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Secure Computing Posts Q3 Results
Secure Computing reports record revenues and record cash from operations
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SAN JOSE, Calif. -- Secure Computing Corporation (Nasdaq: SCUR), a leading enterprise gateway security company, today announced third quarter GAAP revenue of $60.0 million. This represents a 37% increase in revenue compared to $43.7 million in the same quarter last year. Third quarter non-GAAP revenue was $65.2 million. This represents a 49% increase compared to the same quarter last year. On a GAAP basis, net loss was $10.1 million or $0.17 per share. Third quarter non-GAAP net income was $6.4 million or $0.09 per fully-diluted share. The company generated a record $12.8 million of cash from operations and reduced the long term debt balance by $10.0 million. Billings for the quarter were $74.0 million, a 20% increase compared to the same quarter last year.
“Our team again delivered solid results in the third quarter,” said John McNulty, chairman and chief executive officer of Secure Computing. “Secure Computing is in the enviable position of being able to address the evolving threat environment at the gateway in a fashion that we believe is better and more complete than any other security provider. Today’s Web 2.0 technologies have great allure and benefit, but they also provide an inviting target for blended malware, and stopping that type of threat is what we do best. Our products fit the needs of the market and good execution allowed us to realize record revenue and cash from operations. We believe we are well positioned to accelerate our growth in the enterprise security market.”
Third Quarter Financial Highlights:
GAAP revenue for the third quarter was $60.0 million. This represents a 37% increase compared to $43.7 million in the same quarter last year and a 4% increase compared to revenue of $57.6 million in the prior quarter. Non-GAAP revenue for the quarter was $65.2 million. This represents a 49% increase compared to the same quarter last year and a 2% increase compared to non-GAAP revenue of $63.7 million in the prior quarter.
Billings for the third quarter were $74.0 million. This represents a 20% increase compared to $61.6 million in the same quarter last year and a 5% increase compared to billings of $70.7 million in the prior quarter.
GAAP gross profit in the third quarter was 72% of revenue or $43.1 million. Non-GAAP gross profit in the third quarter was 77% of revenue or $50.0 million. These non-GAAP results compare to 76% of non-GAAP revenue, or $33.3 million, in the year ago quarter and 76% of non-GAAP revenue, or $48.1 million, in the prior quarter.
Third quarter GAAP operating expenses were $47.9 million, or 80% of revenue. Non-GAAP operating expenses for the quarter were $41.2 million or 63% of non-GAAP revenue. These non-GAAP results compare to 72% of non-GAAP revenue in the year ago quarter and 63% in the prior quarter.
GAAP operating loss for the third quarter was $4.9 million. Third quarter non-GAAP operating income was $8.8 million or 13% of non-GAAP revenue, compared to 8% in the same quarter last year and 12% in the prior quarter.
GAAP net loss for the third quarter was $10.1 million or $0.17 per share. Third quarter non-GAAP net income was $6.4 million or $0.09 per fully-diluted share, compared to non-GAAP net income of $2.0 million, or $0.03 per fully diluted share in the year ago quarter, and $5.0 million, or $0.07 per fully-diluted share in the prior quarter.
In the third quarter, deferred revenue increased $11.4 million, or 8%, bringing the total deferred revenue balance to $153.8 million at the end of September.
Days sales outstanding (DSOs) were 90 days. As we have experienced in previous quarters, the change in DSOs from the prior quarter correlates to the change in deferred revenue. Excluding the impact of the increase in deferred revenue, DSOs were 73 days.
Total cash and restricted cash was $10.7 million at September 30, 2007. Cash generated from operations in the quarter was a record $12.8 million.
“In the third quarter, we experienced strong performance across many important metrics, including closing six seven-figure deals and a record 127 deals over $100,000,” said Tim Steinkopf, senior vice president of operations and chief financial officer of Secure Computing. “Our strong cash flow from operations over the last three quarters has allowed us to reduce our debt by $32 million since the beginning of the year, which is well ahead of plan.”
Secure Computing Corp. (Nasdaq: SCUR)
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