Qualys, Inc. Q2 FY2025 earnings call

• Qualys is pioneering a risk operations center category in cybersecurity, with its cloud-native ETM solution integrating data from various tools for proactive risk management.
• Introduced an Agentic AI platform for cyber risk management, with AI agents to automate processes and a marketplace for risk management agents.
• Enhanced TruRisk Eliminate with new capabilities for trending risk analysis, breach impact estimation, and patch risk assessment.
• Launched natively integrated Identity Security Posture Management (ISPM) to address identity-related cyber risks.
• Highlighted customer wins, including a global fintech and a large federal government agency, and received FedRAMP High authorization.
• Invested in partner ecosystem with strategic alliances and certified new mROC partners.
• Appointed May Mitchell as CMO and introduced Qualys platform pricing model (QLUs) for flexible module access.

Revenues grew 10% to $164.1 million in Q2 2025. The channel contributed 49% of total revenues, with channel partner revenues growing 17% and direct revenues growing 4%. Geo-wise, international revenue grew 15% compared to 7% growth in the U.S. U.S. and international revenue mix was 57% and 43%, respectively. In terms of product contribution to bookings, Patch Management and CyberSecurity Asset Management combined made up 16% of total bookings and 26% of new bookings on an LTM basis. Our cloud security solutions, TotalCloud CNAPP, made up 5% of LTM bookings.

• Full-year 2025 revenue expected $656M-$662M (8%-9% growth), Q3 2025 revenue $164.5M-$167.5M (7%-9% growth).
• Full-year 2025 EBITDA margin mid-40s, free cash flow mid-30s. Full-year EPS $6.2-$6.5, Q3 EPS $1.5-$1.6.
• 2025 capital expenditures $7M-$9M, Q3 2025 $1M-$3M.

• Macro economic uncertainty remains a factor, impacting deal scrutiny and new business growth.

Q: Jonathan Ho asked about the macro environment and conservatism in guidance.

A: Sumedh Thakar said the environment is challenging with deal scrutiny, and Joo Mi Kim noted a slight improvement in net dollar expansion rate.

Q: Roger Boyd inquired about billings vs revenue growth.

A: Joo Mi Kim said revenue lags, current billings are a leading indicator, and current billings are expected 6%-8% for the year.

Q: Kingsley Crane asked about Qualys Flex pricing and large deals in the quarter.

A: Sumedh Thakar said early feedback on Flex pricing is positive, and it's early days for large deals under this model.

Q: Trevor Walsh asked about AI agents and building vs buying.

A: Sumedh Thakar discussed Qualys' Agentic AI platform and the dynamic nature of AI in security, focusing on organic development.

Q: Patrick Colville asked about multiproduct platform deals vs single-module purchases.

A: Sumedh Thakar said conversations involve a mix of consolidation and retaining trusted vendors for specific use cases, with ETM helping integrate data from existing tools.