The benefit from income taxes recorded in the fourth quarter and full year 2014 includes
Fourth Quarter 2014 Financial Highlights
Revenues: Revenues for the fourth quarter of 2014 increased by 26% to
Deferred Revenues: Current deferred revenues increased by 20% to
Gross Profit: GAAP gross profit for the fourth quarter of 2014 increased by 29% to
Operating Income: GAAP operating income for the fourth quarter of 2014 was
Net Income: GAAP net income for the fourth quarter of 2014 was
Adjusted EBITDA: Adjusted EBITDA (a non-GAAP financial measure) for the fourth quarter of 2014 increased by 139% to
Full Year 2014 Financial Highlights
Revenues: Revenues for 2014 increased by 24% to
Gross Profit: Gross profit for 2014 increased by 26% to
Operating Income: GAAP operating income for 2014 increased by 300% to
Net Income: GAAP net income for 2014 was
Adjusted EBITDA: Adjusted EBITDA (a non-GAAP financial measure) in 2014 increased by 82% to
Cash Flows: The Company generated
Fourth Quarter 2014 Business Highlights
Customers:
- New customers included: Associated British Foods,
Blue Cross and Blue Shield of Minnesota , Blue Shield ofCalifornia ,Bridgewater Associates , British American Tobacco,Cadillac Fairview , Dimension Data Cloud Solutions Australia,Gatwick Airport , Graham Holdings, Halliburton,HIS, Inc. ,Michigan State University , Netflix,QBE North America , Rexam PLC, Siemens AG,The Church of Jesus Christ of Latter Day Saints ,Tyco International ,UC Health and Yellowpages.com.
New Products and Functionalities:
- Continued Qualys Cloud Platform expansion by adding new capabilities to Vulnerability Management, Policy Compliance and Web Application Scanning solutions, including new scanning options, reporting enhancements and support for new technologies and compliance frameworks.
- Released version 4.0 for Web Application Scanning with new, powerful continuous scanning capabilities for web applications.
- Expanded
Qualys' popular Continuous Monitoring solution to enable customers to monitor internal IT assets inside an enterprise's DMZ. - Released a new version of the Qualys Private Cloud Platform that is fully disconnected from Qualys Secure Operations Centers, allowing organizations, such as government agencies, to utilize this scalable offering to secure their IT assets from cyber attacks, while maintaining full control of their security data and day-to-day management of the platform.
- The newly-formed
Qualys Malware and Vulnerability Research Lab discovered the "GHOST" vulnerability on Linux and released a security advisory onJanuary 27, 2015 . GHOST is a high-severity vulnerability found in theLinux GNU C Library (glibc) that allows attackers to remotely take control of an entire system without having any prior knowledge of system credentials.Qualys also added detection to this vulnerability for customers to scan their IT systems and track remediation progress.
Industry Recognition:
- Won three Information Security™ magazine awards and a SearchSecurity.com 2014 Readers' Choice Award for Risk Policy Management, Vulnerability Management and Application Security.
- Honored by
Frost & Sullivan with the 2014 Company of the Year Award for product excellence, continued innovation and a unique cloud-based approach to providing customers with continuous security solutions on a global scale.
Strategic Alliances and Partnerships:
- Signed a managed security services partnership agreement with Telstra in
Australia to resellQualys' security and compliance solutions to Telstra's customers in theAsia-Pacific region . - Expanded managed security services partnership with Orange CyberDefense via a Qualys Private Cloud Platform installed in
France to deliverQualys' portfolio of security services to their government customers. - Selected by DMI to expand their managed security offerings for both federal and commercial customers globally.
- Finalized technology partnership with Splunk to integrate
Qualys data with Splunk and deliver it to joint customers as a Splunk application.
