What happened

Shares of FireEye Inc. (NASDAQ:FEYE) climbed 13.5%% in September, according to data from S&P Global Market Intelligence, as the recent massive security breach at Equifax (NYSE:EFX) highlighted the merits of its next-gen cybersecurity solutions.

FireEye stocked climbed nearly 7% on Sept. 7, 2017 alone -- the same day Equifax disclosed a data breach that we now know exposed the sensitive personal information of nearly 146 million Americans. In the days following the announcement, news emerged that Equifax had brought in the incident response team of FireEye subsidiary Mandiant to investigate both the recent breach, which was first discovered on July 29, and a previous security incident involving payroll-related services in March. 

Metal padlock on a computer circuit board, cybersecurity concept image


So what

For perspective, FireEye's Mandiant professional services revenue climbed 19% year over year to $33.7 million last quarter, representing just over 18% of total company sales and a new quarterly record for the segment. But going forward, note that such incidents also tend to result in a surge in sales of FireEye's other endpoint security and threat intelligence products.

Coincidentally, FireEye only just released the latest version of FireEye Endpoint last week, noting it's "designed to deliver multiple integrated threat detection/prevention capabilities to significantly bolster customer threat protection and response effectiveness." 

Now what

Investors should keep in mind that Equifax's discovery of the latest breach and its subsequent hiring of Mandiant came around the same time as FireEye's fiscal second-quarter report in early August. So it's unclear whether FireEye's latest guidance incorporates the full benefit -- however unfortunate the circumstance -- of the incident.

But as it stands, FireEye is slated to release fiscal third-quarter results early next month. Its most recent guidance (provided with its Q2 results in early August) calls for quarterly revenue of $183 million to $189 million, billings of $190 million to $205 million, and an adjusted net loss per share of $0.06 to $0.09. Whether it meets or exceeds those targets remains to be seen. Given the obvious long-term need for increasingly more sophisticated cybersecurity products, however, I think FireEye investors should be happy with where their company stands.