Qualys(US:QLYS)2024-11-05 22:05Revenue Performance - Revenues for the three months ended September 30, 2024, increased by $11.9 million (8%) compared to the same period in 2023, driven by increased demand for subscription services [116]. - Of the total revenue increase, 93% came from existing customers prior to July 1, 2024, while 7% was from new customers added in the same period [116]. - For the nine months ended September 30, 2024, total revenues reached $448.4 million, an increase of $38.5 million (9%) from $409.9 million in the same period of 2023 [116]. - In the three months ended September 30, 2024, 53% of total revenue was generated from direct customers, while 47% came from partners [116]. - Approximately 59% of revenues for the nine months ended September 30, 2024, were derived from customers in the United States [103]. - Revenues increased by $38.5 million for the nine months ended September 30, 2024, compared to the same period in 2023, with 78% from existing customers and 22% from new customers [117]. Expenses and Profitability - Operating expenses for the three months ended September 30, 2024, were 52% of revenues, compared to 50% in the same period of 2023 [114]. - The gross profit margin for the three months ended September 30, 2024, was 81%, consistent with the same period in 2023 [114]. - The income tax provision for the three months ended September 30, 2024, was 4% of income before taxes, compared to 1% in the same period of 2023 [114]. - Cost of revenues increased by $2.1 million for the three months ended September 30, 2024, primarily due to shared cloud platform costs and personnel costs [119]. - Research and development expenses increased by $1.1 million for the three months ended September 30, 2024, mainly due to increased headcount [123]. - Sales and marketing expenses rose by $4.8 million for the three months ended September 30, 2024, driven by personnel costs and increased travel expenses [125]. - General and administrative expenses increased by $2.5 million for the three months ended September 30, 2024, primarily due to higher personnel costs and software expenses [127]. - Net income for the three months ended September 30, 2024, was $46,212 thousand, a slight decrease from $46,515 thousand in the same period of 2023, representing a net income margin of 30% compared to 33% in 2023 [141]. - Adjusted EBITDA for the nine months ended September 30, 2024, was $208,647 thousand, up from $193,300 thousand in 2023, maintaining an adjusted EBITDA margin of 47% [141]. Cash Flow and Investments - Cash and cash equivalents, along with marketable securities, totaled $573.0 million as of September 30, 2024, including $122.4 million held outside the United States [142]. - Net cash provided by operating activities for the nine months ended September 30, 2024, was $196,372 thousand, compared to $210,766 thousand in 2023 [142]. - The company used $59,509 thousand in investing activities during the nine months ended September 30, 2024, compared to $47,499 thousand in 2023 [144]. - Share repurchases amounted to $97.2 million during the nine months ended September 30, 2024, down from $147.7 million in the same period of 2023 [145]. - The company has $185.7 million remaining under its share repurchase program, which has a total authorization of $1.2 billion [149]. - The company generated $180.4 million of cash from net income adjusted for non-cash items during the nine months ended September 30, 2024, compared to $168.4 million in 2023 [143]. Market Outlook and Challenges - The company expects to continue investing in research and development to enhance existing solutions and develop new capabilities, which will likely increase R&D expenses [109]. - The company continues to face macroeconomic challenges, including inflationary pressures and high interest rates, which could impact future business performance [104]. - The company expects revenue growth from new and existing customers to continue, driven by strong market demand [118]. - Net dollar expansion rates were 103% and 106% as of September 30, 2024, and September 30, 2023, respectively [136]. Financial Instruments and Obligations - Fixed operating lease payment obligations were $56.8 million as of September 30, 2024, with $13.6 million expected to be paid within the next 12 months [147]. - As of September 30, 2024, the company had designated cash flow hedge forward contracts with notional amounts of €46.4 million, £18.0 million, and Rs.4,273.0 million to mitigate foreign currency risks [153]. - Total other income, net increased by $2.9 million for the three months ended September 30, 2024, mainly from increased interest income and foreign currency gains [129]. - Income tax provision increased by $4.6 million for the three months ended September 30, 2024, due to higher pretax income and decreased excess tax benefits [131].