Financial Performance - Revenues for Q1 2025 increased by 10% to $159.9 million compared to $145.8 million in Q1 2024[3] - GAAP net income for Q1 2025 rose by 20% to $47.5 million, or $1.29 per diluted share, compared to $39.7 million, or $1.05 per diluted share, in Q1 2024[6] - Operating cash flow for Q1 2025 increased by 28% to $109.6 million, representing 69% of revenues compared to 59% in Q1 2024[8] - Non-GAAP net income for Q1 2025 was $61.4 million, or $1.67 per diluted share, compared to $54.7 million, or $1.45 per diluted share, in Q1 2024[6] - GAAP operating income for Q1 2025 increased by 16% to $51.8 million, representing 32% of revenues compared to 31% in Q1 2024[5] - Net income for the same period rose to $47,534 thousand, representing a net income margin of 30%, up from 27% in the prior year[33] - Basic net income per share increased to $1.30 for the three months ended March 31, 2025, compared to $1.08 in the same period of 2024[35] Guidance and Expectations - The company raised its full year 2025 revenue guidance to a range of $648 million to $657 million, reflecting a growth of 7% to 8% over 2024[12] - The company expects Q2 2025 revenues to be in the range of $159.7 million to $162.7 million, representing 7% to 9% growth over Q2 2024[11] Cash Flow and Assets - Non-GAAP free cash flows for the three months ended March 31, 2025, were $107,550 thousand, compared to $83,454 thousand in the same period of 2024[37] - Cash and cash equivalents increased to $290,671 thousand as of March 31, 2025, up from $232,182 thousand at the end of 2024[29] - Total assets reached $996,471 thousand as of March 31, 2025, compared to $973,537 thousand at the end of 2024[29] - Total liabilities were $498,436 thousand as of March 31, 2025, slightly up from $496,421 thousand at the end of 2024[29] Revenue and Deferred Revenue - Current deferred revenue as of March 31, 2025, was $366,824 thousand, compared to $332,128 thousand in the same period of the previous year[39] - Revenues for the three months ended March 31, 2025, increased to $159,899 thousand, a growth of 10% compared to $145,805 thousand in the same period of 2024[27] Adjusted Metrics - Adjusted EBITDA for Q1 2025 increased by 8% to $74.8 million, maintaining a margin of 47% of revenues[7] - Adjusted EBITDA for the three months ended March 31, 2025, was $74,752 thousand, maintaining 47% as a percentage of revenues, consistent with the previous year[33] Stock-Based Compensation - Stock-based compensation totaled $18,820 thousand for the three months ended March 31, 2025, down from $19,031 thousand in the same period of 2024[35] New Initiatives - The company introduced the Managed Risk Operation Center (mROC) to help partners expand revenue streams through a unified managed service[15] - Qualys launched TotalAppSec, a comprehensive application risk management solution, enhancing its cybersecurity offerings[15]

Core Insights - The rapid adoption of AI is leading organizations to implement solutions without adequate security controls, raising concerns about potential security breaches, with 72% of CISOs expressing worry about generative AI risks [1] - Qualys TotalAI is designed to address AI-specific security challenges, ensuring that only trusted models are deployed, thus balancing innovation with risk management [2][3] Group 1: Qualys TotalAI Features - TotalAI goes beyond basic assessments by testing models for vulnerabilities such as jailbreak risks, bias, and sensitive information exposure, aligning with OWASP Top 10 for LLMs [2] - The platform provides visibility, intelligence, and automation to protect AI workloads throughout their lifecycle, enhancing operational resilience and brand trust [3] - TotalAI detects 40 different attack scenarios, including advanced jailbreak techniques and bias amplification, to strengthen model resilience against exploitation [6] Group 2: Availability and Resources - Qualys TotalAI is now available for a 30-day trial, allowing organizations to explore its capabilities [4] - Qualys, Inc. is a leading provider of cloud-based security solutions, serving over 10,000 subscription customers globally, including many from the Forbes Global 100 and Fortune 100 [5]

