Fourth Quarter 2013 Financial Highlights
Revenues: Revenues for the fourth quarter of 2013 increased by 18% to
Bookings: Four-Quarter Bookings (a non-GAAP financial measure comprised of revenues for the most recent four quarters plus the change in current deferred revenues for the period) were
Gross Profit: GAAP gross profit for the fourth quarter of 2013 increased by 14% to
Operating Income: GAAP operating income for the fourth quarter of 2013 decreased to
Net Income: GAAP net income for the fourth quarter of 2013 was
Adjusted EBITDA: Adjusted EBITDA (a non-GAAP financial measure) for the fourth quarter of 2013 increased by 1% to
Full Year 2013 Financial Highlights
Revenues: Revenues for 2013 increased by 18% to
Gross Profit: Gross profit for 2013 increased by 14% to
Operating Income: GAAP operating income for 2013 decreased by 23% to
Net Income: GAAP net income for 2013 was
Adjusted EBITDA: Adjusted EBITDA (a non-GAAP financial measure) for 2013 increased by 26% to
Fourth Quarter 2013 Business Highlights
Customers:
New customers included: Carlsberg A/S,
Catholic Health , Cielo S.A.,Davis Polk & Wardwell , Gazprom,Hearst Corporation ,State of Ohio , Oshkosh, Royal KPN, J Sainsbury plc, Scotts Miracle-Gro,Stanford University and Starwood Hotels & Resorts.
New Products and Functionalities:
At the upcoming
- Continuous Security Monitoring for Internet-facing systems that will allow customers to continuously monitor their mission-critical assets and to be alerted to security vulnerabilities or misconfigurations that may make them susceptible to a cyber-attack.
- Web Application Firewall (WAF) for both the Amazon EC2 platform and for on-premise deployments on VMware's virtualization platform. QualysGuard WAF is integrated with the Company's Web Application Scanning solution, which allows customers to more rapidly deploy robust security for their web applications while minimizing administrative efforts and costs.
-
Top 4 Security Controls Free Tool allowing customers to quickly determine if Windows PCs in their environments have implemented the Top 4 critical security controls as recommended by the
Council on CyberSecurity , which has found that 85% of cyber-attack techniques may be prevented by the implementation of these critical security controls. More details can be found at http://www.qualys.com/TOP4.
Industry Recognition:
-
Received
Frost & Sullivan's Global Market Leadership Award in Vulnerability Management for the third consecutive year. -
Named a finalist in five 2014
SC Magazine Awards Categories, including Best Security Company, Best Customer Service, Best Vulnerability Management, Best Policy Compliance and Best SME Solution.
-
Announced partnership with Lumension to offer their customers the award-winning QualysGuard Vulnerability Management solution beginning in
April 2014 . -
Signed agreement with PathDefender, the new operating entity for McAfee Secure, to resell QualysGuard solutions as well as to integrate
Qualys vulnerability management, PCI compliance, web application scanning and malware detection capabilities into McAfee Secure. -
Expanded partnership with
Accuvant to launch their managed security services offering leveraging the QualysGuard Vulnerability Management solution.
Appointments:
-
Appointed
Ann Johnson , former RSA executive, to the newly-created position of President and Chief Operating Officer to lead global sales, business development and customer relations and support efforts.
Financial Performance Outlook
First Quarter 2014 Guidance: Management expects revenues to be in the range of
Full Year 2014 Guidance: Management expects revenues to be in the range of
Investor Conference Call
About
Legal Notice Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements generally relate to future events or our future financial or operating performance. Forward-looking statements in this press release include, but are not limited to, statements related to: our belief that we will continue to gain market share with our core Vulnerability Management solution; our expectations regarding bringing new capabilities and solutions to market in 2014; our belief that we will continue to unlock the potential of our cloud platform and will grow revenues and increase value to our customers and shareholders; our guidance for revenues, GAAP EPS (loss) and non-GAAP EPS for the first quarter and full year 2014; and our expectations for the number of weighted average diluted shares outstanding for the first quarter and full year 2014. Our expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks include our ability to continue to develop platform capabilities and solutions; customer acceptance and purchase of our existing solutions and new solutions; our ability to retain existing customers and generate new customers; the market for cloud solutions for IT security and compliance not continuing to develop; competition from other products and services; and general market, political, economic and business conditions. The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in our filings with the
Non-GAAP Financial Measures
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP,
The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. A reconciliation of the non-GAAP financial measures discussed in this press release to the most directly comparable GAAP financial measures is included with the financial statements contained in this press release. Management uses both GAAP and non-GAAP information in evaluating and operating its business internally and as such has determined that it is important to provide this information to investors.
