Qualys Inc ((QLYS)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Qualys Inc’s recent earnings call reflected a generally positive sentiment, driven by strong financial performance and significant innovations in cybersecurity solutions. The company reported notable revenue growth and profitability, although challenges in upselling and macroeconomic uncertainties were acknowledged. The focus on product innovation and strategic partnerships contributed to the optimistic outlook.
Solid Revenue Growth
Qualys reported a 10% increase in revenue, reaching $169.9 million for the third quarter of 2025. This growth was bolstered by a 17% rise in channel partner revenues, highlighting the company’s expanding market reach and effective sales strategies.
Strong EBITDA Margin
The company achieved an adjusted EBITDA of $82.6 million for Q3 2025, representing a 49% margin, up from 45% in the previous year. This improvement underscores Qualys’ operational efficiency and ability to maintain strong profitability.
Innovations and Product Expansion
Qualys introduced TruConfirm and AI-driven enhancements to its ETM platform, which are expected to enhance risk management and operational efficiencies. These innovations demonstrate the company’s commitment to staying at the forefront of cybersecurity technology.
Successful Partner Ecosystem
The company’s partner ecosystem saw increased activity, with partner-led deal registrations on the rise. Nearly a dozen partners have certified for mROC services, indicating a robust and growing network of strategic alliances.
Notable Customer Wins
Qualys secured significant upsells, including a mid-6-figure annual bookings upsell with a Global 700 customer and a high 6-figure upsell with a federal agency. These wins reflect the company’s ability to expand its footprint within existing accounts.
Strong Free Cash Flow
Free cash flow for the third quarter was $89.5 million, representing a 53% margin, compared to 37% in the prior year. This strong cash flow performance highlights Qualys’ financial health and ability to generate cash.
Challenging Upsell Environment
Despite improvements in gross retention, upsells remain challenging, with a net dollar expansion rate of 104%, unchanged from the previous quarter. This indicates a need for continued focus on customer engagement and value delivery.
Macroeconomic Challenges
The company acknowledged the macroeconomic challenges, with guidance assuming continued budget scrutiny and a challenging environment for new business growth in the fourth quarter.
Forward-Looking Guidance
Qualys provided robust guidance for the full year 2025, expecting revenue between $665.8 million and $667.8 million, representing a 10% growth rate. The fourth quarter is projected to bring in revenues ranging from $172 million to $174 million. The company raised its full-year EPS guidance to $6.93 to $7.00 and emphasized its strategic focus on Enterprise TruRisk Management (ETM) as a key driver of future growth.
In summary, Qualys Inc’s earnings call highlighted a positive outlook driven by strong financial performance and innovative product developments. Despite facing challenges in upselling and macroeconomic uncertainties, the company’s strategic focus and robust partner ecosystem position it well for continued growth.