Slide 1: Investor presentation
Investor presentation Philippe Courtot, Chairman and CEO Melissa Fisher, CFO October 31st, 2017
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 li
Slide 3: Investment highlights
Investment highlights Leading SaaS security and compliance solutions cloud platform Uniquely positioned to capitalize on the stack consolidation and move to the cloud Multiple levers of recurring revenue growth Scalable business model and industry-leading profitability 2
Slide 4: Qualys: Next-gen Security and Compliance Platform
Qualys: Next-gen Security and Compliance Platform Next-gen public Next-gen public cloud Next-gen Next-gen cloud infrastructure infrastructure Incumbents applications applications Source: Morgan Stanley 3
Slide 5: Qualys Cloud Platform Benefits
Qualys Cloud Platform Benefits 2-second visibility across all of your global IT assets (on-premise, endpoints and cloud assets) Continuous assessment of your global security & compliance posture Identify vulnerable and compromised assets Consolidate all your security and compliance stacks Secure you
Slide 6: 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 On-premise Endpoints Cloud Environments V M w a r e 5
Slide 7: Qualys Cloud Platform Apps
Qualys Cloud Platform Apps ASSET MANAGEMENT Asset Inventory CMDB Sync Cloud Inventory (Beta) Maintain full, instant visibility of all your Synchronize asset information from Qualys Inventory of all your cloud assets across global IT assets into ServiceNow CMDB AWS, Azure, GCP and others Certificate
Slide 8: See the results in one place anytime, anywhere
See the results in one place anytime, anywhere Via dynamic and customizable dashboards and centrally managed, self-updating, integrated Cloud Apps in a single-pane-of-glass UIs (AssetView, CloudView, CertView…) 1+ trillion 250+ billion Security Events Data Points Indexed on Elasticsearch Clusters 3+
Slide 9: Applications to come
Applications to come Target beta dates Q4 2017 Q1 2018 Container Security Passive Network Discovery Discover, track, and continuously protect containers Discover and classify all live devices in your network in real-time Cloud Inventory Inventory of all your cloud assets across AWS, Azure, GCP and o
Slide 10: Qualys Cloud Platform enables vendor and stack consolidation
Qualys Cloud Platform enables vendor and stack consolidation IT Security Compliance Monitoring Web Application Security New services in the making New Services 9
Slide 11: Large expanding market opportunity
Large expanding market opportunity Qualys has taken the #1 market-share position over IBM and HP in the $1.6B Vulnerability Assessment Market 20% Qualys growth (1) 12% CAGR CAGR $8.2B New Services Coming (IOC, FIM, PM, $0.8B CertView, CloudView…) $0.7B $1.2B 1% Other Security $4.6B $0.8B $1.9B 8% We
Slide 12: Blue chip global customer base
Blue chip global customer base 70% of the Forbes Global 50 and 25% of the Forbes Global 2000 standardized on Qualys 9 of the top 10 in Major Banks 9,300+ Customers 9 of the top 10 in Software 8 of the top 10 in Consumer Discretionary 8 of the top 10 in Consumer Staples DAIMLER 8 of the top 10 in Tec
Slide 13: Scalable go-to-market model
Scalable go-to-market model Market segmentation & key strategic partners ENTERPRISE SME & SMB 2016 Large enterprise Small / medium business REVENUES (Over 5,000 employees) (Up to 5,000 employees) Direct New Existing New Existing customers customers customers customers 58% Channel 42% 12
Slide 14: Attractive value proposition for partners
Attractive value proposition for partners High-margin recurring revenue with no capex MSSPs Outsourcing VAS Consultant telcos providers resellers auditors 13
Slide 15: Strong global presence
Strong global presence 9,300+ 120+ 5 50 27 Customers Countries Data Centers Private Clouds Locations Qualys locations 14
Slide 16: Strong and consistent organic revenue growth
