Websense Posts Record Revenues

Security software vendor Websense Inc. (Nasdaq: WBSN) posted its fourth-quarter and annual results yesterday, posting fourth-quarter revenues of $31.7 million, up 40 percent on the same period in 2003, just topping analyst estimates of $31.26 million (see Websense Posts Q4, Plans for CEO).

Fourth-quarter earnings per share were 33 cents on net income of $8.1 million, an 80 percent increase on the fourth quarter of 2003. This also came in above the 31 cents estimated by analysts.

The San Diego, Calif.-based firms annual results were also strong. Revenues for the full year were $111.9 million, up 37 percent on 2003, and earnings were $1.09 per share on net income of $26.2 million, an increase of 57 percent on the previous year. Analysts had predicted annual revenue of $111.44 million and earnings of $1.06 for the year.

Speaking on a conference call earlier today, Websense execs explained that strong growth in software subscriptions during the fourth quarter had helped boost results. The company had increased its installed base by 1.3 million “seats” to 20 million worldwide, they said.

However, the coming year promises to be a period of change for Websense. After nearly six years at the helm, the company’s CEO John Carrington is planning to step down, and the search is now on to find his successor.During the call Carrington explained that it was his own decision to step down. “I want to emphasize that this decision was not prompted by health or any other issues,” he says.

But Carrington is not leaving altogether; the exec will remain chairman of the Websense board. This will be more of a strategic role, he says, where he will focus on technology, partnerships, and acquisitions. “I anticipate being around for a lot of years,” he adds.

Websense hopes to identify a potential successor by early 2006, according to Carrington. The former CEO of Artios Inc.(a CAD/CAM software company that got acquired) guided Websense through its March 2000 IPO. He says he will remain in his current role until a successor is identified.

Away from the CEO search, 2005 looks like a busy year for Websense. Execs on the call said that the company will soon be launching new product bundles, designed to help channel partners sell the software on to enterprise customers.

The company’s headcount is also set to increase. Websense CFO Doug Wride says the firm is planning to add between 100 and 120 people to its current workforce of 479 employees.Despite its strong results, Websense shares fell in after hours trading, dropping $1.10 (2.17%) to $49.63.

— James Rogers, Site Editor, Next-Gen Data Center Forum