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    QLYS
    Earnings call· Jun 2026(Q2 FY26)

    QUALYS Q2 FY26 earnings call QLYS

    Aug 4, 2026 Source

    Executive summary

    Qualys Q2 FY26 — Strong Revenue Growth Driven by AI-Native Risk Operations and QFlex Adoption

    Qualys delivered a strong quarter, driven by robust revenue growth and expanding profitability, fueled by increasing adoption of its AI-native Enterprise TruRisk Management (ETM) solution. The company is strategically leveraging its partner ecosystem and QFlex model to accelerate platform expansion and address the rapidly evolving AI-driven threat landscape with autonomous risk operations and remediation capabilities. Management expressed confidence in reaccelerating long-term growth, emphasizing the urgency for customers to adopt AI-speed detection and autonomous remediation.

    Highlights

    5
    • Revenue grew 11% to $182.2 million, exceeding prior guidance.

    • Adjusted EBITDA margin expanded to 46% from 45% a year ago, reaching $83.8 million.

    • Non-GAAP EPS was $1.98 per diluted share, with full-year guidance raised to $7.74-$7.88.

    • Net dollar expansion rate improved to 105%, up from 104% last quarter.

    • Channel partners increased contribution to 54% of total revenues, growing 22%.

    Concerns

    3
    • Adversary's playbook rewritten by AI, collapsing exploit timelines

    • Inadequacy of Traditional CTEM Solutions

    • Massive surge in exploitable vulnerability volume creating an impossible backlog

    Guidance & targets

    14
    CategoryTargetConfidence
    Revenue
    $732M-$738M
    high materiality
    High
    Revenue Growth
    9%-10%
    high materiality
    High
    Revenue
    $185.5M-$187.5M
    medium materiality
    High
    Revenue Growth
    9%-10%
    medium materiality
    High
    EBITDA Margin
    mid-40s
    high materiality
    High
    Operating Expenses Increase
    low teens
    medium materiality
    High
    Free Cash Flow Margin
    low 40s
    high materiality
    High
    EPS
    $7.74-$7.88
    high materiality
    High
    EPS
    $1.91-$1.98
    medium materiality
    High
    Capital Expenditures
    $8M-$12M
    medium materiality
    High
    Capital Expenditures
    $1M-$2.5M
    low materiality
    High
    Net Dollar Expansion Rate
    remains at current levels
    medium materiality
    High
    New Business Contribution
    moderate growth contribution
    low materiality
    Medium
    Current Billings Growth
    7%-8% YoY
    medium materiality
    Medium

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Channel Partners
    Increased contribution from 49% a year ago.
    Contribution to total revenues: 54%
    22%
    Direct Sales
    Compared to Q2 of last year.
    largely unchanged
    International
    Growth was ahead of the domestic business.
    Revenue mix: 45%
    15%
    U.S.
    Domestic business growth.
    Revenue mix: 55%
    8%

    Operational metrics

    19
    Revenue
    $182.2Mup 11% YoY
    Q2 FY26

    Exceeded expectations.

    Adjusted EBITDA
    $83.8M
    Q2 FY26

    Reflecting scalable and sustainable business model.

    Non-GAAP EPS
    $1.98
    Q2 FY26
    Free cash flow margin
    42%compared to 43% in the prior year
    H1 FY26
    Capital expenditures
    $3.7M
    Q2 FY26

    Investment of cash generated from operations.

    Share repurchase amount
    $76.8M
    Q2 FY26

    Used to repurchase outstanding shares.

    Shares repurchased
    797,000
    Q2 FY26

    Outstanding shares repurchased.

    Remaining share repurchase authorization
    $229.8M
    as of Q2 FY26 end
    Net dollar expansion rate
    105%up from 104% last quarter
    Q2 FY26

    Overall upsell execution improved.

    Net dollar expansion rate
    107%consistent to last quarter
    Q2 FY26
    Operating expenses
    $73.2Mincreased by 8%
    Q2 FY26

    Driven by investments in sales and marketing.

