Slide 1: Investor Presentation
Investor Presentation Securing the Digital Transformation Building a safer world - one app at a time Sumedh Thakar, interim CEO Joo Mi Kim, CFO February 10, 2021
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, and compliance solutions, and secure the digital transformation 3
Slide 4: 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 4
Slide 5: Expanding Market Opportunity
Expanding Market Opportunity $30B CAGR $5.6B 10% Security Analytics and Orchestration(1) $19B 7% Endpoint Security $9.9B 13% Cloud Security 8% IT Asset Management $8.1B $3.3B 11% Compliance $2.3B $3.8B 12% Web Application Security $3.0B $4.2B 11% Vulnerability Management $3.0B $1.7B $1.2B $1.5B $2.0
Slide 6: Blue Chip Global Customer Base
Blue Chip Global Customer Base 66% of the Forbes Global 50, 46% of Global 500, and 25% of Global 2000 standardized on Qualys 19,000+ Customers DAIMLER Note: Customers include active subscribers to our free services 6
Slide 7: Scalable Go-to-Market Model
Scalable Go-to-Market Model Market segmentation & key strategic partners ENTERPRISE MID-MARKET 2020 REVENUES Large enterprise Small / medium business (Over 5,000 employees) (Up to 5,000 employees) 58% New Existing New Existing Direct customers customers customers customers CHANNEL 42% Indirect 7
Slide 8: Attractive Value Proposition for Partners
Attractive Value Proposition for Partners High-margin recurring revenue with no capex / maintenance costs Outsourcing VAS MSSPs Telcos Resellers Consultants Providers 8
Slide 9: Global Presence
Global Presence 19,000+ 130+ 8 84 54 Customers Countries Shared Platforms Private Clouds Locations Qualys’ Shared Platforms Qualys’ Locations Note: Customers include active subscribers to our free services 9
Slide 10: Scalable Business Model
Scalable Business Model 2017- 2020 CAGR 29% 26% 16% Revenue Adj. EBITDA FCF 10
Slide 11: Strong Organic Revenue Growth
Strong Organic Revenue Growth ($ in millions) 16% CAGR $363 $322 $279 $231 Revenues 2017 2018 2019 2020 11
Slide 12: Adoption of New Solutions Fuels Growth and Profitability
Adoption of New Solutions Fuels ($ in millions) Growth and Profitability Quarterly revenues vs. customers 20+ APPS VM, WAS, PC, TP, CM, PCI, FIM, AI, CS, PM, IOC, CSA… $100 4 APPS VM, PC, PCI, WAS $50 2 APPS VM, PCI $0 2008 2013 2020 Quarterly revenues Customers 12
Slide 13: Number of Cloud Agents Sold
New Apps Enabled by Cloud Agents (Units in millions) Number of Cloud Agents Sold 56 50 43 38 LTM LTM LTM LTM Q1 2020 Q2 2020 Q3 2020 Q4 2020 13
Slide 14: VMDR Adoption Increasing
VMDR Adoption Increasing 35% % VM Customers Renewed into VMDR 35% 20% 6% Q1 2020 Q2 2020 Q3 2020 Q4 2020 Note: Excludes strategic alliances deals 14
Slide 15: Platform Adoption Driving Higher Customer Spend
Platform Adoption Driving ($ in millions) Higher Customer Spend 18% Growth $120 $124 Aggregate Revenues $100 $105 $80 $60 $79 $40 $54 $20 $0 LTM LTM LTM LTM Q4 2017 Q4 2018 Q4 2019 Q4 2020 Number of 51 70 93 106 Customers 15 Note: Customer count is defined as customers with greater than $500K in ann
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 $1.3M 78% $1.0M 36% 2015 2020 2015 2020 High sales leverage Leveraging low cost geos 16
Slide 17: Expanding Margins
Expanding Margins ($ in millions) 47% 43% $170 39% 50% $160 $138 45% $140 37% 40% $120 $109 35% $100 $85 30% 25% $80 20% $60 15% $40 10% $20 5% $0 0% 2017 2018 2019 2020 Adjusted EBITDA Adjusted EBITDA margin (%) 17
Slide 18: Increasing Free Cash Flow
Increasing Free Cash Flow ($ in millions) 41% 41% $160 36% $150 45% $140 $131 40% $120 30% 35% $101 30% $100 25% $80 $70 20% $60 15% $40 10% $20 5% $0 0% 2017 2018 2019 2020 Free cash flow Free cash flow margin (%) 18
Slide 19: Capital Allocation
Capital Allocation (in millions) Returning Cash to Shareholders via Share Repurchases $127 $85 $86 41.9 41.3 40.8 2018 2019 2020 Share Repurchases Weighted Average Diluted Shares Outstanding 19
Slide 20: Industry-leading Margins
Industry-leading Margins QLYS 2019 Adjusted EBITDA margin vs. 43% select Security and SaaS peers Security SaaS Peer Median: 13% 20
Slide 21: Industry-leading Performance
Industry-leading Performance 2019 Rule of 40 vs. select Security and SaaS peers Security QLYS SaaS 59% Rule of 40 Note: 2019 Revenue Growth % + EBITDA Margin % 21
Slide 22: Qualys Cloud Platform & What's Coming Next
Qualys Cloud Platform & What’s Coming Next 22
Slide 23: Qualys Sensor Platform
Qualys Sensor Platform Scalable, self-updating and centrally managed 23
