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Yahoo
20-05-2025
- Business
- Yahoo
QLYS Q1 Earnings Call: Channel Partnerships and AI Security Drive Outperformance
Cloud security and compliance software provider Qualys (NASDAQ:QLYS) beat Wall Street's revenue expectations in Q1 CY2025, with sales up 9.7% year on year to $159.9 million. The company expects next quarter's revenue to be around $161.2 million, close to analysts' estimates. Its non-GAAP profit of $1.67 per share was 13.8% above analysts' consensus estimates. 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 Free Cash Flow Margin: 67.3%, up from 26.3% in the previous quarter Net Revenue Retention Rate: 103%, in line with the previous quarter 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: $4.97 billion Qualys delivered better-than-expected results in Q1, with revenue and non-GAAP profit both exceeding Wall Street's expectations. Management attributed the performance to ongoing customer demand for cloud-native cybersecurity risk management and a strategic focus on channel partnerships. CEO Sumedh Thakar highlighted the company's integrated Enterprise TruRisk Management (ETM) platform and continued product expansion as key differentiators, stating that Qualys is 'increasingly well armed with fresh new capabilities to further strengthen our strategic position.' Looking ahead, Qualys' leadership pointed to a more cautious operating environment, with CFO Joo Mi Kim noting increased budget scrutiny among customers and a challenging upsell environment. Despite this, the company modestly raised its full-year revenue and non-GAAP EPS guidance, reflecting confidence in its partner-first sales approach and product innovation. Kim emphasized, 'We intend to continue to responsibly align our product and marketing investments to focus on high impact initiatives.' Q1 results were driven by continued investment in product development and deeper engagement with channel partners. Management discussed how enterprise customers are consolidating security tools and seeking solutions that unify risk data across multiple platforms. Channel Partnerships Expand Reach: Revenue from channel partners grew significantly faster than direct sales, with the channel now representing nearly half of total revenue. Management credited this to the partner-first sales strategy and indicated that partner-led deal registration increased again in Q1. Integrated Risk Operations Center (ROC): The new ROC offering helps organizations consolidate risk signals across various security tools, including those from other vendors. This solution is designed to provide actionable insights and prioritize remediation, which management says leads to operational efficiency and cost savings for customers. Cloud Security and TotalCloud CNAPP: Adoption of Qualys' cloud-native security tools, especially the TotalCloud Cloud-Native Application Protection Platform (CNAPP), continued to gain traction. Management mentioned several seven-figure annual bookings, particularly among large enterprises needing unified multi-cloud and container security. AI Security Posture Management Growth: The company expanded its TotalAI and AI Security Posture Management (AI-SPM) solutions to address risks associated with machine learning and large language models. Management described this as an early but important area, with pilot projects underway at select customers. Audit Readiness Automation: New solutions for policy audit and automated evidence collection were introduced, targeting regulatory compliance needs and helping customers reduce manual audit workloads. Management views this as a growing area of IT security spending. Management expects the rest of the year to be shaped by continued partner channel expansion, growing adoption of its cloud and AI security solutions, and persistent macroeconomic caution. Partner-First Sales Strategy: The transition toward working more closely with channel partners is expected to drive incremental pipeline and revenue, as more customers seek managed risk operations and integrated security solutions. Cloud and AI Security Adoption: Expanded offerings in cloud workload protection and AI risk management are anticipated to support future growth, particularly as enterprise customers increase investment in these areas. Budget Scrutiny and Upsell Challenges: Management highlighted ongoing customer cost controls and budget reviews as potential headwinds, which may temper new business growth and upsell rates, especially in North America. Jonathan Ho (William Blair): Asked about the impact of macroeconomic uncertainty on customer spending. Management noted longer decision cycles and increased ROI scrutiny, but said no major deals were pushed or lost. Patrick Colville (Scotiabank): Inquired about competition from endpoint security players expanding into network-based vulnerability management. CEO Sumedh Thakar responded that Qualys can integrate competitor data, and prioritizes actionable risk remediation over simply finding more vulnerabilities. Kingsley Crane (Canaccord): Questioned the demand environment for AI security solutions. Management described the market as still in the exploratory phase, with most customers evaluating risks and formulating future budgets for AI security. Rudy Kessinger (D.A. Davidson): Queried a decline in large customer counts above $500K in annual contract value. Management stated there were no unusual losses, attributing fluctuations to normal business dynamics and improved gross retention. Trevor Walsh (Citizens): Asked about the rollout and ramp of managed risk operations partners. Management explained that initial focus is on a few strategic partners, with plans to expand based on partner investment and customer demand. In coming quarters, the StockStory team will monitor (1) the pace at which channel partner contributions continue to grow as a share of overall revenue, (2) adoption rates for Qualys' new AI and cloud security solutions, and (3) any changes in customer renewal and upsell trends amid ongoing macroeconomic uncertainty. Progress toward federal market certifications and additional strategic partner certifications will also be key markers of execution. Qualys currently trades at a forward price-to-sales ratio of 7.6×. In the wake of earnings, is it a buy or sell? See for yourself in our free research report. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Channel Post MEA
13-05-2025
- Business
- Channel Post MEA
Teksalah First MSP From Middle East To Join Qualys mROC Partner Alliance
