Qualys (QLYS) To Report Q1 Earnings: What's In The Offing?

Qualys (NASDAQ:QLYS) is slated to release first-quarter 2019 results on May 1.

Notably, the company surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 19.2%.

In the last reported quarter, the company’s earnings and revenues exceeded the Zacks Consensus Estimate and recorded a year-over-year improvement on both counts.

Continued platform innovation and increasing customer adoption of the Qualys Cloud Platform alongside its integrated Apps are tailwinds. Strength in the total number of orders from the company’s SMB, SME and PCI customers is a key driver.

What to Expect in Q1?

For the first quarter, Qualys anticipates revenues in the range of $74.5-$75.2 million, indicating 15-16% year-over-year growth. The Zacks Consensus Estimate for revenues is pegged at nearly $75 million.

Further, non-GAAP earnings for the quarter are projected in the range of 41-43 cents. The Zacks Consensus Estimate stands at 42 cents, which is 16.67% higher than the figure reported in the year-ago quarter.

Let’s see how things are shaping up for the upcoming announcement.

Factors to Consider

Qualys is benefiting from a healthy demand environment in the security market. Growing demand for cybersecurity solutions due to the increasing frequency and technologically advanced nature of cyber attacks is likely to boost adoption of the company’s solutions in the to-be-reported quarter.

The company’s partnerships with the likes of AWS Security Hub, Microsoft (NASDAQ:MSFT) Azure and IBM’s X-Force Red are expected to boost growth in the upcoming results.

Qualys’ scalable platform model continues to drive margins and generate significant cash flow. Although the company expects to invest across engineering, sales and marketing, operations and administrative functions, the quarterly free cash flow growth is likely to exceed the expected earnings growth for the to-be-reported quarter.

However, acute competition from the likes of FireEye (NASDAQ:FEYE) , Fortinet (NASDAQ:FTNT) , Symantec (NASDAQ:SYMC) et al is a major concern.

Early this year, Qualys acquired the software assets of cloud applications management startup, Adya. This is expected to put a crunch on the cash balances in the to-be-reported quarter.

Qualys currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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