Qualys Announces Third Quarter 2022 Financial Results

PRESS RELEASE

FOSTER CITY, Calif., Nov. 2, 2022 /PRNewswire/ — Qualys, Inc. (NASDAQ: QLYS), a pioneer and leading provider of disruptive cloud-based IT, security and compliance solutions, today announced financial results for the third quarter ended September 30, 2022. For the quarter, the Company reported revenues of $125.6 million, net income under United States Generally Accepted Accounting Principles ("U.S. GAAP") of $27.7 million, non-GAAP net income of $36.8 million, Adjusted EBITDA of $54.9 million, GAAP net income per diluted share of $0.71, and non-GAAP net income per diluted share of $0.94.

"In Q3, we delivered another quarter of strong revenue growth and cash flow generation," said Sumedh Thakar, president and CEO. "We believe our extendable cloud-based platform is core to building a durable growth business over the long term. The launch of TotalCloud flexes the power of our platform by enabling cloud-native VMDR with accurate, comprehensive and unrestricted scanning options to uniquely secure cloud and container environments from build to run-time. We believe the Blue Hexagon acquisition allows us to further extend the Qualys Cloud Platform by transforming our massive data lake into a powerful, predictive analytics engine to perform real-time zero-day threat detection while advancing our value proposition and competitive differentiation in the market."

Third Quarter 2022 Financial Highlights

Revenues: Revenues for the third quarter of 2022 increased by 20% to $125.6 million compared to $104.9 million for the same quarter in 2021.

Gross Profit: GAAP gross profit for the third quarter of 2022 increased by 21% to $99.6 million compared to $82.5 million for the same quarter in 2021. GAAP gross margin was 79% for both the third quarter of 2022 and the third quarter of 2021. Non-GAAP gross profit for the third quarter of 2022 increased by 20% to $102.2 million compared to $85.1 million for the same quarter in 2021. Non-GAAP gross margin was 81% for both the third quarter of 2022 and the third quarter of 2021.

Operating Income: GAAP operating income for the third quarter of 2022 was $33.3 million compared to $32.0 million for the same quarter in 2021. As a percentage of revenues, GAAP operating income was 27% for the third quarter of 2022 compared to 30% for the same quarter in 2021. Non-GAAP operating income for the third quarter of 2022 increased by 11% to $48.0 million compared to $43.1 million for the same quarter in 2021. As a percentage of revenues, non-GAAP operating income was 38% for the third quarter of 2022 compared to 41% for the same quarter in 2021.

Net Income: GAAP net income for the third quarter of 2022 was $27.7 million, or $0.71 per diluted share, compared to $27.8 million, or $0.70 per diluted share, for the same quarter in 2021. As a percentage of revenues, GAAP net income was 22% for the third quarter of 2022 compared to 26% for the same quarter in 2021. Non-GAAP net income for the third quarter of 2022 was $36.8 million, or $0.94 per diluted share, compared to $34.2 million, or $0.86 per diluted share, for the same quarter in 2021. As a percentage of revenues, non-GAAP net income was 29% for the third quarter of 2022 compared to 33% for the same quarter in 2021.

Adjusted EBITDA: Adjusted EBITDA (a non-GAAP financial measure) for the third quarter of 2022 increased by 9% to $54.9 million compared to $50.3 million for the same quarter in 2021. As a percentage of revenues, Adjusted EBITDA was 44% for the third quarter of 2022 compared to 48% for the same quarter in 2021.

Operating Cash Flow: Operating cash flow for the third quarter of 2022 decreased by 13% to $42.2 million compared to $48.5 million for the same quarter in 2021. As a percentage of revenues, operating cash flow was 34% for the third quarter of 2022 compared to 46% for the same quarter in 2021.

Third Quarter 2022 Business Highlights

Financial Performance Outlook

Based on information as of today, November 2, 2022, Qualys is issuing the following financial guidance for the fourth quarter and full year fiscal 2022. The Company emphasizes that the guidance is subject to various important cautionary factors referenced in the sections entitled "Legal Notice Regarding Forward-Looking Statements" and "Non-GAAP Financial Measures" below.

Fourth Quarter 2022 Guidance: Management expects revenues for the fourth quarter of 2022 to be in the range of $129.7 million to $130.7 million, representing 18% to 19% growth over the same quarter in 2021. GAAP net income per diluted share is expected to be in the range of $0.52 to $0.54, which assumes an effective income tax rate of 26%. Non-GAAP net income per diluted share is expected to be in the range of $0.89 to $0.91, which assumes a non-GAAP effective income tax rate of 24%. Fourth quarter 2022 net income per diluted share estimates are
based on approximately 39.0 million weighted average diluted shares outstanding for the quarter.

Full Year 2022 Guidance: Management now expects revenues for the full year of 2022 to be in the range of $488.6 million to $489.6 million, representing 19% growth over 2021, up from the previous guidance range of $488.0 million to $489.5 million. GAAP net income per diluted share is expected to be in the range of $2.52 to $2.54, up from the previous guidance range of $2.39 to $2.44. This assumes an effective income tax rate of 22%. Non-GAAP net income per diluted share is expected to be in the range of $3.60 to $3.62, up from the previous guidance range of $3.50 to $3.55. This assumes a non-GAAP effective income tax rate of 24%. Full year 2022 net income per diluted share estimates are based on approximately 39.5 million weighted average diluted shares outstanding.

Investor Conference Call

Qualys will host a conference call and live webcast to discuss its third quarter financial results at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) on Wednesday, November 2, 2022. To access the conference call by phone, please register here and you will be provided with dial in details. A live webcast of the earnings conference call, investor presentation and prepared remarks can be accessed at https://investor.qualys.com/events-presentations. A replay of the conference call will be available through the same webcast link following the end of the call.