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By Soham Chatterjee (Reuters) - Cybersecurity company FireEye Inc (O:FEYE) forecast quarterly revenue largely below average analyst expectation as customers increasingly shifted to subscription-based products, away from on-premise equipment that brought in revenue upfront.
FireEye shares were down 22 percent in after-market trading.
The company said it expects revenue of $135 million-$147 million for the fourth quarter ending December.
Analysts on average were expecting $144.2 million, according to Thomson Reuters I/B/E/S.
There has been "a mix change in product and product subscriptions," Chief Executive David DeWalt told Reuters.
More clients were moving to FireEye's cloud-based services, which bring in less money upfront but assures a steady stream of subscription revenue.
Governments and businesses subscribe to FireEye's products to monitor, alert and act against hacking into company networks.
FireEye, Fortinet Inc (O:FTNT) and Palo Alto Networks Inc (O:PANW) are benefiting from higher spending on cybersecurity following high profile attacks on companies such as Target Corp (N:TGT), Home Depot Inc (N:HD) and JPMorgan Chase & Co (N:JPM).
The company now expects full-year revenue of $418-$430 million, compared with its prior forecast of $423-$430 million. Analysts were expecting $428.4 million.
FireEye's revenue rose 168 percent to $114.2 million for the third quarter ended Sept. 30, falling short of analysts' estimate of $116 million.
Excluding items, the company reported a loss of 51 cents per share — better than the loss of 55 cents per share analysts predicted.
The net loss attributable to shareholders widened to $120 million, or 83 cents per share from $50.9 million, or $1.61 per share, a year earlier.
Expenses more than doubled as the company spent more on sales and marketing and hiring sales representatives.
Shares of the company closed at $34.25 on the Nasdaq on Tuesday. The stock had a strong run-up from its IPO last September until March, nearing $100 a share from an IPO price of $20 after the cyber-attack at retailer Target. It has retreated since but is still 71 percent above its IPO price.
(Reporting by Soham Chatterjee and Ankit Ajmera in Bangalore; Editing by Joyjeet Das)