Financial Data and Key Metrics Changes - Revenues grew 10% to $169.9 million in Q3 2025, with channel partners contributing 50% of total revenues compared to 47% a year ago [20][21] - Adjusted EBITDA for Q3 was $82.6 million, representing a 49% margin, up from 45% a year ago [21] - EPS for Q3 grew 19% to $1.86, with quarterly free cash flow at $89.5 million, representing a 53% margin compared to 37% in the prior year [22] Business Line Data and Key Metrics Changes - Patch Management and Cybersecurity Asset Management combined accounted for 17% of total bookings and 28% of new bookings on an LTM basis [21] - TotalCloud CNAPP made up 5% of LTM bookings, reflecting the company's scalable and sustainable business model [21] Market Data and Key Metrics Changes - US revenue grew 7%, while international revenue grew 15%, with a revenue mix of 56% from the US and 44% from international markets [20] - Net dollar retention rate remained at 104%, indicating challenges in upselling despite improved gross retention [20] Company Strategy and Development Direction - The company is focusing on transitioning from traditional cybersecurity to risk surface management using AI-powered proactive risk management [5][6] - The Risk Operations Center (ROC) is being positioned as a central solution for organizations to manage cyber risks effectively, with a focus on consolidating security tools [6][9] - The company plans to shift reporting from cybersecurity asset management bookings to ETM customer penetration, indicating a strategic pivot towards ETM as a growth pillar [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate macroeconomic challenges, emphasizing the importance of aligning cybersecurity spend with business risk [23] - The company anticipates continued scrutiny of budgets in Q4, but expects to maintain growth momentum with a revenue guidance of $172 million to $174 million for Q4 2025 [23] Other Important Information - The company has repurchased 10.4 million shares since the program's inception, returning $1.2 billion in cash to shareholders, with $205 million remaining in the repurchase program [22] - The introduction of the QFlex pricing model has seen notable customer interest, with one Global 10 customer increasing their annual bookings by over 50% [17][18] Q&A Session Summary Question: Can you elaborate on the pricing around ETM and the 100% upsell metric? - Management clarified that ETM pricing includes cybersecurity asset management and focuses on optimizing cybersecurity spend through agentic AI capabilities [26][27] Question: What are the prospects in the federal market, especially with the recent shutdown? - Management noted early positive conversations in the federal space, emphasizing the need for efficiency and consolidation of security tools [32][36] Question: How is the competitive environment changing for Qualys? - Management highlighted that while competitors focus on discovering more CVEs, Qualys is concentrating on helping customers prioritize and remediate key vulnerabilities quickly [38][39] Question: Were there any one-time benefits to revenue this quarter? - Management confirmed that there were no specific one-time benefits, indicating solid growth from execution [42][43] Question: What needs to happen for net dollar retention to increase? - Management is focused on delivering value through ETM to existing customers, which could positively impact net dollar retention [44] Question: How is R&D spend prioritized across initiatives? - Management emphasized the focus on leveraging AI for efficiency gains in R&D, while continuing to invest in key areas [47][51]

