Proofpoint Announces $300 Million Share Repurchase Program

Rhea-AI Summary

Proofpoint announced a new share repurchase program authorized by its Board of Directors, allowing the company to buy back up to $300 million of its common stock, approximately 5% of its current market capitalization. This strategy reflects the Board's confidence in Proofpoint's long-term growth and commitment to returning value to shareholders while continuing investments in its cybersecurity platform. The company plans to finance the buyback through existing cash and operational cash flows, with no set schedule for repurchases.

Positive

• Authorization for a $300 million share buyback program aims to enhance shareholder value.
• Repurchase represents approximately 5% of current market capitalization, indicating strong market confidence.
• Funds for the buyback are from existing cash and operational cash flows, ensuring financial stability.

Negative

• None.

SUNNYVALE, Calif., Aug. 31, 2020 (GLOBE NEWSWIRE) -- Proofpoint, Inc., (NASDAQ: PFPT), a leading cybersecurity and compliance company, today announced that its Board of Directors has approved its first share repurchase program under which the Company is authorized to repurchase up to $300 million of its common stock, representing approximately 5% of current market capitalization.

“This share repurchase program demonstrates the Board’s and Management’s confidence in our strategy, execution, and long-term growth opportunity,” said Gary Steele, Chairman and CEO of Proofpoint.  “Our top priority continues to be investing in our people-centric cybersecurity and compliance platform in the years ahead.  At the same time, this program gives us a compelling opportunity to return value to shareholders and reduce our common stock outstanding.  We believe our strong balance sheet and anticipated operating cashflow generation provide us with the flexibility to execute share repurchases while continuing to invest in R&D and M&A to profitably grow our business.” 

Proofpoint does not have a specific schedule for the repurchase of the shares. The timing and the amount of any repurchases will be determined by the Company based on its evaluation of market conditions, applicable legal requirements and other factors.  Repurchases may be made through open market purchases, block trades and/or in privately negotiated transactions, and may be implemented pursuant to Rule 10b5-1 plans. The repurchase authorization does not obligate the Company to buy any particular amount of stock and may be suspended or discontinued by the Company at any time without prior notice. The Company expects to fund the repurchase program from its existing cash balance and cash flows from operations.  The Company had approximately 57.6 million shares of common stock outstanding as of July 17, 2020.

Proofpoint also reaffirms its third quarter and full year 2020 financial guidance as originally provided on its second quarter earnings release and filed on Form 8-K on July 30, 2020.  Proofpoint’s policy is to not reiterate or adjust financial guidance unless it is also done through a public disclosure such as a press release or Form 8-K, as done here.

Forward-Looking Statements

This press release contains forward-looking statements, including Proofpoint’s intention to implement a program to purchase up to $300 million of Proofpoint’s common stock; the expected timing, volume and nature of such securities repurchase program; the expected source of funding; and future growth and future financial performance. There are a number of important factors that could cause actual events to differ materially from those suggested or indicated by such forward-looking statements. These include, among others, the market price of Proofpoint’s common stock prevailing from time to time, the amount of Proofpoint's cash commitments, the nature of other acquisition or investment opportunities presented to Proofpoint from time to time, Proofpoint’s cash flows from operations, general economic conditions, the potential direct and indirect impact of events beyond our control such as the current coronavirus (COVID-19) pandemic on our business, financial condition and operations, including on our customers’ spending and on our expenses, supply chain, and employees, failure to maintain or increase renewals 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 and other factors identified in Proofpoint’s Quarterly Report on Form 10-Q for the Quarterly Period Ended June 30, 2020, as filed with the Securities and Exchange Commission on July 31, 2020. Additional information will also be set forth in Proofpoint’s future quarterly reports on Form 10-Q, annual reports on Form 10-K and other filings that we make with the Securities and Exchange Commission. These forward-looking statements are subject to material risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Proofpoint is under no obligation, and expressly disclaims any obligation, to update or alter its forward-looking statements whether as a result of new information, future events, or otherwise.

About Proofpoint, Inc.
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.

Connect with Proofpoint: Twitter | LinkedIn | Facebook | YouTube

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

PROOFPOINT MEDIA CONTACT:
Kristy Campbell
Proofpoint, Inc.
(408) 850-4142
kcampbell@proofpoint.com

PROOFPOINT INVESTOR CONTACT:
Jason Starr
Proofpoint, Inc.
(408) 585-4351
jstarr@proofpoint.com

FAQ

What is the purpose of Proofpoint's share repurchase program?

The share repurchase program aims to return value to shareholders while demonstrating the Board's confidence in the company's long-term growth.

How much stock is Proofpoint planning to buy back?

Proofpoint plans to repurchase up to $300 million of its common stock.

What percentage of Proofpoint's market capitalization does the buyback represent?

The buyback program represents approximately 5% of Proofpoint's current market capitalization.

How will Proofpoint fund the share repurchase program?

The program will be funded through Proofpoint's existing cash balance and cash flows from operations.

Does Proofpoint have a schedule for the stock buyback?

No, Proofpoint does not have a specific schedule for the repurchase; the timing will depend on market conditions and other factors.