Earlier this month, cloud services security provider Qualys (Nasdaq: QLYS) announced its second quarter results. The current pandemic conditions have resulted in an increased demand for security services and Qualys is catering to that through product development and acquisitions.
Qualys’s Q2 revenues grew 13% to $88.8 million, surpassing the market’s estimates by 0.53%. Net income of $26.3 million improved from $16.2 million a year ago. On an adjusted basis, EPS was $0.74 compared with $0.55 a year ago and ahead of the market’s forecast of $0.64 per share.
For the third quarter, Qualys forecast revenues of $91.6-$92.2 million, with adjusted earnings of $0.65-$0.67 a share. The market was looking for revenues of $90.31 million and an EPS of $0.60 for the quarter. Qualys expects to end the year with revenues of $359-$360.5 million compared with an earlier estimate of $354-$359 million. It forecast the year’s EPS at $2.60-$2.65 which was marginally higher than its earlier forecast of $2.46-$2.51 per share.
Qualys’s Product Expansion
Qualys recently announced the general release of Qualys VMDR. Qualys VMDR allows users to discover, asses, prioritize, and patch critical vulnerabilities live, all from one solution. It also added malware detection to its Remote Endpoint Protection solution to help businesses secure remote workers. To make inroads into the government sector, Qualys made this solution available to federal agencies with a free 60-day pilot. In addition to these services, Qualys also the announced general availability of Qualys Cloud Agent on Google Cloud, which will provide its customers with a clear visibility of their workloads and their virtual machines, without requiring software to be installed or maintained.
Qualys is looking to enter the Endpoint Detection and Response (EDR) market, and it recently announced the acquisition of Spell Security, an Indian security startup, for an undisclosed amount. Spell Security was set up in 2017 and gained expertise in threat hunting and malware research. It is known for its deep understanding of multi-vector attacks.
Spell Security’s threat hunting platforms will be fully integrated into Qualys’s platform. Qualys hopes to leverage the acquisition to provide its customers with access to deep malware threat research, the ability to detect malicious activities, continuously detect and secure endpoints, correlate telemetry with historical threat events and build a powerful anomaly detection and reporting engine. Prior to the acquisition, Spell Security was privately held and did not disclose its funding or financial details.
As more and more employees have migrated to remote working conditions, endpoint security has become more critical for businesses. Analysts believe that it may not be so easy for Qualys to break into the EDR market. According to Forrester Research, there are 12 major vendors of EDR services and products which includes big names like Microsoft, Trend Micro, and VMware’s Carbon Black. Qualys, however, is hopeful that its cloud-based services will help give businesses access to a robust dashboard that will provide visibility into the current state of their infrastructure’s security and offer more context to customers.
Qualys is known to acquire smaller Indian startups as part of its acqui-hire strategy. It invests in acquiring capital-efficient startups to drive market and technological expansion. Last year, it had acquired Indian 1Mby1M player Adya to help Google’s G Suite admins get visibility into what data has been exposed, what third-party apps have been installed along with their degree of risk. Besides identifying security risks, Adya’s tools helped manage these threats as well. In 2017, it had acquired Pune-based Nevis Networks Technologies to help expand its technology stack and commercial presence in the country.
Its stock is currently trading at $108.54 with a market capitalization of $4.26 billion. It touched a 52-week high of $125.22 in late July. The stock has recovered from the 52-week low of $63.37 it had fallen to in March this year.
This segment is a part in the series : Cloud Stocks