Financial Performance Outlook
First Quarter 2015 Guidance: Management expects revenues to be in the range of
Full Year 2015 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: the accelerated growth of our business, including renewals, adoption of our existing solutions and our new offerings, the threat environment in which we operate, perceptions related to the cloud delivery model, the capabilities of our platform, our strategy, the scalability of our strategy, and ability to execute such strategy, our guidance for revenues, GAAP EPS and non-GAAP EPS for the first quarter and full year 2015, our expectations for the number of weighted average diluted shares
outstanding and effective income tax rate for the first quarter and full year 2015 and our intention to reevaluate our effective tax rate on a non-GAAP basis. 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; the ability of our platform and solutions to perform as intended; 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 increasing at the rate we expect; competition from other products and services; fluctuations in currency exchange rates, unexpected fluctuations
in our effective tax rate on a GAAP and non-GAAP basis, our ability to effectively manage our rapid growth, our ability to anticipate future market needs and opportunities; any unanticipated accounting charges; and general market, political, economic and business conditions in
Non-GAAP Financial Measures
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP,
Beginning in 2015, due to the recognition of deferred tax assets in 2014 and in order to provide a more complete picture of recurring core operating business results, the Company's non-GAAP net income and non-GAAP net income per diluted share will include tax adjustments, if any, required to achieve the effective tax rate on a non-GAAP basis, which could differ from the GAAP effective tax rate. The Company believes the non-GAAP effective tax rate, which has been set to be 35% in 2015, is a reasonable estimate under its global operating structure. The Company intends to re-evaluate the non-GAAP effective tax rate on an annual basis, however, it may adjust this rate during the year to take into account events or trends that it believes materially impact the estimated annual rate. The non-GAAP effective tax rate could be subject to change for a number of reasons, including but not limited to, significant changes resulting from tax legislation, material changes in geographic mix of revenues and expenses and other significant events.
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.
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||
| (Unaudited) | ||||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||||
| Revenues | $ | 36,573 | $ | 29,039 | $ | 133,579 | $ | 107,962 | ||||||||||
| Cost of revenues (1) | 7,521 | 6,526 | 28,963 | 24,660 | ||||||||||||||
| Gross profit | 29,052 | 22,513 | 104,616 | 83,302 | ||||||||||||||
| Operating expenses: | ||||||||||||||||||
| Research and development (1) | 7,015 | 5,939 | 26,320 | 21,678 | ||||||||||||||
| Sales and marketing (1) | 11,938 | 11,784 | 48,049 | 42,523 | ||||||||||||||
| General and administrative (1) | 5,888 | 4,566 | 21,000 | 16,792 | ||||||||||||||
| Total operating expenses | 24,841 | 22,289 | 95,369 | 80,993 | ||||||||||||||
| Income from operations | 4,211 | 224 | 9,247 | 2,309 | ||||||||||||||
| Other income (expense), net: | ||||||||||||||||||
| Interest expense | - | (6 | ) | (9 | ) | (43 | ) | |||||||||||
| Interest income | 87 | 102 | 452 | 375 | ||||||||||||||
| Other income (expense), net | (655 | ) | (147 | ) | (1,077 | ) | (517 | ) | ||||||||||
| Total other income (expense), net | (568 | ) | (51 | ) | (634 | ) | (185 | ) | ||||||||||
| Income before income taxes | 3,643 | 173 | 8,613 | 2,124 | ||||||||||||||
| (Benefit from) provision for income taxes | (22,270 | ) | 128 | (21,631 | ) | 500 | ||||||||||||
| Net income | $ | 25,913 | $ | 45 | $ | 30,244 | $ | 1,624 | ||||||||||
| Net income per share: | ||||||||||||||||||
| Basic | $ | 0.77 | $ | 0.00 | $ | 0.92 | $ | 0.05 | ||||||||||
| Diluted | $ | 0.69 | $ | 0.00 | $ | 0.81 | $ | 0.05 | ||||||||||
| Weighted average shares used in computing net income per share: | ||||||||||||||||||
| Basic | 33,449 | 32,287 | 32,979 | 31,914 | ||||||||||||||
| Diluted | 37,630 | 36,678 | 37,170 | 35,973 | ||||||||||||||
