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PRNewswire 12-Feb-2019 4:15 PM
FOSTER CITY, Calif., Feb. 12, 2019 /PRNewswire/ -- Qualys, Inc. (NASDAQ: QLYS), a pioneer and leading provider of cloud-based security and compliance solutions, today announced financial results for the fourth quarter and full year ended December 31, 2018. For the quarter, the Company reported revenues of $74.2 million, net income under United States Generally Accepted Accounting Principles ("U.S. GAAP") of $14.4 million, non-GAAP net income of $21.3 million, Adjusted EBITDA of $29.1 million, GAAP earnings per diluted share of $0.35, and non-GAAP earnings per diluted share of $0.51. For the full year ended December 31, 2018, the Company reported revenues of $278.9 million, GAAP net income of $57.3 million, non-GAAP net income of $73.4 million, Adjusted EBITDA of $112.4 million, GAAP earnings per diluted share of $1.37 and non-GAAP earnings per diluted share of $1.75.
"We achieved a solid fourth quarter, ending a strong year during which we grew revenues by 21%, produced record margins, saw new solutions contribute 20% of bookings and benefited from increased multi-product adoption. We delivered an impressive suite of new technology and application components to our Qualys Cloud Platform, including our innovative Global IT Asset Inventory application," said Philippe Courtot, chairman and CEO of Qualys. "We believe that the scalability, accuracy, immediacy and breadth of our Qualys Cloud Platform continues to enable organizations across the globe to build security into their digital transformation initiatives as well as to consolidate their IT, security and compliance stacks."
Fourth Quarter 2018 Financial Highlights
Revenues: Revenues for the fourth quarter of 2018 increased by 18% to $74.2 million compared to $62.9 million for the same quarter in 2017.
Gross Profit: GAAP gross profit for the fourth quarter of 2018 increased by 17% to $56.7 million compared to $48.5 million for the same quarter in 2017. GAAP gross margin percentage was 76% for the fourth quarter of 2018 compared to 77% for the same quarter in 2017. Non-GAAP gross profit for the fourth quarter of 2018 increased by 18% to $58.6 million compared to $49.5 million for the same quarter in 2017. Non-GAAP gross margin percentage was 79% for the fourth quarter of 2018 compared to 79% for the same quarter in 2017.
Operating Income: GAAP operating income for the fourth quarter of 2018 increased by 33% to $12.9 million compared to $9.7 million for the same quarter in 2017. As a percentage of revenues, GAAP operating income was 17% for the fourth quarter of 2018 compared to 15% for the same quarter in 2017. Non-GAAP operating income for the fourth quarter of 2018 increased by 22% to $22.8 million compared to $18.7 million for the same quarter in 2017. As a percentage of revenues, non-GAAP operating income was 31% for the fourth quarter of 2018 compared to 30% for the same quarter in 2017.
Net Income: GAAP net income for the fourth quarter of 2018 was $14.4 million, or $0.35 per diluted share, compared to $2.9 million, or $0.07 per diluted share, for the same quarter in 2017. Non-GAAP net income for the fourth quarter of 2018 was $21.3 million, or $0.51 per diluted share, compared to non-GAAP net income of $13.0 million, or $0.32 per diluted share, for the same quarter in 2017. Non-GAAP net income benefited from a $2.3 million true-up of the non-GAAP tax rate; without this benefit, non-GAAP net income for the fourth quarter of 2018 would have been $19.0 million, or $0.46 per diluted share.
Adjusted EBITDA: Adjusted EBITDA (a non-GAAP financial measure) for the fourth quarter of 2018 increased by 22% to $29.1 million compared to $23.8 million for the same quarter in 2017. As a percentage of revenues, Adjusted EBITDA was 39% for the fourth quarter of 2018 compared to 38% for the same quarter in 2017.
Operating Cash Flow: Operating cash flow for the fourth quarter of 2018 increased by 12% to $29.0 million compared to $25.9 million for the same quarter in 2017. As a percentage of revenues, operating cash flow was 39% for the fourth quarter of 2018 compared to 41% for the same quarter in 2017.
Adoption of the new revenue recognition standard (ASC 606): As a result of adopting ASC 606 on January 1, 2018, the company capitalizes commission expenses relating to new and upsell business as contract acquisition costs, and amortizes the expense over 5 years. Without the adoption of ASC 606, commission expenses would have been $1.0 million higher in the fourth quarter of 2018.