Financial Data and Key Metrics Changes - Revenues grew 10% to $169.9 million in Q3 2025, with channel partners contributing 50% of total revenues compared to 47% a year ago [19][20] - Adjusted EBITDA for Q3 2025 was $82.6 million, representing a 49% margin compared to 45% margin a year ago [21] - EPS for Q3 2025 grew 19% to $1.86, with quarterly free cash flow at $89.5 million, representing a 53% margin compared to 37% in the prior year [22] Business Line Data and Key Metrics Changes - Patch Management and Cybersecurity Asset Management combined accounted for 17% of total bookings and 28% of new bookings on an LTM basis [21] - Cloud security solutions, specifically TotalCloud CNAPP, made up 5% of LTM bookings [21] Market Data and Key Metrics Changes - Revenue growth outside the US was 15%, outpacing domestic growth of 7%, with a revenue mix of 56% from the US and 44% from international markets [19] Company Strategy and Development Direction - The company is focusing on transitioning from attack surface management to risk surface management, utilizing AI-powered proactive risk management [4][5] - The Risk Operations Center (ROC) is being positioned as a new category in cybersecurity, centralizing threat response before business impacts occur [5][6] - The company plans to shift from reporting cybersecurity asset management LTM bookings to ETM customer penetration, indicating a strategic pivot towards ETM as a growth pillar [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the platform approach to cyber risk management, despite macroeconomic challenges affecting new business growth [23] - The company anticipates continued budget scrutiny in Q4 but expects to maintain a strong performance due to its innovative solutions [23] Other Important Information - The company has repurchased 10.4 million shares since the program's inception, returning $1.2 billion in cash to shareholders [22] - The introduction of the QFlex pricing model has seen notable customer interest, with one Global 10 customer increasing their annual bookings by over 50% [17] Q&A Session Summary Question: Can you elaborate on the pricing around ETM and the 100% upsell metric? - The ETM pricing includes cybersecurity asset management, and the upsell is expected to be significant as customers utilize ETM for inventory and exploit confirmation [24][25] Question: What are the developments in the federal market and the competitive environment? - The federal market is in early stages, with positive conversations about efficiency and consolidation. The competitive landscape includes players like CrowdStrike, but Qualys focuses on actionable risk management rather than just detection [26][29] Question: Were there any one-time benefits to revenue this quarter? - There were no specific one-time benefits; the quarter was solid in terms of execution [32] Question: What needs to happen for net dollar retention to increase? - The company is focused on demonstrating the value of ETM to existing customers, which could positively impact net dollar retention [33] Question: How is R&D spending prioritized across initiatives? - The company is leveraging AI to improve efficiency in R&D without significant increases in expenses, focusing on delivering capabilities across various initiatives [34][36] Question: How is the ROC solution being received by customers? - Customer feedback on the ROC solution has been positive, with a focus on business risk management rather than just technical scores [55][56]

Revenue Performance - For the nine months ended September 30, 2025, approximately 57% of revenues were derived from customers in the United States[114]. - Revenues for the three months ended September 30, 2025, increased by $16.0 million (10%) to $169.9 million compared to the same period in 2024, driven by increased demand for subscription services[126]. - For the nine months ended September 30, 2025, revenues increased by $45.5 million (10%) to $493.8 million compared to the same period in 2024, with 83% of the increase from existing customers[127]. - The company expects revenue growth from new and existing customers to continue, supported by a strong market position[128]. Cost and Expenses - Operating expenses for the three months ended September 30, 2025, were 49% of revenues, down from 52% in the same period of 2024[125]. - Cost of revenues for the three months ended September 30, 2025, was 16% of revenues, down from 19% in the same period of 2024[125]. - Cost of revenues for the three months ended September 30, 2025, decreased by $1.0 million (4%) to $27.8 million, primarily due to a reduction in shared cloud platform costs[129]. - Cost of revenues for the nine months ended September 30, 2025, increased by $3.2 million (4%) to $85.6 million, mainly due to increased personnel costs[130]. - Research and development expenses for the three months ended September 30, 2025, remained relatively flat at $28.9 million, while for the nine months, they increased by $4.8 million (6%) to $83.6 million[131][132]. - Sales and marketing expenses for the three months ended September 30, 2025, increased by $2.6 million (8%) to $32.7 million, and for the nine months, they rose by $9.5 million (10%) to $103.8 million[134][135]. - General and administrative expenses for the three months ended September 30, 2025, decreased by $0.6 million (3%) to $18.5 million, while for the nine months, they increased by $2.7 million (5%) to $53.0 million[136][137]. Profitability - Revenues for the three months ended September 30, 2025, were recognized at 100% with a gross profit margin of 84%[125]. - Income from operations for the three months ended September 30, 2025, increased to 35% of revenues compared to 29% in the same period of 2024[125]. - Adjusted EBITDA for the three months ended September 30, 2025, was $82.6 million, representing 49% of revenues, compared to $69.7 million or 45% of revenues for the same period in 2024[150]. - Net income for the three months ended September 30, 2025, was $50.3 million, maintaining a net income margin of 30%, consistent with the same period in 2024[150]. Taxation - The income tax provision for the three months ended September 30, 2025, was 8% of income before taxes, compared to 4% in the same period of 2024[125]. - The income tax provision for the three months ended September 30, 2025, increased by $8.8 million (144%) to $10.9 million, mainly due to changes in tax benefits[140]. - The company expects a reduction in cash taxes paid for U.S. federal and state income taxes for the fiscal year ended December 31, 2025, due to deductions for domestic research and development expenditures[153]. Cash Flow and Investments - Cash provided by operating activities for the nine months ended September 30, 2025, was $233.7 million, an increase from $196.4 million in the same period in 2024[151]. - Cash used in investing activities during the nine months ended September 30, 2025, was $97.3 million, compared to $59.5 million in the same period in 2024[151]. - Share repurchases in the nine months ended September 30, 2025, totaled $138.8 million, compared to $97.2 million in the same period in 2024[155]. - The company has approximately $205.2 million remaining under its share repurchase program as of September 30, 2025[159]. Economic Environment - The current macroeconomic environment characterized by inflation and high interest rates may adversely affect long-term business and customer spending on IT security[115]. - The company continues to evaluate the impact of the OBBBA on its financial results, particularly regarding research and development expenses and depreciation[124]. Market Metrics - Net dollar expansion rates were 104% and 103% as of September 30, 2025, and September 30, 2024, respectively[146]. - Total other income, net for the three months ended September 30, 2025, decreased by $2.0 million (28%) to $5.3 million, primarily due to unfavorable foreign currency changes[138]. Lease Obligations - As of September 30, 2025, fixed operating lease payment obligations were $69.2 million, with $12.6 million expected to be paid within the next 12 months[157].

