QLYS

A month has gone by since the last earnings report for Qualys (QLYS). Shares have lost about 6.8% in that time frame, underperforming the S&P 500. But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Qualys due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts. Qualys reported second-quarter 2026 non-GAAP earnings of $1.98 per share, which rose 17.9% year over year and beat the Zacks Consensus Estimate by 11.24%. Revenues increased 11% to $182.2 million and surpassed the consensus mark of $179 million by 1.8%. Results benefited from stronger partner-led execution and broader adoption of differentiated platform offerings. The net dollar expansion rate improved to 105% from 104% in the preceding quarter, signaling better upsell performance among existing customers. The channel accounted for 54% of total revenues, up from 49% in the year-ago quarter. Channel-partner revenues climbed 22% year over year, while direct revenues remained largely unchanged. The performance reflected Qualys’ continued emphasis on using partners to expand customer reach and support larger platform transactions. International growth also outpaced the domestic business. Revenues outside the United States rose 15% compared with 8% growth in the United States. The geographic revenue mix remained 55% domestic and 45% international. Enterprise TruRisk Management and CyberSecurity Asset Management together represented 12% of last-12-month total bookings, up from 9% a year earlier. The products also contributed 14% of new bookings versus 10% in the prior-year period. Patch Management accounted for 9% of total bookings, up from 7%, and 16% of new bookings. TotalCloud remained at 5% of total bookings. Meanwhile, vulnerability management’s contribution declined to 49% from 54%, indicating a broader mix as customers adopted newer modules. Qualys introduced InstaScan, powered by Agent Insta, to identify exposure findings within minutes of a vulnerability disclosure without requiring another scan. Findings can then move to Agent Val for exploit validation and immediate risk quantification. The company also outlined autonomous remediation capabilities that select patches, controlled deployments or compensating controls based on asset risk. Management said live benchmarking reduced the exposure window from 21 days to minutes and automatically patched 60% of vulnerabilities. TotalAI 2.0 extends visibility across employee AI activity, models, services, code and runtime environments. New capabilities are designed to uncover shadow AI usage and identify AI workloads operating across hybrid and multi-cloud infrastructure. The platform also added posture-management coverage for Anthropic and OpenAI environments. It can evaluate Model Context Protocol tool exploits across more than 50 adversarial scenarios and prioritize AI-related risks through the TruRisk engine. GAAP gross profit rose 12% year over year to $151.9 million, while the gross margin expanded to 83% from 82%. GAAP operating income advanced 20% to $61.9 million, with the operating margin improving to 34% from 31%. Non-GAAP operating income increased 16% to $81.4 million, and the related margin widened to 45% from 43%. Adjusted EBITDA grew 14% to $83.8 million, representing a margin of 46% compared with 45% a year ago. The company ended the second quarter with cash and marketable securities of $703.5 million. Operating cash flow surged 77% year over year to $59.6 million in the second quarter, representing 33% of revenues. Free cash flow totaled $55.9 million, with a margin of 31%. For the first six months of 2026, free cash flow reached $149.5 million, and the margin was 42%. During the quarter, Qualys spent $76.8 million to repurchase 797,000 shares. The company had $229.8 million remaining under its share repurchase authorization at quarter-end. Management increased its full-year 2026 revenue guidance to $732-$738 million from $721-$727 million. The updated range implies growth of 9-10%. Non-GAAP earnings are now projected between $7.74 and $7.88 per share, up from the prior forecast of $7.44-$7.65. For the third quarter, Qualys expects revenues of $185.5-$187.5 million, calling for 9-10% year-over-year growth. Non-GAAP earnings are projected in the range of $1.91-$1.98 per share. Management continues to expect an adjusted EBITDA margin in the mid-40% range and a free cash flow margin in the low-40% range for 2026. In the past month, investors have witnessed a upward trend in fresh estimates. Currently, Qualys has a average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a score of F on the value side, putting it in the lowest quintile for this investment strategy. Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Qualys has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months. Qualys is part of the Zacks Security industry. Over the past month, Varonis Systems (VRNS), a stock from the same industry, has gained 7.7%. The company reported its results for the quarter ended June 2026 more than a month ago. Varonis reported revenues of $180.02 million in the last reported quarter, representing a year-over-year change of +18.3%. EPS of $0.04 for the same period compares with $0.03 a year ago. For the current quarter, Varonis is expected to post earnings of $0.02 per share, indicating a change of -66.7% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days. The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Varonis. Also, the stock has a VGM Score of D. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Qualys, Inc. (QLYS) : Free Stock Analysis Report Varonis Systems, Inc. (VRNS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Palo Alto Networks, Inc. PANW is scheduled to report its fourth-quarter fiscal 2026 results on Sept. 1. Palo Alto Networks projects fiscal fourth-quarter revenues in the range of $3.34-$3.35 billion, which suggests a year-over-year increase of 32%. The Zacks Consensus Estimate is pegged at $3.35 billion, which implies growth of 32.1% from the year-ago reported figure. For the fiscal fourth quarter, the company expects non-GAAP earnings per share between 96 cents and 98 cents. The consensus mark for PANW’s fiscal fourth-quarter non-GAAP earnings has remained unchanged at 98 cents per share over the past 30 days, which indicates a 3.2% increase from the year-ago quarter’s earnings. Image Source: Zacks Investment Research Palo Alto Networks’ earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 7.03%. Palo Alto Networks, Inc. price-eps-surprise | Palo Alto Networks, Inc. Quote Our proven model does not conclusively predict an earnings beat for Palo Alto Networks this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. Palo Alto Networks has an Earnings ESP of -2.66% and carries a Zacks Rank #2 at present. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter. You can see the complete list of today’s Zacks #1 Rank stocks here. Palo Alto Networks’ fourth-quarter fiscal 2026 performance is likely to have benefited from the robust traction stemming from deal wins, along with continued progress in its platformization strategy. The increased adoption of its AI-powered XSIAM, SASE and software firewall offerings, which enable enterprises to advance zero-trust network security, is expected to have contributed to the growing share of incremental Next-Generation Security (NGS) Annual Recurring Revenues (ARR). Through its platformization strategy, Palo Alto Networks is enabling larger customers to adopt its full security platform, which is helping the company grow faster and secure bigger deals. In the third quarter of fiscal 2026, PANW’s NGS ARR grew 60% year over year to $8.13 billion, where the platformization strategy was a key driver.  In the third quarter of fiscal 2026, the company added 110 new platformized customers, including 20 from the CyberArk and Chronosphere acquisitions. Total platformized customers reached approximately 2,280 at the end of the third quarter. PANW's platformized customers currently have a 120% net retention rate and single-digit churn. This means existing customers continue to buy more PANW products over time, while very few leave the platform. During the fiscal third quarter, the company shared examples of customers expanding their deployments. A large U.S. power producer adopted next-generation firewalls and SASE in an $80 million deal, while a global consulting company signed a contract worth more than $20 million to use Prisma AIRS for securing its AI applications and agents. These gains show that large enterprises are consolidating security budgets with PANW as customers want fewer tools and simpler security operations, which is likely to have boded well for the company’s prospects in the to-be-reported quarter. However, PANW’s fiscal fourth-quarter prospects are expected to be weighed down due to rising integration and acquisition-related costs. As a result of back-to-back acquisitions, PANW is incurring high integration-related costs, including onboarding employees, aligning go-to-market teams and integrating systems and operations. Acquisition-related costs in the third quarter of fiscal 2026 amounted to $113 million, a whopping increase from $5 million incurred in the prior quarter. These costs are expected to have hurt the company's profitability in the to-be-reported quarter before the benefits of synergies from acquisitions are fully realized. Further, PANW’s near-term prospects might be hurt by softening IT spending due to the current uncertain macroeconomic environment. Enterprises are postponing their large IT spending plans due to a weakening global economy amid ongoing macroeconomic and geopolitical issues. This is expected to have hurt Palo Alto Networks’ prospects in the to-be-reported quarter. Palo Alto Networks’ shares have surged 100.5% over the past year, outperforming the Zacks Security industry and its peers, including Okta Inc. OKTA, Qualys Inc. QLYS and Zscaler ZS. The Zacks Security industry has jumped 63.1% over the past year. Shares of Okta and Qualys have surged 84.6% and 38.8%, respectively, while Zscaler shares have lost 32.6%. Image Source: Zacks Investment Research Now, let’s look at the value Palo Alto Networks offers investors at the current levels. Palo Alto Networks is currently trading at a premium with a forward 12-month P/S of 22.45X compared with the industry’s 16.77X. Image Source: Zacks Investment Research Palo Alto Networks stock also trades at a higher P/S multiple compared with other industry peers, including Okta, Qualys and Zscaler. At present, Okta, Qualys and Zscaler have P/S multiples of 8.92X, 8.45X and 7.68X, respectively. PAWN’s rally reflects strong investor confidence in AI-related cybersecurity demand, putting it above industry and peers in terms of valuation, reflecting the high growth expectations of the company in the long term. Palo Alto Networks remains well positioned to benefit from the growing demand for cybersecurity as enterprises consolidate security tools and adopt AI. Its platformization strategy is helping the company win larger deals and expand spending among existing customers. The strong growth in NGS ARR and the 120% net retention rate among platformized customers indicate that customers are increasing their use of PANW’s broader security portfolio. The company is also seeing growing demand for AI security, SASE and next-generation firewall products. The expansion of Prisma AIRS and XSIAM should provide additional growth opportunities as enterprises look to secure AI applications, agents and cloud environments. The company is combining network security, AI security, security operations, identity and observability on a single platform and aims to reach more than 4,000 platformized customers and $20 billion in Next-Generation Security ARR by fiscal 2030. Rising AI adoption should continue to increase demand across these product areas and help PANW expand its addressable market and support its long-term ARR target. Palo Alto Networks remains a leader in cybersecurity, with a strong long-term growth trajectory, continued AI-driven innovation and a shift toward a more predictable recurring revenue model. Strong traction in Palo Alto Networks’ platform-based security offerings, supported by large enterprise deals and increasing customer adoption, provides a favorable long-term growth opportunity for the company. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Palo Alto Networks, Inc. (PANW) : Free Stock Analysis Report Qualys, Inc. (QLYS) : Free Stock Analysis Report Okta, Inc. (OKTA) : Free Stock Analysis Report Zscaler, Inc. (ZS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

CrowdStrike Holdings CRWD is scheduled to report its second-quarter fiscal 2027 results on Aug. 26, 2026. CrowdStrike anticipates revenues between $1.43 billion and $1.44 billion for the second quarter of fiscal 2027. The Zacks Consensus Estimate for CrowdStrike’s fiscal second-quarter revenues is pegged at $1.44 billion, indicating year-over-year growth of 23.2%. For the fiscal second quarter, the company expects non-GAAP earnings of 29 cents per share. The Zacks Consensus Estimate for CrowdStrike’s fiscal second-quarter earnings is pegged at 29 cents per share, implying a year-over-year increase of 26.1%. The consensus mark for earnings has remained unchanged over the past 30 days. Image Source: Zacks Investment Research CrowdStrike’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 4.7%. CrowdStrike price-eps-surprise | CrowdStrike Quote Our proven model does not conclusively predict an earnings beat for CrowdStrike this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. CrowdStrike has an Earnings ESP of 0.00% and carries a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter. You can see the complete list of today’s Zacks #1 Rank stocks here. CrowdStrike’s second-quarter fiscal 2027 results are likely to benefit from the robust demand for its cybersecurity products, given the increasing number of threat incidents across the globe. As a rising number of employees log into the enterprise's network, the vulnerabilities of cyber breaches lead to a greater need for security. These factors are likely to have spurred the demand for CrowdStrike’s products in the fiscal second quarter. CrowdStrike’s Falcon Flex subscription model is expected to have remained a major growth driver.  