Qualys, Inc. (QLYS Quick QuoteQLYS - Free Report) delivered first-quarter 2026 earnings of $1.95 per share, up 16.8% year over year and beat the Zacks Consensus Estimate by 7.7%. Revenues rose 9.8% year over year to $176 million and surpassed the consensus mark by 1.3%.

First-quarter results reflected benefits from a favorable mix shift toward partners and continued traction in newer platform offerings, alongside steady customer spending behavior. Qualys’ net dollar expansion rate improved to 104% from 103% in the previous quarter.

Qualys’ earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 11.58%.

Qualys Keeps Growth Balanced With High Profitability

Qualys’ business model continued to pair solid top-line expansion with industry-leading profitability. GAAP gross profit soared 11% year over year to $145.6 million, while GAAP gross margin improved to 83% from 82% in the year-ago quarter. GAAP operating income climbed 18% to $60.9 million, while margin expanded 300 basis points to 35%.

On a non-GAAP basis, gross profit soared 11% year over year to $148.3 million, while non-GAAP margin remained flat at 84%. Non-GAAP operating income increased 14% to $80.9 million, and non-GAAP operating margin improved 100 basis points to 46%.

Adjusted EBITDA jumped 11% year over year to $83.3 million. Adjusted EBITDA margin remained flat at 47%, underscoring continued operating leverage, even as the company invested in growth.

Qualys Leans Further on Partners and International Mix

The quarter highlighted Qualys’ strategic emphasis on expanding through its partner ecosystem. Channel contribution increased to 52% of total revenues, up from 49% a year ago, with channel-partner revenues rising 17% year over year and direct revenues up 3%.

Geographically, growth remained stronger outside the United States. International revenues increased 15% year over year versus 6% domestic growth, resulting in a 55% U.S. and 45% international mix for the quarter.

Qualys’ Booking Mix Shows Broader Platform Adoption

Qualys continues to push beyond core vulnerability management into a broader “risk operations” platform narrative. On a last-12-month basis through the first quarter of 2026, vulnerability management remained the largest component of total bookings at 50%, while ETM/CSAM (Enterprise TruRisk Management / CyberSecurity Asset Management) increased to 11%, and patch management represented 8%. TotalCloud accounted for 5% of bookings, with the remainder spread across other platform modules.

Management tied this evolution to its ETM strategy, emphasizing closed-loop workflows that combine exploit validation, risk quantification and remediation inside an AI-driven Risk Operations Center. The company also pointed to Agent Val (powered by TruConfirm) as a key addition intended to narrow the gap between theoretical exposure and verified exploitability.

Qualys’ Balance Sheet & Cash Flow

Qualys ended the quarter with $729.3 million in cash, cash equivalents and marketable securities, up from $696.8 million in the previous quarter. The company generated operating cash flow of $95.3 million and free cash flow of $93.6 million in the first quarter.

Qualys repurchased 505,000 shares worth $53.9 million during the first quarter and has repurchased a cumulative 11.2 million shares valued at $1.3 billion since the program’s inception in February 2018. At the end of the first quarter, the company had approximately $306.6 million remaining under its ongoing share repurchase authorization.

QLYS Raises 2026 Revenue Outlook and Profit View

Management raised its full-year 2026 revenue guidance to a range of $721-$727 million compared with the prior guidance range of $717-$725 million. It now projects non-GAAP earnings in the range of $7.44-$7.65, up from the earlier range of $7.17-$7.45. The Zacks Consensus Estimate for revenues and EPS is currently pegged at $721.5 million and $7.35, respectively.

Management also reiterated expectations for adjusted EBITDA margin in the mid-40s and free cash flow margin in the low 40s for the full year, signaling a continued balance between investing for growth and defending profitability.

For the second quarter, the company expects revenues between $177.5 million and $179.5 million, indicating year-over-year growth of 8-9%. It projects non-GAAP earnings in the range of $1.73-$1.80. The Zacks Consensus Estimate for revenues and EPS is currently pegged at $176.8 million and $1.81, respectively.

Qualys’ Zacks Rank and Stocks to Consider

Currently, QLYS carries a Zacks Rank #3 (Hold).

Some better-ranked stocks worth considering in the broader Zacks Computer and Technology sector are Micron Technology (MU Quick QuoteMU - Free Report) , Broadcom (AVGO Quick QuoteAVGO - Free Report) and NVIDIA (NVDA Quick QuoteNVDA - Free Report) . Micron Technology sports a Zacks Rank #1 (Strong Buy) at present, while Broadcom and NVIDIA each carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Micron Technology’s fiscal 2026 earnings has been revised upward by a penny to $58.36 per share in the past 30 days, suggesting an increase of 604% from fiscal 2025’s reported figure. Micron Technology shares have surged 124.3% year to date (YTD).

The Zacks Consensus Estimate for Broadcom’s fiscal 2026 earnings has moved northward by 9 cents to $11.45 per share over the past 30 days and calls for a year-over-year jump of 67.9%. Broadcom shares have soared 25.8% YTD.

The Zacks Consensus Estimate for NVIDIA’s fiscal 2027 earnings has moved upward by 4 cents to $8.07 per share in the past 30 days, implying a year-over-year improvement of approximately 69.2%. NVIDIA shares have risen 5.3% YTD.