Qualys Enterprise TruRisk Platform - Qualys Enterprise TruRisk Platform 旨在利用风险分析来交付所需的业务成果[12] - 该平台提供全面的风险降低，通过与 SCCM、ITOps 和开发者工具无缝集成来协调风险降低[21] - 该平台通过统一的资产清单可视化整个攻击面，整合来自 Qualys 和第三方来源的数据，并根据严重性、可利用性、资产重要性和业务影响来量化和确定网络风险的优先级[28] - Qualys Enterprise TruRisk Platform 的优势在于它提供跨整个全球混合 IT 环境的单一视图，允许客户整合他们的堆栈以获得更好的安全结果[31] Market and Customer Base - Qualys 估计其当前的总潜在市场在 2025 年为 550 亿美元，到 2028 年将增长到 790 亿美元[35] - Qualys 拥有 10,000 多个订阅客户[37] - Qualys 的客户包括福布斯全球 50 强的 72%，福布斯全球 500 强的 55% 和福布斯全球 2000 强的 33%[37] Financial Performance - Qualys 在 2024 年的总收入为 6.08 亿美元[45] - 2025 年第三季度累计收入为 4.94 亿美元，同比增长 10%[45] - 2025 年第三季度累计调整后的 EBITDA 为 2.31 亿美元，占收入的 47%[45] - 2025 年第三季度累计自由现金流为 2.29 亿美元，自由现金流利润率为 46%[50]

Financial Performance - Revenue for Q3 2025 increased by 10% to $169.9 million compared to $153.9 million in Q3 2024[3] - GAAP net income for Q3 2025 was $50.3 million, or $1.39 per diluted share, up 9% from $46.2 million, or $1.24 per diluted share in Q3 2024[6] - Non-GAAP net income for Q3 2025 was $67.4 million, or $1.86 per diluted share, compared to $58.0 million, or $1.56 per diluted share in Q3 2024[6] - Adjusted EBITDA for Q3 2025 increased by 19% to $82.6 million, representing 49% of revenues[7] - Operating cash flow for Q3 2025 rose by 48% to $90.4 million, accounting for 53% of revenues[8] - Full year 2025 revenue guidance raised to $665.8 million to $667.8 million, reflecting a 10% growth over 2024[12] - Fourth quarter 2025 revenue expected to be between $172.0 million and $174.0 million, indicating 8% to 9% growth year-over-year[11] - Revenues for Q3 2025 reached $169,882 million, a 10.5% increase from $153,867 million in Q3 2024[27] - Gross profit for the nine months ended September 30, 2025, was $408,242 million, up from $365,935 million in the same period of 2024, reflecting a growth of 11.5%[27] - Net income for Q3 2025 was $50,346 million, compared to $46,212 million in Q3 2024, representing an increase of 4.9%[27] - Adjusted EBITDA for Q3 2025 was $82,600 million, which is 49% of revenues, compared to 45% in Q3 2024[33] - Cash flow from operating activities for the nine months ended September 30, 2025, was $233,741 million, compared to $196,372 million in 2024, indicating a growth of 19%[31] - GAAP revenue for the three months ended September 30, 2025, was $169,882 million, representing a 10% growth compared to the same quarter of the prior year[39] - Non-GAAP calculated current billings for the three months ended September 30, 2025, were $186,387 million, reflecting an 11% growth year-over-year[39] - GAAP net income for the nine months ended September 30, 2025, was $145,170 million, an increase from $129,715 million in the same period of 2024[35] - Non-GAAP net income for the nine months ended September 30, 2025, reached $190,100 million, compared to $169,621 million in the prior year[35] - Non-GAAP gross profit for the three months ended September 30, 2025, was $144,895 million, up from $127,821 million in the same quarter of 2024[35] - Non-GAAP operating expenses for the nine months ended September 30, 2025, totaled $195,054 million, compared to $177,599 million in the same period of 2024[35] - Non-GAAP free cash flows for the nine months ended September 30, 2025, were $229,475 million, an increase from $189,875 million in the same period of 2024[37] - GAAP income from operations for the three months ended September 30, 2025, was $59,955 million, compared to $44,954 million in the same quarter of 2024[35] - Basic GAAP net income per share for the nine months ended September 30, 2025, was $4.00, up from $3.52 in the same period of 2024[35] - Diluted non-GAAP net income per share for the nine months ended September 30, 2025, was $5.20, compared to $4.53 in the prior year[35] Operational Developments - Qualys received FedRAMP High Authorization for its GovCloud Platform, enhancing its capabilities for federal agencies[15] - The company launched a marketplace of AI-powered agents to improve cyber risk operations[15] - May Mitchell appointed as Chief Marketing Officer to lead global marketing strategy[15] Asset and Equity Growth - Total assets as of September 30, 2025, were $1,031,989 million, an increase from $973,537 million at the end of 2024[29] - The company’s total stockholders' equity increased to $529,403 million as of September 30, 2025, up from $477,116 million at the end of 2024[29] Expense Management - Total operating expenses for the nine months ended September 30, 2025, were $245,125 million, an increase from $228,152 million in 2024, marking a rise of 7.4%[27] - The company reported a net cash used in investing activities of $97,323 million for the nine months ended September 30, 2025, compared to $59,509 million in 2024[31]