In the first quarter of fiscal 2027, CrowdStrike added more than 300 Flex customers and ended the first quarter with over 1,900 customers who have adopted Falcon Flex. Accounts using Falcon Flex now represent nearly $2 billion in ending annual recurring revenues (ARR), up 99% from the year-ago quarter, showing strong adoption across enterprise customers. Falcon Flex helps customers adopt new modules without long contract steps, which leads to faster platform usage. The model is helping CrowdStrike benefit from platform consolidation. Customers are using Flex to adopt additional offerings such as Next-Gen SIEM, Identity Protection, Cloud Security and AI Detection and Response without negotiating separate contracts. On the back of strong platform adoption, Falcon Flex should remain one of CrowdStrike’s most important growth drivers in the to-be-reported quarter. In the first quarter of fiscal 2027, CrowdStrike's Next-Gen SIEM surpassed $600 million in ending ARR. During the first quarter, a major fuel retailer selected CrowdStrike to replace a legacy SIEM platform with a next-generation endpoint detection and response solution and software from a network security vendor. This 8-figure new logo win demonstrates how CrowdStrike is using Next-Gen SIEM to consolidate multiple security products onto a single platform. This momentum is likely to have continued in the to-be-reported quarter. CrowdStrike is expanding its identity security business as more companies deploy AI across their operations. CrowdStrike is addressing this opportunity through Falcon Shield, Falcon Next-Gen Identity and SGNL, which it acquired in the first quarter of fiscal 2027. Falcon Shield’s ending ARR grew nearly four times year over year during the first quarter. During the fiscal first quarter, a large U.S. healthcare company expanded its deployment by purchasing Falcon Next-Gen Identity and SGNL in a seven-figure deal. With more companies deploying AI across their businesses, the need to secure AI identities should continue to increase. Strong momentum in identity security is likely to have boded well for CrowdStrike's prospects in the fiscal second quarter. CrowdStrike is seeing strong demand for its AI Detection and Response (AIDR) solution. CRWD's AIDR solution is designed to help companies monitor and secure AI applications, AI agents and AI workloads as AI adoption increases across enterprises. Management highlighted AIDR as one of the company's fastest-growing products during the first quarter of fiscal 2027. During the first quarter, an automotive financial services company deployed AIDR across more than 30,000 hosts in a seven-figure deal. As organizations add identity, cloud security, SIEM and AI security to their existing Falcon deployments, CRWD can increase customer spending without relying only on new customer additions. These factors are likely to have boded well for the company's prospects in the to-be-reported quarter. Over the past year, shares of CrowdStrike have surged 83.3%, outperforming the Zacks Security industry and its peers, including Qualys Inc. QLYS, Okta Inc. OKTA and Check Point Software CHKP. The Zacks Security industry has appreciated 71.3% over the past year. Shares of Okta and Qualys have jumped 47.9% and 37.3%, respectively, while Check Point Software shares have plunged 30.5%. Image Source: Zacks Investment Research Now, let’s look at the value CrowdStrike offers investors at the current levels. CrowdStrike is trading at a premium with a forward 12-month P/S of 29.36X compared with the industry’s 17.23X, reflecting a stretched valuation. The Zacks Value Score of F also suggests that CRWD stock is overvalued. Image Source: Zacks Investment Research CrowdStrike stock also trades at a higher P/S multiple compared with other industry peers, including Qualys, Okta and Checkpoint Software. At present, Qualys, Okta and Checkpoint Software have P/S multiples of 8.16X, 6.98X and 4.58X, respectively. A significant driver of new customer addition is the Falcon Flex subscription model, which simplifies security adoption by offering modular, scalable cybersecurity solutions. CrowdStrike secured major deals in the last reported quarter, including an eight-figure Next-Gen SIEM deal with a major fuel retailer and a seven-figure AIDR deal with an automotive financial services company, showing strong enterprise demand. This shows CrowdStrike’s ability to attract high-value customers, encourages long-term commitments, steady revenue growth and deep customer integration. However, CrowdStrike’s rising costs are a cause of concern. Over the last seven fiscal years, CrowdStrike’s Research & Development (R&D) expenses have increased 12-fold, while Sales & Marketing (S&M) expenses have flared up more than 10-fold to $1.83 billion in fiscal 2026 from $173 million in fiscal 2019. Compared with fiscal 2025, S&M and R&D expenses soared 20% and 29%, respectively. Though the firm foresees these investments generating benefits over the long run, higher expenses might weigh on the company’s bottom-line results. As businesses continue prioritizing AI-driven cybersecurity solutions, CrowdStrike’s leadership in threat prevention, response and recovery will only strengthen. CrowdStrike’s subscription-based model and recurring revenue streams, along with its strong partner base, should provide stability and gradual growth, even amid ongoing macroeconomic challenges and geopolitical issues. However, rising costs and premium valuation warrant a cautious approach to the stock. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CrowdStrike (CRWD) : Free Stock Analysis Report Check Point Software Technologies Ltd. (CHKP) : Free Stock Analysis Report Qualys, Inc. (QLYS) : Free Stock Analysis Report Okta, Inc. (OKTA) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Never miss an important update on your stock portfolio and cut through the noise. Over 7 million investors trust Simply Wall St to stay informed where it matters for FREE. Qualys stock has delivered a 69.6% return over the past five years, yet its current valuation picture is split, with a Discounted Cash Flow (DCF) intrinsic value estimate pointing to upside while market based multiples look less generous. Over five years, Qualys has returned 69.6%, which puts recent gains in context for anyone asking how much upside might still be left. Recent enthusiasm around Qualys' AI driven security offerings can support expectations for future cash flows, while rapid changes in AI and customer needs may create uncertainty around how durable those cash flows will be. On Simply Wall St's broader checks, Qualys scores 4 out of 6 for value, which points to a mixed picture rather than a clear bargain or clear overvaluation. The issue now is whether the current price already reflects these cash flow expectations, or if the intrinsic value estimate still leaves Qualys trading at an attractive discount. Qualys delivered 42.4% returns over the last year. See how this stacks up to the rest of the Software industry. The Discounted Cash Flow (DCF) model values Qualys based on the cash it is expected to generate for shareholders. Qualys currently produces last twelve month free cash flow of about $311.4 million, and the model assumes those cash flows keep growing rather than shrinking. On that basis, the 2 Stage Free Cash Flow to Equity model points to an estimated intrinsic value of about $234 per share. That estimate sits above the current share price, which implies the stock screens as roughly 20.6% undervalued under this approach. Because the company already generates solid free cash flow in dollars instead of relying on a distant turnaround story, this gap may attract investors who focus on cash generation. The recent Q2 2026 beat and higher full year guidance on AI security demand helps explain why some investors see the current price as not fully reflecting the projected cash flows. On this DCF view, Qualys stock currently appears undervalued relative to the cash flows analysts expect it to produce. Our Discounted Cash Flow (DCF) analysis suggests Qualys is undervalued by 20.6%. Track this in your watchlist or portfolio, or discover 52 more high quality undervalued stocks. Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Qualys. P/E is a good fit for Qualys because the company is profitable and investors often anchor software valuations on earnings. On this measure, Qualys trades on a P/E of about 31.2x. That is slightly below the broader Software industry average of around 31.6x, yet below peers on roughly 38.3x. However, Simply Wall St's fair P/E for Qualys is closer to 24.9x based on its growth, margins, size and risk profile. Against that benchmark, the stock price implies a premium, since the current 31.2x multiple sits comfortably above this fair level. This suggests a market that is currently paying a higher multiple for Qualys earnings than the fair ratio model indicates. On the P/E multiple, Qualys stock appears overvalued relative to what the fair ratio model suggests would be a more balanced price. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives pick up where this valuation split leaves off and focus on what needs to happen in Qualys' future for the stock to justify a higher or lower price. Each Narrative ties a specific set of assumptions about Qualys' growth, margins and earnings to a clear fair value estimate, so you can see which combination of potential catalysts and risks is coming through as real results over time. These are available on Simply Wall St's Community page. Community narratives on Qualys sit far apart, with one side focusing on AI security and TruRisk upside while the other leans into execution and pricing risk. Bull case: 15% undervalued Read the full Bull Case to see why Qualys could be undervalued Bear case: 63% overvalued Read the full Bear Case to see why Qualys could be overvalued Do you think there's more to the story for Qualys? Head over to our Community to see what others are saying! Qualys sits at an interesting crossroads. The Discounted Cash Flow (DCF) view points to meaningful upside based on projected cash generation, while the P/E multiple suggests the stock already trades on a premium to the fair ratio model. That split reflects a market willing to pay up for earnings tied to AI security growth, even as the intrinsic value model leans on the strength and timing of future cash flows. The key question from here is whether Qualys can turn its AI and TruRisk opportunity into durable, profitable demand rather than letting current optimism prove to be a value trap. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include QLYS. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Qualys posted a strong second quarter, with results surpassing market expectations and prompting a notably positive market reaction. Management attributed the quarter’s performance to heightened demand for its AI-native risk operations platform and new capabilities like InstaScan, which speeds vulnerability detection and remediation. CEO Sumedh Thakar emphasized that “the urgency behind [AI-driven] conviction continues to intensify,” pointing to the rapid adoption of Enterprise TruRisk Management (ETM) and agent-based automation as key contributors. Growth was also supported by increased channel partner activity and robust international expansion. Is now the time to buy QLYS? Find out in our full research report (it’s free). Revenue: $182.2 million vs analyst estimates of $178.6 million (11% year-on-year growth, 2% beat) Adjusted EPS: $1.98 vs analyst estimates of $1.78 (10.9% beat) Adjusted EBITDA: $83.78 million vs analyst estimates of $77.45 million (46% margin, 8.2% beat) The company lifted its revenue guidance for the full year to $735 million at the midpoint from $724 million, a 1.5% increase Management raised its full-year Adjusted EPS guidance to $7.81 at the midpoint, a 3.5% increase Operating Margin: 34%, up from 31.3% in the same quarter last year Annual Recurring Revenue: $728.7 million (11% year-on-year growth, beat) Billings: $175.3 million at quarter end, up 17.3% year on year Market Capitalization: $6.43 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. William Kingsley Crane (Canaccord): Asked how the surge in AI-generated vulnerabilities is reflected in the pipeline and asset-based pricing. CEO Sumedh Thakar explained that urgency for autonomous remediation is driving more proof-of-concept activity, with increased customer conversations and pilots underway but most demand still in early stages. Jonathan Ho (William Blair): Inquired whether ETM adoption is driven by the need to cover more assets or by fundamental changes in patch management. Thakar clarified that customers seek to remediate critical threats quickly across all assets, using ETM for multi-vendor integration and prioritization. Patrick Edwin Colville (Scotiabank): Questioned the sustainability and drivers of raised long-term growth targets. Thakar emphasized that continued platform innovation and autonomous remediation capabilities build customer confidence for double-digit growth, aided by recent customer adoption metrics. Rudy Kessinger (D.A. Davidson): Asked about balancing growth and profitability, specifically willingness to reinvest margins to accelerate expansion. CFO Joo Mi Kim and Thakar said partner-led growth and targeted sales investments allow for scaling without sacrificing efficiency, but spending will increase as opportunities arise. Junaid Siddiqui (Truist): Queried if exploit validation tools like TruConfirm are becoming the main entry point for ETM deployments. Thakar responded that validation significantly narrows the scope of vulnerabilities requiring remediation, making automated solutions more practical and attractive to customers. In the coming quarters, the StockStory team will be monitoring (1) the pace of ETM and QFlex adoption among existing and new enterprise customers, (2) progress in converting federal pipeline opportunities into revenue, and (3) continued expansion of partner-led sales channels and international markets. The rollout and customer uptake of new AI-native platform features will also serve as key indicators of execution. Qualys currently trades at $184.39, up from $161.06 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members). WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses. But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Tuesday, Aug. 4, 2026 at 5 p.m. ET Investor Relations - Blair King President and Chief Executive Officer - Sumedh Thakar Chief Financial Officer - Joo Mi Kim Operator: Ladies and gentlemen, thank you for standing by. Welcome to Qualys' Second Quarter 2026 Investor Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would like now to turn the conference over to Blair King, Investor Relations. Please go ahead. Blair King: Thank you, Michelle. Good afternoon, and welcome to Qualys' Second Quarter 2026 Earnings Call. Joining me today to discuss our results are Sumedh Thakar, our President and CEO; and Joo Mi Kim, our CFO. Before we get started, I would like to remind you that our remarks today will include forward-looking statements that generally relate to product capabilities, future events or future financial or operating performance. Actual results may differ materially from these statements. Factors that could cause results to differ materially are set forth in today's press release and our filings with