Thank you. Good afternoon and thank you all for joining us on today's conference call to discuss FireEye's financial results for the fourth quarter of 2015 and the full year 2015. This call is being broadcast live over the internet and can be accessed on the Investor Relations section of FireEye's website at investors.fireeye.com.
After the market closed, FireEye, issued a press release announcing the results for the fourth quarter of 2015 and the full year 2015. Before we begin our call, let me remind you that FireEye's management will make forward-looking statements during the course of this call, including statements relating to FireEye's guidance and expectations for the first quarter of 2016 and the full year 2016, expectations and plans relating to FireEye's recent acquisitions of iSIGHT Partners and Invotas, growth drivers, market opportunities and opportunities with partners, customer demand for and adoption of FireEye's products and services, growth in FireEye's business and ability to gain market share, changes in the threat landscape and the security industry, FireEye's competitive position in the market, FireEye's path to profitability, and FireEye's continued innovation and new and enhanced offerings.
These forward-looking statements involve a number of risks and uncertainties, some of which are beyond our control, which could cause actual results to differ materially from those anticipated by these statements. These forward-looking statements apply as of today and you should not rely on them as representing our views in the future. And we undertake no obligation to update these statements after the call.
For a detailed description of the risks and uncertainties, please refer to our SEC filings as well as our earnings release posted a few moments ago to our website. Copies of these documents may be obtained from the SEC or by visiting the Investor Relations section of our website. Additionally, certain non-GAAP financial measures will be discussed on this call. We have provided reconciliations on these non-GAAP financial measures for the most directly comparable GAAP financial measures in the Investor Relations section of the website, as well as in the earnings release.
With that, I'll turn the call over to Dave.
Okay. Thank you very much, Kate, and greetings everyone, and thank you all for joining us.
Today I'd like to primarily discuss three topics. A recap of our Q4 and full year 2015 record results, key trends occurring in the cybersecurity industry, as well as how FireEye can take advantage of those trends with our vision and strategy to build the most important valued cybersecurity company.
First of all, FireEye had a very strong 2015. In the three most important metrics, we grew total revenues 46%, total billings 35%, and reversed our operating cash flow losses from a negative $131 million to a positive $37 million. A transformation of $168 million of cash flow from operations in one year.
For the full year we grew total billings on an absolute dollar basis more than $200 million. Moreover, in the fourth quarter of 2015, we grew total revenues 29%, billings 21%, and had a positive cash flow from operations. Important key metrics such as overall growth of total transactions, which grew at a very solid rate year over year, deals over $1 million, and total new logos showed continued market share growth across the board and across the globe.
All this despite a very difficult compare of the year prior where FireEye closed several mega-deals from the cyber breached crisis clients that we didn't see in the fourth quarter of 2015. Moreover, we continue to see strong adoption of our global threat management platform that enables clients to detect, prevent and remediate threats in a single solution.
Many examples to highlight, including one of our largest deals ever in Europe. This deal included FireEye as a Service and a rollout of more than 100,000 endpoints, but most importantly, highlighted our growing partnership with Hewlett-Packard Enterprise, HPE.
Other deals including several greater than $1 million deals in global locations such as Germany, Japan, Canada, Poland, Saudi Arabia, Brazil, Singapore and Korea, as well as strong wins against competition in smaller-sized companies across the globe. The depth and breadth of FireEye is beginning to show its strength.
With that having been said, I'd like to thank the 3,600 employees of FireEye for their hard work, their dedication and their support as we continue our journey from a single-product vendor to a complete platform solution provider.
I'd also be remiss if I didn't welcome all the iSIGHT and Invotas employees to the FireEye family. Thank you for believing in our mission and our strategy. The best is yet to come.
We've come a long way since going public a little over two years ago. Annual billings have grown more than 200%, from $257 million in 2013 to nearly $800 million in 2015. And our customer base has more than doubled to more than 4,400.
We've gone from selling discrete web and email security appliances to enterprise customers to delivering a global threat management platform integrated across the network, endpoint and cloud to customers large and small. We pioneered new security delivery models, with FireEye as a Service, and new go-to market models with partners like Hewlett-Packard and Visa. We've extended our Mandiant Services brand globally and expanded our presence around the world, opening up new total addressable markets. And we're still the only cybersecurity company to undergo the rigorous process and achieve for certification under the Safety Act of the Department of Homeland Security, a key capability that continues to differentiate us more than our competitors.
As we look to the future, I see four mega-trends that make me very optimistic about the future of FireEye. The first trend is that cybersecurity problem that we see continues to worsen by the day. If you look at just two metrics, they're simply staggering to the complexity of the problem. At FireEye, we're now tracking more than 16,000 unique attacker groups located in nearly every part of the world. The number of attackers has grown exponentially over the past few years, and with anonymity on the internet, coupled by the lack of government cooperation, the safe havens for these attackers will remain and grow indefinitely.
In addition, the number of attack surfaces that the bad guys can use is becoming infinite as well. What once was primarily a Windows-based attack surface has now morphed to hundreds of device types, from endpoints, the servers, to IoT devices. And now nearly everything is connected both through fiber-linked internet gateways and now satellite-linked internet gateways, the latter of which exacerbates the overall problem with limited security and no governance models. When combining this vast attack surface with the number of attackers, you have a massive problem that's just growing every day.
The second trend, which is a direct result of the first trend, is the complexity of solving this security management problem. And this problem is growing more untenable every day as well. The number of security vendors used by most corporations exceeds well over 100 vendors. This is compounded by the number of alerts that are generated by these vendors, which is now measured in the millions per day per enterprise. How does a security professional wade through millions of alerts from hundreds of vendors to pick out the one alert that could be malicious? The answer is they can't and new solutions are needed.
Trend number three is the world of cybersecurity is now converging with the world of physical security as information technology enables critical infrastructure operational technology. This fusion is creating a new set of dangers for the world, dangers to our everyday work or life such as energy, water, transportation, connectivity, and more. Dangers where cyberterrorism meets terrorism, activism meets activism, and cyber espionage meets espionage, and these worlds ever increasingly intertwined. Recent examples such as the Parisian terrorist attacks, the attacks at San Bernardino and Ukrainian electrical grid outages all suggest that this problem is here to stay.
The fourth trend that we see is that technology alone cannot solve this problem. While machine learning, big data and analytics, and behavioral analysis are important, a combination of human intelligence and machine-based technology intelligence is required to address these highly-sophisticated and complex problems. Recent security spending forecasts make it clear that services and as-a-service will become a bigger and bigger part of the spend.
Gardner forecasts the enterprise security market will grow from about a $67 billion market in 2014 to about $100 billion market in 2019, with securities services accounting for more than 70% of that growth. Security outsourcing or as-a-service is the fastest-growing subcategory in that market.
