Thank you, Michelle. Good afternoon and welcome to Qualys' second-quarter 2026 earnings call.

Joining me today to discuss our results are Sumedh Thakar, our President and CEO, and Joo Mi Kim, our CFO. Before we get started, I would like to remind you that our remarks today will include forward-looking statements that generally relate to product capabilities, future events, or future financial or operating performance.

Actual results may differ materially from these statements. Factors that could cause results to differ materially are set forth in today's press release and our filings with the SEC, including our latest Form 10-Q and 10-K.

Any forward-looking statements that we make on this call are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events. During this call, we will present both GAAP and non-GAAP financial measures.

A reconciliation of GAAP to non-GAAP measures is included in today's press release. As a reminder, the press release, prepared remarks, and investor presentation are all available on the Investor Relations section of our website.

With that, I'd like to turn the call over to Sumedh.

Thank you, Blair, and welcome to our second-quarter earnings call. The adversary's playbook has been fundamentally rewritten by AI, collapsing exploit timelines and making one thing undeniably clear: durable pre-breach risk management increasingly requires a vendor-neutral, agentic AI fabric that moves beyond theoretical exposure to autonomous quantification of actual exploitable risk and remediation.

Demonstrating this conviction, we delivered another quarter of strong revenue growth and profitability. The urgency behind that conviction continues to intensify.

Frontier and open-source AI models are capable of discovering and weaponizing vulnerabilities faster than any human team can triage them, compressing exploit timelines to hours and, in some cases, turning disclosure into compromise before a patch even exists. AI is simultaneously becoming the greatest force multiplier and the most formidable challenge cybersecurity has ever faced.

Where we part ways with continuous threat exposure management, CTEM, solutions is how we respond to it. CTEM solutions today respond by generating more findings, more theoretical risk scores, and more dashboards, and then pass along these findings off to siloed solutions that collect data and do the patching while losing critical time at every handoff.

That approach was already failing before AI accelerated the threat landscape, and it is fundamentally inadequate now. We believe the defenders who win in this new era of AI will not be the ones who simply detect more and more vulnerabilities and produce dashboard tourism.

They will be the ones who can autonomously detect vulnerabilities at AI speed, validate actual exploitability in production, quantify that risk in dollar terms, remediate it, and then prove the exposure is closed in multivendor environments, all before an adversary gets there first. That is the design outcome of the AI-native Risk Operations Center, ROC, powered by our Enterprise TruRisk Management, ETM, solution, and it is where nearly every customer conversation we are having is heading.

Against this backdrop, I'm pleased to announce major new capabilities on the platform we'll showcase at Black Hat later this week, spanning both AI for security and security for AI to address the post-Mythos threat landscape head-on. First, with respect to AI for security, we're pleased to introduce InstaScan.

Powered by Agent Insta, the newest addition to our agentic AI marketplace and ETM solution for AI-speed detection that is continuous, instantaneous, and scanless. Today, when a new vulnerability advisory is released, it takes 24 hours to a week for organizations to detect it through traditional scan cycles, while adversaries weaponize the same vulnerability in minutes.

Agent Insta is designed to collapse that timeline by converting the asset inventory, software paths, and threat intelligence our customers already collect with Qualys sensors into high-confidence exposure findings without a scan. New detections appear within minutes of disclosure, and no rescan required, and no agent disruption.

The finding is then handed to Agent Val for instant exploit validation, and the risk impact is determined and quantified immediately. While competitors are still processing and advisory writing signatures and waiting for a scan to complete, our customers already know whether they are exposed and are taking action before a vendor patch exists.

Because the finding flows straight into validation and remediation, detection is not a report; it is the first step of a continuous closed loop. With last quarter's launch of TruConfirm and Agent Val safely validating actual exploitability across chained attack paths in live production environments and hyper-prioritizing millions of findings to the fewer than 1% that require immediate action, the bottleneck is now shifting from identifying what to fix to actually fixing it before adversaries can act.

This leads me to the next phase of our TruRisk Eliminate agenda: autonomous zero-day remediation at scale. Through AI-scored autonomous remediation waves, the AI-native ROC now determines the right action for every asset in multivendor environments: deploying a patch [promptly?]

, staging a controlled rollout where caution is warranted, or applying a compensating control where operational risk demands it. Every action is gated by our AI-driven patch reliability score and resiliency snapshots, delivering rollback rates below one and a half percent—below half of 1%.

The most critical assets remain human-in-the-loop oversight, while the platform autonomously remediates the rest. Orchestrating the cycle is Agent Sarah, who prioritizes exploitable risk, quantifies it in dollar terms, sequences continuous waves, and revalidates closure with Agent Val, all without proportional headcount.

Furthermore, with the introduction of peer-to-peer patching, we are accelerating the delivery across distributed environments while removing the dependency on centralized infrastructure. Put simply, these newest innovations make autonomous zero-day remediation wave-driven, vendor-agnostic, safe, and provable.

In live benchmarking, this collapsed the window of exposure from 21 days to minutes and auto-patched 60% of the vulnerabilities. This is not incremental.

It turns a massive surge in exploitable vulnerability volume from an impossible backlog into a continuously cleared queue at the speed of modern attacks. You cannot solve a minutes problem with a month-long solution.

