According to Gartner, the global cloud-based security services market is estimated to grow 21% this year to $5.9 billion and $9 billion by the year 2020. Cloud-based security and compliance solutions provider and Billion Dollar Unicorn Qualys (NASDAQ: QLYS) has a 3.1% market share in the Security and Vulnerability Management market, which is led by IBM with 13.5% share.

Qualys’ Offerings

Redwood City-based Qualys offers cloud-based security and compliance solutions that enable organizations to identify security risks to their IT infrastructures and help protect their IT systems and applications from cyber-attacks. Its Qualys Cloud Platform consists of a suite of IT security and compliance solutions such as Vulnerability Management, Continuous Monitoring, Cloud Agent, AssetView, ThreatPROTECT, Policy Compliance, Payment Card Industry Compliance, Security Assessment Questionnaire, Web Application Scanning, and Web Application Firewall. It provides its solutions through a software-as-a-service model.

Its solutions are used by over 9,300 customers in over 100 countries, including Forbes Global 100 and Fortune 100 companies. As of December 2016, it had 684 full-time employees.

Qualys recently announced the general availability of its IOC Cloud App that expands its capabilities to threat hunting, detecting suspicious activity, and confirming the presence of known and unknown malware for devices both on and off the network. It also announced general availability of its FIM Cloud App that logs and centrally tracks file change events across global IT systems.

It recently completed the purchase of certain assets of Nevis Networks, which provide Qualys with domain expertise in passive scanning technologies. This acquisition allows the company to expand into the adjacent market of mitigation and response at endpoints.

Its competitors include large and small public companies, such as Barracuda Networks, Hewlett-Packard Company, Imperva, IBM, Symantec, and Rapid7 as well as privately held security providers including BeyondTrust Software, Tripwire, NetIQ, Tenable Network Security, and Trustwave.

Qualys’ Financials

In the recent third-quarter results, Qualys reported revenue of $59.5 million, up 17%. GAAP net income was $8.5 million, or $0.21 per diluted share, compared to $5.0 million, or $0.13 per diluted share a year ago. Non-GAAP net income for the third quarter of 2017 was $12.4 million, or $0.31 per diluted share. Analysts expected earnings of $0.21 per share on revenue of $58.59 million.

For the fourth quarter, Qualys expects revenue in the range of $61.7 million to $62.2 million, representing 18% to 19% growth. It expects GAAP net income per diluted share in the range of $0.15 to $0.17 and non-GAAP net income per diluted share in the range of $0.27 to $0.29.

For the full year 2017, it expects revenue in the range of $229.6 million to $230.1 million. It expects GAAP net income per diluted share in the range of $1.09 to $1.11 and non-GAAP net income per diluted share in the range of $0.27 to $0.29.

Its revenues increased from $133.6 million in 2014 to $164.3 million in 2015 and reached $197.9 million in 2016 , representing increases of 23% and 20%, respectively. Net income was $30.2 million in 2014, $15.9 million in 2015, and $19.2 million in 2016.

Qualys went public in June 2012 at a list price of $12. It ended up raising $90.9 million at a valuation of $451.5 million. Since then, it has steadily improved its profitability and the market has rewarded its performance.

Its stock is trading at $60.60 with a market cap of $2.3 billion. It has a 52-week low of $30.60 and a 52-week high of $60.70.