Proofpoint, Inc. (NASDAQ:PFPT) Q3 2018 Earnings Conference Call Transcript

Oct 25, 2018 • 04:30 pm ET


Proofpoint, Inc. (NASDAQ:PFPT) Q3 2018 Earnings Conference Call Transcript


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Good day, and welcome to the Proofpoint Third Quarter 2018 Earnings Results Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Jason Starr, VP, IR. You may begin.

Jason Starr

Thanks, James. Good afternoon, and welcome to Proofpoint's third quarter 2018 earnings call. Joining me on the call are: Gary Steele, Proofpoint's CEO and Chairman of the Board; and Paul Auvil, Proofpoint's CFO. Today, we'll be discussing the results announced in our press release that was issued after the market close this afternoon, a copy of which is available on the Investor Relations section of our website.

(Forward-Looking Cautionary Statements)

Additionally, we will present both GAAP and non-GAAP financial measures on today's call. These non-GAAP measures exclude a number of items as set forth in our release. These non-GAAP measures are not intended to be considered in isolation from, a substitute for or superior to our GAAP results, and we encourage you to consider all measures when analyzing Proofpoint's performance. A reconciliation of GAAP to non-GAAP measures, and a list of the reasons why the company uses these non-GAAP measures are included in today's press release.

Also, I would like to remind everyone that we have adopted ASC 606 as of January 1, 2018 under the full retrospective method. And as such, all of the comparisons to prior financial periods discussed on today's earnings call and outlined in today's press release are made in reference to our retrospective financials as revised in accordance with the 606 accounting standard. Please refer to our comments during our Q1 call as well as our filings with the SEC for greater detail regarding some of the impacts and differences in our reporting under this new accounting standard.

So with that said, I'll turn the call over to Gary.

Gary Steele

Thanks, Jason. I'd like to thank everyone for joining us on the call today. I am pleased to report that we had another excellent quarter, beating our guidance on all of our financial metrics and demonstrating our ongoing strategy to drive attractive growth, paired with expanding free cash flow margins. Our overall business momentum remains strong driven by the continuing demand for our next-generation cloud security and compliance platform, the ongoing migration to the cloud and the rapidly evolving threat landscape.

As we've shared on prior calls, attackers increasingly target people, not infrastructure, to infiltrate a company. And while employees are every organization's greatest asset, when it comes to security, they are also every organization's greatest weakness. As bad actors continue to innovate their tradecraft to exploit this human vulnerability, our people-centric approach to cybersecurity has become a crucial strategy for enterprises to embrace in order to more effectively protect their employees, their sensitive data, their customers, their supply chain and their brand. This is especially true as more applications and sensitive data move to the cloud, where traditional approaches to security must evolve to protect critical targets and people.

The foundation of a people-centric solution requires a compressive platform