Qualys, Inc. · NASDAQ:QLYS
Qualys — Investor Day (November 2019)
82 slides from Qualys's investor day presentation, Nov 20, 2019
Slide 1: Security at a Crossroads – Part II
ANALYST AND INVESTOR LUNCHEON AT QSC19 LAS VEGAS Security at a Crossroads – Part II The drastic changes and opportunities the Cloud brings to the industry, the Security Vendors and the Security Professionals Philippe Courtot Chairman and CEO, Qualys, Inc.
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: Looking Back: The Inconvenient Truth
Looking Back The Inconvenient Truth 3 Qualys Security Conference 20 November 2019
Slide 4: The Evolution of Computing
The Evolution of Computing MAINFRAME COMPUTING 1955 – 2000 45 YEARS MINI COMPUTERS COMPUTING 1977 – 1998 20 YEARS CLIENT SERVER COMPUTING 1985 – 2015 20 YEARS CLOUD BASED COMPUTING AWS 2006, AZURE 2007, GCP 2008 What’s next? 5G – Quantum Computing – Genetic Storage ... 4 Qualys Security Conference 2
Slide 5: Changes and Opportunities Created
Changes and Opportunities Created Driven by advances in Computing Technologies and the underlining architectures they enable 5 Qualys Security Conference 20 November 2019
Slide 6: What about Security?
What about Security? MAINFRAME COMPUTING For the very large companies MINI COMPUTERS COMPUTING For the Labs/ Departments CLIENT SERVER COMPUTING For the employees CLOUD BASED COMPUTING For everyone on the Planet With Client Server Computing Security became far more Complex 6 Qualys Security Conferen
Slide 7: The Rise of Hackers – Bolting On Security
The Rise of Hackers – Bolting On Security The Digital Transformation is accelerating and changing everything we know 7 Qualys Security Conference 20 November 2019
Slide 8: The Four New Security Market Segments in the Making
The Four New Security Market Segments in the Making 1) LARGE ENTERPRISE 2) CLOUD COMPUTING VENDORS 3) A NEW GENERATION OF MSSPS 4) OT and IOT VENDORS The Enterprise Network is about to shrink, accelerating the undergoing vendor consolidation 8 Qualys Security Conference 20 November 2019
Slide 9: Challenges Facing Traditional Enterprise Security Vendors
Challenges Facing Traditional Enterprise Security Vendors 1) RE-ARCHITECTING CHALLENGE 2) DISTRIBUTION CHANNELS ARE CHANGING 3) A NEW BUYER IS EMERGING 4) BUSINESS MODEL CHALLENGE Security Professionals must adapt and embrace change 9 Qualys Security Conference 20 November 2019
Slide 10: IT, DevOps and Security Teams must Unite and Create True Partnerships with Vendors
IT, DevOps and Security Teams must Unite and Create True Partnerships with Vendors Security is now front and center and it must be built-in 10 Qualys Security Conference 20 November 2019
Slide 11: Societe Generale Embracing the Change
Societe Generale Embracing the Change 11 Qualys Security Conference 20 November 2019
Slide 12: Qualys Contribution: Introducing VMDR
Qualys Contribution Introducing VMDR 12 Qualys Security Conference 20 November 2019
Slide 13: VMDR - Bringing VM to the Next Level
VMDR - Bringing VM to the Next Level A Single Cloud Platform that unites IT, DevOps, Security and Compliance teams. The underlying foundation for our forthcoming EDR, Data Lake/SIEM and other initiatives. Unprecedented real time visibility, detection, automation and response with rich contextual inf
Slide 14: A Tribute to our Customers
A Tribute to our Customers 72% of the Forbes Global 50, 46% of Global 500, and 25% of Global 2000 DAIMLER 14 Qualys Security Conference 20 November 2019
Slide 15: Philippe Courtot
ANALYST AND INVESTOR LUNCHEON AT QSC19 LAS VEGAS Philippe Courtot pcourtot@qualys.com
Slide 16: The Evolution of the Qualys Platform
ANALYST AND INVESTOR LUNCHEON AT QSC19 LAS VEGAS The Evolution of the Qualys Platform Unveiling Latest Updates and Next-Gen Initiatives Sumedh Thakar President & Chief Product Officer, Qualys, Inc.
