Qualys(QLYS)2024-05-07 21:07Revenue Growth - Revenues for the three months ended March 31, 2024, increased by $15.1 million (12%) to $145.8 million compared to $130.7 million in the same period in 2023, driven by increased demand for subscription services [113]. - 96% of the revenue increase was from existing customers prior to January 1, 2024, while 4% was from new customers added in the same period [113]. - The company expects continued revenue growth from both new and existing customers due to strong market demand for its solutions [113]. Cost and Expenses - Cost of revenues for the three months ended March 31, 2024, increased by $0.2 million (1%) to $27.2 million, primarily due to increased personnel costs and shared cloud platform costs [114]. - Operating expenses as a percentage of revenues decreased to 50% for the three months ended March 31, 2024, from 53% in the same period in 2023 [112]. - Sales and marketing expenses increased by $3.8 million to $25.6 million, representing a 15% increase, primarily due to higher personnel costs driven by increased headcount [116]. - General and administrative expenses rose by $1.8 million to $16.9 million, a 12% increase, mainly due to increased personnel costs including stock-based compensation [117]. - Research and development expenses decreased by $0.3 million to $27.8 million for the three months ended March 31, 2024, a decline of 1% compared to the same period in 2023 [115]. Profitability - Gross profit margin improved to 81% for the three months ended March 31, 2024, compared to 79% in the same period in 2023 [112]. - Income from operations increased to 31% of revenues for the three months ended March 31, 2024, compared to 26% in the same period in 2023 [112]. - Net income for the three months ended March 31, 2024, was 27% of revenues, up from 22% in the same period in 2023 [112]. - Net income increased to $39.7 million for the three months ended March 31, 2024, compared to $29.1 million in the same period in 2023, with net income as a percentage of revenues rising to 27% [127]. - Adjusted EBITDA increased by $10.4 million to $69.0 million, representing 47% of revenues for the three months ended March 31, 2024, compared to 45% in the prior year [127]. Cash Flow and Investments - Cash provided by operating activities increased to $85.5 million, up from $66.8 million in the same period in 2023 [128]. - As of March 31, 2024, the company had cash, cash equivalents, and marketable securities totaling $543.4 million, including $120.5 million held outside the United States [128]. - The company expects to continue share repurchases in 2024, with approximately $265.7 million remaining under the authorized repurchase program [136]. - The company had $543.4 million in cash, cash equivalents, and short-term and long-term marketable securities as of March 31, 2024 [142]. - The primary objectives of the company's investment activities are the preservation of principal and support of liquidity requirements [142]. Market Risks - The company is exposed to market risks including interest rate, foreign exchange, and inflation risks [140]. - A hypothetical 100 basis point increase in interest rates would result in a decrease in the fair value of the company's marketable securities by $1.0 million [142]. - The effect of an immediate 10% adverse change in foreign exchange rates would not be material to the company's financial condition, operating results, or cash flows [141]. - The company enters into foreign currency forward contracts to reduce exposure to foreign currency exchange rate fluctuations related to forecasted subscription revenue and operating expenses [141]. - The company monitors the financial condition of large customers and limits credit exposure by collecting subscription fees in advance [140]. Other Income - Total other income, net decreased by $2.5 million to $2.2 million, a 117% decline, primarily due to a $3.7 million increase in interest income offset by a $1.2 million increase in foreign currency loss [118]. - The net dollar expansion rate was 104% as of March 31, 2024, down from 109% in the same period in 2023 [123].