the SEC, including our latest Form 10-Q and 10-K. Any forward-looking statements that we make on this call are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events. During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in today's press release. And as a reminder, the press release, prepared remarks and investor presentation are all available on the Investor Relations section of our website. With that, I'd like to turn the call over to Sumedh. Sumedh Thakar: Thank you, Blair, and welcome to our second quarter earnings call. The adversary's playbook has been fundamentally rewritten by AI, collapsing exploit time lines and making one thing undeniably clear. Durable pre-breach risk management increasingly requires a vendor-neutral agentic AI fabric that moves beyond theoretical exposure to autonomous quantification of actual exploitable risk and remediation. Demonstrating this conviction, we delivered another quarter of strong revenue growth and profitability. The urgency behind that conviction continues to intensify. Frontier and open source AI models are capable of discovering and weaponizing vulnerabilities faster than any human team can triage them, compressing exploit time lines to hours and in some cases, turning disclosure into compromise before a patch even exists. AI is simultaneously becoming the greatest force multiplier and the most formidable challenge cybersecurity has ever faced. Where we part ways with the continuous threat exposure management, CTEM, solutions, is how we respond to it. CTEM solutions today respond by generating more findings, more theoretical risk scores and more dashboards and then pass along these findings off to siloed solutions that collect data and do the patching while losing critical time at every handoff. That approach was already failing before AI accelerated the threat landscape, and it is fundamentally inadequate now. We believe the defenders who win in this new era of AI will not be the ones who simply detect more and more vulnerabilities and produce dashboard tourism. They will be the ones who can autonomously detect vulnerabilities at AI speed, validate actual exploitability in production, quantify that risk in dollar terms, remediate it and then prove the exposure is closed in multi-vendor environments, all before an adversary gets there first. That is the design outcome of the AI-native risk operations powered by our Enterprise TruRisk Management, ETM, solution, and it is where nearly every customer conversation we are having is heading. Against this backdrop, I'm pleased to announce major new capabilities on the platform we will showcase at Black Hat later this week, spanning both AI for security and security for AI to address the post-Mythos threat landscape head on. First, with respect to AI for security, we're pleased to introduce InstaScan, powered by Agent Insta, the newest addition to our agentic AI marketplace and ETM solution for AI speed detection that is continuous, instantaneous and scanless. Today, when a new vulnerability advisory is released, it takes 24 hours to a week for organizations to detect it through traditional scan cycles, while adversaries weaponize the same vulnerability in minutes. Agent Insta is designed to collapse that time line. By converting the asset inventory, software patch and threat intelligence our customers already collect with Qualys sensors into high confidence exposure findings without a scan, new detections appear within minutes of disclosure and no rescan required and no agent disruption. The finding is then handed to Agent Val for instant exploit validation and the risk impact is determined and quantified immediately. While competitors are still processing an advisory writing signatures and waiting for a scan to complete, our customers already know whether they are exposed and are taking action before a vendor patch exists. Because the finding flows straight into validation and remediation, detection is not a report. It is the first step of a continuous closed loop. With last quarter's launch of TruConfirm and Agent Val safely validating actual exploitability across chained attack paths in live production environments and hyperprioritization using millions of findings to the fewer than 1% that require immediate action, the bottleneck is now shifting from identifying what to fix to actually fixing it before adversaries can act. This leads me to the next phase of our TruRisk Eliminate agenda, autonomous zero-day remediation at scale. Through AI scored autonomous remediation waves, the AI-native ROC now determines the right action for every asset in multi-vendor environment, deploying a patch [indiscernible], staging a control rolled out where caution is warranted or applying a compensatory control where operational risk demands it. Every action is gated by our AI-driven patch reliability score and resiliency snapshots, delivering rollback rates below 1.5%, below half of 1%. The most critical assets remain human-in-the-loop oversight while the platform autonomously remediates the rest. Orchestrating the cycle is Agent Sara, who prioritizes exploitable risk, quantifies it in dollar terms, sequence continuous waves and revalidates closure with Agent Val, all without proportional headcount. Furthermore, with the introduction of peer-to-peer patching, we are accelerating the delivery across distributed environments while removing the dependency on centralized infrastructure. Put simply, these newest innovations make autonomous zero-day remediation wave-driven vendor-agnostic, safe and provable. In live benchmarking, this collapsed the window of exposure from 21 days to minutes and auto patch 60% of the vulnerabilities. This is not incremental. It turns a massive surge in exploitable vulnerability volume from an impossible backlog into a continuously clear queue at the speed of modern attacks. You cannot solve a minutes problem with a month-long solution. And that's the gap the AI-native ROC was designed to solve with Agent Insta, providing AI speed detections, Agent Val hyperprioritizing validated exposures, and Agent Sara performing autonomous remediation in a continuous closed loop. Turning to security for AI. As enterprises raise AI workloads into production, the AI infrastructure they are building is already the next attack surface. With the introduction of TotalAI 2.0, organizations can now see their full AI estate from workforce to workload and from code to run time. Through new sensors that see AI activity at both the employee and workload level, security teams can now discover shadow AI activity across the organization, from what employees are doing with AI to which models, endpoints and services are running in production across hybrid multi-cloud environments. We have also extended our posture management coverage to SaaS platforms, including Anthropic and OpenAI to help organizations enforce security and compliance policies across the AI platforms their teams are already using. Additionally, they can now identify security gaps in code before deployment, remediate with guardrails at run time and test model context MCP tool exploits across over 50 adversarial scenarios. And of equal importance, every AI risk across the entire stack from GPU to infrastructure to supply chain to the newest prompt injection attacks is now scored and prioritized through the same true TruRisk that powers the risk operations center. For organizations seeking to secure the infrastructure, powering their AI future, these new innovations become an increasingly strong differentiator for Qualys. As ROC adoption accelerates and these capabilities continue to compound, we remain laser-focused on driving ETM adoption throughout our VMDR customer base and positioning Qualys for larger upsell opportunities over time. Moving to our business update with customers spending $500,000 or more with us growing 8% from a year ago to 229. Let me share a couple of recent wins, which illustrate why organizations are turning to Qualys to help unify their security stack and operationalize the ROC. The first is with an existing Global 300 customer managing a complex data-intensive environment spanning on-prem, multi-cloud and rapidly growing LLMs in production. As the volume and velocity of vulnerabilities across the environment accelerated, their teams recognized that prioritization based on theoretical risk scores couldn't deliver the business context needed to act decisively. With fragmented telemetry, disconnected tools and little automation, their teams were spending more time documenting risk than reducing it, while unpatched assets and shadow IT were silently extending exposure windows by months. As a result, the customer chose Qualys to operationalize their ROC, adopting VMDR, ETM, TruRisk Eliminate and TotalAI alongside several other modules in a low seven-figure QFlex annual upsell. By consolidating Qualys and third-party data into unified risk fabric, this customer has aligned risk reporting to the Board's tolerance level, shifted remediation from manual processes to autonomous workflows and reduced its exposure window from months to hours while flattening the hiring curve and delivering better security outcomes. This is also an outstanding example of how we are leveraging our channel partners to activate the ROC with new -- to win new business. The second is with a European health care company that has been a small existing scan on behalf of Qualys customer, but was relying on a managed service provider to run the broader vulnerability program across more than 140 locations. That model delivered people and process, but not autonomy. Scan operations prioritization and remediation guidance all flowed through the provider's team on the provider's time line, leaving the customer dependent on external resources to understand and act on its own risk. As this environment grew more complex and vulnerability volume surge, the limitation of that dependency became unsustainable. Costs for ballooning remediation cycles were [indiscernible], the customer had limited visibility into the very data driving the decisions made on its behalf. This customer chose Qualys consolidating its stack into the Qualys platform by adopting VMDR, ETM and TruRisk Eliminate in a six-figure QFlex upsell. ROC automation was the entry point and remediation was the immediate proof of value. By unifying detection prioritization and autonomous remediation into a single AI-native workflow, this customer has replaced a manual people and process dependency with a platform that delivers significantly lower cost, less complexity, full control and peace of mind for the CISO. These wins reflect the broader ETM momentum we are starting to see as more and more customers recognize the efficiencies and scale of AI-native ROC automation. Further supporting our growth trajectory, QFlex continues to gain traction as another strategic lever for accelerating ETM adoption. As we heard in the customer wins I described earlier, QFlex played a direct role in enabling significant upsells for Qualys by giving these customers the flexibility to commit broadly across the platform while preserving the ability to shift investments as their needs evolve. This precisely the value proposition of QFlex model was designed to deliver. Building on strong results from our initial rollout, we have now taken QFlex live for enterprise customers looking to expand with Qualys and believe it can become an increasingly important driver of platform expansion over time. Turning to our executive team. With the recent departure of our CISO and General Manager of our ETM business, I want to address how we are positioning for continuity and acceleration. To lead product strategy and our ETM business going forward, I have appointed Shailesh Athalye as our Chief Product Solutions Officer, a nearly 14-year Qualys veteran who has served as our SVP of Products for the last 5 years. Shailesh has been instrumental in shaping many of the platform innovations we discussed today, and his deep institutional knowledge of our technology, our customers and our road map makes him the natural leader to drive the next phase of ETM adoption and our customer-led growth strategy. Additionally, I'm pleased to welcome Nathan Smolenski as our new Chief Information Security Officer. Nathan is a seasoned cybersecurity executive with over 25 -- 24 years of experience driving security transformations across financial services, insurance and high-power -- high-growth SaaS environments, most recently serving as the global CISO at Cyera. We are excited to have both Shailesh and Nathan in these critical roles as we continue to scale our platform and accelerate ROC adoption. In summary, Qualys' continued innovation spanning both AI for security and security for AI, growing AI-native ROC adoption powered by our ETM solution, a growing federal pipeline for new business opportunities, strong partner-led execution and promising early QFlex engagement continue to reinforce the demand we're seeing for a unified risk management platform that autonomously moves beyond theoretical exposure to validated, quantified and remediated risk at the speed of modern attacks in multi-vendor environments. We believe these achievements not only advance our strong competitive differentiation, but also sharpen the market opportunity ahead of us and bolster our confidence in reaccelerating long-term growth in the business. With that, I will turn the call over to Joo Mi to further discuss our second quarter results and outlook for the third quarter and full year 2026. Joo Mi Kim: Thanks, Sumedh, and good afternoon. Before I start, I'd like to note that except for revenues, all financial figures are non-GAAP, and growth rates are based on comparisons to the prior year period unless stated otherwise. Turning to second quarter results. Revenues grew 11% to $182.2 million. As a result of a strategic emphasis on leveraging our partner ecosystem to drive growth, the channels continue to increase its contribution, making up 54% of total revenues compared to 49% a year ago. Revenues from channel partners grew 22%, with revenues from direct remaining largely unchanged from Q2 of last year. By geo, 15% growth outside the U.S. was ahead of our domestic business, which grew 8%. U.S. and international revenue mix was 55% and 45%, respectively. In Q2, our overall upsell execution improved, with our net dollar expansion rate at 105%, up from 104% last quarter. The net dollar expansion rate of customers with prior year purchase of ETM or CSAM subscriptions in Q2 was [ 107% ], consistent to last quarter. Moving on to product mix. Our differentiated new products continue to drive growth. First, ETM/CSAM combined made up 12% of total bookings and 14% of new bookings on an LTM basis in Q2, up from last year's 9% and 10%, respectively. Next, patch management made up 9% of