Slide 1: Investor presentation
Investor presentation Philippe Courtot, Chairman and CEO Melissa Fisher, CFO May 1st, 2018
Slide 2: Safe harbor
Safe harbor This presentation includes forward-looking statements within the meaning of the federal securities laws. Forward- looking statements generally relate to future events or our future financial or operating performance. Forward-looking statements in this presentation include, but are not li
Slide 3: Market and Investment Opportunity
Market and Investment Opportunity 2
Slide 4: Investment highlights
Investment highlights Uniquely positioned to capitalize on stack consolidation and move to the cloud Scalable business model and industry-leading profitability Multiple levers of recurring revenue growth Industry-leading Cloud Security and Compliance Platform 3
Slide 5: Large expanding market opportunity
Large expanding market opportunity Qualys has taken the #1 position over IBM and HP in the $1.7B Worldwide Vulnerability Assessment Market 20% Qualys growth (1) 11% CAGR CAGR $8.9B New Services Coming (IOC, FIM, PM, $1.0B CertView, CloudView…) $0.7B $1.3B 3% Other Security $5.3B $0.9B 8% Web Securit
Slide 6: Blue chip global customer base
Blue chip global customer base 74% of the Forbes Global 50, 47% of Global 500, and 26% of Global 2000 standardized on Qualys 9 of the top 10 in Software 10,300+ Customers 8 of the top 10 in Consumer Discretionary 8 of the top 10 in Consumer Staples 8 of the top 10 in Major Banks DAIMLER 8 of the top
Slide 7: Scalable go-to-market model
Scalable go-to-market model Market segmentation & key strategic partners ENTERPRISE SME & SMB 2017 Large enterprise Small / medium business REVENUES (Over 5,000 employees) (Up to 5,000 employees) Direct New Existing New Existing customers customers customers customers 60% Channel 40% 6
Slide 8: Attractive value proposition for partners
Attractive value proposition for partners High-margin recurring revenue with no capex MSSPs Outsourcing VAS telcos resellers Consultants providers 7
Slide 9: Strong global presence
Strong global presence 10,300+ 130+ 6 66 47 Customers Countries Shared Platforms Private Clouds Locations Qualys locations 8
Slide 10: Qualys Cloud Platform and 2018 Roadmap
Qualys Cloud Platform and 2018 Roadmap 9
Slide 11: Qualys Cloud Platform
Qualys Cloud Platform Unified approach to detection, prevention & response Integrated Suite of Applications … Analytics and Reporting Engines Distributed Sensors Hardware Virtual Cloud Agent Passive API Environments On- Endpoints Cloud Premises 10
Slide 12: Global visibility across environments enables superior security
Global visibility across environments enables superior security Scalable, self-updating & centrally managed Physical Virtual Cloud/Container Cloud Agents Passive API Legacy data Private cloud Commercial IaaS Light weight, Passively sniff on Integration with centers infrastructure & PaaS clouds multi
Slide 13: Qualys Cloud Platform produces results in one place anytime, anywhere
Qualys Cloud Platform produces results in one place anytime, anywhere Via dynamic and customizable dashboards and centrally managed, self-updating, integrated Cloud Apps in a single-pane-of-glass UIs (AssetView, CloudView, CertView…) 1+ trillion 250+ billion Security Events Data Points Indexed on El
Slide 14: Robust pure cloud platform serves as a scalable distribution channel
Robust pure cloud platform serves as a scalable distribution channel Scalable, Micro-services, DevOps VM PC WAS WAF FIM Scanner Service Qualys Streaming Data Backbone Cloud Agent Asset Service Indexing Reporting Analytics IOC Tagging Service Service 13
Slide 15: Increasing number of Apps delivered through the Qualys Cloud Platform
Increasing number of Apps delivered through the Qualys Cloud Platform ASSET MANAGEMENT Asset Inventory CMDB Sync Cloud Inventory Maintain full, instant visibility of all your Synchronize asset information from Qualys Inventory of all your cloud assets across global IT assets into ServiceNow CMDB AWS
Slide 16: Qualys Cloud Platform enables vendor and stack consolidation
Qualys Cloud Platform enables vendor and stack consolidation IT Security Compliance Monitoring Web Application Security New Services 15
Slide 17: Additional apps to come
Additional apps to come 1H 2018 2H 2018 Container Security (GA) Patch Management (Beta) Discover, track, and continuously protect containers Cross platform unified patch management to respond quickly to critical vulnerabilities Cloud Inventory (GA) Inventory of all your cloud assets across Secure Ac
Slide 18: Scalable Business Model
Scalable Business Model v @ Qualys.
