Qualys shares plunged 13.5% to close at $175.11 on Tuesday, despite the cybersecurity firm beating third-quarter expectations and raising its full-year guidance. Investors focused instead on slowing billings growth in the current quarter.

Qualys reported revenue of $188.05 million for the third quarter of 2026, up 10.7% year on year and ahead of the $186.6 million analysts expected. Adjusted earnings per share were $2.12, beating the $1.96 consensus, while adjusted EBITDA of $89.93 million also topped forecasts. Billings rose 15.5% year on year to $211.9 million.

Guidance raised, but billings growth slows

The company raised its full-year 2026 revenue guidance to between $736.9 million and $738.9 million, and lifted its full-year adjusted earnings guidance to $8.11 per share at the midpoint. Fourth-quarter revenue guidance of about $192 million was roughly in line with what analysts expected.

What unsettled the market was the outlook for billings. Analysts highlighted that fourth-quarter billings growth is expected at about 8% year on year, down roughly six percentage points from the prior quarter, suggesting demand is cooling even as reported revenue keeps growing.

A sharp fall after a strong year

Even after Tuesday's drop, Qualys shares are up about 35% since the start of the year, after a strong run into the results. The sell-off shows how quickly investors punish a growth stock when forward indicators soften, even when the headline numbers beat forecasts. Read StockStory on why Qualys shares fell and Seeking Alpha on the billings slowdown.