Financial Data and Key Metrics Changes - Revenues grew 10% to $159.9 million, with channel contributions increasing to 49% of total revenues from 45% a year ago [19][20] - Adjusted EBITDA for Q1 was $74.8 million, representing a 47% margin, consistent with the previous year [22] - Free cash flow was $107.6 million, maintaining a 57% margin compared to the prior year [22][23] - EPS for Q1 was $1.67, with full-year EPS guidance raised to $6.00 - $6.30 from a prior range of $5.50 - $5.90 [23][24] Business Line Data and Key Metrics Changes - Patch management and cybersecurity asset management accounted for 15% of total bookings and 24% of new bookings on an LTM basis [21] - Total Cloud CNAP made up 5% of LTM bookings, reflecting customer demand for comprehensive risk management [21] Market Data and Key Metrics Changes - U.S. revenue grew 6%, while international revenue grew 16%, indicating stronger performance outside the U.S. [20] - Customers spending $500,000 or more increased by 6% year-over-year to 2,003 [15] Company Strategy and Development Direction - The company is focusing on a partner-first strategy to drive growth, emphasizing the consolidation of security tools and risk management [60][73] - Qualys aims to enhance its Total AI and TruRisk capabilities to address evolving threats associated with AI technologies [10] - The company is advancing its managed risk operations (MROC) services to provide a centralized approach to pre-breach risk management [16] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing macroeconomic uncertainty affecting customer spending and decision-making cycles, leading to a more cautious outlook [28][29] - Despite challenges, the company remains confident in its long-term growth potential and ability to gain market share [15][18] - Guidance for full-year revenue growth is set at 7% to 8%, with expectations of increased scrutiny on new business growth [24][25] Other Important Information - The company has made progress towards achieving FedRAMP high certification, which is expected to fuel growth [17] - Qualys has repurchased 9.6 million shares since February 2018, returning nearly $1.1 billion to shareholders [23] Q&A Session Summary Question: Thoughts on the macro environment and customer spending - Management observed that cybersecurity remains a priority, but there is increased scrutiny on spending and longer decision cycles [28] Question: Customer journey with the Risk Operations Center (ROC) - The ROC consolidates risk signals from multiple tools, providing actionable insights and remediation plans, which helps customers save time and resources [31][32] Question: Impact of macro challenges on deals - No material deals were pushed or pulled; however, there was some pushback on anticipated upsell rates from existing customers [37] Question: Competitive landscape and response to competitors expanding into network-based VM - Management expressed confidence in Qualys's focus on prioritizing and remediating vulnerabilities rather than just identifying them [39][40] Question: Growth in Total Cloud CNAP and audit readiness - The Total Cloud CNAP is still in early stages but has seen growth, with audit readiness becoming a significant area of focus for customers [78][81]

Qualys (QLYS) Q1 2025 Earnings Call May 06, 2025 05:00 PM ET Company Participants Blair King - Vice President of Investor Relations & Corporate DevelopmentSumedh Thakar - President and CEOJoo Mi Kim - CFOTrevor Walsh - Director - Equity ResearchJoshua Tilton - DirectorYun Kim - Managing DirectorOscar Saavedra - Equity Research Associate - Software Conference Call Participants Jonathan Ho - Research AnalystPatrick Colville - Lead Equity Research AnalystKingsley Crane - Director, Senior AnalystRudy Kessinger ...