Third Quarter 2015 Financial Highlights
Revenues: Revenues for the third quarter of 2015 increased by 24% to
Deferred Revenues: Current deferred revenues increased by 24% to
Gross Profit: GAAP gross profit for the third quarter of 2015 increased by 25% to
Operating Income: GAAP operating income for the third quarter of 2015 was
Net Income: GAAP net income for the third quarter of 2015 was
Adjusted EBITDA: Adjusted EBITDA (a non-GAAP financial measure) for the third quarter of 2015 increased by 67% to
Cash Flows: The Company generated
Third Quarter 2015 Business Highlights
Customers:
- New customers included: BBVA Spain, Criteo, EiQ Networks, IMS Health,
JW Associates , Markit,Post Office LTD , Quintiles, Santander UK, Spectrum Health Companies,State Farm Insurance ,Texas Department of Transportation , T-Mobile, Tropicana Entertainment, Whitbread PLC and Windstream Hosted Solutions.
New Services:
- Launched AssetView, a global asset inventory free service providing customers with visibility and actionable data across millions of IT assets in seconds. AssetView enables companies to search for information on any IT asset where a Qualys Cloud Agent is deployed, scaling to millions of assets for organizations of all sizes, helping IT and security personnel to search IT assets in seconds and maintain an up-to-date inventory on a continuous basis.
- Released new Qualys Add-on for Splunk Enterprise and Splunk Enterprise Security providing customers with real-time security analytics on
Qualys data for breach detection and incident response. - Released new Qualys App for ServiceNow Configuration Management Database (CMDB) to provide ServiceNow's CMDB real-time updates for assets and related attributes discovered by
Qualys . - Released Qualys Policy Compliance Questionnaire Service enabling customers to assess business processes and vendor risk against standards and mandates such as PCI-DSS, HIPAA, COBIT and ISO 27001/2.
Financial Performance Outlook
Fourth Quarter 2015 Guidance: Management expects revenues to be in the range of
Full Year 2015 Guidance: Management now expects revenues to be in the range of
Management has increased its expectations for both GAAP and non-GAAP EPS full year estimates. GAAP net income per diluted share is now expected 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 growth of our business, including renewals, adoption of our existing solutions and our new offerings to both existing and new customers; our ability to effectively manage our costs; trends related to the diversification of our revenue base; the expansion of our partnerships and the related benefits of such partnerships; the threat environment in which we operate and any changes thereto; 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 fourth quarter and full year 2015, and our expectations for the number of weighted average diluted shares outstanding and effective income tax rate for the fourth quarter and full year 2015. 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; real or perceived defects, errors or vulnerabilities in our products or services; our ability to retain existing customers and generate new customers; the budgeting cycles,
seasonal buying patterns and length of our sales cycle; our ability to manage costs as we increase our customer base and the number of our platform solutions; 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 and 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 for 2015 include tax adjustments 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 is 36% 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 | Nine Months Ended | |||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||
Revenues | $ | 42,469 | $ | 34,348 | $ | 119,839 | $ | 97,006 | ||||||||||
Cost of revenues (1) | 8,762 | 7,421 | 24,883 | 21,442 | ||||||||||||||
Gross profit | 33,707 | 26,927 | 94,956 | 75,564 | ||||||||||||||
Operating expenses: | ||||||||||||||||||
Research and development (1) | 7,564 | 6,490 | 21,919 | 19,305 | ||||||||||||||
Sales and marketing (1) | 12,282 | 11,774 | 36,501 | 36,111 | ||||||||||||||
General and administrative (1) | 6,983 | 5,156 | 19,426 | 15,112 | ||||||||||||||
Total operating expenses | 26,829 | 23,420 | 77,846 | 70,528 | ||||||||||||||
Income from operations | 6,878 | 3,507 | 17,110 | 5,036 | ||||||||||||||
Other income (expense), net: | ||||||||||||||||||
Interest expense | -- | (2 | ) | (4 | ) | (9 | ) | |||||||||||
