Qualys, Inc. reported third‑quarter 2025 results that surpassed consensus expectations, with revenue climbing 10% year‑over‑year to $169.9 million and GAAP net income rising 9% to $50.3 million. Non‑GAAP net income reached $67.4 million, a 16% increase, and diluted earnings per share were $1.39 (GAAP) and $1.86 (non‑GAAP), beating analyst estimates of $1.24 and $1.56 respectively. The company’s GAAP gross margin expanded to 84% from 81% a year earlier, while non‑GAAP gross margin rose to 85% from 83%, reflecting a higher mix of subscription‑based services and disciplined cost management.
Revenue growth was driven by a 17% increase in channel partner sales, which now account for 50% of total revenue, and by strategic federal wins that added $12 million in new contracts. The Enterprise TruRisk Management (ETM) platform and the Risk Operations Center (ROC) continued to gain traction, with ETM deployments up 22% quarter‑over‑quarter. A new flexible pricing model, Q‑Flex, secured a multi‑year commitment from a major customer, boosting annual bookings and reinforcing the company’s pricing power.
Margin expansion was largely a result of higher‑margin subscription revenue and operational leverage. GAAP operating income rose 33% to $60.0 million, or 35% of revenue, while non‑GAAP operating income climbed 21% to $80.0 million, or 47% of revenue. The company’s focus on AI‑driven automation in product development and risk operations helped keep support costs in check, allowing the firm to maintain a 5‑percentage‑point lift in operating margin despite increased sales and marketing spend.
Management raised its full‑year 2025 revenue guidance to $665.8‑$667.8 million, up 10% from the prior $656.0‑$662.0 million range, and lifted the Q4 revenue outlook to $172.0‑$174.0 million. Full‑year non‑GAAP EPS guidance was increased to $6.93‑$7.00 from $6.20‑$6.50, and GAAP EPS guidance was raised to $5.23‑$5.30 from $4.47‑$4.77. The revisions reflect confidence in continued demand for the ETM platform, the momentum of the ROC, and the expanding partner ecosystem, all of which are expected to sustain growth through the end of the year.
CEO Sumedh Thakar highlighted the quarter as a “significant milestone” that validates the company’s investment in AI and partner‑driven growth. “Our results demonstrate that the combination of the ETM platform, ROC deployments, and flexible pricing is resonating with customers across the public and private sectors,” he said. CFO Joo Mi Kim noted that channel partner revenue grew 17% and that the company’s adjusted EBITDA margin remained strong, underscoring disciplined cost control.
Analysts responded positively to the earnings beat and the upward guidance. The non‑GAAP EPS beat of $0.30, or 19%, was cited as a key driver of the favorable reception, while the 10% revenue growth and margin expansion reinforced confidence in the company’s operating model. Management’s emphasis on AI integration and federal wins was seen as a strategic advantage in a competitive cybersecurity market.
Headwinds remain in the form of budget scrutiny in the public sector and increasing competition from larger cloud‑security vendors. Qualys is addressing these challenges by deepening its partner network, expanding its FedRAMP High authorization for the GovCloud platform, and continuing to innovate with AI‑powered agents, positioning the company to sustain its growth trajectory in the coming quarters.
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