Revenue Growth of 21% Year-Over-Year
GAAP EPS of
Cloud Platform Expansion Continues to Drive Growth
Third Quarter 2012 Financial Highlights
Revenues: Revenues for the third quarter of 2012 increased by 21% to
Bookings: Four-Quarter Bookings (a non-GAAP financial measure) were
Gross Profit: Gross profit for the third quarter of 2012 increased by 16% to
Operating Income: GAAP operating income for the third quarter of 2012 increased by 73% to
Net Income: GAAP net income for the third quarter of 2012 was
Adjusted EBITDA: Adjusted EBITDA (a non-GAAP financial measure) for the third quarter of 2012 increased 66% to
Initial Public Offering:
Third Quarter 2012 Business Highlights
New Customers:
-
New customers include:
Bombardier Aerospace , Dolby Laboratories, F5 Networks,Federal Housing Finance Agency , FMC Technologies, Morgan Stanley, Ring Central, Salesforce.com,San Francisco Department of Public Health , Southern California Edison, Sophos PLC,University of California, San Francisco (UCSF),VISA and Washington Post.
New Products and Functionalities:
- Expanded QualysGuard PCI Cloud Platform to help organizations meet new internal scanning requirements of PCI DSS 6.2.
- Added IPv6 support to FreeScan service allowing organizations to test the security of their IPv6 deployments on the Internet.
- Announced the general availability of Dynamic Asset Tagging, a patent-pending technology, enabling customers to identify and organize large numbers of assets in highly dynamic IT environments to attain a comprehensive view of their security and compliance posture by assets, business units and technical owners.
Industry Recognition:
- Received highest rating of "Strong Positive" in Gartner's MarketScope for Vulnerability Assessment1.
-
Recognized as "Best Vulnerability Management" by TechTarget's
Information Security Magazine (ISM) Reader's Choice Awards 2012.
Financial Performance Outlook
Fourth Quarter 2012 Guidance: Management expects revenues to be in the range of
Full Year 2012 Guidance: Management expects revenues to be in the range of
Investor Conference Call
About
1Disclaimer: Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.
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 expectations regarding investments in, and the development of, our platform capabilities in areas such as Web Application Firewall; our belief that we are poised to continue delivering value to our customers and shareholders; and our guidance for revenues, GAAP EPS and non-GAAP EPS for the fourth quarter and full year 2012. 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 | Nine Months Ended | |||
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|||
2012 | 2011 | 2012 | 2011 | |
Revenues | $ 23,382 | $19,375 | $ 66,763 | $ 55,560 |
Cost of revenues (1) | 4,634 | 3,225 | 13,423 | 9,124 |
Gross profit | 18,748 | 16,150 | 53,340 | 46,436 |
Operating expenses: | ||||
Research and development (1) | 5,076 | 4,922 | 15,325 | 14,680 |
Sales and marketing (1) | 8,797 | 7,985 | 27,827 | 22,297 |
General and administrative (1) | 3,154 | 2,249 | 8,811 | 6,510 |
Total operating expenses | 17,027 | 15,156 | 51,963 | 43,487 |
Income from operations | 1,721 | 994 | 1,377 | 2,949 |
Other income (expense), net: | ||||
Interest expense | (38) | (47) | (153) | (164) |
Interest income | 1 | 4 | 2 | 10 |
Other income (expense), net | 60 | (418) | (44) | 101 |
Total other income (expense), net | 23 | (461) | (195) | (53) |
Income before provision for income taxes | 1,744 | 533 | 1,182 | 2,896 |
Provision for income taxes | 77 | 81 | 77 | 291 |
Net income | $ 1,667 | $ 452 | $ 1,105 | $ 2,605 |
Net income attributable to common stockholders | $ 415 | $ 102 | $ 264 | $ 576 |
Net income per share attributable to common stockholders: | ||||
Basic | $ 0.07 | $ 0.02 | $ 0.05 | $ 0.12 |
Diluted | $ 0.06 | $ 0.02 | $ 0.04 | $ 0.11 |
Weighted average shares used in computing net income per share attributable to common stockholders: | ||||
Basic | 5,843 | 5,137 | 5,540 | 5,002 |
Diluted | 26,545 | 24,402 | 25,972 | 24,208 |
(1) Includes stock-based compensation as follows: | ||||
Cost of revenues | $ 68 | $ 44 | $ 195 | $ 96 |
Research and development | 167 | 118 | 484 | 340 |
Sales and marketing | 349 | 163 | 856 | 397 |