That's the gap the AI-native ROC was designed to solve, with Agent Insta providing AI-speed detections, Agent Val hyper-prioritizing validated exposures, and Agent Sarah performing autonomous remediation in a continuous closed loop. Turning to security for AI, as enterprises raise AI workloads into production, the AI infrastructure they are building is already the next attack surface.

With the introduction of TotalAI 2.0, organizations can now see their full AI estate from workforce to workload and from code to runtime. Through new sensors that see AI activity at both the employee and workload level, security teams can now discover shadow AI activity across the organization, from what employees are doing with AI to which models, endpoints, and services are running in production across hybrid multicloud environments.

We have also extended our posture management coverage to SaaS platforms, including Anthropic and OpenAI, to help organizations enforce security and compliance policies across the AI platforms their teams are already using. Additionally, they can now identify security gaps in code before deployment, remediate with guardrails at runtime, and test model context, MCP, tool exploits across over 50 adversarial scenarios.

Of equal importance, every AI risk across the entire stack, from GPU to infrastructure, to supply chain, to the newest prompt injection attacks, is now scored and prioritized through the same TruRisk engine that powers the Risk Operations Center. For organizations seeking to secure the infrastructure powering their AI future, these new innovations become an increasingly strong differentiator for Qualys.

As ROC adoption accelerates and these capabilities continue to compound, we remain laser-focused on driving ETM adoption throughout our VMDR customer base and positioning Qualys for larger upsell opportunities over time. Moving to our business update, with customers spending $500,000 or more with us growing 8% from a year ago to 229, let me share a couple of recent wins, which illustrate why organizations are turning to Qualys to help unify their security stack and operationalize the ROC.

The first is with an existing Global 300 customer managing a complex data-intensive environment spanning on-prem, multicloud, and rapidly growing LLMs in production. As the volume and velocity of vulnerabilities across the environment accelerated, their teams recognized that prioritization based on theoretical risk scores couldn't deliver the business context needed to act decisively.

With fragmented telemetry, disconnected tools, and little automation, their teams were spending more time documenting risk than reducing it, while unpatched assets and shadow IT were silently extending exposure windows by months. As a result, the customer chose Qualys to operationalize their ROC, adopting VMDR, ETM, TruRisk Eliminate, and TotalAI alongside several other modules in a low-seven-figure Q-Flex annual upsell.

By consolidating Qualys and third-party data into a unified risk fabric, this customer has aligned risk reporting to the board's tolerance level, shifted remediation from manual processes to autonomous workflows, and reduced its exposure window from months to hours while flattening the hiring curve and delivering better security outcomes. This is also an outstanding example of how we are leveraging our channel partners to activate the ROC to win new business.

The second is with a European healthcare company that has been a small existing scan-on-behalf Qualys customer, but was relying on a managed service provider to run their broader vulnerability program across more than 140 locations. That model delivered people and process, but not autonomy.

Scan operations, prioritization, and remediation guidance all flowed through the provider's team on the provider's timeline, leaving the customer dependent on external resources to understand and act on its own risk. As this environment grew more complex and vulnerability volume surged, the limitation of that dependency became unsustainable.

Costs were ballooning, remediation cycles were [slow?] , and the customer had limited visibility into the very data driving the decisions made on its behalf.

This customer chose Qualys, consolidating its stack into the Qualys platform by adopting VMDR, ETM, and TruRisk Eliminate in a six-figure Q-Flex upsell. ROC automation was the entry point, and remediation was the immediate proof of value.

By unifying detection, prioritization, and autonomous remediation into a single AI-native workflow, this customer has replaced a manual people-and-process dependency with a platform that delivers significantly lower cost, less complexity, full control, and peace of mind for the CISO. These wins reflect the broader ETM momentum we are starting to see as more and more customers recognize the efficiencies and scale of AI-native ROC automation.

Further supporting our growth trajectory, Q-Flex continues to gain traction as another strategic lever for accelerating ETM adoption. As we heard in the customer wins I described earlier, Q-Flex played a direct role in enabling significant upsells for Qualys by giving these customers the flexibility to commit broadly across the platform while preserving the ability to shift investments as their needs evolve.

This precisely the value proposition of Q-Flex model was designed to deliver. Building on strong results from our initial rollout, we have now taken Q-Flex live for enterprise customers looking to expand with Qualys and believe it can become an increasingly important driver of platform expansion over time.

Turning to our executive team, with the recent departure of our CISO and general manager of our ETM business, I want to address how we are positioning for continuity and acceleration. To lead product strategy and our ETM business going forward, I have appointed Shailesh Athalye as our Chief Product Solutions Officer, a nearly 14-year Qualys veteran who has served as our SVP of Product for the last five years.

Shailesh has been instrumental in shaping many of the platform innovations we discussed today, and his deep institutional knowledge of our technology, our customers, and our roadmap makes him the natural leader to drive the next phase of ETM adoption and our customer-led growth strategy. Additionally, I'm pleased to welcome Nathan Smolenski as our new Chief Information Security Officer.

Nathan is a seasoned cybersecurity executive with over 25—24 years of experience driving security transformations across financial services, insurance, and high-growth SaaS environments, most recently serving as the global CISO at Cyera. We are excited to have both Shailesh and Nathan in these critical roles as we continue to scale our platform and accelerate ROC adoption.

