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Revenue: $169.9 million, a growth of 10% year-over-year.

Channel Revenue Contribution: 50% of total revenues, up from 47% a year ago.

Channel Partners Revenue Growth: 17%, outpacing direct revenue growth of 5%.

International Revenue Growth: 15%, compared to 7% domestic growth.

Net Dollar Expansion Rate: 104%, unchanged from last quarter.

Adjusted EBITDA: $82.6 million, representing a 49% margin, up from 45% a year ago.

Operating Expenses: Increased by 5% to $64.9 million.

EPS: $1.86, a growth of 19% year-over-year.

Free Cash Flow: $89.5 million, representing a 53% margin, up from 37% in the prior year.

Full Year 2025 Revenue Guidance: $665.8 million to $667.8 million, a growth rate of 10%.

Q4 2025 Revenue Guidance: $172 million to $174 million, representing a growth rate of 8% to 9%.

Full Year 2025 EPS Guidance: $6.93 to $7.00, up from a prior range of $6.20 to $6.50.

Q4 2025 EPS Guidance: $1.73 to $1.80.

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Release Date: November 04, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Qualys Inc (NASDAQ:QLYS) reported solid revenue growth of 10% year-over-year, reaching $169.9 million for Q3 2025.

The company achieved a high adjusted EBITDA margin of 49%, demonstrating strong operational efficiency.

Qualys Inc (NASDAQ:QLYS) is pioneering a new category in cybersecurity with its Agentic AI-powered risk operations center, which centralizes threat response before business impact.

The company has seen early adoption and commercial success of its Enterprise Threat Management (ETM) solution, with several proof-of-concepts converting to commercial deployments.

Qualys Inc (NASDAQ:QLYS) continues to innovate rapidly, expanding its platform capabilities and positioning itself for larger upsell opportunities with new modules and AI-driven solutions.

Net dollar expansion rate remained flat at 104%, indicating challenges in upselling existing customers.

The company faces a challenging environment for new business growth in Q4 2025, with continued budget scrutiny.

Despite strong performance, upsells remain challenging, impacting the overall growth potential.

Qualys Inc (NASDAQ:QLYS) is still in the early stages of penetrating the federal market, which may take time to yield significant results.

The competitive environment is evolving, with new entrants like CrowdStrike claiming to gain market share, potentially impacting Qualys Inc (NASDAQ:QLYS)'s growth trajectory.

Q: Can you elaborate on the pricing strategy for ETM and the potential upsell opportunities? A: Sumedh Thakar, President and CEO, explained that the ETM pricing includes cybersecurity Asset Management and Agentic AI capabilities. The upsell potential lies in transitioning customers from ETM to TrueRisk Eliminate, which includes patch management and mitigation, allowing for a comprehensive risk management approach. The pricing strategy anticipates up to a 100% uplift from VMDR to ETM, with further upsell opportunities to Eliminate for remediation capabilities.

Q: How is Qualys navigating the competitive landscape, especially with new entrants like CrowdStrike? A: Sumedh Thakar noted that while competitors focus on discovering more vulnerabilities, Qualys emphasizes prioritization and remediation. The company is leveraging its Risk Operations Center to help customers narrow down critical threats and automate remediation, which differentiates Qualys from competitors who may not offer integrated remediation solutions.

Q: What are the expectations for net dollar retention and its impact on growth? A: Joo Mi Kim, CFO, stated that the net dollar expansion rate remains at 104%. The focus is on demonstrating the value of ETM to existing customers to drive upsell and cross-sell opportunities, which could positively impact the net dollar retention rate and overall growth.

Q: How is Qualys prioritizing R&D investments across its initiatives? A: Sumedh Thakar highlighted that Qualys is leveraging AI to enhance R&D efficiency, achieving a 20-25% gain in productivity. The focus is on strategic investments in AI and sales and marketing to support growth initiatives, with a geographic shift in hiring towards India to optimize R&D spending.

Q: What is the strategy for expanding the ETM solution and its market impact? A: Sumedh Thakar explained that ETM is positioned as a comprehensive risk management solution, integrating asset management and exploit validation. The strategy involves upselling existing VMDR customers to ETM and further to TrueRisk Eliminate, with a focus on business risk quantification and remediation. The ETM solution is expected to drive significant growth and customer adoption.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.