Core Insights - Qualys, Inc. reported a revenue growth of 10% year-over-year for Q3 2025, with revenues reaching $169.9 million compared to $153.9 million in Q3 2024 [3][6] - The company raised its revenue guidance for the full year 2025 to a range of $665.8 million to $667.8 million, reflecting a 10% growth over 2024 [12] Financial Performance - **Revenue**: Q3 2025 revenues increased by 10% to $169.9 million from $153.9 million in Q3 2024 [3] - **Gross Profit**: GAAP gross profit rose by 14% to $142.1 million, with a gross margin of 84% in Q3 2025 compared to 81% in Q3 2024 [4] - **Operating Income**: GAAP operating income increased by 33% to $60.0 million, representing 35% of revenues, up from 29% in Q3 2024 [5] - **Net Income**: GAAP net income for Q3 2025 was $50.3 million, or $1.39 per diluted share, a 9% increase from $46.2 million, or $1.24 per diluted share, in Q3 2024 [6] - **Adjusted EBITDA**: Adjusted EBITDA grew by 19% to $82.6 million, accounting for 49% of revenues, compared to 45% in Q3 2024 [7] - **Operating Cash Flow**: Operating cash flow increased by 48% to $90.4 million, representing 53% of revenues [8] Business Highlights - Qualys received FedRAMP High Authorization for its GovCloud Platform, enhancing its ability to support federal agencies [15] - The company launched a marketplace of AI-powered agents to improve cyber risk operations [15] - Qualys was recognized with two Pwnie Awards for its Threat Research Unit, which supports its Enterprise TruRisk Management Platform [15] - The company appointed May Mitchell as Chief Marketing Officer to lead global marketing strategies [15] Future Guidance - **Q4 2025 Guidance**: Expected revenues between $172.0 million and $174.0 million, indicating 8% to 9% growth year-over-year [11] - **Full Year 2025 Guidance**: Revenue guidance raised to $665.8 million to $667.8 million, with GAAP net income per diluted share expected between $5.23 and $5.30 [12]

Core Insights - Qualys, Inc. has appointed Bradford L. Brooks to its Board of Directors, bringing extensive experience in cybersecurity and SaaS organizations [1][2] - Brooks will serve on the Board's nominating and governance committee, enhancing the board's oversight and supporting Qualys's growth agenda [2] - The company emphasizes the importance of AI and measurable effectiveness in cybersecurity, particularly through its Enterprise TruRisk Platform [2][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 [3] - The company aims to streamline and automate security and compliance solutions on a single platform, promoting agility and cost savings for organizations [3] Product and Technology - The Qualys Enterprise TruRisk Platform utilizes a single agent to deliver critical security intelligence and automate vulnerability detection, compliance, and protection across various IT environments [4] - Qualys has established strategic partnerships with major cloud service providers, integrating its vulnerability management capabilities into their security offerings [4]

