Websense (NASDAQ:WBSN) had another successful quarter of confounding workers' attempts to surf questionable sites and/or download undesirable and potentially dangerous content.

Reported revenue rose 39% to just over $34 million for the first quarter, and billings grew 34% to $35.5 million. While both figures show good annual growth, the billings number was down significantly on a sequential basis. Investors worried about this need to consider two factors.

First, a fair bit of revenue slipped from the third quarter into the fourth quarter and inflated that number a bit. Second, a sequential decline in bookings from the fourth quarter to the first quarter is entirely normal for this company -- it has happened in the two previous years.

Operating income climbed about 61%, and the company generated about $26 million in operating cash flow, exiting the quarter with about $268 million in cash on the balance sheet.

The company added about 500,000 seats under subscription on a sequential basis (3.5 million on an annual comparison), and more than 50% of subscriptions included at least one add-on product. Renewals remained fairly firm, the company announced several major new clients, and renewals continued to make up about two-thirds of subscription revenue.

If there was an area of concern for the quarter, it was that average contract value slipped sequentially to $7,700 from $8,300, though it was higher than the year-ago figure of $6,400. I don't believe this is an especially big problem, especially since it fits a historical seasonal trend, but some of the bears might try to seize on it as "proof" that this industry is becoming commoditized and that pricing is under attack.

Although Websense remains one of the strongest companies in its space, that's not to say that there isn't competition. SurfControl and Secure Computing (NASDAQ:SCUR) are still in the game. Other companies, like Blue Coat Systems (NASDAQ:BCSI), Watchguard (NASDAQ:WGRD), and Internet Security Systems (NASDAQ:ISSX), are taking a "back-door approach" of adding on filtering modules to other, broader security products. Of course, large players like Symantec (NASDAQ:SYMC) and Computer Associates (NYSE:CA) could get more aggressive as well.

All that said, I'm not especially worried. Many competitive offerings are little more than souped-up porn blockers and don't really compare with Websense's products. What's more, Websense offers specialized modules that offer functionality like guards against IM attachments and protection from portable storage devices that may harbor dangerous code and/or be used to violate company rules and policies.

At the end of the day, any good idea is going to get copied, and any attractive market is going to attract competition. That's just a reality of life that investors need to deal with and accept. It's also a fact of life that Websense's growth has to slow down at some point.

Websense's P/E looks high, though I think the enterprise value-to-free cash flow metric is more important. And by that standard, the shares don't look too expensive -- even if growth slows a bit. Accordingly, I still think Websense might make sense for more aggressive investors looking for exposure to the software/Internet industries.

Need help making sense of Websense? Avail yourself of these previous Foolish takes:

Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).