Revenue during the quarter grew 20.06 percent to $50.99 million from $42.47 million in the previous year period. Gross margin for the quarter contracted 151 basis points over the previous year period to 77.86 percent. Total expenses were 84.34 percent of quarterly revenues, up from 83.80 percent for the same period last year. That has resulted in a contraction of 53 basis points in operating margin to 15.66 percent.

Operating income for the quarter was $7.99 million, compared with $6.88 million in the previous year period.

However, the adjusted operating income for the quarter stood at $13.09 million compared to $11.30 million in the prior year period. At the same time, adjusted operating margin contracted 93 basis points in the quarter to 25.67 percent from 26.61 percent in the last year period.

“Our strong third quarter 2016 results continue to underscore the market demand for our cloud-based security and compliance platform with customers worldwide using our services to continuously secure their global IT assets while enabling their digital transformation into the cloud,” said Philippe Courtot, chairman and chief executive officer, Qualys, Inc. “We continue to focus our efforts on a balanced approach to growth and profitability as reflected in our financial performance. Such an approach allows us to continue investing in our platform, expanding our existing offerings and adding new ground-breaking services as we recently demonstrated at our 16th annual user conference in Las Vegas. Furthermore, this gives us a strong competitive advantage, significantly outpacing the competition and further establishing ourselves as a leader in cybersecurity.”

For the fourth-quarter, Qualys forecasts revenue to be in the range of $197.60 million to $198.60 million. Qualys forecasts revenue to be in the range of $51.90 million to $52.90 million for fiscal year 2016. The company expects diluted earnings per share to be in the range of $0.41 to $0.42 for the fourth-quarter. For fiscal year 2016, the company expects diluted earnings per share to be in the range of $0.06 to $0.08. On an adjusted basis, the company expects diluted earnings per share to be in the range of $0.79 to $0.80 for the fourth-quarter. For fiscal year 2016, the company expects diluted earnings per share to be in the range of $0.16 to $0.18 on adjusted basis.

The company has spent $65.26 million cash to meet investing activities during the nine month period as against cash outgo of $30.32 million in the last year period.

Cash flow from financing activities was $17.16 million for the nine month period, up 148.36 percent or $10.25 million, when compared with the last year period.

Cash and cash equivalents stood at $98.30 million as on Sep. 30, 2016, up 3.73 percent or $3.54 million from $94.76 million on Sep. 30, 2015.

Working capital increases
Qualys, Inc has recorded an increase in the working capital over the last year. It stood at $134.12 million as at Sep. 30, 2016, up 11.79 percent or $14.15 million from $119.97 million on Sep. 30, 2015. Current ratio was at 2.06 as on Sep. 30, 2016, down from 2.14 on Sep. 30, 2015.

Days sales outstanding went down to 69 days for the quarter compared with 78 days for the same period last year.

At the same time, days payable outstanding went down to 10 days for the quarter from 16 for the same period last year.