| (1) Includes stock-based compensation as follows: | ||||||||||||||||||
| Cost of revenues | $ | 275 | $ | 125 | $ | 757 | $ | 432 | ||||||||||
| Research and development | 919 | 350 | 2,470 | 1,047 | ||||||||||||||
| Sales and marketing | 555 | 440 | 2,407 | 1,244 | ||||||||||||||
| General and administrative | 1,700 | 783 | 4,915 | 2,783 | ||||||||||||||
| Total stock-based compensation | $ | 3,449 | $ | 1,698 | $ | 10,549 | $ | 5,506 | ||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| (in thousands) | |||||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | ||||||||||||||||
| Net income | $ | 25,913 | $ | 45 | $ | 30,244 | $ | 1,624 | |||||||||||
| Available-for-sale investments: | |||||||||||||||||||
| Change in net unrealized gain (loss) on investments, net of zero tax | (7 | ) | 7 | - | 38 | ||||||||||||||
| Less: reclassification adjustment for net realized gain included in net income | 18 | (5 | ) | (28 | ) | (8 | ) | ||||||||||||
| Net change, net of zero tax | 11 | 2 | (28 | ) | 30 | ||||||||||||||
| Other comprehensive income (loss), net | 11 | 2 | (28 | ) | 30 | ||||||||||||||
| Comprehensive income | $ | 25,924 | $ | 47 | $ | 30,216 | $ | 1,654 | |||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||
| (Unaudited) | ||||||||||
| (in thousands) | ||||||||||
| 2014 | 2013 | |||||||||
| Assets | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 76,504 | $ | 42,369 | ||||||
| Short-term investments | 50,714 | 54,827 | ||||||||
| Accounts receivable, net | 32,993 | 28,581 | ||||||||
| Deferred tax assets, current | 8,520 | 114 | ||||||||
| Prepaid expenses and other current assets | 6,528 | 4,565 | ||||||||
| Total current assets | 175,259 | 130,456 | ||||||||
| Long-term investments | 39,448 | 35,608 | ||||||||
| Property and equipment, net | 26,618 | 23,075 | ||||||||
| Deferred tax assets, net | 14,119 | 72 | ||||||||
| Intangible assets, net | 2,001 | 2,394 | ||||||||
| Goodwill | 317 | 317 | ||||||||
| Other noncurrent assets | 2,262 | 681 | ||||||||
| Total assets | $ | 260,024 | $ | 192,603 | ||||||
| Liabilities and Stockholders' Equity | ||||||||||
| Current liabilities: | ||||||||||
| Accounts payable | $ | 5,661 | $ | 1,930 | ||||||
| Accrued liabilities | 10,353 | 9,037 | ||||||||
| Deferred revenues, current | 81,147 | 67,505 | ||||||||
| Capital lease obligations, current | - | 805 | ||||||||
| Total current liabilities | 97,161 | 79,277 | ||||||||
| Deferred revenues, noncurrent | 10,064 | 8,889 | ||||||||
| Other noncurrent liabilities | 972 | 1,320 | ||||||||
| Total liabilities | 108,197 | 89,486 | ||||||||
| Stockholders' equity: | ||||||||||
| Common stock | 34 | 32 | ||||||||
| Additional paid-in capital | 195,133 | 176,641 | ||||||||
| Accumulated other comprehensive income | 10 | 38 | ||||||||
| Accumulated deficit | (43,350 | ) | (73,594 | ) | ||||||
| Total stockholders' equity | 151,827 | 103,117 | ||||||||
| Total liabilities and stockholders' equity | $ | 260,024 | $ | 192,603 | ||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||
| (Unaudited) | ||||||||||||
| (in thousands) | ||||||||||||
| Year Ended | ||||||||||||
| 2014 | 2013 | |||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net income | $ | 30,244 | $ | 1,624 | ||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
| Depreciation and amortization expense | 11,897 | 9,612 | ||||||||||
| Bad debt expense | 470 | 307 | ||||||||||
| Loss on disposal of property and equipment | 324 | 12 | ||||||||||
| Stock-based compensation | 10,549 | 5,506 | ||||||||||
| Amortization of premiums and accretion of discounts on investments | 565 | 282 | ||||||||||
| Excess tax benefits from stock-based compensation | (259 | ) | (150 | ) | ||||||||
| Deferred income taxes | (22,599 | ) | - | |||||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Accounts receivable | (4,882 | ) | (4,343 | ) | ||||||||
| Prepaid expenses and other assets | (3,456 | ) | 510 | |||||||||
| Accounts payable | 2,332 | (112 | ) | |||||||||
| Accrued liabilities | 1,570 | 453 | ||||||||||
| Deferred revenues | 14,817 | 11,281 | ||||||||||
| Other noncurrent liabilities | (201 | ) | 164 | |||||||||
| Net cash provided by operating activities | 41,371 | 25,146 | ||||||||||
| Cash flows from investing activities: | ||||||||||||
| Purchases of investments | (157,660 | ) | (145,263 | ) | ||||||||