Core Thesis - Qualys, Inc. is viewed as a resilient and profitable cybersecurity company with a strong subscription-based business model, offering a range of services that create high switching costs for customers [1][5]. Business Model and Financials - Qualys operates a cloud-based cybersecurity platform that provides services such as vulnerability management, compliance, patching, and endpoint detection, characterized by a capital-light and scalable SaaS model [2]. - The company boasts gross margins exceeding 70% and generates highly recurring revenue, contributing to strong free cash flow [2]. Market Position and Customer Base - Qualys serves over 10,000 customers across more than 130 countries, including many from the Forbes Global 100, which underscores its scale and trust in the cybersecurity market [3]. - The company's pricing power is enhanced by regulatory and compliance risks associated with replacing its platform, making its solutions indispensable for clients [3]. Competitive Landscape - While facing competition from companies like CrowdStrike, Tenable, Palo Alto, and Microsoft Defender, Qualys differentiates itself through the breadth and integration of its offerings, covering multiple aspects of cybersecurity in a single platform [4]. - Key risks include rapid innovation from competitors and pricing pressure from bundled IT solutions, but Qualys addresses these challenges through automation and a focus on compliance [4]. Investment Perspective - Qualys is considered a reliable long-term investment in the cybersecurity sector, offering steady growth with strong recurring cash flow and minimal downside risk, despite being less flashy than hypergrowth peers [5]. - The company's consistent execution and platform stickiness further enhance its attractiveness as a long-term investment option [5].

Core Insights - Qualys, Inc. will report its financial results for Q3 2025 on November 4, 2025, after market close [1] - A conference call and live webcast will be held on the same day at 5:00 p.m. Eastern Time to discuss the financial results [2] Company Overview - Qualys is a leading provider of cloud-based IT, security, and compliance solutions, serving over 10,000 subscription customers globally, including many from the Forbes Global 100 and Fortune 100 [3] - The company offers a platform that automates security and compliance solutions, aiming for improved agility, business outcomes, and cost savings [3] Product and Technology - The Qualys Enterprise TruRisk Platform utilizes a single agent for continuous security intelligence and automates vulnerability detection, compliance, and protection across various IT environments [4] - Qualys has established strategic partnerships with major cloud service providers like Amazon Web Services, Google Cloud Platform, and Microsoft Azure, integrating its capabilities into their security offerings [4]

Core Insights - Qualys, Inc. has introduced enhancements to its Enterprise TruRisk Management (ETM) platform, focusing on proactive risk management to predict and prevent emerging cyber threats, particularly in the context of agentic AI [1][3][9] Group 1: New Capabilities - The enhancements to Qualys ETM include improved identity security for both human and non-human identities, predictive threat analysis, and validation of exposure exploitability, allowing security teams to anticipate cyber risks before breaches occur [1][3] - ETM Identity consolidates visibility and remediation across various identity and access management systems, correlating identity and asset risk into a single Identity TruRisk score, which helps security teams focus on the most exploitable attack paths [5][6] Group 2: Addressing AI-Driven Threats - The rise of AI has led to an increase in the volume and complexity of cyber attacks, necessitating a proactive, intelligence-driven approach to breach prevention tailored to organizations' unique risk profiles [3][4] - Qualys ETM aligns Identity Risk Posture Management with contextual threat intelligence and exposure exploitability validation, enabling measurable risk reduction at an enterprise scale [3][4] Group 3: Enhanced Risk Management Tools - TruLens provides real-time, tailored threat intelligence, allowing organizations to detect, prioritize, and remediate cyber risks more effectively by continuously applying live threat analysis and business impact context [6][7] - TruConfirm validates the exploitability of exposures by executing real-world attack scenarios, enabling security teams to prioritize and mitigate risks more efficiently [8][9] Group 4: Market Position and Availability - Qualys ETM is now generally available, with its new features, including ETM Identity, TruLens, and TruConfirm, available in preview [9][11] - Qualys serves over 10,000 subscription customers globally, including many from the Forbes Global 100 and Fortune 100, indicating a strong market presence [11][12]