When you look at these four mega-trends, I believe FireEye is perfectly positioned. First of all, with hundreds of Mandiant incident responders and hundreds of iSIGHT researchers deployed around the world, we have the best human threat intelligence possible. We also have the machine-based threat intelligence from our millions of virtual machines and endpoints deployed around the world.
This combination gives us a huge advantage in solving the security problems both today and well into the future. This intelligence, when coupled with our global threat management platform, can give us both on-premise, in-the-cloud and as-a-service capabilities, enabling us to reduce the risk, mask [ph] the complexity, and lower the total cost of security problems. Only FireEye has built this platform.
Over the past two years we've been very busy building out our global infrastructure to deliver our platform to customers all over the world. We built an around-the-clock, around-the-world service capability, delivered from seven major cyber operation centers on four continents, in 28 languages, and we partnered with strategic partners around the world such as Hewlett-Packard and SingTel to deliver it.
When powered by our intelligence, backed up by our Mandiant consultants and delivered by our FireEye products, this capability is very unique and can enable us to deliver an as-a-service solution that is affordable from the smallest companies to the largest enterprises.
To show our progress financially, in 2015 we built FireEye as a Service into a $100 million business in less than 18 months, grew it at over 100% and scaled to hundreds of customers, and reduced deployment times to less than 40 days. Moreover, we have proven this model to be cost-effective and margin-accretive. Our vision and goal is to continuously improve this capability with segmented offerings that real-time monitor, protects and actively hunt for threats for our clients. We also plan as a goal over time to deliver this FireEye as a Service through the cloud within minutes.
Our unique capabilities enable us to continue to expand our partner ecosystem as well. Our partnership model is starting to take shape and our partners delivered very solid results for the fourth quarter and for the full year.
For example, one of our top partners, Optiv, closed 440 transactions for the year and delivered 48% growth year over year in fulfillment bookings. Other partners who had great years included Carahsoft, Set Solutions [ph] and Macnica [ph], and all were recognized at our annual Partner of the Year Awards at our recent Momentum event. I'd like to thank all of our partners for their contributions.
Overall for the year, deal registrations increased 33%, pipeline 47%, and partner-led bookings increased a strong 70%. The VAR distributor channel is important to our overall strategy and we'll remain committed to our joint success. Last week we announced significant enhancements to our fuel program that are designed to ensure an innovative and collaborative experience, with opportunities to build a highly-profitable security practice based on the FireEye platform.
With the new Essentials addition of NX, targeting the midmarket customers, and new programs built around FireEye as a Service and iSIGHT Threat Intelligence subscriptions, we believe we've dramatically increased the opportunity for joint success with our VAR community.
We're also excited about our success with other strategic partners. These non-traditional partnerships complement our existing VAR distributor programs and a diversified go-to market strategy that enables delivery of the FireEye platform to new market segments and customers. Strategic partners including HPE helped deliver more than $15 million in incurred [ph] billings in Q4.
Our global service provider business also showed strong growth for the year. And we extended our successful partnership with SingTel with the renewal of our partnership contract. Our partnership with Visa continues to expand and I'm pleased to say that Visa will be launching the second jointly-developed product shortly called the Visa Remote Monitoring Service.
Moreover, the Parsons partnership, which we announced in early January, is helping us to expand our markets into the industrial control systems and operational technology sector. As you know, the Internet of Things or IoT devices is a massive opportunity for cybersecurity vendors. We're looking forward to our great partnership with Parsons.
We also continue to expand our market reach through innovations in our core technologies, our as-a-service offerings, and our go-to market platform packaging. From a product and technology perspective, we achieved several key milestones in Q4, including the introduction of the next generation of MBX detection engine. This release, which became available in December, tripled analysis speeds, increased the detection capability five-fold, and expanded our detection algorithms to include adware, commodity malware, and other unwanted programs. This capability now offers customers a complete solution, from advanced threat management to commodity malware.
This new architecture also enables the segmentation of our platform in the Essentials and Power editions, which we announced last week. These new additions, which were initially available on our Network NX platform, create compelling value propositions based on customer security maturity levels and budget requirements. Essentials NX now includes IPS support and functionality, allowing midmarket customers to consolidate budget line items. The NX Power Edition, which targets customers with mature security organizations, includes mobile protection, threat analytics, and rich, contextual intelligence.
We also released the next generation of our HX endpoint solution, adding exploit detection and rapid search to provide unparalleled visibility, even if the device is disconnected from the network. HX continues to post strong growth, increasing more than 75% for the year on a standalone basis.
Our network forensics platform or PX also continues to gain traction with customers and sales were up nearly 150% in Q4. HX and PX are both enabling technologies with our FireEye as a Service offering.
We also saw growing demand for our cloud email product called ETP, which outpaced appliance-based email security for the first time in the fourth quarter. On a combined basis, our appliance and cloud-based email solutions now protect more than 17 million mailboxes from advanced attacks, up from less than 10 million at the end of 2014. Adoption of our platform has accelerated and is evident in our multiproduct attach rates.
At the end of the year, approximately 36% of our customers had adopted more than three product families, up from 28% at the end of 2014. Additionally, more and more customers are purchasing multiple products in a single transaction. And this is evident in the growth of our seven-figure deals. In 2015, we closed 139 transactions over $1 million, up from 83 in 2014 and fewer than 25 in 2013.
Core to our success is our differentiated threat intelligence, a nation-state grade capability that allows us to detect threats and eliminate false-positives faster, better and with higher fidelity than any other security vendor. The acquisition of iSIGHT provides an over-the-horizon view of attacks in the development stage. And this expanded visibility across 29 languages makes our products and our as-a-service offerings, and our incident response, much better.
When we add the ability of unified tools and data from multiple vendors and automate the response to known attacks with the Invotas security orchestration technology, we will have an incredibly compelling value proposition for our customers. We expect the first native integrations midyear, with deeper integrations toward the end of 2016.
As you can see, we've made tremendous progress on our journey. We've advanced from a limited number of best-of-breed products to a comprehensive global threat management platform, at a time when the market is moving to the best-of-suite buying mentality. By bringing FireEye, Mandiant, iSIGHT and Invotas together, we've created a cybersecurity like no other, one with a suite of leading technologies, world-class cybersecurity expertise, and nation-grade threat intelligence, all brought together to form a comprehensive threat management platform.
While others in the security industry focus on best-of-breed, FireEye is delivering best-of-suite. And I believe this positions us for the long-term growth in a continuing, evolving marketplace.
