REDWOOD CITY, CA — (Marketwired) — 08/03/15 — Qualys, Inc. (NASDAQ: QLYS), a pioneer and leading provider of cloud security and compliance solutions, today announced financial results for the second quarter ended June 30, 2015. For the quarter, the Company reported record revenues of $39.9 million, GAAP net income of $3.3 million, non-GAAP net income of $6.2 million, adjusted EBITDA of $13.1 million, GAAP earnings per diluted share of $0.09 and non-GAAP earnings per diluted share of $0.16.
Philippe Courtot, Chairman, President and Chief Executive Officer of Qualys, said, “We had an excellent second quarter and delivered on all aspects of our business, including the launch of our groundbreaking Cloud Agent Platform for continuous asset inventory, security and compliance. This new offering represents a tremendous opportunity for Qualys, as it allows us to expand our footprint within the enterprise and deliver a state-of-the-art solution to secure IT assets on premise, in elastic cloud environments or on mobile endpoints. In addition, we continue to see strong demand for all of our services, including Vulnerability Management, Policy Compliance and Web Application Scanning, due to the increased threat landscape. Our customers are benefitting from the scalability and extensibility of our cloud platform, as well as from our consistent delivery of innovative technology that extends the value of the platform and enhances our customers– security.”
Revenues for the second quarter of 2015 increased by 23% to $39.9 million compared to $32.3 million for the same quarter in 2014. Revenue growth was driven by a combination of sales of subscriptions to new customers, as well as subscription renewals and upsells of additional subscriptions to existing customers.
Current deferred revenues increased by 22% to $87.4 million at June 30, 2015 compared to $71.9 million at June 30, 2014. Total deferred revenues increased by 20% to $97.1 million at June 30, 2015 compared to $80.6 million at June 30, 2014.
GAAP gross profit for the second quarter of 2015 increased by 26% to $31.7 million compared to $25.1 million for the same quarter in 2014. GAAP gross margin percentage was 79% for the second quarter of 2015 compared to 78% in the prior year–s second quarter. Non-GAAP gross profit increased by 27% to $32.1 million compared to $25.3 million in the same quarter in 2014. Non-GAAP gross margin percentage was 80% for the second quarter of 2015 compared to 78% in the same quarter in 2014.
GAAP operating income for the second quarter of 2015 was $5.3 million compared to $1.8 million in the same quarter in 2014. Non-GAAP operating income for the second quarter of 2015 was $9.7 million compared to $4.3 million in the same quarter in 2014.
GAAP net income for the second quarter of 2015 was $3.3 million, or $0.09 per diluted share, compared to $1.7 million, or $0.04 per diluted share, for the same quarter in 2014. Non-GAAP net income for the second quarter of 2015 was $6.2 million, or $0.16 per diluted share, compared to non-GAAP net income of $4.1 million, or $0.11 per diluted share, for the same quarter in 2014.
Adjusted EBITDA (a non-GAAP financial measure) for the second quarter of 2015 increased by 81% to $13.1 million compared to $7.2 million for the same quarter in 2014. As a percentage of revenues, adjusted EBITDA increased to 33% for the second quarter of 2015 compared to 22% for the same quarter in 2014.
The Company generated $25.6 million in net cash from operations in the first six months of 2015 compared to $15.2 million in the same period last year. The Company generated $15.0 million in free cash flow (a non-GAAP financial measure) in the first six months of 2015 compared to $8.7 million in the first six months of 2014. Qualys defines free cash flows as cash provided by operating activities less purchases of property and equipment and capitalized software development costs.
New customers included: AbbVie, Advanced Micro Devices, British American Tobacco, EADS Cassidian CyberSecurity, Holland America Line, LifePoint Hospitals, The National Football League, Prudential Financial, Reed Elsevier Technology Services, Saudi Telecom Company, Thomas Cook Group, Tractor Supply Company and VeriFone Systems.
Launched Qualys Cloud Agent Platform (CAP), which provides customers with the ability to secure IT assets on a continuous basis regardless of where they reside — inside the enterprise, in the cloud or mobile endpoints. This new offering, which has seen significant interest from customers, allows Qualys to expand both its Vulnerability Management and Policy Compliance offerings, making them more real-time and continuous. Further, it enables Qualys to expand the platform to deliver new functionalities to customers such as File Integrity Monitoring (FIM) and Indication of Compromise (IOC). CAP is already available for Microsoft platforms and will be available on Mac and Linux in August 2015.
Expanded Continuous Monitoring solution from the perimeter to internal IT assets. Qualys has seen significant customer interest as the combined offering with CAP allows users to generate real-time alerts for all critical threats on a continuous basis. This expansion presents major benefits to customers by allowing for even quicker responses to threats before they turn into breaches.
Released Qualys SCAP Auditor 1.2 to help federal agencies automate vulnerability management and policy compliance processes to demonstrate compliance with FISMA and USGCB regulations.
Expanded Qualys Scanner Virtual Images to support elastic cloud environments for Amazon EC2, Microsoft Azure and Google Compute Engine. This allows customers to natively scan cloud environments and track their security and compliance posture through the Qualys Cloud Platform.
