pfpt-ex991

SUNNYVALE, Calif., – October 24, 2019 – Proofpoint, Inc. (NASDAQ: PFPT), a leading next-generation security and compliance company, today announced financial results for the third quarter ended September 30, 2019.

“The third quarter marked another strong quarter for Proofpoint,” stated Gary Steele, chief executive officer of Proofpoint. “Our people-centric approach to cybersecurity and compliance, our proven ability to identify and block advanced threats, and a favorable competitive environment all continue to be the main drivers of our success. We are seeing further momentum with our bundling strategy and consistently high customer renewal rates which have us well-positioned to continue to drive attractive growth and increase our market share in the over $13 billion total addressable market that we’re pursuing.”

“We are pleased with our ability to exceed expectations during the third quarter and once again demonstrate the strong operating leverage inherent within our financial model,” stated Paul Auvil, chief financial officer of Proofpoint. “The company remains well-positioned to execute our disciplined growth strategy given the ongoing investments we’re making in expanding our product portfolio for our customers and driving strong returns on behalf of our shareholders.”

A reconciliation of GAAP to non-GAAP financial measures has been provided in the financial tables included in this press release. An explanation of these measures and how they are calculated are also included below under the heading “Non-GAAP Financial Measures.”

As of October 24, 2019, Proofpoint is providing its fourth quarter and full year 2019 guidance as follows:

Proofpoint will host a conference call today at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) to review the company’s financial results for the third quarter ended September 30, 2019. To access this call, dial (800) 239-9838 for the U.S. or Canada, or (929) 477-0448 for international callers, with conference ID #1877243. A live webcast, and an archived recording of the conference call will be accessible from the Investors section of Proofpoint’s website at investors.proofpoint.com. An audio replay of this conference call will also be available through November 7, 2019, by dialing (844) 512-2921 for the U.S. or Canada or (412) 317-6671 for international callers, and entering passcode #1877243.

Proofpoint, Inc. (NASDAQ: PFPT) is a leading cybersecurity company that protects organizations’ greatest assets and biggest risks: their people. With an integrated suite of cloud-based solutions, Proofpoint helps companies around the world stop targeted threats, safeguard their data, and make their users more resilient against cyber attacks. Leading organizations of all sizes, including more than half of the Fortune 1000, rely on Proofpoint for people-centric security and compliance solutions that mitigate their most critical risks across email, the cloud, social media, and the web. More information is available at www.proofpoint.com.

Proofpoint is a trademark or registered trademark of Proofpoint, Inc. in the U.S. and other countries. All other trademarks contained herein are the property of their respective owners.

This press release contains forward-looking statements that involve risks and uncertainties. These forward-looking statements include statements regarding momentum in the company’s business, market position, win rates and renewal rates, future growth, and future financial results. It is possible that future circumstances might differ from the assumptions on which such statements are based. Important factors that could cause results to differ materially from the statements herein include: failure to maintain or increase renewals and increased business from existing customers and failure to generate increased business through existing or new channel partner relationships; uncertainties related to continued success in sales growth and market share gains; failure to convert sales opportunities into definitive customer agreements; risks associated with successful implementation of multiple integrated software products and other product functionality; competition, particularly from larger companies with more resources than Proofpoint; risks related to new target markets, new product introductions and innovation and market acceptance thereof; the ability to attract and retain key personnel; potential changes in strategy; risks associated with management of growth; lengthy sales and implementation cycles, particularly in larger organizations; the time it takes new sales personnel to become fully productive; unforeseen delays in developing new technologies and the uncertain market acceptance of new products or features; technological changes that make Proofpoint’s products and services less competitive; security breaches, which could affect our brand; the costs of litigation; the impact of changes in foreign currency exchange rates; the effect of general economic conditions, including as a result of specific economic risks in different geographies and among different industries; risks related to integrating the employees, customers and technologies of acquired businesses; assumption of unknown liabilities from acquisitions; ability to retain customers of acquired entities; and the other risk factors set forth from time to time in our filings with the SEC, including our Quarterly Report on Form 10-Q for the three months ended June 30, 2019, and the other reports we file with the SEC, copies of which are available free of charge at the SEC’s website at www.sec.gov or upon request from our investor relations department. All forward-looking statements herein reflect our opinions only as of the date of this release, and Proofpoint undertakes no obligation, and expressly disclaims any obligation, to update forward-looking statements herein in light of new information or future events.