In other news, real quickly, I'm very pleased to announce the appointment of Kevin Mandia, FireEye's President and Founder of Mandiant to the FireEye Board of Directors. Thank you, Kevin. Additionally, this will be effective by the way on February 9th, additionally, Enrique Salem, former CEO of Symantec, was appointed as our Lead Independent Director. I'd like to thank both of them for their continued service, and look forward to working with them.
We'll talk more about our long-term strategy, along with our technology and product roadmaps, and our go-to market plans, at our Annual Analyst Day coming up on March 8th.
So with that, I'll turn the call over to Mike Berry, our Chief Financial Officer, to discuss the details of our Q4 numbers and our outlook for 2016. Go for it, Mike.
Great. Thanks a lot, Dave. Very good afternoon to everybody on the call.
On today's call, as Dave mentioned, on today's call I will go over the fourth quarter and full year 2015 results, as well as the Q1 and full year 2016 outlook. Along the way, I will talk about our efforts around improved operational efficiency and cost optimization strategy.
While we have made great progress during my first five months, we also realized that we have a lot more work to do as we continue to drive towards positive free cash flow and profitability. I will hit the fourth quarter and 2015 at a pretty high level so that I can spend most of the time at our outlook for 2016.
I'd like to remind you that, except for revenue, which is a GAAP metric, I will be using non-GAAP metrics to discuss our financial results and guidance ranges. With that said, let's move on to the financial results for the fourth quarter 2015, which were consistent with the preliminary results that we disclosed in conjunction with the iSIGHT acquisition during our call on January 20th.
Billings finished at $257 million, for a year-over-year growth rate of 21%. As we discussed a few weeks ago, our international regions posted strong results, which is reflected in international revenue growth of 70% year over year for the fourth quarter.
From a metrics perspective, we closed 47 transactions greater than $1 million, compared to 43 in Q4 2014 and 34 in Q3 2015. We closed one transaction above $5 million in the quarter, which was in our EMEA region. There were no eight-figure transactions in the fourth quarter 2015.
For transactions greater than $1 million, more than 85% included multiple products. Our average contract length for new business was approximately 32 months, up slightly from Q3 and reflecting normal Q4 seasonality.
Total revenue was approximately $185 million, up 29% over the fourth quarter 2014. Total platform revenue, which comprises product and product subscription revenue, grew by 19% in the fourth quarter 2015. Product revenue decreased by 2%, consistent with the modest year-over-year decline in product billings which we disclosed with our preliminary results. Product subscription revenue increased by 56% year over year, reflecting the continued transition to subscription and cloud-based offering.
As we continue on our journey from product to platform, we believe that platform revenue, which is a combination of product revenue plus product subscription revenue, is the best metric to measure adoption of our solutions by the market.
Similar to product subscriptions, support revenue grew by 57% year over year for the fourth quarter 2015. The growth in these recurring revenue categories reflects continued strong renewals as well as increased adoption of our standalone subscription offerings, including FireEye as a Service and ETP.
Professional services continued its strong quarter and increased 60% year over year in the fourth quarter. The growth in professional services reflects the growing strength of the Mandiant brand in the U.S. and international market. Importantly, the incident response portion of the Mandiant business now comprises less than half of the total Mandiant business as other services such as Compromised Assessments, Security Program Assessments, Penetration Testing and other programs continue to grow very nicely.
Total gross profit increased to 75% in the fourth quarter, driven by strong profit expansion in the subscription and services products as we began to achieve economies of scale with the growth in our renewals and the expansion of our customer base. The gross profit from subscription and services increased by 4 percentage points in the fourth quarter and 5 percentage points for the full year, which is a very positive trend as we continue the evolution to more product subscription billing.
Operating expenses finished just below $191 million, resulting in an operating loss of $53 million. We continue to drive operating leverage on our path to profitability with an operating margin of negative 28% versus negative 40% in the fourth quarter 2014. Non-GAAP EPS loss finished at $0.36, on the good side of our EPS range of $0.36 to $0.38.
For the full year 2015, total billings finished at $797 million, a 35% year-over-year growth rate. Total revenue grew 46% for the full year, driven by 68% year-over-year growth in recurring product subscription and support revenues.
For the full year, gross margin increased to 73%, up from approximately 71% in 2014, driven mainly by the gross profit expansion and product subscription that I just mentioned. Our operating income margin for the full year of 2015 improved to negative 38%, versus negative 65% in 2014.
Our balance sheet remained strong, as we finished the fourth quarter with approximately $1.17 billion in cash and short-term investments, basically flat versus the end of the third quarter 2015. DSOs, measured against billings, of 62 days were slightly better than our target range of 65 to 75 days.
Our total deferred revenue continued to show very strong growth, finishing at $527 million, an increase of 49% versus the yearend 2014. The higher growth on deferred revenue compared to revenue reflects the continued transition to a subscription-based business model as adoption of our cloud-based products and FaaS continues to grow.
Our cash flow from operations finished at positive $9.4 million for the fourth quarter and positive $37 million for the full year. Free cash flow finished the fourth quarter at negative $8 million and negative $18 million for the full year. The significant improvement in our cash flow results over 2014 was driven almost equally by a combination of better operating leverage as billings outgrew cash expenses and better-than-expected collections as our DSOs declined from an average in the low 80s in 2014, excuse me, to an average in the mid-60s in 2015.
Okay, now let's move on to 2016. I would like to go through some high-level comments to help set the stage for our guidance. First, let's talk about the impact of the recently completed acquisitions on 2016.
For iSIGHT, we disclosed on the January 20th call that they did about $50 million in bookings and $40 million in revenue in 2015. Keep in mind that for a subscription and services business, billings are usually less than bookings if the contract term extends beyond the invoice term. While the majority of iSIGHT's bookings were billed and paid upfront on an annual basis, they do have a few contracts they bill monthly. As a result, for 2015, we have calculated the billings for iSIGHT to be approximately $45 million of their $50 million in bookings and you should use $45 million in your pro forma growth calculations for 2015 billings.
Invotas was much smaller, with less than $1 million in both billings and revenue in 2015. We are really excited about the acquisition and believe that, in addition to having standalone billings, that the Invotas Security Orchestrator will add significant value to FireEye's platform and drive increased platform sales over time.
To summarize the impact of the recent acquisitions, we expect iSIGHT and Invotas to add approximately $60 million to $65 million to 2016 billings and approximately $55 million to $60 million to 2016 revenue.
Also, remember that, because both companies are primarily subscription-based, we expect to write down a portion of their deferred revenue which will reduce the revenue we recognize particularly in the first few quarters. While we're still working through the details of the purchase accounting and deferred revenue write-down for both companies, at this point we expect the deferred revenue write-down to reduce revenue between $7 million to $10 million for the full year. The majority of this haircut will occur in the first half of 2016. As a result, our Q1 guidance reflects approximately $7 million in incremental revenue from the two acquisitions.
