Qualys Inc (QLYS)

“For the second quarter of 2026, we expect EPS to be in the range of $1.73 to $1.80.”

“For the second quarter of 2026, we expect revenues to be in the range of $177.5 million to $179.5 million, representing a growth rate of 8% to 9%.”

“As a result of our strategic emphasis on leveraging our partner ecosystem to drive growth, we expect this trend to continue.”

“So while we see early signs and positive customer conversations, we believe it will be gradual and therefore are conservative in our baseline modeling for this year.”

“Currently, we're forecasting OpEx growth in the mid-teens.”

“Exciting early conversations with large customers and we look forward to going GA by the end of the year.”

“So given that, the baseline still remains at 7% to 8% for current billings for the full year.”

“We have made good progress growing our federal business and advancing our FedRAMP High status with large federal agencies, and we continue to believe this market will fuel a new leg of growth for the company over time.”

“We're planning to build on this momentum by proactively identifying opportunities to extend Q-Flex to select customers and partners with a go-live date planned for later this year.”

“As a percentage of revenue, we expect to prioritize an increase in investments in sales and marketing with more modest increases in engineering and G&A.”

“Our planned capital expenditures in 2026 are expected to be in the range of $8 million to $12 million and for the second quarter of 2026 in the range of $1.2 million to $3.2 million.”

“We expect full year EPS to be in the range of $7.44 to $7.65, updated from the prior range.”

“For the full year 2026 we expect EBITDA margin to be in the mid-40s, implying mid-teens increase in operating expenses and free cash flow margin in the low 40s.”

“While we believe our approach to pre-breach cyber risk management provides some insulation in the face of ongoing macro volatility, this guidance continues to assume no material change in our net dollar expansion rate, with moderate growth contribution from new business in 2026.”

“For the full year 2026, we now expect revenues to be in the range of $721 million to $727 million, which represents a growth rate of 8% to 9%.”

“We anticipate ETM adoption to drive higher net dollar expansion rates.”

“As more customers move into this cohort, we hope to see consistent and meaningful improvement to our overall net dollar expansion rate and thereby drive accelerated revenue growth.”

“This is where, as Joo Mi has previously mentioned, we will begin to provide guidance on how ETM is performing, starting with the Q1 earnings call for 2026.”

“Yes. Right now, our expectation is that the seasonality remains the same. So same thing as what you saw in 2025. It will be skewed towards the second half of 2026.”

“I would say that we don't give specific guidance for current billings, but our expectation is that current billings growth rate will be more or less in line with the revenue growth rate. So 7% to 8% for both for the full year 2026.”

“Currently, as we begin the year with an expectation to finish 2025 at 103, we do not foresee a substantial change in that rate.”

“At this year, 2026, we look forward to doing more of that and moving more towards the GA model for that.”

“As a percentage of revenues, we expect to prioritize an increase in investments in sales and marketing with more modest increases in engineering and G&A.”

“Our planned capital expenditures in 2026 are expected to be in the range of $8 million to $12 million, and for the first quarter of 2026 in the range of $1.2 million to $2.6 million.”

“For the full year 2026, we expect EBITDA margin to be in the mid-40s, implying mid-teens increase in operating expenses, and free cash flow margin in the low 40s.”

“This guidance assumes no material change in our net dollar expansion rate with moderate growth contribution from new business in 2026.”

“We believe that these differentiated products combined will continue to increase contribution to bookings in 2026, given our opportunity to increase market share and maximize share of wallet.”

“With customers confirming their prioritization of security within IT budgets, we anticipate the selling environment in 2026 to remain similar to last year with a low to mid-single-digit growth in security spend persisting for the foreseeable future.”

“As a result of our strategic emphasis on leveraging our partner ecosystem to drive growth, we expect this trend to continue.”

“This win demonstrates our growing proficiency in risk management, and we expect Q-Flex's contribution to continue increasing.”

“Consequently, starting with our Q1 2026 earnings call, we will shift from reporting cybersecurity asset management long-term bookings to ETM customer penetration, as we believe ETM will become a crucial growth pillar for Qualys in the coming years.”

“While we believe our platform approach to cyber risk management provides some insulation in macro volatility, this guidance assumes continued budget scrutiny in a challenging environment for new business growth in Q4.”

