Qualys(US:QLYS)2025-11-04 22:06Revenue 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].