Since both companies are now a part of FireEye, we will see the impact to the added headcount in our expenses immediately. On a combined basis, the two acquisitions are expected to add approximately $16 million in total expenses in the first quarter 2016. This is comprised of approximately $5 million for cost of goods sold and $11 million in operating expenses.
For the full year 2016, we expect between $60 million and $65 million in total expenses, which is comprised of approximately $22 million in cost of goods sold and between $38 million and $43 million in operating expenses. The incremental negative impact from adding both acquisitions to our P&L negatively impacts our Q1 EPS by an estimated $0.06.
For the year, we still expect the iSIGHT acquisition to be neutral to slightly accretive to operating margins and EPS. We expect Invotas to be slightly dilutive to non-GAAP EPS by approximately $0.03 in the full year 2016 but accretive beginning in 2017, which is not unusual for an earlier-stage company that recognizes revenue on a ratable basis.
By the way, the total purchase price for Invotas was approximately $30 million, with approximately $19 million paid in cash and the remainder in FireEye shares. They have about 20 employees who are already integrated into the FireEye organization.
Now let's go through the impact of large deals on our year-over-year growth rate. When we gave the organic billings growth rate for 2016, we said that, while we expected to achieve 20% organic growth for the full year, we expected to post lower growth in the first half of the year and higher growth in the second half of the year. A portion of this accelerative second half growth rate is due to our exciting product roadmap and expected contribution from new products, as well as the availability of more of our products in our international markets. But another big contributor is grow-over [ph] impact of the big deals we completed in the first half of 2015.
In the first and second quarters of 2015, we completed two transactions in each of these quarters that contributed a total of approximately $20 million to billings per quarter. While we hope that we can duplicate these large transactions in the first quarter, at this point we do not have any transactions greater than $5 million that we expect to close in our first quarter. And while we are not -- and we are not including any larger transactions in our guidance.
Including just the $20 million in big deals from the first quarter 2015 to get a better apples-to-apples comparison of our growth rates, the midpoint of our guidance equates to organic growth of about 25% year over year. I believe this comparison gives a more relevant measure of our ability to grow the top line at our 20% full year organic growth rate target.
Next, let's discuss our expense base for 2016. We continue to focus on operational efficiencies and make progress on optimizing our cost structure to ensure that we are able to reinvest in our growth areas. This is reflected in our ability to keep a good portion of our operating costs basically flat during 2016 as we move more resources to more high-growth areas. As I have mentioned in several venues before this call, one of the nice things about FireEye's investments during the past two years is that we largely have the expense base in each of our key areas to continue to support our growth goals. For 2016 we will focus incremental investments in the following areas.
Professional services. Our Mandiant consulting organization now has approximately 350 employees and we expect to keep adding to this important team both in the U.S. and internationally.
FaaS infrastructure. We signed nearly 100% growth in FaaS new billings in 2015, and we will continue to add resources to support the expected growth in our as-a-service offering. We are expecting to add quota-carrying sales resources throughout 2016 on a very targeted basis, with a focus on the international market.
For the rest of the Company, we expect to keep operating expenses relatively flat as we go throughout 2016. At this point we feel we have enough resources to drive our growth initiatives and we will constantly look at optimizing our costs as we go through 2016. So for operating expenses, except for variable costs such as commission, you should expect to see relatively flat operating expenses for the first quarter through the fourth quarter. This will enable us to continue to make progress on our path to profitability as we exit 2016.
From a capital expenditure perspective, right now we are targeting approximately $50 million for 2016, with the priorities focused on our cloud infrastructure, our R&D capabilities, and facilities expansions in our lower-cost sites. On operating cash flow, as I mentioned earlier, we saw a significant improvement in this measure in 2015 as our focus and discipline around cash collections reduced DSOs by a significant amount, and we continue to drive operational leverage as billings growth outpaced cash expense growth.
While we will maintain laser-focused attention on our working capital management, for the 2016 guidance we are expecting DSOs between 65 and 75 days, which is slightly above the full year 2015 average DSOs. Thus, operating cash flow growth in 2016 will track more closely to the delta between billings and cash expenses.
Lastly, but very importantly, as we reviewed on the conference call a few weeks ago, we continue to expect our cloud and as-a-service offerings to grow faster than the rest of the business, and you will see this reflected in the billings, deferred revenue, and revenue line items.
Okay. With that said, let's go through the full year 2016 guidance first, and then I will go back and go through the first quarter 2016.
For the full year 2016, we expect total billings to be in the range of $975 million to $1,055 million. This represents total growth of 22% to 32%. Within the billings guidance, we currently expect organic billings to grow at approximately 20% at the midpoint and the two acquisitions to contribute between $60 and $65 million in billings for the full year.
We also included on our website the updated charts that show the platform billings mix, which is based on the midpoint of our full-year guidance. From this chart you can see that we expect the product subscription portion of our platform billings to increase to approximately 70% of the total for 2016.
Moving on to revenue, expect total revenue to be between $815 million and $945 million, for a year-over-year growth rate of 31% to 36%. On an organic basis, we expect revenue to grow by approximately 24% and the two acquisitions to contribute approximately $55 million to $60 million in revenue. Within the revenue line, we currently expect platform revenue to increase over 2015 between 30% and 35%, which is driven by continued strong growth in subscription offering. We currently expect product revenue to be relatively flat on a year-over-year growth rate basis, consistent with product billings.
We expect full year gross profit margins to stay constant at around 73% and total operating expense to increase by between 14% and 16% over 2015, which includes the additional $38 million to $43 million in operating expenses from the two acquisitions. Again as I mentioned earlier, this increase is being driven mainly by the increased costs added throughout 2015 as we expect to keep operating expenses, excluding commissions, relatively flat as we go through the year.
This would bring full-year operating margins to between negative 22% and 24%. I would also reiterate that we expect to see fairly significant improvement in our operating margin as we go through 2016 and currently expect the fourth quarter 2016 operating income margin to be approximately negative 10%. This would represent another meaningful improvement from the negative 28% seen in the fourth quarter 2015. This would equate to a non-GAAP earnings per share loss between $1.25 and $1.32.
For operating cash flow, we currently expect between $70 million and $80 million for the full year 2016, with the first half being negative and the second half being positive.
Okay, let's shift to the first quarter guidance.
We currently expect total billings to be between $163 million and $183 million. On an organic basis, we expect billings to be approximately $165 million at the midpoint. Again, remember the big deal grow-over that I discussed earlier.
