Qualys Announces First Quarter 2025 Financial Results
- Revenue increased 10% YoY to $159.9 million
- GAAP net income grew 20% YoY to $47.5 million
- Operating cash flow increased 28% to $109.6 million
- Strong gross margins at 82% GAAP and 84% non-GAAP
- Raised full-year 2025 revenue guidance
- Improved GAAP net income guidance from $3.62-$4.02 to $4.27-$4.57 per share
- Revenue growth guidance for full year 2025 shows deceleration to 7-8%
- Q2 2025 revenue growth guidance of 7-9% indicates continued growth slowdown
Insights
Qualys delivered strong Q1 with 10% revenue growth, 20% profit growth, and impressive 69% operating cash flow margins while raising full-year guidance.
Qualys delivered exceptional Q1 2025 results showcasing both consistent growth and remarkable profitability metrics. Revenue grew
The company's cash generation capabilities are particularly impressive. Operating cash flow jumped
Margin expansion appears across all key metrics. GAAP gross margin improved to
Management's raised guidance signals confidence in the business trajectory. While the revenue guidance increase was modest (raising the lower end from
Qualys strengthens its market position with integrated security offerings, partner-enabled services, and strategic ServiceNow integration to address enterprise security challenges.
Qualys is executing on a clear platform consolidation strategy that aligns perfectly with enterprise demands for simplified security operations. The launch of TotalAppSec represents a significant move toward security convergence by unifying previously distinct functions—API security, web application scanning, and malware detection—into a cohesive solution that addresses the complete application security lifecycle.
The introduction of the Managed Risk Operation Center (mROC) reveals a smart channel strategy that enables partners to deliver Qualys' Enterprise TruRisk Management capabilities as managed services. This approach expands market reach without requiring direct sales investment while creating new revenue opportunities for partners who can offer unified risk management services to clients with limited security resources.
Third-party validation from GigaOm strengthens Qualys' competitive positioning in two critical markets: cloud workload security and attack surface management. Being named both a leader and outperformer in cloud security particularly validates their approach to securing hybrid environments—an essential capability as organizations continue operating across multiple cloud and on-premises environments.
The ServiceNow integration represents a strategic enhancement to enterprise workflow capabilities. By connecting Qualys' runtime container security intelligence with ServiceNow's workflow automation, the company addresses a critical friction point in vulnerability management processes. This integration streamlines remediation workflows and improves security team efficiency—crucial advantages in today's resource-constrained cybersecurity environments.
CEO Sumedh Thakar's emphasis on "real-time data, automation, and AI" signals Qualys' alignment with the evolving cybersecurity landscape where manual processes are giving way to intelligence-driven, automated operations that can match the speed and scale of modern threats.
Revenue Growth of
Raises 2025 Revenue Guidance to
"Our Q1 results reflect the success of new product initiatives and demonstrate customer demand for natively-integrated cybersecurity risk management solutions," said Sumedh Thakar, Qualys' president and CEO. "We believe our cloud-native architecture and rapid innovation engine underpin our leadership in cybersecurity transformation, extend our competitive differentiation, and provide multiple paths to drive durable long-term growth. As we enter a new paradigm of cyber risk management powered by real-time data, automation, and AI, our Enterprise TruRisk Management solution fosters enduring customer engagements, redefines and empowers real cybersecurity stack consolidation, and strategically positions Qualys as a foundational risk management platform of the future."
First Quarter 2025 Financial Highlights
Revenues: Revenues for the first quarter of 2025 increased by
Gross Profit: GAAP gross profit for the first quarter of 2025 increased by
Operating Income: GAAP operating income for the first quarter of 2025 increased by
Net Income: GAAP net income for the first quarter of 2025 increased by
Adjusted EBITDA: Adjusted EBITDA (a non-GAAP financial measure) for the first quarter of 2025 increased by
Operating Cash Flow: Operating cash flow for the first quarter of 2025 increased by
First Quarter 2025 Business Highlights
- Introduced the Managed Risk Operation Center (mROC), powered by Qualys' Enterprise TruRisk Management solution, allowing select partners to expand their revenue streams by offering a unified managed service that helps clients identify, quantify, assess, and mitigate cyber risk.
- Launched TotalAppSec a comprehensive application risk management solution unifying API security, web application scanning, and malware detection. This integrated approach helps organizations quickly identify, prioritize, and remediate critical issues across the enterprise accelerating risk reduction.
