The Zacks Security industry is experiencing robust demand for cybersecurity products, driven by the increasing need for secure networks and cloud-based applications, especially with the rise of hybrid work environments. This surge in demand is largely due to a significant increase in data breaches, prompting companies to seek comprehensive IT security solutions. Additionally, the growing need for privileged access security, fueled by digital transformation and cloud migration strategies, is further boosting ...

Core Viewpoint - Qualys reported mixed Q2 2024 results with earnings exceeding estimates but revenues slightly missing expectations, indicating a significant year-over-year improvement in both metrics [2][3]. Financial Performance - Non-GAAP earnings for Q2 2024 were $1.52 per share, surpassing the Zacks Consensus Estimate of $1.31 and exceeding previous guidance of $1.27-$1.35 per share [2]. - Year-over-year earnings increased by 19.7% from $1.27 per share [3]. - Revenues rose 8.4% year-over-year to $148.71 million, though it fell short of the Zacks Consensus Estimate of $148.76 million [4]. Revenue Breakdown - Sales from channel partners grew by 17%, while direct sales only increased by 2%, with channel partners contributing 46% to total revenues [5]. - U.S. sales grew by 5%, contributing approximately 58% to total revenues, while international sales increased by 14%, accounting for 42% of total revenues [6]. Profitability Metrics - Non-GAAP gross profit increased by 11% year-over-year to $124.9 million, with a gross margin expansion of 200 basis points to 84% [7]. - Non-GAAP operating income grew by 11% to $65.9 million, and the operating margin improved by 100 basis points to 44% [7]. - Adjusted EBITDA rose by 6% to $69.9 million, with a slight contraction in the adjusted EBITDA margin by 100 basis points to 47% [7]. Cash Flow and Balance Sheet - As of the end of Q2, Qualys had cash and cash equivalents totaling $393.2 million [8]. - The company generated operating cash flow of $49.8 million and free cash flow of $48.8 million during Q2 2024 [8]. Guidance - For Q3 2024, Qualys expects revenues between $149.8 million and $151.8 million, indicating a year-over-year growth of 5-7% [9]. - For the full year 2024, the revenue guidance is adjusted to a range of $597.5-$601.5 million, down from previous guidance, while non-GAAP earnings per share guidance has been raised to $5.46-$5.62 [10]. Market Sentiment - Estimates for Qualys have trended upward, with a consensus estimate shift of 13.33% in the past month [11]. - The stock currently holds a Zacks Rank 1 (Strong Buy), indicating expectations for above-average returns in the coming months [13].

Group 1: Market Overview - The stock market is currently under bullish control, with the S&P 500 and Nasdaq trading above their 21-day and 50-day moving averages after a significant two-week recovery [1] - Investors are optimistic about tech-driven earnings growth and potential interest rate cuts, with the Fed's July minutes indicating a dovish cycle starting at the next FOMC meeting [2] Group 2: Qualys (QLYS) - Qualys provides cloud-based cybersecurity, compliance, and IT solutions, serving a diverse customer base that includes enterprises and governments, which helps it remain resilient to spending patterns [3] - The company has faced challenges due to slowing sales outlook after years of double-digit revenue growth, with a projected sales increase of 8% in FY24 and FY25, reaching $649 million [5][6] - Qualys is expected to grow adjusted earnings by 6% in 2024 and 4% in 2025, with management providing positive EPS guidance following Q2 results [6] - Despite a 40% decline since late 2023, Qualys has seen a 395% increase over the past decade, outperforming the Zacks Tech sector [7] - The stock is currently trading at its lowest valuation in 10 years at 31.1X forward 12-month earnings, representing a 90% discount to its 10-year highs [8] Group 3: Celestica Inc. (CLS) - Celestica is a leader in design, manufacturing, and supply chain solutions, servicing various sectors including communications, aerospace, and healthcare technology [9][10] - The company expanded its revenue by 29% in 2022 and 10% in FY23, with projections of 19% revenue growth this year and 9% in 2025, reaching $10.28 billion [11] - Celestica is expected to achieve 50% adjusted EPS growth this year and 9% next year, following a strong performance in the previous four years [11][12] - The stock has increased by 685% over the past five years, significantly outperforming the tech sector, although it is currently trading 15% below its mid-July highs [13] - Celestica's stock is trading at a 43% discount to the wider Zacks Tech sector, at 15.6X forward 12-month earnings [14]

Investors might want to bet on Qualys (QLYS) , as it has been recently upgraded to a Zacks Rank #1 (Strong Buy). An upward trend in earnings estimates -- one of the most powerful forces impacting stock prices -- has triggered this rating change. The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate. Since a changing earnings ...

Qualys (QLYS) posted mixed second-quarter 2024 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same. However, both top and bottom lines marked a significant year-over-year improvement. The company reported non-GAAP earnings of $1.52 per share, which beat the Zacks Consensus Estimate of $1.31. Qualys' second-quarter non-GAAP earnings also came well ahead of its previous guidance of $1.27-$1.35 per share. The bottom line increased 19.7% from the year-ago quarter's earn ...