Slide 17: TTR: Time To Remediate
T T R Time To Remediate Qualys Security Conference 20 November 2019
Slide 18: True measure of effectiveness of security program
True measure of effectiveness of security program 18 Qualys Security Conference 20 November 2019
Slide 19: Digital Transformation is accelerating
Digital Transformation is accelerating Qualys Security Conference 20 November 2019
Slide 20: Rapid Adoption of New Processes and Technologies
Rapid Adoption of New Processes and Technologies Elastic, Kafka, Cassandra, Flink, Spark, etc. DevOps 20 Qualys Security Conference 20 November 2019
Slide 21: Infrastructure is Increasingly Hybrid
Infrastructure is Increasingly Hybrid Cloud, bare-metal, Containers, Endpoints, Mobility, OT, IoT, APIs, etc. 21 Qualys Security Conference 20 November 2019
Slide 22: Security Challenges
Security Challenges Increasing surface area Decreasing visibility Increasing TTR 22 Qualys Security Conference 20 November 2019
Slide 23: Silos!
Silos! People Process Tools 23 Qualys Security Conference 20 November 2019
Slide 24: Reduce TTR
Reduce TTR Real-time context with continuous data collection Powerful analytics platform to correlate multiple datapoints and detect issues Real-time response capabilities Powerful decision engine to transparently orchestrate the response 24 Qualys Security Conference 20 November 2019
Slide 25: Home Security Solutions
Home Security Solutions Nest Home Security Sensors Nest Aware Subscription 25 Qualys Security Conference 20 November 2019
Slide 26: Enterprise Security Tools Today
Enterprise Security Tools Today Point solutions Multiple agents Multiple consoles 26 Qualys Security Conference 20 November 2019
Slide 27: Integrations?
Integrations? Integrate point solutions But then too many point to point integrations Doesn’t provide full context 27 Qualys Security Conference 20 November 2019
Slide 28: The Rise of the SIEM
The Rise of the SIEM Tie together point solutions But still point solutions! + UEBA + ML/AI Detection? Sort of with low confidence 28 Qualys Security Conference 20 November 2019
Slide 29: What About Response?
What About Response? Additional point solutions to respond to Well now we need new app - SOAR Ties point solutions together – again! 29 Qualys Security Conference 20 November 2019
Slide 30: Evolution of the Qualys Cloud Platform
Evolution of the Qualys Cloud Platform Remember those 19+ Apps? 30 Qualys Security Conference 20 November 2019
Slide 31: Evolution of the Qualys Cloud Platform
Evolution of the Qualys Cloud Platform Unifying IT, Security & Compliance Consolidating the Stack: reducing point solutions, their agents and consoles 31 Qualys Security Conference 20 November 2019
Slide 32: Reduce TTR: Best TTR ever?
Reduce TTR 0 Best TTR ever? 32 Qualys Security Conference 20 November 2019
Slide 33: Cloud & Container Leading the Way
Cloud & Container Leading the Way DevOps in CI/CD Azure built-in security 33 Qualys Security Conference 20 November 2019
Slide 34: Evolution of the Qualys Cloud Platform
Evolution of the Qualys Cloud Platform Cloud-based platform build into your DevOps 34 Qualys Security Conference 20 November 2019
Slide 35: Qualys Next-Gen Initiatives
Qualys Next-Gen Initiatives 35 Qualys Security Conference 20 November 2019
Slide 36: Next-Gen Initiatives 2020
Next-Gen Initiatives 2020 Now introducing Qualys Respond Adding Security Analytics & Orchestration 36 Qualys Security Conference 20 November 2019
Slide 37: Comprehensive Response Capabilities
Comprehensive Response Capabilities Covering servers, endpoints, mobile, network, web applications, cloud & containers 37 Qualys Security Conference 20 November 2019
Slide 38: Security Analytics, Correlation & Data Lake