“Revenues from channel partners grew 17%, outpacing direct, which grew 5%. As a result of our strategic emphasis on leveraging our partner ecosystem to drive growth, we expect this trend to continue.”

“Next year, we are particularly concentrated on converting VMDR to ETM and pursuing upsells with Eliminate.”

“All these efforts will be supported by our initiatives with mROC partners, which we anticipate will significantly enhance our business scaling by 2026.”

“For context, we anticipate ETM can yield up to a 100% increase for every $1 of VMDR, now that ETM also encompasses Cybersecurity Asset Management and additional ETM feature enhancements discussed earlier, along with third-party data ingestion.”

“we plan to continue to invest, and hence, we were guiding to the 15% to 17% increase in OpEx growth.”

“Right now, we are starting the 2026 budget and planning cycle, but what we're planning to execute to is what we had planned at the beginning of this year. So it's fully baked into the guidance.”

“I think that would be the best indicator for projecting 2026 revenue. Regarding current billings, I believe we have a greater chance of exceeding expectations with our existing customers, particularly due to our newer products.”

“in the second half, because of the tougher comparison relative to the second half of last year, we are anticipating it to kind of come down to land around 6% to 8% for the full year for current billings.”

“For current billings, I would say that still remains true, probably the best indicator or guidance I can give at this time.”

“although the new business continues to be challenging, and we expect that to continue throughout 2025, we do see some upside when it comes to expand with our existing customers.”

“We're not assuming anything is getting better from an environmental perspective. So it's more assuming that it's going to continue kind of as is.”

“As a percentage of revenues, we expect to prioritize increased investments in sales and marketing and engineering with a more modest increase in G&A, consistent with our commitment to balance long-term growth and profitability.”

“For the full year 2025, we expect an EBITDA margin in the range of low to mid-40s, applying a 15% to 17% increase in operating expenses and a free cash flow margin in the mid-30s.”

“As a result of our strategic emphasis on leveraging our partner ecosystem to drive growth, we expect this trend to continue.”

“There's definitely pieces just because we are making sure that all the investments that we need to achieve that ramp high have already been made... I think that from a meaningful bookings perspective, it won't happen until next year.”

“I think this is a key for us, as I mentioned in the last few quarters as well that federal over the next couple of years can be an important area of growth for us.”

“I do see an upside there... given the ROC, given the Flex pricing, given newer products that we've just launched, I do anticipate that to continue to tick up. Not consistently, though, I'm not calling that. I think that for this year, I'm just assuming that no meaningful improvement in the net dollar expansion rate in the current guide.”

“I don't really expect anything immediately in this quarter. But I think with the momentum that we're seeing, our investment in the federal side, the conference that we did and now getting FedRAMP High, I think this is a key for us”

“I think expecting any federal movement happening within a few weeks of us getting the FedRAMP High would be a little bit too much expectation.”

“In our guidance, what we're kind of assuming is not a meaningful improvement from what we see today.”

“Yes, I would say assume the same seasonality as the prior year.”

“I think for the direct side of the business, we are not expecting an acceleration on that side just because we are taking the partner-first approach for this year”

“if you were to look for a color for the annual current billings growth, it will be more or less the same as our prior guidance of 6% to 8%.”

“Overall, we closed the quarter at 103%, and we anticipate maintaining this level throughout the year.”

“As a percentage of revenues, we expect to prioritize increased investment in sales and marketing and engineering with a more modest increase in G&A, consistent with our commitment to balancing long-term growth and profitability.”

“We've recently made good progress advancing our FedRAMP High certification status, and we continue to believe we're on track to achieve the authorized milestone later this year, fueling a new leg of growth for the company.”

“So we're kind of assuming that it will continue on that path into 2025 where we're not expecting meaningful growth in the new business, especially particularly just because we are more focused on landing new logos through our partners.”

“With our FedRAMP high-ready platform anticipating FedRAMP high certification in 2025 and our continued investment in federal GTM, we are excited about the opportunity as the federal government looks to change the way things have been done in the past with costly on-prem solutions and move to cloud-based, more effective, and cost-efficient solutions for cybersecurity risk management.”

“As a percentage of revenues, we expect to prioritize an increase in investments in sales and marketing, and engineering with a more modest increase in G&A.”

