"We are pleased to report another solid quarter as we continue to execute against our strategic plan, drive momentum throughout our business and deliver growth through the expansion of the QualysGuard platform with new capabilities and offerings," said
Third Quarter 2013 Financial Highlights
Revenues: Revenues for the third quarter of 2013 increased by 19% to
Bookings: Four-Quarter Bookings (a non-GAAP financial measure) were
Gross Profit: GAAP gross profit for the third quarter of 2013 increased by 14% to
Operating Income: GAAP operating income for the third quarter of 2013 decreased to
Net Income: GAAP net income for the third quarter of 2013 was
Adjusted EBITDA: Adjusted EBITDA (a non-GAAP financial measure) for the third quarter of 2013 increased by 23% to
Third Quarter 2013 Business Highlights
New Customers:
- New customers included: American International Group (AIG), Barnes & Noble, Clorox, The
City of Glendale CA , Humana, McGraw-Hill,Montana State University , Suncor Energy, VMware, Volkswagen of America,UConn Health Center , and theUniversity of Cincinnati . - Hosted more than 600 customers and partners at the 11th Annual
Qualys Security Conference inLas Vegas , where attendees and industry experts shared best practices and discussed how to protect IT Infrastructures from cyber-attacks and how to manage compliance more effectively.
New Products and Functionalities:
- Showcased key expansions to the QualysGuard Platform at the
Qualys Security Conference , including:- Continuous Security Monitoring for Internet facing systems allowing customers to continuously monitor their mission critical assets and to be alerted to any security vulnerabilities or misconfigurations that may lead to a cyber-attack.
- New
Cloud Agent technology that can be seamlessly installed on mobile devices enabling customers to collect security and compliance postures for mobile assets to drive remediation efforts across highly distributed networks with large populations of mobile users. - Enhanced Malware Analysis and Detection capabilities on extracted documents from inbound traffic using URL and IP address reputation solutions and correlating detection events with the intelligence acquired from QualysGuard vulnerability audits to reduce false positives.
- Released a new version of Qualys BrowserCheck, the Company's popular, free service that helps consumers and businesses keep their browsers and plug-ins up-to-date in an effort to protect against harmful online content and malicious software. The latest version now includes expanded support for Macs and enables users to automatically run daily scans that can detect the status of browsers, plug-ins, system settings, security software, missing patches and applications that could expose them to cyber threats.
- Announced a significant expansion of capabilities for securing web applications with a Web Application Firewall service (WAF), now in beta on Amazon EC2 and as virtual machines for on-premise deployments, which allows organizations to mitigate vulnerabilities automatically before they are remediated.
Qualys is also working on delivering a Cloud Web Application Log Analysis and a Remediation/Exploit console that is expected to be available in beta in the first quarter of 2014.
Industry Recognition:
- Received highest rating of "Strong Positive" in Gartner's MarketScope for Vulnerability Assessment1 for fifth consecutive time.
- QualysGuard Web Application Scanning (WAS) received Gold in SearchSecurity.com 2013 Readers' Choice Award for Application Security.
- IDC ranked
Qualys number 1 for Worldwide Device Vulnerability Assessment Revenue Share for 2012 for the fifth consecutive year.
1 Disclaimer: 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.
Financial Performance Outlook
Fourth Quarter 2013 Guidance: Management expects revenues to be in the range of
Full Year 2013 Guidance: Full year 2013 guidance remains unchanged with management expecting 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: continued revenue growth and overall momentum in our business; the expansion of our platform with new capabilities and offerings; our expectations regarding strategic investments in our business; our expectations regarding the release dates of our new products; our guidance for revenues, GAAP net income per diluted share and non-GAAP net income per diluted share for the fourth quarter and full year of 2013; and our expectations for the number of weighted average diluted shares outstanding for
the fourth quarter and full year of 2013. 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.