In summary, Qualys' continued innovation spanning both AI for security and security for AI, growing AI-native ROC adoption powered by our ETM solution, a growing federal pipeline for new business opportunities, strong partner-led execution, and promising early Q-Flex engagement continue to reinforce the demand we're seeing for a unified risk management platform that autonomously moves beyond theoretical exposure to validated, quantified, and remediated risk at the speed of modern attacks in multivendor environments. We believe these achievements not only advance our strong competitive differentiation, but also sharpen the market opportunity ahead of us and bolster our confidence in re-accelerating long-term growth in the business.

With that, I will turn the call over to Joo Mi to further discuss our second-quarter results and outlook for the third quarter and full-year 2026.

Thanks, Sumedh, and good afternoon. Before I start, I'd like to note that except for revenues, all financial figures are non-GAAP, and growth rates are based on comparisons to the prior-year period unless stated otherwise.

Turning to second-quarter results, revenues grew 11% to $182.2 million. As a result of a strategic emphasis on leveraging our partner ecosystem to drive growth, the channel continued to increase its contribution, making up 54% of total revenues compared to 49% a year ago.

Revenues from channel partners grew 22%, with revenues from direct remaining largely unchanged from Q2 of last year. By geo, 15% growth outside the US was ahead of our domestic business, which grew 8%.

US and international revenue mix was 55% and 45%, respectively. In Q2, our overall upsell execution improved, with our net dollar expansion rate at 105%, up from 104% last quarter.

The net dollar expansion rate of customers with prior-year purchase of ETM or CSAM subscriptions in Q2 was 107%, consistent to last quarter. Moving on to product mix, our differentiated new products continued to drive growth.

First, ETM/CSAM combined made up 12% of total bookings and 14% of new bookings on an LTM basis in Q2, up from last year's 9% and 10%, respectively. Next, Patch Management made up 9% of total bookings and 16% of new bookings on an LTM basis in Q2.

This compares to 7% and 16%, respectively, in Q2 of last year. Lastly, TotalCloud made up 5% of total LTM bookings in Q2, unchanged from a year ago.

We believe that these differentiated products combined will increase contribution to bookings in 2026, given our opportunity to increase market share and maximize share of wallet. Reflecting our scalable and sustainable business model, adjusted EBITDA for the second quarter of 2026 was $83.8 million, representing a 46% margin compared to 45% last year.

Operating expenses in Q2 increased by 8% to $73.2 million, driven by investments in sales and marketing, which grew 14%. With this strong performance, EPS for the second quarter of 2026 was $1.98 per diluted share, and our free cash flow was $55.9 million, representing a 31% margin compared to 20% in the prior year due to fluctuations in working capital.

Normalizing for this, first-half of 2026 margin was 42% compared to 43% in the prior year. In Q2, we continued to invest the cash we generated from operations back into Qualys, including $3.7 million in capital expenditures and $76.8 million to repurchase 797,000 of our outstanding shares.

As of the end of the quarter, we had $229.8 million remaining in our share repurchase program. With that, let us turn to guidance, starting with revenues.

For the full-year 2026, we now expect revenues to be in the range of $732 to $738 million, which represents a growth rate of 9% to 10%. This compares to prior guidance of $721 to $727 million.

For the third quarter of 2026, we expect revenues to be in the range of $185.5 to $187.5 million, representing a growth rate of 9% to 10%. This guidance assumes our net dollar expansion rate remains at current levels, with moderate growth contribution from new business in 2026.

Shifting to profitability guidance, for the full-year 2026, we expect EBITDA margin to be in the mid-40s with a low-teens increase in operating expenses and free cash flow in the low-40s. We expect full-year EPS to be in the range of $7.74 to $7.88, up from the prior range of $7.44 to $7.65.

For the third quarter of 2026, we expect EPS to be in the range of $1.91 to $1.98. Our planned capital expenditures in 2026 are expected to be in the range of $8 to $12 million, and for the third quarter of 2026, in the range of $1 to $2.5 million.

With that, Sumedh and I would be happy to answer any of your questions.

Great. Thanks for taking the question and congrats on amazing results.

Sumedh, look, the volume of AI-generated vulnerabilities, it's a clear reason why customers need InstaScan in the ROC. Can you just double-click again on how this is showing up in pipeline, how this is showing up in urgency?

Then if CVE volumes were to double again, how could you capture that in your pricing models?

That's a great question. I think even though the disclosure of findings are increasing, I think the organization's ability to remediate is what is currently being looked at, right?

That's really where our focus has been on helping these customers with autonomous remediation, because at a very high level, you cannot go and tell your management as a security leader that you're going to respond to autonomous AI exploits with more manual tools that are emailing each other on what need to be fixed, etc. If you look at sort of the Risk Operations Center and what we are focused on is Agent Sarah is already helping with autonomous remediation piece.

To do a great job with that and with high confidence, you need to significantly hyper-prioritize your findings, and that's where Agent Val on the Risk Operations Center platform is helping run actual exploits to reduce the number of findings that need to be auto-remediated, that actually matter to the business. Then now, our latest announcement yesterday of Agent Insta, which is the ability to scan instantaneously whenever new advisory comes out, now shrinks the timeline from the advisory coming to the timeline when the vulnerabilities you can detect it in the customer environment.