Fourth Quarter 2018 Business Highlights
Select New Customers:
Business Highlights:
Full Year 2018 Financial Highlights
Revenues: Revenues for 2018 increased by 21% to $278.9 million compared to $230.8 million for 2017.
Gross Profit: GAAP gross profit for 2018 increased by 19% to $212.7 million compared to $179.2 million for 2017. GAAP gross margin percentage was 76% for 2018 compared to 78% for 2017. Non-GAAP gross profit increased by 20% to $218.8 million for 2018 compared to $181.9 million for 2017. Non-GAAP gross margin percentage was 78% for 2018 compared to 79% for 2017.
Operating Income: GAAP operating income for 2018 was $50.4 million compared to $37.2 million for 2017. Non-GAAP operating income for 2018 was $87.2 million compared to $65.0 million for 2017.
Net Income: GAAP net income for 2018 was $57.3 million, or $1.37 per diluted share, compared to $40.4 million, or $1.01 per diluted share, for 2017. Non-GAAP net income for 2018 was $73.4 million, or $1.75 per diluted share, compared to non-GAAP net income of $43.7 million, or $1.09 per diluted share, for 2017.
Adjusted EBITDA: Adjusted EBITDA (a non-GAAP financial measure) for 2018 increased by 32% to $112.4 million compared to $84.9 million for 2017. As a percentage of revenues, Adjusted EBITDA was 40% for 2018 compared to 37% for 2017.
Operating Cash Flow: Operating cash flow for 2018 was $127.8 million compared to $107.6 million for 2017. As a percentage of revenues, operating cash flow was 46% in 2018 compared to 47% in 2017.
Additional Full Year 2018 Business Highlights
Market Recognition
Products & Features
Business Development
Financial Performance Outlook
First Quarter 2019 Guidance: Management expects revenues for the first quarter of 2019 to be in the range of $74.5 million to $75.2 million, representing 15% to 16% growth over the same quarter in 2018. GAAP net income per diluted share is expected to be in the range of $0.16 to $0.18, which assumes an effective income tax rate of 26%. Non-GAAP net income per diluted share is expected to be in the range of $0.41 to $0.43, which assumes an effective non-GAAP income tax rate of 22%. First quarter 2019 earnings per share estimates are based on approximately 41.6 million weighted average diluted shares outstanding for the quarter.
Full Year 2019 Guidance: Management expects revenues for the full year 2019 to be in the range of $320.0 million to $323.0 million, representing 15% to 16% growth over 2018. GAAP net income per diluted share is expected to be in the range of $0.90 to $0.95, which assumes an effective income tax rate of 26%. Non-GAAP net income per diluted share is expected to be in the range of $1.84 to $1.89, which assumes an effective non-GAAP income tax rate of 22%. Full year 2019 earnings per share estimates are based on approximately 42.1 million weighted average diluted shares outstanding.
Investor Conference Call
Qualys will host a conference call and live webcast to discuss its fourth quarter and full year 2018 financial results at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) on Tuesday, Feb. 12, 2019. To access the conference call, dial (877) 881-2609 in the U.S. or (970) 315-0463 for international participants with conference ID # 2274058. The live webcast of Qualys' earnings conference call, investor presentation, and prepared remarks can also be accessed at https://investor.qualys.com/events.cfm. A replay of the conference call will be available through the same webcast link following the end of the call.
Investor Contact
Natasha Asar
Investor Relations
(650) 801-6172
ir@qualys.com
About Qualys, Inc.
Qualys, Inc. (NASDAQ: QLYS) is a pioneer and leading provider of cloud-based security and compliance solutions with over 12,200 customers and active users in more than 130 countries, including a majority of each of the Forbes Global 100 and Fortune 100. Qualys helps organizations streamline and consolidate their security and compliance solutions in a single platform and build security into digital transformation initiatives for greater agility, better business outcomes and substantial cost savings. The Qualys Cloud Platform and its integrated Cloud Apps deliver businesses critical security intelligence continuously, enabling them to automate the full spectrum of auditing, compliance and protection for IT systems and web applications on premises, on endpoints and elastic clouds. Founded in 1999 as one of the first SaaS security companies, Qualys has established strategic partnerships with leading managed service providers and consulting organizations including Accenture, BT, Cognizant Technology Solutions, Deutsche Telekom, DXC Technology, Fujitsu, HCL Technologies, IBM, Infosys, NTT, Optiv, SecureWorks, Tata Communications, Verizon and Wipro. The company is also a founding member of the Cloud Security Alliance. For more information, please visit www.qualys.com.
