We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is Qualys (QLYS) Down 1.2% Since Last Earnings Report?
Read MoreHide Full Article
It has been about a month since the last earnings report for Qualys (QLYS - Free Report) . Shares have lost about 1.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Qualys due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Qualys posted mixed second-quarter 2024 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same. However, both top and bottom lines marked a significant year-over-year improvement.
The company reported non-GAAP earnings of $1.52 per share, which beat the Zacks Consensus Estimate of $1.31. Qualys’ second-quarter non-GAAP earnings also came well ahead of its previous guidance of $1.27-$1.35 per share.
The bottom line increased 19.7% from the year-ago quarter’s earnings of $1.27 per share. The robust year-over-year growth was primarily driven by higher revenues, improved efficiency and increased financial income.
Qualys’ second-quarter revenues increased 8.4% year over year to $148.71 million but marginally missed the Zacks Consensus Estimate of $148.76 million. The year-over-year increase in the top line was achieved by leveraging the partner ecosystem, partially offset by a decline in billings due to customers transitioning from Qualys on Microsoft Defender to TotalCloud CNAPP.
Quarter in Detail
During the second quarter, sales from channel partners increased 17%, outpacing the 2% sales growth registered in direct selling. Revenue contribution mix from channel partners was 46% in the second quarter, while direct selling accounted for the remaining 54%.
Geography-wise, sales in the United States grew 5% year over year and contributed approximately 58% to the second-quarter total revenues. Accounting for the remaining 42% of second-quarter total revenues, international sales increased 14%.
Qualys’ net dollar expansion rate on a constant currency basis for the second quarter was 102%.
QLYS’ non-GAAP gross profit increased 11% year over year to $124.9 million, while the non-GAAP gross margin expanded 200 basis points (bps) to 84% in the second quarter. Non-GAAP operating income grew 11% to $65.9 million, while the non-GAAP operating margin improved 100 bps to 44%, mainly driven by better cost management.
Adjusted EBITDA for the second quarter rose 6% to $69.9 million, while adjusted EBITDA margin contracted 100 bps to 47%.
Balance Sheet
Qualys ended the April-June quarter with cash and cash equivalents and marketable securities of $393.2 million.
During the second quarter, the company generated operating cash flow and free cash flow of $49.8 million and $48.8 million, respectively. In the first half of 2024, it generated operating cash flow and free cash flow of $135.3 million and $132.3 million, respectively.
Guidance
For the third quarter, Qualys expects revenues between $149.8 million and $151.8 million, indicating year-over-year growth of 5-7%. It projects non-GAAP earnings in the range of $1.28-$1.36 per share.
For 2024, QLYS expects revenues in the range of $597.5-$601.5 million, down from the previous guidance of $601.5-$608.5 million. The company projects its non-GAAP earnings per share in the range of $5.46-$5.62, up from the previous guidance of $5.06-$5.30.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
The consensus estimate has shifted 13.33% due to these changes.
VGM Scores
At this time, Qualys has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
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 trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Qualys has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is Qualys (QLYS) Down 1.2% Since Last Earnings Report?
It has been about a month since the last earnings report for Qualys (QLYS - Free Report) . Shares have lost about 1.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Qualys due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Qualys Q2 Earnings Beat Estimates, Revenues Rise Y/Y
Qualys posted mixed second-quarter 2024 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same. However, both top and bottom lines marked a significant year-over-year improvement.
The company reported non-GAAP earnings of $1.52 per share, which beat the Zacks Consensus Estimate of $1.31. Qualys’ second-quarter non-GAAP earnings also came well ahead of its previous guidance of $1.27-$1.35 per share.
The bottom line increased 19.7% from the year-ago quarter’s earnings of $1.27 per share. The robust year-over-year growth was primarily driven by higher revenues, improved efficiency and increased financial income.
Qualys’ second-quarter revenues increased 8.4% year over year to $148.71 million but marginally missed the Zacks Consensus Estimate of $148.76 million. The year-over-year increase in the top line was achieved by leveraging the partner ecosystem, partially offset by a decline in billings due to customers transitioning from Qualys on Microsoft Defender to TotalCloud CNAPP.
Quarter in Detail
During the second quarter, sales from channel partners increased 17%, outpacing the 2% sales growth registered in direct selling. Revenue contribution mix from channel partners was 46% in the second quarter, while direct selling accounted for the remaining 54%.
Geography-wise, sales in the United States grew 5% year over year and contributed approximately 58% to the second-quarter total revenues. Accounting for the remaining 42% of second-quarter total revenues, international sales increased 14%.
Qualys’ net dollar expansion rate on a constant currency basis for the second quarter was 102%.
QLYS’ non-GAAP gross profit increased 11% year over year to $124.9 million, while the non-GAAP gross margin expanded 200 basis points (bps) to 84% in the second quarter. Non-GAAP operating income grew 11% to $65.9 million, while the non-GAAP operating margin improved 100 bps to 44%, mainly driven by better cost management.
Adjusted EBITDA for the second quarter rose 6% to $69.9 million, while adjusted EBITDA margin contracted 100 bps to 47%.
Balance Sheet
Qualys ended the April-June quarter with cash and cash equivalents and marketable securities of $393.2 million.
During the second quarter, the company generated operating cash flow and free cash flow of $49.8 million and $48.8 million, respectively. In the first half of 2024, it generated operating cash flow and free cash flow of $135.3 million and $132.3 million, respectively.
Guidance
For the third quarter, Qualys expects revenues between $149.8 million and $151.8 million, indicating year-over-year growth of 5-7%. It projects non-GAAP earnings in the range of $1.28-$1.36 per share.
For 2024, QLYS expects revenues in the range of $597.5-$601.5 million, down from the previous guidance of $601.5-$608.5 million. The company projects its non-GAAP earnings per share in the range of $5.46-$5.62, up from the previous guidance of $5.06-$5.30.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
The consensus estimate has shifted 13.33% due to these changes.
VGM Scores
At this time, Qualys has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
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 trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Qualys has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.