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
(Unaudited) | ||||
(in thousands, except per share data) | ||||
Three Months Ended | Year Ended | |||
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2013 | 2012 | 2013 | 2012 | |
Revenues |
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Cost of revenues (1) | 6,526 | 4,981 | 24,660 | 18,404 |
Gross profit | 22,513 | 19,676 | 83,302 | 73,016 |
Operating expenses: | ||||
Research and development (1) | 5,939 | 4,870 | 21,678 | 20,195 |
Sales and marketing (1) | 11,784 | 9,911 | 42,523 | 37,738 |
General and administrative (1) | 4,566 | 3,268 | 16,792 | 12,079 |
Total operating expenses | 22,289 | 18,049 | 80,993 | 70,012 |
Income from operations | 224 | 1,627 | 2,309 | 3,004 |
Other income (expense), net: | ||||
Interest expense | (6) | (39) | (43) | (192) |
Interest income | 102 | 12 | 375 | 14 |
Other income (expense), net | (147) | (144) | (517) | (188) |
Total other income (expense), net | (51) | (171) | (185) | (366) |
Income before provision for income taxes | 173 | 1,456 | 2,124 | 2,638 |
Provision for income taxes | 128 | 281 | 500 | 358 |
Net income |
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Net income attributable to common stockholders |
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Net income per share attributable to common stockholders: | ||||
Basic |
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Diluted |
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Weighted average shares used in computing net income per share attributable to common stockholders: | ||||
Basic | 32,287 | 30,807 | 31,914 | 11,891 |
Diluted | 36,678 | 35,064 | 35,973 | 28,352 |
(1) Includes stock-based compensation as follows: | ||||
Cost of revenues |
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Research and development | 350 | 188 | 1,047 | 672 |
Sales and marketing | 440 | 218 | 1,244 | 1,074 |
General and administrative | 783 | 383 | 2,783 | 1,430 |
Total stock-based compensation |
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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
(Unaudited) | ||||
(in thousands) | ||||
Three Months Ended | Year Ended | |||
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2013 | 2012 | 2013 | 2012 | |
Net income |
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Change in foreign currency translation gain (loss), net of zero tax | (10) | (42) | (83) | (59) |
Available-for-sale investments: | ||||
Change in net unrealized gain on investments, net of zero tax | 7 | 8 | 38 | 8 |
Less: reclassification adjustment for net gain included in net income | (5) | — | (8) | — |
Net change, net of zero tax | 2 | 8 | 30 | 8 |
Other comprehensive income (loss), net | (8) | (34) | (53) | (51) |
Comprehensive income |
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CONDENSED CONSOLIDATED BALANCE SHEETS | ||
(Unaudited) | ||
(in thousands) | ||
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2013 | 2012 | |
Assets | ||
Current assets: | ||
Cash and cash equivalents |
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Short-term investments | 54,827 | 83,547 |
Accounts receivable, net | 28,581 | 24,545 |
Prepaid expenses and other current assets | 4,679 | 4,377 |
Total current assets | 130,456 | 147,354 |
Restricted cash | — | 114 |
Long-term investments | 35,608 | — |
Property and equipment, net | 23,075 | 18,148 |
Intangible assets, net | 2,394 | 2,811 |
Goodwill | 317 | 317 |
Other noncurrent assets | 753 | 1,574 |
Total assets |
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Liabilities and Stockholders' Equity | ||
Current Liabilities: | ||
Accounts payable |
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Accrued liabilities | 9,037 | 7,803 |
Deferred revenues, current | 67,505 | 56,497 |
Capital lease obligations, current | 805 | 1,183 |
Total current liabilities | 79,277 | 67,514 |
Deferred revenues, noncurrent | 8,889 | 8,616 |
Income taxes payable, noncurrent | 717 | 594 |
Other noncurrent liabilities | 603 | 1,231 |
Capital lease obligations, noncurrent | — | 808 |
Total liabilities | 89,486 | 78,763 |
Stockholders' equity: | ||
Common stock | 32 | 31 |
Additional paid-in capital | 176,641 | 166,651 |
Accumulated other comprehensive loss | (1,088) | (1,035) |
Accumulated deficit | (72,468) | (74,092) |
Total stockholders' equity | 103,117 | 91,555 |
Total liabilities and stockholders' equity |
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
(Unaudited) | ||
(in thousands) | ||
Year Ended | ||
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2013 | 2012 | |
Cash flows from operating activities: | ||
Net income |
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Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization expense | 9,612 | 7,341 |
Bad debt expense | 307 | 218 |
Loss on disposal of property and equipment | 12 | 10 |
Stock-based compensation | 5,506 | 3,452 |
Non-cash interest expense | — | 24 |
Amortization of premiums on investments | 282 | 7 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (4,343) | (4,014) |
Prepaid expenses and other assets | 510 | 92 |
Accounts payable | (112) | (242) |
Accrued liabilities | 303 | (1,110) |
Deferred revenues | 11,281 | 13,683 |
Other noncurrent liabilities | 164 | 211 |
Net cash provided by operating activities | 25,146 | 21,952 |
Cash flows from investing activities: | ||
Purchases of investments | (145,263) | (83,547) |
Sales and maturities of investments | 138,124 | — |
Purchases of property and equipment | (13,663) | (11,188) |
Release of restricted cash | 114 | — |
Purchases of intangible assets | — | (49) |
