Summary
Qualys closed fiscal 2025 with a solid fourth quarter. Revenue rose 10.1% to $175.3 million from the prior-year quarter, and full-year revenue reached $669.1 million, also up 10.1%. Profitability grew faster than the top line. Fourth-quarter GAAP operating income rose 19.1% to $58.8 million, and net income rose 20.9% to $53.2 million. For the full year, operating income was $222.0 million, up 18.6%, net income was $198.3 million, up 14.2%, and diluted earnings per share was $5.44, up 17.0%.
Margins improved on both a quarterly and annual basis. Fourth-quarter gross margin was 83.4%, up 1.6 points, and the quarterly operating margin was 33.6%, up 2.5 points. Full-year gross margin was 82.8%, up 1.2 points, and the full-year operating margin was 33.2%, up 2.4 points. Cash generation stood out. Fourth-quarter operating cash flow rose 58.5% to $75.7 million, and full-year operating cash flow rose 26.8% to $309.4 million. Capital expenditures fell 87.6% to $0.7 million in the quarter and 59.5% to $5.0 million for the year. Non-GAAP free cash flow for 2025 was $304.4 million.
Backlog metrics send a mixed message. Deferred revenue of $417.4 million at December 31, 2025 was up 5.5% from the prior-year quarter, and remaining performance obligations of $518.0 million were up 19.2%. Calculated current billings of $204.9 million grew 6%, well below the 13% growth recorded in the year-ago quarter. The net dollar expansion rate was 103% for both 2025 and 2024. Management called the quarter another period of solid growth and pointed to early QFlex traction, broader engagements with large federal agencies, deeper Enterprise TruRisk Management adoption and partner-led execution. Product news included ETM Identity, TruLens, TruConfirm, the TotalAppSec launch, and FedRAMP High authorization for the GovCloud platform. The managed Risk Operations Center partner alliance now counts 15 members.
The balance sheet supports continued capital returns. Cash, cash equivalents and marketable securities totaled $696.8 million at December 31, 2025, including $155.3 million held outside the United States. Qualys spent $183.4 million on share repurchases during 2025. The board added $200.0 million to the repurchase program, lifting total authorization to $1.6 billion, and $160.5 million remained available at year end.
Guidance points to slower growth ahead. First-quarter 2026 revenue is guided to $172.5 million to $174.5 million, which represents 8% to 9% growth over the same quarter of 2025. Full-year 2026 revenue is guided to $717.0 million to $725.0 million, or 7% to 8% growth over 2025. Non-GAAP net income per diluted share is guided to $1.76 to $1.83 for the first quarter and $7.17 to $7.45 for the full year. The full-year estimate assumes roughly 35.4 million weighted average diluted shares and a 20% non-GAAP effective tax rate.
Spending remains a watch item. Sales and marketing costs grew faster than revenue in 2025, driven by headcount, commissions and marketing programs, and capital expenditures are expected to land between $8.0 million and $12.0 million in 2026. Management listed the usual risks: macroeconomic uncertainty, inflation, high interest rates, tariff and non-tariff trade barriers, extended sales cycles and geopolitical conflicts that could push customers to trim security budgets. Competition, customer budgeting cycles, the ability to maintain government authorizations and shifts in the effective tax rate also made the list. The full-year tax provision rose partly because the One Big Beautiful Bill Act reduced the foreign-derived intangible income deduction benefit.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2025 | Q3 FY2025 | QoQ | Q4 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $175.3M | $169.9M | +3.2% | $159.2M | +10.1% |
| Gross profit | $146.1M | $142.1M | +2.8% | $130.2M | +12.3% |
| Gross margin | 83.4% | 83.6% | -0.3 pp | 81.8% | +1.6 pp |
| Research & development | $29.0M | $28.9M | +0.1% | $28.3M | +2.3% |
| Sales & marketing | $39.8M | $35.3M | +12.7% | $34.1M | +16.7% |
| General & administrative | $18.6M | $17.9M | +3.6% | $18.4M | +1.1% |
| Total operating expenses | $87.3M | $82.1M | +6.3% | $80.7M | +8.1% |
| Operating income (loss) | $58.8M | $60.0M | -1.9% | $49.4M | +19.1% |
| Operating margin | 33.6% | 35.3% | -1.7 pp | 31.0% | +2.5 pp |
| Net income (loss) | $53.1M | $50.3M | +5.6% | $44.0M | +20.9% |
| Net margin | 30.3% | 29.6% | +0.7 pp | 27.6% | +2.7 pp |
| Diluted EPS | $1.46 | $1.39 | +$0.07 | $1.18 | +$0.28 |
| Customers | 10,000 | — | — | 10,000 | ±0.0% |
Risks
MD&A states uncertainty from inflationary pressure, high interest rates, reduced spending, extended sales cycles, tariffs and geopolitical conflicts could reduce customer spending on IT security and harm long-term business.
The sales cycle for solutions typically ranges from six to twelve months but can exceed eighteen months, and complexity of customer requirements has prolonged it, making large deal timing hard to forecast and causing revenue variability.
QLYS competes with CrowdStrike, Palo Alto Networks, Rapid7, Tenable and private vendors including Wiz, which has announced a pending acquisition by Google; larger competitors can bundle products and pressure pricing.
The company incorporates AI/machine learning into its solutions, but competitors may do so more quickly or successfully, and evolving rules such as the EU Artificial Intelligence Act may require significant changes to AI use.
For the year ended December 31, 2025, approximately 49% of revenues were derived through channel partners; agreements are generally non-exclusive, partners may favor competitors, and loss of a large partner could reduce sales.
Privacy and data protection obligations include GDPR, NIS2, CCPA/CPRA and the EU Data Act; noncompliance can lead to fines up to the greater of 4% of prior-year annual revenue or EUR 20 million, plus cross-border transfer restrictions.
As of December 31, 2025, approximately 78% of employees were outside the United States, with 70% in India; for the year ended December 31, 2025, about 22% of revenues and 31% of expenses were in foreign currencies, exposing QLYS to FX, regulatory and geopolitical risks.
Substantially all solutions are hosted from 15 third-party shared cloud platforms in multiple countries; some platforms are not redundant, and disruption or failure to renew provider agreements could interrupt service delivery.
Growth depends on recruiting and retaining qualified sales personnel; competition for highly skilled personnel is intense, and recent hires may not become productive as quickly as desired, which could harm revenue growth.
The One Big Beautiful Bill Act (OBBBA), OECD Pillar Two, digital services taxes and tax audits could increase QLYS's effective tax rate or result in additional tax liabilities in future periods.
Sales to government entities require certifications including FedRAMP; loss or change of authorization could preclude or limit contracts with U.S. federal customers and breach public sector contracts.
The company has incorporated AI/machine learning into its technology and may continue to do so, which may create additional cybersecurity risks or increase them, including technical error, security breaches and incidents, and AI may be used in attacks.
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 Q4 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.