Before diving into QLYS' quarterly report, here is some more background on the company:
QLYS is a provider of cloud-based security and compliance technologies that enable organizations to identify risks to their IT infrastructures, help protect their IT systems and applications from cyber attacks, and achieve compliance with internal policies and external regulations. The company says that companies and organizations use QLYS' products to cost-effectively obtain a unified view of their security and compliance status across their global IT infrastructures.
From there, its customers can collect and analyze large amounts of IT security data, discover and prioritize vulnerabilities, recommend remediation actions, and verify the implementation of any actions it undertook. It provides its solutions through a SaaS model, primarily with renewable annual subscriptions. These subscriptions require customers to pay a fee in order to access its cloud platform.
Circling back to its Q4 results and guidance, QLYS reported EPS of $0.32, good for a $0.04 beat, and up 39% year/year. Helping to drive earnings higher was a 100 basis point improvement in Non-GAAP gross margin, which came in at 79% versus 78% in the year ago quarter. On the topline, revenue grew by 20.5% to $62.9 million, edging out the $61.9 million Capital IQ Consensus.
In addition to the upside result, what is especially encouraging is that revenue growth has been accelerating over the past few quarters. Specifically, in Q2, revenue grew by 14%; then in Q3, revenue growth ticked higher to 17%, and then again, revenue growth improved to 20.5% this quarter.
Outside of the headline numbers, another positive is that cash flow from operating activities jumped by 58% to $107.6 million. Because of this strong cash flow, QLYS is able to conduct a new $100 million share buyback program.
Capping off the solid Q4 report was QLYS upside Q1 and FY18 guidance. For Q1, it is projecting EPS of $0.32-$0.34, well ahead of the $0.26 consensus, with revenue of $63.4-64.1 million vs. the $62.8 million consensus. On a year/year basis, the revenue outlook would equate to growth of 20%. For FY18, QLYS sees EPS of $1.39-$1.44, easily ahead of the $1.17 consensus, on revenue of $275.5-$278.5 million versus the $267.7 million consensus.
To conclude, it was yet another impressive quarterly report from QLYS as its consistency was once again on display. Heading into last night's print, the stock had sold-off, along with the broader markets. But, this beat-and-raise report should drive a reversal higher in the stock -- perhaps ultimately to new highs, which are certainly in reach.