Interest income | 153 | 127 | 386 | 365 | ||||||||||||||
Other income (expense), net | (307 | ) | (244 | ) | (485 | ) | (422 | ) | ||||||||||
Total other income (expense), net | (154 | ) | (119 | ) | (103 | ) | (66 | ) | ||||||||||
Income before income taxes | 6,724 | 3,388 | 17,007 | 4,970 | ||||||||||||||
Provision for income taxes | 2,601 | 283 | 6,566 | 639 | ||||||||||||||
Net income | $ | 4,123 | $ | 3,105 | $ | 10,441 | $ | 4,331 | ||||||||||
Net income per share: | ||||||||||||||||||
Basic | $ | 0.12 | $ | 0.09 | $ | 0.31 | $ | 0.13 | ||||||||||
Diluted | $ | 0.11 | $ | 0.08 | $ | 0.27 | $ | 0.12 | ||||||||||
Weighted average shares used in computing net income per share: | ||||||||||||||||||
Basic | 34,119 | 33,120 | 33,967 | 32,820 | ||||||||||||||
Diluted | 37,938 | 37,080 | 38,202 | 37,006 | ||||||||||||||
(1) Includes stock-based compensation as follows: | ||||||||||||||||||
Cost of revenues | $ | 333 | $ | 175 | $ | 1,005 | $ | 482 | ||||||||||
Research and development | 1,294 | 599 | 3,584 | 1,551 | ||||||||||||||
Sales and marketing | 1,015 | 561 | 2,806 | 1,852 | ||||||||||||||
General and administrative | 1,779 | 1,159 | 5,283 | 3,215 | ||||||||||||||
Total stock-based compensation | $ | 4,421 | $ | 2,494 | $ | 12,678 | $ | 7,100 | ||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||||||||||||||
(Unaudited) | |||||||||||||||||
(in thousands) | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
Net income | $ | 4,123 | $ | 3,105 | $ | 10,441 | $ | 4,331 | |||||||||
Available-for-sale investments: | |||||||||||||||||
Change in net unrealized gain (loss) on investments, net of tax | 15 | (44 | ) | 25 | (11 | ) | |||||||||||
Less: reclassification adjustment for net realized gain (loss) included in net income | (5 | ) | (27 | ) | 2 | (28 | ) | ||||||||||
Net change, net of tax | 10 | (71 | ) | 27 | (39 | ) | |||||||||||
Other comprehensive income (loss), net | 10 | (71 | ) | 27 | (39 | ) | |||||||||||
Comprehensive income | $ | 4,133 | $ | 3,034 | $ | 10,468 | $ | 4,292 | |||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||
(Unaudited) | ||||||||||
(in thousands) | ||||||||||
Assets | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 94,763 | $ | 76,504 | ||||||
Short-term investments | 79,382 | 50,714 | ||||||||
Accounts receivable, net | 37,876 | 32,993 | ||||||||
Deferred tax assets, current | 4,353 | 8,520 | ||||||||
Prepaid expenses and other current assets | 8,947 | 6,528 | ||||||||
Total current assets | 225,321 | 175,259 | ||||||||
Long-term investments | 25,732 | 39,448 | ||||||||
Property and equipment, net | 29,965 | 26,618 | ||||||||
Deferred tax assets, net | 13,180 | 14,119 | ||||||||
Intangible assets, net | 1,708 | 2,001 | ||||||||
317 | 317 | |||||||||
Other noncurrent assets | 2,065 | 2,262 | ||||||||
Total assets | $ | 298,288 | $ | 260,024 | ||||||
Liabilities and Stockholders' Equity | ||||||||||
Current liabilities: | ||||||||||
Accounts payable | $ | 2,055 | $ | 5,661 | ||||||
Accrued liabilities | 11,358 | 10,353 | ||||||||
Deferred revenues, current | 91,939 | 81,147 | ||||||||
Total current liabilities | 105,352 | 97,161 | ||||||||
Deferred revenues, noncurrent | 9,884 | 10,064 | ||||||||
Other noncurrent liabilities | 1,154 | 972 | ||||||||
Total liabilities | 116,390 | 108,197 | ||||||||
Stockholders' equity: | ||||||||||
Common stock | 34 | 34 | ||||||||
Additional paid-in capital | 214,736 | 195,133 | ||||||||
Accumulated other comprehensive income | 37 | 10 | ||||||||
Accumulated deficit | (32,909 | ) | (43,350 | ) | ||||||
Total stockholders' equity | 181,898 | 151,827 | ||||||||
Total liabilities and stockholders' equity | $ | 298,288 | $ | 260,024 | ||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||
(Unaudited) | ||||||||||||
(in thousands) | ||||||||||||
Nine Months Ended | ||||||||||||
2015 | 2014 | |||||||||||
Cash flows from operating activities: | ||||||||||||
Net income | $ | 10,441 | $ | 4,331 | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization expense | 10,424 | 8,826 | ||||||||||
Bad debt expense | 629 | 346 | ||||||||||
Loss on disposal of property and equipment | 9 | 1 | ||||||||||
Stock-based compensation | 12,678 | 7,100 | ||||||||||
Amortization of premiums and accretion of discounts on investments | 429 | 427 | ||||||||||
Excess tax benefits from stock-based compensation | (315 | ) | (131 | ) | ||||||||
Deferred income taxes | 5,105 | (47 | ) | |||||||||
Changes in operating assets and liabilities: | ||||||||||||
