Industry Overview - The AI infrastructure space is experiencing significant growth, with fears related to DeepSeek being overblown. Confidence among market participants has increased due to potential trade deals, expected rate cuts by the Fed, and reduced recession worries in the U.S. economy [1] - The AI sector is supported by a bullish demand scenario, with major companies planning to invest $325 billion in AI infrastructure by 2025, representing a 46% year-over-year increase in capital spending [4] Investment Recommendations - Five mid-cap AI infrastructure stocks are recommended for investment, having outperformed the S&P 500 in the past three months and offering deep discounted value for long-term growth. The stocks include UiPath Inc. (PATH), Five9 Inc. (FIVN), C3.ai Inc. (AI), Qualys Inc. (QLYS), and Fastly Inc. (FSLY) [2][3] Company Insights UiPath Inc. (PATH) - UiPath provides an end-to-end automation platform with a focus on robotic process automation solutions. The company has introduced new generative AI features to enhance its automation capabilities [8][10] - Expected revenue and earnings growth rates for UiPath are 8.5% and 5.7%, respectively, for the current year, with a P/E ratio of 23.9X compared to the industry average of 29.7X [11] Five9 Inc. (FIVN) - Five9 offers intelligent cloud software for contact centers, benefiting from the growing adoption of AI tools. The company recently launched its Intelligent CX Platform powered by Five9 Genius AI [12][14] - Expected revenue and earnings growth rates for Five9 are 9.6% and 11.7%, respectively, for the current year, with a P/E ratio of 10.1X compared to the industry average of 29.7X [15] C3.ai Inc. (AI) - C3.ai specializes in enterprise AI applications and aims to deepen its alignment with major cloud providers and government institutions. The company focuses on deploying actionable AI solutions [16][17] - Expected revenue and earnings growth rates for C3.ai are 20.1% and 9.8%, respectively, for the current year, but it has yet to generate profit, with an industry P/E of 20.2X [18] Qualys Inc. (QLYS) - Qualys is experiencing increased demand for cloud-based cybersecurity solutions, supported by strategic acquisitions that enhance its threat detection capabilities [19][21] - Expected revenue and earnings growth rates for Qualys are 7.3% and 0.7%, respectively, for the current year, with a P/E ratio of 8.8X compared to the industry average of 11.6X [22] Fastly Inc. (FSLY) - Fastly provides infrastructure software for cloud computing and has introduced the Fastly AI Accelerator to optimize generative AI applications [23][24] - Expected revenue and earnings growth rates for Fastly are 8.6% and 25%, respectively, for 2025, but it has yet to generate profit, with an industry P/E of 29.7X [25]

Company Overview - Palo Alto Networks (PANW) shares have increased by approximately 10.2% over the past month, outperforming the S&P 500 [1] - The most recent earnings report is crucial for understanding the catalysts affecting the stock [1] Earnings Estimates - Estimates for Palo Alto Networks have trended upward in the past month, indicating positive sentiment among analysts [2][4] VGM Scores - Palo Alto Networks has an average Growth Score of C, a Momentum Score of F, and a Value Score of F, resulting in an overall VGM Score of F, placing it in the lowest quintile for investment strategies [3] Outlook - The upward trend in estimates suggests a promising outlook for Palo Alto Networks, with a Zacks Rank of 3 (Hold), indicating expectations for an in-line return in the coming months [4] Industry Comparison - Palo Alto Networks is part of the Zacks Security industry, where another player, Qualys (QLYS), has seen a 1% gain over the past month [5] - Qualys reported revenues of $159.9 million for the last quarter, reflecting a year-over-year increase of 9.7%, with EPS rising from $1.45 to $1.67 [5] - For the current quarter, Qualys is expected to report earnings of $1.47 per share, a decrease of 3.3% from the previous year, with a Zacks Rank of 1 (Strong Buy) [6]

Core Insights - Qualys, Inc. has won two prestigious awards at the 2025 SC Awards Europe, with Qualys TotalCloud recognized as the Best Cloud Security Solution and Qualys VMDR awarded the Best Vulnerability Management Solution for the third consecutive year [1][2][5] Group 1: Awards and Recognition - The SC Awards Europe are noted as the longest-running and most prestigious cybersecurity competition, celebrating top innovators and solutions in the industry [2] - Qualys VMDR was praised by judges for being a strong, affordable, and holistic solution adaptable to both SME and enterprise use cases [3] - Qualys TotalCloud was recognized for its comprehensive protection, cost efficiency, and effective risk management across diverse environments [4] Group 2: Customer Testimonials - A customer from Amazon reported a significant ROI of approximately 20-30% from using Qualys VMDR, highlighting time and cost savings through automated patching and compliance tracking [4] - A UBS Financial Cyber Security Specialist emphasized the effectiveness of Qualys TotalCloud in improving security and managing risks, noting the ability to customize policies and track cloud assets [4] Group 3: Company Commitment and Strategy - Qualys emphasizes a customer-first approach that enables organizations to assess, prioritize, and remediate cyber risks rather than merely detecting them [5] - The company is dedicated to extending risk management programs from code to cloud, addressing evolving threats in cloud and container environments [5] Group 4: Company Overview - Qualys, Inc. is a leading provider of cloud-based security, compliance, and IT solutions, serving over 10,000 subscription customers globally, including many from the Forbes Global 100 and Fortune 100 [6][7] - The Qualys Enterprise TruRisk Platform automates vulnerability detection, compliance, and protection across various IT environments, including on-premises, cloud, and mobile devices [8]