total bookings and 16% of new bookings on an LTM basis in Q2. This compares to 7% and 16%, respectively, in Q2 of last year. Lastly, TotalCloud made up 5% of total LTM bookings in Q2, unchanged from a year ago. We believe that these differentiated products combined will increase contribution to bookings in 2026, given our opportunity to increase market share and maximize share of wallet. Reflecting our scalable and sustainable business model, adjusted EBITDA for the second quarter of 2026 was $83.8 million, representing a 46% margin compared to 45% last year. Operating expenses in Q2 increased by 8% to $73.2 million, driven by investments in sales and marketing, which grew 14%. With this strong performance, EPS for the second quarter of 2026 was $1.98 per diluted share and our free cash flow was $55.9 million, representing a 31% margin compared to 20% in the prior year due to fluctuations in working capital. Normalizing for this, first half of 2026 margin was 42% compared to 43% in the prior year. In Q2, we continue to invest the cash we generated from operations back into Qualys, including $3.7 million in capital expenditures and $76.8 million to repurchase 797,000 of our outstanding shares. As of the end of the quarter, we had $229.8 million remaining in our share repurchase program. With that, let us turn to guidance, starting with revenue. For the full year 2026, we now expect revenues to be in the range of $732 million to $738 million, which represents a growth rate of 9% to 10%. This compares to prior guidance of $721 million to $727 million. For the third quarter of 2026, we expect revenues to be in the range of $185.5 million to $187.5 million, representing a growth rate of 9% to 10%. This guidance assumes our net dollar expansion rate remains at current levels with moderate growth contribution from new business in 2026. Shifting to profitability guidance. For the full year 2026, we expect EBITDA margin to be in the mid-40s, with a low teens increase in operating expenses and free cash flow in the low 40s. We expect full year EPS to be in the range of $7.74 to $7.88, up from the prior range of $7.44 to $7.65. For the third quarter of 2026, we expect EPS to be in the range of $1.91 to $1.98. Our planned capital expenditures in 2026 are expected to be in the range of $8 million to $12 million and for the third quarter of 2026 in the range of $1 million to $2.5 million. With that, Sumedh and I would be happy to answer any of the questions. Operator: [Operator Instructions] The first question comes from Kingsley Crane with Canaccord. William Kingsley Crane: Congrats on amazing results. Sumedh, look, the volume of AI-generated vulnerabilities, it's a clear reason why customers need InstaScan and the ROC. Can you just double-click again on how this is showing up in pipeline, how this is showing up in urgency? And then if CVE volumes were to double again, how could that -- how could you capture that in your per asset pricing model? Sumedh Thakar: That's a great question. And I think even though the disclosure findings are increasing, I think the organization's ability to remediate is what is currently being looked at, right? And that's really where our focus has been on helping these customers with autonomous remediation because at a very high level, you cannot go and tell your management as a security leader that you're going to respond to autonomous AI exploits with more manual tools that are e-mailing each other on what needs to be fixed, et cetera. And so if you look at sort of the risk operations center and what we are focused on is Agent Sara is already helping with the autonomous remediation piece. But to do a great job with that and with high confidence, you need to significantly hyperprioritize your findings, and that's where Agent Val on the risk operations center platform is helping run actual exploits to reduce the number of findings that need to be auto remediated that actually matter to the business. And then now, our latest announcement yesterday of Agent Insta, which is the ability to scan instantaneously whenever new advisory comes out, now shrinks the time line from the advisory coming to the time line when the advisory -- the vulnerability even detected in the customer environment. And so with all three of these on the ETM platform, you now actually have a real path to get something that is important and exploitable in your business remediated within the first 24 hours with minimal human intervention. And that is the conversation that everybody is having, is that they need to go -- have conversations internally to say, how are we going to move towards a road map that allows us a feasible autonomous remediation plan, and the ETM is enabling that. And so we, of course, have been ahead of this, as you know, for the last few years with creating autonomous remediation capabilities. And so we already had a few customers in the pipeline who were discussing with this, who saw this beforehand. And so the conversation with post-Mythos is helping -- helped us accelerate a couple of these opportunities. However, there's a large number of customers that are very, very curious now about what they are -- what they can do and what is the art of the possible with this kind of autonomous remediation. And so we're very excited to see that pipeline in terms of the conversations, in terms of POCs. It's looking good, and we're happy with that. And of course, we have to now move forward, get the POCs done, look at the budget, see when they will close, et cetera. But I would say with all the innovation and the investment that we have made, we're pretty excited to see the current conversations that we are having. William Kingsley Crane: Great. And then just a follow-up for either Sumedh or Joo Mi. Building off of that, billings grew 16%. It was a really sizable raise. On top of a broad-based beat, we're now talking about reaccelerating long-term growth. Is it that the conviction in the business hasn't changed and the market has come towards you this quarter? Or just -- can you help us understand just how much more bullish you are in the business today than you were 3 months ago? Sumedh Thakar: Look, I think we've always sort of -- we're ahead of this, with remediation, et cetera. And so the conviction that this is what the market is going to need and the investments that we put in before that has always been there. I think right now, with the advent of AI, it's just accelerated what we have sort of been seeing was going to happen at some point. And so that's sort of driving -- the conversations are driving us to feel like because of the investment we put in the platform, these are solutions that actually can help customers right now in what they are looking for to set up as auto remediation capabilities for the future. So I mean I will say that a lot of that goes to us being able to see where the industry is going to go and putting the investment behind it and now, positive conversations with the customers are kind of helping us get through to ensuring that we can actually work through to see how these opportunities can close. Operator: And our next question is going to come from Jonathan Ho with William Blair. Jonathan Ho: Congratulations on the strong quarter. I wanted to understand a little bit better. When you talk to your customers about sort of their change in the exposure risk management process, can you maybe help us understand how much of this is that they need to cover more assets versus the fundamental patch management process changing versus having sort of the ROC part of this on the managed side. Can you just maybe unpack that for us a little bit in terms of what they're buying and also what they intend to buy over time? Sumedh Thakar: Great question. I think at the end, what they are focusing on is can I remediate the thing that actually matters to my environment as fast as possible, right? And that includes all assets in their environment, but that doesn't necessarily mean that they have -- they don't have other products that might be helping them get some visibility through acquisitions with that. And I think that's where if you look at our strategy around ETM and what we have done with the concept of a ROC is that the ROC is a multi-vendor solution. So it gives us the ability for the customers who are leveraging Qualys to have capabilities like InstaScan where we can instantaneously detect things. We could do the same on data collecting from other scan-only products that are just throwing a bunch of CVEs. So we are seeing with ETM that it is allowing us to expand licenses in the early POCs that we have with some of these customers and early purchases. They are also bringing data on other tools from outside of Qualys into the ETM solutions so that they can get a holistic view across multiple tools and then prioritize the ones that really matter, run the exploit and then get into the remediation piece. So I think it's the focus on adding on the patch management eliminate capabilities is one aspect. And then with ETM broadening the coverage of with how many assets that they should look at to make sure the remediation succeeds is helping us that even if they have some other scan-only CVE detection tool, which is producing a lot of false positives, we can all still bring that license as part of the Qualys ETM solution. Jonathan Ho: Excellent. And just given the relative proximity of Mythos, when do you think the bulk of the spending will start to materialize? I'm guessing we haven't seen it yet. I just wanted to get your sense for how you think this is developing with the pipeline. Sumedh Thakar: I think we -- it's the same that we had talked about when Log4j came out and SolarWinds and stuff. Our customers typically tend to be enterprises, organizations that are more thinking of long-term changes in their security programs and less about the knee-jerk reaction of immediate spending, and that's kind of what we're seeing right now as well. A lot of these conversations are CISOs looking at ways to use this post-Mythos threat landscape to make the point to their teams, internal stakeholders on long-term sustainable changes that they can make to their security program, where it's not that you do this one thing for the 1 month. For companies to roll out a program that allows them to do autonomous remediation, that's where they need to think through, work with different stakeholders and then look at the budget. Does it come from an existing solution that they can get rid of? Does it something that they need to add on? Et cetera. So I think we are early on, we feel, like in these conversations. And we will see, as the next few quarters goes, we'll see what meaningful signals come in terms of when these budgets might be leveraged otherwise. But so far, right now, it's a lot more of positive conversations and pipeline building we're doing. Operator: And our next question will come from Patrick Colville with Scotiabank. Patrick Edwin Colville: I guess let me just ask Sumedh a question first and then Joo Mi, I'd like to ask you one after, if possible. Great to see the guide, Sumedh, your fiscal year guide being raised from 8% to 10%. And then in your prepared remarks, talking about reaccelerating growth in the long term. I guess can I ask -- one question is like I think that's a new disclosure. I don't think you said that before. Can you just clarify that, that is new? And then what gives you confidence if it is new to say that now? Is it stuff you're seeing or just conversations or just kind of help provide some color around that? Sumedh Thakar: I wouldn't say it's new, Patrick. I think we always talked about investing and innovating in the platform, and our belief that what we're doing and helping with the focus on remediation is something that we've been working on strategically, along with a focus on federal and along with focus on working with our partners to focus on that acceleration of growth in the long term. Getting into long-term double-digit growth has been a focus for us. So I think that is not new, so to say. I would say that given the current conversations that are happening, it just gives us an opportunity again to talk about what we have already built and the innovations that we have already done and see how this maps to the current focus that the market has in terms of -- look, at the end of the day, the CISOs need to be able to go tell the Board and management somehow that they are going to adopt some form of autonomous remediation. And so they're going to have to figure out how they're going to do that. And if you look in the market, with Qualys having 150 million patches deployed in the last 12 months, 40 million of those already being deployed autonomously, that gives us an interesting conversation point to build confidence for them when they're looking at these things. And so right now, it's the same sort of what we have always talked about and focused on, is working towards innovating and investing to create long-term growth and double-digit revenue growth is what we've always been looking at. And so this is just continuing on that momentum. Patrick Edwin Colville: And Joo Mi, if I may, the disclosure about new bookings, so 14% of new bookings were from ETM and CSAM, which if my model is correct, that's the same as last quarter. And then 15% of new bookings from patch in 2Q. Again, if my model is correct, that's the same as last quarter. So I guess, I totally understand all the kind of qualitative commentary around ETM and patch. Shouldn't -- like how come it's not showing up more clearly in that new booking number? And should we expect that proportion of new bookings to ETM and CSAM and patch to increase as we look towards kind of 3Q and 4Q? Joo Mi Kim: In terms of the percentage contribution to bookings from new customers, we do anticipate fluctuations. We're not too surprised whether it goes up or down. So if you take a look at the percentage that made up from patch management last quarter was 15%. This quarter, it's 16. You're right, on the ETM side, ETM/CSAM, it's 14%, the same as last quarter. We're not too surprised by it because it really depends more on the customers who are onboarding at that point in time, what they end up starting off with. So for example, if we have a new prospect that decide to purchase more of that or spend more of that budget on VMDR or versus ETM versus patch management, we want to make sure that, that customer is set up to succeed and grow with us. And so this percentage, it's a healthy percentage. What it lends itself to -- for us is it's really a validation that when we land new logos, go after the market and when we're able to win, it's partly due to the fact that we were able to innovate and lead the market in terms of our continuous enhancement and our product solution set with ETM/CSAM as well as patch management. Operator: And the next question is going to come from Rudy Kessinger with D.A. Davidson. Rudy Kessinger: Congrats on the strong results here. I guess if I hear what you're saying, in that the Mythos stuff is more so still in the pipeline and conversation stages, and that wasn't really the driver of the quarter. It sounds like more so just better ETM execution, but certainly seeing those demand trends. I guess -- and your goal is to accelerate growth going forward. I guess, are you guys more willing to maybe utilize some of that margin and put that to work and maybe take margins down a bit further to help drive that accelerated growth? Or how should we think about the growth profitability trade-off into next year? Sumedh Thakar: Look, I think we always look at -- we've talked about this. We always look at investing in the innovation, investing in our sales and marketing as we have been doing more recently. And I think we are -- we always focus on ROI, and we see the opportunity ahead of us. And as the opportunities move through the pipeline, it is something that we continue to evaluate. But at this point, we feel good about kind of the investments that we're making. And I think as we see the opportunity, we will continue to evaluate that to make additional investments where needed. Joo Mi Kim: Right. And to double-click on that, part of the reason why we're able to accelerate the top line growth currently without necessarily having to double dip on the investment is the fact that we are a partner-first, partner-led growth momentum right now, with majority of our growth, especially when it comes to new logo acquisitions, we're working very [indiscernible] with our partners. And we believe that we are investing appropriately at the current levels with the sales and marketing expense going up by 17% in Q1 and 14% in Q2. In the second half, we're anticipating further acceleration in the investments into sales and marketing. Rudy Kessinger: Got it. And then for my follow-up, current calculated billings was really strong in the quarter. Anything to call out there as far as maybe early renewals or anything like that, that drove the better sequential and year-over-year on CCB in Q2? And then for Q3 and the full year, just any directional commentary on CCB growth expectations? Joo Mi Kim: Q2, from a current billings perspective, there's always naturally quarterly fluctuations. So I would point to the LTM, which has smooth out some of the lumpiness in the current billings growth rate, which is still an acceleration. As of last quarter, it was 8.5% on the LTM growth. And then this quarter, it's at 10%. We're very pleased with the growth. And because of that, we decided to increase the revenue growth guidance. In terms of the second half current billings growth, we're still anticipating for the baseline 7% to 8%, which implies a full year current billings growth in line with the revenue growth rate of 9% to 10%. Operator: And the next question is going to come from Junaid Siddiqui with Truist. Junaid Siddiqui: Sumedh, TruConfirm appears to be a powerful tool for ETM by helping customers validate which vulnerabilities are actually exploitable in their environment. Is that becoming like the land motion for ETM? In other words, once customers see exploit validation reduced thousands of findings to a handful of truly exploitable risks, how often does that conversation expand into broader ETM remediation and risk quantification deployments? Sumedh Thakar: That's a great question. I think when you look at the entire vulnerability life cycle to be successful with that, those are three buckets, right, which is detection as fast as possible, and that's where our innovation with Agent Insta, which I call -- I like to call it scanless scanning, the ability to post detection in less than 1 hour, makes it possible for you to get that visibility of what might be exposed. However, just based on what is exposed from a vulnerability perspective, doesn't give you the confidence that this is actually exploitable and not exploitable environment because you have other tools that you might have put in place. And so we definitely see that with TruConfirm, it's a differentiator. There are a lot of "CTEM solutions" that are just aggregating findings and giving you a theoretical score, but that theoretical score doesn't necessarily tell you whether it is actually going to be exploitable or not. So when we are able to tell the customer, look, the ETM solution will help you theoretically reduce your findings to the 1% that matter. And then additionally, you can run these lightweight safe exploits to further reduce the number of findings that actually will work in your environment. That becomes a very interesting conversation because -- why is that interesting? Because now that you have reduced the number of findings, it makes autonomous remediation, which is the next thing that we are selling to them, really plausible. If you tell somebody that you're going to fix 1 million vulnerabilities autonomously, that's a very hard conversation. But if you can show to them that highly validated 70 vulnerabilities are the ones that we are going to fix with automation because they are confirmed exploitable and we cannot wait for attackers to exploit them, that conversation becomes a lot better. And so TruConfirm is definitely a key part of the conversation, especially with our existing VMDR customers who are just getting great scanning. Now the ability to upgrade to ETM and then run the validation, which then encourages them to look for the eliminate, which is the remediation kind of fits and makes all these pieces work together really well. And so it is an important piece of every conversation we are having with existing customers. Junaid Siddiqui: Great. And just a follow-up, could you just help us understand the behavior of those customers that have not yet adopted ETM, like those VMDR-only customers? Are you still experiencing a high amount of churn there? And is that kind of like still the primary source of any pressure on your overall net dollar retention rate? Sumedh Thakar: I think nothing to call out. We are pleased with the overall momentum of the business, and it's -- we look at that as a great opportunity for us to talk to our existing VMDR customers because all of them are going to have to answer to their management and Board what they are doing to find a way for autonomous remediation. And so the conversation of upgrading to ETM and the conversation of upgrading and adding on eliminate, we look at that VMDR customer base as a big base that we have where we can actually create growth opportunities because almost everybody is going to need some sort of a prioritization and remediation solution moving forward after the post-Mythos era. So that's actually a pretty good way for us to look at it, is I think less and less customers -- I mean, more and more customers, I would say, would want to look at a solution that's not just scanning, but also giving them remediation, and that's what we're seeing in the conversations right now. Operator: And the next question will come from Joseph Gallo with Jefferies. Grant Darling: This is Grant Darling on for Joe Gallo. I wanted to ask first, have you seen anything different competitively post-Mythos release? It seems like we're hearing more chatter from a variety of players who are signaling more interest in the space. So your results certainly signal strength, but just curious if you're seeing or expecting any change in competitive dynamics? And also if there's any difference in the frequency of competitive displacements to call out? Sumedh Thakar: Well, I think the problem the customers have is the chatter, right? There's too many solutions that are just throwing more and more CVEs and which is kind of something that they're focusing on, and that creates a lot of chatter and noise for customers that they have to read through. And so where we are seeing success is not just the traditional, hey, let's find 1 million CVE findings. Where we are differentiating and why we are seeing that differentiator is things like TruConfirm, right, where we're basically able to not just tell you the CVE is there, but actually have the ability to find a way to give you confidence in its exploitability by actually exploiting it in some cases, giving you additional information in other cases. Our autonomous remediation, while there's a lot of tools that are throwing out CVEs and tools that are saying that they can find something and then they will e-mail the patching solution what they need to fix, we're actually natively patching that in a matter of hours. And so the interest is more to say, oh, wait, there is a solution that can actually allow me to fix an exploited exposed vulnerability in 4 hours from the release versus I'm going to have a hotspot of these different solutions that is not actually going to work in the environment. And so I think that's really kind of what's driving the conversations right now, and that's what we're excited about. Grant Darling: Got it. And then maybe for my follow-up, you've referenced the growing federal pipeline a few times. I guess just any way to quantify the size of that business today? And then just any more detail that you could provide regarding your thoughts about that opportunity and maybe your right to win there going forward? Sumedh Thakar: It is right now not a big part of the business, but that is where the opportunity lies right now. I think if you look at the focus of the current administration, if you look at the new CISA BOD, very interesting that the new CISA BOD really talks about fast detection, exploit validation and quick remediation. I've heard this somewhere for the last 2 years, right? So we've focused on building this and being ready for this. And so the federal government is also very, very focused on ensuring that they are seeing outcomes, which are CISA's new requirement of remediating in 72 hours, okay? How are you going to remediate something if your scan is taking 2 days? That's where InstaScan is going to help you find the issue in the first 60 minutes, giving you a realistic chance to meet the board requirement. And so that is creating very, very positive conversations with the federal customers that we are engaged with. A lot of them have very old school traditional on-prem solutions for scanning, different solutions for patching. They've been trying to patch those together for a while. And now, these BODs and the focus from the administration is giving them an opportunity to look at something that is more modern and something that is really helping them give an outcome that is measurable. And so now with Qualys having a FedRAMP high platform that actually is the only platform that can do both the detection and the patching as a FedRAMP high solution and our modern approach with agentic AI capabilities built in with these three different agents versus sort of having one generic agent that is just talking to, in the back end, to Anthropic or something like that, it creates a big differentiation in our mind. And I think that gives us the opportunity to go out and the right to have these conversations and work towards winning some of these opportunities that are coming our way. And so for us, given that right now, it's not a big material part of the business is where we see the big opportunity moving forward. And we're excited about the conversations and the investments that we're putting behind that. Operator: And the next question is going to come from Joshua Tilton with Wolfe Research. Joshua Tilton: I apologize for the background noise. I'm in Vegas for Black Hat. Maybe just two quick clarifications. First one, Joo Mi, I think you said you still expect 7% to 8% product billings growth for the year. Can you help us understand like why that stands or is un-updated from, I guess, what you expected last quarter, given the strong billings growth in 2Q? Is it a conservative thing? Is it a 2Q is a blitz type thing? Just help us understand why that full year outlook is left unchanged. And maybe I'll just -- I'll ask my second question now. Any way you could help us understand what net dollar retention rate is baked into the full year guidance since I think it's the second quarter now that it kind of picks up for us? Joo Mi Kim: To clarify, the current billings guidance for the full year is now in line with our revenue guidance of 9% to 10%. So the 7% to 8% is for the second half current billings. So what we're assuming is for the baseline, the second half current billings will grow by 7% to 8% year-over-year, and that's predicated on no meaningful change to our net dollar expansion rate, which is now at 105% versus 103% that we started off the year. Joshua Tilton: To be clear, the current billings of 7% to 8% is for the second half, you're saying? Joo Mi Kim: That's right. Operator: And the next question will come from Mike Cikos with Needham. Michael Cikos: If I could just pick up on where Josh was leading off there. I think even earlier this year, we were talking about a soft guide for that 7% to 8% CCB in calendar '26. Just given the year-to-date outperformance we've seen, why not tweak that CCB even for back half of this year at 7% to 8%? Why not take that slightly higher? Again, we're coming off this mid-teens result you just posted in Q2. It doesn't seem like there was any real fluctuations from early renewals. So can you just help us think about what your assumptions are in driving that 7% to 8% in the back half? Joo Mi Kim: Yes. Quarterly current billings because we don't actively manage to it, it tends to be lumpy. And so if you take a look at it on an LTM basis, that's what we like to point to if you're trying to gauge the business momentum. So on the LTM current billings growth rate, last quarter, it was at 8.5%. This quarter, it's currently sitting at 10%. And so what we believe right now is, it's great that we see that acceleration in the LTM current billings growth rate. And I think that, that 10% better reflects the current business momentum today. And as Sumedh commented on before, we didn't know exactly when the acceleration or heightened kind of pressure from our existing customers who are already pretty far along the discussion of ETM adoption, we're really going to execute on those deals. And Q2 is a reflection of that. If you were to take a look at our customer base and take a look at them and split them into two different camps, there are already a smaller cohort of customers that were pretty far along in the discussion around the ROC adoption upgrading to ETM that ended up translating into a better-than-expected results in Q2. But that said, the second camp of customers that are not as far along in discussion, what we're anticipating right now is we're not seeing any significant increases or acceleration in the sales