GlobalSCAPE Inc (GSB, Financial) filed Quarterly Report for the period ended 2012-06-30.
Globalscape, Inc. has a market cap of $36.9 million; its shares were traded at around $2.08 with a P/E ratio of 202 and P/S ratio of 1.8.
As detailed below in the discussion of our results of operations, revenue was substantially flat for the three months ended June 30, 2012, compared to the same period in 2011 and grew by approximately 7% for the six months ended June 30, 2012 relative to the comparable period in 2011. Our software license revenue decreased approximately 11% in the second quarter of 2012 relative to the second quarter of 2011 while increasing approximately 1% for the first six months of 2012 compared to the first six months of 2011. We attribute the relative flatness of our software license revenue trends in recent periods to the previously described transitional effects associated with introduction of our cloud-based managed solutions, continuing attainment of market traction for our software solutions such as Mail Express, and the maturity of certain of our other software solutions, such as CuteFTP. Future new releases of mature solutions like CuteFTP and EFT Server, including optional modules, may provide opportunities to positively influence trends in this area. As described below under Recurring Revenue Growth, M&S and managed solutions revenue grew substantially in the first six months of 2012 as compared to the same period of 2011. M&S revenue currently is the largest contributor to our total revenue growth which we believe reflects continued customer reliance on, and satisfaction with, our solutions.
Recurring revenue continued to grow during the three and six months ended June 30, 2012 as compared to the comparable periods in 2011. As stated in our 2011 Form 10-K, an increase in deferred revenue indicates both growth in our installed base and satisfaction with our products and our maintenance and support services. At June 30, 2012, deferred revenue was $8.0 million, an increase of$1.0 million, or approximately14%, over the balance at June 30, 2011 of $7.0 million. Sales of our cloud-based managed solutions continued to grow during the three and six months ended June 30, 2012, reaching more than $1.0 million in total contracted services since the launch of this line of business in the second half of 2010 with more than 35% of the total sales since inception occurring during the six months ended June 30, 2012. These sales increasingly will factor into additional recurring revenue in future periods.
We believe increasing recurring revenue provides greater predictability of revenue in future periods and a stronger hedge against future business or broader economic downturns. Our recurring revenue, such as that from M&S contracts, increased by 16.6% to $5.3 million for the six months ended June 30, 2012, compared to $4.5 million for the six months ended June 30, 2011.
In July 2012, we finalized a new contract with the U.S. Army to continue supporting the Standard Army Maintenance System-Enhanced (SAMS-E) logistics program. This is the fourth large U.S. Army contract for Globalscape since 2005. The new contract extends through July 2013 and replaces a previous three-year contract awarded in 2009. This sole source contract is for $1.35 million for the first year which we will recognize as revenue in equal monthly installments over that term. The agreement includes two one-year renewal options that, if exercised, could result in a total contract value in excess of $4.5 million making it potentially the largest single contract ever received by Globalscape. Under this agreement, we will continue to provide maintenance and support to previously purchased software licenses, including the Enhanced File Transfer Server solution and CuteFTP Pro managed file transfer application. Globalscape solutions enable the SAMS-E program to maintain compliance with federal and U.S. Army and information security regulations as a result of our product certifications that include Federal Information Processing Standards (FIPS 140-2) and the U.S. Army Certificate of Networthiness (CoN).
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Globalscape, Inc. has a market cap of $36.9 million; its shares were traded at around $2.08 with a P/E ratio of 202 and P/S ratio of 1.8.
Highlight of Business Operations:
Since 1996, we have transitioned from a consumer products company (mostly focused on CuteFTP) to an enterprise solutions provider with growing revenue contribution from cloud-based solutions and professional services. We have grown revenue consistently throughout this transition such that our enterprise solutions sales have grown from less than 50% of our revenue as recently as 2005 to now comprising the bulk of our sales with our CuteFTP consumer products accounting for less than 5% of revenue for the three and six months ended June 30, 2012. We believe our ability to sustain revenue growth while continuing our business transformation is the most significant metric for our business.As detailed below in the discussion of our results of operations, revenue was substantially flat for the three months ended June 30, 2012, compared to the same period in 2011 and grew by approximately 7% for the six months ended June 30, 2012 relative to the comparable period in 2011. Our software license revenue decreased approximately 11% in the second quarter of 2012 relative to the second quarter of 2011 while increasing approximately 1% for the first six months of 2012 compared to the first six months of 2011. We attribute the relative flatness of our software license revenue trends in recent periods to the previously described transitional effects associated with introduction of our cloud-based managed solutions, continuing attainment of market traction for our software solutions such as Mail Express, and the maturity of certain of our other software solutions, such as CuteFTP. Future new releases of mature solutions like CuteFTP and EFT Server, including optional modules, may provide opportunities to positively influence trends in this area. As described below under Recurring Revenue Growth, M&S and managed solutions revenue grew substantially in the first six months of 2012 as compared to the same period of 2011. M&S revenue currently is the largest contributor to our total revenue growth which we believe reflects continued customer reliance on, and satisfaction with, our solutions.
Recurring revenue continued to grow during the three and six months ended June 30, 2012 as compared to the comparable periods in 2011. As stated in our 2011 Form 10-K, an increase in deferred revenue indicates both growth in our installed base and satisfaction with our products and our maintenance and support services. At June 30, 2012, deferred revenue was $8.0 million, an increase of$1.0 million, or approximately14%, over the balance at June 30, 2011 of $7.0 million. Sales of our cloud-based managed solutions continued to grow during the three and six months ended June 30, 2012, reaching more than $1.0 million in total contracted services since the launch of this line of business in the second half of 2010 with more than 35% of the total sales since inception occurring during the six months ended June 30, 2012. These sales increasingly will factor into additional recurring revenue in future periods.
We believe increasing recurring revenue provides greater predictability of revenue in future periods and a stronger hedge against future business or broader economic downturns. Our recurring revenue, such as that from M&S contracts, increased by 16.6% to $5.3 million for the six months ended June 30, 2012, compared to $4.5 million for the six months ended June 30, 2011.
In July 2012, we finalized a new contract with the U.S. Army to continue supporting the Standard Army Maintenance System-Enhanced (SAMS-E) logistics program. This is the fourth large U.S. Army contract for Globalscape since 2005. The new contract extends through July 2013 and replaces a previous three-year contract awarded in 2009. This sole source contract is for $1.35 million for the first year which we will recognize as revenue in equal monthly installments over that term. The agreement includes two one-year renewal options that, if exercised, could result in a total contract value in excess of $4.5 million making it potentially the largest single contract ever received by Globalscape. Under this agreement, we will continue to provide maintenance and support to previously purchased software licenses, including the Enhanced File Transfer Server solution and CuteFTP Pro managed file transfer application. Globalscape solutions enable the SAMS-E program to maintain compliance with federal and U.S. Army and information security regulations as a result of our product certifications that include Federal Information Processing Standards (FIPS 140-2) and the U.S. Army Certificate of Networthiness (CoN).
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