Industry Overview - Cybersecurity has transitioned from a back-office concern to a boardroom priority due to the increasing frequency and sophistication of cyberattacks, with global cybercrime costs projected to rise from $9.22 trillion in 2024 to $15.63 trillion by 2029 [1] - The global cybersecurity market is expected to grow from $193.73 billion in 2024 to $562.72 billion by 2032, reflecting a compound annual growth rate (CAGR) of 14.3% [2] - The growth in the cybersecurity market is driven by increasing enterprise IT complexity, rising regulatory scrutiny, and the need for real-time protection of data, identities, and infrastructure [2] Technological Advancements - Artificial intelligence (AI) is revolutionizing the cybersecurity landscape, enabling more efficient detection, prevention, and response to cyber threats [3] - AI can analyze large volumes of data, detect anomalies, and identify potential breaches in real time, providing a proactive approach to security [3] Company Highlights - Companies like Fortinet, Zscaler, Okta, and Qualys are heavily investing in AI-driven security solutions to enhance their capabilities and position themselves for long-term growth in the expanding cybersecurity market [4] - Okta specializes in identity and access management (IAM) and is ramping up its AI capabilities to address the complexities of digital identities [6] - Qualys focuses on vulnerability management and cloud security, integrating advanced AI models into its platforms for faster detection and remediation of security threats [10][11] - Fortinet offers a comprehensive suite of cybersecurity solutions, differentiating itself with high-performance security at lower costs, and has integrated AI-driven analytics into its services [13][14][15] - Zscaler is a pioneer in zero-trust security, enhancing its platform with AI-powered security analytics to improve threat detection and response [16][17][18] Financial Performance - Okta reported 19,650 customers at the end of fiscal Q4 2025, with a 7% year-over-year increase in customers with over $100,000 in Annual Contract Value (ACV) [8] - Qualys' AI-powered platform is expected to drive customer adoption and revenue growth, positioning it well in the market [12] - Fortinet has consistently delivered profitability and strong free cash flow, reflecting its growing market share and demand for AI-enhanced security solutions [15] - Zscaler has maintained robust financial performance with expanding revenues driven by demand for its AI-enhanced offerings [18]

Core Insights - Enterprises are facing an increasing compliance burden, with nearly 70% of service organizations subject to at least six regulatory frameworks, leading to resource strain and higher costs [1] - Misconfigurations complicate compliance efforts, often resulting in non-compliance and regulatory penalties, highlighting the need for automated compliance management solutions [1] - Qualys Policy Audit offers a solution by automating evidence mapping to various compliance frameworks, ensuring continuous compliance and reducing audit failures [3] Compliance Challenges - Organizations struggle with complex regulations, limited staff, and tight budgets, making compliance costly and prone to errors [3] - Time-consuming tasks such as auditing and reporting are susceptible to human error, necessitating a more efficient approach [1] Qualys Policy Audit Features - Qualys Policy Audit provides comprehensive coverage across 450 technologies, over 1,000 out-of-the-box policies, and more than 90 frameworks, ensuring organizations remain audit-ready [3] - The solution reduces audit failure rates by up to 95%, helping organizations mitigate risks of fines and penalties [6] - Automated ITSM workflows enhance communication between teams, ensuring timely information flow and streamlined compliance tracking [6] New Offerings - Qualys is introducing Audit Fix, which allows users to proactively address audit findings before they escalate into compliance issues, utilizing predefined scripts and policies [4] - Customizable remediation workflows integrated into Policy Audit significantly reduce breach exposure and accelerate compliance efforts [4] Availability and Resources - Qualys Policy Audit will be available in Q2, with a 30-day trial offered on their website [5] - Additional resources include a blog and a webinar focused on the new standard for audit readiness [5] Company Overview - Qualys, Inc. is a leading provider of cloud-based security and compliance solutions, serving over 10,000 subscription customers globally, including many Fortune 100 companies [6][7] - The Qualys Enterprise TruRisk Platform automates vulnerability detection and compliance across various IT environments, enhancing overall security posture [8]

Core Viewpoint - Qualys, Inc. will report its financial results for Q1 2025 on May 6, 2025, after market close [1] Group 1: Financial Reporting - The financial results for the first quarter of 2025 will be announced after market hours on May 6, 2025 [1] - A conference call and live webcast will be held at 5:00 p.m. Eastern Time on the same day to discuss the results [2] Group 2: Company Overview - Qualys, Inc. is a leading provider of cloud-based security, compliance, and IT solutions with 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, leading to improved agility and cost savings for organizations [3] Group 3: Product and Technology - The Qualys Enterprise TruRisk Platform utilizes a single agent for continuous security intelligence and automates vulnerability detection and compliance 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 [4]

Core Insights - Qualys, Inc. has become the Major Partner and official Cybersecurity Partner of the San Francisco Unicorns for the 2025 Cognizant Major League Cricket season, highlighting its commitment to community engagement and support for local sporting events [1][3][5] Group 1: Partnership Details - The partnership includes the Qualys logo prominently displayed on the Unicorns' matchday and training jerseys, as well as branding opportunities across various media assets [4] - Qualys aims to reflect its values of innovation and determination through this partnership, aligning with the Unicorns' mission to promote cricket in the U.S. [3][5] Group 2: Team and Event Information - The San Francisco Unicorns debuted in Major League Cricket in 2023 and are set to play their first three games of the 2025 season at the Oakland Coliseum, starting with a match against Washington Freedom on June 12 [6][9] - The team features top international cricket talents, including Cooper Connolly, Jake Fraser-McGurk, and Matt Short, promising exciting performances for fans [3][9] Group 3: 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 [10] - The company specializes in automating security and compliance solutions, offering significant cost savings and improved business outcomes for organizations [10][11]

