Qualys — Financial Results

Revenue Grew 10% to $669 Million, Driven Largely by International and Partner Channels

Revenue climbed $61.6 million year-over-year. The majority of that growth — 76% — came from existing customers spending more, while 24% came from new customers. Notably, 63% of the revenue increase came from outside the U.S., and 80% came through channel partners (resellers and managed security providers) rather than direct sales, signaling that the partner network is becoming an increasingly important growth engine.

Profitability Improved Across the Board, with Net Income Up to 30% of Revenue

The business became slightly more profitable in 2025. Net income (what the company actually earned after all costs and taxes) rose by $24.6 million. Adjusted EBITDA (a measure of operating profitability before taxes, depreciation, and stock compensation) held steady at 47% of revenue, which is a high margin for a software company.

A New Tax Law Raised the Tax Bill by 34%

The One Big Beautiful Bill Act, signed in July 2025, changed how certain R&D deductions and international income are taxed. This pushed Qualys's tax bill up by $12.4 million — a meaningful headwind that partly offset otherwise strong earnings growth. The company says it will continue monitoring how this law affects future results.

Customer Retention Held Steady but Growth from Existing Customers Is Modest

The net dollar expansion rate — which measures how much more existing customers spent compared to the prior year — stayed at 103% for both 2025 and 2024. A rate above 100% means existing customers are collectively spending more over time, but 103% is a relatively modest expansion rate, suggesting most revenue growth is coming from adding new customers rather than dramatically upselling existing ones.

Operating Cash Flow Jumped 27%, and the Balance Sheet Remains Strong

Cash generated from operations rose sharply from $244 million to $309 million. The company holds $696.8 million in cash and investments with no mention of debt, giving it significant financial flexibility to invest, acquire, or return capital to shareholders.

Share Buybacks Accelerated, with $200 Million More Authorized

In 2025, Qualys spent $183.4 million repurchasing its own shares, up from $139.9 million in 2024. Shortly after year-end, the board authorized an additional $200 million in buybacks, bringing the total program to $1.6 billion. Share repurchases reduce the number of shares outstanding, which can increase earnings per share over time — a signal that management believes the stock is a worthwhile use of the company's cash.