Summary
Qualys reported second quarter fiscal 2025 revenue of $164.1 million, up 10.3% from the prior-year quarter. GAAP gross profit rose 10.5% to $135.2 million, and gross margin was 82.4%, up 0.2 percentage points. GAAP operating income increased 6.9% to $51.4 million, but operating margin slipped to 31.3%, down 1.0 percentage point. GAAP net income was $47.3 million, up 8.0%, and diluted EPS was $1.29, up 10.3%. Non-GAAP net income reached $61.2 million, or $1.68 per diluted share, while Adjusted EBITDA was $73.4 million. The company ended the quarter with current deferred revenue of $354.97 million, up 9.4% year over year, and remaining performance obligations of $433.24 million, up 18.7%. Those figures suggest a healthy pipeline, though calculated current billings of $152.2 million grew 8%.
The revenue increase came mostly from existing customers. Of the total increase, 95% came from customers existing before April 1, 2025, and 5% from new customers. Foreign customers contributed 62% of the increase, while partners contributed 77%. Direct customers made up 51% of total revenue, and partners made up 49%. Qualys launched its inaugural managed Risk Operations Center Alliance with partners BlueVoyant, GuidePoint Security, ImagineX, NetHive, The Tech Collective, and Teksalah. The company expanded its TotalAI solution with advanced AI security capabilities, multi-modal protections, and internal Large Language Model scanning. It enhanced its Policy Audit solution to streamline evidence collection and support continuous audit readiness. Industry recognition included being named a Leader in the 2025 KuppingerCole Analysts AG Leadership Compass for Attack Surface Management and for Cloud Native Application Protection Platforms with TotalCloud. TotalCloud and Vulnerability Management, Detection, and Response applications won SC Awards Europe. The public sector push continued with an expanded Washington D.C. office and a second annual Public Sector Cyber Risk Conference. Net dollar expansion rate was 104% as of June 30, 2025, compared with 102% as of June 30, 2024.
Management issued third quarter fiscal 2025 revenue guidance of $164.5 million to $167.5 million, which represents 7% to 9% growth over the same quarter in 2024. Third quarter non-GAAP net income per diluted share is expected to be $1.50 to $1.60. For the full fiscal year 2025, Qualys raised revenue guidance to $656.0 million to $662.0 million, representing 8% to 9% growth over 2024, compared with the previous range of $648.0 million to $657.0 million. Non-GAAP net income per diluted share guidance for the full year is $6.20 to $6.50, up from the previous range of $6.00 to $6.30. Management also increased its full-year GAAP net income per diluted share outlook.
Cash generation was uneven. Operating cash flow for the second quarter fell 32.2% to $33.8 million, while six-month operating cash flow rose 5.9% to $143.4 million. Capital expenditures were $1.33 million in the quarter, up 29.3%, and $3.36 million for the six months, up 9.4%. Non-GAAP free cash flow for the six months was $139.994 million. The company faces familiar risks. Macroeconomic uncertainty, inflationary pressure, high interest rates, reduced spending, extended sales cycles, tariffs, and geopolitical conflicts could pressure customer budgets. Competition, customer acceptance of new solutions, retention of existing customers, government authorizations, and tax rate fluctuations are also cited. The One Big Beautiful Bill Act was enacted on July 4, 2025, after the quarter closed, and Qualys does not expect it to have a material impact on its estimated annual effective rate in 2025.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2025 | Q1 FY2025 | QoQ | Q2 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $164.1M | $159.9M | +2.6% | $148.7M | +10.3% |
| Gross profit | $135.2M | $131.0M | +3.2% | $122.3M | +10.5% |
| Gross margin | 82.4% | 81.9% | +0.5 pp | 82.2% | +0.2 pp |
| Research & development | $30.2M | $29.2M | +3.8% | $27.1M | +11.5% |
| Sales & marketing | $35.8M | $32.7M | +9.6% | $32.1M | +11.4% |
| General & administrative | $17.7M | $17.4M | +1.8% | $15.0M | +18.4% |
| Total operating expenses | $83.8M | $79.2M | +5.8% | $74.2M | +12.9% |
| Operating income (loss) | $51.4M | $51.8M | -0.7% | $48.1M | +6.9% |
| Operating margin | 31.3% | 32.4% | -1.0 pp | 32.3% | -1.0 pp |
| Net income (loss) | $47.3M | $47.5M | -0.5% | $43.8M | +8.0% |
| Net margin | 28.8% | 29.7% | -0.9 pp | 29.4% | -0.6 pp |
| Diluted EPS | $1.29 | $1.29 | ±$0.00 | $1.17 | +$0.12 |
Risks
MD&A warns that macroeconomic uncertainty, including inflationary pressure, high interest rates, reduced spending, tariff and non-tariff trade barriers, and geopolitical conflicts, could lead current and potential customers to reduce or eliminate IT security spending. The Risk Factors also state adverse economic conditions and reduced IT spending have resulted and may result in decreased revenue and earnings.
Qualys says its sales cycle is long and unpredictable, typically six to twelve months but can exceed eighteen months, and increased customer requirements have prolonged the sales cycle. MD&A also cites extended sales cycles as part of the current macroeconomic environment, which can delay revenue recognition and make quarterly results vary.
The company faces intense competition from larger vendors such as CrowdStrike, Palo Alto Networks, Rapid7, and Tenable, as well as private providers including Wiz, which has announced a pending acquisition by Google. Competitors with broader suites can bundle competing products and pressure pricing, potentially reducing Qualys' gross profits and average sales prices.
For the six months ended June 30, 2025, approximately 49% of revenues came through channel partners, and 83% of the revenue increase was from partners. Partner agreements are generally non-exclusive, and loss of one or more larger partners could adversely affect sales.
As a security provider, Qualys may be targeted for cyberattacks and has experienced security incidents; some shared cloud platforms are not currently redundant. A breach or service disruption could harm reputation, lead to customer losses, regulatory investigations, and potential loss of FedRAMP authorization.
Qualys has incorporated AI/machine learning into its solutions and expects to rely on it for future growth, but competitors may incorporate AI more quickly or successfully. The evolving EU Artificial Intelligence Act and other AI regulations may require significant changes and expose Qualys to additional claims and reputational harm.
As of June 30, 2025, approximately 78% of employees were outside the United States, with 69% in India, while for the six months ended June 30, 2025, about 25% of revenues and 27% of expenses were in foreign currencies. This creates exposure to foreign exchange fluctuations, foreign labor and tax laws, and geopolitical instability.
Growth depends on recruiting and retaining qualified sales personnel, but competition is intense and recent hires may not become productive as quickly as desired. Sales and marketing expenses increased 11% for both the three and six months ended June 30, 2025, and if these investments do not generate increased revenues, operating results could be negatively impacted.
SaaS KPIs
All quarters →Calculated Current Billings
Adjusted EBITDA
Non-GAAP Gross Margin
Subscription Customers
Non-GAAP Operating Income
Calculated Current Billings Growth
Summary, forecast, risks and KPIs are extracted from QUALYS, INC.'s SEC filings for Q2 FY2025 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.