Qualys, Inc. · NASDAQ:QLYS
Qualys — Investor Day (November 2018)
55 slides from Qualys's investor day presentation, Nov 15, 2018
Slide 1: QLYS Analysts & Investors Day
QUALYS SECURITY CONFERENCE 2018 18 QLYS Analysts & Investors Day Making the World Safer - One App at a Time Qualys Security Conference Las Vegas, November 15th, 2018
Slide 2: Safe Harbor
Safe Harbor Good morning, and welcome to Qualys 2018 Analyst and Investor Day. Today, we have a series of presentations from the Qualys executive team, including product demos by Sumedh Thakar, our Chief Product Officer. Before we get started, I'd like to note that the presentations given today at t
Slide 3: Agenda
Agenda 9:00am-9:45am Where are we now. Where are we going and where is the industry going? by Philippe Courtot, Chairman and CEO 9:45am-10:45am QLYS Disruptive cloud platform and 2019 roadmap by Sumedh Thakar, Chief Product Officer, Qualys 10:45am-11:15am Measuring QLYS business model and performanc
Slide 4: Our Beginnings
Our Beginnings Huge resistance to Cloud adoption Qualys Cloud Platform 1.0 Scalability/accuracy The Vulnerability Management years Consolidation – 1999 to 2011 of best-of-breed solutions 3 Qualys Security Conference, 2018 15 November 2018
Slide 5: Where Are We Now?
Where Are We Major re-architecting Now? of the Back-End Started Ops, DevOps, Customer Support and Qualys Cloud Platform 2.0 Engineering In India Integrated suite of security and compliance solutions Expanded our solution - 2012 to 2018 to more than 10 Apps and made our first technology acquisitions
Slide 6: Where Are We Going?
Where Are We Global IT Asset Going? Inventory Consolidating Qualys Cloud Platform 3.0 more solutions Single pane view that unifies IT, security & Bringing to market compliance - Entering the an integrated OT and IOT space Incidence response - 2019 to 2021 solution 5 Qualys Security Conference, 2018
Slide 7: Where is the Industry Going?
Where is the The Rise of the Industry Going? Public Cloud Platforms Major Consolidation The era of the Cloud is Building-In coming fast and Not Bolting-on unavoidable - 2019 to 2021 Accelerated Consolidation 6 Qualys Security Conference, 2018 15 November 2018
Slide 8: Thank You
QUALYS SECURITY CONFERENCE 2018 18 Thank You Philippe Courtot pcourtot@qualys.com
Slide 9: Regaining Our Lost Visibility
QUALYS SECURITY CONFERENCE 2018 18 Regaining Our Lost Visibility Making the World Safer - One App at a Time Qualys Security Conference Las Vegas, November 15th, 2018
Slide 10: IT Transformation
IT Transformation Infrastructure & Application
Slide 11: Digital Transformation
Digital Transformation Holistic Transformation of Business to Digital Cloud, Containers, IaaS, PaaS, OT, IIoT, IoT, Mobility, Web apps, APIs, Mobile Apps 10 Qualys Security Conference, 2018 15 November 2018
Slide 12: Hybrid Cloud Overview Architecture
Hybrid Cloud Overview Architecture Mobile Workforce Clouds Work Stations NETWORKS NETWORKS VMs BARE METAL VMs BARE METAL DB West Coast East Coast DB Datacenter Datacenter STORAGE STORAGE On-Premise 11 Qualys Security Conference, 2018 15 November 2018
Slide 13: Containers
Containers Real game changer Hypervisor disappearing, bare metal is back Kubernetes Infrastructure-as-code Container-as-a-Service AWS Fargate AWS Lambda function-as-a-service, serverless Kubefed 12 Qualys Security Conference, 2018 15 November 2018
Slide 14: DevOps
DevOps Accelerating Rapidly Developer decides how infrastructure runs in production Changing decision makers 13 Qualys Security Conference, 2018 15 November 2018
Slide 15: On-Prem
On-Prem Shrinking Datacenter Footprint Increasing OT & IIoT Corp IT – more distributed & mobile More IoT! 14 Qualys Security Conference, 2018 15 November 2018
Slide 16: Enterprise Mobility != BYoD
Enterprise Mobility != BYoD Enterprise owned handheld devices Indispensable to modern business Running apps handling sensitive business & consumer data Mobile! 15 Qualys Security Conference, 2018 15 November 2018
