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what it is
Qualys sells cloud software that helps companies find weak spots in their computers, servers, apps, and cloud systems.
how it gets paid
Last year Qlys made $669M in revenue. vulnerability management was the main engine at $248M, or 37% of sales.
why it's growing
Revenue grew 10.1% last year. The company's strong performance in 2025 has been attributed to the continued expansion of network security applications.
what just happened
The quarter was about the earnings beat: $1.87 EPS versus the $1.30 estimate cited in the source pack.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
75/100 earnings predictability — reasonably predictable
19.9x trailing p/e — priced about right
27.5% return on capital — every dollar works hard here
xvary composite: 69/100 — average
What they do
Qualys sells cloud software that helps companies find weak spots in their computers, servers, apps, and cloud systems.
Qualys sits inside your security plumbing. Once it is scanning your laptops, servers, cloud workloads, and containers, ripping it out is a chore. That stickiness shows up in the math: net profit margin is 37.0% and return on capital is 27.5%, based on.
How they make money
$669M
annual revenue · their business grew +10.1% last year
vulnerability management
$248M
cloud workload security
$141M
patch management
$114M
policy compliance
$94M
web app and endpoint security
$72M
The products that matter
vulnerability management and compliance
Cloud Security Platform
$669M · 100% of revenue
It is the whole business: $669M in revenue last year, over 10,300 customers, and no second engine to offset a slowdown.
10,300 customers
Key numbers
37.0%
net margin
Net margin → profit after all expenses → so what: Qualys keeps 37 cents from every sales dollar, versus many software peers that keep far less.
13.8x
forward p/e
P/E → price divided by earnings → so what: at $99.71 versus $7.25 fiscal 2026 EPS, you are paying 13.8 times next year's profit estimate.
27.5%
return on capital
Return on capital → profit earned on the money used in the business → so what: every $1 invested in the business produces about $0.28 in operating returns.
+82%
18-month upside
Target price → where analysts think the stock can trade → so what: the 18-month target is $181 versus $99.71 today, an upside case of about $81 per share.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- price stability 40 / 100
- net profit margin 37.0% — keeps 37 cents of every dollar in revenue
- return on equity 28% — $0.28 profit for every $1 investors have put in
B++ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in QLYS 3 years ago → it's now worth $12,180.
The index would have given you $13,920.
source: institutional data · total return
What just happened
beat estimates
The quarter was about the earnings beat: $1.87 EPS versus the $1.30 estimate cited in the source pack.
Value Line expected about $171M in December-quarter revenue and $1.30 in EPS. The reported quarter beat on EPS by 43.85%, while gross margin stayed extremely high at 82.7%.
$171M
revenue
$1.87
eps
82.7%
gross margin
the number that mattered
43.85% was the earnings surprise, which tells you profitability is still outrunning expectations even as revenue growth cools.
-
qualys should post solid results in the december quarter.
-
we think the cloud-based security provider will deliver earnings of $1.30 per share on revenues around $171 million, reflecting increases of 12% and 7%, respectively, from a year ago.the company's strong performance in 2025 has been attributed to the continued expansion of network security applications, growing array of information technology (it) systems, and internet-connected devices.
-
the company is benefitting from accelerating demand for unified cybersecurity platforms.the company's cloud-based architecture, built around the qualys cloud platform and its modular suite of applications, gives it strong operating leverage as organizations consolidate point solutions into more integrated security ecosystems. qualys has been steadily broadening its relevance beyond traditional vulnerability management with expanded capabilities in attack-surface management (easm), cloud security posture management (cspm), endpoint detection, and web application scanning. the increasing adoption of devsecops (development, security, operations) workflows provides an additional growth vector, as the company's tools help enterprises embed security earlier in the development pipeline.
-
long-term growth prospects are bright.qualys' scalable SaaS model positions it to attract recurring revenue from both new customers and expansions within existing accounts. the company is also likely to benefit from organizations increasingly looking to rationalize cybersecurity spending.
-
qualys' single-platform model should offer an attractive combination of lower total cost of ownership and operational efficiency.international expansion, growth among mid-market companies, and development of additional cloud-native modules could further support mid-to-high single-digit revenue growth over the next several years.
source: company earnings report, 2026
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What could go wrong
the #1 risk is growth deceleration in the cloud security platform.
med
2026 growth reset
Management guided to $717M–$725M in 2026 revenue. That points to roughly 7–8% growth, down from 35.5% last year.
The stock already dropped 13% after that guide. If actual quarters come in below it, the market has to reset expectations again.
med
single-platform concentration
Qualys gets 100% of its $669M revenue from one platform. There is no second segment to smooth out demand, pricing, or product risk.
That means any weakness in vulnerability management demand hits the full income statement, not just one division.
med
margin has to stay elite
A 36.4% net margin and 46% Q4 non-GAAP operating margin buy a lot of investor patience. They do not buy infinite patience.
If growth cools to 7–8% and margins slip at the same time, the market stops paying for software-like economics.
With 100% of revenue tied to one platform and 2026 growth guided to 7–8%, the stock now depends on margin staying exceptional while demand slows.
source: institutional data · regulatory filings · risk analysis
Pay attention to
metric
whether revenue tracks above the 7–8% guide
Last year revenue grew 35.5%. This year management guided to $717M–$725M. If early quarters start above that pace, the selloff thesis weakens.
calendar
q1 2026 earnings report
Expected around May 5, 2026. You want to see whether the first quarter confirms the slower outlook or starts repairing it.
trend
operating margin after the growth slowdown
Q4 non-GAAP operating margin was 46%. If that stays elevated while revenue cools, Qualys still has a quality argument.
risk
buyback pace versus business momentum
The $200M repurchase program matters less than demand trends. If buybacks become the main story, the operating story is not strong enough.
Analyst rankings
short-term outlook
top 20%
momentum score 2 — in human-speak, analysts still think the stock can outperform over the next 12 months.
risk profile
average
stability score 3 — this sits near the middle of the pack on risk, not in the bunker and not in the casino.
chart momentum
top 20%
technical score 2 — price action still looks better than the recent narrative feels.
earnings predictability
75 / 100
The company usually delivers numbers close to expectations. That matters more now that growth has slowed.
source: institutional data
Institutional activity
institutions have been net buying for 2 consecutive quarters — 216 buyers vs. 197 sellers in 3q2025. total institutional holdings: 35.5M shares. net buying for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$115
$247
$100
current price
$181
target midpoint · +82% from current · 3-5yr high: $265 (+95% · 18% ann'l return)
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