Qualys Prepares $100m IPO

Cloud-based security provider Qualys has filed with the US Securities and Exchange Commission for an initial public offering (IPO), as it looks to raise $100 million.

Qualys did not say how many shares it would be offering to investors, nor at what price it was planning to offer them. J.P. Morgan Securities and Credit Suisse Securities have been brought in as joint bookrunning managers for the proposed IPO.

Qualys, which has strong financial backing from its CEO Philippe Courtot, said in its SEC filing it was planning to use the proceeds from the offering for “capital expenditures, working capital and other general corporate purposes, which may include hiring additional personnel and investing in sales and marketing and research and development”.

The security firm said it may also use some of the proceeds to acquire or invest in complementary businesses or technologies, according to the filing. It has one main solution, the QualysGuard cloud platform, on which various protections like web application firewalls and malware detection systems are offered.

Risky business?

In the ‘risks’ section of the filing, Qualys admitted it had not been consistently profitable on a quarterly or annual basis. It recorded a net loss of $0.3 million for the first quarter of this year. That was despite hitting $21.2 million in revenues for the three months ended 31 March, compared to $17.7 million from the same quarter a year ago, when it had a net income of $1 million.

Qualys said the net loss from this year “was primarily due to increased sales and marketing activities in the first quarter of 2012 as we continued to expand our worldwide customer base as well as focus on the promotion of our new solutions”.

“We plan to continue to invest in our infrastructure, new solutions, research and development and sales and marketing and, as a result, we cannot assure you that we will return to or maintain profitability. In addition, as a public company, we will incur significant accounting, legal and other expenses that we did not incur as a private company.”

Qualys also had a warning about the cloud industry, saying if the market for cloud solutions for security did not meet its expectations, its revenues might not grow.

The US-based company will be hoping its IPO goes a little better than that of Facebook, which has reportedly cost banking giant UBS as much as $350 million.

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