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||
| (Unaudited) | ||||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||||
| Revenues | $ | 27,749 | $ | 23,382 | $ | 78,923 | $ | 66,763 | ||||||||||
| Cost of revenues (1) | 6,415 | 4,634 | 18,134 | 13,423 | ||||||||||||||
| Gross profit | 21,334 | 18,748 | 60,789 | 53,340 | ||||||||||||||
| Operating expenses: | ||||||||||||||||||
| Research and development (1) | 5,151 | 5,076 | 15,739 | 15,325 | ||||||||||||||
| Sales and marketing (1) | 10,411 | 8,797 | 30,739 | 27,827 | ||||||||||||||
| General and administrative (1) | 4,277 | 3,154 | 12,226 | 8,811 | ||||||||||||||
| Total operating expenses | 19,839 | 17,027 | 58,704 | 51,963 | ||||||||||||||
| Income from operations | 1,495 | 1,721 | 2,085 | 1,377 | ||||||||||||||
| Other income (expense), net: | ||||||||||||||||||
| Interest expense | (7 | ) | (38 | ) | (37 | ) | (153 | ) | ||||||||||
| Interest income | 115 | 1 | 273 | 2 | ||||||||||||||
| Other income (expense), net | (84 | ) | 60 | (370 | ) | (44 | ) | |||||||||||
| Total other income (expense), net | 24 | 23 | (134 | ) | (195 | ) | ||||||||||||
| Income before provision for income taxes | 1,519 | 1,744 | 1,951 | 1,182 | ||||||||||||||
| Provision for income taxes | 210 | 77 | 372 | 77 | ||||||||||||||
| Net income | $ | 1,309 | $ | 1,667 | $ | 1,579 | $ | 1,105 | ||||||||||
| Net income attributable to common stockholders | $ | 1,307 | $ | 415 | $ | 1,577 | $ | 264 | ||||||||||
| Net income per share attributable to common stockholders: | ||||||||||||||||||
| Basic | $ | 0.04 | $ | 0.07 | $ | 0.05 | $ | 0.05 | ||||||||||
| Diluted | $ | 0.04 | $ | 0.06 | $ | 0.04 | $ | 0.04 | ||||||||||
| Weighted average shares used in computing net income per share attributable to common stockholders: | ||||||||||||||||||
| Basic | 32,088 | 5,843 | 31,789 | 5,540 | ||||||||||||||
| Diluted | 36,247 | 26,545 | 35,704 | 25,972 | ||||||||||||||
| (1) Includes stock-based compensation as follows: | ||||||||||||||||||
| Cost of revenues | $ | 103 | $ | 68 | $ | 307 | $ | 195 | ||||||||||
| Research and development | 253 | 167 | 697 | 484 | ||||||||||||||
| Sales and marketing | 363 | 349 | 804 | 856 | ||||||||||||||
| General and administrative | 902 | 443 | 2,000 | 1,048 | ||||||||||||||
| Total stock-based compensation | $ | 1,621 | $ | 1,027 | $ | 3,808 | $ | 2,583 | ||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||||||||||||||||
| (Unaudited) | ||||||||||||||||||
| (in thousands) | ||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||||
| Net income | $ | 1,309 | $ | 1,667 | $ | 1,579 | $ | 1,105 | ||||||||||
| Change in foreign currency translation gain (loss), net of zero tax | (12 | ) | 41 | (73 | ) | (17 | ) | |||||||||||
| Available-for-sale investments: | ||||||||||||||||||
| Change in net unrealized gain on investments, net of zero tax | 52 | -- | 37 | -- | ||||||||||||||
| Less: reclassification adjustment for net gain included in net income | (1 | ) | -- | (9 | ) | -- | ||||||||||||
| Net change, net of zero tax | 51 | -- | 28 | -- | ||||||||||||||
| Other comprehensive income (loss), net | 39 | 41 | (45 | ) | (17 | ) | ||||||||||||
| Comprehensive income | $ | 1,348 | $ | 1,708 | $ | 1,534 | $ | 1,088 | ||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||
| (Unaudited) | ||||||||||
| (in thousands) | ||||||||||
| Assets | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 42,118 | $ | 34,885 | ||||||
| Short-term investments | 58,748 | 83,547 | ||||||||
| Accounts receivable, net | 25,022 | 24,545 | ||||||||
| Prepaid expenses and other current assets | 5,116 | 4,377 | ||||||||
| Total current assets | 131,004 | 147,354 | ||||||||
| Restricted cash | -- | 114 | ||||||||
| Long-term investments | 24,805 | -- | ||||||||
| Property and equipment, net | 22,493 | 18,148 | ||||||||
| Intangible assets, net | 2,492 | 2,811 | ||||||||
| Goodwill | 317 | 317 | ||||||||
| Other noncurrent assets | 564 | 1,574 | ||||||||
| Total assets | $ | 181,675 | $ | 170,318 | ||||||
| Liabilities and Stockholders' Equity | ||||||||||
| Current Liabilities: | ||||||||||