Security Analytics, Correlation & Data Lake Qualys built-in! Plug-n-play analytics Powerful cloud-based correlation and analytics of known & unknown threats
Slide 39: SOAR
SOAR Qualys built-in! Granular flexible playbooks Quickly respond with complex actions
Slide 40: Advanced Correlation & Analytics
Advanced Correlation & Analytics ML/AI Service Orchestration & Automation UEBA Patterns | Outlier | Predictive SoC Integration | Playbooks | Response User & Entity Behavior Analytics Threat Hunting Security Analytics Advanced Correlation Search | Exploration | Behavior Graph Anomaly | Visualization
Slide 41: Evolving Qualys Cloud Platform to the Next Level
Evolving Qualys Cloud Platform to the Next Level Single platform for detection & response with built-in orchestration 41 Qualys Security Conference 20 November 2019
Slide 42: One solution to discover, assess, prioritize and patch critical vulnerabilities
One solution to discover, assess, prioritize and patch critical vulnerabilities 42 Qualys Security Conference 20 November 2019
Slide 43: Qualys Security Conference 20 November 2019
43 Qualys Security Conference 20 November 2019
Slide 44: New prioritization engine
New prioritization engine Combining real-time threat intelligence, asset context and machine learning Accurately pinpoint patches for most lethal vulnerabilities instantly End-to-end workflows & real-time, interactive dashboards 44 Qualys Security Conference 20 November 2019
Slide 45: Qualys VMDR
Qualys VMDR Fastest platform to go from discovering new assets to patching it’s most critical vulnerabilities with contextual prioritization PERIOD! 45 Qualys Security Conference 20 November 2019
Slide 46: Cloud Platform Architecture
Cloud Platform Architecture 46 Qualys Security Conference 20 November 2019
Slide 47: Qualys Sensor Platform
Qualys Sensor Platform Scalable, self-updating & centrally managed Physical Virtual Cloud/Container Cloud Agents Passive API Passively sniff on network Integration with Threat Intel Legacy data centers Private cloud infrastructure Commercial IaaS & PaaS Light weight, multi-platform clouds feeds Real
Slide 48: Qualys Cloud Platform
Qualys Cloud Platform 19+ products providing comprehensive suite of security solutions 12,200+ customers and active users 8 shared cloud platforms across North America, Europe & Asia 87 private clouds platforms deployed globally... on-prem, AWS, Azure, GCP 19+ PB storage and 27000 cores 48 Qualys Se
Slide 49: Qualys Cloud Platform
Qualys Cloud Platform 3+ billion IP scans/Audits per year 50,000+ Scanner Appliances 28 million Cloud Agents 2+ trillion security events annually 5+ billion messages daily across Kafka clusters 3.2+ trillion data points indexed in our Elasticsearch clusters 49 Qualys Security Conference 20 November
Slide 50: Continued Platform Expansion
Continued Platform Expansion ICS OT environments SaaS security & compliance
Slide 51: More DRs Coming Soon
More DRs Coming Soon Endpoint Detection & Response Cloud Detection & Response Container Detection & Response Mobile Device Detection & Response SaaS Security Detection & Response 51 Qualys Security Conference 20 November 2019
Slide 52: Sumedh Thakar
ANALYST AND INVESTOR LUNCHEON AT QSC19 LAS VEGAS Sumedh Thakar sthakar@qualys.com
Slide 53: Qualys Global Sales Model
ANALYST AND INVESTOR LUNCHEON AT QSC19 LAS VEGAS Qualys Global Sales Model QSC19 Investor Session Laurie MacCarthy EVP, Worldwide Field Operations
Slide 54: Agenda
Agenda What makes the Qualys sales model scalable? Our Unique Field Operations approach… How do we enable the sales team? The Qualys platform as a distribution model Growing into 2020 54 Analyst and Investor Luncheon at QSC19 Las Vegas November 20, 2019
Slide 55: What makes our sales model scalable?