Slide 17: Web Apps & APIs
Web Apps & APIs Explosion for B2B and B2C interaction Wide window into all sensetive data 16 Qualys Security Conference, 2018 15 November 2018
Slide 18: SaaS
SaaS No infrastructure to manage No Applications to code or manage 17 Qualys Security Conference, 2018 15 November 2018
Slide 19: Security
Security
Slide 20: Current State
Current State No visibility across global hybrid infrastructure Still need to do Vulnerability & Configuration management Still need to monitor integrity of systems(?) More data incoming into “SIEM” deployments not scaling Basically no visibility to respond Compliance demands on new infrastructure 1
Slide 21: Qualys Security Conference, 2018 15 November 2018
20 Qualys Security Conference, 2018 15 November 2018
Slide 22: Future of Security
Future of Security Transparent Orchestration Built-in Automation the only real solution Starts in DevOPs New generation of Security Analytics platforms 21 Qualys Security Conference, 2018 15 November 2018
Slide 23: Qualys
Qualys Embracing our own Digital Transformation
Slide 24: Cloud Platform Environment
Cloud Platform Environment Security at scale on hybrid clouds 15+ products providing comprehensive suite of security solutions 10,300+ customers 7 shared cloud platforms across North America, Europe & Asia 70+ private clouds platforms deployed globally... on-prem, AWS, Azure, GCP 23 Qualys Security
Slide 25: Cloud Platform Highlights
Cloud Platform Highlights 1+ trillion security events annually 3+ billion scans annually 2.5+ billion messages daily across Kafka clusters 620+ billion data points indexed in our Elasticsearch clusters Unprecedented 2-second visibility 24 Qualys Security Conference, 2018 15 November 2018
Slide 26: Qualys Cloud Platform Architecture
Qualys Cloud Platform Architecture Integrated Suite of CA AI VM CM TP FIM PC PCI SAQ IOC WAS WAF Applications Analytics and Reporting Engines Distributed Sensors Hardware Virtual Cloud Agent Passive API 25 Qualys Security Conference, 2018 15 November 2018
Slide 27: Qualys Sensors
Qualys Sensors Scalable, self-updating & centrally managed Cloud/ Cloud Agents Passive Physical Virtual Container API Light weight, multi- Passively sniff on Legacy data Private cloud Commercial IaaS & platform network Integration with infrastructure PaaS clouds Threat Intel feeds centers On premise
Slide 28: Qualys Cloud Platform Backend
Qualys Cloud Platform Backend Scalable, Micro-services, DevOps VM PC WAS WAF FIM Scanner Service APIs Qualys Streaming Data Backbone Cloud Asset Agent IOC Indexing Tagging Reporting Analytics Service Service Service 27 Qualys Security Conference, 2018 15 November 2018
Slide 29: Qualys Platform Approach
Qualys Platform Approach Extending solutions into remediation & response Rapid expansion of R&D org Focus on data lake for security analytics Key technology acquisitions & Investments 28 Qualys Security Conference, 2018 15 November 2018
Slide 30: Acquisitions & Investments
Acquisitions & Investments Nevis Passive scanning & Secure access control Netwatcher Event Correlation Platform 1Mobility Enterprise Mobility Layered Insight built-in Runtime container Security 42Crunch Investment API security 29 Qualys Security Conference, 2018 15 November 2018
Slide 31: Qualys Cloud Apps
Qualys Cloud Apps ASSET MANAGEMENT AI Asset Inventory SYN CMDB Sync CI Cloud Inventory CRI Certificate Inventory Maintain full, instant visibility of all your Synchronize asset information from Inventory of all your cloud assets across Inventory of TLS/SSL digital certificates on global IT assets Qu
Slide 32: Q4 2018 – more apps to come
Q4 2018 – more apps to come 2018 2019 PM AM Patch Management – beta Global IT Asset Management (managed assets) – GA PAS Passive Network Senor (unmanaged assets) – beta 31 Qualys Security Conference, 2018 15 November 2018
Slide 33: H1 2019 – Even More Apps to Come!