Net cash used in investing activities | (20,688) | (94,784) |
Cash flows from financing activities: | ||
Proceeds from initial public offering, net of offering costs | — | 84,534 |
Proceeds from exercise of stock options | 4,073 | 1,685 |
Proceeds from early exercise of stock options | 40 | 384 |
Income tax benefits from exercise of stock options | 150 | — |
Principal payments under capital lease obligations | (1,186) | (2,401) |
Non-contingent payment related to acquisition | — | (1,000) |
Net cash provided by financing activities | 3,077 | 83,202 |
Effect of exchange rate changes on cash and cash equivalents | (51) | (33) |
Net increase in cash and cash equivalents | 7,484 | 10,337 |
Cash and cash equivalents at beginning of period | 34,885 | 24,548 |
Cash and cash equivalents at end of period |
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Non-cash investing and financing activities: | ||
Purchases of property and equipment included in accrued liabilities |
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$ — |
Vesting of early exercised common stock options |
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Conversion of convertible preferred stock to common stock | $ — |
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Issuance of common stock for acquisition of license | $ — |
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RECONCILIATION OF NON-GAAP DISCLOSURES | ||
FOUR-QUARTER BOOKINGS | ||
(Unaudited) | ||
(in thousands) | ||
Four Quarters Ended | ||
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2013 | 2012 | |
Revenues |
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Deferred revenues, current | ||
Beginning of the Four-Quarter Period | 56,497 | 46,717 |
Ending | 67,505 | 56,497 |
Net change | 11,008 | 9,780 |
Four-Quarter Bookings |
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RECONCILIATION OF NON-GAAP DISCLOSURES | ||||
EBITDA AND ADJUSTED EBITDA | ||||
(Unaudited) | ||||
(in thousands) | ||||
Three Months Ended | Year Ended | |||
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2013 | 2012 | 2013 | 2012 | |
Net income |
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Depreciation and amortization of property and equipment | 2,464 | 1,829 | 9,195 | 6,895 |
Amortization of intangible assets | 98 | 115 | 417 | 446 |
Interest expense | 6 | 39 | 43 | 192 |
Provision for income taxes | 128 | 281 | 500 | 358 |
EBITDA | 2,741 | 3,439 | 11,779 | 10,171 |
Stock-based compensation | 1,698 | 870 | 5,506 | 3,452 |
Other (income) expense, net | 45 | 132 | 142 | 174 |
Adjusted EBITDA |
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RECONCILIATION OF NON-GAAP DISCLOSURES | ||||
(Unaudited) | ||||
(in thousands, except per share data) | ||||
Three Months Ended | Year Ended | |||
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2013 | 2012 | 2013 | 2012 | |
GAAP gross profit |
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Plus: | ||||
Stock-based compensation | 125 | 81 | 432 | 276 |
Non-GAAP gross profit |
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GAAP income from operations |
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Plus: | ||||
Stock-based compensation | 1,698 | 870 | 5,506 | 3,452 |
Non-GAAP income from operations |
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GAAP net income |
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Plus: | ||||
Stock-based compensation | 1,698 | 870 | 5,506 | 3,452 |
Non-GAAP net income |
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Non-GAAP net income attributable to common stockholders |
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Non-GAAP net income per share attributable to common stockholders: | ||||
Basic |
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Diluted |
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Weighted average shares used in computing non-GAAP net income per share attributable to common stockholders | ||||
Basic | 32,287 | 30,807 | 31,914 | 11,891 |
Diluted | 36,678 | 35,064 | 35,973 | 28,352 |
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NET INCOME PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS | ||||
(Unaudited) | ||||
(in thousands, except per share data) | ||||
Three Months Ended | Year Ended | |||
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2013 | 2012 | 2013 | 2012 | |
Numerator: | ||||
Net income |
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Net income attributable to participating securities | — | (16) | (2) | (1,204) |
Net income attributable to common stockholders - basic | 45 | 1,159 | 1,622 | 1,076 |
Undistributed earnings reallocated to participating securities | — | 15 | — | 1,201 |
Net income attributable to common stockholders - diluted |
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Denominator: | ||||
Weighted-average shares used in computing net income per share attributable to common stockholders - basic | 32,287 | 30,807 | 31,914 | 11,891 |
Effect of potentially dilutive securities: | ||||
Convertible preferred stock | — | 383 | — | 13,270 |
Common stock options | 4,391 | 3,874 | 4,059 | 3,187 |
Contingently issuable shares related to an acquisition | — | — | — | 4 |
Weighted-average shares used in computing net income per share attributable to common stockholders - diluted | 36,678 | 35,064 | 35,973 | 28,352 |
Net income per share attributable to common stockholders | ||||
Basic |
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Diluted |
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Source:
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