Accounting principles require that EPS be computed based on the weighted average shares outstanding (“basic”), and also assuming the issuance of potentially issuable shares (such as those subject to stock options, convertible notes, etc.) if those potentially issuable shares would reduce EPS (“diluted”).

The number of shares related to options and similar instruments included in diluted EPS is based on the “Treasury Stock Method” prescribed in Financial Accounting Standards Board (“FASB”) ASC Topic 260, Earnings Per Share (“FASB ASC Topic 260”). This method assumes a theoretical repurchase of shares using the proceeds of the respective stock option exercise at a price equal to the issuer’s average stock price during the related earnings period. Accordingly, the number of shares includable in the calculation of diluted EPS in respect of stock options and similar instruments is dependent on this average stock price and will increase as the average stock price increases.

The number of shares includable in the calculation of diluted EPS in respect of convertible senior notes is based on the “If Converted” method prescribed in FASB ASC Topic 260. This method assumes the conversion or exchange of these securities for shares of common stock. In determining if convertible securities are dilutive, the interest savings (net of tax) subsequent to an assumed conversion are added back to net earnings. The shares related to a convertible security are included in diluted EPS only if EPS as otherwise calculated is greater than the interest savings, net of tax, divided by the shares issuable upon exercise or conversion of the instrument. Accordingly, the calculation of diluted EPS for these instruments is dependent on the level of net earnings.

We have provided in this release financial information that has not been prepared in accordance with GAAP. We use these non-GAAP financial measures internally in analyzing our financial results and believe they are useful to investors, as a supplement to GAAP measures, in evaluating our ongoing operational performance. We believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial results with other companies in our industry, many of which present similar non-GAAP financial measures to investors.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures below. As previously mentioned, a reconciliation of our non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included below in this press release.

Non-GAAP gross profit and gross margin. We define non-GAAP gross profit as GAAP gross profit, adjusted to exclude stock-based compensation expense and the amortization of intangibles associated with acquisitions. We define non-GAAP gross margin as non-GAAP gross profit divided by GAAP revenue. We consider these non-GAAP financial measures to be useful metrics for management and investors because they exclude the effect of non-cash charges that can fluctuate for Proofpoint, based on timing of equity award grants and the size, timing and purchase price allocation of acquisitions so that our management and investors can compare our recurring core business operating results over multiple periods. There are a number of limitations related to the use of non-GAAP gross profit and non-GAAP gross margin versus gross profit and gross margin, in each case, calculated in accordance with GAAP. For example, stock-based compensation has been and will continue to be for the foreseeable future a significant recurring expense in our business. Stock-based compensation is an important part of our employees’ compensation and impacts their performance. In addition, the components of the costs that we exclude in our calculation of non-GAAP gross profit and non-GAAP gross margin may differ from the components that our peer companies exclude when they report their non-GAAP results. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP gross profit and non-GAAP gross margin and evaluating non-GAAP gross profit and non-GAAP gross margin together with gross profit and gross margin calculated in accordance with GAAP.

Non-GAAP operating income. We define non-GAAP operating income as operating loss, adjusted to exclude stock-based compensation expense and the amortization of intangibles and costs associated with acquisitions and litigation. Costs associated with acquisitions include legal, accounting, and other professional fees, as well as changes in the fair value of contingent consideration obligations. We consider this non-GAAP financial measure to be a useful metric for management and investors because it excludes the effect of stock-based compensation expense and the amortization of intangibles and costs associated with acquisitions and litigation so that our management and investors can compare our recurring core business operating results over multiple periods. There are a number of limitations related to the use of non-GAAP operating income versus operating loss calculated in accordance with GAAP. For example, as noted above, non-GAAP operating income excludes stock-based compensation expense. In addition, the components of the costs that we exclude in our calculation of non-GAAP operating income may differ from the components that our peer companies exclude when they report their non-GAAP results of operations, and some of these items are cash-based. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP operating income and evaluating non-GAAP operating income together with operating loss calculated in accordance with GAAP.

