Revenue and Top-Line Growth
Q1 revenues grew 10% year-over-year to $175.6 million; company raised FY26 revenue guide to $721M–$727M (growth ~8%–9%) and Q2 guide to $177.5M–$179.5M (growth ~8%–9%).
Qualys
· QLYS
May 5th, 2026
Summary
- Earnings Call Date:
- 2026-05-05
- Change Since:
- +26.10%
- Next Earnings Date:
- 2026-08-10
Earnings Call Sentiment
PositiveThe call conveyed a generally positive operational and financial story: solid 10% revenue growth, strong adjusted EBITDA margin (47%), meaningful product innovation (Agent Vail, AI-driven reliability score), third-party recognition, expanding partnerships, and continued cash returns. Offsetting these positives are early-stage adoption of ETM/ATM (cohort small), a flat company-level NRR (~104%), a notable decline in free cash flow margin (53% vs 67% prior year), rising operating investments (S&M +17%), and macro-related sales-cycle risk. On balance the company demonstrated healthy growth and profitability while prudently investing for product and go-to-market expansion; adoption and monetization of new AI-driven offerings remain a near-term execution watch item.
Company Guidance
Qualys guided full‑year 2026 revenue of $721–$727 million (growth of 8–9%, vs. prior $717–$725M) and Q2 revenue of $177.5–$179.5 million (8–9% growth), with no material change assumed to the company net dollar expansion rate (historically ~103–104%; Q1 NRR 104%; ETM/CSAM cohort NRR 107%). Profitability targets include adjusted EBITDA margin in the mid‑40s, free‑cash‑flow margin in the low‑40s, full‑year EPS of $7.44–$7.65 (Q2 EPS $1.73–$1.80), implied mid‑teens OpEx growth (Q1 OpEx was $67.5M, up 8%; S&M +17%), and planned capex of $8–$12M for the year ($1.2–$3.2M in Q2); Q1 operating context: revenue $175.6M (+10%), adjusted EBITDA $83.3M (47% margin) and FCF $93.6M (53% margin).
Strong Profitability and Cash Generation
Adjusted EBITDA was $83.3 million with a 47% margin (unchanged YoY). Q1 EPS was $1.95 diluted and free cash flow of $93.6 million (53% margin).
Channel and International Momentum
Channel made up 52% of revenue (up from 49% a year ago); channel revenue grew 17% while direct grew 3%. International revenue grew 15% vs U.S. growth of 6%; revenue mix U.S. 55% / International 45%.
Product Adoption and Mix Shifts (ATM / CSAM / Patch Management)
ATM+CSAM comprised 11% of total bookings and 14% of new bookings on an LTM basis (up from 8% and 9% YoY). Patch management accounted for 8% of total bookings and 15% of new bookings LTM (vs 7% and 16% prior year).
New Product Availability and AI Innovations
Agent Vail (autonomous exploit validation and remediation powered by TruConfirm) is now generally available; company introduced an AI-powered batch reliability score to predict patch-induced outages and claims <10% rollback rate and Six Sigma accuracy across deployed patches.
Third-Party Recognition and Research Wins
Qualys positioned as a leader in Forrester Wave (CNAPP Q1 2026), won 2026 SC Award for Best Cloud Security Management, leader in 2026 GigaOM report; research team disclosed large-scale vulnerabilities (Track Armor) and additional security research.
Partnerships and Ecosystem Expansion
Nearly two dozen certified MRO partners beginning go-to-market; strategic partnerships with OpenAI and Anthropic for cyber programs; partnership with Converge Insurance for cyber insurance integrations; Q-Flex pilot shows strong early engagement with GA planned later this year.
Capital Returns and Balance Sheet Actions
Continued share repurchases (11.2M shares repurchased to-date, $1.3B returned since 2018) with $306.6M remaining in the repurchase program; Q1 capital expenditures were $1.7M.
Operator
Ladies and gentlemen, thank you for standing by. Welcome to Qualys First Quarter 2026 Investor Call. [Operator Instructions]. Please be advised that today's conference is being recorded. I would like now to turn the conference over to Blair King, Investor Relations. Please go ahead.
Blair King
Thanks, Michelle. Good afternoon, and welcome to Qualys' First Quarter 2026 Earnings Call. Joining me today to discuss our results, Sumedh Thakar, our President and CEO; and Joo Mi Kim, our CFO. Before we get started, I would like to remind you that our remarks today will include forward-looking statements that generally relate to product capabilities, future events or future financial or operating performance. Actual results may materially differ from these statements and factors that could result -- and factors that could cause results to differ materially are set forth in today's press release in our filings with the SEC, including our latest Form 10-Q and 10-K. Any forward-looking statements that we make on this call are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events. During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in today's earnings press release.
And as a reminder, the press release, prepared remarks and investor presentation are all available on the Investor Relations section of our website. So with that, I'd like to now turn the call over to Sumedh.
Sumedh Thakar
Thanks, Blair, and welcome to our first quarter earnings call....
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