Company Reports

Qualys reported second-quarter earnings, with sales growing 11% to $182 million and GAAP operating margins expanding by 3 points to 34%. Management also raised its full-year sales outlook to $735 million, up from $724 million in the prior guidance.

We view Qualys as a strong cybersecurity vendor focused on providing cloud-based security and compliance solutions to its clients. The firm’s primary solutions revolve around vulnerability management, or VM, and are designed to help clients identify and mitigate vulnerabilities in their IT infrastructure. We view VM as a space poised for high-single-digit growth over the next few years, thereby providing Qualys with an additional uplift as demand for its products is expected to remain robust. We believe the company has built a narrow economic moat by developing a sticky product portfolio.

Qualys reported solid first-quarter results, with sales growing 10% to $176 million and operating margins expanding 230 basis points to 35%. The firm's nonvulnerability management solutions now make up 50% of its bookings, up from 46% a year ago.

Anthropic confirmed the existence of an upcoming model after Fortune first reported plans for it on March 26. This new model, named either Mythos or Capybara, is reportedly much better than existing models at finding cyber vulnerabilities. This news sent our cyber coverage down 5% on average.

On Feb. 20, Anthropic released a vulnerability-scanning tool aimed at security applications, leading to an average drawdown of over 5% across our cybersecurity coverage as investors worry that Anthropic and other artificial intelligence labs could replace cybersecurity functions within companies.

We view Qualys as a strong cybersecurity vendor focused on providing cloud-based security and compliance solutions to its clients. The firm’s primary solutions revolve around vulnerability management, or VM, and are designed to help clients identify and mitigate vulnerabilities in their IT infrastructure. We view VM as a space poised for high-single-digit growth over the next few years, thereby providing Qualys with an additional uplift as demand for its products is expected to remain robust. We believe the company has built a narrow economic moat by developing a sticky product portfolio.

Qualys ended 2025 with quarterly revenue of $175 million, up 10% year over year, driven by a 17% increase in channel-partner-driven revenue. Operating margin rose 260 basis points year over year to about 34%.

Qualys reported third-quarter results, with revenue of $169.9 million, up 10% year over year, and adjusted earnings per share of $1.86, up 9% year over year. The firm also outlined its fourth-quarter outlook, noting that budget scrutiny will likely remain a headwind to near-term growth.

Qualys closed out its second quarter with a set of strong financial results that included sales of $164 million and adjusted EPS of $1.68, both up 10% year over year. The firm raised its 2025 sales and profitability guidance, owing to a strong demand landscape and solid execution.

Qualys kicked off fiscal 2025 with the firm's sales growing 10% year over year to $160 million and operating margin expanding 170 basis points year over year to 32.4%. Alongside earnings, the firm also raised its fiscal 2025 guidance, primarily owing to the strong start to the year.

We view Qualys as a strong cybersecurity vendor focused on providing cloud-based security and compliance solutions to its clients. The firm’s primary solutions revolve around vulnerability management, or VM, and are designed to help clients identify and mitigate vulnerabilities in their IT infrastructure. We view VM as a space poised for high-single-digit growth over the next few years, thereby providing Qualys with an additional uplift as demand for its products is expected to remain robust. We believe the company has built a narrow economic moat by developing a sticky product portfolio.

Qualys reported good fourth-quarter financial results, with the firm's top line growing by 10% year over year to $159 million and operating margins expanding 240 basis points to 31%.

After Qualys released strong quarterly results on Nov. 5, Bloomberg reported that the cybersecurity company is considering a sale, with a private equity firm likely to be the potential acquirer.

Qualys reported solid third-quarter financial results, with the firm's top line growing 8% year over year to $154 million. Profitability also remained strong, with operating margins of 29% for the quarter.

We are lowering our fair value estimate for narrow-moat Qualys to $143 from $155, after the firm reported decent second-quarter results with a top-line deceleration outweighing its improved profitability. Top-line momentum showed cracks as second-quarter sales decelerated year over year, with further deceleration baked into management’s outlook for the upcoming two quarters. We attribute a portion of these top-line wobbles to vendor consolidation, with customers increasingly opting for more solutions from larger vendors, putting smaller players like Qualys in a tough spot. With shares dropping after hours, we view Qualys as fairly valued relative to our updated fair value estimate.

We view Qualys as a strong cybersecurity vendor focused on providing cloud-based security and compliance solutions to its clients. The firm’s primary solutions revolve around vulnerability management, or VM, and are designed to help clients identify and mitigate vulnerabilities in their IT infrastructure. We view VM as a space poised for high-single-digit growth over the next few years, thereby providing Qualys with an additional uplift as demand for its products is expected to remain robust. We believe the company has built a narrow economic moat by developing a sticky product portfolio.

We are maintaining our $155 fair value estimate for narrow-moat Qualys after the firm kicked off fiscal 2024 with strong financial results that were mostly ahead of our above-consensus estimates. We remain impressed by Qualys’ high-quality security business, which delivers strong profitability along with top-line growth in the teens. While we view most of the cybersecurity spending consolidation as benefiting larger vendors such as Palo Alto Networks, CrowdStrike, Fortinet, and Zscaler, we believe Qualys is well positioned to serve a variety of security needs for its small and medium business customer base. Its wide array of security solutions spans vulnerability management to compliance, allowing the firm access to different nodes of a client’s security infrastructure, thereby making its offerings stickier. With the shares trading down after hours, we view Qualys as fairly valued.

We view Qualys as a strong cybersecurity vendor focused on providing cloud-based security and compliance solutions to its clients. The firm’s primary solutions revolve around vulnerability management, or VM, and are designed to help clients identify and mitigate vulnerabilities in their IT infrastructure. We view VM as a space poised for high-single-digit growth over the next few years, thereby providing Qualys with an additional uplift as demand for its products is expected to remain robust. We believe the company has built a narrow economic moat by developing a sticky product portfolio.

We raise our fair value estimate for narrow-moat Qualys to $155 from $143 after the firm closed out 2023 with a strong set of financial results. While the firm’s initial outlook for 2024 was lower than our prior estimates, we still view a path for Qualys to maintain a low teens revenue growth profile over the next five years while increasing its profitability as it scales. We remind investors that while the company’s top-line expansion is below that of other higher-growth security peers, Qualys’ margin profile is among the best in our security coverage. From a longer-term perspective, we believe Qualys is well-positioned to serve a variety of cybersecurity needs for its small and medium business-leaning customer base. The firm’s cybersecurity capabilities range from vulnerability management to compliance-related security solutions. We believe this breadth of offerings can provide Qualys with further revenue expansion opportunities within its installed base and help entrench its solutions within a client’s IT stack. The firm’s shares traded down after hours, and we view them as fairly valued after our fair value increase.

We view Qualys as a strong cybersecurity vendor focused on providing cloud-based security and compliance solutions to its clients. The firm’s primary solutions revolve around vulnerability management, or VM, and are designed to help Qualys’ clients identify and mitigate vulnerabilities in their IT infrastructure. We view VM as a space poised for high single-digit growth over the next few years, thereby providing Qualys with an additional uplift as demand for its products is expected to remain robust. As Qualys competes within the space going forward, we believe the firm has built out a narrow economic moat by developing a sticky product portfolio.