QualysNASDAQ: QLYS executives said the company’s second-quarter performance reflected growing customer demand for vulnerability remediation, patch management and Enterprise TruRisk Management, or ETM, while positioning newer products as potential drivers of longer-term growth.
During an investor discussion, President and CEO Sumedh Thakar said the company remains focused on “profitable growth” through product innovation. He pointed to customer interest in remediation capabilities, including Patch Management and Qualys’ Eliminate offering, as a central factor in recent sales conversations.
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The operator noted that Qualys reported 16% growth in current calculated billings during the quarter, raised its outlook and generated 77% growth in operating cash flow. Thakar said customers renewing in the second quarter expanded their purchases after gaining additional budget for ETM-related capabilities.
ETM Adoption and Product Mix
Thakar said customers are using ETM to prioritize the vulnerabilities they need to address most urgently, while Patch Management and Eliminate support the remediation process. He said renewals and upsells during the quarter were larger than the company had anticipated at the beginning of the period, following customer discussions and increased interest in the company’s tools.
Chief Financial Officer Joo Mi Kim said ETM is expected to be Qualys’ primary growth engine in the near term, though she does not expect it to contribute materially to revenue immediately because the offering is still relatively new for customers.
Kim highlighted the net dollar expansion rate among customers that had ETM or CSAM subscriptions a year earlier. That cohort posted an expansion rate of about 107% in both the current and prior quarter, she said.
- ETM and CSAM accounted for 12% of total bookings on a last-twelve-month basis, compared with 9% a year earlier.
- Patch Management represented 9% of total bookings, up from 7% a year earlier.
- Kim said the company’s overall net dollar expansion rate has improved from 103% to 104% to 105%, with growth also supported by new customer acquisitions.
Kim said Qualys aims to return its net dollar expansion rate to above 110%, a level it has achieved previously, as ETM, Patch Management and TotalAI 2.0 gain adoption.
Remediation and AI Security
Thakar said Qualys is seeking to move customers from vulnerability management and detection toward a broader workflow that includes prioritization, validation and remediation. He described recent launches including Agent Val, designed to validate vulnerabilities, and Agent Insta, which he said can notify customers within 60 minutes of an advisory being released if they are affected.
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