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FNJN: Sophos Settlement Adds $15 Million to 2017 Revenues

04/03/2017

By Lisa Thompson

NASDAQ:FNJN

Finjan (NASDAQ:FNJN) won its trial against Sophos in September and was awarded $15 million for the life of the patents. It was subsequently granted pre and post trial interest. On Friday the two companies decided to settle and Finjan was paid $15 million. In addition, Finjan and Sophos cross-licensed patents in the mobile area. For this cross-license agreement Sophos is expected to pay Finjan another $2.5 million. One payment is expected on 3/31/2018 and the second on 3/31/2019. We have adjusted estimates accordingly.

Raising 2017 Forecasts

Due to Friday’s settlement with Sophos we are raising full year 2017 and Q1 2017 estimates. For Q1 2017 we are now looking for $24.8 up from $9.845 million in revenues, all of which have already been announced and paid except for the estimated $100,000 in revenue we are estimating for the CybeRisk division. With expenses of $4.1 million, this would yield a fully diluted EPS of $0.67 up from the previously estimated $0.23 per share. This is compared with $2.3 million in sales and a loss of $0.05 per share in 2016.

For the 2017 year we are raising revenues to $76.1 million and $1.68 versus $18.4 million and a loss of $0.28 EPS in 2016.

Accordingly we are lowering 2018 a net $13.8 million. Removing $15 million for the Sophos win and adding on $1.25 million for the cross-licensing payment. This results in 2018 revenues of $21.8 million and $0.03. Given the nature of this business, this preliminary 2018 estimate has a huge margin of error and will change for sure.

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