Qualys and the Qualys logo are proprietary trademarks of Qualys, Inc. All other products or names may be trademarks of their respective companies.
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 our suite of new technology and application components added to our Qualys Cloud Platform; our expectations regarding our IT asset management application; the capabilities of our platform; the related benefits of our strategic acquisitions; the related benefits of our new products, integrations, collaborations and joint solutions; our strategy and our business model and our ability to execute such strategy; our guidance for revenues, GAAP EPS and non-GAAP EPS for the first quarter and full year 2019, and our expectations for the number of weighted average diluted shares outstanding and effective income tax rate for the first quarter and full year 2019. 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 September 30, 2018, filed with the Securities and Exchange Commission on November 5, 2018.
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.
Non-GAAP Financial Measures
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Qualys monitors operating measures of non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP net income, non-GAAP net income per diluted share and Adjusted EBITDA. In computing these non-GAAP financial measures, Qualys excludes the effects of stock-based compensation expense, non-recurring expenses and cash acquisition-related expenses that do not reflect ongoing costs of operating the business. Qualys also monitors Adjusted EBITDA (defined as earnings before interest, taxes, depreciation, amortization, stock-based compensation, other (income) expense, net, non-recurring expenses, and cash acquisition-related expenses that do not reflect ongoing costs of operating the business). 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 expenses, 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 believes that non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP net income, non-GAAP net income per diluted share, and Adjusted EBITDA provide additional tools for investors to use in comparing its recurring core business operating results over multiple periods with other companies in its industry. Non-GAAP net income and non-GAAP net income per diluted share for the twelve months ended December 31, 2018 excludes $3.7 million of amortization of intangibles from acquisitions of Nemean, Nevis Networks, NetWatcher, 1Mobility and Layered Insight and $3.0 million of compensation expense from the acquisition of NetWatcher and Layered Insight that do not reflect ongoing costs of operating the business.
Qualys has not reconciled non-GAAP net income per diluted share guidance to GAAP net income per diluted share because Qualys does not provide guidance on the various reconciling cash and non-cash items between GAAP net income and non-GAAP net income (i.e., stock-based compensation and non-recurring expenses). The actual dollar amount of reconciling items in the first quarter and full year 2019 is likely to have a significant impact on the Company's GAAP net income per diluted share in the first quarter and full year 2019. Accordingly, a reconciliation of the non-GAAP net income per diluted share guidance to the GAAP net income per diluted share guidance is not available without unreasonable effort.
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 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 its estimated non-GAAP effective tax rate of 22% in 2019 is a reasonable estimate under its global operating structure. The Company 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.
