To The Moon

Why QLYS dropped after reporting earning?

Lets grab some details from Q4 earning release:

QLYS customer base include 66% of the Forbes Global 50, 46% of Global 500, and 25% of Global 2000; JP Morgan, Microsoft and Mastercard, just to name a few.

EBITDA growth remains constantly above 40%, for past 3 years.

QLYS has very strong cash flow, increasing and remained above 40% for past 3 years.

The CFO said: The continued adoption of VMDR with total customer penetration now at 36%, up from 32% in Q3 and 19% a year ago and continued adoption of Qualys solutions increased large customer spend with now over 125 customers spending $500,000 or more with us. This represents 17% growth

from 2020. And net dollar expansion rate increasing to 108%, up from 103% last year.

In the prepared remark, there is a line : “In 2021, With focused execution, we finally crossed the growth inflection point and started on our journey of revenue acceleration.”

As shared in the press released: For the first quarter, they expect revenues to be in the range of $112.5 million to $113.1million, which represents a range of 16% to 17% growth, and EPS is expected to be in the range of $0.80 to $0.82. For the full 2022 year, revenues expected to be in the range of $482 million to $485 million, which represents a range of 17% to 18% growth. As a reminder, revenues for Q4 of 2021 grew 16% to $109.8 million, up from 13% growth in Q3.

The full year non-GAAP EPS is expected to be in the range of $2.87 to $2.92. This range is lower than the non-GAAP EPS they achieved in 2021. This is due to the management is planning higher expense in the second half of the year. For the full year 2022, we should expect the company to invest in the range of $25 million to $30 million.

In my opinion, management is bullish about the future. But we cannot expect the good stuffs to materialise very soon. You need some holding power.