An extra $1.4 million in cost of revenues came alongside higher revenue for Qualys. The company said the increase came mainly from personnel costs and shared cloud-platform costs, even as revenue in the three months ended June 30 climbed 11% to $182.2 million.
That is the comfortable reading of the latest 10-Q: subscription demand is still doing its job, and operating leverage is doing the rest. Operating income rose 20.4% to $61.9 million, pushing operating margin up 2.6 percentage points to 34.0%. Gross margin also widened, reaching 83.4%.
The less tidy part sits below the income statement. Capital spending rose 59.5% year over year, while free-cash-flow margin declined 1.4 percentage points. Qualys ended the period with $250.3 million in cash, up 29%, but the cash balance does not erase the question raised by the cash-flow math: how much of the operating improvement is available after the company funds the business?
Management pinned the revenue increase on customer demand for subscriptions. The six-month comparison in the 10-Q says:
"Revenues increased by $33.9 million for the six months ended June 30, 2026 compared to the same period in 2025, driven by increased demand for our subscription services by our end customers ."
Qualys 10-Q, August 4, 2026
That gives the growth a plainly stated operating driver. It also keeps the central tension narrow: Qualys is adding sales through its subscription business, while investment is taking a larger bite of the cash generated around that growth.
The cost line helps explain the margin expansion. Cost of revenues rose only 5% in the three months, slower than revenue, even though Qualys hired additional employees to support the business:
"Cost of revenues increased by $1.4 million for the three months ended June 30, 2026 compared to the same period in 2025, primarily due to an increase in personnel costs of $0.9 million, driven by additional employees hired to support the growth of our business, an increase in shared cloud platform costs of $0.4 million, and an increase of $0.6 million primarily attributable to overhead allocations and other costs."
Qualys 10-Q, August 4, 2026
Sales and marketing grew faster than revenue, rising 15%, but the company still expanded operating margin. Research and development was nearly flat, up 1.4%, leaving the latest period with more profit per dollar of sales and a larger investment bill behind it.
Working capital adds another wrinkle, though the company attributes the movement to timing rather than a structural change. In the six months ended June 30, 2026, Qualys generated just $1.3 million from working-capital changes, with a favorable accounts-receivable and deferred-revenue movement offset by unfavorable prepaid expenses, payables, and accrued liabilities.
At the latest close, Qualys shares were $161.17, and the company carried a 29.6-times price-to-earnings multiple. That market context is a measuring stick alongside the filing: the business grew revenue at 11% and reported a 34% operating margin.
Qualys's next quarterly report will put the unresolved point in one place: the cash-flow section's capex and free-cash-flow margin figures, compared with this period's investment load. For now, the filing offers a familiar software trade-off, with a small edit: more margin, more spending, same subscription engine.
Qualys expanded operating margin as subscription revenue grew, while higher capital spending reduced free-cash-flow margin in the reported period.