With all three of these on the ETM platform, you now actually have a real path to get something that is important and exploitable in your business remediated within the first 24 hours with minimal human intervention. That is the conversation that everybody is having is that they need to go have conversations internally to say, how are we going to move towards a roadmap that allows us a feasible autonomous remediation plan, and the ETM is enabling that.

We of course have been ahead of this as you know for the last few years with creating autonomous remediation capabilities. We already had a few customers in the pipeline who were discussing with this, who saw this beforehand.

The conversation with post-Mythos helped us accelerate a couple of these opportunities. However, there's a large number of customers that are very, very curious now about what they can do and what is the art of the possible with this kind of autonomous remediation.

We're very excited to see that pipeline in terms of the conversations, in terms of POCs is looking good and we're happy with that. Of course, you have to now move forward, get the POCs done, look at the budget, see when they will close, etc.

I would say, with all the innovation and the investment that we have made, we're pretty excited to see the current conversations that we are happening.

Great. Then just a follow-up for either Sumedh or Joo Mi.

Building off of that, billings grew 16%, it was a really sizeable raise. On top of a broad-based beat, we're now talking about re-accelerating long-term growth.

Is it that the conviction in the business hasn't changed and the market has come towards you this quarter? Or could you help us understand just how much more bullish you are on the business today than you were three months ago?

Thanks.

Look, I think we always sort of were ahead of this with remediation, etc. The conviction that this is what the market is going to need and the investments that we put in before that has always been there.

I think right now, with the advent of AI, it's just accelerated what we're sort of seeing was going to happen at some point. The conversations are driving us to feel like because of the investment we put in the platform, these are solutions that actually can help customers right now in what they are looking for to set up as auto-remediation capabilities for the future.

I will say that a lot of that goes to us being able to see where the industry is going to go and putting the investment behind it. Now, positive conversations with the customers are kind of helping us get through to ensuring that we can actually work through to see how these opportunities can close.

Thanks so much. Congrats.

Hi, good afternoon and congratulations on the strong quarter. I wanted to understand a little bit better, when you talk to your customers about sort of their change in the exposure risk management process, can you maybe help us understand how much of this is that they need to cover more assets versus the fundamental patch management process changing versus having sort of the ROC part of this on a managed side?

Can you just maybe unpack that for us a little bit in terms of what they're buying and also what they intend to buy over time? Thank you.

Great question. I think at the end, what they are focusing on is can I remediate the thing that actually matters to my environment as fast as possible, right?

That includes all assets in their environment, but that doesn't necessarily mean that they don't have other products that might be helping them get some visibility through acquisitions, this, that. I think that's really if you look at our strategy around ETM and what we have done with the concept of a ROC is that the ROC is a multivendor solution.

It's gives us the ability for the customers who are leveraging Qualys to have capabilities like InstaScan, where we can instantaneously detect things. We could do the same on data collecting from other scan-only products that are just throwing a bunch of CVEs.

We are seeing with ETM that it is allowing us to expand licenses, in the early POCs that we have with some of these customers, the early purchases. They are also bringing data on other tools from that outside of Qualys into the ETM solution so that they can get a holistic view across multiple tools and then prioritize the ones that really matter, run the exploits, and then get into the remediation piece.

I think the focus on adding on the patch management Eliminate capabilities is one aspect, and then with ETM, broadening the coverage with how many assets that they should look at to make sure the remediation succeeds is helping us that even if they have some other scan-only CVE detection tool, which is producing a lot of false positives, we can all still bring that as part of the Qualys ETM solution.

Excellent. Just given the relative proximity of Mythos, when do you think the bulk of the spending will start to materialize?

I'm guessing we haven't seen it yet. I just wanted to get your sense for how you think this is developing with the pipeline.

Thank you.

I think it's the same that we had talked about when Log4j came out and SolarWinds and stuff. Look, our customers typically tend to be enterprises, organizations that are more thinking of long-term changes in their security programs and less about the knee-jerk reaction of immediate spending.

That's kind of what we're seeing right now as well. A lot of these conversations are CISOs looking at ways to use this post-Mythos threat landscape to make the point to their team's internal stakeholders on long-term, sustainable changes that they can make to their security program where it's not that you do this one thing for the one month.

For companies to roll out a program that allows them to do autonomous remediation, that's where they need to think through, work with different stakeholders, and then look at the budget. Does it come from an existing solution that they can get rid of?

Is it something that they need to add on, etc.? I think we are early on, we feel like, in these conversations, and we will see as the next few quarter goes to see what meaningful signals come in terms of when these budgets might be leveraged otherwise.

Far right now, it's a lot more of positive conversations and pipeline building that we're doing.

Thank you.

Thank you so much for having me on. I guess let me just ask Sumedh a question first, and then Joo Mi, I'd like to ask you one after if possible.

Great to see the guide, Sumedh, fiscal year guide being raised from 8% to 10%. Then in your prepared remarks, talking about re-accelerating growth in the long term.

I guess can I ask one question is, I think that's new disclosure, I don't think you've said that before. Can you just clarify that that is new?

Then what gives you confidence, if it is new, to say that now? Is it stuff you're seeing or just conversations or just kind of help provide some color around that?