We expect total revenue to be between $167 million and $177 million, with the two acquisitions contributing approximately $7 million in revenue. Remember that the deferred revenue write-down, which impacts revenue recognized by $7 million to $10 million for the full year, has a larger impact on the first half 2016. We expect gross margins to be approximately 70% and total operating expenses between $197 million and $199 million.
Before moving on, let's stop and discuss the puts and takes to the first quarter operating expenses compared with the fourth quarter 2015 operating expense amount of $191 million. Although we will have lower commission expenses associated with the seasonally lower first quarter 2016 billings, we have several expenses that come back into the expense base in the first quarter 2016. These include the full quarter impact of our fourth quarter new hires, merit increases for the employee base, FICA and other employee-related taxes, and the cost of our sales kickoff event momentum. In addition, the two acquisitions increased the first quarter operating expenses via approximately $11 million.
This results in total operating expenses, including the impact of the two acquisitions, to be between $197 million and $199 million, and non-GAAP EPS loss per share between $0.49 and $0.53.
On a percentage of total revenue, this would result in the following approximate percentages. R&D up 39% of revenue, sales and marketing at 59% of revenue, and G&A at 16% of revenue. Keep in mind that first quarter 2016 non-GAAP loss per share includes approximately $0.02 for the interest on our convertible debt and approximately $0.06 from the recent acquisitions.
We also have some one-time cash expenses in the first quarter 2016 that will impact operating cash flow. These include some prepaid software licenses and cloud services, as well as a payment of nearly $5 million related to specific tax holdbacks from the Mandiant acquisition. Thus we expect operating cash flow in the first quarter to be in the low single-digit million negative.
This concludes my prepared remarks on our model for 2016 -- or for Q1 and 2016. I know there's a lot to absorb here and I gave you a lot of numbers, so feel free to call us with any questions as you build your models. We will go into more detail on our long-term model at our Analyst Day on March 8 in New York City, so really look forward to seeing everybody in the Big Apple.
In conclusion, let me say that I'm really excited about our market opportunity, growth potential and ability to drive continued operating leverage as we progress on the path to free cash flow and profitability.
I'll now turn the call back to Dave.
All right, Mike. Take a deep breath.
All right. Listen, closing remarks real quick, we'll open up for Q&A.
I just want to say, you know, we just really believe FireEye is just perfectly positioned for 2016. We entered 2016 with a diversified customer base, a unique value proposition based on reduced cyber risks and lower total cost of ownership, a differentiated intelligence-led platform. We're very excited about the breadth and relevancy of our solutions and the expanded opportunities represented by our new Essential and Power editions, our new intelligence subscriptions and our international expansions.
Even in this more normalized spending environment, we remain one of the fastest-growing companies in our industry. Our recent acquisitions of iSIGHT and Invotas further extend our platform and expand our addressable market.
I'm looking forward to working with Mike and Kevin and the rest of the Board and team and the entire FireEye employee base as we continue to reimagine cybersecurity.
With that, Candace [ph], will you take us through some questions? Thank you very much.
Thank you. [Operator Instructions]
And our first question comes from Gur Talpaz of Stifel. Your line is now open.
Gur Talpaz - Stifel Nicolaus & Co.
Great. Thanks for taking my question. A lot to parse there as well.
So, Dave, you're off-shooting [ph] your product to tackle a much wider customer base. I was hoping you could dig in a bit to some of the changes you're making to the core architecture, and then including the launch of your Essentials Edition.
And then I guess the next step to that is, how do you ensure you properly segment the solution sets so that you don't cannibalize via the core enterprise customer base as well?
Yeah, Gur, that's a good question. You know, what we're excited about here is keeping to expand our addressable market, and that's what we've been focused on. As you know, just two years ago when we went IPO, we had our NX product, it was largely wrapped in appliance form factor, we really had one form factor that we had. We had some various speeds to that form factor. But now we've been able to really segment the offering into kind of a lower-end, more affordable solution for smaller companies. We've been offering some incentives to our channel to really drive some expansion in that area. We think that targeted Essentials Edition is really greenfield for the Company. So, just by nature of where we're taking that product really doesn't have an effect on the other version which is the Power Edition which we're excited about.
And now with the Power Edition, we've added a lot of the power of our acquisitions and our innovation to that release. You might have heard we have an analytics capability now that we're enabling third-party collectors to the cloud that enable us to analyze real-time events, put on the intelligence, react to them. And we got mobile integration support, natively integrated to the Power Edition. We've got iSIGHT powering that edition. So when it comes to detection, low false-positive, almost zero false-positive rates, we believe we have the best ROI product on the market by far.
You probably heard, we also expanded the amount of detection we have in both those products to include commodity malware, advanced attack malware. So now we have a solution that is a wide spectrum of product that can really defeat any of the good-enough vendors across the board. And to your point, we have a number of new releases in 2016 we're excited about, our software version and our cloud version as well. So you'll see some more expansion opportunity for the Company as we now have capabilities to reach the edges with the software version, reach new types of clients with the cloud version.
So we've been busy innovating and I think this capability and a number of the segmentation offerings gives us a lot of ability to grow.
Thank you. Good question.
Thank you. And our next question comes from Shaul Eyal of Oppenheimer. Your line is now open.
Shaul Eyal - Oppenheimer
Thank you. Hi, good afternoon, guys. Good progress. Congrats.
Dave, last quarter, Europe had a little bit of mis-execution issues. Can you provide us with the latest progress taking place in that region?
Yes, Shaul, absolutely. You know, the team bounced back very nicely. We hope they would. The summer quarter was a peculiar quarter in my career for sure. We entered that quarter with a pretty large pipeline, we came off a very strong first half of 2015, and sort of ran into a bus albeit with some of the spending and some of the change that we've seen, particularly impacted in Europe as we mentioned. But Europe had a strong quarter. We had a lot of growth in transactions, new logos, you know, diversification.
I'll sort of mention just a little bit there some of the locations of the deals we closed in Europe, Nordics, U.K., Germany, Saudi, Poland, places like that. And I feel like the organization's taking better shape. We have new leadership there. We now have the Mandiant service model beginning to get implemented there, so we're starting to get service-led. I think iSIGHT will help us a little bit more.
So, you know, that 70% overall growth rate we got in international is a good number. We're hoping for even better. And as Mike alluded to, we'll be making more kind of sales capacity investments into both Europe and Asia. And we didn't even mention Asia. Asia did quite well too.
So, I feel good about what we're doing internationally. It takes a little time to build all that, but a little rocky there for one quarter. But they had a good quarter and a good bounce-back.
Good question. Thanks, Shaul.
Thank you. And our next question comes from Joel Fishbein of BTIG. Your line is now open.
