Sophos billings up 22% as Central performs well

Full-year billings at FTSE 250 cyber security firm Sophos rose 22% thanks to growth in its integrated cloud-based management platform, but pre-tax losses widened due to currency movements.

In the year to the end of March 2018, billings rose to $768.6m from $632.1m in 2017, while revenue was up 21% to $640.7m and adjusted operating profit was 20% higher at $46.1m.

Sophos attributed much of the growth to its Central cloud platform, which saw billings grow 112% to $186m.

However, the group's pre-tax loss widened to $52.3m from $49.3m the year before, as it took a hit from foreign exchange losses of $16.5m compared to a net gain the year before of $3m, as the pound and the euro strengthened against the dollar.

Sophos said its total subscription renewal base has now surpassed the $1bn milestone, while the net renewal rate improved to 140% from 129% in 2017.

Chief executive officer Kris Hagerman said: "FY18 was a strong year for Sophos. Cybersecurity has never been more important for enterprises of all sizes, and the demand environment for our solutions has never been stronger. We continue to take share in the market, as we execute a differentiated strategy of delivering advanced and highly-effective cybersecurity solutions designed to be simple to use, managed in the cloud, and sold 100% through our channel partners.

"We have a massive market opportunity in front of us, and our strong and growing subscription base and growth in new customers, combined with our next-generation technology in endpoint and firewall and our Sophos Central cloud platform, position us well for FY19 and beyond."

Sophos expects to see mid-teens per cent billings growth in the current year, including a currency benefit of around 200 basis points, and growth in margin consistent with its medium term outlook. The group added that it remains confident in its goal of delivering annual billings of around $1bn, unlevered free cash flow of $220-240m and adjusted operating profit greater than $100m for FY20.

At 0930 BST, the shares were up 3.4% to 568.50p.