Summary
Qualys reported second-quarter fiscal 2026 revenue of $182.18 million, up 11.0% from the prior-year quarter. GAAP gross profit was $151.93 million, up 12.4%, and GAAP operating income was $61.90 million, up 20.4%. GAAP net income was $52.40 million, up 10.8%, while diluted EPS was $1.50, up 16.3%. Gross margin reached 83.4%, up 1.0 percentage point from the prior-year quarter, and operating margin reached 34.0%, up 2.6 percentage points. The operating margin gain shows that profit growth outpaced revenue growth.
On a year-to-date basis through June 30, 2026, revenue was $357.81 million, up 10.4%. Gross profit was $297.58 million, up 11.8%, and operating income was $122.79 million, up 19.0%. Net income was $103.05 million, up 8.7%, and diluted EPS was $2.91, up 12.4%. Gross margin was 83.2%, up 1.0 percentage point, and operating margin was 34.3%, up 2.5 percentage points. Cash generation was strong. Operating cash flow for the quarter was $59.61 million, up 76.5%, and operating cash flow year to date was $154.91 million, up 8.1%. Capital expenditures were $3.70 million for the quarter, up 178.8%, and $5.37 million year to date, up 59.5%.
Deferred revenue, current portion, stood at $388.08 million, up 9.3% from the prior-year quarter. Remaining performance obligations were $499.91 million, up 15.4%. Net dollar expansion rate was 105% as of June 30, 2026, compared with 104% as of June 30, 2025. Management tied the quarter to product and partnership progress. Qualys TotalCloud received FedRAMP High Authorization sponsored by the U.S. Drug Enforcement Administration. The company also worked with Anthropic Project Glasswing and OpenAI Trusted Access for Cyber, earned recognition from Frost Sullivan in two 2026 Frost Radar reports, announced a joint cyber insurance offering with Converge, and hosted ROCon user conferences in London, Milan, Sydney, and Washington, D.C.
Guidance points to continued growth. For the third quarter of 2026, management expects revenue of $185.5 million to $187.5 million, representing 9% to 10% growth over the same quarter in 2025, and non-GAAP net income per diluted share of $1.91 to $1.98. For the full year fiscal 2026, revenue guidance was raised to $732.0 million to $738.0 million, representing 9% to 10% growth over 2025, compared with the previous range of $721.0 million to $727.0 million. Non-GAAP net income per diluted share guidance for the full year was raised to $7.74 to $7.88 from $7.44 to $7.65. GAAP EPS guidance was also increased.
Risks remain centered on the macro environment and execution. Qualys cited uncertainty from inflationary pressure, high interest rates, significant volatility of global markets, reduced spending, extended sales cycles, tariff and non-tariff trade barriers, economic and regulatory uncertainty, and geopolitical conflicts. Those factors could lead customers to reduce or eliminate spending on IT security. The company also faces competition, the need to retain existing customers and add new ones, dependence on channel partners, exposure to foreign exchange fluctuations, and the challenge of maintaining government authorizations. Sales and marketing expenses increased, which management attributed to headcount, commissions, and incentive compensation, but the company still delivered operating income growth that outpaced revenue growth.