Qualys, Inc. |
|||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||||||||||
(Unaudited) |
|||||||||||||||
(in thousands, except per share data) |
|||||||||||||||
Three Months Ended |
Year Ended |
||||||||||||||
December 31, |
December 31, |
||||||||||||||
2018 |
2017 |
2018 |
2017 |
||||||||||||
Revenues |
$ |
74,200 |
$ |
62,915 |
$ |
278,889 |
$ |
230,828 |
|||||||
Cost of revenues (1) |
17,525 |
14,405 |
66,185 |
51,580 |
|||||||||||
Gross profit |
56,675 |
48,510 |
212,704 |
179,248 |
|||||||||||
Operating expenses: |
|||||||||||||||
Research and development (1) |
15,073 |
11,576 |
53,255 |
42,816 |
|||||||||||
Sales and marketing (1) |
19,341 |
16,983 |
70,039 |
63,855 |
|||||||||||
General and administrative (1) |
9,318 |
10,222 |
39,049 |
35,334 |
|||||||||||
Total operating expenses |
43,732 |
38,781 |
162,343 |
142,005 |
|||||||||||
Income from operations |
12,943 |
9,729 |
50,361 |
37,243 |
|||||||||||
Other income, net: |
|||||||||||||||
Interest expense |
(60) |
— |
(172) |
(3) |
|||||||||||
Interest income |
1,887 |
899 |
6,080 |
2,674 |
|||||||||||
Other income (expense), net |
35 |
(247) |
(801) |
(536) |
|||||||||||
Total other income, net |
1,862 |
652 |
5,107 |
2,135 |
|||||||||||
Income before income taxes |
14,805 |
10,381 |
55,468 |
39,378 |
|||||||||||
(Benefit from) provision for income taxes |
405 |
7,524 |
(1,836) |
(1,062) |
|||||||||||
Net income |
$ |
14,400 |
$ |
2,857 |
$ |
57,304 |
$ |
40,440 |
|||||||
Net income per share: |
|||||||||||||||
Basic |
$ |
0.37 |
$ |
0.07 |
$ |
1.47 |
$ |
1.08 |
|||||||
Diluted |
$ |
0.35 |
$ |
0.07 |
$ |
1.37 |
$ |
1.01 |
|||||||
Weighted average shares used in computing net income per share: |
|||||||||||||||
Basic |
39,200 |
38,278 |
38,876 |
37,443 |
|||||||||||
Diluted |
41,580 |
41,186 |
41,897 |
40,071 |
|||||||||||
(1) Includes stock-based compensation as follows: |
|||||||||||||||
Cost of revenues |
$ |
601 |
$ |
590 |
$ |
2,489 |
$ |
2,159 |
|||||||
Research and development |
2,207 |
1,715 |
7,961 |
5,944 |
|||||||||||
Sales and marketing |
981 |
1,311 |
4,650 |
4,755 |
|||||||||||
General and administrative |
3,629 |
4,823 |
14,990 |
14,103 |
|||||||||||
Total stock-based compensation |
$ |
7,418 |
$ |
8,439 |
$ |
30,090 |
$ |
26,961 |
Qualys, Inc. |
|||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |
|||||||||||||||
(Unaudited) |
|||||||||||||||
(in thousands) |
|||||||||||||||
Three Months Ended |
Year Ended |
||||||||||||||
December 31, |
December 31, |
||||||||||||||
2018 |
2017 |
2018 |
2017 |
||||||||||||
Net income |
$ |
14,400 |
$ |
2,857 |
$ |
57,304 |
$ |
40,440 |
|||||||
Other comprehensive income (loss): |
|||||||||||||||
Available-for-sale marketable securities: |
|||||||||||||||
Change in net unrealized (loss) gain, net of tax |
166 |
(493) |
(261) |
(462) |
|||||||||||
Reclassification adjustment for net change realized and included in net income, net of tax |
40 |
40 |
289 |
44 |
|||||||||||
Total change in unrealized gain (loss) on marketable securities, net of tax |
206 |
(453) |
28 |
(418) |
|||||||||||
Cash flow hedges: |
|||||||||||||||
Change in net unrealized (loss), net of tax |
(40) |
— |
(40) |
— |
|||||||||||
Other comprehensive income (loss), net of tax |
166 |
(453) |
(12) |
(418) |
|||||||||||
Comprehensive income |
$ |
14,566 |
$ |
2,404 |
$ |
57,292 |
$ |
40,022 |
Qualys, Inc. |
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||
(Unaudited) |