General and administrative | 443 | 225 | 1,048 | 679 |
Total stock-based compensation | $ 1,027 | $ 550 | $ 2,583 | $ 1,512 |
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Condensed Consolidated Statements of Comprehensive Income (Loss) | ||||
(Unaudited) | ||||
(in thousands) | ||||
Three Months Ended | Nine Months Ended | |||
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2012 | 2011 | 2012 | 2011 | |
Net income | $ 1,667 | $ 452 | $ 1,105 | $ 2,605 |
Foreign currency translation gain (loss), net of zero tax | 41 | (106) | (17) | (138) |
Other comprehensive income (loss), net | 41 | (106) | (17) | (138) |
Comprehensive income | $ 1,708 | $ 346 | $ 1,088 | $ 2,467 |
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||
Condensed Consolidated Balance Sheets | ||
(Unaudited) | ||
(in thousands) | ||
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|
2012 | 2011 | |
(restated) | ||
Assets | ||
Current assets: | ||
Cash | $ 25,804 | $ 24,548 |
Accounts receivable | 23,452 | 20,750 |
Prepaid expenses and other current assets | 6,502 | 3,774 |
Total current assets | 55,758 | 49,072 |
Restricted cash | 112 | 112 |
Property and equipment, net | 16,896 | 13,861 |
Intangible assets, net | 2,869 | 3,175 |
Goodwill | 317 | 317 |
Other noncurrent assets | 1,884 | 2,252 |
Total assets | $ 77,836 | $ 68,789 |
Liabilities, Convertible Preferred Stock and Stockholders' Equity (Deficit) | ||
Current liabilities : | ||
Accounts payable | $ 1,715 | $ 2,254 |
Accrued liabilities | 9,085 | 8,468 |
Deferred revenues, current | 51,693 | 46,717 |
Capital lease obligations, current | 1,556 | 1,987 |
Total current liabilities | 64,049 | 59,426 |
Deferred revenues, noncurrent | 6,152 | 4,713 |
Income taxes payable, noncurrent | 504 | 661 |
Other noncurrent liabilities | 1,189 | 2,134 |
Capital lease obligations, noncurrent | 1,074 | 2,406 |
Total liabilities | 72,968 | 69,340 |
Commitments and contingencies | ||
Convertible preferred stock | 63,873 | 63,873 |
Stockholders' equity (deficit): | ||
Common stock | 6 | 5 |
Additional paid-in capital | 17,257 | 12,927 |
Accumulated other comprehensive loss | (1,001) | (984) |
Accumulated deficit | (75,267) | (76,372) |
Total stockholders' equity (deficit) | (59,005) | (64,424) |
Total liabilities, convertible preferred stock and stockholders' equity (deficit) | $ 77,836 | $ 68,789 |
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Condensed Consolidated Statements of Cash Flows | ||
(Unaudited) | ||
(in thousands) | ||
Nine Months Ended | ||
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2012 | 2011 | |
Cash flows from operating activities: | ||
Net income | $ 1,105 | $ 2,605 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization expense | 5,397 | 3,781 |
Bad debt expense | 182 | 171 |
Loss on disposal of property and equipment | 3 | -- |
Stock-based compensation | 2,583 | 1,512 |
Non-cash interest expense | 24 | 27 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (2,884) | (1,973) |
Prepaid expenses and other assets | 146 | (1,283) |
Accounts payable | (542) | 676 |
Accrued liabilities | (1,509) | 752 |
Deferred revenues | 6,415 | 4,724 |
Income taxes payable | (189) | 311 |
Other noncurrent liabilities | (62) | (16) |
Net cash provided by operating activities | 10,669 | 11,287 |
Cash flows from investing activities: | ||
Purchases of property and equipment, net | (8,104) | (4,250) |
Net cash used in investing activities | (8,104) | (4,250) |
Cash flows from financing activities: | ||
Principal payments under capital lease obligations | (1,763) | (1,153) |
Payment of consideration related to acquisition | (1,000) | -- |
Proceeds from exercise of stock options | 1,998 | 971 |
Payments for offering costs in connection with initial public offering | (560) | -- |
Proceeds from issuance of Series C Preferred Stock | -- | 128 |
Net cash used in financing activities | (1,325) | (54) |
Effect of exchange rate changes on cash | 16 | (128) |
Net increase in cash | 1,256 | 6,855 |
Cash at beginning of period | 24,548 | 15,010 |
Cash at end of period | $ 25,804 | $ 21,865 |
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Reconciliation of Non-GAAP Disclosures | ||
Four-Quarter Bookings | ||
(Unaudited) | ||
(in thousands) | ||