Strong and consistent organic revenue growth Outperforming market and gaining share ($ in millions) 22% 18% CAGR Normalized* $198 $164 $168 Revenues $134 $146 $108 2013 2014 2015 2016 Q3 2016 Q3 2017 YTD YTD *Normalized for MSSP and FX 15
Slide 17: Strong customer retention drives land and expand
Strong customer retention drives land and expand ($ in millions) Quarterly revenues vs. customers $60 $50 $40 9,300+ $30 Initial solution $20 Expansion of initial solution $10 Additional solutions 2010 2012 2014 2016 Future products Quarterly revenues Customers 16
Slide 18: Platform adoption accelerating
Platform adoption accelerating % of Enterprise customers with 3+ Qualys products has more than doubled in the last 3 years Percent of Enterprise customers with 3 or more Qualys solutions 30% 23% 19% 14% Q3 2014 Q3 2015 Q3 2016 Q3 2017 Note: PCI excluded in the product count for Enterprise customers
Slide 19: Multiplier effect
Multiplier effect Enterprise customers with 3+ products spend more than 3x 1-product customers ($ in thousands) $200 $179 $175 $149 3.7x per customer Avg. revenue $150 $130 of 1-product $125 average $100 $100 $75 $50 $25 $41 $46 $49 $49 $0 LTM LTM LTM LTM Q3 2014 Q3 2015 Q3 2016 Q3 2017 Enterprise c
Slide 20: Increasing number of customers with annual revenue >$500K
Increasing number of customers with annual revenue >$500K ($ in millions) $80 47 $70 50 Cumulative revenues $60 40 34 Customers $50 $48 26 30 $40 $32 $30 16 $23 20 $20 $14 10 $10 $0 0 LTM LTM LTM LTM Q3 2014 Q3 2015 Q3 2016 Q3 2017 Note: Customer count is defined as customers with greater than $500K
Slide 21: Platform enables scalable operational model
Platform enables scalable operational model 20
Slide 22: Increasing adjusted EBITDA & operating cash flow
Increasing adjusted EBITDA & operating cash flow ($ in millions) $82 $68 $61 $68 $57 $66 $49 $55 34% 34% $41 $32 36% 34% 49% $25 40% 34% 38% $17 24% 16% 31% 23% 2013 2014 2015 2016 Q3 Q3 2013 2014 2015 2016 Q3 Q3 2016 2017 2016 2017 YTD YTD YTD YTD Adjusted Adjusted EBITDA Operating Operating cash E
Slide 23: Industry-leading margins and scalable business model
Industry-leading margins and scalable business model Q2 CY2017 EBITDA margin vs. Qualys select Security and SaaS peers 37% Security SaaS Peer average: 3% Source: JPMorgan 22
Slide 24: Unique advantages of the Qualys Cloud Platform
Unique advantages of the Qualys Cloud Platform No hardware to Lower Easy to deploy Unprecedented buy or manage operating costs and maintain scaling Nothing to install or With everything in the Easily perform assessments Qualys Cloud Platform is a manage, and all services cloud, there are no capital
Slide 25: Revenue guidance range
Revenue guidance range ($ in millions) Q4 2017 2017 Revenue guidance range $61.7 $62.2 $229.6 $230.1 Y/Y revenue growth under 18.1% 19.1% 16.0% 16.3% US GAAP Plus: estimated impact of MSSP contract signed in 0.6% 0.6% 1.6% 1.6% Feb 2016 Plus: estimated foreign 0.6% 0.6% 1.1% 1.1% exchange impact Est
Slide 26: Appendix
Appendix 25
Slide 27: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA ($ in millions) 2016 2015 2014 2013 Q3 2017 Q3 2016 YTD YTD Net income $19.2 $15.9 $30.2 $1.5 $37.6 $13.3 Other (income) expenses, net (0.3) 0.3 0.6 0.3 (1.5) (0.4) Provision for (benefit from) 11.2 8.7 (21.6) 0.5 (8.6) 8.4 income taxes Depreciation and amortization
Slide 28: Reconciliation of revenues
Reconciliation of revenues ($ in millions) Q3 2017 YTD Revenues $167.9 Y/Y revenue growth under US GAAP 15.2% Plus: impact of MSSP contract signed in Feb 2016 1.9% Plus: foreign exchange impact 1.2% Normalized revenue growth 18.4% 27
Slide 29: Strong growth in VM and Other Security Solutions
Strong growth in VM and Other Security Solutions ($ in millions) VM Solutions* Other Security Solutions* Revenues % Year-over-year revenue growth 19% 19% 13% 19% $151 20% 14% $127 $126 $107 $111 $90 38% 26% 27% 22% 49% 42% $47 $27 $37 $34 $42 $18 2013 2014 2015 2016 Q3 Q3 2013 2014 2015 2016 Q3 Q3 2