Non-GAAP net income. We define non-GAAP net income as net loss, adjusted to exclude stock-based compensation expense, amortization of intangibles, costs associated with acquisitions and litigation, non-cash interest expense related to the convertible debt discount and issuance costs for the convertible debt offering, loss on conversion of convertible debt, and tax effects. We consider this non-GAAP financial measure to be a useful metric for management and investors for the same reasons that we use non-GAAP operating income.

Starting January 1, 2019, we changed the calculation of our non-GAAP provision for income taxes in accordance with the SEC’s Non-GAAP Financial Measures Compliance and Disclosure Interpretations. Our current and deferred income tax expense is commensurate with the non-GAAP measure of profitability using a non-GAAP tax rate of 17% for the three and nine months ended September 30, 2019. We use an annual projected tax rate in a computation of the non-GAAP income tax provision, and exclude the impact of stock-based compensation, intangible amortization expenses, costs associated with acquisitions and litigations, and non-cash interest expense related to the debt discount and issuance costs for the convertible notes. The projected rate considers other factors such as our current operating structure, existing tax positions in various jurisdictions, and key legislation in major jurisdictions where we operate.

Billings. We define billings as revenue recognized plus the change in deferred revenue and customer prepayments less change in unbilled accounts receivable from the beginning to the end of the period, but excluding additions to deferred revenue from acquisitions. Customer prepayments represent billed amounts for which the contract can be terminated and the customer has a right of refund. Unbilled accounts receivable represent amounts for which the company has recognized revenue, pursuant to its revenue recognition policy, for subscription software already delivered and professional services already performed, but billed in arrears and for which the company believes it has an unconditional right to payment. We consider billings to be a useful metric for management and investors because billings drive deferred revenue, which is an important indicator of the health and visibility of our business, and has historically represented a majority of the quarterly revenue that we recognize. There are a number of limitations related to the use of billings versus revenue calculated in accordance with GAAP. Billings include amounts that have not yet been recognized as revenue, but exclude additions to deferred revenue from acquisitions. We may also calculate billings in a manner that is different from other companies that report similar financial measures. Management compensates for these limitations by providing specific information regarding GAAP revenue and evaluating billings together with revenues calculated in accordance with GAAP.

Free cash flow. We define free cash flow as net cash provided by operating activities minus capital expenditures. We consider free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that, after the acquisition of property and equipment, can be used for strategic opportunities, including investing in our business, making strategic acquisitions, and strengthening the balance sheet. Analysis of free cash flow facilitates management’s comparisons of our operating results to competitors’ operating results. A limitation of using free cash flow versus the GAAP measure of net cash provided by operating activities as a means for evaluating our company is that free cash flow does not represent the total increase or decrease in the cash balance from operations for the period because it excludes cash used for capital expenditures during the period. Management compensates for this limitation by providing information about our capital expenditures on the face of the cash flow statement and in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources” section of our quarterly and annual reports filed with the SEC.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Revenue:
Subscription	$	224,275		$	181,505		$	634,639		$	509,311
Hardware and services		3,110			2,674			10,122			9,204
Total revenue		227,385			184,179			644,761			518,515
Cost of revenue:⁽¹⁾⁽²⁾
Subscription		52,308			45,679			151,208			133,495
Hardware and services		7,573			5,258			21,744			15,271
Total cost of revenue		59,881			50,937			172,952			148,766
Gross profit		167,504			133,242			471,809			369,749
Operating expense:⁽¹⁾⁽²⁾
Research and development		60,060			45,917			168,494			137,176
Sales and marketing		105,502			90,006			305,343			252,814
General and administrative		26,388			23,877			80,094			60,431
Total operating expense		191,950			159,800			553,931			450,421
Operating loss		(24,446	)		(26,558	)		(82,122	)		(80,672	)
Interest expense		(3,698	)		(9,746	)		(3,698	)		(16,761	)
Other income, net		2,180			224			3,565			941
Loss before income taxes		(25,964	)		(36,080	)		(82,255	)		(96,492	)
(Provision for) benefit from income taxes		(18,376	)		20			(19,276	)		13,978
Net loss	$	(44,340	)	$	(36,060	)	$	(101,531	)	$	(82,514	)
Net loss per share, basic and diluted	$	(0.79	)	$	(0.69	)	$	(1.82	)	$	(1.61	)
Weighted average shares outstanding, basic and diluted		56,014			52,184			55,708			51,214
(1) Includes stock-based compensation expense as follows:
Cost of subscription revenue	$	4,519		$	3,503		$	12,663		$	10,402
Cost of hardware and services revenue		1,043			474			3,003			1,636
Research and development		13,735			9,678			37,756			29,699
Sales and marketing		16,515			13,191			46,068			37,075
General and administrative		9,871			11,250			32,864			24,153
Total stock-based compensation expense	$	45,683		$	38,096		$	132,354		$	102,965
(2) Includes intangible amortization expense as follows:
Cost of subscription revenue	$	7,886		$	7,121		$	22,153		$	20,141
Research and development		—			15			—			45
Sales and marketing		3,632			3,982			10,803			10,379
Total intangible amortization expense	$	11,518		$	11,118		$	32,956		$	30,565

