Proofpoint (PFPT) reported earnings on Thur 20 Apr 17 (a/h)

** charts before earnings **

 

** charts after earnings **

ProofPoint reported Q1 revenue and profit that topped analysts’ expectations, and beat with its outlook for this quarter, and also raised its full-year outlook.

Tonight’s jump comes after a 9% drop in the stock during regular trading, following a downgrade to Neutral this morning by R.W. Baird’s Jayson Noland. (That followed an upgrade of the stock yesterday by D.A. Davidson‘s Jack Andrews, who had predicted a beat tonight.)

Revenue in the three months ended in March rose 43%, year over year, to $113.3 million, yielding EPS of 12 cents, excluding some costs.

Analysts had been modeling $111 million and 9 cents a share.

The company’s “billings” rose 40% to $137.4 million.

CEO Gary Steele said the quarter was “strong,” pointing to causes such as the “overall threat landscape” and “robust new and add-on activity, traction with new emerging products, and consistently high renewal rates.”

Steele said the company will increase its share of the market “for the remainder of the year and beyond.”

For this quarter, ProofPoint sees revenue of $118 million to $120 million, with billings of $141 million to $143 million, and EPS of 11 cents to 13 cents, non-GAAP. That is better than consensus for $118 million and 11 cents.

Revenue for the full year is expected in a range of $496 million to $500 million, which is up from a prior $488 million to $492 million first offered back in January. EPS is seen in a range of 56 cents to 59 cents, up from 49 to 52 cents. The new numbers top consensus for $492 million and 52 cents.

Baird’s Noland had cut the stock to Neutral on concerns that the company’s outlook for this year would be hampered by “sales execution challenges that appear to have accelerated of late.”

“We‘ve heard about elevated sales force turnover and frustration surpassing quotas in a smaller territory or with newer, non-core products,” wrote Noland. “We do believe some level of turnover is to be expected, even at a high-growth company, but recent feedback has been concerning.”

Not tonight, apparently.

Davidson’s Andrews, raising his rating yesterday to Buy from Neutral, wrote that more and more companies are interested in security products to use in conjunction with Microsoft‘s (MSFT) “Office 365,” which he argued could benefit ProofPoint.