Industry Overview - The cybersecurity industry is experiencing significant growth, driven by complex attacks such as credential theft and social engineering. The market is projected to grow at a CAGR of 12.63% from 2025 to 2030, with a robust CAGR of 9.4% expected during the same period [2]. Company Analysis: Palo Alto Networks (PANW) - Palo Alto Networks is a leader in cybersecurity, offering a comprehensive suite of solutions including network security, cloud security, and endpoint protection [4]. - The company is focusing on innovative product offerings, such as the enhanced Prisma Cloud platform with Prisma Cloud Copilot, which utilizes generative AI to improve security analysts' efficiency [6]. - PANW's strategic expansion in the APAC region and its focus on Zero Trust and private 5G security solutions are expected to drive growth [5][7]. - The Zacks Consensus Estimate for PANW's 2025 earnings is $3.22, reflecting a year-over-year increase of 13.4% [7][8]. - Over the past year, PANW shares have returned 14%, and the stock is trading at a forward sales multiple of 10.01X, above its three-year median of 9.35X [14][15]. Company Analysis: Qualys (QLYS) - Qualys specializes in Vulnerability Management, Detection, and Response (VMDR) solutions, with 73% of its customers using four or more modules, up from 63% the previous year [9]. - The company has launched several new products, including the Risk Operations Center and Qualys TotalAI, which focus on enhancing cloud-based offerings [10]. - The Zacks Consensus Estimate for Qualys' 2025 earnings is $5.75, indicating a year-over-year decline of 6.2% [12][13]. - Qualys shares have lost 29.8% over the past year, and the stock is trading at a forward sales multiple of 6.43X, significantly below its three-year median of 11.41X [14][15]. Comparative Analysis - Palo Alto Networks is viewed as a stronger investment opportunity due to its leadership position, robust growth prospects, and strong financial execution, despite its premium valuation [18]. - In contrast, Qualys faces challenges from increased competition and a declining growth trajectory, raising concerns about its ability to capitalize on the cybersecurity market [17][18]. - Currently, Palo Alto holds a Zacks Rank 3 (Hold), while Qualys has a Zacks Rank 4 (Sell), indicating a more favorable outlook for PANW compared to QLYS [19].

Industry Overview - The pace of technological change is accelerating, particularly in quantum computing, raising concerns about cybersecurity threats, specifically the potential for quantum-powered attacks to break current encryption methods in seconds, referred to as "Q-Day" [1] - Regulators and privacy watchdogs are urging organizations to adopt quantum-resistant encryption before 2035, indicating that quantum computing is an immediate concern rather than a distant risk [1] - The Post-Quantum Cryptography market is projected to grow at a 41.47% CAGR, reaching approximately US$17.69 billion by 2034, while the Quantum Computing Software market is expected to expand at a 40% CAGR, reaching about US$31.8 billion [2] Company Developments - Scope Technologies Corp. is actively engaging in the quantum security space, recently announcing a $1.5 million private placement financing, which includes a $1 million strategic investment from First Majestic Silver Corp. [3] - The funds will be utilized to repay a prior loan and accelerate the development of Scope's upcoming QSE mobile app, which will offer quantum-resistant messaging and file-sharing capabilities [4] - Scope has secured a master reseller agreement with Coegi Cloud AB in Sweden and a channel partnership with COGITO, expanding its reach across Europe, North America, and Asia [5] - The company launched an upgraded Quantum Preparedness Assessment (QPA) tool that uses AI-driven automation to help businesses assess their exposure to quantum threats, aligning with upcoming updates to the HIPAA Security Rule [6] Competitive Landscape - Qualys, Inc. has launched its Managed Risk Operations Center (mROC) Partner Alliance to help organizations turn risk data into actionable insights, addressing a significant challenge in cybersecurity [9][10] - CyberArk Software Ltd. highlighted the growing issue of machine identity security, reporting that 72% of organizations experienced certificate-related outages, emphasizing the need for comprehensive security strategies [11][12] - Cisco Systems, Inc. and NVIDIA Corporation have introduced the Cisco Secure AI Factory, an infrastructure solution designed to secure AI workloads, integrating security at every layer [13][14]