- Independent analyst firm, GigaOm, named Qualys' TotalCloud a leader and outperformer in its Cloud Workload Security Radar, citing its comprehensive support for hybrid environments and superior asset discovery. GigaOm also named Qualys' CyberSecurity Asset Manager a leader in its Attack Surface Management Radar, recognizing its ability to unify internal and external attack surface monitoring and its growing emphasis on discovery and validation.
- Integrated Container Security with ServiceNow to enable organizations to seamlessly detect, prioritize, and remediate vulnerabilities at scale using Qualys' runtime-aware security intelligence with ServiceNow's workflow automation. Available via the ServiceNow store, the solution helps systematically track and reduce risk across containerized environments.
Financial Performance Outlook
Based on information as of today, May 6, 2025, Qualys is issuing the following financial guidance for the second quarter and full year fiscal 2025. The Company emphasizes that the guidance is subject to various important cautionary factors referenced in the sections entitled "Legal Notice Regarding Forward-Looking Statements" and "Non-GAAP Financial Measures" below.
Second Quarter 2025 Guidance: Management expects revenues for the second quarter of 2025 to be in the range of
Full Year 2025 Guidance: Management now expects revenues for the full year of 2025 to be in the range of
Qualys has not reconciled non-GAAP net income per diluted share guidance to GAAP net income per diluted share guidance because Qualys does not provide guidance on the various reconciling cash and non-cash items between GAAP net income and non-GAAP net income (i.e., stock-based compensation, amortization of intangible assets from acquisitions and non-recurring items). The actual dollar amount of reconciling items in the second quarter and full year 2025 is likely to have a significant impact on the Company's GAAP net income per diluted share in the second quarter and full year 2025. A reconciliation of the non-GAAP net income per diluted share guidance to the GAAP net income per diluted share guidance is not available without unreasonable effort.
Investor Conference Call
Qualys will host a conference call and live webcast to discuss its first quarter financial results at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) on Tuesday, May 6, 2025. To access the conference call by phone, please register here. A live webcast of the earnings conference call, investor presentation and prepared remarks can be accessed at https://investor.qualys.com/events-presentations. A replay of the conference call will be available through the same webcast link following the end of the call.
Investor Contact
Blair King
Vice President, Investor Relations and Corporate Development
(650) 538-2088
ir@qualys.com
About Qualys
Qualys, Inc. (NASDAQ: QLYS) is a leading provider of disruptive cloud-based Security, Compliance and IT solutions with more than 10,000 subscription customers worldwide, including a majority of the Forbes Global 100 and Fortune 100. Qualys helps organizations streamline and consolidate their security and compliance solutions onto a single platform for greater agility, better business outcomes, and substantial cost savings.
The Qualys Enterprise TruRisk Platform leverages a single agent to continuously deliver critical security intelligence while enabling enterprises to automate the full spectrum of vulnerability detection, compliance, and protection for IT systems, workloads and web applications across on premises, endpoints, servers, public and private clouds, containers, and mobile devices. Founded in 1999 as one of the first SaaS security companies, Qualys has strategic partnerships and seamlessly integrates its vulnerability management capabilities into security offerings from cloud service providers, including Amazon Web Services, the Google Cloud Platform and Microsoft Azure, along with a number of leading managed service providers and global consulting organizations. For more information, please visit www.qualys.com.
Qualys, Qualys VMDR® and the Qualys logo are proprietary trademarks of Qualys, Inc. All other products or names may be trademarks of their respective companies.
Legal Notice Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements generally relate to future events or our future financial or operating performance. Forward-looking statements in this press release include, but are not limited to, quotations of management and statements related to: the benefits of our existing, new and upcoming products, features, integrations, acquisitions, collaborations and joint solutions, and their impact upon our long-term growth; our ability to advance our value proposition and competitive differentiation in the market; our ability to address demand trends; our ability to maintain and strengthen our category leadership; our ability to solve modern security challenges at scale; our strategies and ability to achieve and maintain durable profitable growth; our guidance for revenues, GAAP EPS and non-GAAP EPS for the second quarter and full year 2025; and our expectations for the number of weighted average diluted shares outstanding and the GAAP and non-GAAP effective income tax rate for the second quarter and full year 2025. Our expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks include our ability to continue to develop platform capabilities and solutions; the ability of our platform and solutions to perform as intended; customer acceptance and purchase of our existing solutions and new solutions; real or perceived defects, errors or vulnerabilities in our products or services; our ability to retain existing customers and generate new customers; the budgeting cycles and seasonal buying patterns of our customers; general market, political, economic and business conditions in
The forward-looking statements in this press release are based on information available to Qualys as of the date hereof, and Qualys disclaims any obligation to update any forward-looking statements, except as required by law.