|||||||
(in thousands) |
|||||||
December 31, 2018 |
December 31, 2017 |
||||||
Assets |
|||||||
Current assets: |
|||||||
Cash and cash equivalents |
$ |
41,026 |
$ |
86,591 |
|||
Short-term marketable securities |
248,140 |
201,823 |
|||||
Accounts receivable, net |
75,825 |
64,412 |
|||||
Prepaid expenses and other current assets |
13,974 |
16,524 |
|||||
Total current assets |
378,965 |
369,350 |
|||||
Long-term marketable securities |
76,710 |
67,224 |
|||||
Property and equipment, net |
61,442 |
58,557 |
|||||
Deferred tax assets, net |
26,387 |
25,066 |
|||||
Intangible assets, net |
21,976 |
12,401 |
|||||
Goodwill |
7,225 |
1,549 |
|||||
Long-term investment |
2,500 |
— |
|||||
Restricted cash |
1,200 |
1,200 |
|||||
Other noncurrent assets |
9,275 |
2,178 |
|||||
Total assets |
$ |
585,680 |
$ |
537,525 |
|||
Liabilities and Stockholders' Equity |
|||||||
Current liabilities: |
|||||||
Accounts payable |
$ |
5,588 |
$ |
1,144 |
|||
Accrued liabilities |
25,130 |
21,444 |
|||||
Deferred revenues, current |
164,624 |
143,186 |
|||||
Capital lease, current |
1,565 |
— |
|||||
Total current liabilities |
196,907 |
165,774 |
|||||
Deferred revenues, noncurrent |
20,423 |
17,136 |
|||||
Other noncurrent liabilities |
10,361 |
11,071 |
|||||
Total liabilities |
227,691 |
193,981 |
|||||
Stockholders' equity: |
|||||||
Common stock |
39 |
39 |
|||||
Additional paid-in capital |
330,572 |
304,155 |
|||||
Accumulated other comprehensive loss |
(586) |
(574) |
|||||
Retained earnings |
27,964 |
39,924 |
|||||
Total stockholders' equity |
357,989 |
343,544 |
|||||
Total liabilities and stockholders' equity |
$ |
585,680 |
$ |
537,525 |
Qualys, Inc. |
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
(Unaudited) |
|||||||
(in thousands) |
|||||||
Year Ended December 31, |
|||||||
2018 |
2017 |
||||||
Cash flows from operating activities: |
|||||||
Net income |
$ |
57,304 |
$ |
40,440 |
|||
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||
Depreciation and amortization expense |
28,905 |
20,636 |
|||||
Bad debt expense |
86 |
657 |
|||||
Loss on disposal of property and equipment |
31 |
161 |
|||||
Stock-based compensation |
30,090 |
26,961 |
|||||
Amortization of premiums and accretion of discounts on marketable securities |
(1,136) |
1,324 |
|||||
Deferred income taxes |
(4,144) |
(2,718) |
|||||
Changes in operating assets and liabilities: |
|||||||
Accounts receivable |
(11,498) |
(17,966) |
|||||
Prepaid expenses and other assets |
(5,833) |
(53) |
|||||
Accounts payable |
656 |
(454) |
|||||
Accrued liabilities |
10,522 |
1,485 |
|||||
Deferred revenues |
24,725 |
29,830 |
|||||
Other noncurrent liabilities |
(1,906) |
7,343 |
|||||
Net cash provided by operating activities |
127,802 |
107,646 |
|||||
Cash flows from investing activities: |
|||||||
Purchases of marketable securities |
(339,862) |
(299,891) |
|||||
Sales and maturities of marketable securities |
285,223 |
231,996 |
|||||
Purchases of property and equipment |
(25,112) |
(37,818) |
|||||
Business combinations, net of cash acquired |
(13,633) |
(12,482) |
|||||
Purchase of privately-held investment |
(2,500) |
— |
|||||
Net cash used in investing activities |
(95,884) |
(118,195) |
|||||
Cash flows from financing activities: |
|||||||
Repurchase of common stock |
(85,040) |
— |
|||||
Proceeds from exercise of stock options |
24,053 |
31,327 |
|||||
Payments for taxes related to employee net share settlement of equity awards |