| Sales and maturities of investments | 157,339 | 138,124 | ||||||||||
| Purchases of property and equipment | (13,914 | ) | (13,663 | ) | ||||||||
| Release of restricted cash | - | 114 | ||||||||||
| Capitalized software development costs | (98 | ) | - | |||||||||
| Net cash used in investing activities | (14,333 | ) | (20,688 | ) | ||||||||
| Cash flows from financing activities: | ||||||||||||
| Proceeds from exercise of stock options | 7,691 | 4,073 | ||||||||||
| Proceeds from early exercise of stock options | - | 40 | ||||||||||
| Excess tax benefits from stock-based compensation | 259 | 150 | ||||||||||
| Principal payments under capital lease obligations | (805 | ) | (1,186 | ) | ||||||||
| Net cash provided by financing activities | 7,145 | 3,077 | ||||||||||
| Effect of exchange rate changes on cash and cash equivalents | (48 | ) | (51 | ) | ||||||||
| Net increase in cash and cash equivalents | 34,135 | 7,484 | ||||||||||
| Cash and cash equivalents at beginning of period | 42,369 | 34,885 | ||||||||||
| Cash and cash equivalents at end of period | $ | 76,504 | $ | 42,369 | ||||||||
| Non-cash investing and financing activities: | ||||||||||||
| Vesting of early exercised common stock options | $ | 47 | $ | 262 | ||||||||
| Purchases of property and equipment included in accrued liabilities and accounts payable | $ | 1,399 | $ | 487 | ||||||||
| RECONCILIATION OF NON-GAAP DISCLOSURES | |||||||||||||||
| EBITDA AND ADJUSTED EBITDA | |||||||||||||||
| (Unaudited) | |||||||||||||||
| (in thousands) | |||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||
| 2014 | 2013 | 2014 | 2013 | ||||||||||||
| Net income | $ | 25,913 | $ | 45 | $ | 30,244 | $ | 1,624 | |||||||
| Depreciation and amortization of property and equipment | 2,972 | 2,464 | 11,504 | 9,195 | |||||||||||
| Amortization of intangible assets | 99 | 98 | 393 | 417 | |||||||||||
| Interest expense | - | 6 | 9 | 43 | |||||||||||
| (Benefit from) provision for income taxes | (22,270 | ) | 128 | (21,631 | ) | 500 | |||||||||
| EBITDA | 6,714 | 2,741 | 20,519 | 11,779 | |||||||||||
| Stock-based compensation | 3,449 | 1,698 | 10,549 | 5,506 | |||||||||||
| Other (income) expense, net | 568 | 45 | 625 | 142 | |||||||||||
| Adjusted EBITDA | $ | 10,731 | $ | 4,484 | $ | 31,693 | $ | 17,427 | |||||||
| RECONCILIATION OF NON-GAAP DISCLOSURES | |||||||||||||||
| (Unaudited) | |||||||||||||||
| (in thousands, except per share data) | |||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||
| 2014 | 2013 | 2014 | 2013 | ||||||||||||
| GAAP gross profit | $ | 29,052 | $ | 22,513 | $ | 104,616 | $ | 83,302 | |||||||
| Plus: Stock-based compensation | 275 | 125 | 757 | 432 | |||||||||||
| Non-GAAP gross profit | $ | 29,327 | $ | 22,638 | $ | 105,373 | $ | 83,734 | |||||||
| GAAP income from operations | $ | 4,211 | $ | 224 | $ | 9,247 | $ | 2,309 | |||||||
| Plus: Stock-based compensation | 3,449 | 1,698 | 10,549 | 5,506 | |||||||||||
| Non-GAAP income from operations | $ | 7,660 | $ | 1,922 | $ | 19,796 | $ | 7,815 | |||||||
| GAAP net income | $ | 25,913 | $ | 45 | $ | 30,244 | $ | 1,624 | |||||||
| Plus: Stock-based compensation | 3,449 | 1,698 | 10,549 | 5,506 | |||||||||||
| Less: Tax benefit from recognition of deferred tax assets | (23,741 | ) | - | (23,741 | ) | - | |||||||||
| Non-GAAP net income | $ | 5,621 | $ | 1,743 | $ | 17,052 | $ | 7,130 | |||||||
| Non-GAAP net income per share: | |||||||||||||||
| Basic | $ | 0.17 | $ | 0.05 | $ | 0.52 | $ | 0.22 | |||||||
| Diluted | $ | 0.15 | $ | 0.05 | $ | 0.46 | $ | 0.20 | |||||||
| Weighted average shares used in computing non-GAAP net income per share: | |||||||||||||||
| Basic | 33,449 | 32,287 | 32,979 | 31,914 | |||||||||||
| Diluted | 37,630 | 36,678 | 37,170 | 35,973 | |||||||||||
| RECONCILIATON OF NON-GAAP DISCLOSURES | ||||||
| FREE CASH FLOWS | ||||||
| (Unaudited) | ||||||
| (in thousands) | ||||||
| Year Ended | ||||||
| 2014 | 2013 | |||||
| GAAP cash flows provided by operating activities | $ | 41,371 | $ | 25,146 | ||
| Less: | ||||||
| Purchases of property and equipment | (13,914 | ) | (13,663 | ) | ||
| Capitalized software development costs | (98 | ) | - | |||
| Non-GAAP free cash flows | $ | 27,359 | $ | 11,483 | ||
Investors:
Chief Financial Officer
+1 (650) 801-6181
Email Contact
Media:
Sard Verbinnen & Co
+1 (415) 618-8750
Email Contact / Email Contact
Source:
News Provided by Acquire Media