Qualys Q4 Earnings Beat, Stock Down on Dim FY25 EPS Guidance

Core Viewpoint - Qualys, Inc. reported strong fourth-quarter results for 2024, exceeding earnings expectations, but shares fell due to lower-than-expected guidance for 2025 [1][4]. Financial Performance - Fourth-quarter 2024 non-GAAP earnings were $1.60 per share, surpassing the Zacks Consensus Estimate of $1.35 and management's guidance of $1.28-$1.38 [1][2]. - Year-over-year earnings improved from $1.40 in the same quarter last year, driven by higher revenues, improved efficiency, and lower diluted shares outstanding, despite increased taxes [2]. - Full-year 2024 revenues increased 10% year over year to $607.6 million, exceeding the Zacks Consensus Estimate of $604.5 million [8]. Revenue Breakdown - Fourth-quarter revenues from channel partners grew 18%, while direct sales increased by 3%, with channel partners contributing 48% to total revenues [5]. - U.S. sales grew 7% year over year, contributing approximately 58% to total revenues, while international sales increased 15%, accounting for 42% of total revenues [6]. Profitability Metrics - Non-GAAP gross profit for the fourth quarter rose 11% to $130.2 million, with a gross margin of 84%, an increase of 100 basis points [7]. - Non-GAAP operating income grew 16% to $70.7 million, with an operating margin improvement of 200 basis points to 44% [7]. Cash Flow and Share Repurchase - The company ended the quarter with cash and cash equivalents of $381.4 million and generated an operating cash flow of $47.7 million in Q4 and $244.1 million for the full year [9]. - Qualys repurchased stocks worth $42.3 million in Q4 and $139.9 million for the full year 2024, with $143.4 million remaining under the share repurchase program [10]. Guidance for 2025 - For Q1 2025, Qualys expects revenues between $155.5 million and $158.5 million, indicating year-over-year growth of 7-9%, with non-GAAP earnings projected between $1.40 and $1.50 [11]. - For the full year 2025, the company anticipates revenues in the range of $645-$657 million, reflecting a year-over-year growth of 6-8%, with non-GAAP earnings per share projected between $5.50 and $5.90 [12].