(14,879) |
(20,924) |
|||||
Principal payments under capital lease obligations |
(1,617) |
— |
|||||
Net cash (used in) provided by financing activities |
(77,483) |
10,403 |
|||||
Net decrease in cash, cash equivalents and restricted cash |
(45,565) |
(146) |
|||||
Cash, cash equivalents and restricted cash at beginning of period |
87,791 |
87,937 |
|||||
Cash, cash equivalents and restricted cash at end of period |
$ |
42,226 |
$ |
87,791 |
Qualys, Inc. |
|||||||||||||||
RECONCILIATION OF NON-GAAP DISCLOSURES |
|||||||||||||||
EBITDA AND ADJUSTED EBITDA |
|||||||||||||||
(Unaudited) |
|||||||||||||||
(in thousands) |
|||||||||||||||
Three Months Ended |
Year Ended |
||||||||||||||
December 31, |
December 31, |
||||||||||||||
2018 |
2017 |
2018 |
2017 |
||||||||||||
Net income |
$ |
14,400 |
$ |
2,857 |
$ |
57,304 |
$ |
40,440 |
|||||||
Depreciation and amortization of property and equipment |
6,316 |
5,166 |
25,136 |
19,828 |
|||||||||||
Amortization of intangible assets |
1,364 |
416 |
3,768 |
808 |
|||||||||||
Interest expense |
60 |
— |
172 |
3 |
|||||||||||
(Benefit from) provision for income taxes |
405 |
7,524 |
(1,836) |
(1,062) |
|||||||||||
EBITDA |
22,545 |
15,963 |
84,544 |
60,017 |
|||||||||||
Stock-based compensation |
7,418 |
8,439 |
30,090 |
26,961 |
|||||||||||
Other income, net |
(1,922) |
(652) |
(5,279) |
(2,138) |
|||||||||||
Cash acquisition-related expense (1) |
1,099 |
93 |
3,025 |
93 |
|||||||||||
Adjusted EBITDA |
$ |
29,140 |
$ |
23,843 |
$ |
112,380 |
$ |
84,933 |
Note (1): Includes $3.0 million and $0.1 million of compensation related to acquisitions in 2018 and 2017, respectively. |
Qualys, Inc. |
|||||||||||||||
RECONCILIATION OF NON-GAAP DISCLOSURES |
|||||||||||||||
(Unaudited) |
|||||||||||||||
(in thousands, except per share data) |
|||||||||||||||
Three Months Ended |
Year Ended |
||||||||||||||
December 31, |
December 31, |
||||||||||||||
2018 |
2017 |
2018 |
2017 |
||||||||||||
GAAP Cost of revenues |
$ |
17,525 |
$ |
14,405 |
$ |
66,185 |
$ |
51,580 |
|||||||
Less: Stock-based compensation |
(601) |
(590) |
(2,489) |
(2,159) |
|||||||||||
Less: Intangible asset amortization |
(1,339) |
(374) |
(3,625) |
(460) |
|||||||||||
Non-GAAP Cost of revenues |
$ |
15,585 |
$ |
13,441 |
$ |
60,071 |
$ |
48,961 |
|||||||
GAAP Gross profit |
$ |
56,675 |
$ |
48,510 |
$ |
212,704 |
$ |
179,248 |
|||||||
Plus: Stock-based compensation |
601 |
590 |
2,489 |
2,159 |
|||||||||||
Plus: Intangible asset amortization |
1,339 |
374 |
3,625 |
460 |
|||||||||||
Non-GAAP Gross profit |
$ |
58,615 |
$ |
49,474 |
$ |
218,818 |
$ |
181,867 |
|||||||
GAAP Research and development |
$ |
15,073 |
$ |
11,576 |
$ |
53,255 |
$ |
42,816 |
|||||||
Less: Stock-based compensation |
(2,207) |
(1,715) |
(7,961) |
(5,944) |
|||||||||||
Less: Cash acquisition-related expense (1) |
(1,099) |
(14) |
(1,223) |
(14) |
|||||||||||
Less: Intangible asset amortization |
(25) |
(25) |
(100) |
(282) |
|||||||||||
Non-GAAP Research and development |
$ |
11,742 |
$ |
9,822 |
$ |
43,971 |
$ |
36,576 |
|||||||
GAAP Sales and marketing |
$ |
19,341 |
$ |
16,983 |
$ |
70,039 |
$ |
63,855 |
|||||||
Less: Stock-based compensation |
(981) |
(1,311) |
(4,650) |
(4,755) |
|||||||||||
Less: Cash acquisition-related expense (1) |
— |
(79) |
(1,802) |
(79) |
|||||||||||
Non-GAAP Sales and marketing |
$ |
18,360 |
$ |
15,593 |
$ |
63,587 |
$ |
59,021 |
