Qualys Q1 2025 presentation slides: 47% EBITDA margin leads industry as growth moderates

Qualys Inc (NASDAQ:QLYS) shared its latest investor presentation on May 6, 2025, highlighting the company’s financial performance and strategic direction. The cybersecurity and compliance solutions provider continues to demonstrate industry-leading profitability while navigating a competitive landscape with moderating growth rates.

Executive Summary

Qualys reported Q1 2025 revenue of $160 million, representing a 10% year-over-year increase from $146 million in Q1 2024. The company maintains exceptional profitability with an adjusted EBITDA margin of 47%, significantly outperforming the industry median of 25%. Qualys continues to expand its Enterprise TruRisk Platform, positioning itself as a consolidator in the fragmented cybersecurity market.

As shown in the following chart of revenue and profitability metrics, Qualys has maintained consistent growth with strong margins:

The company’s blue-chip customer base includes 72% of the Forbes Global 50 and 55% of the Forbes Global 500 companies, with a total of over 10,000 subscription customers worldwide. Qualys is capitalizing on an expanding market opportunity projected to grow from $55 billion in 2025 to $79 billion by 2028.

Financial Performance Highlights

Qualys has demonstrated consistent revenue growth with an 11% CAGR from 2022 to 2024, though the pace has moderated from 19% to 10% year-over-year growth during this period. The company generated $608 million in revenue for full-year 2024, up from $554 million in 2023.

Free cash flow has grown at a 12% CAGR since 2022, reaching $232 million in 2024. Q1 2025 showed particularly strong cash generation with a 67% free cash flow margin, up from 57% in Q1 2024. This robust cash flow has enabled significant capital returns to shareholders through share repurchases, with $40 million deployed in Q1 2025 alone.

The following chart illustrates Qualys’ strong cash flow generation and capital return program:

The company is also seeing increased adoption of its platform among larger customers. As of Q1 2025, Qualys had 203 customers generating $500,000 or more in annual revenue, up from 192 in the prior year. These customers collectively contributed $258 million in revenue for the trailing twelve months, representing 7% growth.

Qualys’ revenue mix remains balanced between direct (54%) and partner (46%) channels, with international markets showing stronger growth than domestic ones. This aligns with the recent earnings call which noted international revenue growing at 14%, outpacing U.S. growth.

Strategic Initiatives: Enterprise TruRisk Platform

At the core of Qualys’ strategy is its Enterprise TruRisk Platform, which aims to consolidate multiple security functions into a unified solution. The platform focuses on measuring, communicating, and eliminating cyber risk through a comprehensive approach.

The TruRisk Platform architecture is illustrated below:

Key components of the platform include:

1. CyberSecurity Asset Management (CSAM): Provides comprehensive visibility into all IT assets, identifying security gaps and unmanaged assets.

2. Vulnerability Management, Detection and Response (VMDR): Quantifies risk across assets and enables faster remediation.

3. TotalCloud (CNAPP): Offers unified multi-cloud security across infrastructure and SaaS environments.

This integrated approach positions Qualys to capitalize on the trend toward security tool consolidation, addressing a key pain point for enterprises managing complex security stacks.

Competitive Industry Position

Qualys maintains a significant competitive advantage in profitability, with its 47% adjusted EBITDA margin far exceeding the peer median of 25%. The company attributes this to its cloud-native architecture and efficient operating model.

The following chart compares Qualys’ adjusted EBITDA margin to selected security and SaaS peers:

Qualys also emphasizes its performance on the "Rule of 50+" metric, which combines revenue growth rate and adjusted EBITDA margin. At 57%, the company outperforms many competitors in balancing growth and profitability.

The company’s market opportunity continues to expand across multiple segments, including vulnerability management, compliance, cloud security, and endpoint security. The total addressable market is projected to grow from $55 billion in 2025 to $79 billion by 2028, representing a 1.42x expansion.

Forward-Looking Statements

Qualys is positioning itself to capitalize on several key trends in the cybersecurity market, including cloud transformation, security tool consolidation, and increased focus on quantifiable risk management. The company’s go-to-market strategy leverages both direct sales and channel partnerships with major technology and consulting firms.

However, recent earnings results suggest some potential challenges ahead. The Q3 2024 earnings call indicated a potential slowdown in new business bookings due to a lighter pipeline, with Q4 2024 revenue growth projected at 7-9%. This aligns with the moderating growth trend visible in the presentation.

Despite these challenges, Qualys remains optimistic about long-term demand for its solutions, particularly as organizations seek to consolidate security tools and improve risk management capabilities. The company’s strong cash position and industry-leading profitability provide a solid foundation for continued investment in product innovation and strategic initiatives.

With cybersecurity remaining a board-level priority for organizations worldwide, Qualys’ focus on quantifiable risk assessment and comprehensive security management positions it well in an increasingly complex threat landscape. The company’s ability to maintain exceptional margins while continuing to grow will be closely watched by investors in the coming quarters.

Full presentation:

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