Sophos Group increases its 2017 final dividend by 200%

DividendMax Ltd.

Sophos Group increases its 2017 final dividend by 200%

Business highlights

FY17 reported billings grew 18.2% to $632.1 million, or by 19.9% at constant currency, with strong momentum across all regions and products, in new business and renewals

Cash flow growth exceptionally strong, with unlevered free cash flow almost tripling to $133.4 million

Very strong performance from Sophos Central, growing 220% to $87.7 million from $27.4 million in the prior year; now representing 17.1% of subscription billings (FY16: 6.5%)

Enduser security increased by 24.4% to $298.5 million and network security grew by 17.8% to $319.1 million at constant currency, reflecting continued market share gains

Operating loss increased over prior-year, primarily as a consequence of cost increases associated with the strong growth in billings, whilst the majority of revenue is deferred and recognised over time

Deferred revenue grew 16.5%, growing $82.3 million to $581.0 million, increasing visibility of future revenue growth

Cash EBITDA margin increase by 110 basis points to 23.7%

Net renewal rate (including cross-sell and upsell) increased to 106% (FY16: 102%) with UTM/endpoint cross-sell at 9.6% (FY16: 7.4%)

Launch in September of Intercept X, a next-generation endpoint protection application, featuring signature-less anti-exploit and anti-ransomware capabilities, already with more than 8,000 customers

Integration of Invincea's machine learning technology progressing well, with new endpoint protection solution expected to be available in Sophos Central in 2017

Final dividend of 3.3 US Cents per share, an increase of 200%; total dividend for the year of 4.6 US Cents, an increase of 156% over the prior year

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