Core Insights - Qualys, Inc. has opened a new office in Washington, D.C. to expand its support for the growing public sector customer base amid escalating cyber threats and the need for operational efficiency [1][4][5] Industry Context - Government agencies are currently facing challenges such as shrinking budgets, limited resources, and an increasing frequency and sophistication of cyberattacks, which heightens the pressure on teams responsible for protecting sensitive data and critical infrastructure [2] Company Strategy - To address these challenges, public sector organizations are transitioning from reactive defense to proactive risk management, with Qualys leading this shift through the introduction of the Risk Operations Center (ROC) model. This model allows agencies to unify visibility, prioritize significant threats, and automate responses, thereby enhancing cyber resilience and operational efficiency [3] Commitment to Public Sector - The expansion of Qualys' operations is a continuation of its commitment to serving public sector agencies, as evidenced by its support for numerous federal entities and its progress towards achieving FedRAMP High Authorization for its cloud platform, which aligns with the stringent security and compliance requirements of government customers [4] Leadership Perspective - The CEO of Qualys emphasized that the new office represents a strategic investment in the federal space, aiming to provide public sector agencies with efficient and powerful solutions to mitigate cyber risks [5] Product Offering - Qualys offers the Enterprise TruRisk Platform, which utilizes a single agent to deliver critical security intelligence and automate vulnerability detection, compliance, and protection across various IT environments, including on-premises, cloud, and mobile devices [6]

Core Insights - Zscaler (ZS) and Qualys (QLYS) are significant players in the cybersecurity sector, both competing in the vulnerability management space [1][2] - The cybersecurity market is expected to grow at a CAGR of 12.63% from 2025 to 2030, driven by increasing cyberattacks [2] Zscaler Overview - Zscaler provides a wide range of enterprise network security solutions, including web security, antivirus, and vulnerability management [4] - The company integrates over 150 data sources for unified vulnerability management, enhancing automation in risk mitigation [5] - Zscaler is focusing on privileged access security due to digital transformation trends and has a diverse industry presence, which helps mitigate macroeconomic risks [6] - The integration of AI in Zscaler's offerings enhances its capabilities in threat detection and mitigation [7] - However, rising sales and marketing expenses, along with increased R&D investment, are leading to margin compression, with fiscal 2025 earnings projected at $3.18 per share, a decline of 0.31% year-over-year [8][10] Qualys Overview - Qualys is a leader in Vulnerability Management, Detection and Response (VMDR) solutions, with a growing customer base and product enhancements [11] - The company has a strong channel partner program that accelerates revenue growth, particularly through cloud-based security solutions [12] - Qualys reported a 16% year-over-year growth in international revenue, indicating successful organic expansion [13] - The total addressable market for Qualys is projected to reach $72 billion by 2027, growing at approximately 13% annually [14] - Fiscal 2025 revenues for Qualys are estimated at $652.2 million, reflecting a year-over-year increase of 7.34%, with earnings projected at $6.17 per share, a growth of 0.65% [15] Stock Performance and Valuation - Year-to-date, Zscaler shares have returned 68%, while Qualys shares have returned 1.2% [17] - Zscaler trades at a forward sales multiple of 15.21X, above the industry average of 14.77X, while Qualys trades at a lower multiple of 7.69X [19] - Qualys is currently rated as a Zacks Rank 1 (Strong Buy), making it a more attractive investment compared to Zscaler, which holds a Zacks Rank 3 (Hold) [20]