    Sales and marketing expenses growth
    14%
    Q2 FY26

    Investment in sales and marketing.

    Sales and marketing expenses growth
    17%
    Q1 FY26

    Investment in sales and marketing.

    Customers spending $500,000 or more
    229growing 8% from a year ago
    Q2 FY26
    Patches deployed
    150M
    last 12 months
    Autonomous patches deployed
    40M
    last 12 months
    Rollback rates
    below 0.5%
    Q2 FY26

    Delivered by AI-driven patch reliability score and resiliency snapshots.

    Window of exposure reduction
    from 21 days to minutes
    Q2 FY26

    In live benchmarking with new innovations.

    Auto patch percentage
    60%
    Q2 FY26

    Of vulnerabilities in live benchmarking.

    Industry KPIs

    6
    MetricValueDetails
    Capacity CAPEX$3.7MUSD
    Revenue growth$182.2MUSD
    Bookings billings10%%
    Customer account count229customers
    Operating FCF margin rule of 4046%%
    Net revenue net dollar retention105%%

    Orderbook & backlog

    5
    ETM/CSAM Bookings12%Q2 FY26 LTM

    up from 9% last year

    Percentage of total bookings

    ETM/CSAM New Bookings14%Q2 FY26 LTM

    up from 10% last year

    Percentage of new bookings

    Patch Management Bookings9%Q2 FY26 LTM

    up from 7% last year

    Percentage of total bookings

    Patch Management New Bookings16%Q2 FY26 LTM

    consistent with last year

    Percentage of new bookings

    TotalCloud Bookings5%Q2 FY26 LTM

    unchanged from a year ago

    Percentage of total LTM bookings

    Product announcements

    3
    ProductTypeDetails
    InstaScanlaunch
    TotalAI 2.0launch
    Autonomous Zero-Day Remediationupdate

    Deals & partnerships

    2
    Global 300 customerConsolidation of security stack and operationalization of ROClow seven-figureannual

    Adopted VMDR, ETM, TruRisk Eliminate, TotalAI, and other modules via QFlex. Managed complex data-intensive environment spanning on-prem, multi-cloud, and LLMs in production. Consolidated Qualys and third-party data into unified risk fabric.

    European health care companyConsolidation of vulnerability program across 140+ locationssix-figure

    Previously relied on a managed service provider. Chose Qualys, adopting VMDR, ETM, and TruRisk Eliminate via QFlex. ROC automation was entry point, remediation was immediate proof of value.

    Risks & headwinds

    3
    Adversary's playbook rewritten by AI, collapsing exploit timelinescurrent and ongoing

    exploit timelines compressed to hours, disclosure turning into compromise before patch exists

    Mitigation: Qualys' AI-native risk operations (InstaScan, Agent Val, Agent Sara) for autonomous detection, validation, and remediation at AI speed.

    Inadequacy of Traditional CTEM Solutionscurrent and ongoing

    losing critical time at every handoff, fundamentally inadequate now that AI accelerated the threat landscape

    Mitigation: Qualys' ETM solution focuses on autonomously detecting, validating, quantifying, and remediating risk in multi-vendor environments.

    Massive surge in exploitable vulnerability volume creating an impossible backlogcurrent and ongoing

    massive surge in exploitable vulnerability volume

    Mitigation: AI-native ROC designed to turn backlog into a continuously clear queue at the speed of modern attacks, with autonomous zero-day remediation.

    What to watch in Q3 FY26

    5

    AI-native ROC adoption and ETM upsells

    next quarter
    Currentgrowing AI-native ROC adoption powered by our ETM solution
    TargetContinued acceleration and translation into bookings

    Why it matters

    Indicates the success of Qualys' core strategy to address AI-driven threats and drive platform expansion.

    As ROC adoption accelerates and these capabilities continue to compound, we remain laser-focused on driving ETM adoption throughout our VMDR customer base and positioning Qualys for larger upsell opportunities over time.

    Q&A highlights

    6

    How are AI-generated vulnerabilities driving urgency and pipeline for InstaScan/ROC, and how does Qualys capture this in its per-asset pricing model if CVE volumes double?