|||||||
GAAP General and administrative |
$ |
9,318 |
$ |
10,222 |
$ |
39,049 |
$ |
35,334 |
|||||||
Less: Stock-based compensation |
(3,629) |
(4,823) |
(14,990) |
(14,103) |
|||||||||||
Non-GAAP General and administrative |
$ |
5,689 |
$ |
5,399 |
$ |
24,059 |
$ |
21,231 |
|||||||
GAAP Operating expenses |
$ |
43,732 |
$ |
38,781 |
$ |
162,343 |
$ |
142,005 |
|||||||
Less: Stock-based compensation |
(6,817) |
(7,849) |
(27,601) |
(24,802) |
|||||||||||
Less: Intangible asset amortization |
(25) |
(25) |
(100) |
(282) |
|||||||||||
Less: Cash acquisition-related expense (1) |
(1,099) |
(93) |
(3,025) |
(93) |
|||||||||||
Non-GAAP Operating expenses |
$ |
35,791 |
$ |
30,814 |
$ |
131,617 |
$ |
116,828 |
|||||||
GAAP Income from operations |
$ |
12,943 |
$ |
9,729 |
$ |
50,361 |
$ |
37,243 |
|||||||
Plus: Stock-based compensation |
7,418 |
8,439 |
30,090 |
26,961 |
|||||||||||
Plus: Intangible asset amortization |
1,364 |
399 |
3,725 |
742 |
|||||||||||
Plus: Cash acquisition-related expense (1) |
1,099 |
93 |
3,025 |
93 |
|||||||||||
Non-GAAP Income from operations |
$ |
22,824 |
$ |
18,660 |
$ |
87,201 |
$ |
65,039 |
|||||||
GAAP Net income |
$ |
14,400 |
$ |
2,857 |
$ |
57,304 |
$ |
40,440 |
|||||||
Plus: Stock-based compensation |
7,418 |
8,439 |
30,090 |
26,961 |
|||||||||||
Plus: Intangible asset amortization |
1,364 |
399 |
3,725 |
742 |
|||||||||||
Plus: Cash acquisition-related expense (1) |
1,099 |
93 |
3,025 |
93 |
|||||||||||
Less: Tax adjustment |
(2,945) |
1,244 |
(20,739) |
(24,573) |
|||||||||||
Non-GAAP Net income |
$ |
21,336 |
$ |
13,032 |
$ |
73,405 |
$ |
43,663 |
|||||||
Non-GAAP Net income per share: |
|||||||||||||||
Basic |
$ |
0.54 |
$ |
0.34 |
$ |
1.89 |
$ |
1.17 |
|||||||
Diluted |
$ |
0.51 |
$ |
0.32 |
$ |
1.75 |
$ |
1.09 |
|||||||
Weighted average shares used in non-GAAP net income per share: |
|||||||||||||||
Basic |
39,200 |
38,278 |
38,876 |
37,443 |
|||||||||||
Diluted |
41,580 |
41,186 |
41,897 |
40,071 |
Note (1): Relates to compensation expense from the acquisition of NetWatcher and Layered Insight. |
Qualys, Inc. |
|||||||
RECONCILIATION OF NON-GAAP DISCLOSURES |
|||||||
FREE CASH FLOWS |
|||||||
(Unaudited) |
|||||||
(in thousands) |
|||||||
Year Ended December 31, |
|||||||
2018 |
2017 |
||||||
GAAP Cash flows provided by operating activities (1) |
$ |
127,802 |
$ |
107,646 |
|||
Less: |
|||||||
Purchases of property and equipment |
(25,112) |
(37,818) |
|||||
Principal payments under capital lease obligations |
(1,617) |
— |
|||||
Non-GAAP Free cash flows |
$ |
101,073 |
$ |
69,828 |
Note (1): Includes $2.0 million of compensation paid during the year ended 2018 related to acquired assets. |
Qualys, Inc. |
|||||||
RECONCILIATION OF NON-GAAP DISCLOSURES |
|||||||
CALCULATED CURRENT BILLINGS |
|||||||
(Unaudited) |
|||||||
(in thousands) |
|||||||
Three Months Ended December 31, |
|||||||
2018 |
2017 |
||||||
Q4 GAAP Revenue |
$ |
74,200 |
$ |
62,915 |
|||
Plus: Current Deferred Revenue at December 31 |
164,624 |
143,186 |
|||||
Less: Current Deferred Revenue at September 30 |
(155,115) |
(132,167) |
|||||
Non-GAAP Q4 Calculated Current Billings |
$ |
83,709 |
$ |
73,934 |
|||
Calculated Current Billings Growth Compared to Same Period of Prior Year |
13 |
% |
27 |
% |
View original content:http://www.prnewswire.com/news-releases/qualys-announces-fourth-quarter-and-full-year-2018-financial-results-300794460.html
SOURCE Qualys, Inc.