	September 30,			December 31,
	2019			2018
Assets
Current assets:
Cash and cash equivalents	$	1,020,183		$	185,392
Short-term investments		31,327			46,307
Accounts receivable, net		204,769			199,194
Inventory		425			481
Deferred product costs		2,078			1,800
Deferred commissions		42,473			37,391
Prepaid expenses and other current assets		19,053			16,872
Total current assets		1,320,308			487,437
Property and equipment, net		70,285			70,627
Operating lease right-of-use assets		53,719			—
Long-term deferred product costs		349			303
Goodwill		543,143			460,425
Intangible assets, net		124,689			136,645
Long-term deferred commissions		79,488			69,989
Other assets		16,045			7,592
Total assets	$	2,208,026		$	1,233,018
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	17,819		$	20,237
Accrued liabilities		103,573			90,719
Deferred rent		—			829
Operating lease liabilities		20,529			—
Deferred revenue		542,429			490,296
Total current liabilities		684,350			602,081
Convertible senior notes		741,367			—
Long-term deferred rent		—			3,757
Long-term operating lease liabilities		36,835			—
Other long-term liabilities		18,571			6,812
Long-term deferred revenue		132,174			107,834
Total liabilities		1,613,297			720,484
Stockholders’ equity
Common stock, $0.0001 par value; 200,000 shares authorized; 56,204 and 55,149 shares issued and outstanding at September 30, 2019, and December 31, 2018, respectively		6			6
Additional paid-in capital		1,291,580			1,107,953
Accumulated other comprehensive income (loss)		3			(7	)
Accumulated deficit		(696,860	)		(595,418	)
Total stockholders’ equity		594,729			512,534
Total liabilities and stockholders’ equity	$	2,208,026		$	1,233,018

