5 Revealing Analyst Questions From Qualys's Q1 Earnings Call

Yahoo

27-06-2025

Qualys delivered first quarter results that exceeded Wall Street's expectations, driven by continued expansion of its cloud-native security platform and rising demand for integrated risk management tools. CEO Sumedh Thakar cited operational execution around its Enterprise TruRisk Management (ETM) solution and the rollout of new AI-powered security features as key contributors. Management also noted strong momentum in international markets, where channel partner-led growth outpaced domestic sales, and highlighted improved gross retention as a positive sign despite ongoing macroeconomic headwinds.
Is now the time to buy QLYS? Find out in our full research report (it's free).
Revenue: $159.9 million vs analyst estimates of $157.1 million (9.7% year-on-year growth, 1.8% beat)
Adjusted EPS: $1.67 vs analyst estimates of $1.47 (13.8% beat)
Adjusted Operating Income: $71.22 million vs analyst estimates of $63.8 million (44.5% margin, 11.6% beat)
The company slightly lifted its revenue guidance for the full year to $652.5 million at the midpoint from $651 million
Management raised its full-year Adjusted EPS guidance to $6.15 at the midpoint, a 7.9% increase
Operating Margin: 32.4%, up from 30.7% in the same quarter last year
Annual Recurring Revenue: $639.6 million at quarter end, up 9.7% year on year
Billings: $153.1 million at quarter end, up 6.1% year on year
Market Capitalization: $5.15 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.
Jonathan Ho (William Blair) pressed on how macro uncertainty is impacting customer spend; CEO Sumedh Thakar explained that while cybersecurity remains a priority, increased scrutiny and longer decision cycles are influencing sales and guidance.
Patrick Colville (Scotiabank) asked about competitive pressure from new network-based vulnerability management entrants. Thakar responded that Qualys' differentiation is its focus on actionable remediation and unified risk context, not just detection.
Kingsley Crane (Canaccord) inquired about market adoption for AI Security Posture Management; Thakar said most customers are still in the exploratory phase, with broader budget impact likely next year rather than in 2025.
Rudy Kessinger (D.A. Davidson) questioned the dip in large customer count; Thakar noted stable win rates and improved retention, attributing fluctuations to upsell and downsell dynamics rather than customer losses.
Rob Owens (Piper Sandler) asked about weaker North American growth versus international; Thakar attributed this to stronger partner engagement internationally and efforts to replicate this success domestically through expanded partner initiatives.
In upcoming quarters, our team will be watching (1) the pace and scale of partner-led new business wins, particularly through mROC offerings, (2) sustained adoption of AI and cloud security modules like TotalAI and CNAPP as customers move beyond proof-of-concept phases, and (3) improvements in upsell rates and net dollar expansion as macro pressures evolve. Execution against these milestones will be key to validating management's growth strategy.
Qualys currently trades at $138.60, up from $126.64 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it's free).
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