Photo Credit: Gerd Altmann / Pixabay

According to a recent report, the cloud security market is estimated to grow at 18% CAGR to reach $106.02 billion in 2029 from $33.13 billion in 2022. Cloud services security provider Qualys (Nasdaq: QLYS) announced its first-quarter results recently. The company continues to deliver new products, but the market is not too pleased with its overall performance.
 

Qualys’s Financials

For the first quarter of the year, Qualys’s revenues grew 17% to $113.4 million, surpassing the market’s estimates by 0.20%. Net income of $33.5 million was higher than the net loss of $2.7 million a year ago. Non-GAAP EPS was $0.89 compared with the market’s estimates of $0.81.

For the second quarter, Qualys forecast revenues of $117-$117.8 million and non-GAAP earnings of $0.78-$0.80 a share. The market was looking for revenues of $117.55 million and an EPS of $0.70 for the quarter. Qualys expects to end the year with revenues of $484-$486.5 million and EPS of $3.13-$3.17. The market was looking for revenues of $484.06 million and an EPS of $2.92 for the year.
 

Qualys’s Product Expansion

Recently, Qualys announced the launch of Multi-Vector EDR 2.0 with additional threat-hunting and risk mitigation capabilities to improve alert prioritization and reduce the time needed to respond to threats. The updated solution operationalizes MITRE ATT&CK tactics and techniques to allow security practitioners to quickly analyze and respond to threats. Its extended prediction and prevention capabilities provide orchestrated access to multiple context vectors including asset criticality, vulnerabilities, system misconfigurations, and recommended patches through a single agent and unified dashboard. Multi-Vector EDR also has a comprehensive approach to prevent future attacks by identifying and eliminating vulnerabilities that are exploited by malware. With native integration with Qualys VMDR, practitioners have the ability to pivot from a single malware incident to identifying all assets susceptible to CVEs associated with the malware incident, and then patch it through Qualys Patch Management.

It also announced the launch of Qualys Custom Assessment and Remediation, opening its Cloud Platform to provide security architects with access to customer scripts that have the ability to be natively integrated into other Qualys solutions. The solution reduces response time by empowering security teams to orchestrate workflows, secure custom applications, and take immediate action to counter threats such as zero-day attacks, lessening the need to rely on IT operations teams.

The cloud security market has been seeing a lot of market demand and consolidation. The Russian attack on Ukraine accelerated the demand for stronger security solutions across the globe. Recently Google announced plans to acquire security solutions provider Mandiant for an estimated $5.4 billion. The acquisition was expected to help Google Cloud further strengthen its security offerings. Microsoft has been on an acquisition spree for security startups as well. Earlier this year, it acquired RiskIQ and CloudKnox to strengthen its security offerings. In this highly competitive and crowded market space, analysts believe that Qualys has been struggling to keep pace with market growth in recent years. Its slower product innovation, rising operating expenses, and margin pressures make Qualys a struggling player in the industry.

Qualys’s stock is currently trading at $117.74 with a market capitalization of $4.57 billion. It touched a 52-week high of $150.10 in April. The stock has recovered from the 52-week low of $95.00 it had fallen to in May last year.