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Cash flows from operating activities
Net loss	$	(44,340	)	$	(36,060	)	$	(101,531	)	$	(82,514	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		20,220			19,437			58,457			54,315
Stock-based compensation		45,683			38,096			132,354			102,965
Change in fair value of contingent consideration		—			—			—			(79	)
Amortization of debt issuance costs and accretion of debt discount		3,455			2,230			3,455			8,383
Amortization of deferred commissions		12,763			9,413			36,434			26,121
Noncash lease costs		5,869			—			17,216			—
Loss on conversion of convertible notes		—			7,207			—			7,207
Deferred income taxes		(1,884	)		(373	)		(2,494	)		(15,269	)
Other		627			327			1,594			1,147
Changes in assets and liabilities:
Accounts receivable		(34,069	)		(3,476	)		(6,209	)		(26,501	)
Inventory		(69	)		29			55			359
Deferred products costs		(229	)		(51	)		(324	)		(304	)
Deferred commissions		(20,036	)		(19,289	)		(51,014	)		(41,218	)
Prepaid expenses		2,199			270			(5,496	)		(2,344	)
Other current assets		55			(445	)		514			1,212
Long-term assets		(253	)		(102	)		(876	)		248
Accounts payable		559			(1,555	)		(2,607	)		2,655
Accrued liabilities		38,401			14,977			28,030			10,479
Deferred rent		—			(32	)		—			29
Operating lease liabilities		(6,477	)		—			(17,925	)		—
Deferred revenue		46,124			34,101			76,474			82,799
Net cash provided by operating activities		68,598			64,704			166,107			129,690
Cash flows from investing activities
Proceeds from maturities of short-term investments		26,853			13,805			81,902			51,237
Proceeds from sales of short-term investments		—			—			—			11,931
Purchase of short-term investments		(25,268	)		(23,763	)		(67,036	)		(47,457	)
Purchase of property and equipment		(10,006	)		(6,497	)		(23,856	)		(23,108	)
Receipts from escrow account		—			2,766			—			3,321
Acquisitions of business, net of cash acquired		—			—			(104,503	)		(223,786	)
Net cash used in investing activities		(8,421	)		(13,689	)		(113,493	)		(227,862	)
Cash flows from financing activities
Proceeds from issuance of common stock		827			2,897			15,518			15,898
Withholding taxes related to restricted stock net share settlement		(6,585	)		(7,327	)		(41,590	)		(41,967	)
Proceeds from issuance of convertible senior notes, net of costs		901,293			—			901,293			—
Purchase of capped calls		(84,640	)		—			(84,640	)		—
Repayments of equipment loans and capital lease obligations		—			(13	)		—			(29	)
Repayment of convertible notes		—			(142	)		—			(142	)
Contingent consideration payment		—			—			—			(555	)
Net cash provided by (used in) financing activities		810,895			(4,585	)		790,581			(26,795	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(584	)		(139	)		(505	)		(352	)
Net increase (decrease) in cash, cash equivalents and restricted cash		870,488			46,291			842,690			(125,319	)
Cash, cash equivalents and restricted cash
Beginning of period		158,354			115,050			186,152			286,660
End of period	$	1,028,842		$	161,341		$	1,028,842		$	161,341

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2019			2018			2019			2018


GAAP gross profit	$	167,504		$	133,242		$	471,809		$	369,749
GAAP gross margin		74	%		72	%		73	%		71	%
Plus:
Stock-based compensation expense		5,562			3,977			15,666			12,038
Intangible amortization expense		7,886			7,121			22,153			20,141
Non-GAAP gross profit		180,952			144,340			509,628			401,928
Non-GAAP gross margin		80	%		78	%		79	%		78	%

GAAP operating loss		(24,446	)		(26,558	)		(82,122	)		(80,672	)
Plus:
Stock-based compensation expense		45,683			38,096			132,354			102,965
Intangible amortization expense		11,518			11,118			32,956			30,565
Acquisition-related expenses		56			—			909			1,433
Litigation-related expenses		1,127			—			1,127			—
Non-GAAP operating income		33,938			22,656			85,224			54,291

GAAP net loss		(44,340	)		(36,060	)		(101,531	)		(82,514	)
Plus:
Stock-based compensation expense		45,683			38,096			132,354			102,965
Intangible amortization expense		11,518			11,118			32,956			30,565
Acquisition-related expenses		56			—			909			1,433
Litigation-related expenses		1,127			—			1,127			—
Interest expense - debt discount and issuance costs		3,455			2,230			3,455			8,383
Loss on conversion of convertible notes		—			7,207			—			7,207
Income tax expense (1)		12,277			26			4,223			(14,668	)
Non-GAAP net income		29,776			22,617			73,493			53,371
Add interest expense of convertible senior notes, net of tax (2)		243			309			243			1,172
Numerator for non-GAAP EPS calculation	$	30,019		$	22,926		$	73,736		$	54,543
Non-GAAP net income per share - diluted	$	0.49		$	0.40		$	1.25		$	0.96

GAAP weighted-average shares used to compute net loss per share, diluted		56,014			52,184			55,708			51,214
Dilutive effect of convertible senior notes (2)		2,533			2,099			854			2,649
Dilutive effect of employee equity incentive plan awards (3)		2,617			2,767			2,604			3,044
Non-GAAP weighted-average shares used to compute net income per share, diluted		61,164			57,050			59,166			56,907

