Slide 1: Investor presentation
Investor presentation Securing the Digital Transformation Building a safer world - one app at a time Philippe Courtot, Chairman and CEO Melissa Fisher, CFO July 31st, 2019
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: Market and Investment Opportunity
Market and Investment Opportunity The Power of the Qualys Cloud Platform One stack to consolidate traditional enterprise IT/security/compliance solutions and secure the Digital Transformation
Slide 4: Investment Highlights
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 Industry-leading Cloud Security and Compliance Platform
Slide 5: Large Expanding Market Opportunity
Large Expanding Market Opportunity Driven by Increasing Apps on Qualys’ Cloud Platform 12% CAGR $21.3B $2.8B IT Asset Management Cloud Security $12.1B $10.0B Endpoint Management (1) $1.9B Web Security: SaaS (2) $5.3B $0.6B $0.7B Network and Edge $1.3B $0.5B $2.5B Security Policy and Compliance $0.5B
Slide 6: Blue Chip Global Customer Base
Blue Chip Global Customer Base 72% of the Forbes Global 50, 46% of Global 500, and 25% of Global 2000 standardized on Qualys 12,200+ Customers Note: Customers include active users
Slide 7: Scalable Go-to-market Model
Scalable Go-to-market Model Market segmentation & key strategic partners 2018 ENTERPRISE SME & SMB REVENUES Large enterprise Small / medium business DIRECT (Over 5,000 employees) (Up to 5,000 employees) 59% New Existing New Existing customers customers customers customers CHANNEL 41%
Slide 8: Attractive Value Proposition for Partners
Attractive Value Proposition for Partners High-margin recurring revenue with no capex /maintenance costs Outsourcing VAS MSSPs Telcos Consultants Providers Resellers
Slide 9: Global Presence
Global Presence 12,200+ 130+ 8 81 48 Customers Countries Shared Platforms Private Clouds Locations Qualys’ Shared Platforms Qualys’ Locations Note: Customers include active users
Slide 10: Qualys Cloud Platform and Roadmap
Qualys Cloud Platform and Roadmap
Slide 11: Global Visibility Across Hybrid IT Environments Enables Superior Security
Global Visibility Across Hybrid IT Environments Enables Superior Security Scalable, extensible, self-updating & centrally managed Active Scanners Cloud Agents 3+ billion 50,000+ 23.6 million 2+ trillion IP Scans/Audits a Year Scanner appliances Cloud Agents across Security Events collected servers,
Slide 12: 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
Slide 13: Cloud Platform Serves as a Scalable Distribution Channel
Cloud Platform Serves as a Scalable Distribution Channel Scalable, Extensible, Micro-services, DevOps Scanner VM PC WAS WAF FIM Service Qualys Streaming Data Backbone Cloud Agent Asset Service Indexing Reporting Analytics IOC Tagging Service Service
Slide 14: Micro-Service Architecture
Micro-Service Architecture
Slide 15: Cloud Platform Enables Vendor and Stack Consolidation
Cloud Platform Enables Vendor and Stack Consolidation IT Security Compliance Monitoring Web App Security New Services
Slide 16: Increasing Number of Apps Delivered Through the Qualys Cloud Platform
Increasing Number of Apps Delivered Through the Qualys Cloud Platform ** * Free Service ** Paid and Free Service
Slide 17: Qualys Ubiquity Play
Qualys Ubiquity Play Introducing our Global IT Asset Discovery and Inventory as a Free Service Qualys Global IT Asset Inventory (AI) gives you a “single source of truth” for IT assets of all types, whether on-prem (devices and applications), mobile endpoints, clouds, containers, OT and IoT. “You can
Slide 18: Qualys Ubiquity Play
Qualys Ubiquity Play Single source of truth for IT and Security teams managing assets in hybrid environments. Free Features: • Real-time inventory of known and unknown assets across global IT footprint • Search across millions of assets and obtain full visibility of any device in seconds • Instantly
Slide 19: Introducing Qualys Global IT Asset Inventory
ANEW PRESCRIPTION FOR SECURITY AND ITS FREE. Introducing Qualys Global IT Asset Inventory” /INVENTORY © WARNING! SIDE EFFECTS MAY CAUSE
Slide 20: Additional Apps to Come in 2019
Additional Apps to Come in 2019 Passive Network Analysis Continuous and unobtrusive detection of every IT asset and its activity on the network Secure Access Control Respond to threats automatically by controlling access to critical resources Certificate Management Automated renewing and management
Slide 21: Qualys Cloud Platform Data Lake Initiative