Slide 19: Strong and consistent organic revenue growth
Strong and consistent organic revenue growth Outperforming market and gaining share ($ in millions) 20% CAGR $231 $198 Revenues $164 $134 22% $53 $65 2014 2015 2016 2017 Q1 2017 Q1 2018 YTD YTD 18
Slide 20: Adoption of new solutions (APPS) fuels growth and profitability
Adoption of new solutions (APPS) fuels growth and profitability Quarterly revenues vs. customers $ millions 20+ APPS $100 10 APPS Q2’ 17 VM, PC, PCI, WAS, WAF, CM, CA, AV, SAQ, TP 4 APPS $50 Q2’ 13 2 APPS VM, PC, PCI, WAS Q1’ 08 Initial solution VM, PCI Expansion Additional solutions Future products
Slide 21: Increasing Cloud Agent Adoption
Increasing Cloud Agent Adoption (Units in millions) Number of Cloud Agents Sold 7.3 6.0 4.7 3.4 LTM LTM LTM LTM Q2 2017 Q3 2017 Q4 2017 Q1 2018 20
Slide 22: Platform adoption accelerating
Platform adoption accelerating % of Enterprise customers with 4+ solutions has almost doubled in the last year % of Enterprise customers % of Enterprise customers with 3+ solutions with 4+ solutions 34% 27% 21% 17% 16% 9% 3% 1% Q1 Q1 Q1 Q1 Q1 FY15 Q1 FY16 Q1 FY17 Q1 FY18 FY15 FY16 FY17 FY18 21
Slide 23: Multiplier effect
Multiplier effect Enterprise customers with 4+ solutions spend approximately 5x that of 1-solution customers ($ in thousands) $300 $247 5x $250 of 1-solution $214 average Avg. LTM revenues $200 $187 per customer $175 $168 $142 $150 $115 $100 $59 $48 $46 $50 $50 $45 $0 LTM LTM LTM LTM Q1 FY15 Q1 FY16
Slide 24: Our largest customers spend an average of LTM $1M+ with Qualys
Our largest customers spend an average of LTM $1M+ with Qualys ($ in millions) $80 57 60 42 $61 Cumulative revenues $60 40 Customers 29 $39 $40 19 $27 20 $20 $17 $0 0 LTM LTM LTM LTM Q1 2015 Q1 2016 Q1 2017 Q1 2018 Note: Customer count is defined as customers with greater than $500K in annual revenu
Slide 25: Platform enables scalable operational model
Platform enables scalable operational model Revenue per % of Customer Support, S&M headcount Operations, and R&D headcount in India $1.2M 58% $1.0M $1.1M $0.9M 46% 36% 28% 2014 2015 2016 2017 2014 2015 2016 2017 High sales leverage Leveraging low cost geos 24
Slide 26: 2018 Revenue and Non-GAAP EPS Growth
2018 Revenue and Non-GAAP EPS Growth Quarterly Annual Quarterly Annual Revenues Revenues Non-GAAP EPS Non-GAAP EPS $1.45 $0.36 25
Slide 27: Increasing adjusted EBITDA & operating cash flow
Increasing adjusted EBITDA & operating cash flow ($ in millions) 47% $150 45% $140 60% $130 40% 34% 37% $120 40% $108 $110 34% 34% 35% 50% $100 $90 $85 30% 31% 40% 24% 66% 25% $80 $68 38% $66 $68 61% $70 30% $57 32% 20% $60 $50 $41 $43 20% $32 15% $40 $32 $30 $26 $25 $17 10% $20 10% $10 5% $0 0% ($1
Slide 28: Industry-leading margins
Industry-leading margins Q4 CY2017 EBITDA margin vs. select Security and SaaS peers Security QLYS 38% SaaS Peer average: 12% Source: JPMorgan 27
Slide 29: Unique advantages of the Qualys Cloud Platform
Unique advantages of the Qualys Cloud Platform No hardware to Lower Easy to deploy Unprecedented buy or manage operating costs and maintain scaling Nothing to install or With everything in the Easily perform assessments Qualys Cloud Platform is a manage, and all services cloud, there are no capital
Slide 30: Appendix
Appendix 29
Slide 31: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA ($ in millions) Q1 Q1 2014 2015 2016 2017 2017 2018 Net income $30.2 $15.9 $19.2 $40.4 $21.9 $9.1 Depreciation and amortization of 11.5 14.0 16.6 19.8 4.7 6.4 property and equipment Amortization of intangible assets 0.4 0.4 0.4 0.8 0.1 0.6 Interest expense 0.0 0.0 0
Slide 32: Reconciliation of Non-GAAP Net Income
Reconciliation of Non-GAAP Net Income ($ in millions, except per diluted share metric) Q1 2017 2018 GAAP Net income $40.4 $9.1 Stock-based compensation 27.0 8.9 Intangible asset amortization (1) 0.5 0.6 Acquisition-related expense (2) 0.1 0.3 Tax adjustment (24.5) (4.0) Non-GAAP Net income $43.5 $15