| Accounts payable | $ | 1,097 | $ | 2,031 | ||||||
| Accrued liabilities | 7,950 | 7,803 | ||||||||
| Deferred revenues, current | 61,389 | 56,497 | ||||||||
| Capital lease obligations, current | 1,071 | 1,183 | ||||||||
| Total current liabilities | 71,507 | 67,514 | ||||||||
| Deferred revenues, noncurrent | 8,456 | 8,616 | ||||||||
| Income taxes payable, noncurrent | 684 | 594 | ||||||||
| Other noncurrent liabilities | 533 | 1,231 | ||||||||
| Capital lease obligations, noncurrent | -- | 808 | ||||||||
| Total liabilities | 81,180 | 78,763 | ||||||||
| Stockholders' equity: | ||||||||||
| Common stock | 32 | 31 | ||||||||
| Additional paid-in capital | 174,056 | 166,651 | ||||||||
| Accumulated other comprehensive loss | (1,080 | ) | (1,035 | ) | ||||||
| Accumulated deficit | (72,513 | ) | (74,092 | ) | ||||||
| Total stockholders' equity | 100,495 | 91,555 | ||||||||
| Total liabilities and stockholders' equity | $ | 181,675 | $ | 170,318 | ||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||
| (Unaudited) | ||||||||||||
| (in thousands) | ||||||||||||
| Nine Months Ended | ||||||||||||
| 2013 | 2012 | |||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net income | $ | 1,579 | $ | 1,105 | ||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
| Depreciation and amortization expense | 7,050 | 5,397 | ||||||||||
| Bad debt expense | 211 | 182 | ||||||||||
| Loss on disposal of property and equipment | 12 | 3 | ||||||||||
| Stock-based compensation | 3,808 | 2,583 | ||||||||||
| Non-cash interest expense | -- | 24 | ||||||||||
| Amortization of premiums on investments | 188 | -- | ||||||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Accounts receivable | (688 | ) | (2,884 | ) | ||||||||
| Prepaid expenses and other assets | 229 | 147 | ||||||||||
| Accounts payable | (939 | ) | (542 | ) | ||||||||
| Accrued liabilities | (608 | ) | (1,529 | ) | ||||||||
| Deferred revenues | 4,732 | 6,415 | ||||||||||
| Other noncurrent liabilities | (383 | ) | (232 | ) | ||||||||
| Net cash provided by operating activities | 15,191 | 10,669 | ||||||||||
| Cash flows from investing activities: | ||||||||||||
| Purchases of investments | (113,689 | ) | -- | |||||||||
| Sales and maturities of investments | 113,524 | -- | ||||||||||
| Purchases of property and equipment | (10,364 | ) | (8,104 | ) | ||||||||
| Release of restricted cash | 114 | -- | ||||||||||
| Net cash used in investing activities | (10,415 | ) | (8,104 | ) | ||||||||
| Cash flows from financing activities: | ||||||||||||
| Proceeds from exercise of stock options | 3,374 | 1,998 | ||||||||||
| Income tax benefits from exercise of stock options | 59 | -- | ||||||||||
| Principal payments under capital lease obligations | (920 | ) | (1,763 | ) | ||||||||
| Payment of consideration related to acquisition | -- | (1,000 | ) | |||||||||
| Payment for offering costs in connection with initial public offering | -- | (560 | ) | |||||||||
| Net cash provided by (used in) financing activities | 2,513 | (1,325 | ) | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | (56 | ) | 16 | |||||||||
| Net increase in cash and cash equivalents | 7,233 | 1,256 | ||||||||||
| Cash and cash equivalents at beginning of period | 34,885 | 24,548 | ||||||||||
| Cash and cash equivalents at end of period | $ | 42,118 | $ | 25,804 | ||||||||
| Non-cash investing and financing activities: | ||||||||||||
| Purchases of property and equipment included in accrued liabilities | $ | 731 | $ | -- | ||||||||
| Vesting of early exercised common stock options | $ | 204 | $ | 86 | ||||||||
| Deferred offering costs not yet paid | $ | -- | $ | 1,973 | ||||||||
| Issuance of common stock for acquisition of license | $ | -- | $ | 51 | ||||||||
| RECONCILIATION OF NON-GAAP DISCLOSURES | ||||||||
| FOUR-QUARTER BOOKINGS | ||||||||
| (Unaudited) | ||||||||
| (in thousands) | ||||||||
| Four Quarters Ended | ||||||||
| 2013 | 2012 | |||||||
| Revenues | $ | 103,580 | $ | 87,416 | ||||
| Deferred revenues, current | ||||||||
| Beginning of the Four-Quarter Period | 51,693 | 40,413 | ||||||
| Ending | 61,389 | 51,693 | ||||||
