Slide 1: Investor Presentation
Investor Presentation Security and Compliance for the Digital Transformation Sumedh Thakar, President and CEO Joo Mi Kim, CFO February 7, 2024
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 lim
Slide 3: Investment highlights
Investment highlights Industry-leading cloud security and compliance platform Multiple levers of recurring revenue growth Scalable business model and industry- leading profitability Uniquely positioned to capitalize on stack consolidation and cloud transformation 3
Slide 4: Qualys Enterprise TruRisk Platform
Qualys Enterprise TruRisk Platform One platform, one view | Integrated capabilities | FedRAMP authorized EC LOUD A Qualys Risk Management & Security Automation L GE SING NT Asset Vulnerability Threat Response Sensors Management Management Detection & Remediation Compliance Qualys Threat Research & I
Slide 5: Qualys Enterprise TruRisk Platform advantages
Qualys Enterprise TruRisk Platform advantages One view across the entire global hybrid-IT environment, allowing customers to consolidate their stack for better IT, security and compliance visibility Available as a Public or No hardware to Lower Easy to deploy buy or manage operating costs and mainta
Slide 6: Helping organizations rapidly manage and reduce risk across all environments
Helping organizations rapidly manage and reduce risk across all environments CyberSecurity Asset Vulnerability & XDR/EDR Management Risk Management Assess, monitor, prioritize and Asset management with Detect and assess vulnerabilities, Complete anti-virus & advanced remediate the risk in cloud cybe
Slide 7: Global visibility across hybrid IT environments
Global visibility across hybrid IT environments Enabling superior security with scalable, extensible, self-updating & centrally managed platform Active Scanners Cloud Agents 6+ billion 100,000+ 109 million 2+ trillion IP Scans/Audits a Year Scanner appliances Cloud Agents across Security Events coll
Slide 8: Cloud platform enables vendor & stack consolidation
Cloud platform enables vendor & stack consolidation IT Security Compliance Web App Security Asset Management Cloud Security 8
Slide 9: Large expanding market opportunity
Large expanding market opportunity 1.43x $72B Expand $50B $18.1B $12.3B $26.7B $18.6B $5.8B $3.7B $7.9B $5.9B $5.0B $4.0B $5.9B $8.6B CY2024E CY2027E VM & Assessment Compliance IT Asset Management Cloud Security Endpoint Security Security Analytics & Orchestration Source: IDC, Qualys estimates Qualy
Slide 10: Blue chip global customer base
Blue chip global customer base Forbes 70% of the Global 50 10,000+ Forbes Subscription customers 54% of the Global 500 Forbes 32% of the Global 2000 Note: A customer is defined as any customer with subscription revenue at the measurement date 10
Slide 11: Scalable go-to-market model
Scalable go-to-market model Market segmentation & key strategic partners ENTERPRISE MID-MARKET 2023 REVENUES Large enterprise Small / medium business (Over 5,000 employees) (Up to 5,000 employees) 57% New Existing New Existing Direct customers customers customers customers CHANNEL 43% Indirect 11
Slide 12: Attractive value proposition for partners
Attractive value proposition for partners High-margin recurring revenue with no capex / maintenance costs Cloud Provider Outsourcing Value Added MSSPs Partners Providers Resellers Consultants 12
Slide 13: Continued revenue growth
Continued revenue growth ($ in millions) $554 $490 $411 $363 2020 2021 2022 2023 Y/Y revenue growth 13% 13% 19% 13% Revenue 13
Slide 14: Increasing VMDR penetration
Increasing VMDR penetration VMDR Customer Penetration (%) Key strategic and competitive differentiation 56% 54% 52% 50% Q1 2023 Q2 2023 Q3 2023 Q4 2023 Note: The penetration rate represents the percent of customers with VMDR divided by total customers with revenue in the quarter 14
Slide 15: Platform adoption driving higher customer spend
Platform adoption driving ($ in millions) higher customer spend 20% Growth $230 Aggregate Revenues $192 $151 $125 LTM LTM LTM LTM Q4 2020 Q4 2021 Q4 2022 Q4 2023 Number of 108 126 160 183 customers Note: Customer count is defined as customers with $500K or more in annual revenue 15
Slide 16: Cloud platform enables scalable operational model
Cloud platform enables scalable operational model Revenue per % of Customer Support, S&M headcount Operations, and R&D headcount in India $1.4M 81% $1.3M 78% 2020 2023 2020 2023 Leveraging low cost, High sales leverage high talent geos 16
