Qualys Stock Gains 4% as Q1 Earnings and Revenues Crush Estimates

Qualys, Inc. QLYS shares gained 4% during Monday’s extended trading session after the company reported better-than-expected results for first-quarter 2025. It reported first-quarter non-GAAP earnings of $1.67 per share, which surpassed the Zacks Consensus Estimate of $1.46 and came above management’s guidance of $1.40-$1.50.

The bottom line also witnessed a significant improvement from the year-ago quarter’s earnings of $1.45. The robust year-over-year growth was primarily driven by higher revenues, improved efficiency, increased financial income and lower diluted shares outstanding, partially offset by increased taxes.

Qualys’ earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 16.6%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Qualys’ first-quarter revenues increased 10% year over year to $159.9 million and surpassed the Zacks Consensus Estimate of $157.1 million. The year-over-year increase in the top line was achieved by leveraging the partner ecosystem.

Qualys’ Q1 in Detail

During the first quarter, sales from channel partners increased 19%, outpacing the 2% sales growth registered in direct selling. Revenue contribution mix from channel partners was 49% in the first quarter, while direct selling accounted for the remaining 51%.

Geography-wise, sales in the United States grew 6% year over year and contributed approximately 57% to the first-quarter total revenues. Accounting for the remaining 43% of first-quarter total revenues, international sales increased 16%.

Qualys’ net dollar expansion rate on a constant currency basis for the first quarter was 103%, unchanged from the previous quarter.

QLYS’ non-GAAP gross profit increased 10% year over year to $133.7 million, while the non-GAAP gross margin expanded 100 basis points to 84% in the first quarter. Non-GAAP operating income grew 10% to $71.2 million, while the non-GAAP operating margin improved 100 basis points to 45%.

Adjusted EBITDA for the first quarter rose 8% to $74.8 million, while adjusted EBITDA margin remained flat at 47%.

Qualys’ Balance Sheet & Cash Flow

Qualys ended the quarter with cash and cash equivalents and marketable securities of approximately $640 million, up from $575 million in the year-ago quarter. The company generated an operating cash flow of $109.6 million and a free cash flow of $107.6 million.

During the quarter, Qualys repurchased stocks worth $39.7 million. As of March 31, 2025, it has $303.8 million remaining under the ongoing share repurchase program.

Qualys Updates Guidance

Buoyed by stronger-than-expected first-quarter performance, Qualys raised guidance for the full-year 2025. It now expects revenues between $648 million and $657 million, up from the earlier range of $645-$657 million. The updated guidance range reflects a year-over-year improvement of 7-8%. The Zacks Consensus Estimate for 2025 revenues is currently pegged at $649.7 million.

Qualys now forecasts non-GAAP earnings for 2025 to be in the range of $6.00-$6.30 per share, up from the previous range of $5.50-$5.90. The consensus mark for the bottom line is pinned at $5.73 per share.

Qualys also initiated guidance for the second quarter. For the second quarter, the company expects revenues between $159.7 million and $162.7 million, indicating year-over-year growth of 7-9%. It projects non-GAAP earnings in the range of $1.40-$1.50. The Zacks Consensus Estimate for revenues and EPS is currently pegged at $159.6 million and $1.40, respectively.

Qualys’ Zacks Rank & Other Stocks to Consider

Currently, QLYS carries a Zacks Rank #2 (Buy).

Impinj PI, Broadcom AVGO and StoneCo STNE are some other top-ranked stocks that investors can consider in the broader Zacks Computer and Technology sector. All three stocks sport a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Impinj’s 2025 earnings has been revised upward by 21 cents to $1.68 per share over the past 30 days, and suggests a year-over-year decrease of 20.4%. Impinj shares have plunged 41.1% over the past year.

The Zacks Consensus Estimate for Broadcom’s fiscal 2025 earnings has been revised upward by 18 cents to $6.60 per share in the past 60 days, suggesting an increase of 35.5% from fiscal 2024’s reported figure. Broadcom shares have rallied 50% over the past year.

The Zacks Consensus Estimate for StoneCo’s 2025 earnings has moved upward by 19 cents to $1.38 per share in the past 30 days, reflecting 2.2% year-over-year growth. StoneCo shares have plunged 21.7% in the trailing 12 months.

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

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