Qualys has announced the expansion of its invite-only managed Risk Operations Center (mROC) Partner Alliance with seven new global partners, including Teksalah from the Middle East. This marks a significant step forward in Qualys' mission to build a robust Risk Operations Center (ROC) ecosystem—making business-aligned cyber risk management more accessible, actionable, and measurable for organizations worldwide. Built on the Qualys Enterprise TruRisk Management Platform, the ROC framework consolidates risk signals across an organization's digital footprint into a single pane of glass. It enables Continuous Threat Exposure Management (CTEM), cyber risk quantification, and risk remediation, empowering CISOs to translate cyber risk into business terms, ensure audit readiness, and build long-term resilience. The mROC Partner Alliance equips partners to drive growth by delivering enhanced Qualys-powered ROC services that transform how enterprises measure, manage, and reduce cyber risk. The expanded roster of partners brings world-class expertise to help organizations overcome common cybersecurity challenges such as fragmented tools, disjointed risk response, and limited visibility—enabling a proactive approach to managing cyber risk at scale. 'When we introduced the concept of the Risk Operations Center, we knew it had the potential to redefine how organizations manage cyber risk,' said Sumedh Thakar, president and CEO of Qualys. 'Today, with the launch of our inaugural global mROC partners, we're delivering on that vision. This is a major milestone in building a thriving ROC ecosystem—one that helps businesses around the world take control of cyber risk with clarity, speed, and measurable impact.' mROC Partners, through a comprehensive suite of risk service offerings, play a critical role in Qualys' mission to make cyber risk management easier to adopt, more practical to implement, and more impactful for organizations globally. This innovative group of mROC partners has been thoroughly trained and enabled to operate a ROC powered by Qualys Enterprise TruRisk Management (ETM), delivering comprehensive managed risk services. By aggregating and analyzing risk signals from both Qualys and third-party tools, they offer their clients a holistic, business-aligned view of their risk exposure. 'The Teksalah and Qualys partnership is built on a shared vision — to embed a holistic risk-based, proactive approach at the core of enterprise cybersecurity. Through our powerful platforms, intelligent tools, and proven services—covering real-time risk monitoring to effective remediation—we are enabling organizations to manage risk with precision and drive secure innovation. Together, we are transforming our client's cybersecurity from a control function into a catalyst for business growth and resilience,' commented Murali Konasani, CEO, Teksalah. Interested Qualys partners can sign up to learn more about the mROC Partner Alliance at Organizations looking to engage an mROC certified partner to build a ROC can find them here. 0 0
Yahoo
07-05-2025
- Business
- Yahoo
Qualys Inc (QLYS) Q1 2025 Earnings Call Highlights: Strong Revenue Growth and Strategic ...
The company's direct sales growth has been slower compared to its channel partner growth, highlighting a need for improved execution in North America. Qualys Inc ( NASDAQ:QLYS ) experienced a decline in the number of customers spending $500,000 or more annually, indicating potential challenges in retaining large accounts. Qualys Inc ( NASDAQ:QLYS ) has maintained a strong focus on innovation, with advancements in AI security solutions and audit readiness capabilities, enhancing its competitive edge. The company is seeing increased adoption of its cloud security solutions, with Total Cloud Snap making up 5% of LTM bookings. Qualys Inc ( NASDAQ:QLYS ) has launched innovative security solutions, including the Enterprise TruRisk Management (ETM) solution, which provides comprehensive AI-powered orchestration of security findings. The company has successfully expanded its channel partner ecosystem, with revenues from channel partners growing by 19%, outpacing direct sales growth. Qualys Inc ( NASDAQ:QLYS ) reported better-than-expected revenue growth, strong profitability, and solid cash flow generation for the first quarter of 2025. For the complete transcript of the earnings call, please refer to the full earnings call transcript . Story Continues Q & A Highlights Q: Can you provide insights on the macro environment and its impact on customer spending and guidance? A: Sumedh Thakar, President and CEO, noted that cybersecurity remains a critical aspect of risk management, but there is increased scrutiny on spending and ROI. Decision cycles are longer, and while no specific changes have been observed, there is prudence in expectations due to potential budget scrutiny across the board. Q: How does the Risk Operations Center (ROC) function from a customer journey perspective, and what financial impact does it have? A: Sumedh Thakar explained that the ROC consolidates risk signals from multiple tools, providing contextual business insights and remediation plans. It helps customers prioritize actionable risks, potentially saving costs by avoiding unnecessary remediation efforts. Customers pay Qualys for these cost savings, which justifies additional budget allocation for the ROC. Q: Were there any significant deal shifts due to macroeconomic challenges at the end of the quarter? A: Joo Mi Kim, CFO, stated there were no material deal shifts. The commentary was more about anticipated upsell rates not materializing as expected, rather than deals being pushed to the next quarter. Q: How is Qualys addressing competition from other cybersecurity players expanding into network-based vulnerability management (VM)? A: Sumedh Thakar mentioned that Qualys focuses on prioritizing and remediating vulnerabilities rather than just finding them. The company provides higher value by adding context to vulnerability data from competitors, allowing customers to choose their preferred solutions while still benefiting from Qualys's risk management capabilities. Q: What is the competitive landscape for TotalAI, and how are security budgets expected to evolve in this market? A: Sumedh Thakar noted that the market is in an exploratory phase, with customers assessing AI-related risks. While there is interest and some early adoption, significant budget allocations for AI security are expected to take a couple of years as organizations evaluate potential losses and formulate budget requests. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