“In 2025, we anticipate gross margin to contract by approximately 1%, given certain investments we are currently making in some of our data centers, to achieve greater operational efficiencies and reduce medium to long-term marginal costs.”

“This guidance assumes no material change in our net dollar expansion rate, with moderate growth contribution for new business in 2025.”

“I would say current bills are guided towards mid-single digits, in line with our revenue growth expectations for Q4.”

“Yes, it's a little too early to be discussing next year, but given our current bills, I would say our guidance aligns with a revenue growth rate of 7% to 9% for Q4.”

“With respect to operating expenses, in Q4 we expect to continue to prioritize an increase in investments in Sales & Marketing aimed at driving more pipeline, supporting sales, enhancing our partner program, and expanding our federal vertical with more modest increases in engineering and G&A.”

“These investments pressured gross margin in Q3 by approximately 1%, and we anticipate a similar contraction in Q4.”

“Our planned capital expenditures in 2024 are expected to be in the range of $12 million to $16 million; and, for the fourth quarter of 2024, in the range of $5.5 million to $9.5 million.”

“As we continue to increase our investment intensity and focus on sales and marketing enablement, customer success, and productivity, we believe we will be able to drive wallet share and long-term returns.”

“We rolled out this packaging this quarter, and we are optimistic about its momentum early next year.”

“It's not going to be material enough for us to normalize it in Q3 and Q4.”

“The biggest impact that we expect to see is in Q2.”

“We are targeting to continue to grow the sales and marketing headcount by double digits in 2024, and we are on track to meet that goal.”

“Our planned capital expenditures in 2024 are expected to be in the range of $12 million to $16 million; and for the third quarter of 2024, in the range of $4 million to $7 million.”

“This guidance assumes continued deal scrutiny and no improvement to our net dollar expansion rate through the back half of this year.”

“We continue to expect our pending FedRamp High certification for several key applications later this year, making Qualys the only modern alternative to legacy on-prem scanners for federal, state, and local government agencies at the High Impact level.”

“We will have to continue to see in the next quarter how these conversations translate into additional upsells for the customers, because in this current environment, it's a little harder with the scrutiny that they face to know the timing of when they will adopt additional solutions, especially with cloud security, etc. So we're pretty excited about the opportunities we see, but we're going to have to watch the next couple of quarters on how this rate evolves.”

“As we look towards 2024, we expect to see more merger and acquisition opportunities, particularly at valuations that are favorable for us.”

“We are planning to increase our sales and marketing headcount by double digits this year as we had planned before.”

“As a percentage of revenue, we expect to prioritize an increase in investment in sales and marketing as well as the related support functions and personnel, with more modest increases in engineering and G&A.”

“For the full year 2024, we continue to expect EBITDA margin to be in the low 40s and free cash flow margin in the mid-30s.”

“Looking ahead, we expect our U.S. and international revenue mix to remain roughly at 60% and 40%, respectively.”

“In terms of VMDR, we are very happy with where it is. It has reached a point where we will see its continued sort of incremental growth.”

“The average deal size is growing by double digits, and we expect it to continue into 2024.”

“As we look into 2024, we're encouraged by the mix we are seeing between partner vs direct, and we're going to continue in 2024 to invest with our partners.”

“I think what you could assume is progress evenly throughout the entire year, but it will be more heavily weighted in the second half than the first half.”

“As a percentage of revenue, we expect to prioritize an increase in investments in sales and marketing as well as related support functions, systems, and people with more modest increases in engineering and G&A.”

“For the full year 2024, we expect EBITDA margin to be in the low 40s, implying approximately a 20% to 25% increase in operating expenses similar to increase in investments in 2022 and free cash flow margin in the mid-30s.”

“Normalized for this change, our revenue guidance for the full year 2024 would have been 9% to 11%.”

“This guidance includes an estimated 1% reduction to revenue growth in 2024 from sunsetting our embedded solution for Microsoft Defender, effective May 1.”

“we anticipate that the selling environment in 2024 to remain stable with ongoing budget scrutiny being the new normal for many organizations.”

“Looking ahead to 2024, we expect our US and international revenue mix to remain roughly at 60% and 40% respectively.”

“We expect a similar trend to continue in 2024.”

