Qualys Q3 Earnings Surpass Expectations, Revenues Rise Y/Y

Qualys QLYS came out with third-quarter 2025 earnings of $1.86 per share, beating the Zacks Consensus Estimate of $1.56 by 19.2%. The company reported earnings of $1.56 per share in the year-ago quarter.

Qualys’ earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 16.1%.

Qualys posted revenues of $169.88 million for the third quarter 2025, surpassing the Zacks Consensus Estimate by 2.49%. This compares to year-ago revenues of $153.87 million. The top line grew 10% year over year.

Qualys’ Q3 in Detail

During the third quarter, sales from channel partners surged 17%, outpacing the 5% sales growth recorded in direct selling. Channel partners contributed 50% to total revenues in the quarter, up from 47% a year ago, while direct selling accounted for the remaining 50%.

Qualys, Inc. Price, Consensus and EPS Surprise

Qualys, Inc. price-consensus-eps-surprise-chart | Qualys, Inc. Quote

Geographically, U.S. sales grew 7% year over year, contributing approximately 56% to total revenues, while international sales rose 15% and accounted for 44%.

Qualys’ net dollar expansion rate remained steady at 104%, reflecting improved gross retention but continued upsell challenges.

QLYS’ non-GAAP gross profit increased 13% year over year to $144.9 million, with the non-GAAP gross margin expanding to 85% compared with 83% in the year-ago quarter. Non-GAAP operating income rose 21% to $80 million, representing a margin of 47%, up from 43% a year earlier. The margin improvement highlights Qualys’ strong operating leverage despite higher investments in sales and marketing, which grew 9%.

Adjusted EBITDA grew 19% year over year to $82.6 million, with the adjusted EBITDA margin improving to 49% from 45% in the prior-year quarter.

Qualys’ Balance Sheet & Cash Flow

Qualys ended the quarter with $663.6 million in cash, cash equivalents, and marketable securities compared with $621 million in the previous quarter. The company generated operating cash flow of $90.4 million, up 48% year over year, and free cash flow of $89.5 million, representing a 53% margin versus 37% in the prior year.

Qualys repurchased 366,000 shares worth $49.4 million during the third quarter and has repurchased a cumulative 10.4 million shares valued at $1.2 billion since the program’s inception. As of Sept. 30, 2025, $205.2 million remained under the current share repurchase authorization.

Qualys Updates Guidance

Buoyed by stronger-than-expected third-quarter performance, Qualys raised guidance for full-year 2025. It now expects revenues between $665.8 million and $667.8 million, up from the earlier range of $656-$662 million. The updated guidance range implies a year-over-year improvement of 10%. The Zacks Consensus Estimate for 2025 revenues is currently pegged at $658.6 million.

Qualys now forecasts non-GAAP earnings for 2025 to be in the range of $6.93 to $7.00 per share, up from the previous range of $6.20-$6.50. The consensus mark for the bottom line is pinned at $6.40.

Qualys also initiated guidance for the fourth quarter. The company expects revenues between $172.0 million and $174.0 million for the fourth quarter, indicating year-over-year growth of 8-9%. It projects non-GAAP earnings in the range of $1.73 to $1.80. The Zacks Consensus Estimate for revenues and EPS is currently pegged at $165.8 million and $1.56, respectively.

Zacks Rank & Stocks to Consider

Currently, QLYS carries a Zacks Rank #3 (Hold).

Reddit Inc. RDDT, Credo Technology Group CRDO and Amphenol APH are some better-ranked stocks that investors can consider in the Zacks Computer and Technology sector. Impinj, Credo Technology Group and Amphenol sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Reddit Inc.’s full-year 2025 earnings is pegged at $2.01 per share, revised upward by 6.9% over the past seven days and suggests a year-over-year increase of 160.4%. Reddit shares have soared 14.9% year to date.

The Zacks Consensus Estimate for Credo Technology Group’s fiscal 2026 earnings has been revised upward by a cent over the past 30 days to $2.04 per share, calling for an increase of 191.4% year over year. Credo Technology Group shares have rallied 144.3% year to date.

The Zacks Consensus Estimate for Amphenol’s full-year 2025 earnings has been revised upward to $3.22 per share from $3.03 per share over the past 30 days, implying 70.4% year-over-year growth. Amphenol shares have risen 96.8% year to date.

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This article originally published on Zacks Investment Research (zacks.com).

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