I wouldn't say it's new, Patrick. I think we've always talked about investing and innovating in the platform and our belief that what we're doing and helping with the focus on remediation is something that we've been working on strategically, along with the focus on federal and along with focus on working with our partners to focus on that acceleration of growth in the long term, getting into long-term double-digit growth has been a focus for us.

I think that is not new, to say. I would say that given the current conversations that are happening, it just gives us an opportunity again to talk about what we have already built and the innovations that we have already done, and see how this maps to the current focus that the market has in terms of, look, at the end of the day, the CISOs need to be able to go tell their board and management somehow that they are going to adopt some form of autonomous remediation.

They're going to have to figure out how they're going to do that. If you look in the market, with Qualys having 150 million patches deployed in the last 12 months, 40 million of those already being deployed autonomously, that gives us an interesting conversation point to build confidence for them when they are looking at these things.

Right now, it's the same sort of what we've always talked about and focused on is working towards innovating and investing to create long-term growth. Double-digit revenue growth is what we've always been looking at, and so this is just continuing on that momentum.

Very helpful, Sumedh. Joo Mi, if I may, the disclosure about new bookings, 14% of new bookings were from ETM and CSAM, which if my model is correct, that's the same as last quarter.

Then 15% of new bookings from Patch in 2Q, again, if my model is correct, that's the same as last quarter. I guess totally understand all the kind of qualitative commentary around ETM and Patch, how come it's not showing up more clearly in that new booking number?

Should we expect that proportion of new bookings to ETM and CSAM and Patch to increase as we look towards kind of 3Q and 4Q?

In terms of the percentage contribution to bookings from new customers, we do anticipate fluctuations. We're not too surprised whether it goes up or down.

If you take a look at the percentage that made up from Patch Management last quarter was 15, this quarter is 16. You're right on the ETM side.

ETM/CSAM, it's 14, the same as last quarter. We're not too surprised by it because it really depends more on the customers what we're onboarding at that point in time, what they end up starting off with.

For example, if we have a new prospect that decide to purchase more of that or spend more of that budget on VMDR or versus ETM versus Patch Management, we want to make sure that that customer is set up to succeed and grow with us. This percentage, it's a healthy percentage.

What it lends itself to for us is it's really a validation that when we land new logos, go after the market, when we're able to win, it's partly due to the fact that we were able to innovate and lead the market in terms of our continuous enhancement in our product solution set with ETM, CSAM, as well as Patch Management.

Thank you so much.

Hey, guys. Thanks for taking my questions and congrats on the strong results here.

I guess if I hear what you're saying in that the Mythos stuff is more so still in the pipeline and conversation stage and that wasn't really the driver of the quarter, it sounds like more so just better ETM execution. Certainly seeing those demand trends, I guess if your goal is to accelerate growth going forward, I guess are you guys more willing to maybe utilize some of that margin and put that to work and maybe take margins down a bit further to help drive that accelerated growth?

Or how should we think about the growth profitability trade-off into next year?

Look, I think we've talked about this, we always look at investing in the innovation, investing in our sales and marketing as we have been doing more recently. I think we've always focused on ROI and we see the opportunity ahead of us.

As the opportunities move through the pipeline, it is something that we continue to evaluate, but at this point, we feel good about kind of the investments that we're making. I think as we see the opportunity, we will continue to evaluate that to make additional investments if needed.

Right. To double-click on that, part of the reason why we're able to accelerate the top-line growth currently without necessarily having to double-dip on the investment is the fact that we are a partner-first, partner-led growth momentum right now, with majority of our growth, especially when it comes to new logo acquisitions.

We're working very with our partners, and we believe that we are investing appropriately at the current levels, with the sales and marketing expense going up by 17% in Q1 and 14% in Q2. In the second half, we're anticipating further acceleration in the investments into sales and marketing.

Got it. Then for my follow-up, current calculated billings was really strong in the quarter.

Anything to call out there as far as maybe early renewals or anything like that that drove the better sequential and year-over-year on CCB in Q2? Then for Q3 in the full year, just any directional commentary on CCB growth expectations?

In

Q2, from a current billings perspective, there's always naturally quarterly fluctuations, I would point to the LTM, which smooths out some of the lumpiness in the current billings growth rate, which is still an acceleration. As of last quarter, it was 8.5% on the LTM growth, and then this quarter, it's at 10%.

We're very pleased with that growth, and because of that, we decided to raise our revenue growth guidance. In terms of the second-half current billings growth, we're still anticipating for the baseline 7% to 8%, which implies the full-year current billings growth in line with a revenue growth rate of 9% to 10%.

Super helpful. Thanks and congrats again on the results.

Great. Thank you for taking my question.

Sumedh, TruConfirm appears to be a powerful tool for ETM by helping customers validate which vulnerabilities are actually exploitable in their environment. Is that becoming the land motion for ETM?

In other words, once customers see exploit validation reduce thousands of findings to a handful of truly exploitable risks, how often does that conversation expand into broader ETM remediation and risk quantification deployments?

That's a great question. I think, when you look at the entire vulnerability life cycle to be successful with that, there's a three buckets, right, which is detection as fast as possible, and that's where our innovation with Agent Insta, which I like to call it scanless scanning, the ability to post the detection in less than one hour makes it possible for you to get that visibility of what might be exposed.