“For the next quarter, we do not anticipate any significant changes from this growth rate.”

“Right. So what that basically means is that Q4 around the same like maybe 13% to 14% current billings growth for Q4.”

“Yes. We take that could more or less in line with Q3, so what we tend to look at is, I mean, current billings, we understand is a proxy for bookings performance and it tends to be monthly. So where you're looking at it as of Q2 LTM current billings growth was 11%, Q3 trended up a little bit higher than what we had expected and landing at 12%, and we expect it to be approximately that range ending the year in Q4 for the current billings growth for the full year to be around that 12% range.”

“We do see, as we continue to invest in the federal market, good opportunities for us in the next couple of years to accelerate the growth for our federal business from where we are today.”

“For the full year 2023, we expect revenues to be in the range of $554 million to $555 million, representing a growth rate of 13%.”

“But if you take a look at the gross margin of 82%, we expect to hover around that 81% to 82%.”

“Looking at 11% in Q3, I don't think that will be materially different. I don't see it kind of ticking down from that 11% right now. Q3 and Q4, I think it will probably be more in line with that 11% achievement that we had in Q2 or potentially higher.”

“So underlying that is our belief that our net dollar expansion rate isn't going to materially change. It has ticked down by a percentage this quarter, and it could continue to do so, but we don't think that even with that, our current billings was able to reaccelerate back up to 11% from 9%, and we don't see that to change in the second half of this year.”

“As a result, we expect the full year 2023 EBITDA margin to be in the mid-40s, with full-year EPS in the range of $4.50 to $4.65, up from the prior range of $4.13 to $4.28.”

“For the third quarter of 2023, we expect revenues to be in the range of $140.5 million to $141.5 million, representing a growth rate of 12% to 13%.”

“With that said, given our ratable SaaS subscription model, our guidance for revenue growth for the full year 2023 remains largely unchanged at 13% with a revised range of $553 million to $555 million, the high end of the range down from $557 million last quarter.”

“And with the algorithmic expertise already in-house, over the next few quarters, we expect to further extend these capabilities to transform the user experience on the Qualys Cloud platform, harvesting trillions of data points and rich investigation and remediation using generative AI.”

“We are confident that our new product initiatives will help us regain the growth rates we experienced last year.”

“We expect that to kind of trend down because of that.”

“In terms of the direct versus indirect, we have been focusing on developing our relationship with and building our relationship with our channel partners. So we do anticipate the mix to be shifting more towards the channel partners”

“As a result, we continue to expect full-year 2023 EBITDA margin to be in the low 40s with full-year EPS in the range of $4.13 to $4.28, up from the prior range of $4.10 to $4.18.”

“We believe our value proposition remains strong with solid demand from our existing customers but anticipate the current macro environment will moderate returns in 2023, despite having increased our sales and marketing headcount by over 20% in 2022.”

“This guidance assumes no material change in our net dollar expansion rate in 2023, but continued challenges in new customer growth.”

“Starting with revenues, for the full year 2023, we are reaffirming our revenue guidance range of $553 million to $557 million, which represents a growth rate of 13% to 14%.”

“Looking ahead to the balance of 2023, we expect our US and international revenue mix to remain at roughly 60% and 40%, respectively.”

“While we expect these conditions to linger for at least the remainder of this year, consolidation remains a key theme with our customers.”

“While we plan to continue to invest in 2023, given the environment we are in, we're planning to prioritize increases in investment in sales and marketing as well as related support functions and systems while largely maintaining our level of investment in engineering.”

“Our planned capital expenditures in 2023 are expected to be in the range of $18 million to $25 million, and for the first quarter of 2023 in the range of $4 million to $5 million.”

“As a result, we expect full year 2023 EBITDA margin to be in the low 40s, roughly in line with the fourth quarter of 2022 margins.”

“We expect this segment to gain momentum with the launch of the new product packages that Sumedh just mentioned.”

“Looking ahead to 2023, we expect our US and international revenue mix to remain at roughly 60% and 40%, respectively.”

“I mean we do see a huge upside to our guidance if our newer product happened to take off in the second half of this year.”

“We believe that will have incremental revenue if we can deliver probably in the second half of 2023.”