Introducing New Expansion of the Qualys Cloud Platform Data Lake Initiative Note: Target Beta time frame 1H 2020
Slide 22: Scalable Business Model
Scalable Business Model © Qualys. Asset Inventory DASHBOARD INVENTORY ‘Qualys Demo (quays Jes) ® oruan20180.. + ° CATEGORY BREAKDOWN OPERATING SYSTEM DISTRIBUTION TOP HARDWARE MANUFACTURER Wm comouss Netra ret 272 view vel h sx fines 8 Lenore D rs =e lf : 2 Nawok 0-28 ee ried oO fica 8 ‘ow > Ss ee ‘
Slide 23: Adoption of New Solutions Fuels Growth and Profitability
Adoption of New Solutions Fuels Growth and Profitability ($ in millions) Quarterly revenues vs. customers 19 APPS $100 VM, PC, PCI, WAS, WAF, CM, FIM, SAQ, AI, TP, SYN, CRA, CI… 4 APPS $50 VM, PC, PCI, WAS 2 APPS VM, PCI $0 2008 2013 2018 Quarterly revenues Customers
Slide 24: Number of Cloud Agents Sold
New Apps Enabled by Cloud Agents (Units in millions) Number of Cloud Agents Sold 23.6 17.9 16.2 14.5 LTM LTM LTM LTM Q3 2018 Q4 2018 Q1 2019 Q2 2019
Slide 25: Strong and Consistent Organic Revenue Growth
Strong and Consistent Organic Revenue Growth Outperforming market and gaining share ($ in millions) 19% CAGR 16%
Slide 26: Increasing Adjusted EBITDA & Free Cash Flow
Increasing Adjusted EBITDA & Free Cash Flow ($ in millions) 2015 2016 2017 2018 Q2 Q2 2015 2016 2017 2018 Q2 Q2 2018 2019 2018 2019 YTD YTD YTD YTD Note: 2017 non-GAAP Free cash flow normalized for headquarters office facility costs (net)
Slide 27: Platform Adoption Accelerating
Platform Adoption Accelerating 71% 44% 24% 13% 2+ solutions 3+ solutions 4+ solutions 5+ solutions % of Enterprise customers with select number of solutions
Slide 28: Multiplier Effect
Multiplier Effect Enterprise customers with 4+ solutions spend over 5x that of 1-solution customers ($ in thousands) $274 $270 5+X $238 of 1-solution Avg. LTM revenues $220 $207 average per customer $192 $182 $153 $51 $50 $52 $50 LTM LTM LTM LTM Q2 2016 Q2 2017 Q2 2018 Q2 2019
Slide 29: Multi-Product Adoption Drives Increased Stickiness
Multi-Product Adoption Drives Increased Stickiness 99% 97% 91% 2 Products 3 Products 4 Products 2018 Enterprise Gross Dollar Retention Rate Note: Dollar Retention Rate is the retention rate of prior year Enterprise ARR (excluding upsell and downsell) averaged over the last four quarters
Slide 30: Increasing Number of Large Customers
Increasing Number of Large Customers ($ in millions) 83 60 Aggregate Revenues Customers 45 31 LTM LTM LTM LTM Q2 2016 Q2 2017 Q2 2018 Q2 2019 Note: Customer count is defined as customers with greater than $500K in annual revenue
Slide 31: 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 $1.2M $1.2M $1.1M 69% $1.0M 58% 46% 36% 2015 2016 2017 2018 2015 2016 2017 2018 High sales leverage Leveraging low cost geos
Slide 32: Industry-leading Margins
Industry-leading Margins Q1 CY2019 Adjusted EBITDA margin vs. select Security and SaaS peers QLYS Peer Median: 11%
Slide 33: Industry-leading Margins
Industry-leading Margins Q1 CY2019 Rule of 40 vs. select Security and SaaS peers QLYS Rule of 40
Slide 34: Unique Advantages of the Qualys' Cloud Platform
Unique Advantages of the Qualys’ Cloud Platform Single-pane-of-glass-view across on-premises assets, endpoints, containers and cloud environments No hardware to Lower Easy to deploy Unprecedented buy or manage operating costs and maintain scaling Nothing to install or manage, With everything in the
Slide 35: Appendix
Appendix © Qualys. WannaCry and Shadow Brokers + Aetions ~ Add Widget Fiterby Asset Tags C) MISSING MS17-010 PATCH WANNACRY RANSOMWARE DOUBLEPULSAR DETECTED - AUTH ONLY BACKDOORS ian t : WINDOWS HOSTS PENDING ns vs All Windows s vs All Windows «hit TOP 5 OS MISSING MS17-010 PATCH ((y TOP 5 EOLIOBSOL
Slide 36: Increasing Number of Apps Delivered Through the Qualys Cloud Platform
Increasing Number of Apps Delivered Through the Qualys Cloud Platform IT SECURITY GLOBAL IT ASSET MANAGEMENT Vulnerability Management Patch Management Asset Inventory ** Continuously detect and protect Streamline and accelerate vulnerability Maintain full, instant visibility of against attacks, anyt
Slide 37: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA ($ in millions)
Slide 38: Reconciliation of Non-GAAP Free Cash Flow
Reconciliation of Non-GAAP Free ($ in millions) Cash Flow Note: 2017 non-GAAP Free cash flow normalized for headquarters office facility costs (net)
Slide 39: Revenue by Geographic Area
Revenue by Geographic Area ($ in millions)