Non-GAAP Financial Measures
In addition to reporting financial results in accordance with GAAP, Qualys provides investors with certain non-GAAP financial measures, including non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP net income, non-GAAP net income per diluted share, Adjusted EBITDA (defined as earnings before interest expense, interest income and other income (expense), net, income taxes, depreciation, amortization, and stock-based compensation) and non-GAAP free cash flows (defined as cash provided by operating activities less purchases of property and equipment, net of proceeds from disposal).
In computing non-GAAP financial measures, Qualys excludes the effects of stock-based compensation expense, amortization of intangible assets from acquisitions, non-recurring items and for non-GAAP net income, certain tax effects. Qualys believes that these non-GAAP financial measures help illustrate underlying trends in its business that could otherwise be masked by the effect of the income or expenses that are excluded in non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP net income, non-GAAP net income per diluted share, Adjusted EBITDA and non-GAAP free cash flows.
Furthermore, Qualys uses some of these non-GAAP financial measures to establish budgets and operational goals for managing its business and evaluating its performance. Qualys believes that non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP net income, non-GAAP net income per diluted share, Adjusted EBITDA and non-GAAP free cash flows provide additional tools for investors to use in comparing its recurring core business operating results over multiple periods with other companies in its industry.
Although Qualys does not focus on or use quarterly billings in managing or monitoring the performance of its business, Qualys provides calculated current billings (defined as total revenues recognized in a period plus the sequential change in current deferred revenue in the corresponding period) for the convenience of investors and analysts in building their own financial models.
In order to provide a more complete picture of recurring core operating business results, the Company's non-GAAP net income and non-GAAP net income per diluted share include adjustments for non-recurring income tax items and certain tax effects of non-GAAP adjustments to achieve the effective income tax rate on a non-GAAP basis. The Company's non-GAAP effective tax rate may differ from the GAAP effective income tax rate as a result of these income tax adjustments. The Company believes its estimated non-GAAP effective income tax rate of
The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. A reconciliation of the non-GAAP financial measures discussed in this press release to the most directly comparable GAAP financial measures is included with the financial statements contained in this press release. Management uses both GAAP and non-GAAP information in evaluating and operating its business internally and as such has determined that it is important to provide this information to investors.
Qualys, Inc. | |||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||
(unaudited) | |||
(in thousands, except per share data) | |||
Three Months Ended | |||
2025 | 2024 | ||
Revenues | $ 159,899 | $ 145,805 | |
Cost of revenues (1) | 28,926 | 27,198 | |
Gross profit | 130,973 | 118,607 | |
Operating expenses: | |||
Research and development (1) | 29,154 | 27,530 | |
Sales and marketing (1) | 32,660 | 29,408 | |
General and administrative (1) | 17,404 | 16,908 | |
Total operating expenses | 79,218 | 73,846 | |
Income from operations | 51,755 | 44,761 | |
Other income (expense), net: | |||
Interest income | 6,235 | 6,123 | |
Other income (expense), net | 317 | (1,399) | |
Total other income, net | 6,552 | 4,724 | |
Income before income taxes | 58,307 | 49,485 | |
Income tax provision | 10,773 | 9,754 | |
Net income | $ 47,534 | $ 39,731 | |
Net income per share: | |||
Basic | $ 1.30 | $ 1.08 | |
Diluted | $ 1.29 | $ 1.05 | |