Industry Overview - The digital economy has elevated cybersecurity from a background IT concern to a top priority for businesses, as they face increasing cyber threats such as ransomware, data breaches, and phishing attacks [1] - The global cybersecurity market is projected to grow from $193.73 billion in 2024 to $562.72 billion by 2032, reflecting a strong CAGR of 14.3%, driven by the complexity of IT systems, tighter regulations, and the need to protect sensitive data [2] Technological Advancements - Traditional security tools are becoming inadequate against smarter and faster cyberattacks, leading to a shift towards artificial intelligence (AI) for proactive threat detection and response [3] - AI is being integrated into cybersecurity solutions to analyze large volumes of data, enabling companies to automate detection and response processes [3] Company Highlights - **CyberArk Software (CYBR)**: Focuses on identity security solutions, leveraging AI to enhance its leadership in the identity security space with innovations like the Secure AI Agent solution [6][8] - **Qualys (QLYS)**: Specializes in vulnerability management and cloud security, enhancing its AI capabilities to improve threat detection and remediation [9][10] - **Okta (OKTA)**: Concentrates on identity and access management, ramping up AI capabilities to address the complexities of digital identities, with innovations like Identity Threat Protection with Okta AI [12][13] - **A10 Networks (ATEN)**: Advances its AI-driven cybersecurity strategy through acquisitions and scalable solutions, positioning itself for growth in AI data center deployments [15][16][17] Market Positioning - CyberArk's unified platform offers critical capabilities for identity security, enhancing its market relevance and customer value proposition [7][8] - Qualys' AI-powered platform is expected to drive customer adoption and long-term revenue growth [11] - Okta's growing customer base, particularly among Fortune 500 clients, positions it as a compelling long-term investment [14] - A10 Networks is well-placed to benefit from the intersection of AI and cybersecurity, supported by strong margins and disciplined capital allocation [17]

Industry Overview - The Zacks Security industry is experiencing strong demand for cybersecurity products due to the increasing need for secure networks and cloud-based applications, particularly in hybrid work environments [1] - The surge in demand is driven by a significant rise in data breaches, leading companies to seek comprehensive IT security solutions [1] - The industry encompasses both on-premise and cloud-based security solutions, including identity access management, infrastructure protection, integrated risk management, malware analysis, and Internet traffic management [3] Major Trends - Rising cyber threats are escalating the need for robust security solutions, impacting not only individual companies but also national security [4] - The shift towards digital transformation and cloud migration is driving demand for cybersecurity solutions across various sectors, including education, healthcare, and entertainment [5] - Macroeconomic headwinds and geopolitical issues may lead enterprises to delay significant IT investments, potentially affecting the security market in the short term [6] Company Performance - Companies like CyberArk Software, Okta, and Qualys are benefiting from the trends in the cybersecurity market [2] - CyberArk Software is experiencing growth due to rising demand for privileged access security solutions, with a strong presence across various sectors [21] - Qualys is well-positioned to navigate market challenges with its diverse customer base and continuous innovation in information security solutions [28] - Okta's identity security solutions are gaining traction as organizations adopt digital transformation strategies, serving approximately 20,000 customers [33] Financial Outlook - The Zacks Security industry holds a Zacks Industry Rank of 19, placing it among the top 8% of nearly 250 Zacks industries, indicating solid near-term prospects [8] - The industry's bottom-line estimate for 2025 has increased to $1.45 from $1.35, reflecting analysts' optimism about earnings growth potential [10] - Over the past year, the Zacks Security industry has outperformed the broader Zacks Computer and Technology sector and the S&P 500, with a return of 38.3% compared to 11.8% and 11.9% respectively [13] Valuation Metrics - The industry is currently trading at a forward 12-month price-to-sales ratio of 14.77, significantly higher than the S&P 500's 5.12 and the sector's 6.37 [16] - Over the last five years, the industry's price-to-sales ratio has ranged from a high of 19.36X to a low of 6.92X, with a median of 12.56X [17]

Company Overview - Qualys shares have increased by approximately 8.4% over the past month, outperforming the S&P 500 [1] - The most recent earnings report is crucial for understanding the catalysts affecting the stock [1] Earnings Estimates - Fresh estimates for Qualys have trended upward, with the consensus estimate shifting by 8.18% [2] VGM Scores - Qualys has a Growth Score of A, a Momentum Score of C, and a Value Score of F, resulting in an aggregate VGM Score of C [3] Outlook - The upward trend in estimates suggests a promising outlook, leading to a Zacks Rank of 1 (Strong Buy) for Qualys, indicating expectations of above-average returns in the coming months [4] Industry Performance - Qualys is part of the Zacks Security industry, where Check Point Software has gained 4.6% over the past month [5] - Check Point reported revenues of $637.8 million for the last quarter, reflecting a year-over-year increase of 6.5% [5] - Check Point's expected earnings for the current quarter are $2.36 per share, indicating an 8.8% increase from the previous year [6]