However, just based on what is exposed from a vulnerability perspective, doesn't give you the confidence that this is actually exploitable or not exploitable in the environment, because you have other tools that you might have put in place. We definitely see that with TruConfirm, it's a differentiator.

There are a lot of quote-unquote CTEM solutions that are just aggregating findings and giving you a theoretical score, but that theoretical score doesn't necessarily tell you whether it is actually going to be exploitable or not. When we are able to tell the customer, look, the ETM solution will help you theoretically reduce your findings to the 1% that matter, and then additionally, you can run these lightweight, safe exploits to further reduce the number of findings that actually will work in your environment, that becomes a very interesting conversation because, why is that interesting?

Because now that you have reduced the number of findings, it makes autonomous remediation, which is the next thing that we are selling to them, really plausible. If you tell somebody that you're going to fix a million vulnerabilities autonomously, that's a very hard conversation.

If you can show to them that highly validated 70 vulnerabilities are the ones that we are going to fix with automation because they are confirmed exploitable and we cannot wait for attackers to exploit them, that conversation becomes a lot better. TruConfirm is definitely a key part of the conversation, especially with our existing VMDR customers who are of course getting great scanning.

Now, the ability to upgrade to ETM and then run the validation, which then encourages them to look for the Eliminate, which is the remediation, kind of all fits and makes all these pieces work together really well. It is an important piece of every conversation we are having with existing customers.

Great. Thank you.

Just a follow-up, could you just help us understand the behavior of those customers that have not yet adopted ETM, like those VMDR-only customers? Are they still experiencing a high amount of churn there and is that kind of still the primary source of any pressure on your overall net dollar retention rate?

I think nothing to call out. We're pleased with the overall momentum of the business, and we look at that as a great opportunity for us to talk to our existing VMDR customers, because all of them are going to have to answer to their management and board what they're doing to find a way for autonomous remediation.

The conversation of upgrading to ETM and the conversation of upgrading and adding on Eliminate, we look at that VMDR customer base as a big base that we have where we can actually create growth opportunities, because almost everybody is going to need some sort of a prioritization and remediation solution moving forward after the post-Mythos era. That's actually a pretty good way for us to look at it as, I think more and more customers, I would say, would want to look at a solution that's not just scanning, but also giving them remediation, and that's what we're seeing in the conversations right now.

Great. Thank you.

Hi, this is Grant Darling on for Joe Gallo. Thanks for taking the questions.

I wanted to ask first, have you seen anything different competitively post-Mythos release? It seems like we're hearing more chatter from a variety of players who are signaling more interest in the space.

Your results certainly signal strength, but just curious if you're seeing or expecting any change in competitive dynamics, and also if there's any difference in the frequency of competitive displacements to call out.

I think the problem the customers have is that chatter, right? There's too many solutions that are just throwing more and more CVEs, and which is kind of something that they're focusing on, and that creates a lot of chatter and noise for customers that they have to weed through.

Where we are seeing success is not just the traditional, hey, let's find a million CVE findings. Where we are differentiating and why we are seeing that differentiator is things like TruConfirm, right, where we're basically able to not just tell you the CVE is there, but actually have the ability to find a way to give you a confidence in its exploitability by actually exploiting it in some cases, giving you additional information in other cases.

Our autonomous remediation, while there's a lot of tools that are throwing out CVEs and tools that are saying that they can find something and then they will email the patching solution what they need to fix, we're actually natively patching that in a matter of hours. The interest is more to say, oh wait, there is a solution that can actually allow me to fix an exploited, exposed vulnerability in 4 hours from the release versus I'm going to have a hodgepodge of these different solutions that is not actually going to work in the environment.

I think that's really kind of what's driving the conversations right now, and that's what we're excited about.

Got it. Then maybe for my follow-up, you've referenced the growing federal pipeline a few times.

I guess just any way to quantify the size of that business today, and then just any more detail that you could provide regarding your thoughts about that opportunity and maybe your right to win there going forward?

It is right now not a big part of the business, but that is where the opportunity lies right now. I think if you look at the focus of the current administration, if you look at the new CISA BOD, very interesting that the new CISA BOD really talks about fast detection, exploit validation, and quick remediation.

I've heard this somewhere for the last 2 years, right? We've focused on building this and being ready for this.

The federal government is also very, very focused on ensuring that they are seeing outcomes which are CISA's new requirement of remediating in 72 hours, okay? How are you going to remediate something if your scan is taking 2 days?

That's where InstaScan is going to help you find the issue in the first 60 minutes, giving you a realistic chance to meet the BOD requirement. That is creating very, very positive conversations with the federal customers that we are engaged with.

A lot of them have very old-school, traditional on-prem solutions for scanning, different solutions for patching, they've been trying to patch those together for a while. Now these BODs and the focus from the administration is giving them an opportunity to look at something that is more modern and something that is really helping them give an outcome that is measurable.