Weighted average shares used in computing net income per share: | |||
Basic | 36,466 | 36,955 | |
Diluted | 36,784 | 37,723 | |
(1) Includes stock-based compensation as follows: | |||
Cost of revenues | $ 2,090 | $ 2,020 | |
Research and development | 5,104 | 5,303 | |
Sales and marketing | 3,200 | 3,739 | |
General and administrative | 8,426 | 7,969 | |
Total stock-based compensation, net of amounts capitalized | $ 18,820 | $ 19,031 | |
Qualys, Inc. | |||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||
(unaudited) | |||
(in thousands) | |||
March 31, | December 31, | ||
Assets | |||
Current assets: | |||
Cash and cash equivalents | $ 290,671 | $ 232,182 | |
Short-term marketable securities | 150,206 | 149,241 | |
Accounts receivable, net | 121,563 | 164,551 | |
Prepaid expenses and other current assets | 39,506 | 39,717 | |
Total current assets | 601,946 | 585,691 | |
Long-term marketable securities | 198,990 | 193,887 | |
Property and equipment, net | 28,250 | 30,349 | |
Operating leases - right of use asset | 41,329 | 40,968 | |
Deferred tax assets, net | 86,059 | 81,307 | |
Intangible assets, net | 6,172 | 6,812 | |
Goodwill | 7,447 | 7,447 | |
Noncurrent restricted cash | 1,200 | 1,200 | |
Other noncurrent assets | 25,078 | 25,876 | |
Total assets | $ 996,471 | $ 973,537 | |
Liabilities and Stockholders' Equity | |||
Current liabilities: | |||
Accounts payable | $ 1,292 | $ 1,270 | |
Accrued liabilities | 52,921 | 45,942 | |
Deferred revenues, current | 366,824 | 371,457 | |
Operating lease liabilities, current | 10,991 | 9,721 | |
Total current liabilities | 432,028 | 428,390 | |
Deferred revenues, noncurrent | 22,073 | 24,265 | |
Operating lease liabilities, noncurrent | 37,652 | 37,500 | |
Other noncurrent liabilities | 6,683 | 6,266 | |
Total liabilities | 498,436 | 496,421 | |
Stockholders' equity: | |||
Common stock | 36 | 37 | |
Additional paid-in capital | 677,531 | 664,879 | |
Accumulated other comprehensive income | 136 | 1,417 | |
Accumulated deficit | (179,668) | (189,217) | |
Total stockholders' equity | 498,035 | 477,116 | |
Total liabilities and stockholders' equity | $ 996,471 | $ 973,537 | |
Qualys, Inc. | |||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||
(unaudited) | |||
(in thousands) | |||
Three Months Ended | |||
2025 | 2024 | ||
Cash flow from operating activities: | |||
Net income | $ 47,534 | $ 39,731 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization expense | 4,177 | 5,239 | |
Provision for credit losses | 206 | 193 | |
Stock-based compensation, net of amounts capitalized | 18,820 | 19,031 | |
Accretion of discount on marketable securities, net | (1,107) | (1,915) | |
Deferred income taxes | (4,360) | (4,111) | |
Changes in operating assets and liabilities: | |||
Accounts receivable | 42,782 | 30,404 | |
Prepaid expenses and other assets | 162 | (10,126) | |
Accounts payable | (66) | (335) | |
Accrued liabilities and other noncurrent liabilities | 8,265 | 8,892 | |
Deferred revenues | (6,825) | (1,498) | |
Net cash provided by operating activities | 109,588 | 85,505 | |
Cash flow from investing activities: | |||
Purchases of marketable securities | (55,525) | (61,340) | |
Sales and maturities of marketable securities | 50,532 | 71,463 | |
Purchases of property and equipment | (2,038) | (2,051) | |
Net cash provided by (used in) investing activities | (7,031) | 8,072 | |
Cash flow from financing activities: | |||
Repurchase of common stock | (39,653) | (18,029) | |
Proceeds from exercise of stock options | 2,599 | 2,770 | |
Payments for taxes related to net share settlement of equity awards | (10,831) | (11,808) | |
Proceeds from issuance of common stock through employee stock purchase plan | 3,817 | 3,608 | |
Payment of acquisition-related holdback | — | (1,500) | |
Net cash used in financing activities | (44,068) | (24,959) | |
Net increase in cash, cash equivalents and restricted cash | 58,489 | 68,618 | |
Cash, cash equivalents and restricted cash at beginning of period | 233,382 | 206,365 | |
