Why Is Qualys (QLYS) Down 1.2% Since Last Earnings Report?

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].