Core Insights - Qualys reported quarterly earnings of $1.52 per share, exceeding the Zacks Consensus Estimate of $1.31 per share, and showing an increase from $1.27 per share a year ago, resulting in an earnings surprise of 16.03% [1] - The company posted revenues of $148.71 million for the quarter ended June 2024, slightly missing the Zacks Consensus Estimate by 0.03%, but up from $137.21 million year-over-year [2] - Qualys has surpassed consensus EPS estimates in all four of the last quarters, while it has topped consensus revenue estimates twice during the same period [2] Earnings Outlook - The future performance of Qualys shares will largely depend on management's commentary during the earnings call and the sustainability of the stock's immediate price movement based on the recently released numbers [3][4] - The current consensus EPS estimate for the upcoming quarter is $1.24 on revenues of $153.84 million, and for the current fiscal year, it is $5.21 on revenues of $605.56 million [7] Industry Context - The Zacks Security industry, to which Qualys belongs, is currently ranked in the top 7% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% of ranked industries [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors or through tools like the Zacks Rank [5][6]

Core Insights - Qualys, Inc. reported a revenue growth of 8% year-over-year for Q2 2024, with revenues reaching $148.7 million compared to $137.2 million in Q2 2023 [3][35] - The company achieved a GAAP net income of $43.8 million, or $1.17 per diluted share, reflecting a 24% increase from $35.4 million, or $0.95 per diluted share, in the same quarter last year [6][35] - Non-GAAP net income for Q2 2024 was $56.9 million, or $1.52 per diluted share, up from $47.5 million, or $1.27 per diluted share, in Q2 2023 [6][35] Financial Performance - Gross profit for Q2 2024 increased by 11% to $122.3 million, with a GAAP gross margin of 82%, compared to 81% in Q2 2023 [4][35] - Operating income rose by 12% to $48.1 million, representing 32% of revenues, compared to 31% in the same quarter last year [5][35] - Adjusted EBITDA for Q2 2024 was $69.9 million, a 6% increase from $65.8 million in Q2 2023, with an adjusted EBITDA margin of 47% [7][35] Business Highlights - The company launched a new global Managed Security Service Provider (MSSP) portal to enhance partner operations and client acquisition [9] - Significant enhancements were made to the CyberSecurity Asset Management 3.0 platform, particularly in External Attack Surface Management (EASM) [10] - Qualys expanded its focus on the government sector, aligning with federal zero-trust strategies and hosting a Public Sector Cyber Risk Conference [10] Guidance - For Q3 2024, Qualys expects revenues between $149.8 million and $151.8 million, indicating a growth of 5% to 7% year-over-year [12] - The full-year revenue guidance for 2024 is projected to be between $597.5 million and $601.5 million, representing an 8% growth compared to 2023 [13]

Core Insights - Qualys, Inc. is launching TruRisk Eliminate, a comprehensive remediation solution designed to enhance cybersecurity resilience by addressing vulnerabilities without solely relying on patching [7][15] - The solution aims to mitigate risks associated with unpatched vulnerabilities, particularly in scenarios where patches are unavailable or would cause operational disruptions [8][13] Product Features - TruRisk Eliminate provides innovative remediation methods, including patchless patching and targeted isolation, to ensure robust protection against cyber threats [7][14] - The platform integrates with IT operations and ticketing workflows, automating complex risk remediation tasks and improving efficiency [2][3] - TruRisk Mitigate and TruRisk Isolate are components of the solution that allow for advanced risk mitigation controls and proactive asset quarantine, respectively [9] Market Position - Qualys has established itself as a leader in cloud-based security solutions, with over 10,000 subscription customers, including many from the Forbes Global 100 and Fortune 100 [11] - The company leverages strategic partnerships with major cloud service providers to enhance its vulnerability management capabilities [5] Industry Context - The increasing difficulty in addressing vulnerabilities due to potential business disruptions from patching and the rise of zero-day vulnerabilities necessitates innovative solutions like TruRisk Eliminate [13] - The Qualys Threat Research Unit has identified five million instances of CISA Known At-risk assets that cannot be patched, highlighting the urgent need for effective risk mitigation strategies [13]

Core Insights - Qualys, Inc. will report its financial results for the second quarter of 2024 on August 6, 2024, 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 the Qualys Enterprise TruRisk Platform, which automates vulnerability detection, compliance, and protection across various IT environments [4] - Founded in 1999, 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. announced that its Vulnerability Management, Detection and Response (VMDR) solution won the Best Vulnerability Management Solution category at the 2024 SC Awards Europe, highlighting its industry leadership in cybersecurity solutions [1][5]. Industry Recognition - Qualys VMDR has received multiple accolades, including the 2023 SC Awards Europe and ranking 1 in the 2022 SC Media Awards for Best Vulnerability Management Solution in the U.S., showcasing its consistent performance and recognition in the cybersecurity sector [2]. Product Performance - The SC Awards Europe recognized Qualys VMDR for its exceptional ability to proactively monitor and identify vulnerabilities, emphasizing its effectiveness in addressing potential threats and cybersecurity attacks [3]. - Qualys VMDR with TruRisk is noted for its transformative approach to cyber risk management, allowing organizations to prioritize vulnerabilities based on risk and providing actionable remediation options [4]. Customer Feedback - A customer, Greg Coutouvidis from Centrica, praised VMDR with TruRisk for its effectiveness in addressing vulnerability management challenges, highlighting its ability to prioritize high-risk vulnerabilities through lightweight cloud agents [4]. Company Commitment - The Chief Product Officer of Qualys expressed pride in the recognition from SC Awards Europe, stating that it reflects the company's commitment to delivering exceptional solutions that protect organizations from increasing cyber threats [5]. 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].