Medical systems software maker Quality Systems (NASDAQ:QSII) reported more blowout numbers yesterday. The company's Q2 delivered a 35% year-over-year gain in revenue, a 41% jump in net income, and a 37% rise in diluted EPS.

Thank the company's NextGen Healthcare Information Systems division, whose electronic medical records revenues jumped 57%, and operating profit, 81% year over year. NextGen revenues comprised 76% of total company sales in Q2, with the remainder stemming from the Quality Systems division that markets to a more mature dental market (older dentists -- kidding!). There, revenues actually declined 5% and 4% year over year for the last two quarters, though they were up 3% sequentially.

Here are just a few things we picked up from NextGen President Pat Cline on the company's earnings call, transcribed and made available for us courtesy of CCBN/StreetEvents:

Enough business coming in?

From time to time we've had difficulty keeping on top of all the leads that we have. We've had to get on some sales reps from time to time to make sure they actually follow up the leads because they have more leads than they can handle.

Opportunities for growth?

...[W]e're trying to control our growth. Our year-over-year growth has been tremendous, but we don't want to get ahead of ourselves, chasing every market segment and every opportunity that's out there. There are opportunities for related markets. There are opportunities internationally. There are additional opportunities within the government, specialties -- certain specialties that we're not really attacking. There's more that we could do with respect to marketing. Again, it's an infant market that is I believe just starting to explode. So there are quite a lot of opportunities out there that we can be and hopefully will be pursuing.

Size of that market?

I think the market is somewhere around 10% saturated. So 90% of those are wide open...the market for clinical information systems [today] is in the billions, not the millions.

Investors have cottoned to the stock in the last year (some through its selection in the Motley Fool's annual Stocks 2003 and monthly subscription newsletter, Motley Fool Stock Advisor), driving shares up 157% on the year. Now they sell for a rich 37 times trailing 12-month (ttm) EPS and 31 times ttm free cash flow (beginning with the June quarter, because the company hasn't filed or released its Q2 cash flow statement).

But for a taste of this incredible overall growth, here are the last eight quarters:

  
         Total         % ChangeQuarter Revs.     Y-O-Y*    Seq.**Q2 04  $17.6 mil. 35.8%      8.2%   Q1 04   16.3      32.5%      8.2%Q4 03   15.1      25.8%      4.6%Q3 03   14.4      30.4%     10.8%Q2 03   13.0      23.8%      5.6%Q1 03   12.3      12.8%      2.8%Q4 02   12.0       --        8.4%Q3 02   11.0       --        5.2%*Vs. the year-ago period. **Vs. the preceding quarter.

Rich or not, Quality Systems' valuation is more than justified by its growth rate, so long as it continues. And in the delightful position Pat Cline describes, it shows every sign of doing just that.

To learn more about Quality Systems, check out Quality Systems Delivers , Quality Systems' Winning Ways , and EMR: Electronic Medical Revolution . This one's worth the effort.