(1) Starting January 1, 2019, the Company changed the calculation of its non-GAAP provision for income taxes in accordance with the SEC’s Non-GAAP Financial Measures Compliance and Disclosure Interpretations. The Company’s current and deferred income tax expense commensurate with the non-GAAP measure of profitability using non-GAAP tax rate of 17% for the three and nine months ended September 30, 2019. The Company uses annual projected tax rate in its computation of the non-GAAP income tax provision, and excludes the direct impact of stock-based compensation, intangible amortization expenses, costs associated with acquisitions and litigations, and non-cash interest expense related to the debt discount and issuance costs for the convertible notes. For the three and nine months ended September 30, 2018, only GAAP deferred tax expenses or benefits related to the amortization of intangible assets and deferred tax benefits related to changes in the Company's valuation allowance resulting from business acquisitions were excluded from the non-GAAP income tax

expense. The Non-GAAP income tax for the nine months ended September 30, 2018, excluded $14,725 of deferred tax benefits related to a reduction in the Company’s deferred tax valuation allowance resulting from the Wombat Acquisition.

(2) The company uses the if-converted method to compute diluted earnings per share with respect to its convertible senior notes. There was no add-back of interest expense or additional dilutive shares related to the convertible senior notes where the effect was anti-dilutive.

(3) The company uses the treasury method to compute the dilutive effect of employee equity incentive plan awards.

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
		2019			2018			2019			2018
Total revenue	$	227,385		$	184,179		$	644,761		$	518,515
Deferred revenue and customer prepayments
Ending		688,105			534,309			688,105			534,309
Beginning		635,450			496,315			605,073			431,371
Net Change		52,655			37,994			83,032			102,938
Unbilled accounts receivable
Ending		4,060			1,886			4,060			1,886
Beginning		1,861			1,090			1,276			603
Net Change		(2,199	)		(796	)		(2,784	)		(1,283	)
Less:
Deferred revenue contributed by acquisitions		—			—			—			(14,700	)
Billings	$	277,841		$	221,377		$	725,009		$	605,470

	Three Months Ending		Year Ending
	December 31,		December 31,
	2019		2019

Total revenue	$237.5 - $239.5		$882.3 - $884.3

GAAP gross profit	174.2 - 175.7		646.0 - 647.5
GAAP gross margin	73%		73%
Plus:
Stock-based compensation expense	5.6 - 5.3		21.3 - 21.0
Intangible amortization expense		7.8		29.9
Non-GAAP gross profit	187.6 - 188.8		697.2 - 698.4
Non-GAAP gross margin	79%		79%

GAAP net loss	(32.7) - (28.2)		(134.2) - (129.7)
Plus:
Stock-based compensation expense	47.7 - 45.7		180.1- 178.1
Intangible amortization expense		11.3		44.3
Acquisition-related expenses		—	0.9
Litigation-related expenses		0.5		1.6
Interest expense - debt discount and issuance costs		8.3		11.7
Income tax expense	(5.1) - (5.6)		(0.9) - (1.4)
Non-GAAP net income	30.0 - 32.0		103.5 - 105.5
Add interest expense of convertible senior notes, net of tax (if dilutive)		0.6		0.8
Numerator for non-GAAP EPS calculation	$30.6 - $32.6		$104.3 - $106.3
Non-GAAP net income per share - diluted	$0.47 - $0.50		$1.72 - $1.75
Non-GAAP weighted-average shares used to compute net income per share, diluted		64.9	60.6


	Three Months Ending		Year Ending
	December 31,		December 31,
	2019		2019

GAAP cash flows provided by operating activities	$72.4 - $74.4		$238.5 - $240.5
Less:
Purchases of property and equipment	(14.2)		(38.0)
Non-GAAP free cash flows	$58.2 - $60.2		$200.5 - $202.5

	Three Months Ended
	September 30, 2019		June 30, 2019		March 31, 2019		December 31, 2018		September 30, 2018		June 30, 2018
Advanced Threat	$	164,182	$	156,569	$	151,325	$	147,367	$	137,953	$	129,208
Compliance		63,203		57,870		51,612		51,112		46,226		42,667
Total revenue	$	227,385	$	214,439	$	202,937	$	198,479	$	184,179	$	171,875


Jason Starr
Proofpoint, Inc.
408-585-4351
jstarr@proofpoint.com