Accounts receivable | (5,512 | ) | (2,042 | ) | ||||||||
Prepaid expenses and other assets | (2,143 | ) | (1,177 | ) | ||||||||
Accounts payable | (3,606 | ) | (32 | ) | ||||||||
Accrued liabilities | 2,735 | 236 | ||||||||||
Deferred revenues | 10,612 | 6,907 | ||||||||||
Other noncurrent liabilities | 182 | 117 | ||||||||||
Net cash provided by operating activities | 41,668 | 24,862 | ||||||||||
Cash flows from investing activities: | ||||||||||||
Purchases of investments | (88,694 | ) | (117,279 | ) | ||||||||
Sales and maturities of investments | 73,340 | 144,218 | ||||||||||
Purchases of property and equipment | (14,865 | ) | (10,196 | ) | ||||||||
Capitalized software development costs | (99 | ) | -- | |||||||||
Net cash provided by (used in) investing activities | (30,318 | ) | 16,743 | |||||||||
Cash flows from financing activities: | ||||||||||||
Proceeds from exercise of stock options | 6,594 | 5,012 | ||||||||||
Excess tax benefits from stock-based compensation | 315 | 131 | ||||||||||
Principal payments under capital lease obligations | -- | (805 | ) | |||||||||
Net cash provided by financing activities | 6,909 | 4,338 | ||||||||||
Effect of exchange rate changes on cash and cash equivalents | -- | (27 | ) | |||||||||
Net increase in cash and cash equivalents | 18,259 | 45,916 | ||||||||||
Cash and cash equivalents at beginning of period | 76,504 | 42,369 | ||||||||||
Cash and cash equivalents at end of period | $ | 94,763 | $ | 88,285 | ||||||||
Non-cash investing and financing activities: | ||||||||||||
Vesting of early exercised common stock options | $ | 16 | $ | 41 | ||||||||
RECONCILIATION OF NON-GAAP DISCLOSURES | |||||||||||||
EBITDA AND ADJUSTED EBITDA | |||||||||||||
(Unaudited) | |||||||||||||
(in thousands) | |||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||
Net income | $ | 4,123 | $ | 3,105 | $ | 10,441 | $ | 4,331 | |||||
Depreciation and amortization of property and equipment | 3,741 | 2,946 | 10,131 | 8,532 | |||||||||
Amortization of intangible assets | 97 | 98 | 293 | 294 | |||||||||
Interest expense | -- | 2 | 4 | 9 | |||||||||
Provision for income taxes | 2,601 | 283 | 6,566 | 639 | |||||||||
EBITDA | 10,562 | 6,434 | 27,435 | 13,805 | |||||||||
Stock-based compensation | 4,421 | 2,494 | 12,678 | 7,100 | |||||||||
Other (income) expense, net | 154 | 117 | 99 | 57 | |||||||||
Adjusted EBITDA | $ | 15,137 | $ | 9,045 | $ | 40,212 | $ | 20,962 | |||||
RECONCILIATION OF NON-GAAP DISCLOSURES | |||||||||||||||
(Unaudited) | |||||||||||||||
(in thousands, except per share data) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
GAAP gross profit | $ | 33,707 | $ | 26,927 | $ | 94,956 | $ | 75,564 | |||||||
Plus: Stock-based compensation | 333 | 175 | 1,005 | 482 | |||||||||||
Non-GAAP gross profit | $ | 34,040 | $ | 27,102 | $ | 95,961 | $ | 76,046 | |||||||
GAAP income from operations | $ | 6,878 | $ | 3,507 | $ | 17,110 | $ | 5,036 | |||||||
Plus: Stock-based compensation | 4,421 | 2,494 | 12,678 | 7,100 | |||||||||||
Non-GAAP income from operations | $ | 11,299 | $ | 6,001 | $ | 29,788 | $ | 12,136 | |||||||
GAAP net income | $ | 4,123 | $ | 3,105 | $ | 10,441 | $ | 4,331 | |||||||
Plus: Stock-based compensation | 4,421 | 2,494 | 12,678 | 7,100 | |||||||||||
Less: Tax adjustment | (1,455 | ) | -- | (4,239 | ) | -- | |||||||||
Non-GAAP net income | $ | 7,089 | $ | 5,599 | $ | 18,880 | $ | 11,431 | |||||||
Non-GAAP net income per share: | |||||||||||||||
Basic | $ | 0.21 | $ | 0.17 | $ | 0.56 | $ | 0.35 | |||||||
Diluted | $ | 0.19 | $ | 0.15 | $ | 0.49 | $ | 0.31 | |||||||
Weighted average shares used in computing non-GAAP net income per share: | |||||||||||||||
Basic | 34,119 | 33,120 | 33,967 | 32,820 | |||||||||||
Diluted | 37,938 | 37,080 | 38,202 | 37,006 | |||||||||||
RECONCILIATON OF NON-GAAP DISCLOSURES | |||||||||
FREE CASH FLOWS | |||||||||
(Unaudited) | |||||||||
(in thousands) | |||||||||
Nine Months Ended | |||||||||
2015 | 2014 | ||||||||
GAAP cash flows provided by operating activities | $ | 41,668 | $ | 24,862 | |||||
Less: | |||||||||
Purchases of property and equipment | (14,865 | ) | (10,196 | ) | |||||
Capitalized software development costs | (99 | ) | -- | ||||||
Non-GAAP free cash flows | $ | 26,704 | $ | 14,666 | |||||
Investors Contact:
Chief Financial Officer
+1 (650) 801-6181
Email Contact
Media Contact:
Sard Verbinnen & Co
+1 (415) 618-8750
Email Contact / Email Contact
Source:
News Provided by Acquire Media