Cloud-based security service provider Qualys (Nasdaq: QLYS) continues to surge past market expectations. The recently reported quarterly results were significantly better than the Street’s forecast, yet again.

Qualys’s Financials

Third quarter revenues grow 15% over the year to $82.67 million, ahead of the market’s estimates of $82.38 million. EPS of $0.66 was also significantly better than the Street’s forecast of $0.53 for the quarter and $0.49 for the previous year.

For the current quarter, Qualys forecast revenues of $84.3-$84.9 million, and adjusted earnings of $0.57-$0.59 a share. The market was looking for revenues of $85.19 million with an EPS of $0.49.

It expects to end the current year with revenues of $321.2-$321.8 million and an EPS of $2.28-$2.30. The Street had forecast revenues of $321.96 million with an EPS of $2.06 for the year.

Qualys’s Monetization Focus

Qualys is focusing on increasing monetization of its services and on upselling to its existing customer portfolio. During the quarter, Cloud Agent subscriptions grew 93% and it had almost 28 million paid Cloud Agent subscribers. Qualys’s Cloud Agent is the technology platform for security, compliance, and IT solutions that provides vulnerability management, Policy Compliance, file integrity monitoring, Indication of Compromise, patch management, and Asset Inventory. Qualys is working on adding certificate management to the offering.

Qualys wants to make Cloud Agents the universal choice for all enterprises. It is helping organizations adapt that by offering free services as well. Once the organization builds its infrastructure to support the free services, it is easier to get them to switch to the paid apps. Additionally, it also leads to increasing customer retention rates for Qualys.

Earlier this quarter, it launched its free offering of Global IT Asset Discovery and Inventory app. The app will allow organizations to get insight into their global IT asset inventory across on-premise, end points, cloud, containers and mobile environments on a real-time basis. In less than three months of its launch, Qualys has already signed up 3,650 companies to the service – of which 500 are new customers.

More recently, Qualys released a FedRAMP-authorized version of the Global IT Asset Discovery and Inventory app. This version is available for Federal government customers at $99 per year with a commitment that the proceeds collected from the sale of this app will be donated to a qualifying veteran’s charity.

Qualys is hopeful of continuing the strong growth rates it is witnessing currently. To support this growth, it is continuing to expand its geographical footprint. It recently expanded operations in Pune, India. Qualys plans to invest another $9-$10 million in capital expenditure this quarter of which approximately $3.5 million will be used to fund the development of the Pune center.

Its stock is currently trading at $86.35 with a market capitalization of $3.4 billion. It touched a 52-week high of $97.12 in February this year. The stock has recovered from the 52-week low of $65.94 that it had fallen to in December last year when most technology stocks had fallen.