cycle for the cohort of customers that are up for renewal in the second half. So given that, it's a data point, Q2 very strong quarter. We're not anticipating any meaningful material changes in the deal cycle in second half. And so therefore, we decided to keep the baseline at 7% to 8% for the current billings for the second half of this year. Michael Cikos: Understood. And maybe another one here. Just wanted to get a better sense. It was great to see the last 12 months net dollar expansion improved by 1 point again this quarter to 105%, especially since you have this improvement for total company. Meanwhile, the ETM and CSAM NDR was unchanged sequentially at 107%. Can you, I guess, provide any further granularity, almost like a quarterly snapshot here as far as what was driving the total company improvement from products or cohort of customers adopting or increasing spend? I'd just love to get a little bit more on that. Joo Mi Kim: If you take a look at our product mix, that will help you to kind of come with us in this journey of different product adoptions and as customers come up for renewal, where they decide to spend more on. So right now, with our ETM and CSAM currently making up 12% of total bookings, up from 9% a year ago period, that kind of tells you that, that's really helping to drive the bookings growth momentum that we see in the business today. Patch management definitely contributed to that as well, currently at 8% a year ago, it was at 7%. And then offsetting that was the VMDR contribution coming down to 49%, down from 54% a year ago. Operator: And the next question will come from Brian Essex with JPMorgan. Brian Essex: I guess I have two. I think both for Joo Mi. But I guess, Joo Mi, I'd love to -- it's great to see the traction that you've got on the partner side of the business, on the indirect side. But I would love to kind of understand where you're guiding spending, particularly in sales and marketing, but for OpEx overall. I think last quarter, you talked about mid-teens growth. It seems like you're pointed in the same direction, but you've come in well under that for the first half of the year. I'd love to understand where are you seeing traction? Where might you regulate greater spend? And what might -- outside of outperformance on the top line in the back half of the year, how are you regulating spend on OpEx and sales and marketing relative to that mid-teen level when we've come in materially below that in the first half? And then I've got a follow-up. Joo Mi Kim: On the sales and marketing spend, majority of that spend increase is driven by the headcount. So if you take a look at the 17% year-over-year for Q1 and 14% year-over-year for Q2, both quarters, majority of it was basically investing back into our business, expanding our team, making sure that we have the right team members and the GTM team, whether it be sales or marketing or product all across the board that's really focused on selling our product and better positioning ourselves and working very closely with our partners. Now with that said, we are leveraging AI back into our business as well, and that certainly helped to make sure that we're looking at the operating efficiency, making sure that it's an appropriate level of investment that we're spending each quarter. And so with that in mind, we're very pleased with the momentum that we see today. And we do anticipate increasing spend, whether it be -- number one is always going to be headcount for us right now for 2026, but there are other certainly investments that we're making, which is demand, making sure that we're investing back in the business to generate sufficient pipeline that's quality that we can execute on for the second half of this year. Brian Essex: Okay. Great. That's helpful. And maybe just on how far penetrated are you into your installed base with QFlex? And how are you regulating the level of availability that customers might have for QFlex? Are you still measuring it and keeping it kind of like the high-end customers? Or could we expect maybe a broader roll out as you develop more experience with QFlex across your customer installed base? Joo Mi Kim: We have rolled out QFlex. It's really more intended for our enterprise customers. And so now it's available -- generally available to enterprise customers, and we are having appropriate level of discussions with the set of customers that are up for renewal as well as new prospects as we discuss with them what they're looking for, is QFlex something that's going to be advantageous to them. And really, if you think about this product, it's a premium product, right? It helps the customers really adopt a number of our solutions in a seamless way. And so they're more than willing to pay the premium price for this. And the way that we think about it right now is it going to be right for customers who are willing to grow [ with us ] and our existing customers as we look to drive our net dollar expansion rate further up and continue to focus on that metric as customers grow with us. It will be right for our enterprise customers who are looking for a cost-effective way to gain more value while at the same time, increasing their spend with Qualys. Operator: And the next question comes from Shrenik Kothari with Baird. Shrenik Kothari: Again, congrats on the great quarter. So big picture, you did underscore that near term, there is a stronger patch management cycle, but you believe there's a broader category reset underway around the control plane for the pre-breach risk management, as you described, exploit validation, risk quantification and autonomous remediation. Around the AI urgency, I remember last quarter, you guys did say since it's broadening the opportunity, customers may extend sales cycles or pause renewals. Just can you add any finer point around these broader strategic deal conversion timing, sales cycles? How long are these evaluations taking? Are you seeing these conversion rates getting faster broadly just directionally? And then I have a quick follow-up. Sumedh Thakar: It's a great question. I think as I mentioned earlier too, and when we talk about the ROC, right, the risk operations center pre-breach risk management is broader than just vulnerability management. Obviously, that is a focus right now. We've talked about the use of misconfigurations as part of these attacks, the use of identities and the recent OpenAI-Hugging Face is a great example of a vulnerability misconfiguration and identity being used. And so the risk operations center has been broadly built around that. I think in terms of the way we are seeing the conversations, it's not about saying, can I just patch for the next 1 month and I'm done? I think there is a -- the conversation with customers are really about -- nobody is saying that they're just going to patch now and then go back to not having regular patching cycle and autonomous patching in the future. So the broad-based conversation is about how do they moving forward create a process throughout their organization that is long-lasting where they're able to -- any threat that comes up, they're able to actually respond to that threat very quickly. And so we see this more as something that is broadly being talked about, and we see the opportunity for that to be something that we can focus on. And so I think right now, like with any corporation, large companies, they want to understand what the big picture road map is that they can talk to their management about while focusing on sort of phases that they can deploy. And so the ROC conversation allows us to have a much broader strategic conversation with ETM. And then the vulnerability management, patch management is something more of a -- that they're focusing on right now to be able to have that phased approach. So overall, I think our innovation around ROC that we have been focusing on is coming to help quite a bit for these customers to have broader conversation while the focus right now is changing their patch management processes and programs. So I do think that the opportunity -- or rather this is giving us an opportunity to have those broader conversations with the customer. And as Joo Mi said, of course, there were a small cohort of customers that was already in this process before Mythos came out to adopt patch management. Just a reminder, 150 million patches already applied by Qualys. So some customers have been at the forefront of these. So that helped us sort of say, look, we were right. The customers were like, look, we're already in the process. We were right to focus on patch management. So that helps in the short term, but then there's a long cohort of customers that are having these conversations now and is going to create the opportunity for us to have sustained conversations of additional things in the ROC as we move forward and they get comfortable with a patch. Shrenik Kothari: Got it. Very helpful. And Joo Mi, just a follow-up to Mike and Josh's question around the NDR improvement, very encouraging to see that pick up. The ETM cohort though remains at 107%, I think they highlighted. Is QFlex going live? and you did highlight it's playing a direct role in several of these large platform expansion and also helping pull forward the commitments, helping bookings more than near-term usage. So is that what is kind of explaining these budgets shifting towards more newly urgent capabilities reflected in your sort of NDR next 12 months versus something more strategic on ETM/CSAM usage will follow through? Like just wanted to understand if QFlex is playing a role there. Joo Mi Kim: QFlex is really meant to accommodate customers who are looking for that flexibility and who are willing to spend more with us. And so we wanted to make the selling motion seamless, easier for them where it creates a win-win opportunity for both the customers as well as us. And so we're very pleased with us going today with it broadly. It still applies to a small percentage of customers today who signed up for QFlex. It's not yet reflected in the numbers, but we believe that this will help drive the NDR for us broadly speaking. Operator: This will conclude today's question-and-answer session and also concludes today's conference call. Thank you so very much for participating, and you may now disconnect. Before you buy stock in Qualys, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Qualys wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $411,427!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,335,252!* Now, it’s worth noting Stock Advisor’s total average return is 965% — a market-crushing outperformance compared to 215% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 11, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Qualys (QLYS) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Qualys, Inc.? Here are five stocks we like better. Qualys raised its 2026 outlook after second-quarter revenue grew 11% to $182.2 million. The company now expects full-year revenue of $732 million to $738 million and non-GAAP EPS of $7.74 to $7.88. The company is expanding its AI-focused security platform, including InstaScan, autonomous remediation agents and TotalAI 2.0. Qualys said its workflow reduced vulnerability exposure windows from 21 days to minutes and autonomously patched 40 million vulnerabilities over the past year. Growth is being supported by stronger channel sales, international demand and enterprise upsells through QFlex. Channel revenue rose 22%, customers spending at least $500,000 increased 8% to 229, and adjusted EBITDA margin improved to 46%. 3 Under-the-Radar Cybersecurity Stocks With Major Upside Potential Qualys (NASDAQ:QLYS) reported second-quarter 2026 revenue growth of 11% to $182.2 million and raised its full-year outlook, citing improved upsell execution, growing channel contribution and customer interest in its enterprise risk-management platform and automated remediation capabilities. Chief Executive Officer Sumedh Thakar said the company is positioning its Enterprise TruRisk Management, or ETM, platform as an “AI-native Risk Operations Center” designed to help organizations detect vulnerabilities, validate whether they are exploitable, quantify risk and remediate exposures across multi-vendor environments. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control Tenable proves cybersecurity defense is the best Thakar said AI has compressed the time between vulnerability disclosure and potential exploitation, increasing pressure on security teams to reduce reliance on manual processes and disconnected tools. He argued that organizations need to move beyond theoretical risk scores and toward automated remediation workflows. At Black Hat, Qualys plans to showcase new capabilities spanning AI for security and security for AI. The company introduced InstaScan, powered by Agent Insta, which is intended to identify exposure findings within minutes of a vulnerability disclosure without requiring a new scan cycle. According to Thakar, the capability uses asset inventory, software-path and threat-intelligence data already collected by Qualys sensors. → Financials Hit Record Highs as the AI Trade Unravels—Can They Keep Leading? Zscaler: A Leader in Cybersecurity Soars with Strong Earnings InstaScan is designed to feed findings into TruConfirm and Agent Val, which the company said validate exploitability and prioritize the vulnerabilities that require action. Qualys also highlighted Agent Sarah, which is intended to coordinate remediation waves, prioritize risk and revalidate that an exposure has been closed. Thakar said the company’s autonomous remediation workflow can determine whether to deploy a patch, stage a control rollout or use a compensating control, depending on the asset and operational risk. In live benchmarking, he said the platform reduced the exposure window from 21 days to minutes and automatically patched 60% of vulnerabilities. He also said Qualys has deployed 150 million patches during the past 12 months, including 40 million deployed autonomously. → Why Rare Earth Processing Could Be the Real 2027 Opportunity For security of AI systems, Qualys announced TotalAI 2.0, which it said is designed to give organizations visibility into AI activity across employees, workloads, code and runtime environments. The offering includes sensors intended to identify shadow AI usage and production AI services across hybrid and multi-cloud environments, as well as posture-management coverage for SaaS platforms including Anthropic and OpenAI. Thakar said customers spending $500,000 or more with Qualys increased 8% from a year earlier to 229. He described a low seven-figure annual QFlex upsell with an existing Global 300 customer that adopted VMDR, ETM, TruRisk Eliminate, TotalAI and other modules. The customer was seeking to manage a data-intensive environment spanning