Qualys — Third Quarter 2026 Earnings Summary

Financial Performance:

• Q3 2026 revenue increased 11% year-over-year to $188.0 million, compared to $169.9 million in Q3 2025.
• GAAP net income rose 14% to $57.2 million ($1.62 per diluted share) from $50.3 million ($1.39 per diluted share) in the prior year quarter.
• Non-GAAP net income increased 11% to $74.8 million ($2.12 per diluted share) from $67.4 million ($1.86 per diluted share) in the prior year quarter.
• GAAP gross profit grew 10% to $156.7 million; GAAP gross margin was 83% (down from 84% in Q3 2025).
• Non-GAAP gross profit increased 10% to $159.3 million; non-GAAP gross margin remained flat at 85%.
• GAAP operating income increased 11% to $66.3 million; operating margin held steady at 35%.
• Non-GAAP operating income rose 9% to $87.1 million; non-GAAP operating margin decreased to 46% from 47%.
• Adjusted EBITDA increased 9% to $89.9 million; Adjusted EBITDA margin was 48% (down from 49%).
• Operating cash flow increased 13% to $101.8 million; operating cash flow margin was 54% (up from 53%).
• Nine-month 2026 revenue reached $545.9 million, up from $493.8 million in the same period of 2025.
• Nine-month 2026 GAAP net income was $160.2 million, compared to $145.2 million in 2025.
• Nine-month 2026 non-GAAP net income was $213.6 million, compared to $190.1 million in 2025.
• Nine-month 2026 operating cash flow was $256.7 million, compared to $233.7 million in 2025.
• Nine-month 2026 non-GAAP free cash flow was $249.5 million, compared to $229.5 million in 2025.
• Deferred revenue (current) increased to $411.958 million at September 30, 2026, from $401.127 million at December 31, 2025.
• Cash and cash equivalents were $357.2 million at September 30, 2026, compared to $250.3 million at December 31, 2025.
• Stock-based compensation for the quarter was $20.2 million, compared to $19.4 million in Q3 2025.

Guidance and Future Outlook:

• Full-year 2026 revenue guidance raised to $736.9 million–$738.9 million, representing 10% growth over 2025 (previously $732.0 million–$738.0 million).
• Full-year 2026 GAAP net income per diluted share guidance raised to $6.08–$6.15 (previously $5.76–$5.90).
• Full-year 2026 non-GAAP net income per diluted share guidance raised to $8.07–$8.14 (previously $7.74–$7.88).
• Q4 2026 revenue guidance set at $191.0 million–$193.0 million, representing 9%–10% growth over Q4 2025.
• Q4 2026 GAAP net income per diluted share guidance set at $1.57–$1.64.
• Q4 2026 non-GAAP net income per diluted share guidance set at $2.05–$2.12.
• Guidance assumes an effective income tax rate of 21% for GAAP and 20% for non-GAAP in Q4 2026.
• Full-year 2026 guidance assumes an effective income tax rate of 22% for GAAP and 20% for non-GAAP.
• Guidance is based on approximately 35.5 million weighted average diluted shares outstanding.

Business Segments and Product Lines:

• Launched InstaScan, powered by Agent Insta in Enterprise TruRisk Management, enabling scanless vulnerability detection within minutes of advisory disclosure.
• Advanced TruRisk Eliminate capabilities with AI-powered Patch Reliability Scoring, wave-based autonomous remediation, and peer-to-peer patching.
• Expanded TotalAI with governance capabilities to reduce shadow AI, flag abnormal model behavior, and demonstrate controls across development and runtime environments.
• TotalAI enhancements include discovery of AI agents and MCP servers, red-team testing against OWASP Top 10 and EU AI Act standards, and audit-ready evidence generation.
• Qualys received the highest score for best current offering in the 2026 Forrester Wave for Proactive Security Platforms.
• Named a Leader in the IDC MarketScape for Worldwide DAST.
• Earned the highest-rated Champion designation in the Info-Tech Research Group Emotional Footprint for Vulnerability Management.
• Named a Leader in the Frost and Sullivan Radar for Cloud Workload Protection Platforms.

Market and Competitive Landscape:

• Qualys positions itself as a leader in cloud-native cyber risk management with a vendor-neutral platform focused on fixing security issues rather than just reporting them.
• The company serves more than 10,000 organizations globally, including most of the Fortune 100.
• Management cites accelerating demand for AI-native Risk Operations Center driven by a partner-first strategy.
• The platform unifies asset visibility, exposure management, risk prioritization, and remediation across hybrid, multi-cloud, endpoint, and AI environments.

Risks and Challenges:

• Forward-looking statements are subject to risks including customer acceptance of new solutions, real or perceived defects, and customer budgeting cycles.
• Risks include competition from other products, fluctuations in currency exchange rates, and unexpected changes in effective income tax rates.
• Actual results may differ from projections due to risks related to platform performance, ability to retain customers, and general market conditions.
• The company notes that non-GAAP guidance does not reconcile to GAAP guidance due to the significant impact of reconciling items like stock-based compensation and amortization.

Management Commentary and Tone:

• CEO Sumedh Thakar stated the company delivered "another quarter of strong revenue growth and profitability."
• Management expressed confidence in long-term growth, citing increasing adoption of AI-native solutions and a competitive position in pre-breach risk management.
• The tone emphasized the value of a platform that fixes security issues and the benefits of the partner-first strategy.

Other Key Points:

• Nine-month 2026 cash used in financing activities was $132.9 million, primarily driven by $185.6 million in repurchases of common stock.
• Nine-month 2026 proceeds from exercise of stock options were $65.6 million.
• Nine-month 2026 payments for taxes related to net share settlement of equity awards were $19.5 million.
• Nine-month 2026 proceeds from issuance of common stock through employee stock purchase plan were $6.7 million.
• Nine-month 2026 purchases of property and equipment were $7.2 million.
• Nine-month 2026 impairment of non-marketable securities was $2.0 million.
• Non-GAAP calculated current billings for Q3 2026 were $211.9 million, a 14% increase year-over-year.