Q1 2017 projections – revenue $67M-$69M (consensus $66.48M), EPS -$0.06 to -$0.02 (consensus -$0.11), gross margin 80%, operating loss $0.5M-$1.9M
FY 2017 projections – revenue $316M-$319M (consensus $304.96M), EPS $0.31-$0.34 (consensus $0.14), gross margin 80%, operating income $17.8M-$19.2M, capital expenditures $15M-$20M, cash flows from operations positive
Imperva president and CEO Anthony Bettencourt: “Our results were driven by the demand of our best-of-breed discovery, protection and compliance solutions, as well as ongoing cost controls. Imperva is well positioned to maintain the momentum in 2017 and beyond, given the growing need for enterprises worldwide to protect their business-critical data and applications.”
Private equity firms, IBM, Cisco, Forcepoint and Akamai Technologies had all been claimed to have expressed interest in an Imperva (NYSE:IMPV) takeover.
New reports out of Bloomberg, however, suggest valuation expectations have been raised, resulting in potential buyers holding off to observe if Imperva's performance going forward can justify a higher price.
Though down 2% today, possibly attributable to an overall difficult week for cybersecurity, Imperva shares have held around 15% gains since the IBM, Cisco Systems (and Forcepoint, Akamai Technologies) reports began circulating on September 22.
Imperva (NYSE:IMPV) -4.9% premarket after cutting its Q2 guidance, citing extended sales cycles across most geographies and verticals relating to larger deals; the company also saw a reduction in size of several large purchases.
IMPV expects Q2 revenues of $57.5M-$58M vs. consensus of $66.1M and well below prior guidance of $65.5-$66.5M.
Cisco (NASDAQ:CSCO) could make a bid for storage array vendor NetApp (NASDAQ:NTAP) and threat-prevention hardware/software provider FireEye (NASDAQ:FEYE) in 2016, thinks FBR's Dan Ives. Cisco/NetApp speculation has been around for a while. Meanwhile, Cisco has made several security acquisitions in recent years, and appears to be up for more, but has also launched products that compete with FireEye.
Ives also thinks IBM could bid for machine/log data analytics software leader Splunk (NASDAQ:SPLK) and business intelligence/data visualization software firm QLIK. With a $7.6B market cap and high multiples, Splunk would be a costlier acquisition than IBM's traditional fare.
HP Enterprise (NYSE:HPE), meanwhile, is seen as a potential suitor for both Qlik and enterprise cloud storage/file-sharing leader BOX. And Oracle (NYSE:ORCL) a potential buyer of cloud ERP, HR, and e-commerce software firm NetSuite (NYSE:N). Larry Ellison owns a large stake in NetSuite (more SMB-focused than Oracle), and the company both competes and partners with Oracle.
Microsoft (NASDAQ:MSFT), which has made plenty of acquisitions in the Satya Nadella era, is seen as a potential buyer of database security software and Web app firewall vendor Imperva (NYSE:IMPV), as well as of cloud vulnerability management and compliance software firm Qualys (NASDAQ:QLYS). Symantec (NASDAQ:SYMC), which has signaled it will make security acquisitions after the sale of its Veritas unit closes, is considered a possible acquirer of e-mail/compliance security software provider Proofpoint (NASDAQ:PFPT).
Yesterday: FBR sees improving cybersecurity spend, likes several stocks
Several security tech plays, including ones that were tech sector darlings earlier this year as a torrent of hacking incidents led corporate cybersecurity spend to jump, are selling off on a quiet day for equities.
Major decliners include Palo Alto Networks (PANW -4%), FireEye (FEYE -4.9%), Fortinet (FTNT -4.3%), CyberArk (CYBR -4.8%), Imperva (IMPV -5.3%), Proofpoint (PFPT -3.9%), Qualys (QLYS -2.8%), and Rapid7 (RPD -6.8%).
No major news has arrived to trigger a selloff. Meanwhile, hacking-related stories have continued producing ink in recent weeks. Notable ones: China is reportedly continuing hacking attacks on U.S. firms in spite of a pact that banned government spying on companies; authorities are probing a potential Russian hack of Dow Jones; and ISIS has reportedly tried (without much success) to hack the U.S. electrical grid.
The PureFunds ISE Cyber Security ETF (HACK -1.6%) is down 24% from a June peak of $33.91. YTD, it's only down modestly.
Proofpoint reports earnings after the close, and Fortinet tomorrow afternoon. Qualys reports on Nov. 2, FireEye on Nov. 4,, CyberArk on Nov. 5,, and Rapid7 on Nov. 12,
Update: One potential culprit: Server virtualization software leader VMware is cratering due to its soft Q4/2016 guidance (partly blamed on cloud adoption). A smattering of other high-beta enterprise tech names are also selling off.
CEO Meg Whitman says Hewlett-Packard (HPQ +0.5%) is again in a position to consider takeover options, a near-record cash pile gives it the means to do a deal and the worst sales forecast among computer hardware peers provides the motivation, so Bloomberg begins speculating about possible targets.
One possible candidate is cybersecurity firm Imperva (IMPV +8.2%), particularly in the wake if the hacking of J.P. Morgan, Home Depot and celebrities’ phones; “H-P could definitely buy them and it would make some sense," Sterne Agee's Robert Breza says.
Teradata (TDC -1.7%) has more of an “old-school” approach to big-data management but H-P could use it as a platform to make other acquisitions and build out its own offerings, HighMark Capital's Todd Lowenstein says.
Tibco Software (TIBX -0.1%) is now reviewing its strategic options, and Morningstar's Peter Wahlstrom thinks it could draw H-P's interest.
Though Palo Alto Networks' (PANW -4.3%) $200M acquisition of endpoint security startup Cyvera might lower its 2014 EPS by 10% and 2015 EPS by 20%, it also stands to increase the company's addressable market by a quarter to ~$20B, thinks FBN's Shelby Seyrafi.
"We view this acquisition as a logical expansion of the company’s end market that enhances its ability to provide end-to-end threat protection," says Baird's Jayson Noland. He notes Palo Alto's management plans to create an "overlay sales force" to sell endpoint security solutions.
FBR's Daniel Ives sees the deal, the latest in a string of high-profile security acquisitions (I, II), as part of a "massive consolidation in the security landscape" set for 2014. He thinks Fortinet (FTNT), Proofpoint (PFPT), and Imperva (IMPV) could be among the companies snapped up this year by larger tech firms.
Several security hardware and software vendors are trading higher in response to FireEye's $1B+ acquisition of cybersecurity software/services firm Mandiant, and perhaps also FireEye's Q4 guidance hike. The acquisition, which comes six months after Cisco agreed to buy top intrustion prevention system vendor Sourcefire for $2.7B, is fueling hopes the industry will see additional M&A.
KEYW (KEYW +9.9%), a cybersecurity software/services provider for defense and security agencies, is the biggest gainer. Other winners include Palo Alto Networks (PANW +3.6%), Barracuda (CUDA +3.2%), Imperva (IMPV +2.4%), Proofpoint (PFPT +5.3%), and Qualys (QLYS +2.3%).