Joel Fishbein - BTIG
Hi guys. Real quick. Dave, if you can just help us walk through how you guys came up with the guidance for 2016, with all the moving parts and the new, you know, the acquisitions, it would be really helpful, just how you did it from a bottoms-up perspective considering the environment, etcetera.
Yeah, Joel, I'll take it. And Mike, feel free to add on to this.
You know, certainly a lot of different views to roll up your forecasts. You know, certainly, what we do is you look at capacity and productivity of your sales force, sort of how many butts and seats you have, and what kind of productivity analysis have they been yielding. You look at prior year's first quarter, you look at your pipeline, you slice and dice all that, you look at what you've closed already. And you come up with a number of angle points that show that, you know, we feel good about organically at the 20 percentish kind of range for the full year. I think we feel good about, you know, with acquisition, another $60 million to $65 million or so of billings from that.
And so we want to be mindful of the environment, but when you look at our transaction growth rates that are significantly above our billings growth rate, you could kind of see, Joel, that we've had some ASP compression, even though the transaction volumes are good, most of which was due to some very large transactions. I think Mike did a nice job showing you, hey, we had taken advantage of some of the cyber breach crisis era that we've seen, and remember the Sonys and Home Depots of the world, the year prior, really invoked a lot of big-deal transactions. And we got to grow over that a little bit.
But when you look at transactions, you look at new logos, you look at the growth of the Company, you look at the angles we have, you know, we feel pretty good we can continue to really expand, and like I said, I think the Company has never been better-positioned.
And last comment on that, Joel, when we came in to 2015, we really didn't have an international platform built. And largely we still had our IPO-like products, NX and EX, to sell. We worked hard to put Mandiant internationally. We worked hard to build our cloud datacenters. We worked hard to put our FireEye as a Service SOC locations in place, all taking capital and all taking investment. But we're beginning to take shape and the big transaction we had in Europe was a great example of FireEye as a Service where we really outflanked all the competition with that kind of capability. And now having $100 million type business for FireEye as a Service, growing at 100%, with the amount of customers we have, now in four continents, kind of puts us in a little different position going forward here than just having two products to sell in Europe and two products to sell in Asia.
So I'm hoping that what we're seeing from the forecast is we got more to sell, you know, more to sell globally, and we've got more of a suite to sell with. And Mike alluded to some of the cross-sell, attach rate kinds of numbers. And those are all good indicators of color about the progress we're making and the things we're doing.
So, great question. Thanks, Joel.
Next question please.
Thank you. And our next question comes from Robert Breza of Wunderlich Securities. Your line is now open.
Robert Breza - Wunderlich Securities
Hi. Dave, I was wondering if you could talk a little bit about salesforce productivity, how you see that versus adding some salesforce. And given the bringing out of the new acquisitions, etcetera, what should we think about those investments being placed? Is it more on the services side or the product side, etcetera? Thanks.
Yeah, this time I'll really let Mike answer too. Real quick though, the sales productivity is an area we've got a lot of focus on. We know we made some pretty big investments into the salesforce globally. I think you heard the color on the Europe and the Asia where we're really getting the productivity improvement. We continue to see productivity improvement there. We certainly see the service-led motion as really a big reward for the Company, very unique for us. Obviously with 60% plus growth with Mandiant and the fourth quarter 83% quarter growth year over year in Q3, we've got a good engine from the service model and from the sales model. So, both of those are areas we're investing in and both of those should increase.
And then real quick on the acquisition, you know, this is a real powerful capability for us. Not only does iSIGHT give us some really unique fidelity of an intelligence, which gives us subscriptions for intel, it really can power better Mandiant IR and compromised assessments. It can also power better efficacy on FireEye's products. And so that acquisition just fits really nicely.
And there, Mike, why don't you add on there a little bit just from your viewpoint?
Yeah. And I will also to Joel's question say, one thing to keep in mind, we spend a good bit of time with our product team making sure that we understand where those trends are. Each of those teams does a very nice job laying out what they think each individual product growth can be. So that kind of triangulates how we come up with the full-year guidance.
And then as it relates to sales resources, as Dave talked about, we will focus most of additional incremental resources internationally. That's where we see holes where we're going to have to add now. We have great channel partners certainly, so, hopefully in some of those regions they'll work together with that.
But most of the incremental investments for the year are going to be focused around consulting and FaaS where we're really seeing the biggest growth.
Robert Breza - Wunderlich Securities
Candace [ph], next question please?
And our next question comes from Walter Pritchard of Citi. Your line is now open.
Walter Pritchard - Citi
Hi, thanks. I guess a question for Mike here. Just on FireEye as a Service, I'm wondering how much the variability in the guidance for the upcoming year here is around not knowing whether or not customers are going to buy product or buy the service. And then, if you could help us baseline, we get this question a lot, around FireEye as a Service kind of economics versus the product side. And is there a breakeven we should be thinking about on a term of a deal and how the margins compare as you see that substitution effect likely continue?
Yeah. So on the first piece, certainly the adoption of FireEye as a Service versus purchasing appliances, we've seen that really accelerate in 2015. Walter, we've tried to take the trends that we've seen, especially in the second half, and roll those forward into 2016.
Keep in mind though, we still think between endpoint PX, NX, that we will still continue to do product revenue. However, as FireEye as a Service continues to grow and the use of FireEye enablers [ph], we do think there's more of that product revenue as it's wrapped together with FireEye as a Service, will continue to grow at, certainly, at a much faster rate.
And Walter, maybe just to add on there. I think you're really hitting on something important, probably the most important thing to understand about FireEye frankly, is when you look at our solutions that we offer the market, we essentially have a product platform that's an on-premise product platform, and then we have this sort of cloud version of the platform, and then we have this as-a-service component that wraps this. It's really the latter two that we see our clients moving to, you know, more cloud and obviously more as-a-service. They get to use OpEx expense versus CapEx expense, they have a little more flexibility to use that tool. It's a rate insurance policy for them to have an extra set of eyes on the solution.
But what's really interesting, it's hard to tell the buying behaviors because oftentimes they lead with a product evaluation, and then it turns into a FireEye as a Service at the end. So that predictability is challenging sometimes for us, but when looked at product and product subscriptions total, and you look at the totality of that model as a platform, as Mike tried to show, that's why we feel good about it. And overall we think that the scale of FireEye as a Service is good. We're seeing the number of clients onboarded per SOX [ph] scaling really nicely. The amount of time to onboard them really declining. In fact we cut that in half this past year, now down to 40 days or so. We think we can improve that dramatically as well, and over time really deliver the entire as-a-service from the cloud with a software version, which could really improve the margins on it yet again.
