Qualys Beats In Q3, But Light Guidance Drags Its Shares South 10%

Ahead of FireEye’s Wednesday report, Qualys reported its third quarter performance today, including revenue of $42.5 million,¬†and earnings per share of $0.11 using normal accounting techniques. Employing less rigorous standards, Qualys earned a steeper $0.19 per share.

Investors had expected the security shop to earn $0.13 off of revenue of $42.3 million. Up more than a point in regular trading, Qualys is sharply down in after-hours trading. Its forward guidance appears to be under market expectations.

The company’s revenue grew 24 percent compared to the year-ago period in the third quarter. The firm’s gross profit cycled north on a roughly commensurate basis. Earnings-per-share aside, here’s Qualys on how much money it made:

Net Income: GAAP net income for the third quarter of 2015 was $4.1 million, or $0.11 per diluted share, compared to $3.1 million, or $0.08 per diluted share, for the same quarter in 2014. Non-GAAP net income for the third quarter of 2015 was $7.1 million, or $0.19 per diluted share, compared to non-GAAP net income of $5.6 million, or $0.15 per diluted share, for the same quarter in 2014.

That all sounds just fine, right? Indeed, but what the company expects to happen next is underwhelming investors:

Fourth Quarter 2015 Guidance: Management expects revenues to be in the range of $44.3 million to $44.8 million. At the midpoint, this represents 22% growth over fourth quarter 2014 revenues. GAAP net income per diluted share is expected to be in the range of $0.08 to $0.10, which assumes an effective income tax rate of 38%, and non-GAAP net income per diluted share is expected to be in the range of $0.16 to $0.18[.]

Investors had expected the company to drop $45.8 million in current-quarter revenue.

Qualys also lowered its full-year guidance:

Full Year 2015 Guidance: Management now expects revenues to be in the range of $164.1 million to $164.6 million. At the midpoint, this represents 23% growth over 2014 full year revenues. This compares to the previous full year 2015 revenue guidance range of $165.0 to $166.5 million.

Investors currently expect a higher $165.6 million in full-year revenue.

So, the current quarter came in a bit above expectations, but what is ahead doesn’t match street sentiment. As of the time of writing, shares of Qualys of down nearly 11 percent. That tells you quite a lot.

At the same time, Qualys expanded, profited and forecasted growth. Those are solid pulse notes, even if the company’s guidance is light. It will be interesting to see where FireEye, another security firm, manages later this week when it records earnings.

Qualys is worth around $100 million less, at the moment, then it was at the close of regular trading.

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