A month has gone by since the last earnings report for Qualys (QLYS Quick QuoteQLYS - Free Report) . Shares have added about 22.9% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Qualys due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent drivers for Qualys, Inc. before we dive into how investors and analysts have reacted as of late.

Qualys Q1 Earnings Beat Estimates on Channel Strength and ETM Uptake

Qualys delivered first-quarter 2026 earnings of $1.95 per share, which increased 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.

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.

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.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a downward trend in estimates review.

VGM Scores

At this time, Qualys has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for value investors.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Qualys has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Qualys is part of the Zacks Security industry. Over the past month, Varonis Systems (VRNS Quick QuoteVRNS - Free Report) , a stock from the same industry, has gained 21.4%. The company reported its results for the quarter ended March 2026 more than a month ago.

Varonis reported revenues of $173.13 million in the last reported quarter, representing a year-over-year change of +26.9%. EPS of $0.06 for the same period compares with $0.00 a year ago.

Varonis is expected to post earnings of $0.01 per share for the current quarter, representing a year-over-year change of -66.7%. Over the last 30 days, the Zacks Consensus Estimate has changed +1%.

Varonis has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.