on-premises systems, multiple clouds and growing large-language-model deployments, he said. The company also cited a six-figure QFlex upsell with a European healthcare customer that adopted VMDR, ETM and TruRisk Eliminate. According to Thakar, the customer had relied on a managed service provider for much of its vulnerability-management program and sought more direct visibility and automation. Qualys has expanded the availability of QFlex to enterprise customers. Chief Financial Officer Joo Mi Kim described QFlex as a premium offering that gives customers flexibility to adopt and shift among multiple Qualys solutions. She said it currently applies to a small percentage of customers and has not yet materially affected reported financial metrics, but the company believes it can support broader net dollar expansion over time. Kim said channel partners accounted for 54% of second-quarter revenue, compared with 49% a year earlier. Revenue from channel partners grew 22%, while direct revenue was largely unchanged from the second quarter of 2025. Revenue outside the U.S. increased 15%, ahead of 8% domestic growth, with the U.S. representing 55% of revenue and international markets representing 45%. Net dollar expansion rate improved to 105%, from 104% in the prior quarter. Customers with prior-year ETM or CSAM purchases had a 107% net dollar expansion rate, unchanged sequentially. ETM and CSAM represented 12% of total trailing-12-month bookings and 14% of new bookings, compared with 9% and 10%, respectively, a year earlier. Patch management represented 9% of total trailing-12-month bookings and 16% of new bookings. Adjusted EBITDA was $83.8 million, or a 46% margin, compared with a 45% margin a year earlier. Non-GAAP diluted earnings per share were $1.98, while free cash flow was $55.9 million, representing a 31% margin. Operating expenses increased 8% to $73.2 million, with sales and marketing expense rising 14%. Kim said the company plans further sales and marketing investment in the second half, supported by a partner-led go-to-market approach and increased headcount. Qualys spent $76.8 million to repurchase 797,000 shares during the quarter and had $229.8 million remaining under its repurchase authorization at quarter-end. For full-year 2026, Qualys increased its revenue outlook to a range of $732 million to $738 million, representing growth of 9% to 10%, from prior guidance of $721 million to $727 million. The company forecast third-quarter revenue of $185.5 million to $187.5 million, also representing 9% to 10% growth. Qualys now expects full-year non-GAAP EPS of $7.74 to $7.88, up from its prior outlook of $7.44 to $7.65. It forecast third-quarter EPS of $1.91 to $1.98. The company expects full-year EBITDA margin in the mid-40% range, operating expense growth in the low teens and free-cash-flow margin in the low 40% range. Management said strong second-quarter billings reflected a smaller group of customers already advanced in ETM and Risk Operations Center discussions. Kim said the company expects second-half current billings growth of 7% to 8%, as it has not yet seen material changes in sales cycles among customers renewing later in the year. Thakar also pointed to a developing federal opportunity, saying Qualys’ FedRAMP High platform supports both detection and patching. While federal revenue is not currently a large part of the business, he said new government requirements around faster detection, exploit validation and remediation are creating additional customer conversations. Qualys, Inc (NASDAQ: QLYS) is a leading provider of cloud-based security and compliance solutions designed to help organizations streamline their IT security programs. Operating on a unified, modular platform, Qualys offers continuous visibility into global IT assets through a combination of lightweight cloud agents and on-premises scanner appliances. The platform supports an array of security and compliance use cases, enabling real-time detection of vulnerabilities, policy violations and misconfigurations across on-premises, cloud and hybrid environments. The company's flagship Qualys Cloud Platform delivers a suite of integrated applications, including vulnerability management, detection and response (VMDR), policy compliance, web application scanning, file integrity monitoring, asset inventory and container security. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Qualys Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

This article first appeared on GuruFocus. Revenue: $182.2 million, up 11% year-over-year. Adjusted EBITDA: $83.8 million, representing a 46% margin, up from 45% last year. EPS: $1.98 per diluted share for Q2 2026. Free Cash Flow: $55.9 million, representing a 31% margin. Operating Expenses: Increased 8% to $73.2 million, driven by a 14% increase in sales and marketing investments. Net Dollar Expansion Rate: 105%, up from 104% last quarter. Channel Revenue: Made up 54% of total revenues, up from 49% a year ago; channel partner revenues grew 22%. International Revenue: Grew 15%, ahead of domestic growth of 8%; U.S. and international mix was 55% and 45%, respectively. ETM/CSAM Bookings: Combined made up 12% of total bookings and 14% of new bookings on an LTM basis, up from 9% and 10% respectively last year. Patch Management Bookings: Made up 9% of total bookings and 16% of new bookings on an LTM basis, compared to 7% and 16% respectively in Q2 of last year. Total Cloud Bookings: Made up 5% of total LTM bookings in Q2, unchanged from a year ago. Full-Year 2026 Revenue Guidance: Raised to $732 to $738 million, representing growth of 9% to 10%. Full-Year 2026 EPS Guidance: Raised to $7.74 to $7.88. Warning! GuruFocus has detected 4 Warning Signs with EHTH. Is QLYS fairly valued? Test your thesis with our free DCF calculator. Release Date: August 04, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Qualys Inc (NASDAQ:QLYS) delivered strong Q2 2026 results with revenue growth of 11% to $182.2 million, beating expectations and raising full-year revenue guidance to $732-$738 million. The company's AI-native Risk Operations Center (ROC) and new innovations like InstaScan and Agent Insta are gaining traction, enabling customers to detect and remediate vulnerabilities in minutes rather than weeks. Net dollar expansion rate improved to 105% in Q2, up from 104% in the prior quarter, driven by strong upsell execution and adoption of ETM and patch management solutions. Channel partner revenue grew 22% year-over-year, now representing 54% of total revenue, reflecting successful partner-led growth strategy. The company reported strong profitability with adjusted EBITDA margin of 46% and free cash flow margin of 31%, while also raising full-year EPS guidance to $7.74-$7.88. QFlex, the flexible enterprise licensing model, is gaining traction and played a direct role in significant upsells, including a low seven-figure deal with a Global 300 customer. International revenue grew 15% year-over-year, outpacing domestic growth of 8%, indicating strong global demand for Qualys' solutions. The company's guidance assumes a net dollar expansion rate remains at current levels, with only moderate growth contribution from new business in 2026, suggesting limited acceleration in the near term. The departure of the CISO and General Manager of the ETM business creates leadership transition risk, though the company has appointed internal and external replacements. Direct revenue remained largely unchanged year-over-year, indicating a reliance on channel partners for growth and potential challenges in direct sales execution. The company expects second-half current billings growth of only 7-8%, which is below the strong Q2 performance, reflecting caution about sales cycle acceleration for the broader customer base. Operating expenses increased 8% in Q2, with sales and marketing expenses growing 14%, which could pressure margins if revenue growth does not keep pace. The ETM/CSAM combined contribution to new bookings remained flat at 14% sequentially, suggesting that the adoption of these key products is not accelerating as quickly as hoped. The company noted that the post-Mythos environment is still in early stages, with most customer conversations focused on pipeline building rather than immediate spending, indicating potential delays in revenue realization. Q: Can you double-click on how the volume of AI-generated vulnerabilities is showing up in pipeline and urgency, and if CVE volumes were to double again, how could you capture that in your asset pricing model?A: Sumedh Thakar (President and CEO) explained that the focus has shifted to autonomous remediation because organizations can't respond to AI-driven exploits with manual tools. The Risk Operations Center (ROC) with Agent Sarah handles autonomous remediation, Agent Val validates actual exploitability to hyper-prioritize findings, and the newly announced Agent Insta enables instantaneous, scanless detection within minutes of a new advisory. This trio collapses the timeline from disclosure to remediation to under 24 hours with minimal human intervention. The post-Mythos environment has accelerated conversations and pipeline for these capabilities, with customers now seeking feasible autonomous remediation roadmaps. Q: Billings grew 16% with a sizable raise. Is it that the conviction in the business hasn't changed and the market has come toward you, or how much more bullish are you today than three months ago?A: Sumedh Thakar (President and CEO) stated that Qualys was always ahead of the curve with remediation investments, and the advent of AI has simply accelerated what they anticipated. The conviction was always there; now, positive customer conversations are validating the investments and helping move opportunities toward closure. The market is now aligning with Qualys's long-held vision. Q: When you talk to customers about changes in exposure risk management, how much is about covering more assets versus the patch management process changing versus the ROC being on the managed side? What are they buying and what do they intend to buy over time?A: Sumedh Thakar (President and CEO) clarified that customers are focused on remediating what actually matters as fast as possible across all assets. The ROC is a multi-vendor solution, so even if customers use other scan-only tools, Qualys can ingest that data into ETM for a holistic view. The strategy is expanding licenses through ETM while also bringing in data from other tools, with the focus on adding patch management/eliminate capabilities and broadening coverage to ensure remediation succeeds. Q: Given the proximity of Mythos, when do you think the bulk of spending will materialize?A: Sumedh Thakar (President and CEO) noted that enterprise customers tend to think long-term about security program changes rather than knee-jerk spending. CISOs are using the post-Mythos landscape to make the case for sustainable, long-term changes like autonomous remediation programs. Qualys is early in these conversations, and it will take a few quarters to see meaningful budget signals, but the pipeline is building positively. Q: You raised the fiscal year guide from 8% to 10% and talked about reaccelerating long-term growth. Is that new disclosure, and what gives you confidence to say that now?A: Sumedh Thakar (President and CEO) said this isn't newQualys has always focused on long-term double-digit growth through innovation, federal focus, and partner execution. The current conversations give them an opportunity to highlight what they've built, like 150 million patches deployed in the last 12 months with 40 million autonomously. CISOs need to adopt some form of autonomous remediation, and Qualys's track record provides the confidence to discuss accelerating growth. Q: ETM/CSAM made up 14% of new bookings, same as last quarter, and Patch was 16%, also flat. Why isn't the strong commentary showing up more clearly in new bookings, and should we expect that to increase?A: Joo Mi Kim (CFO) explained that percentage contributions to bookings from new customers fluctuate based on what new prospects decide to start with. The current percentages are healthy and validate that Qualys is winning new logos due to innovation in ETM/CSAM and patch management. The focus is on setting customers up to succeed and grow with Qualys, not just on the initial product mix. Q: Are you more willing to utilize margin and take margins down to drive accelerated growth, or how should we think about the growth-profitability trade-off into next year?A: Sumedh Thakar (President and CEO) stated they always focus on ROI and will continue to evaluate investments as opportunities move through the pipeline. Joo Mi Kim (CFO) added that the partner-first strategy is enabling top-line acceleration without double-dipping on investment. Sales and marketing grew 17% in Q1 and 14% in Q2, with further acceleration anticipated in the second half. Q: Current calculated billings was really strong. Anything to call out like early renewals, and what's the directional commentary on CCB growth for Q3 and full year?A: Joo Mi Kim (CFO) pointed to the LTM current billings growth, which accelerated to 10% from 8.5% last quarter, smoothing out quarterly lumpiness. For the second half, they anticipate baseline current billings growth of 7% to 8%, implying full-year current billings growth in line with the 9% to 10% revenue growth guidance. Q: Is TrueConfirm becoming the land-and-expand motion for ETM? Once customers see exploit validation reduce findings, how often does that expand into broader ETM remediation deployments?A: Sumedh Thakar (President and CEO) confirmed that TrueConfirm is a key differentiator. By reducing findings to the 1% that matter and validating actual exploitability, it makes autonomous remediation plausible. If you tell a customer you'll fix 70 confirmed exploitable vulnerabilities autonomously versus a million theoretical ones, the conversation becomes much easier. TrueConfirm is an important part of every conversation with existing VMDR customers, encouraging them to upgrade to ETM and add Eliminate. Q: Have you seen anything different competitively post-Mythos, and are you seeing more competitive displacements?A: Sumedh Thakar (President and CEO) said the problem is the chattertoo many solutions throwing more CVEs at customers. Qualys differentiates with TrueConfirm, which actually validates exploitability, and autonomous remediation that natively patches in hours. Customers are realizing there's a solution that can fix an exploited vulnerability in four hours versus a hodgepodge of tools that won't work in their environment, which is driving the conversations. Q: Can you quantify the federal pipeline and provide more detail on the opportunity there?AFor the complete transcript of the earnings call, please refer to the full earnings call transcript.

