When FireEye (NASDAQ:FEYE) released stronger-than-expected third-quarter 2019 results late Tuesday -- and with its underwhelming report from three months ago still fresh on investors' minds -- you'd think the market would have been pleased. But even after falling sharply in the trading session ahead of the announcement, shares were little changed on Wednesday, though FireEye not only outpaced estimates on the top line, but followed with a narrow adjusted profit amid its transition into a more-comprehensive cybersecurity platform provider.

Without further ado, let's dive in for a closer look at how FireEye started the second half, as well as what investors should be watching in the months ahead.

Metric

Q3 2019

Q3 2018

Change

Revenue

$225.9 million

$211.7 million

6.7%

GAAP net income

($65.5 million)

($50.0 million)

N/A

GAAP earnings per share

($0.31)

($0.26)

N/A

Data source: FireEye.https://investors.fireeye.com/news-releases/news-release-details/fireeye-reports-financial-results-third-quarter-2019

Digital hologram of a key and earth.

IMAGE SOURCE: GETTY IMAGES

"We continued to execute on our long-term plan..."

Revenue came in above the high end of FireEye's guidance, which was provided in July and forecast a range of $217 million to $221 million. And after adjusting for items like stock-based compensation, the company eked out non-GAAP net income of $0.02 per share, hitting the high end of the guidance range of $0 to $0.02 per share.

Meanwhile, billings grew 13% year over year to $249 million, slightly below the midpoint of the $245 million to $255 million guidance range.

Broken down by segment -- and perhaps this could explain the market's tepid reaction -- FireEye's product, subscription and support revenue increased a modest 2.4% to $179.8 million. Mandiant professional services revenue, on the other hand, jumped 28% to $46.1 million.

"We continued to execute on our long-term plan to transform FireEye from our origins as a network security product vendor to a comprehensive security platform company," stated CEO Kevin Mandia. "Record third quarter billings for our platform, cloud subscription and managed services as well as professional services categories demonstrate our progress."

During the subsequent conference call, CFO Frank Verdecanna noted that FireEye added another 276 new logo customers this quarter -- better than the 261 new customers it picked up in Q2 -- bringing its total to more than 8,500 customers in 103 countries. Roughly a third of these new customers adopted multiple products and services in their initial transactions.

Is FireEye still worthy?

FireEye issued fourth-quarter guidance for revenue in the range of $224 million to $228 million, billings of $285 million to $295 million, and adjusted earnings per share of $0.03 to $0.05.

It also modestly increased its full-year guidance, calling for revenue of $878 million to $882 million (up from $865 million to $875 million before), billings of $937 million to $947 million (up from $935 million to $955 million previously), and adjusted net income per share of between $0.01 to $0.03 (narrowed from breakeven to to $0.04 per share previously).

Still, FireEye just stepped over a low bar it set for itself, and the new guidance ranges for 2019 remain well below the seemingly light outlook FireEye issued just two quarters ago. Its top-line gains continue to feel underwhelming, at best, considering the comparatively outsized growth achieved by some of its closest competitors.

As such, it's no surprise to see the stock price waffling in response to this report, as growth-hungry investors debate whether FireEye is still worthy of a place in their portfolios. And I'm personally content continuing to watch its transition from the sidelines.