What makes our sales model scalable? Qualys leverages Pre (Hunters) and Post (Farmers) Technical Account Managers with expertise across our entire platform that support a Hybrid Sales Model comprise of Direct and Indirect Sales via Resellers and MSSPs. 55 Analyst and Investor Luncheon at QSC19 Las V
Slide 56: Our Unique Field Operations Approach
Our Unique Field Operations Approach Our Technical Account Managers build trusted relationships with our customers based on the understanding of their security and compliance strategies. 56 Analyst and Investor Luncheon at QSC19 Las Vegas November 20, 2019
Slide 57: Field Enablement
Field Enablement Subject Matter Experts (SME) are part of the Field Operations working closely with product managers to ensure that each of our TAMs are equipped to support each of our solutions. 57 Analyst and Investor Luncheon at QSC19 Las Vegas November 20, 2019
Slide 58: The Qualys Platform is the Distribution Channel (Try and Buy)
The Qualys Platform is the Distribution Channel (Try and Buy) Our freemium services continue to lead the industry in providing coverage and visibility for everyone at a fraction of the cost of traditional lead-gen campaigns. 58 Analyst and Investor Luncheon at QSC19 Las Vegas November 20, 2019
Slide 59: 2020 Key Revenue Drivers
2020 Key Revenue Drivers We are the ONLY solution in our space that provides: - Global Visibility - Entire VM lifecycle - 12+ enterprise security and compliance solutions consolidated - Security built into the Digital Transformation 59 Analyst and Investor Luncheon at QSC19 Las Vegas November 20, 20
Slide 60: Thank You
Thank You lmaccarthy@qualys.com
Slide 61: Qualys Scalable Business Model
ANALYST AND INVESTOR LUNCHEON AT QSC19 LAS VEGAS Qualys Scalable Business Model Melissa Fisher, CFO November 20, 2019
Slide 62: Scalable Business Model
Scalable Business Model Strong and Consistent Performance 33% 26% 18% Revenue Adj. EBITDA FCF 3Q16 LTM – 3Q19 LTM CAGR 62 Analyst and Investor Luncheon at QSC19 Las Vegas November 20, 2019
Slide 63: Revenues
Strong Organic Revenue Growth Outperforming Market and Gaining Share ($ in millions) 18% CAGR 321.5 278.7 230.8 197.9 Revenues 164.3 2015 2016 2017 2018 2019e 63 Analyst and Investor Luncheon at QSC19 Las Vegas November 20, 2019
Slide 64: Multiple Levers of Revenue Growth…
Multiple Levers of Revenue Growth… ** * Free Service ** Paid and Free Service 64 Analyst and Investor Luncheon at QSC19 Las Vegas November 20, 2019
Slide 65: …For Both New and Existing Customers
…For Both New and Existing Customers Enterprise Net Dollar % of Bookings Growth Expansion Rate 108% 66% New Existing 34% LTM 3Q19 LTM 3Q19 65 Analyst and Investor Luncheon at QSC19 Las Vegas November 20, 2019
Slide 66: Adoption of New Solutions Fuels Growth and Profitability
Adoption of New Solutions Fuels Growth and Profitability ($ in millions) Quarterly revenues vs. customers 19 APPS VM, PC, PCI, WAS, WAF, CM, FIM, SAQ, AI, TP, SYN, CRA, CI… $100 4 APPS VM, PC, PCI, WAS 2 $50 APPS VM, PCI $0 2008 2013 2019e Quarterly revenues Customers 66 Analyst and Investor Luncheo
Slide 67: Multi-Solution Adoption Increasing
Multi-Solution Adoption Increasing 72% 46% 26% 13% 72% 69% 64% 46% 59% 39% 30% 26% 23% 20% 14% 9% 13% 6% 2% 6% Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 Q3 FY16 FY17 FY18 FY19 FY16 FY17 FY18 FY19 FY16 FY17 FY18 FY19 FY16 FY17 FY18 FY19 2+ Solutions 3+ Solutions 4+ Solutions 5+ Solutions % of Ente
Slide 68: Cloud Agents Driving Adoption of New Solutions
Cloud Agents Driving Adoption of New Solutions Number of Cloud Agents Sold 27.9 23.6 17.9 16.2 LTM LTM LTM LTM Q4 2018 Q1 2019 Q2 2019 Q3 2019 68 Analyst and Investor Luncheon at QSC19 Las Vegas November 20, 2019
Slide 69: Multiproduct Adoption Drives Increased Stickiness…