H1 2019 – Even More Apps to Come! Secure Access Control - Respond to threats automatically by controlling access to critical resources Certificate Management - Automated renewing and management of digital certificates Cloud Security Management - Remediation and management of cloud vulnerabilities Se
Slide 34: DEMO
DEMO
Slide 35: It's the Platform!
It’s the Platform! Regaining our lost visibility
Slide 36: Thank You
QUALYS SECURITY CONFERENCE 2018 18 Thank You Sumedh Thakar sthakar@qualys.com
Slide 37: Measuring QLYS' Business Model and Performance
QUALYS SECURITY CONFERENCE 2018 18 Measuring QLYS’ Business Model and Performance Making the World Safer - One App at a Time Qualys Security Conference Las Vegas, November 15th, 2018
Slide 38: The QLYS Cloud Platform Model
The QLYS Cloud Platform Model Drives Multi-Product Adoption Provides Operating Leverage Delivers Profitable Growth 37 Qualys Security Conference, 2018 15 November 2018 37
Slide 39: Expanding Our TAM
Expanding Our TAM 21% 12% $20.7B Qualys growth(1) CAGR $10.0B Cloud Security $11.6B $5.3B $2.8B IT Asset Management $0.7B Web Security: SaaS(2) $1.3B $1.9B Network and Edge $0.5B $0.6B $2.5B Security Policy and Compliance $1.6B $0.8B $1.6B Vulnerability Assessment: Application $1.8B $0.9B Vulnerabil
Slide 40: Platform Adoption Is Accelerating…
Platform Adoption Is Accelerating… 69% 39% 20% 9% 69% 64% 59% 57% 39% 30% 23% 19% 20% 14% 9% 6% 6% 2% 0% 2% Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 FY15 FY16 FY17 FY18 FY15 FY16 FY17 FY18 FY15 FY16 FY17 FY18 FY15 FY16 FY17 FY18 2+ solutions 3+ solutions 4+ solutions 5+ solutions % of Enterpr
Slide 41: …In Part Due to Increasing Cloud Agent Adoption…
…In Part Due to Increasing Cloud Agent Adoption… (millions) Number of Cloud Agents Sold 14.5 8.7 7.9 6.6 LTM LTM LTM LTM Q4 2017 Q1 2018 Q2 2018 Q3 2018 Note: Adjusted from Q3 2018 Earnings 40 Qualys Security Conference, 2018 15 November 2018 40
Slide 42: …Driving Higher Revenues…
…Driving Higher Revenues… ($ in thousands) $359 $326 5x 7x of 1-solution $273 $268 average $258 Avg. LTM revenues per customer $206 $209 $192 $158 $136 $105 $48 $52 $49 $52 LTM LTM LTM LTM Q3 FY15 Q3 FY16 Q3 FY17 Q3 FY18 Enterprise customers with 1 solution Enterprise customers with 3+ solutions Ent
Slide 43: …and Increased Stickiness
…and Increased Stickiness 99% 97% Enterprise Gross Dollar Retention Rate 92% 2 Products 3 Products 4 Products LTM 3Q18 Note: Gross Dollar Retention Rate is the retention rate of prior year Enterprise ARR (excluding upsell and downsell) averaged over the last four quarters 42 Qualys Security Conferen
Slide 44: Platform Enables Best in Class Margins…
Platform Enables Best in Class Margins… QLYS 39% Security SaaS Peer average: 11% EL NW CS W R ZE LO VRW X C Y SO RP BL PCOD TE TA FT M H PN SC O P Q YC TE BR ZS NS SA B S PAEV VE YS B IM T Y N T FE E RN E O T TW K M T PF V S P IL SH X O G M I FS D N A N N IM Y C P L L P O D K BO U S L E PA M Q2 CY20
Slide 45: …Driven by a Scalable Operational Model…
