Qualys’ second quarter performance reflected steady execution in a competitive cybersecurity landscape, with management attributing growth to product expansion, increased channel partner activity, and rising demand for integrated risk management solutions. CEO Sumedh Thakar highlighted the company’s focus on its cloud-native Enterprise Threat Management (ETM) platform and new Agentic AI capabilities as key contributors. The quarter also saw progress in partner-driven sales and an improvement in net dollar expansion rate, with CFO Joo Mi Kim noting, “We are optimistic that we were able to make an improvement from both the gross retention as well as upsell perspective this quarter.”
Is now the time to buy QLYS? Find out in our full research report (it’s free).
Qualys (QLYS) Q2 CY2025 Highlights:
- Revenue: $164.1 million vs analyst estimates of $161.3 million (10.3% year-on-year growth, 1.7% beat)
- Adjusted EPS: $1.68 vs analyst estimates of $1.48 (13.3% beat)
- Adjusted Operating Income: $70.09 million vs analyst estimates of $63.49 million (42.7% margin, 10.4% beat)
- The company slightly lifted its revenue guidance for the full year to $659 million at the midpoint from $652.5 million
- Management raised its full-year Adjusted EPS guidance to $6.35 at the midpoint, a 3.3% increase
- Operating Margin: 31.3%, in line with the same quarter last year
- Annual Recurring Revenue: $656.2 million at quarter end, up 10.3% year on year
- Billings: $149.4 million at quarter end, up 7.9% year on year
- Market Capitalization: $4.62 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Qualys’s Q2 Earnings Call
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Jonathan Frank Ho (William Blair) asked about macro headwinds and guidance conservatism. CEO Sumedh Thakar said, “We’re not assuming anything is getting better from an environmental perspective,” while CFO Joo Mi Kim highlighted slight improvements in customer expansion.
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Roger Foley Boyd (UBS) inquired about the billings versus revenue growth gap. Kim explained current billings growth remains in line with prior expectations and is a leading indicator for future revenue.
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William Kingsley Crane (Canaccord) questioned the impact of the new QLU pricing model on deal size. Thakar described strong early feedback, with customers able to trial more modules and potentially increase commitments over time.
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Trevor James Walsh (Citizens) asked about AI strategy and M&A in the AI security space. Thakar detailed rapid internal innovation, emphasizing the company’s ability to react to evolving protocols and customer requirements.
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Joshua Alexander Tilton (Wolfe Research) pressed on channel initiatives and the timing of large deals. Thakar clarified that while pipeline is building, specific large deals are not yet factored into near-term revenue projections.
Catalysts in Upcoming Quarters
Our team will be closely monitoring (1) initial customer adoption and upsell trends linked to the new QLU pricing model, (2) the pace at which certified partners drive managed Risk Operations Center deployments, and (3) progress in securing larger federal contracts following FedRAMP High certification. Execution in these areas, along with continued net retention improvements, will be key signs of strategic traction.
Qualys currently trades at $127.01, down from $130.81 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).
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