QUALYS, INC. Q1 FY2025 earnings call

• Qualys is entering a new era in cybersecurity risk management powered by real-time data, automation, and AI, with strong Q1 performance in revenue, profitability, and cash flow. - Highlighted the Risk Operations Center (ROC) vs traditional SOC, and Qualys' ETM solution, TotalAI, and TruRisk capabilities for LLMs and policy audit. - Notable customer wins include a Global 100 media company and a Global 50 financial services company. - Partner-led deal registration increased, with 6 partners certified for mROC services, and progress on FedRAMP High certification.

Revenues grew 10% to $159.9 million. The channel contributed 49% of total revenues, up from 45% a year ago. Geo-wise, international revenue grew 16% compared to 6% domestic. US and international revenue mix was 57% and 43% respectively. Patch Management and Cybersecurity Asset Management combined made up 15% of total bookings and 24% of new bookings on an LTM basis. TotalCloud CNAPP accounted for 5% of LTM bookings.

• Full-year 2025 revenue expected $648M-$657M (7%-8% growth). Second quarter 2025 revenue $159.7M-$162.7M (7%-9% growth). - Full-year 2025 EBITDA margin low-to-mid 40s, free cash flow margin mid 30s. Full-year EPS $6-$6.3, up from prior range. Second quarter 2025 EPS $1.4-$1.5. - 2025 capital expenditures $8M-$11M, Q2 $1.5M-$3M.

• Macro-economic uncertainty impacting the upsell environment. - Competition in the cybersecurity market poses challenges.

Q: Jonathan Ho asked about macro-environment and confidence in tightening guidance range.

A: Sumedh Thakar said cybersecurity remains important but there's more scrutiny on spend, with longer decision cycles.

Q: Patrick Colville asked about competitor entering network-based VM.

A: Sumedh Thakar said Qualys focuses on prioritizing and remediating findings, not just finding them, and can consume data from competitors.

Q: Kingsley Crane asked about EPS guidance change.

A: Joo Mi Kim said guidance was informed by annual planning, and margin contraction not as significant due to traction with partners.

Q: Rudy Kessinger asked about LTM 500K plus ACV customer count drop.

A: Sumedh Thakar said win rates stable and gross retention improved.

Q: Trevor Walsh asked about MROC rollout with partners.

A: Sumedh Thakar said focusing on partners investing in the vision, with 6 launch partners.

Q: Joshua Tilton asked about billings growth.

A: Joo Mi Kim said current billings in line with annual revenue growth guidance.

Q: Shrenik Kothari asked about TotalCloud CNAPP and audit space.

A: Sumedh Thakar said early days with cloud solution, customers have different requirements.

Q: Yun Kim asked about MSP partner ramp and segments.

A: Sumedh Thakar said partners ramping up, targeting large enterprises with multiple security solutions.

Q: Rob Owens asked about geographic mix.

A: Sumedh Thakar said international is more partner-oriented, working on improving North America business with partners.

Q: Oscar Saavedra asked about partner performance and guidance.

A: Joo Mi Kim said satisfied with partner progress, guidance assumes similar progress considering macro budget scrutiny.