Slide 17: Continued growth in profitability
Continued growth in profitability ($ in millions) $259 $219 $191 $170 2020 2021 2022 2023 Adjusted EBITDA 47% 47% 46% 45% margin Adjusted EBITDA Note: Adjusted EBITDA is a non-GAAP measure. See the appendix for a reconciliation of non-GAAP financial measures to the most directly comparable GAAP fina
Slide 18: Strong cash flow generation
Strong cash flow generation ($ in millions) $236 $176 $183 $150 2020 2021 2022 2023 Free cash flow 41% 43% 37% 43% margin Free Cash Flow Note: Free Cash Flow is a non-GAAP measure. See the appendix for a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial mea
Slide 19: Leveraging excess cash to return capital to shareholders
Leveraging excess cash to (in millions) return capital to shareholders $317 $171 $127 $130 2020 2021 2022 2023 Weighted Average Diluted Shares 40.7 40.1 39.3 37.6 Outstanding Share Repurchase Amount 19
Slide 20: Industry-leading margins
Industry-leading margins QLYS 45% 2022 Adjusted EBITDA margin vs. Security select Security and SaaS peers SaaS Peer Median: 13% Source: Nasdaq IR Insight 20
Slide 21: Achieving rule of 60: growth + profitability
Achieving rule of 60: growth + profitability 2022 Rule of 40 vs. Security select Security and SaaS peers SaaS QLYS 64% Rule of 40 Source: Nasdaq IR Insight, company reports Note: 2022 Revenue Growth % + EBITDA Margin % 21
Slide 22: Appendix
Appendix
Slide 23: Qualys IT, security & compliance solutions
Qualys IT, security & compliance solutions ASSET MANAGEMENT RISK MITIGATION CLOUD SECURITY CyberSecurity Asset Management (CSAM) Patch Management (PM) TotalCloud (CNAPP) See entire attack surface, continuously maintain your Efficiently remediate vulnerabilities and patch systems Cloud-Native Applica
Slide 24: CyberSecurity Asset Management
CyberSecurity Asset Management Purpose-built Asset Management with CyberSecurity & Risk Context Asset Inventory for security External Attack Surface teams to monitor entire attack Management (EASM) surface Augment the vulnerability management program by discovering previously unknown, Discover, inve
Slide 25: VMDR 2.0 key capabilities
VMDR 2.0 key capabilities Bringing prioritization and automated workflow to Vulnerability Management Detection and Response Understand and Manage Automate remediation with Cybersecurity Risk no-code workflows Quantify risk across vulnerabilities, Save valuable time by automating and assets, and grou
Slide 26: Qualys Multi-Vector EDR
Qualys Multi-Vector EDR Providing multi-vector context for the endpoints Endpoint Detection Asset Management & Protection Dynamic discovery of endpoints, Malware & exploit protection software and hardware inventory Detection & analysis on MITRE Automated deployment of security tools Security inciden
Slide 27: Qualys Context XDR
Qualys Context XDR Complete context, enhanced remediation, improved productivity Risk Posture Asset Criticality Continuous vulnerability mapping across Dynamically tag and prioritize high value the entire software catalog – OS and assets in real time third-party applications Qualys Cloud Agent drive
Slide 28: Qualys TotalCloud
Qualys TotalCloud Simplifying cloud-native security Multiple cloud-native Unified TruRisk with most Assessment for comprehensive accurate detections across cloud security environment Agent and agentless assessment options such Extend the industry’s most accurate as API, network scanner and snapshot-
Slide 29: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA ($ in millions) 2020 2021 2022 2023 Net income $91.6 $71.0 $108.0 $151.6 Depreciation and amortization of property 26.6 29.2 28.9 23.9 and equipment Amortization of intangible assets 6.3 6.7 5.7 3.1 Income tax provision 10.5 18.4 25.7 27.1 Stock-based compensation 4
Slide 30: Reconciliation of Non-GAAP Free Cash Flows
Reconciliation of Non-GAAP Free Cash Flows ($ in millions) 2020 2021 2022 2023 GAAP Cash flows provided by operating activities $180.1 $200.6 $198.9 $244.6 Less: Purchases of property and equipment, (29.6) (24.4) (15.4) (8.8) net of proceeds from disposal Less: Principal payments under finance lease
Slide 31: Revenue mix
Revenue mix Geographic Direct vs. Partner 39% 40% 40% 41% 42% 43% 61% 60% 60% 59% 58% 57% 2021 2022 2023 2021 2022 2023 US Foreign Direct Partner 31