Signed agreement with AT&T Managed Security Services (MSS) to deliver Qualys security and compliance solutions integrated with ATT MSS offerings.
Expanded MSS partnership with Solutionary, an NTT Group Security Company, to integrate and deliver Qualys security and compliance offerings through their MSS practice.
Completed integration with ForeScout, helping organizations deliver real-time assessment and mitigation against cyber threats.
Received the Industry Leadership Award from the Cloud Security Alliance (CSA) for continued industry innovations and support as a Founding Member of the Cloud Security Alliance.
Won Best Regulatory Compliance solution for SC Awards US 2015 and Best Vulnerability Management solution in the 3rd Annual 2015 Cyber Defense Magazine Awards.
Third Quarter 2015 Guidance: Management expects revenues to be in the range of $42.0 million to $42.5 million. At the midpoint, this represents 23% growth over third quarter 2014 revenues. GAAP net income per diluted share is expected to be in the range of $0.04 to $0.06, which assumes an effective income tax rate of 38%, and non-GAAP net income per diluted share is expected to be in the range of $0.12 to $0.14, which assumes an effective non-GAAP income tax rate of 36%. Third quarter 2015 EPS estimates are based on approximately 38.9 million weighted average diluted shares outstanding for the quarter.
Full Year 2015 Guidance: Full year 2015 guidance remains unchanged with management expecting revenues to be in the range of $165.0 million to $166.5 million. At the midpoint, this represents 24% growth over 2014 revenues. Management reiterates its expectations for both GAAP and non-GAAP EPS estimates. GAAP net income per diluted share is expected to be in the range of $0.22 to $0.27, which assumes an effective income tax rate of 38%, and non-GAAP net income per diluted share is expected to be in the range of $0.50 to $0.55, which assumes an effective non-GAAP income tax rate of 36%. Full year 2015 EPS estimates are based on approximately 38.6 million weighted average diluted shares outstanding for the full year.
Qualys will host a conference call and live webcast to discuss its second quarter 2015 financial results today at 1:30 p.m. PDT (4:30 p.m. EDT). To access the conference call, dial (877) 881-2609 in the U.S. or +1 (970) 315-0463 for international participants with conference ID #73426314. The live webcast of Qualys– earnings conference call can also be accessed at investor.qualys.com. A replay of the conference call will be available through the same webcast link following the end of the call.
Qualys, Inc. (NASDAQ: QLYS) is a pioneer and leading provider of cloud security and compliance solutions with over 7,700 customers in more than 100 countries, including a majority of each of the Forbes Global 100 and Fortune 100. The Qualys Cloud Platform and integrated suite of solutions help organizations simplify security operations and lower the cost of compliance by delivering critical security intelligence on demand and automating the full spectrum of auditing, compliance and protection for IT systems and web applications. Founded in 1999, Qualys has established strategic partnerships with leading managed service providers and consulting organizations including Accenture, BT, Cognizant Technology Solutions, Dell SecureWorks, Fujitsu, HCL Comnet, Infosys, Optiv, NTT, Tata Communications, Verizon and Wipro. The company is also a founding member of the Cloud Security Alliance (CSA) For more information, please visit .
Qualys and the Qualys logo are proprietary trademarks of Qualys, Inc. All other products or names may be trademarks of their respective companies.
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 third quarter and full year 2015, and our expectations for the number of weighted average diluted shares outstanding and effective income tax rate for the third 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 the United States as well as globally. 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 Securities and Exchange Commission, including our Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, filed with the Securities and Exchange Commission on May 7, 2015. The forward-looking statements in this press release are based on information available to Qualys as of the date hereof, and Qualys disclaims any obligation to update any forward-looking statements, except as required by law.
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Qualys monitors non-GAAP measures of non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income, non-GAAP net income, non-GAAP net income per diluted share and adjusted EBITDA and free cash flow.
Qualys also monitors operating measures including non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income, non-GAAP net income, non-GAAP net income per diluted share and adjusted EBITDA to evaluate its ongoing operational performance and enhance an overall understanding of its past financial performance. Qualys believes that these non-GAAP operating metrics help illustrate underlying trends in its business that could otherwise be masked by the effect of the income or expenses, as well as the related tax effects, that are excluded in non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income, non-GAAP net income, non-GAAP net income per diluted share and adjusted EBITDA. Furthermore, Qualys uses these operating measures to establish budgets and operational goals for managing its business and evaluating its performance. Qualys monitors free cash flow as a liquidity measure to provide useful information to management and investors about the amount of cash generated by the Company that, after the acquisition of property and equipment and capitalized software development costs, can be used for strategic opportunities, including investing in our business, making strategic acquisitions and strengthening the balance sheet. Qualys also believes that non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income, non-GAAP net income, non-GAAP net income per diluted share, adjusted EBITDA and free cash flow provide additional tools for investors to use in comparing its recurring core business operating results over multiple periods with other companies in its industry.
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.
Don McCauley
Chief Financial Officer
Qualys, Inc.
+1 (650) 801-6181
John Christiansen/David Isaacs
Sard Verbinnen & Co
+1 (415) 618-8750
/
You must be logged in to post a comment Login