So, all things we're going to work and, you know, a little bit of work in progress in FaaS, but overall we're making good progress. Great question. Thank you.
Thank you. And our next question comes from Erik Suppiger of JMP Securities. Your line is now open.
John Lucia - JMP Securities
Hey guys. It's John Lucia on for Erik. Thanks for taking my question.
You're guiding for growth to accelerate in the back half of the year but I think you're guiding for OpEx to stay relatively flat. I was wondering if you could just walk us through how you expect to accelerate billings growth while significant slowing the pace of investment.
Sure. Hey, John, it's Mike. So, a couple of things. Keep in mind, one of the reasons why we went through as much detail as we did on the big deal grow-overs is because of what it does to the growth rate. So for instance, if you exclude that from the Q1 2015 numbers, it's actually close to a mid-20s growth rate. So our transaction growth and our velocity in 2016 is going to -- it will increase during the year, that's more of a seasonality, but we don't expect to see a big hockey stick as we go through the year because you get those growth rate, that grow-over.
The other thing is, keep in mind, a lot of the product introductions that we've been working on for a long time, quite frankly, are going to start rolling out in 2016, that do not require incremental investment. So those, as they roll out later in the year, we have the R&D base to be able to support that.
From a sales perspective, we feel very comfortable that, with the targeted ads that we want, with the changes and the focus that Dave talked about with the partners, that we have more than enough sales capacity to support that going into 2016.
So, all in all, we feel very good about being able to support the billings growth that we have with the existing expense structure. Except for we want to make sure to add in consulting and FaaS, I do want to underline that. That is where we do need some infrastructure to support the growth.
John Lucia - JMP Securities
That's where I actually had a quick follow-up. If you're keeping your expenses flat and you're investing in PS and FaaS and international sales, will you have to cut costs in other areas? And if so, which areas will be the places where you cut?
So we will certainly look to optimize across everything. So, John, we've gone through a robust planning process, as everybody does. We will continue to look at, hey, should we move investments here to here? Should we move investments there?
Keep in mind that the expenses for consulting and FaaS both show up in COGS, they're above the line. What I've talked about is the operating expenses staying relatively flat. But the nice part is that the consulting team and FaaS does a wonderful job of onboarding those folks very close to where the revenue shows. So, from a margin perspective, we're still calling about the same operating margin -- I'm sorry, gross profit margin. And that's where you're going to see those investments.
John Lucia - JMP Securities
Okay. Thank you.
Thank you. Next question please?
And our next question comes from Saket Kalia of Barclays. Your line is now open.
Saket Kalia - Barclays
Hi guys. Thanks for taking my question. Dave, on FireEye Essentials and the upcoming cloud MVX, can you just talk about how pricing is going to look, qualitatively of course, versus firewall alternatives? And if the sales motion there has to be different at all.
Yeah, that's a good question. You know, certainly the sales motion, at least from my viewpoint, isn't a whole lot different. We're already selling cloud solutions almost integrated to every transaction now. We alluded in the script that our cloud email solution now has actually outpaced our appliance solution. So we're seeing the form factor change.
I think the nice part about FireEye is we're well-positioned to see the movement from prem to cloud and take advantage of that prem to cloud. We're seeing the movement from sort of premise-only managed by the client themselves to an as-a-service model. We're across-the-board doing that. So now as we have MVX in the cloud and our web solution in the cloud, the selling motion is not much different. In fact that's almost the same, it's just a form factor change.
The pricing and packaging and the way we deliver it, a little bit of an art form. We got to make sure we do a lot of analysis on that. We did do that with Essentials and Power. We really tried to focus the Essentials to the channel really at a targeted type of new account only. So we've really focused on segmentation, use the channel, manage the helpdesk, to do it at the partner deal desk, really make sure we can introduce it to the right markets, the right greenfields. The software version is going to be similar to that in that we're really going to focus it on edge, really focus it in on east/west traffic, focus it in on areas of the market that we couldn't reach effectively before.
I think the good news is, when I look at our current market segments with hardware only, it's large relegated to big clients and big datacenters and big egress points, and when you look at now our new Essentials and our software and cloud versions, it's really opening it up to more edges, more clients and more markets. So, again, a little bit of a journey, we're working through. But at the same time, I think this really opens up the customer base for the Company, and I think that was a good question, so, great.
Saket Kalia - Barclays
Thank you. And our next question comes Melissa Gorham of Morgan Stanley. Your line is now open.
Keith Weiss - Morgan Stanley
Excellent. Thank you. This is Keith Weiss on for Melissa.
I wanted to ask about the ramp-up in the partner program. It sounds like there's a couple of new channels like there's the HP channel, some of the ISPs that are ramping up pretty well. And what's your expectation for the ability to sort of take on a bigger percentage of the load going into 2016? And how does that relate to how you guys feel about sales productivity? Is that one of the drivers that we should be thinking about in terms of how you could be improving sales productivity driving more growth with the same or less OpEx on a go-forward basis?
Yeah, Keith, I was going to say your voice changed there for a second.
You're right on. I mean, I think one of the important -- extremely important imperatives we have for the Company is gaining leverage from our partner community. We've put a big investment into that. We frankly came out with the Mandiant and FireEye acquisition combination. It created some turmoil and chop with our channel for a period of time, we improved those partner programs. I even called out Optiv growing 48% with their bookings on fulfillment. And the number of transactions, even once that have some sort of coopetition with us, but HP generating over $15 million in billings in the fourth quarter are signs, you know, just two quarters into the relationship, there is a lot of scale opportunity out of those partners.
I'm really excited. I just had an update on the Visa, we had just officially launched into their marketplace our threat intelligence portal that we had announced in the fourth quarter. We're going to hit a sale for that in just the first few days that we'd delivered it. We're excited about the second product with Visa that we're launching. We have a nice product set coming with Parsons. We have a nice set of products coming with a number of new strategic partners, I mentioned SingTel and others before.
So, not just the VAR and channel helping us with productivity but also, you know, these more strategic partners. And it's taken us a little while to really get that leverage. I think that's a good area for the Company. We're by no means in full gear, you know, fourth gear on that, but I'm seeing improvement, I'm seeing positive reaction, and I think iSIGHT actually helps us accelerate that even more with some of their partnership models. So, time will tell. But I think you're hitting on an important imperative for us and for the Company.
Keith Weiss - Morgan Stanley
If I could sneak one more sort of high-level strategic question. From a broad-based perspective, a lot of stuff happened in 2015 in terms of you guys building out new products on your own, you guys acquiring new products via acquisition, you guys building on new distribution channels and new distribution partnerships. In a sense, is it -- should we be looking at 2015 as kind of like a core investment year and 2016 is one where it's more harvesting that investment? Or is it still kind of there's a lot more of this platform to build out in 2016, it's not quite time -- like, not quite harvest time, if you will?