Now with Qualys having a FedRAMP High platform that actually is the only platform that can do both the detection and the patching as a FedRAMP High solution and our modern approach with agentic AI capabilities built in with these three different agents versus sort of having one generic agent that is just talking in the back end to Anthropic or something like that, it creates a big differentiation in our mind, and I think that gives us the opportunity to go out and the right to have these conversations and work towards winning some of these opportunities that are coming our way. For us, given that right now it's not a big material part of the business, is where we see the big opportunity moving forward, and we're excited about the conversations and the investments that we're putting behind that.

Understood. Thank you.

Hey guys, can you hear me?

Yes.

Awesome, apologize for the background noise. I am in Vegas for Black Hat.

Maybe just two quick clarifications. First one, Joo Mi, I think you said you still expect 7% to 8% current billings growth for the year.

Can you help us understand like, why that stands or is un-updated from I guess what you expected last quarter given the strong billings growth in 2Q? Is it a conservative thing?

Is it a 2Q as a blip type thing? Just help us help us understand why that that full-year outlook is left unchanged.

Maybe I'll just I'll ask my second question now. Anyway you could help us understand, what what net dollar retention rate is baked into the full-year guidance, since I think it's the second quarter now that it's kind of picked up for us?

Thanks.

To clarify, the current billings guidance for the full year is now in line with our revenue guidance of 9% to 10%. The 7% to 8% is for the second-half current billings.

What we're assuming is for the baseline, the second-half current billings will grow by 7% to 8% year-over-year, and that's predicated on no meaningful change to our net dollar expansion rate, which is now at 105% versus 103% that we started off the year at.

To be clear, the current billings of 7% to 8% is for the second half you're saying?

That's right.

Super helpful. Thank you.

Hey, thanks for taking the questions here, guys. If I could just pick up on where Josh was leaving off there.

I think even earlier this year, we were talking about a soft guide for that 7% to 8% CCB in calendar '26. Just given the year-to-date outperformance we've seen, why not tweak that CCB even for back half of this year at 7% to 8%?

Why not take that slightly higher? Again, we're coming off this mid-teens result you just posted in Q2.

It doesn't seem like there was any real fluctuations from early renewals, can you just help us think about what your assumptions are in deriving that 7% to 8% in the back half?

Yes. Quarterly current billings, because we don't actively manage to it, it tends to be lumpy.

If you take a look on an LTM basis, that's what we like to point to if you're trying to gauge the business momentum. On an LTM current billings growth rate, last quarter, it was at 8.5%, this quarter, it's currently sitting at 10%.

What we believe right now is look, it's great that we see that acceleration in the LTM current billings growth rate, and I think that that 10% better reflects the current business momentum today. As Sumedh commented on before, we didn't know exactly when the acceleration or heightened kind of pressure from our existing customers, who are already pretty far along the discussion of ETM adoption, were really going to execute on those deals, and Q2 is a reflection of that.

If you were to take a look at our customer base and take a look at them and split them into two different camps, there were already a smaller cohort of customers that were pretty far along in the discussion around the ROC adoption, upgrading to ETM, that ended up translating into a better-than-expected results in Q2. That said, the second camp of customers that are not as far along in discussion, what we're anticipating right now is we're not seeing any significant increases or acceleration in the sales cycle for the cohort of customers that are up for renewal in the second half.

Given that, it's a data point, Q2 very strong quarter, we're not anticipating any meaningful, material changes in the deal cycle in second half, and so therefore, we decided to keep the baseline at 7% to 8% for the current billings growth for the second half of this year.

Understood. Thank you for spelling that out, Joo Mi.

Maybe another one here. Just wanted to get a better sense.

It was great to see the last 12 months net dollar expansion improved by a point again this quarter to 105, especially since you have this improvement for total company, meanwhile the ETM/CSAM NDR was unchanged sequentially at 107. Can you I guess provide any further granularity, almost like a quarterly snapshot here as far as what was driving the total company improvement from products or cohort of customers adopting or increasing spend?

I just love to get a little bit more on that.

Yes. If you take a look at our product mix, and that'll help you to kind of come with us on this journey of different product adoption.

As customers come up for renewal, where they decide to spend more on. Right now, with our ETM and CSAM currently making up 12% of total bookings, up from 9% a year-ago period, that kind of tells you that that's really helping to drive that bookings growth momentum that we see in the business today.

Patch Management definitely contributed to that as well, currently at 8%, a year ago it was at 7%. Then offsetting that was a VMDR contribution coming down to 49%, down from 54% a year ago.

Excellent. Thank you so much.

Great, good afternoon and thank you for taking the question. I guess I have two, I think both for Joo Mi.

I guess, Joo Mi, it's great to see the traction that you've got on the partner side of the business on the indirect side. I would love to kind of understand where you're guiding spending, particularly on sales and marketing, but for OpEx overall.

I think last quarter, you talked about mid-teens growth, it seems like you're pointed in the same direction, but you've come in well under that for the first half of the year. I'd love to understand where you're seeing traction, where might you regulate greater spend and outside of outperformance on the top line in the back half of the year, how are you regulating spend on OpEx and sales and marketing relative to that mid-teen level when we've come in materially below that in the first half?

Then I got a follow-up.

On the sales and marketing spend, majority of that spend increase is driven by the headcount. If you take a look at the 17% year-over-year for Q1 and 14% year-over-year for Q2, both quarters, majority of it was basically investing back into our business, expanding our team, making sure that we have the right team members in the GTM team, whether it be sales or marketing or product, all across the board that's really focused on selling our product and better positioning ourselves and working very closely with our partners.

