Cybersecurity cloud platform provider Qualys (NASDAQ:QLYS) announced better-than-expected revenue in Q4 CY2025, with sales up 10.1% year on year to $175.3 million. The company expects next quarter’s revenue to be around $173.5 million, close to analysts’ estimates. Its non-GAAP profit of $1.87 per share was 4.9% above analysts’ consensus estimates.

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Revenue: $175.3 million vs analyst estimates of $173.2 million (10.1% year-on-year growth, 1.2% beat)

Adjusted EPS: $1.87 vs analyst estimates of $1.78 (4.9% beat)

Adjusted Operating Income: $80.13 million vs analyst estimates of $76.61 million (45.7% margin, 4.6% beat)

Revenue Guidance for Q1 CY2026 is $173.5 million at the midpoint, roughly in line with what analysts were expecting

Adjusted EPS guidance for the upcoming financial year 2026 is $7.31 at the midpoint, missing analyst estimates by 1.3%

Operating Margin: 33.6%, up from 31% in the same quarter last year

Billings: $204.9 million at quarter end, up 5.6% year on year

Market Capitalization: $4.63 billion

Originally developed to address the growing complexity of IT security in the cloud era, Qualys (NASDAQ:QLYS) provides a cloud-based platform that helps organizations identify, manage, and protect their IT assets from cyber threats across on-premises, cloud, and mobile environments.

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, Qualys grew its sales at a 13% compounded annual growth rate. Although this growth is acceptable on an absolute basis, it fell short of our standards for the software sector, which enjoys a number of secular tailwinds.

We at StockStory place the most emphasis on long-term growth, but within software, a half-decade historical view may miss recent innovations or disruptive industry trends. Qualys’s recent performance shows its demand has slowed as its annualized revenue growth of 9.9% over the last two years was below its five-year trend.

This quarter, Qualys reported year-on-year revenue growth of 10.1%, and its $175.3 million of revenue exceeded Wall Street’s estimates by 1.2%. Company management is currently guiding for a 8.5% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 7.4% over the next 12 months, a slight deceleration versus the last two years. This projection is underwhelming and suggests its products and services will see some demand headwinds.

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Billings is a non-GAAP metric that is often called “cash revenue” because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract.

Qualys’s billings came in at $204.9 million in Q4, and over the last four quarters, its growth was underwhelming as it averaged 8.3% year-on-year increases. This performance mirrored its total sales and suggests that increasing competition is causing challenges in acquiring/retaining customers.

The customer acquisition cost (CAC) payback period measures the months a company needs to recoup the money spent on acquiring a new customer. This metric helps assess how quickly a business can break even on its sales and marketing investments.

It’s expensive for Qualys to acquire new customers as its CAC payback period checked in at 62.6 months this quarter. The company’s slow recovery of its sales and marketing expenses indicates it operates in a highly competitive market and must invest to stand out, even if the return on that investment is low.

It was encouraging to see Qualys beat analysts’ EBITDA expectations this quarter. We were also glad its EPS guidance for next quarter slightly exceeded Wall Street’s estimates. On the other hand, its full-year EPS guidance slightly missed and its revenue guidance for next year suggests growth will stall. Zooming out, we think this was a mixed quarter. The stock remained flat at $126.91 immediately following the results.

Is Qualys an attractive investment opportunity at the current price? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.