I think you're thinking about it the right way in that, you know, I keep alluding to and I told the employees this too and our customers, we've been on a journey. I think two years and three months ago we IPO-ed the company, we largely had a single appliance and two models, one for web and one for emails, is pretty much all we had. And we've been building since then. And the Company's had a pretty amazing transformation from that day with the Mandiant acquisition, with the nPulse acquisition, with the new products we've launched ourselves, endpoints, cloud, everything we've been investing in.
So your comments are well, I think well-spoken, in that we've had a journey of investment that we've made. Each quarter we felt like we got stronger with Mandiant on a service-led model with the product. But we had to go from their platform of Mir and NTAP to the new products of FireEye which was HX and PX. And we had to make that happen. We had to build the SOX [ph] out.
But the bulk of that is built, you know, Mike alluded to some things we got to keep doing, but it's kind of an 80-20 thing now. We got a little more journey to go with investments, but largely that's behind us, and we got to keep working on it. And now, Mike and I are optimistic we can cost-optimize more and more, we can keep making this company a well-oiled machine cost-wise. We have 3,600 employees. We've got them in low-cost regions. We've got to keep optimizing that. We got a lot of facilities, we got to keep consolidating that.
And so, you know, this is a good time for us to focus on optimization, path to profitability, cash management, leverage that investment, and be a strong player for a long period of time. And I think we can be and we will be.
Keith Weiss - Morgan Stanley
Excellent. Thanks for the time, Dave.
Thank you. And our next question comes from Brent Thill of UBS. Your line is now open.
Brent Thill - UBS
Hey, Dave. The federal cyber budget proposed is up 35% year over year. I know you weren't pleased with what happened in the last federal cycle and I think you've changed leadership. Can you just talk about your getting repositioned now for what is clearly a fairly large budget?
Yeah, Brent, it's good to hear from you. Yeah, absolutely. You know, on the federal government, the U.S. is a wonderful opportunity for the Company. We've made a lot of progress. You know, just for clarity there, you know, we were very pleased with the progress we made with the government work, and we did have some very large transactions Mike alluded to, some grow-over transactions that came out of that, which were difficult compares. But on transactions and our penetration, and frankly if you look at what Mandiant and now iSIGHT have with relationships, we feel we can really capitalize on the spend in the government. We've got a lot of good stuff happening there.
But I'd also underscore, not just the U.S. security budgets are growing by a large amount. You know, we're seeing the Five Eye [ph] partners, the NATO nations, the governments around the world. And I really do think we've got a unique defensible moat built there for growth. Because not only do we have the incident responding partnership model with the governments, we now have intelligence feed opportunities with iSIGHT which we've already been building. So, you put the intelligence feed together with the incident response, together with the product pull-through, together with the trusted advisor components we have with a lot of governments, again time will tell, we got to build it out, we got to focus on it, but not many security companies are as well-positioned government worldwide as we are. And with the changes with the U.S. cybersecurity bills and some of the work President Obama's done, I feel like we've got a good opportunity here to keep taking advantage of it.
Good question, Brent. Thank you.
Go ahead, Brent. One more.
Brent Thill - UBS
Again, just on the endpoint, it seems like that seems to be the new race with a lot of different vendors popping up. Can you just give us an overview where you're at, what we should expect for 2016?
Yeah, it's a great question, and, you know, it's one of those market segments I think we all know is a big opportunity for a lot of vendors.
You know, we had a great year, frankly, with the endpoint. I mean we grew 75% year over year on a total billings basis. We had a number of just very large deployment. I mentioned the European one, over 100,000 endpoints in a single transaction. You know, we can scale. We've got it in 28 languages now. We've got what I think of is the EDR [ph] piece built out real well, and you probably know this from Gardner, the sort of exploit detection response capability built. We're now building the EPP components as well, which is the protection prevention components, with our Ultravisor and some of the newer releases.
I think it gives us a heck of an opportunity from a single vendor to offer a single suite. We're not quite there all the way yet, but we just launched our exploit detection features, we have some great similarity analysis features coming into the endpoint, we have some great prevention features coming in this year as well, and of course we have the mobile product and endpoint.
So, again, a bit of a journey, but the product is growing well, deploying well. It's integrated 100% now into our FireEye as a Service, so that's the primary tool that not only the consultants from Mandiant use but also the FireEye as a Service team uses. So that's a first for the Company as well this past year, getting that integrated. Because we used to have more of kind of a custom endpoint that the Mandiant service teams used, called Mir, but now we've got moved over to our HX platform.
So if we can get all that service-led motion, get the product-led motion, get some of these features built, I mean, not many vendors have that full suite of capability delivered, and if we can be there first and really de-position the feature vendors, I think we have a hell of an opportunity to consolidate that market. So there's the partners [ph].
Take one more question please.
Thank you. And our final question comes from the line of Ken Talanian of Evercore. Your line is now open.
Ken Talanian - Evercore
Hi guys. Thanks for taking my question. And I think most of them have been answered by now, so don't hang up on me for this one.
But Dave, you mentioned in the past that you'd think about selling FireEye at around $1 billion in sales, and given where your full-year guide is and where the stock is today, could you give us your thoughts around that?
Well, that's a good one. I'll give you my fiduciary responsibility answer.
Listen, I love how much progress this Company has made, Ken. Like I said, we hit $1 billion run rate, $257 million of billings. I'm really proud of the Company's progress. But I tell you, the best is yet to come for this Company, I really believe that. We've been a work-in-progress. I thought several of the analysts have said that, that we really are on a bit of a journey. Keith said that.
We're building on a platform, we have a security as a service. I see every other tangential market that had this kind of conditions eventually ended up with an as-a-service model. And you think about the Workdays and the Salesforces and the ServiceNows, security has thousands of vendors, most clients have hundreds of vendors, millions of alerts. If we can make that simple and deliberate, the value of this Company will be a lot greater than it is today. I believe in that. We're not going to get there in one quarter, but over time this Company has just an amazing opportunity. And you look at the size of these cybersecurity marketplaces today, you're hitting well over $100 billion a year now, coming up. So I'm optimistic that if we continue to do what we're doing, we'll create great shareholder value for everybody. So there you go, Ken.
Ken Talanian - Evercore
Okay. Thank you.
Thank you everybody. Yeah. I just want to say thank you again for joining us on the call. Thank you to all the FireEye employees, all our partners, trust our customers have in us, and our management team here.
And with that, we'll end the call. Thank you very much, Candace [ph].
Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program. And you may all disconnect. Have a great day everyone.
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