Qualys (QLYS) FY Conference Summary Company Overview - **Company**: Qualys - **Industry**: Cybersecurity, specifically focusing on cyber risk management and vulnerability management - **Key Executives**: Sumit Dakar (CEO), Jume Kim (CFO) [1][2] Core Business Insights - **Vulnerability Management**: Qualys has been a pioneer in vulnerability management, evolving from basic detection to comprehensive cyber risk management solutions [3][4] - **Product Expansion**: The company has broadened its offerings to include remediation, patch management, asset management, and a risk operation center [4][5] - **Market Growth**: The number of vulnerabilities detected has increased significantly, necessitating a shift from merely identifying vulnerabilities to prioritizing and remediating them effectively [5][6] Financial Performance and Growth Strategy - **Growth Drivers**: Historically, growth has been driven by existing customers, with 15% of last twelve months (LTM) bookings coming from new products like Patch Management and CSAM [9][10] - **Future Growth**: The company anticipates continued growth from existing customers while also targeting new customer acquisition through enhanced value propositions [10][17] - **Financial Model**: Qualys maintains a focus on profitable growth, with a gross margin of 84% despite a shift towards more partner-driven sales [31][32] Product Development and Market Position - **Enterprise True Risk Solution**: This solution aims to provide a holistic view of cybersecurity risks, allowing customers to justify cybersecurity investments to stakeholders [11][12] - **Risk Operation Center**: A new offering that consolidates data from various tools to provide a comprehensive risk assessment, enabling better decision-making for customers [13][14] - **Cloud Security**: Qualys is actively expanding its cloud security capabilities, with 30 million agents deployed in public cloud environments [44][32] Partner Strategy and Market Dynamics - **Channel Focus**: The company is increasingly relying on channel partners for new customer acquisition and upselling, with a significant portion of deals now involving partners [25][29] - **Managed Services**: Qualys is enabling partners to offer risk monitoring services, which differ from traditional threat monitoring, thus expanding its market reach [22][24] - **Federal Market Opportunity**: The company is preparing to enhance its presence in the federal sector, particularly with the upcoming FedRAMP High certification, which will allow access to more federal agencies [33][34] Challenges and Future Outlook - **Sales Productivity**: While relationships with partners have improved, direct sales productivity has not met expectations, prompting a strategic shift towards channel partnerships [47][48] - **Investment in Federal Sector**: The company is committed to investing in the federal market, anticipating significant growth opportunities once FedRAMP High is achieved [35][36] - **Long-term Strategy**: Qualys aims to continue evolving its platform to meet the changing needs of customers, focusing on risk management and comprehensive cybersecurity solutions [17][32] Additional Insights - **Customer Engagement**: There is a notable increase in engagement from Chief Security Officers (CSOs) in discussions about risk management, indicating a shift in customer priorities [16][17] - **Market Confusion**: The distinction between vulnerability management, CSPM (Cloud Security Posture Management), and other security solutions is often misunderstood, but Qualys aims to clarify these roles [41][42] This summary encapsulates the key points discussed during the Qualys FY Conference, highlighting the company's strategic direction, market opportunities, and challenges ahead.

Core Insights - Qualys, Inc. (QLYS) shares rose 4% in after-hours trading following better-than-expected Q1 2025 results, with non-GAAP earnings of $1.67 per share, exceeding both the Zacks Consensus Estimate of $1.46 and management's guidance of $1.40-$1.50 [1][2] Financial Performance - Q1 revenues increased by 10% year-over-year to $159.9 million, surpassing the Zacks Consensus Estimate of $157.1 million, driven by a strong partner ecosystem [2] - Non-GAAP gross profit rose 10% year-over-year to $133.7 million, with a gross margin improvement of 100 basis points to 84% [5] - Non-GAAP operating income grew 10% to $71.2 million, with an operating margin improvement of 100 basis points to 45% [5] - Adjusted EBITDA increased by 8% to $74.8 million, maintaining an adjusted EBITDA margin of 47% [5] Revenue Breakdown - Sales from channel partners grew by 19%, while direct sales saw a modest 2% increase, with channel partners contributing 49% to total revenues [3] - U.S. sales grew by 6%, accounting for approximately 57% of total revenues, while international sales increased by 16%, contributing the remaining 43% [4] Cash Flow and Balance Sheet - As of March 31, 2025, Qualys had cash and cash equivalents of approximately $640 million, up from $575 million a year ago [6] - The company generated an operating cash flow of $109.6 million and free cash flow of $107.6 million during the quarter [6] - Qualys repurchased stocks worth $39.7 million, with $303.8 million remaining under the share repurchase program [6] Guidance Updates - Following the strong Q1 performance, Qualys raised its full-year 2025 revenue guidance to a range of $648 million to $657 million, reflecting a year-over-year improvement of 7-8% [7] - The company now forecasts non-GAAP earnings for 2025 to be in the range of $6.00-$6.30 per share, up from the previous range of $5.50-$5.90 [8] - For Q2, Qualys expects revenues between $159.7 million and $162.7 million, indicating year-over-year growth of 7-9% [8][9]