Sophos shares up on soaring sales

Sophos is bucking the trend of security firms disappointing the market recently, claims analyst

Sophos' share price has jumped this morning after reporting rocketing revenue in Q1.

For the three months to 30 June, Sophos' revenue grew 12 per cent year on year to $127.4m (£96.7m) and cash EBITDA jumped 55.2 per cent to $25.6m over the same period.

Last night, Sophos shares closed at 228.6p per share, but rose as high as 242.7p this morning after the results were published.

Richard Holway, analyst at TechMarketView, was upbeat about the results.

"Many of the other players in the security market have disappointed the market of late - resulting in some dramatic falls in share prices," he said. "I think, in comparison, this shows Sophos in a very good light.

"Firstly they seem to execute well and are now meeting or exceeding expectations.

"Secondly, their mid-market focus, with a multitude of small to mid-sized clients, is much more ‘secure' than those competitors who rely on a small number of large deals.

"I guess the only issue here is that their competitors move down into Sophos‘ space."

Holway said in a recent conversaion with Nick Bray, CFO at Sophos, he was told that only 12 per cent of Sophos' revenues are in the UK and only 20 per cent of its investments are in sterling, meaning Brexit will not be a huge headache for the firm.

For the full 2017 financial year Sophos is expecting to hit billings growth and revenue growth in the mid-teens.

Kris Hagerman, chief executive officer at Sophos, said: "We are encouraged by our strong start to the year which underpins our confidence in the outlook for the full financial year.

"Our compelling strategy of targeting the underserved mid-market with a complete security offering through the channel that serves them continues to drive positive performance."

Last month Hagerman told CRN that the firm is reaping the rewards of moving to a full channel model in 2012.