Four Quarters Ended | ||
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||
2012 | 2011 | |
Revenues | $ 87,416 | $ 72,816 |
Deferred revenues, current | ||
Beginning of Four-Quarter Period | 40,413 | 34,370 |
Ending | 51,693 | 40,413 |
Net change | 11,280 | 6,043 |
Four-Quarter Bookings | $ 98,696 | $ 78,859 |
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Reconciliation of Non-GAAP Disclosures | ||||
EBITDA and Adjusted EBITDA | ||||
(Unaudited) | ||||
(in thousands) | ||||
Three Months Ended | Nine Months Ended | |||
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2012 | 2011 | 2012 | 2011 | |
Net income | $ 1,667 | $ 452 | $ 1,105 | $ 2,605 |
Depreciation and amortization of property and equipment | 1,739 | 1,121 | 5,066 | 3,466 |
Amortization of intangible assets | 112 | 101 | 331 | 315 |
Interest expense, net | 37 | 43 | 151 | 154 |
Provision for income taxes | 77 | 81 | 77 | 291 |
EBITDA | $ 3,632 | $ 1,798 | $ 6,730 | $ 6,831 |
Stock-based compensation | 1,027 | 550 | 2,583 | 1,512 |
Other (income) expense, net | (60) | 418 | 44 | (101) |
Adjusted EBITDA | $ 4,599 | $ 2,766 | $ 9,357 | $ 8,242 |
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Reconciliation of Non-GAAP Disclosures | ||||
(Unaudited) | ||||
(in thousands, except per share data) | ||||
Three Months Ended | Nine Months Ended | |||
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2012 | 2011 | 2012 | 2011 | |
GAAP gross profit | $18,748 | $16,150 | $53,340 | $46,436 |
Plus: | ||||
Stock-based compensation expense | 68 | 44 | 195 | 96 |
Non-GAAP gross profit | $ 18,816 | $ 16,194 | $ 53,535 | $ 46,532 |
GAAP income from operations | $ 1,721 | $ 994 | $ 1,377 | $ 2,949 |
Plus: | ||||
Stock-based compensation expense | 1,027 | 550 | 2,583 | 1,512 |
Non-GAAP income from operations | $ 2,748 | $ 1,544 | $ 3,960 | $ 4,461 |
GAAP net income | $ 1,667 | $ 452 | $ 1,105 | $ 2,605 |
Plus: | ||||
Stock-based compensation expense | 1,027 | 550 | 2,583 | 1,512 |
Non-GAAP net income | $ 2,694 | $ 1,002 | $ 3,688 | $ 4,117 |
Non-GAAP net income attributable to common stockholders | $ 671 | $ 226 | $ 881 | $ 910 |
Non-GAAP net income per share attributable to common stockholders: | ||||
Basic | $ 0.11 | $ 0.04 | $ 0.16 | $ 0.18 |
Diluted | $ 0.10 | $ 0.04 | $ 0.14 | $ 0.17 |
Weighted average shares used in computing net income per share attributable to common stockholders: | ||||
Basic | 5,843 | 5,137 | 5,540 | 5,002 |
Diluted | 26,545 | 24,402 | 25,972 | 24,208 |
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Net Income (Loss) Per Share Attributable to Common Stockholders | ||||
(Unaudited) | ||||
(in thousands, except per share data) | ||||
Three Months Ended | Nine Months Ended | |||
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2012 | 2011 | 2012 | 2011 | |
Numerator: | ||||
Net income | $ 1,667 | $ 452 | $ 1,105 | $ 2,605 |
Net income attributable to participating securities | (1,252) | (350) | (841) | (2,029) |
Net income attributable to common stockholders - basic | 415 | 102 | 264 | 576 |
Undistributed earnings reallocated to participating securities | 1,249 | 349 | 839 | 2,026 |
Net income attributable to common stockholders - diluted | $ 1,664 | $ 451 | $ 1,103 | $ 2,602 |
Denominator: | ||||
Weighted average shares used in computing net income per share attributable to common stockholders - basic | 5,843 | 5,137 | 5,540 | 5,002 |
Effect of potentially dilutive securities: | ||||
Convertible preferred stock | 17,597 | 17,597 | 17,597 | 17,588 |
Common stock options | 3,105 | 1,656 | 2,829 | 1,604 |
Warrants | -- | -- | -- | 2 |
Contingently issuable shares related to an acquisition | -- | 12 | 6 | 12 |
Weighted average shares used in computing net income per share attributable to common stockholders - diluted | 26,545 | 24,402 | 25,972 | 24,208 |
Net income per share attributable to common stockholders: | ||||
Basic | $ 0.07 | $ 0.02 | $ 0.05 | $ 0.12 |
Diluted | $ 0.06 | $ 0.02 | $ 0.04 | $ 0.11 |
CONTACT:Source:Don McCauley Chief Financial OfficerQualys, Inc. +1 (650) 801-6181 dmccauley@qualys.comJohn Christiansen /Stacy Roughan Sard Verbinnen & Co +1 (415) 618-8750/+1 (310) 201-2040 jchristiansen@sardverb.com/sroughan@sardverb.com
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