Multiproduct Adoption Drives Increased Stickiness… 99% 97% 94% 2 Products 3 Products 4 Products 3Q19 Enterprise Gross Dollar Retention Rate Note: Gross Dollar Retention Rate is the retention rate of prior year Enterprise ARR (excluding upsell and downsell) averaged over the last four quarters 69 Ana
Slide 70: …And Higher ARPU
…And Higher ARPU Enterprise customers with 4+ solutions spend ($ in thousands) over 5x that of 1-solution customers 70 Analyst and Investor Luncheon at QSC19 Las Vegas November 20, 2019
Slide 71: Customers Aggregate Revenues
Increasing Number of Large Customers ($ in millions) Aggregate Revenues 89 80 $100 67 $99 Customers $80 60 47 $60 $75 34 40 $40 $48 $20 $32 20 $0 0 LTM LTM LTM LTM Q3 2016 Q3 2017 Q3 2018 Q3 2019 Note: Customer count is defined as customers with greater than $500K in annual revenue 71 Analyst and In
Slide 72: Multiple Levers for Expanding Margins…
Multiple Levers for Expanding Margins… ($ in millions) 72 Analyst and Investor Luncheon at QSC19 Las Vegas November 20, 2019
Slide 73: …Driving Strong Cash Flow Generation
…Driving Strong Cash Flow Generation ($ in millions) Note: 2017 non-GAAP Free cash flow normalized for headquarters office facility costs (net) 73 Analyst and Investor Luncheon at QSC19 Las Vegas November 20, 2019
Slide 74: High Sales Leverage
High Sales Leverage Revenue per S&M headcount $1.2M $1.2M $1.1M $1.0M 2015 2016 2017 2018 74 Analyst and Investor Luncheon at QSC19 Las Vegas November 20, 2019
Slide 75: Strong LTV/CAC
Strong LTV/CAC Security SaaS QLYS 9.0 Peer Median: 8.5 2018 LTV/CAC vs. Source: Morgan Stanley select Security and SaaS peers Note: Calculated using Barclay’s Research methodology using GAAP financials: CAC = 80% of PY S&M; LTV = Net New Revenue multiplied by Gross Margin divided by Churn Rate (assu
Slide 76: Cloud Platform Drive Operational Efficiencies
Cloud Platform Drive Operational Efficiencies 25% 22% 23% 21% 21% 19% 20% 4% 4% 4% 3% 15% 10% 5% 17% 17% 18% 16% 0% 2016 2017 2018 YTD 2019 Peer Median YTD 2019 Operations % of Revenue Support as % of Revenue COGS % of Revenue 76 Analyst and Investor Luncheon at QSC19 Las Vegas November 20, 2019
Slide 77: Maintaining R&D Efficiency while Increasing Product Deployment
Maintaining R&D Efficiency while Increasing Product Deployment 20 18% 19 19 18 apps apps 16 17% 13 14 apps 10 12 16% apps 10 18% 8 15% 17% 16% 16% 16% 6 14% 6 4 apps 2 13% 0 2016 2017 2018 YTD 2019 Peer Median YTD 2019 R&D as % of Revenue # of Products 77 Analyst and Investor Luncheon at QSC19 Las V
Slide 78: Scalable R&D Model
Scalable R&D Model Platform Leverage & Strong Engineering Presence in India % of R&D Headcount in R&D as % of Revenue: PF India R&D as % of Revenue for all US Team 72% 77% 37% 63% 17% 47% 2016 2017 2018 3Q19 YTD 2019 YTD 2019 Attracting Top & Loyal Talent High R&D Leverage Note: ‘PF for all US Team’
Slide 79: Delivering a Best-In-Class Operating Model
Delivering a Best-In-Class Operating Model Expense as a % of Revenue # of Products 8% G&A 11% 20% S&M 40% 19 17% R&D 18% 19% 6 COGS 23% Qualys Peer Median Note: YTD 2019 Expenses as % of revenue (Non-GAAP); Source: Morgan Stanley excluding OneSpan 79
Slide 80: Industry Leading Margins
Industry Leading Margins QLYS Q2 CY2019 Adjusted EBITDA margin vs. Security 42% select Security and SaaS peers SaaS Peer Median: 10% 80 Analyst and Investor Luncheon at QSC19 Las Vegas November 20, 2019
Slide 81: Superior Performance on the Rule of 40
Superior Performance on the Rule of 40 Q2 CY2019 Rule of 40 vs. Security select Security and SaaS peers SaaS QLYS 58% Rule of 40 81 Analyst and Investor Luncheon at QSC19 Las Vegas November 20, 2019
Slide 82: Melissa Fisher
ANALYST AND INVESTOR LUNCHEON AT QSC19 LAS VEGAS Melissa Fisher mfisher@qualys.com