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Qualys Q3 Earnings Beat: Will Upbeat Guidance Lift the Stock?
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Qualys (QLYS - Free Report) reported third-quarter 2024 non-GAAP earnings of $1.56 per share, which surpassed the Zacks Consensus Estimate of $1.33 and came above management’s guidance of $1.28-$1.36.
The bottom line also witnessed a robust improvement from the year-ago quarter’s earnings of $1.51. The robust year-over-year growth was primarily driven by higher revenues, improved efficiency and increased financial income.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Qualys’ third-quarter revenues increased 8% year over year to $153.9 million and surpassed the Zacks Consensus Estimate of $150.56 million. The year-over-year increase in the top line was achieved by leveraging the partner ecosystem.
During the third quarter, sales from channel partners increased 17%, outpacing the 1% sales growth registered in direct selling. Revenue contribution mix from channel partners was 47% in the third quarter, while direct selling accounted for the remaining 53%.
Geography-wise, sales in the United States grew 5% year over year and contributed approximately 58% to the third-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 third quarter was 103%.
QLYS’ non-GAAP gross profit increased 8% year over year to $127.8 million, while the non-GAAP gross margin remained flat at 83% in the third quarter. Non-GAAP operating income grew 5% to $66.1 million, while the non-GAAP operating margin contracted 100 basis points (bps) to 43%, mainly due to an increase in sales and marketing expense.
Adjusted EBITDA for the third quarter rose 1% to $69.7 million, while adjusted EBITDA margin contracted 300 bps to 45%.
Balance Sheet
Qualys ended the quarter with cash and cash equivalents and marketable securities of $386.3 million. During the third quarter, the company generated operating cash flow and free cash flow of $61 million and $57.6 million, respectively.
Guidance
For the fourth quarter, Qualys expects revenues between $154.5 million and $157.5 million, indicating year-over-year growth of 7-9%. It projects non-GAAP earnings in the range of $1.28-$1.38.
For 2024, QLYS expects revenues in the range of $602.9-$605.9 million, up from the previous guidance of $597.5-$601.5 million. The company projects its non-GAAP earnings per share in the range of $5.81-$5.91, up from the previous guidance of $5.46-$5.62.
The consensus mark for Shopify’s 2024 earnings has been revised upward by 13 cents to $1.12 per share over the past 90 days, indicating a 51.31% year-over-year increase. The long-term expected earnings growth rate for the stock stands at 39.2%. Shares of SHOP have gained 2.7% in the year-to-date period.
The Zacks Consensus Estimate for Fortinet’s 2024 earnings has been revised upward by a penny to $2.01 per share in the past 60 days, indicating an increase of 23.31% on a year-over-year basis. It has a long-term earnings growth expectation of 16.3%. Shares of FTNT have jumped 40.8% in the year-to-date period.
The Zacks Consensus Estimate for CyberArk’s fiscal 2024 earnings has been revised upward by a penny to $2.30 per share in the past seven days, suggesting a year-over-year increase of 105.4%. It has a long-term earnings growth expectation of 33.4%. Shares of CYBR have plunged 21.3% in the year-to-date period.
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Qualys Q3 Earnings Beat: Will Upbeat Guidance Lift the Stock?
Qualys (QLYS - Free Report) reported third-quarter 2024 non-GAAP earnings of $1.56 per share, which surpassed the Zacks Consensus Estimate of $1.33 and came above management’s guidance of $1.28-$1.36.
The bottom line also witnessed a robust improvement from the year-ago quarter’s earnings of $1.51. The robust year-over-year growth was primarily driven by higher revenues, improved efficiency and increased financial income.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Qualys’ third-quarter revenues increased 8% year over year to $153.9 million and surpassed the Zacks Consensus Estimate of $150.56 million. The year-over-year increase in the top line was achieved by leveraging the partner ecosystem.
Qualys, Inc. Price, Consensus and EPS Surprise
Qualys, Inc. price-consensus-eps-surprise-chart | Qualys, Inc. Quote
Quarter in Detail
During the third quarter, sales from channel partners increased 17%, outpacing the 1% sales growth registered in direct selling. Revenue contribution mix from channel partners was 47% in the third quarter, while direct selling accounted for the remaining 53%.
Geography-wise, sales in the United States grew 5% year over year and contributed approximately 58% to the third-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 third quarter was 103%.
QLYS’ non-GAAP gross profit increased 8% year over year to $127.8 million, while the non-GAAP gross margin remained flat at 83% in the third quarter. Non-GAAP operating income grew 5% to $66.1 million, while the non-GAAP operating margin contracted 100 basis points (bps) to 43%, mainly due to an increase in sales and marketing expense.
Adjusted EBITDA for the third quarter rose 1% to $69.7 million, while adjusted EBITDA margin contracted 300 bps to 45%.
Balance Sheet
Qualys ended the quarter with cash and cash equivalents and marketable securities of $386.3 million. During the third quarter, the company generated operating cash flow and free cash flow of $61 million and $57.6 million, respectively.
Guidance
For the fourth quarter, Qualys expects revenues between $154.5 million and $157.5 million, indicating year-over-year growth of 7-9%. It projects non-GAAP earnings in the range of $1.28-$1.38.
For 2024, QLYS expects revenues in the range of $602.9-$605.9 million, up from the previous guidance of $597.5-$601.5 million. The company projects its non-GAAP earnings per share in the range of $5.81-$5.91, up from the previous guidance of $5.46-$5.62.
Qualys’ Zacks Rank & Stocks to Consider
Qualys currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Shopify (SHOP - Free Report) , Fortinet (FTNT - Free Report) and CyberArk (CYBR - Free Report) . While Shopify and CyberArk sport Zacks Rank #1 (Strong Buy) each, FTNT carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here.
The consensus mark for Shopify’s 2024 earnings has been revised upward by 13 cents to $1.12 per share over the past 90 days, indicating a 51.31% year-over-year increase. The long-term expected earnings growth rate for the stock stands at 39.2%. Shares of SHOP have gained 2.7% in the year-to-date period.
The Zacks Consensus Estimate for Fortinet’s 2024 earnings has been revised upward by a penny to $2.01 per share in the past 60 days, indicating an increase of 23.31% on a year-over-year basis. It has a long-term earnings growth expectation of 16.3%. Shares of FTNT have jumped 40.8% in the year-to-date period.
The Zacks Consensus Estimate for CyberArk’s fiscal 2024 earnings has been revised upward by a penny to $2.30 per share in the past seven days, suggesting a year-over-year increase of 105.4%. It has a long-term earnings growth expectation of 33.4%. Shares of CYBR have plunged 21.3% in the year-to-date period.