Qualys ended the quarter with a larger deferred revenue and remaining performance obligation base, which supports future revenue recognition. The combination of double-digit revenue growth, expanding gross and operating margins, and strong operating cash flow gives management room to keep investing in AI-driven risk management, federal opportunities, and partner-led sales. The raised full-year revenue and non-GAAP EPS outlook signals confidence. The main question is whether the company can sustain this pace as it faces macro pressure and competition.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2026 | Q1 FY2026 | QoQ | Q2 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $182.2M | $175.6M | +3.7% | $164.1M | +11.0% |
| Gross profit | $151.9M | $145.6M | +4.3% | $135.2M | +12.4% |
| Gross margin | 83.4% | 82.9% | +0.5 pp | 82.4% | +1.0 pp |
| Research & development | $30.7M | $29.0M | +5.7% | $30.2M | +1.4% |
| Sales & marketing | $41.0M | $38.8M | +5.8% | $35.8M | +14.6% |
| General & administrative | $18.3M | $17.0M | +7.9% | $17.7M | +3.4% |
| Total operating expenses | $90.0M | $84.8M | +6.2% | $83.8M | +7.5% |
| Operating income (loss) | $61.9M | $60.9M | +1.7% | $51.4M | +20.4% |
| Operating margin | 34.0% | 34.7% | -0.7 pp | 31.3% | +2.6 pp |
| Net income (loss) | $52.4M | $50.6M | +3.5% | $47.3M | +10.8% |
| Net margin | 28.8% | 28.8% | -0.1 pp | 28.8% | -0.1 pp |
| Diluted EPS | $1.50 | $1.42 | +$0.08 | $1.29 | +$0.21 |
Risks
For the six months ended June 30, 2026, approximately 53% of revenues came from sales through channel partners, and 93% of the $33.9 million year-to-date revenue increase came from partners. These agreements are generally non-exclusive, so partners may favor competitors' products or be lost with limited notice.
Competition is intensifying in vulnerability management, compliance and data security, including from CrowdStrike, Palo Alto Networks, Rapid7 and Tenable, and from Wiz, which the filing notes was acquired by Google in March 2026. Larger rivals with broader suites can bundle competing products at lower prices, pressuring average selling prices.
The sales cycle for the solutions typically ranges from six to twelve months and can exceed eighteen months, and the filing states customer requirements have prolonged the cycle amid the current macroeconomic environment. A single unsuccessful sales effort can consume substantial time and expense without offsetting revenue.
Economic weakness, inflationary pressures, high interest rates, tariff and non-tariff trade barriers and geopolitical conflicts have resulted and may continue to result in decreased revenue and earnings and constrained IT security spending. The filing states longer sales cycles have been experienced since 2023.
AI/machine learning is embedded in the solutions and expected to drive future growth, but the company may fail to implement or market it effectively, and competitors may adopt AI faster. Evolving rules such as the EU Artificial Intelligence Act could require significant changes to AI use and expose the company to new claims and liability.
As of June 30, 2026, approximately 79% of employees were located outside the United States, with 71% in India. For the six months ended June 30, 2026, roughly 26% of revenues and 29% of expenses were in foreign currencies, and total other income, net fell $4.7 million year to date partly on unfavorable foreign currency changes of $2.5 million.
Data privacy and cybersecurity obligations including GDPR, NIS2, the CCPA/CPRA, the UK GDPR and the EU Data Act (applicable September 12, 2025) impose escalating sanctions and potential fines of up to 4% of prior-year revenue. Compliance may require changes to data processing practices, contract terms and data portability measures.
Substantially all solutions are hosted from 15 third-party shared cloud platforms, and the filing states some platforms are not currently redundant and customers may not be rapidly moved between them. Disruption at these facilities could interrupt service delivery, reduce revenues and trigger customer credits or terminations.
Headcount grew from 2,143 employees at the beginning of 2023 to 2,718 as of June 30, 2026, and growth depends on recruiting and retaining qualified sales personnel whose recent and planned hires may not become productive as quickly as expected. Sales and marketing expenses rose $5.2 million in the quarter and $11.3 million year to date largely on personnel costs.
Sales to government entities require FedRAMP authorization and other certifications that may change or be lost, and demand is subject to public sector budgetary cycles and funding authorizations. Losing FedRAMP authorization could preclude contracting with certain U.S. federal customers and breach public sector contracts.
SaaS KPIs
All quarters →Calculated Current Billings
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Non-GAAP Gross Margin
Non-GAAP Operating Income
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Total Subscription Customers
Summary, forecast, risks and KPIs are extracted from QUALYS, INC.'s SEC filings for Q2 FY2026 (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.