“But we see a broader application over the next few quarters over the next year or so that we will integrate different aspects of our data into the machine learning platform and we'll be able to help different applications including more targeted patching for vulnerabilities that using ML models actually bubble up to be the ones that are going to be the most exploitable, et cetera.”

“So next year, although we will continue to invest in sales and marketing as well as other functions, the focus will be more on the optimization.”

“This implies an EBITDA margin in the mid-40s.”

“From the prior range of $3.50 to $3.55.”

“This is expected to have a de minimis impact on full year results.”

“And given the large market opportunity in front of us with multiple growth engines in our business, we anticipate that we can grow at scale long term, generate cash and continue to invest in key initiatives that will further extend the gap between Qualys and the competition.”

“We are optimistic in our ability to continue to accelerate. If you take a look at our revenue guidance, what that implies is 19% growth in the second half after achieving healthy acceleration in revenue in the last year. We feel confident in our ability to deliver that.”

“As a result, it hasn't had a material effect on our margins over the past couple of years, and I don't expect it to be significant in the next 12 months either.”

“So far this year, the impact on revenue has been minor, and while it could increase in the latter half of the year, I do not anticipate it to be significant on an annual basis because of how our hedging programs are functioning.”

“So, we are still on target for that. We are targeting we're still growing. The sales and marketing headcount by double digits, but we are looking into other avenues as well to make sure that we have a balanced approach to investment.”

“I believe these customers will continue to expand through upselling existing VM licenses and adding more Qualys products. We are quite optimistic about the potential impact on deal sizes.”

“We are raising the bottom and top end of our revenue guidance for the full year to now be in the range of $488 million to $489.5 million, representing a 19% growth.”

“Our planned capital expenditures in Q2 is approximately $5.5 million to $6.5 million and for the full year 2022, we continue to expect investment in the range of $25 million to $30 million.”

“This revised guidance implies an EBITDA margin in the low-40s with the timing of our investments to be more back-half weighted.”

“Building off our strong start to the year, we are raising the bottom and top end of our revenue guidance for the full year to now be in the range of $484 million to $486.5 million, representing 18% growth.”

“More specifically, we'll expand on our robust capabilities in cloud, container and ICS/OT environment to further strengthen our competitive differentiator as customers increasingly move applications to cloud and container environments.”

“Given the opportunities ahead, we continue to prioritize investing in our business, especially building our go-to-market team, where we expect to see double-digit growth this year despite the challenging hiring environment given the tight labor market.”

“We believe we can continue to generate attractive levels of free cash flow while continuing to invest in the business.”

“We expect this trend and momentum to continue, which implies that our revenue guidance for the full year reflects an acceleration to 17% to 18%.”

“We think there is definitely room to increase our sales force, which should help increase our bookings growth, since 60% of our revenue comes from the direct sales force versus 40% from the channel.”

“Overall, we don't foresee a significant change in our billing and deferred revenue growth this year.”

“In terms of free cash flow, we anticipate it will be lower relative to our EBITDA margins for the prior year due to the increase in cash taxes we expect to pay.”

“Over the next several quarters, we plan to increase our sales and marketing investment with a focus on digital marketing programs to drive pipeline and customer reach, grow our sales team to further leverage our opportunity in the market and expand our channel by recruiting and enabling partners.”

“Given our highly scalable business model, even with incremental additional investments in 2022, we believe that we will continue to deliver industry-leading margins relative to peers.”

“Looking ahead to 2022, we think the material impact on our bookings and revenue could be driven by new customer wins.”

“We believe that, given our business model and strong fundamentals, there is a possibility to get our margins back up to 40% plus in the long term, but this will depend on our ability to accelerate growth momentum.”

“And, we do have an intention to increase that investment, as we said all along.”

“We do believe that our stock is undervalued from our perspective, so it's a good opportunity for us to leverage our cash on our balance sheet with our cash and short-term marketable securities kind of nearing that 500 million mark and so that is our intention. We will be executing based on the revised spread.”

“We are raising our full year non-GAAP EPS guidance to now be in the range of $3.16 to $3.18 from the prior range of $3.02 to $3.07.”

“We are raising the bottom and top end of our guidance range for the full year for revenue to be now in the range of $409.5 million to $410.1 million from the prior range of $406 million to $407.5 million.”