Now with that said, we are leveraging AI and back into our business as well, and that certainly helped to make sure that we're looking at the operating efficiency, making sure that it's appropriate level of investment that we're spending each quarter. With that in mind, we're very pleased with the momentum that we see today, and we do anticipate increase in spend, whether it be number one is always going to be headcount for us right now for 2026, but there are other certainly investments that we're making, which is demand, making sure that we're investing back for business that generates sufficient pipeline that's quality that we can execute on for the second half of this year.

Great. That's helpful.

Maybe just on Q-Flex, how far penetrated are you into your installed base with Q-Flex? How are you regulating the level of availability that customers might have for Q-Flex?

Are you still measuring it and keeping it kind of like the high-end customers, or could we expect maybe a broader rollout as you develop more experience with Q-Flex across your customer installed base?

We have rolled out Q-Flex, it's really more intended for our enterprise customers. Now it's available, GA, to enterprise customers, and we are having appropriate level of discussions with the set of customers that are up for renewal, as well as new prospects as we discuss with them what they're looking for.

Is Q-Flex something that's going to be advantageous to them? Really, if you think about this product, it's a premium product, right?

It helps our customers really adopt a number of our solutions in a seamless way, and so they're more than willing to pay the premium price for this. The way that we think about it right now is it's going to be right for customers who are willing to grow with Qualys and for existing customers, as we look to drive our net dollar expansion rate further up and continue to focus on that metric as customers grow with us.

It will be right for our enterprise customers who are looking for a cost-effective way to gain more value while at the same

time increasing their spend with Qualys. That's helpful.

Thank you.

Thanks for taking my question. Again, congrats on the great quarter.

Sumedh, big picture, you did underscore that near term, there is a stronger patch management cycle, but you believe there's a broader category reset underway around the control plane for the pre-breach risk management as you described: exploit validation, risk quantification, and autonomous remediation. Around the AI urgency, I remember last quarter you guys did say since it's broadening the opportunity, customers may extend sales cycles or pause renewals.

Just can you add any finer point around these broader strategic deals, conversion, timing, sales cycles? How long are these evaluations taking?

Are you seeing these conversion rates getting faster broadly, just directionally? Then I had a quick follow-up.

It's a great question. I think as I mentioned earlier, too, and when we talk about the ROC, right, the Risk Operations Center, pre-breach risk management is broader than just vulnerability management.

Obviously, that is the focus right now. We've talked about the use of misconfigurations as part of these attacks, the use of identities, and the recent OpenAI, Hugging Face was a great example of a vulnerability, misconfiguration, and identity being used.

The Risk Operations Center has been broadly built around that. I think in terms of the way we are seeing the conversations is not about saying can I just patch for the next one month and I'm done.

I think the conversation with customers are really about, nobody is saying that they're just going to patch now and then go back to not having regular patching cycle and autonomous patching in the future. The broad-based conversation is about how do they, moving forward, create a process throughout their organization that is long-lasting, where, any threat that comes out, they're able to actually respond to that threat very quickly.

We see this more as something that is broadly being talked about, and we see the opportunity for that to be something that we can focus on. I think right now, like with any corporation, large companies, they want to understand what the big picture roadmap is that they can talk to their management about while focusing on sort of phases that they can deploy.

The ROC conversation allows us to have a much broader strategic conversation with ETM, and then the vulnerability management, patch management is something that they're focusing on right now to be able to have that phased approach. Overall, I think our innovation around ROC that we have been focusing on is coming to the help quite a bit for these customers to have broader conversation while the focus right now is changing their patch management processes and programs.

I do think that this is giving us an opportunity to have those broader conversations with the customer. As Joo Mi said, of course, there were a small cohort of customers that was already in this process before Mythos came out to adopt patch management.

Just a reminder, 150 million patches already deployed by Qualys, some customers have been at the forefront of this. That helped us sort of say, look, we were right.

The customers were like, look, we're already in the process, we were right to focus on patch management. That helps in the short term, but then there's a long cohort of customers that are having these conversations now, and it's going to create the opportunity for us to have sustained conversations of additional things in the ROC as we move forward and they get comfortable with autopatching.

Got it, very helpful. Joo Mi, just a follow-up to Mike and Josh's question around the NBR improvement.

Very encouraging to see that take up. The ETM cohort, though, remains at 107, I think you highlighted.

Is Q-Flex going live and you did highlight it's playing a direct role in several of these large platform expansions, also helping pull forward the commitments, helping bookings more than near-term use. Is that what is kind of explaining these budgets shifting towards more newly urgent capabilities reflected in your sort of NDR next 12 months versus something more steady around ETM, CSAM usage will follow through?

Just wanted to understand if Q-Flex is playing a role there.

Q-Flex is really meant to accommodate customers who are looking for that flexibility and who are willing to spend more with us. We wanted to make the selling motion seamless, easier for that, where it creates a win-win opportunity for both the customers as well as us.

We're very pleased with us going GA with it broadly. It's still applies to a small percentage of customers today who sign up for Q-Flex, it's not yet reflected in the numbers, but we believe that this will help drive the NDR up for us broadly speaking.

Got it. Very helpful, thanks.