Qualys — Income Statement, Cash Flows & Balance Sheet

Is Qualys profitable?

Qualys is solidly profitable and growing, with revenue and net income both accelerating meaningfully.

Qualys has grown revenue at a steady double-digit pace while simultaneously expanding its already impressive gross margins. Operating income is growing faster than revenue, meaning the business is becoming more efficient as it scales — a healthy sign for a subscription software company.

The effective tax rate jumped sharply in 2025, though this appears tied to the timing of deferred tax items rather than a structural problem.

The statutory federal rate is 21%, so Qualys still benefits from tax credits (R&D credits, foreign-derived income deductions). However, the effective rate has risen each year, and the 2025 jump reflects a swing in deferred tax items. This didn't prevent strong net income growth, but investors should monitor whether the rate stabilises going forward.

Where does Qualys's revenue come from?

Partners are growing faster than direct sales and now represent nearly half of total revenue.

Partner-led revenue has grown dramatically faster than direct over the past two years. This suggests Qualys is successfully expanding its reach through resellers and technology partners, which can be a cost-efficient way to scale — though partner sales are typically made at a discount to list price.

International revenue is growing faster than domestic and represents a rising share of the business.

International markets are becoming an increasingly important growth engine, expanding at roughly twice the pace of the U.S. business over the past two years.

Does Qualys generate cash?

Qualys is a strong cash generator, with operating cash flow outpacing net income and accelerating in 2025.

Operating cash flow significantly exceeds net income, a hallmark of quality subscription businesses (customers pay upfront, boosting cash before revenue is recognised). The big jump in free cash flow (operating cash minus capex) in 2025 was helped by a sharp drop in capital spending, suggesting the heavy infrastructure investment cycle of prior years is winding down.

Qualys returns most of its cash to shareholders through buybacks, with no dividends paid.

The company has consistently bought back stock each year, gradually reducing the share count. Shortly after year-end, the board authorised another $200 million in repurchases, signalling continued confidence in the business.

How strong is Qualys's balance sheet?

Qualys carries no debt and holds a large, growing pile of cash and high-quality investments.

Qualys has no financial debt whatsoever. Its combined cash and investment portfolio grew by over $120 million in a single year, funded entirely by the business's own earnings. The securities are invested conservatively in U.S. Treasuries, government agency bonds, and high-grade corporate bonds.

Deferred revenue — a liability representing prepaid customer subscriptions — is large and growing, which is actually a positive signal for future recognised revenue.

The largest "liability" on Qualys's balance sheet is money customers have already paid for future services — a very different kind of liability from debt. The $518 million in remaining contracted obligations (including amounts not yet billed) gives good visibility into near-term revenue.