    Sumedh explained that the focus is on autonomous remediation, as manual tools are inadequate for AI-speed exploits. InstaScan, Agent Val, and Agent Sara on the ETM platform provide a path to remediate exploitable risks within 24 hours with minimal human intervention. This is driving conversations and POCs, accelerating opportunities, though it's still early in the budget cycle.

    You cannot go and tell your management as a security leader that you're going to respond to autonomous AI exploits with more manual tools that are e-mailing each other on what needs to be fixed, et cetera.

    asked by William Kingsley Crane · answered by Sumedh Thakar

    3 min read6 chapters

    Detailed Narrative

    01

    AI-Native Risk Operations Center (ROC) and ETM

    Qualys is positioning its Enterprise TruRisk Management (ETM) solution as an AI-native Risk Operations Center (ROC), designed to move beyond theoretical exposure to autonomous quantification of actual exploitable risk and remediation. This approach is deemed critical in the new AI-accelerated threat landscape, where exploit timelines are collapsing, and traditional Continuous Threat Exposure Management (CTEM) solutions are considered inadequate due to their tendency to generate more findings without effective remediation. The company emphasizes that defenders must autonomously detect vulnerabilities at AI speed, validate exploitability, quantify risk, and remediate before adversaries act.

    02

    New Product Capabilities for AI for Security

    At Black Hat, Qualys introduced major new capabilities. InstaScan, powered by Agent Insta, offers continuous, instantaneous, and scanless AI-speed detection, reducing vulnerability detection time from days to minutes. This innovation is integrated with Agent Val for instant exploit validation and Agent Sara for autonomous zero-day remediation. Agent Sara orchestrates continuous, vendor-agnostic patching with high reliability, achieving rollback rates below 0.5% and reducing the window of exposure from 21 days to minutes, auto-patching 60% of vulnerabilities in live benchmarking.

    03

    Security for AI with TotalAI 2.0

    Qualys also launched TotalAI 2.0 to secure the AI infrastructure enterprises are building. This solution provides visibility into the full AI estate, from workforce to workload and code to runtime, through new sensors that detect shadow AI activity. It extends posture management coverage to SaaS platforms like Anthropic and OpenAI, identifies security gaps in AI code, and remediates with runtime guardrails. All AI risks, from GPU to supply chain to prompt injection attacks, are scored and prioritized through the TruRisk platform.

    04

    Customer Wins and QFlex Traction

    The company highlighted two significant customer wins demonstrating the value of its platform. A Global 300 customer adopted VMDR, ETM, TruRisk Eliminate, and TotalAI in a low seven-figure QFlex annual upsell, consolidating its security stack and reducing exposure windows. A European healthcare company, previously reliant on an MSP, consolidated its vulnerability program with a six-figure QFlex upsell, gaining autonomy and reducing costs. QFlex, now generally available for enterprise customers, is proving to be a strategic lever for platform expansion and upsells.

    05

    Executive Team Changes and Strategic Focus

    Sumedh Thakar announced key executive appointments to ensure continuity and accelerate strategic initiatives. Shailesh Athalye was appointed Chief Product Solutions Officer to lead product strategy and the ETM business, leveraging his deep institutional knowledge. Nathan Smolenski joined as the new Chief Information Security Officer. These changes are intended to scale the platform, accelerate ROC adoption, and reinforce Qualys' competitive differentiation and market opportunity, particularly within the growing federal pipeline.

    06

    Competitive Differentiation and Market Opportunity

    Qualys believes its continuous innovation in AI for security and security for AI, coupled with growing AI-native ROC adoption, reinforces its competitive differentiation. The company sees a sharpened market opportunity, particularly with the federal government's focus on fast detection and remediation, and is confident in reaccelerating long-term growth. Management noted that while other solutions generate 'chatter' with more CVEs, Qualys differentiates by providing confidence in exploitability through TruConfirm and actual autonomous remediation.

    AI-generated summary of the company’s earnings call. Not investment advice.