Qualys, Inc. QLYS reported second-quarter 2026 non-GAAP earnings of $1.98 per share, which rose 17.9% year over year and beat the Zacks Consensus Estimate by 11.24%. Revenues increased 11% to $182.2 million and surpassed the consensus mark of $179 million by 1.8%. Results benefited from stronger partner-led execution and broader adoption of differentiated platform offerings. The net dollar expansion rate improved to 105% from 104% in the preceding quarter, signaling better upsell performance among existing customers. Qualys topped the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average surprise being 10.82%. Qualys, Inc. price-consensus-eps-surprise-chart | Qualys, Inc. Quote The channel accounted for 54% of total revenues, up from 49% in the year-ago quarter. Channel-partner revenues climbed 22% year over year, while direct revenues remained largely unchanged. The performance reflected Qualys’ continued emphasis on using partners to expand customer reach and support larger platform transactions. International growth also outpaced the domestic business. Revenues outside the United States rose 15% compared with 8% growth in the United States. The geographic revenue mix remained 55% domestic and 45% international. Enterprise TruRisk Management and CyberSecurity Asset Management together represented 12% of last-12-month total bookings, up from 9% a year earlier. The products also contributed 14% of new bookings versus 10% in the prior-year period. Patch Management accounted for 9% of total bookings, up from 7%, and 16% of new bookings. TotalCloud remained at 5% of total bookings. Meanwhile, vulnerability management’s contribution declined to 49% from 54%, indicating a broader mix as customers adopted newer modules. Qualys introduced InstaScan, powered by Agent Insta, to identify exposure findings within minutes of a vulnerability disclosure without requiring another scan. Findings can then move to Agent Val for exploit validation and immediate risk quantification. The company also outlined autonomous remediation capabilities that select patches, controlled deployments or compensating controls based on asset risk. Management said live benchmarking reduced the exposure window from 21 days to minutes and automatically patched 60% of vulnerabilities. TotalAI 2.0 extends visibility across employee AI activity, models, services, code and runtime environments. New capabilities are designed to uncover shadow AI usage and identify AI workloads operating across hybrid and multi-cloud infrastructure. The platform also added posture-management coverage for Anthropic and OpenAI environments. It can evaluate Model Context Protocol tool exploits across more than 50 adversarial scenarios and prioritize AI-related risks through the TruRisk engine. GAAP gross profit rose 12% year over year to $151.9 million, while the gross margin expanded to 83% from 82%. GAAP operating income advanced 20% to $61.9 million, with the operating margin improving to 34% from 31%. Non-GAAP operating income increased 16% to $81.4 million, and the related margin widened to 45% from 43%. Adjusted EBITDA grew 14% to $83.8 million, representing a margin of 46% compared with 45% a year ago. The company ended the second quarter with cash and marketable securities of $703.5 million. Operating cash flow surged 77% year over year to $59.6 million in the second quarter, representing 33% of revenues. Free cash flow totaled $55.9 million, with a margin of 31%. For the first six months of 2026, free cash flow reached $149.5 million, and the margin was 42%. During the quarter, Qualys spent $76.8 million to repurchase 797,000 shares. The company had $229.8 million remaining under its share repurchase authorization at quarter-end. Management increased its full-year 2026 revenue guidance to $732-$738 million from $721-$727 million. The updated range implies growth of 9-10%. Non-GAAP earnings are now projected between $7.74 and $7.88 per share, up from the prior forecast of $7.44-$7.65. For the third quarter, Qualys expects revenues of $185.5-$187.5 million, calling for 9-10% year-over-year growth. Non-GAAP earnings are projected in the range of $1.91-$1.98 per share. Management continues to expect an adjusted EBITDA margin in the mid-40% range and a free cash flow margin in the low-40% range for 2026. Qualys currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Zacks Computer and Technology sector are AppFolio APPF, Amkor Technology AMKR and Amphenol APH, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here. Shares of AppFolio have plunged 14.2% year to date. The Zacks Consensus Estimate for AppFolio’s 2026 earnings is pegged at $6.90 per share, up by 2.2% over the past 30 days, indicating an increase of 30.4% year over year. Shares of Amkor Technology have jumped 41.5% year to date. The Zacks Consensus Estimate for Amkor Technology’s 2026 earnings is pegged at $2.62 per share, up by 17.5% over the past seven days, implying a rise of 74.7% year over year. Amphenol shares have rallied 26.8% year to date. The Zacks Consensus Estimate for Amphenol’s 2026 earnings is pegged at $5.25 per share, up by 7.8% over the past seven days, indicating an increase of 57.2% year over year. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Qualys, Inc. (QLYS) : Free Stock Analysis Report Amphenol Corporation (APH) : Free Stock Analysis Report Amkor Technology, Inc. (AMKR) : Free Stock Analysis Report AppFolio, Inc. (APPF) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management attributes performance to the 'post-Mythos' threat landscape, where AI has collapsed exploit timelines to hours, necessitating a shift from detection to autonomous remediation. The Enterprise TruRisk Management (ETM) solution is positioned as a vendor-neutral 'agentic AI fabric' designed to move beyond theoretical risk scores to validated, dollar-quantified risk reduction. Operational success is increasingly driven by the partner ecosystem, with channel-led revenue growing 22% and now representing 54% of total revenue. The 'Risk Operations Center' (ROC) framework is gaining traction as customers seek to replace manual, siloed processes with a closed-loop system of detection, validation, and patching. Strategic upsells are being enabled by the QFlex model, which provides enterprise customers the flexibility to commit broadly across the platform while shifting investments as needs evolve. Management notes that while vulnerability volumes are surging, the primary bottleneck has shifted to remediation, which Qualys addresses through AI-scored autonomous waves with rollback rates below 0.5%. Full-year 2026 revenue guidance was raised to $732 million–$738 million, assuming net dollar expansion rates remain stable at approximately 105%. Management expects the federal sector to become a more material growth driver, supported by the new FedRAMP High status and CISA mandates for 72-hour remediation cycles. The guidance assumes moderate growth contribution from new business in 2026, with a strategic focus on converting the existing VMDR install base to ETM and remediation modules. Operating expenses are projected to increase in the low teens, primarily driven by headcount expansion in sales, marketing, and R&D to support ROC adoption. Future growth and the reacceleration of long-term business are supported by innovations in AI for security, the adoption of the AI-native ROC powered by ETM, a growing federal pipeline, and strategic levers like QFlex., which extends security posture management to SaaS platforms like Anthropic and OpenAI to secure the emerging AI attack surface. Appointed Shailesh Athalye as Chief Product Solutions Officer and Nathan Smolenski as CISO to ensure continuity following recent executive departures. Introduced 'InstaScan' and 'Agent Insta' to provide 'scanless' detection, aiming to reduce the window between vulnerability disclosure and detection from days to minutes. Share repurchase activity remained aggressive, with $76.8 million spent to buy back 797,000 shares during the second quarter. Management flagged that while AI-driven threats are accelerating pipeline conversations, enterprise budget cycles for autonomous remediation programs typically involve long-term strategic planning rather than knee-jerk spending. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. An analyst raised a hypothetical scenario regarding CVE volumes doubling, prompting management to discuss their focus on autonomous remediation and the Risk Operations Center., the focus is on 'Agent Val' to hyper-prioritize the less than 1% of findings that are actually exploitable. The pipeline is seeing increased urgency for 'Agent Sara' to perform autonomous remediation, as manual human triage cannot keep pace with AI-speed exploits. The 16% billings growth in Q2 was partly driven by a cohort of customers already deep in ROC adoption cycles, though management maintained a conservative 7-8% billings growth outlook for the second half. Management expressed confidence in reaccelerating to long-term double-digit growth by leveraging partner-led execution and the federal market opportunity. Qualys is positioning its FedRAMP High platform as the only solution capable of both detection and patching to meet CISA's 72-hour remediation requirements. The federal business is currently not a material portion of total revenue, representing a significant untapped expansion opportunity for the ROC framework. QFlex is now generally available for enterprise customers and is treated as a premium offering that simplifies the selling motion for multi-module platform deals. While not yet fully reflected in the 105% NDR, management expects QFlex to be a primary driver for increasing share of wallet and long-term expansion rates.

Qualys (QLYS) came out with quarterly earnings of $1.98 per share, beating the Zacks Consensus Estimate of $1.78 per share. This compares to earnings of $1.68 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +11.24%. A quarter ago, it was expected that this maker of security-analysis software would post earnings of $1.81 per share when it actually produced earnings of $1.95, delivering a surprise of +7.73%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Qualys, which belongs to the Zacks Security industry, posted revenues of $182.18 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 2.06%. This compares to year-ago revenues of $164.06 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Qualys shares have added about 16.6% since the beginning of the year versus the S&P 500's gain of 11%. While Qualys has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Qualys was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.91 on $182.4 million in revenues for the coming quarter and $7.57 on $724.39 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Security is currently in the top 34% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Palo Alto Networks (PANW), is yet to report results for the quarter ended July 2026. The results are expected to be released on September 1. This security software maker is expected to post quarterly earnings of $0.97 per share in its upcoming report, which represents a year-over-year change of +2.1%. The consensus EPS estimate for the quarter has been revised 0.2% higher over the last 30 days to the current level. Palo Alto Networks' revenues are expected to be $3.35 billion, up 32.1% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Qualys, Inc. (QLYS) : Free Stock Analysis Report Palo Alto Networks, Inc. (PANW) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research