| Net change | 9,696 | 11,280 | ||||||
| Four-Quarter Bookings | $ | 113,276 | $ | 98,696 | ||||
| RECONCILIATION OF NON-GAAP DISCLOSURES | |||||||||||||||
| EBITDA AND ADJUSTED EBITDA | |||||||||||||||
| (Unaudited) | |||||||||||||||
| (in thousands) | |||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||||
| Net income | $ | 1,309 | $ | 1,667 | $ | 1,579 | $ | 1,105 | |||||||
| Depreciation and amortization of property and equipment | 2,452 | 1,739 | 6,731 | 5,066 | |||||||||||
| Amortization of intangible assets | 105 | 112 | 319 | 331 | |||||||||||
| Interest expense | 7 | 38 | 37 | 153 | |||||||||||
| Provision for income taxes | 210 | 77 | 372 | 77 | |||||||||||
| EBITDA | 4,083 | 3,633 | 9,038 | 6,732 | |||||||||||
| Stock-based compensation | 1,621 | 1,027 | 3,808 | 2,583 | |||||||||||
| Other (income) expense, net | (31 | ) | (61 | ) | 97 | 42 | |||||||||
| Adjusted EBITDA | $ | 5,673 | $ | 4,599 | $ | 12,943 | $ | 9,357 | |||||||
| RECONCILIATION OF NON-GAAP DISCLOSURES | |||||||||||||
| (Unaudited) | |||||||||||||
| (in thousands, except per share data) | |||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||
| GAAP gross profit | $ | 21,334 | $ | 18,748 | $ | 60,789 | $ | 53,340 | |||||
| Plus: | |||||||||||||
| Stock-based compensation | 103 | 68 | 307 | 195 | |||||||||
| Non-GAAP gross profit | $ | 21,437 | $ | 18,816 | $ | 61,096 | $ | 53,535 | |||||
| GAAP income from operations | $ | 1,495 | $ | 1,721 | $ | 2,085 | $ | 1,377 | |||||
| Plus: | |||||||||||||
| Stock-based compensation | 1,621 | 1,027 | 3,808 | 2,583 | |||||||||
| Non-GAAP income from operations | $ | 3,116 | $ | 2,748 | $ | 5,893 | $ | 3,960 | |||||
| GAAP net income | $ | 1,309 | $ | 1,667 | $ | 1,579 | $ | 1,105 | |||||
| Plus: | |||||||||||||
| Stock-based compensation | 1,621 | 1,027 | 3,808 | 2,583 | |||||||||
| Non-GAAP net income | $ | 2,930 | $ | 2,694 | $ | 5,387 | $ | 3,688 | |||||
| Non-GAAP net income attributable to common stockholders | $ | 2,927 | $ | 671 | $ | 5,382 | $ | 881 | |||||
| Non-GAAP net income per share attributable to common stockholders: | |||||||||||||
| Basic | $ | 0.09 | $ | 0.11 | $ | 0.17 | $ | 0.16 | |||||
| Diluted | $ | 0.08 | $ | 0.10 | $ | 0.15 | $ | 0.14 | |||||
| Weighted average shares used in computing non-GAAP net income per share attributable to common stockholders | |||||||||||||
| Basic | 32,088 | 5,843 | 31,789 | 5,540 | |||||||||
| Diluted | 36,247 | 26,545 | 35,704 | 25,972 | |||||||||
| NET INCOME PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS | ||||||||||||||||||
| (Unaudited) | ||||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||||
| Numerator: | ||||||||||||||||||
| Net income | $ | 1,309 | $ | 1,667 | $ | 1,579 | $ | 1,105 | ||||||||||
| Net income attributable to participating securities | (2 | ) | (1,252 | ) | (2 | ) | (841 | ) | ||||||||||
| Net income attributable to common stockholders - basic | 1,307 | 415 | 1,577 | 264 | ||||||||||||||
| Undistributed earnings reallocated to participating securities | 1 | 1,249 | -- | 839 | ||||||||||||||
| Net income attributable to common stockholders - diluted | $ | 1,308 | $ | 1,664 | $ | 1,577 | $ | 1,103 | ||||||||||
| Denominator: | ||||||||||||||||||
| Weighted-average shares used in computing net income per share attributable to common stockholders - basic | 32,088 | 5,843 | 31,789 | 5,540 | ||||||||||||||
| Effect of potentially dilutive securities: | ||||||||||||||||||
| Convertible preferred stock | -- | 17,597 | -- | 17,597 | ||||||||||||||
| Common stock options | 4,159 | 3,105 | 3,915 | 2,829 | ||||||||||||||
| Contingently issuable shares related to an acquisition | -- | -- | -- | 6 | ||||||||||||||
| Weighted-average shares used in computing net income per share attributable to common stockholders - diluted | 36,247 | 26,545 | 35,704 | 25,972 | ||||||||||||||
| Net income per share attributable to common stockholders | ||||||||||||||||||
| Basic | $ | 0.04 | $ | 0.07 | $ | 0.05 | $ | 0.05 | ||||||||||
| Diluted | $ | 0.04 | $ | 0.06 | $ | 0.04 | $ | 0.04 | ||||||||||
Source:
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