Slide 1: Investor Presentation
Investor Presentation Security and Compliance for the Digital Transformation Sumedh Thakar, President and CEO Joo Mi Kim, CFO November 2, 2022
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 move to the cloud 3
Slide 4: Advantages of the Qualys Cloud Platform
Advantages of the Qualys Cloud Platform 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 maintain on-
Slide 5: Securing IT Infrastructure with Qualys
Securing IT Infrastructure with Qualys Continuously Reducing Time to Resolution with Context Global Asset Inventory Risk Mitigation Threat Detection & Response Discover all managed & unmanaged DevOps – Shift Left Anti Malware Protection Hardware and Software Inventory Continuous Vulnerability Detect
Slide 6: 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+ 90 million 2+ trillion IP Scans/Audits a Year Scanner appliances Cloud Agents across Security Events colle
Slide 7: 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 8: 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 incident
Slide 9: 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 10: Integrated IT, Security & Compliance Apps
COMPLIANCE IT SECURITY Policy Compliance Vulnerability Management, Detection & Response 25 Security Configuration Assessment Threat Protection PCI Compliance Continuous Monitoring File Integrity Monitoring Patch Management Security Assessment Questionnaire Integrated IT, Security Multi-Vector Endpoi
Slide 11: Cloud Platform Enables Vendor & Stack Consolidation
Cloud Platform Enables Vendor & Stack Consolidation IT Security Compliance Web App Security Asset Management Cloud/Container Security 11
Slide 12: Large Expanding Market Opportunity
Large Expanding Market Opportunity 1.42x Expand $51B $36B $14.0B $9.7B $13.3B $10.2B $9.1B $4.9B $6.8B $4.9B $2.1B $1.7B $4.2B $5.4B CY2022E CY2025E VM & Assessment Compliance IT Asset Management Cloud Security Endpoint Security Security Analytics & Orchestration Source: IDC, Gartner, Qualys estimat
Slide 13: Blue Chip Global Customer Base
Blue Chip Global Customer Base 66% of the Forbes Global 50, 46% of Global 500, and 25% of Global 2000 standardized on Qualys 10,000+ Subscription Customers DAIMLER Note: A customer is defined as any customer with subscription revenue at the measurement date 13
Slide 14: Scalable Go-to-Market Model
Scalable Go-to-Market Model Market segmentation & key strategic partners ENTERPRISE MID-MARKET 2021 REVENUES Large enterprise Small / medium business (Over 5,000 employees) (Up to 5,000 employees) 59% New Existing New Existing Direct customers customers customers customers CHANNEL 41% Indirect 14
Slide 15: Attractive Value Proposition for Partners
Attractive Value Proposition for Partners High-margin recurring revenue with no capex / maintenance costs Cloud Provider Outsourcing Value Added MSSPs Partners Providers Resellers Consultants 15
Slide 16: Accelerating Organic Revenue Growth
Accelerating Organic Revenue Growth ($ in millions) $411 $363 $359 $322 $301 $279 2018 2019 2020 2021 Q3 2021 YTD Q3 2022 YTD Y/Y revenue growth 21% 15% 13% 13% 12% 19% Revenue 16
Slide 17: Increasing VMDR Penetration
Increasing VMDR Penetration Key strategic and competitive differentiation 45% 43% VMDR Customer Penetration (%) 40% 36% Q4 2021 Q1 2022 Q2 2022 Q3 2022 Note: The penetration rate represents the percent of customers with VMDR divided by total customers with revenue in the quarter 17
Slide 18: Platform Adoption Driving Higher Customer Spend
Platform Adoption Driving ($ in millions) Higher Customer Spend 26% Growth $179 $142 Aggregate Revenues $119 $99 LTM LTM LTM LTM Q3 2019 Q3 2020 Q3 2021 Q3 2022 Number of 90 102 117 151 customers Note: Customer count is defined as customers with $500K or more in annual revenue 18
Slide 19: 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 79% $1.2M 69% 2018 2021 2018 2021 Leveraging low cost, High sales leverage high talent geos 19
Slide 20: Continued Growth in Profitability
Continued Growth in Profitability ($ in millions) $191 $200 48% $180 $170 $164 46% $160 $138 $142 $140 44% $120 $109 42% $100 40% $80 $60 38% $40 36% $20 $0 34% 2018 2019 2020 2021 Q3 2021 YTD Q3 2022 YTD Adjusted EBITDA 39% 43% 47% 46% 47% 46% margin Adjusted EBITDA 20
Slide 21: Strong Cash Flow Generation
Strong Cash Flow Generation ($ in millions) $200 $176 50% $180 $150 45% $160 $131 $141 $143 40% $140 35% $120 $101 30% $100 25% $80 20% $60 15% $40 10% $20 5% $0 0% 2018 2019 2020 2021 Q3 2021 YTD Q3 2022 YTD Free cash flow 36% 41% 41% 43% 47% 40% margin Free Cash Flow 21
Slide 22: Leveraging Excess Cash to Return Capital to Shareholders
Leveraging Excess Cash to (in millions) Return Capital to Shareholders $220.0 $213 $200.0 $180.0 $160.0 $140.0 $127 $130 $120.0 $95 $100.0 $85 $86 $80.0 $60.0 $40.0 $20.0 2018 2019 2020 2021 Q3 2021 YTD Q3 2022 YTD Weighted Average Diluted Shares 41.9 41.3 40.7 40.1 40.1 39.6 Outstanding Share Repur
Slide 23: Industry-Leading Margins
Industry-Leading Margins QLYS 46% 2021 Adjusted EBITDA margin vs. Security select Security and SaaS peers SaaS Peer Median: 12% Source: Nasdaq IR Insight 23
Slide 24: Achieving Rule of 60: Growth + Profitability
Achieving Rule of 60: Growth + Profitability 2021 Rule of 40 vs. Security select Security and SaaS peers SaaS QLYS 60% Rule of 40 Source: Nasdaq IR Insight Note: 2021 Revenue Growth % + EBITDA Margin % 24
Slide 25: Appendix
Appendix
Slide 26: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA ($ in millions) Q3 2021 Q3 2022 2018 2019 2020 2021 YTD YTD Net income $57.3 $69.3 $91.6 $71.0 $49.1 $79.7 Depreciation and amortization of property 25.2 25.1 26.6 29.2 21.8 21.2 and equipment Amortization of intangible assets 3.7 6.1 6.3 6.7 5.0 4.5 Provision for (
Slide 27: Reconciliation of Non-GAAP Free Cash Flows
Reconciliation of Non-GAAP Free Cash Flows ($ in millions) Q3 2021 Q3 2022 2018 2019 2020 2021 YTD YTD GAAP Cash flows provided by operating activities $125.5 $160.6 $180.1 $200.6 $160.7 $155.0 Purchases of property and equipment (22.8) (27.6) (29.6) (24.4) (20.1) (12.4) Principal payments under fin
Slide 28: Revenue by Geographic Area
Revenue by Geographic Area ($ in millions) Q3 2021 Q3 2022 2018 2019 2020 2021 YTD YTD United States 185.9 206.6 230.4 250.8 184.7 214.3 % of total revenue 67% 64% 63% 61% 61% 60% Foreign 93.0 115.1 132.5 160.4 116.7 144.6 % of total revenue 33% 36% 37% 39% 39% 40% Total Revenues $278.9 $321.6 $363.