Financial Data and Key Metrics Changes - For the full year 2025, the company reported a revenue growth of 10% to $669.1 million, with an adjusted EBITDA margin of 47% and net income of $257.8 million, reflecting a 13% increase [18][19] - In Q4 2025, revenues grew 10% to $175.3 million, with channel partners contributing 51% of total revenues, up from 48% a year ago [19][20] - Free cash flow reached $304.4 million, representing 45% of revenues, exceeding expectations [18] Business Line Data and Key Metrics Changes - Customers spending $500,000 or more grew by 4% to 215, indicating a stable demand for the company's services [12] - New product contributions to bookings increased, with CyberSecurity Asset Management combined with ETM making up 10% of total bookings, up from 8% the previous year [21] - Patch Management accounted for 8% of total bookings, up from 7% last year, indicating strong demand for this service [21] Market Data and Key Metrics Changes - The company experienced 15% growth outside the US, compared to 6% growth in the domestic market, highlighting stronger international demand [20] - The US and international revenue mix was 56% and 44%, respectively, showing a balanced geographical revenue distribution [20] Company Strategy and Development Direction - The company is focusing on unifying fragmented security stacks into a centralized risk fabric, leveraging agentic AI to enhance risk management capabilities [5][6] - The introduction of an agentic AI risk management marketplace aims to provide customers with specialized autonomous experts to improve remediation speed and accuracy [8][9] - The company plans to accelerate ETM adoption through its VMDR customer base, positioning itself for larger upsell opportunities [11] Management's Comments on Operating Environment and Future Outlook - Management anticipates a low to mid-single-digit growth in security spending to persist, reflecting a stable operating environment [20] - The gross dollar retention rate remained above 90%, with a net dollar expansion rate of 103%, indicating customer loyalty and potential for upsell [21] - The company expects revenue growth for 2026 to be in the range of 7%-8%, with a focus on maintaining profitability while investing in growth initiatives [24][25] Other Important Information - The company has authorized an increase of $200 million to its share repurchase program, bringing the total available for repurchases to $360.5 million [23] - The company is actively enhancing its partner ecosystem, with a focus on partner-led sales motions to drive growth [15] Q&A Session Summary Question: Can you talk about Q-Flex offerings and their impact on platform adoption? - Management highlighted that Q-Flex allows customers to consolidate capabilities on a single platform at their own pace, enhancing flexibility and encouraging broader adoption [27][30] Question: What is the customer sentiment regarding AI and its impact on net retention? - Management noted that the introduction of agentic AI capabilities is expected to enhance customer outcomes and drive net retention as customers leverage these advanced features [31][34] Question: How is Agent Val improving ETM efficacy and reducing man-hours? - Management explained that Agent Val confirms exploitability of vulnerabilities, saving IT teams time by reducing false positives and enabling quicker remediation [38][41] Question: What are the growth levers for 2026? - Management indicated that successful execution of ETM and ROC, along with partner engagement and Q-Flex adoption, are key to driving growth in 2026 [44][76] Question: What are the implications of the ServiceNow acquisition of Armis? - Management expressed confidence that their integrated patch management and risk management solutions differentiate them from competitors, including those resulting from acquisitions [50][52]

Financial Data and Key Metrics Changes - For the full year 2025, the company reported revenue growth of 10% to $669.1 million, with an adjusted EBITDA margin of 47% and net income increasing by 13% to $257.8 million [17][18] - In Q4 2025, revenues grew 10% to $175.3 million, with channel partners contributing 51% of total revenues, up from 48% a year ago [18][21] - Free cash flow reached $304.4 million, representing 45% of revenues, exceeding expectations [17] Business Line Data and Key Metrics Changes - CyberSecurity Asset Management combined with ETM accounted for 10% of total bookings and 13% of new bookings in 2025, up from 8% and 9% respectively [19] - Patch Management made up 8% of total bookings and 16% of new bookings in 2025, an increase from 7% and 16% [19] - TotalCloud represented 5% of total bookings in 2025, up from 4% the previous year [20] Market Data and Key Metrics Changes - The company experienced 15% growth outside the US, compared to 6% growth in the domestic market, with a revenue mix of 56% from the US and 44% from international markets [18] - The gross dollar retention rate remained above 90%, with a net dollar expansion rate of 103%, down from 104% in the previous quarter [18] Company Strategy and Development Direction - The company is focusing on unifying fragmented security stacks into a centralized risk fabric, leveraging agentic AI to enhance pre-breach risk management [4][5] - The introduction of an agentic AI risk management marketplace aims to provide organizations with autonomous experts to reduce remediation time and costs [6][9] - The company plans to accelerate ETM adoption through its VMDR customer base and position itself for larger upsell opportunities [9][15] Management's Comments on Operating Environment and Future Outlook - Management anticipates a low to mid-single-digit growth in security spending to persist in 2026, reflecting customer prioritization of security within IT budgets [18] - The company expects revenue for 2026 to be in the range of $717 million to $725 million, representing a growth rate of 7% to 8% [23] - Management expressed optimism about the potential for upsell opportunities and the impact of new product discussions with existing customers [46][77] Other Important Information - The company has authorized an increase of $200 million to its share repurchase program, bringing the total available amount for share repurchases to $360.5 million [22] - The company is focusing on enhancing its partner ecosystem, with an increase in partner-led deal registrations reflecting deeper alignment and execution across the channel [14] Q&A Session Summary Question: Can you talk about Q-Flex offerings and their impact on platform adoption? - The Q-Flex proposal allows customers to consolidate capabilities on a single platform at their own pace, enhancing flexibility and encouraging broader adoption [26][29] Question: What is the customer interest in AI and its impact on net retention? - The introduction of an AI agent marketplace allows customers to augment their security teams, potentially improving net retention as they leverage agentic AI capabilities [31][34] Question: How is Agent Val enhancing ETM efficacy and reducing man-hours? - Agent Val confirms exploitability in the environment, saving IT teams time by reducing false positives and enabling immediate remediation actions [41][42] Question: What are the growth levers for 2026? - The company is focusing on product innovation, partner engagement, and federal opportunities to drive growth, with expectations for continued upsell potential [46][77] Question: How does the acquisition of Armis by ServiceNow impact the competitive landscape? - The company believes that the lack of integrated patch management in competitors' offerings, like Armis, will allow it to maintain a competitive edge [52][60]

Core Insights - Qualys, Inc. reported a revenue growth of 10% year-over-year for Q2 2025, with revenues reaching $164.1 million compared to $148.7 million in Q2 2024 [3][6] - The company raised its revenue guidance for the full year 2025 to a range of $656 million to $662 million, reflecting an expected growth of 8% to 9% over 2024 [12] Financial Performance - **Revenue**: Q2 2025 revenues increased by 10% to $164.1 million from $148.7 million in Q2 2024 [3] - **Gross Profit**: GAAP gross profit rose by 11% to $135.2 million, maintaining a gross margin of 82% [4] - **Operating Income**: GAAP operating income increased by 7% to $51.4 million, representing 31% of revenues [5] - **Net Income**: GAAP net income grew by 8% to $47.3 million, or $1.29 per diluted share, consistent with a 29% net income margin [6] - **Adjusted EBITDA**: Adjusted EBITDA increased by 5% to $73.4 million, accounting for 45% of revenues [7] - **Operating Cash Flow**: Operating cash flow decreased by 32% to $33.8 million, representing 21% of revenues [8] Business Highlights - The company launched its inaugural managed Risk Operations Center (mROC) Alliance Partners, enhancing its risk management capabilities [9] - Qualys expanded its TotalAI solution with advanced AI security features, reinforcing its commitment to cybersecurity [16] - The company was recognized as a leader in various cybersecurity categories by KuppingerCole and SC Awards Europe, highlighting its innovative solutions [16] Future Guidance - **Third Quarter 2025 Guidance**: Expected revenues between $164.5 million and $167.5 million, indicating a growth of 7% to 9% year-over-year [11] - **Full Year 2025 Guidance**: Revised revenue expectations to $656 million to $662 million, with GAAP net income per diluted share projected between $4.47 and $4.77 [12]