…Driven by a Scalable Operational Model… % of Customer Support, R&D as a % of 2017 Revenue per Operations, and R&D Revenues S&M headcount headcount in India 29% $1.2M 58% 16% 201 7 Actual PF for all US T eam 201 7 Attracting Top & Loyal Talent Leveraging Low Cost Geos High Sales Leverage Note: ‘PF f
Slide 46: … And a Top Tier LTV/CAC
… And a Top Tier LTV/CAC QLYS 9.3 Peer Median: 8.4 TWLO PAYC SHOP MSFT NOW QLYS RNG ZEN MDSO HUBS TLND FIVN APPN APTI HDP CSOD DATA Q3 YTD 2018 LTV/CAC vs. select SaaS peers Note: Calculated using Barclay’s Research methodology using GAAP financials: CAC = 80% of PY S&M; LTV = Net New Revenue multip
Slide 47: Revenues
Strong and Consistent Organic Revenue Growth Outperforming Market and Gaining Share ($ in millions) $231 22% 20% CAGR $205 $198 $164 $168 $134 Revenues 2014 2015 2016 2017 Q3 2017 Q3 2018 YTD YTD 46 Qualys Security Conference, 2018 15 November 2018 46
Slide 48: Expanding Industry-Leading EBITDA Margins
Expanding Industry-Leading EBITDA Margins ($ in millions) Adjusted EBITDA 42 % Adjusted EBITDA margin (%) $1 40 41% 41 % $1 20 37% 40 % 39 % 34% 36% $1 00 34% 38 % $85 $83 $8 0 37 % $68 36 % $61 $6 0 $57 35 % $4 0 34 % 33 % $2 0 32 % $0 31 % 20 15 20 16 20 17 Q3 Q3 20 17 YTD 20 18 YTD Note: Non-GAAP
Slide 49: 2021 Long-Term Financial Model
2021 Long-Term Financial Model As the platform adoption continues to increase, we expect to see in 2021: Revenue growth of low 20s to mid 20s Gross margins of approximately 80% EBITDA margins of 40% to 42% Non-GAAP free cash flow margins of 35% to 40% (assuming a 23% cash tax rate) 48 Qualys Securit
Slide 50: QLYS Investment Highlights
QLYS Investment Highlights Uniquely positioned to capitalize on stack consolidation and move to the cloud Multiple levers of recurring revenue growth Scalable business model and industry-leading profitability Early stages of building a highly profitable $Bn+ revenue company 49 Qualys Security Confer
Slide 51: Appendix
Appendix 50 Qualys Security Conference, 2018 15 November 2018
Slide 52: Q4 2018 and Full Year 2018
Q4 2018 and Full Year 2018 Guidance Reminder Q4 2018 Revenues in the range of $73.7 to $74.5 million, representing 17% to 18% growth over the same quarter in 2017 GAAP EPS in the range of $0.17 to $0.19 per diluted share Non-GAAP EPS in the range of $0.39 to $0.41 per diluted share Full year 2018 Re
Slide 53: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA ($ in millions) Q3 2017 Q3 2018 2014 2015 2016 2017 YTD YTD Net income $30.2 $15.9 $19.2 $40.4 $37.6 $42.9 Depreciation and amortization of 11.5 14.0 16.6 19.8 14.7 18.9 property and equipment Amortization of intangible assets 0.4 0.4 0.4 0.8 0.4 2.4 Interest expens
Slide 54: Reconciliation of Non-GAAP Net Income
Reconciliation of Non-GAAP Net Income ($ in millions, except per diluted share metric) Q3 2017 2018 GAAP Net income $40.4 $23.5 Stock-based compensation 27.0 6.8 Intangible asset amortization (1) 0.5 0.8 Acquisition-related expense (2) 0.1 0.0 Tax adjustment (24.5) (10.4) Non-GAAP Net income $43.5 $
Slide 55: Thank You
QUALYS SECURITY CONFERENCE 2018 18 Thank You Melissa Fisher mfisher@qualys.com