Financial Performance - Revenues for 2024 reached $607,571 thousand, a 9.6% increase from $554,458 thousand in 2023[317]. - Gross profit for 2024 was $496,089 thousand, up 10.9% from $446,973 thousand in 2023[317]. - Net income for 2024 increased to $173,680 thousand, representing a 14.6% growth compared to $151,595 thousand in 2023[320]. - Basic net income per share rose to $4.72 in 2024, up from $4.11 in 2023, reflecting a 14.8% increase[317]. - Total revenues for the year ended December 31, 2024, reached $607.6 million, up 9.6% from $554.5 million in 2023[403]. - The net income for the year ended December 31, 2024, was $173.7 million, up 14.6% from $151.6 million in 2023[458]. - Revenue from the United States for the year ended December 31, 2024, was $354.6 million, while foreign revenue was $253.0 million[459]. Assets and Liabilities - As of December 31, 2024, Qualys reported total assets of $973.5 million, an increase from $812.6 million in 2023, representing a growth of approximately 20%[313]. - The company had $575.3 million in cash, cash equivalents, and marketable securities as of December 31, 2024, with no material decrease in fair value expected from a hypothetical 100 basis point increase in interest rates[293]. - The company reported a net accumulated deficit of $189.2 million in 2024, reduced from $228.1 million in 2023, indicating an improvement in financial health[313]. - The Company had total long-lived assets of $71.3 million as of December 31, 2024, compared to $55.0 million in 2023[459]. - The total fair value of marketable securities due within one year was $185,571,000, while those due after one year through five years totaled $186,367,000 as of December 31, 2024[385]. Cash Flow and Investments - Cash flow from operating activities for 2024 was $244,094 thousand, slightly down from $244,605 thousand in 2023[323]. - The company repurchased common stock worth $139,875 thousand in 2024, compared to $170,800 thousand in 2023[323]. - The Company has total purchase commitments of $56.4 million as of December 31, 2024, with $25.1 million due in 2025[415]. - The company incurred advertising costs of $2.9 million in 2024, which is a decrease from the previous years[361]. Stock-Based Compensation - The total stock-based compensation expense for the year ended December 31, 2024 was $77.1 million, an increase of 11.8% from $69.1 million in 2023[439]. - The intrinsic value of options exercised in 2024 was $24.0 million, compared to $41.7 million in 2023, indicating a decrease of 42.0%[431]. - The aggregate fair value of RSUs vested in 2024 was $56.2 million, up from $55.7 million in 2023, reflecting a 0.9% increase[435]. - The company recognized stock-based compensation expenses related to PRSUs of $12.4 million in 2024, a significant increase from $7.4 million in 2023[440]. - The number of shares authorized for issuance under the 2021 Employee Stock Purchase Plan was 600 thousand, with 59 thousand shares issued in 2024[428][429]. Research and Development - The company anticipates continued investments in sales and marketing, infrastructure, and research and development to support growth and innovation[290]. - Research and development expenses for 2024 were $111,852 thousand, a slight increase from $110,472 thousand in 2023[317]. Deferred Revenues and Contracts - Deferred revenues increased to $395.7 million in 2024 from $364.9 million in 2023, indicating a growth of approximately 8.4%[313]. - The Company recognizes revenue from subscriptions ratably over the contract terms, which generally last one year, with some contracts extending up to five years[352]. - Deferred revenues as of the balance sheet date consist of customer contracts billed or cash received that will be recognized in the future, with the current portion expected to be recognized within one year[358]. Foreign Currency and Derivatives - Qualys has designated cash flow hedge forward contracts with notional amounts of €51.4 million, £20.3 million, and Rs.4,381.0 million to mitigate foreign currency risks[291]. - The company utilizes derivative financial instruments to reduce foreign currency exchange risks, primarily through foreign currency forward contracts with maturities of 13 months or less[350]. - The total foreign exchange losses, net for the year ended December 31, 2024, were $3,192,000, compared to losses of $697,000 in 2023[393]. Tax and Compliance - The effective tax rate for the Company was 17.2% for the year ended December 31, 2024, compared to 15.1% in 2023[449]. - The Company reported a deferred tax asset of $94.6 million as of December 31, 2024, compared to $72.4 million in 2023[450]. - The unrecognized tax benefits increased to $12.1 million as of December 31, 2024, from $11.9 million in 2023[452].

Core Insights - Qualys is a cloud-based enterprise cybersecurity company that has been under observation for a significant period, with previous coverage in April of the last year [1]. Group 1 - The company has been noted for its potential investment opportunities, with the possibility of initiating a long position through stock purchases or call options within a short timeframe [1].