Slide 24: Qualys Cloud Platform
Qualys Cloud Platform INTEGRATED SUITE OF APPLICATIONS (20+) SHARED Authentication Authorization Subscription Indexing Data Sync Tagging EXTENSIBLE APIs SERVICES Service Service Service Service Service Service MESSAGING, DATA, ANALYTICS PLATFORM INFRASTRUCTURE & Docker/ Logging Monitoring Config Mgm
Slide 25: 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 6+ billion 50,000+ 56 million 2+ trillion IP Scans/Audits a Year Scanner appliances Cloud Agents across Security Events collected servers, en
Slide 26: Cloud Platform Enables Vendor & Stack Consolidation
Cloud Platform Enables Vendor & Stack Consolidation IT Security Compliance Web App Security Asset Management Cloud/Container Security 26
Slide 27: 20+ IT, Security & Compliance Apps
20+ IT, Security & Compliance Apps Qualys Apps are Fully Integrated and Natively Share the Data They Collect ASSET MANAGEMENT CLOUD/CONTAINER SECURITY WEB APP SECURITY Global IT Asset Inventory Cloud Inventory Web Application Scanning CMDB Sync Cloud Security Assessment Web Application Firewall Cert
Slide 28: Qualys Multi-Vector EDR
Qualys Multi-Vector EDR Bringing the Unified Power of the Qualys Cloud Platform to EDR Discover & Detect Investigate & Analyze Respond & Prevent Monitor assets, vulnerabilities, Correlate and provide context Mitigate the risk with malicious attacks, incidents response and prevent for future A new ap
Slide 29: Qualys Multi-Vector EDR: What Does it Take to Truly Secure Endpoints
Qualys Multi-Vector EDR: What Does it Take to Truly Secure Endpoints Asset Management Endpoint Detection & Protection Dynamic discovery of endpoints Malware & exploit protection software and hardware inventory Detection & analysis on MITRE Automated deployment of security tools Security incident ana
Slide 30: Qualys Multi-Vector EDR
Qualys Multi-Vector EDR Powered by the Qualys Cloud Platform and Singular Agent Uses the Qualys Cloud • Same agent for Inventory, VMDR, Config Compliance, FIM, Patch Agent • Remove from or avoid point solution agents for your systems Cloud Platform • Lightweight Cloud Agent only collects telemetry f
Slide 31: Qualys VMDR
Qualys VMDR Bringing Vulnerability Management to the Next Level Identify all known and unknown assets Automatically detect all known and unknown IT assets everywhere for a complete, categorized inventory enriched with details such as vendor lifecycle information and much more. Analyze Vulnerabilitie
Slide 32: Qualys VMDR
Qualys VMDR A single app for discovery, assessment, detection & response Qualys VMDR® covers all your needs and workflows. Priced on a per-asset basis and with no software to update, VMDR drastically reduces your total cost of ownership 32
Slide 33: Additional Apps to Come
Additional Apps to Come Cloud Security Management Secure Access Control Remediation and management of cloud Respond to threats automatically by vulnerabilities controlling access to critical resources OT / ICS Security XDR: Security Analytics & Response Monitor and secure operational technology Coal
Slide 34: 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 No hardware to Lower Easy to deploy buy or manage operating costs and maintain or on-
Slide 35: Appendix
Appendix
Slide 36: Increasing Number of Apps Delivered Through the Qualys Cloud Platform
Increasing Number of Apps Delivered Through the Qualys Cloud Platform IT SECURITY ASSET MANAGEMENT CLOUD/CONTAINER SECURITY Vulnerability Management, Threat Protection Continuous Monitoring Global IT Asset Inventory Cloud Inventory Detection & Response Pinpoint your most critical threats and Alerts
Slide 37: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA ($ in millions) 2017 2018 2019 2020 Net income $40.4 $57.3 $69.3 $91.6 Depreciation and amortization of property 19.8 25.2 25.1 26.6 and equipment Amortization of intangible assets 0.8 3.7 6.1 6.3 Provision for (benefit from) income taxes (1.1) (1.8) 10.6 10.5 Stock
Slide 38: Reconciliation of Non-GAAP Free Cash Flows
Reconciliation of Non-GAAP Free Cash Flows ($ in millions) 2017 2018 2019 2020 GAAP Cash flows provided by operating activities $107.6 $125.5 $160.6 $180.1 Purchases of property and equipment (37.8) (22.8) (27.6) (29.6) Principal payments under capital lease obligations — (1.6) (1.7) (0.1) Non-GAAP
Slide 39: Revenue by Geographic Area
Revenue by Geographic Area ($ in millions) 2017 2018 2019 2020 United States 162.7 185.9 206.6 230.4 70% 67% 64% 63% Foreign 68.1 93.0 115.1 132.5 30% 33% 36% 37% Total Revenues $230.8 $278.9 $321.6 $363.0 39