Cash, cash equivalents and restricted cash at end of period | $ 291,871 | $ 274,983 | |
Qualys, Inc. | |||
RECONCILIATION OF NON-GAAP DISCLOSURES | |||
ADJUSTED EBITDA | |||
(unaudited) | |||
(in thousands, except percentages) | |||
Three Months Ended | |||
2025 | 2024 | ||
Net income | $ 47,534 | $ 39,731 | |
Net income as a percentage of revenues | 30 % | 27 % | |
Depreciation and amortization of property and equipment | 3,537 | 4,467 | |
Amortization of intangible assets | 640 | 772 | |
Income tax provision | 10,773 | 9,754 | |
Stock-based compensation | 18,820 | 19,031 | |
Total other income, net | (6,552) | (4,724) | |
Adjusted EBITDA | $ 74,752 | $ 69,031 | |
Adjusted EBITDA as a percentage of revenues | 47 % | 47 % | |
Qualys, Inc. | |||
RECONCILIATION OF NON-GAAP DISCLOSURES | |||
(unaudited) | |||
(in thousands, except per share data) | |||
Three Months Ended | |||
2025 | 2024 | ||
GAAP Cost of revenues | $ 28,926 | $ 27,198 | |
Less: Stock-based compensation | (2,090) | (2,020) | |
Less: Amortization of intangible assets | (640) | (747) | |
Non-GAAP Cost of revenues | $ 26,196 | $ 24,431 | |
GAAP Gross profit | $ 130,973 | $ 118,607 | |
Plus: Stock-based compensation | 2,090 | 2,020 | |
Plus: Amortization of intangible assets | 640 | 747 | |
Non-GAAP Gross Profit | $ 133,703 | $ 121,374 | |
GAAP Research and development | $ 29,154 | $ 27,530 | |
Less: Stock-based compensation | (5,104) | (5,303) | |
Less: Amortization of intangible assets | — | (25) | |
Non-GAAP Research and development | $ 24,050 | $ 22,202 | |
GAAP Sales and marketing | $ 32,660 | $ 29,408 | |
Less: Stock-based compensation | (3,200) | (3,739) | |
Non-GAAP Sales and marketing | $ 29,460 | $ 25,669 | |
GAAP General and administrative | $ 17,404 | $ 16,908 | |
Less: Stock-based compensation | (8,426) | (7,969) | |
Non-GAAP General and administrative | $ 8,978 | $ 8,939 | |
GAAP Operating expenses | $ 79,218 | $ 73,846 | |
Less: Stock-based compensation | (16,730) | (17,011) | |
Less: Amortization of intangible assets | — | (25) | |
Non-GAAP Operating expenses | $ 62,488 | $ 56,810 | |
GAAP Income from operations | $ 51,755 | $ 44,761 | |
Plus: Stock-based compensation | 18,820 | 19,031 | |
Plus: Amortization of intangible assets | 640 | 772 | |
Non-GAAP Income from operations | $ 71,215 | $ 64,564 | |
GAAP Net income | $ 47,534 | $ 39,731 | |
Plus: Stock-based compensation | 18,820 | 19,031 | |
Plus: Amortization of intangible assets | 640 | 772 | |
Less: Tax adjustment | (5,547) | (4,796) | |
Non-GAAP Net income | $ 61,447 | $ 54,738 | |
GAAP Net income per share: | |||
Basic | $ 1.30 | $ 1.08 | |
Diluted | $ 1.29 | $ 1.05 | |
Non-GAAP Net income per share: | |||
Basic | $ 1.69 | $ 1.48 | |
Diluted | $ 1.67 | $ 1.45 | |
Weighted average shares used in GAAP and non-GAAP net income per share: | |||
Basic | 36,466 | 36,955 | |
Diluted | 36,784 | 37,723 | |
Qualys, Inc. | |||
RECONCILIATION OF NON-GAAP DISCLOSURES | |||
FREE CASH FLOWS | |||
(unaudited) | |||
(in thousands) | |||
Three Months Ended | |||
2025 | 2024 | ||
GAAP Cash flows provided by operating activities | $ 109,588 | $ 85,505 | |
Less: | |||
Purchases of property and equipment, net of proceeds from disposal | (2,038) | (2,051) | |
Non-GAAP Free cash flows | $ 107,550 | $ 83,454 | |
Qualys, Inc. | |||
RECONCILIATION OF NON-GAAP DISCLOSURES | |||
CALCULATED CURRENT BILLINGS | |||
(unaudited) | |||
(in thousands, except percentages) | |||
Three Months Ended | |||
2025 | 2024 | ||
GAAP Revenue | $ 159,899 | $ 145,805 | |
GAAP Revenue growth compared to same quarter of prior year | 10 % | 12 % | |
Plus: Current deferred revenue at March 31 | 366,824 | 332,128 | |
Less: Current deferred revenue at December 31 | (371,457) | (333,267) | |
Non-GAAP Calculated current billings | $ 155,266 | $ 144,666 | |
Calculated current billings growth compared to same quarter of prior year | 7 % | 8 % | |
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SOURCE Qualys, Inc.
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