Qualys, Inc. · NASDAQ:QLYS
Qualys — Q2 2021 Earnings Presentation
38 slides from Qualys's earnings presentation, Aug 9, 2021
Slide 1: Investor Presentation
Investor Presentation Securing the Digital Transformation Building a safer world - one app at a time Sumedh Thakar, CEO Joo Mi Kim, CFO August 9, 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: The Power of the Qualys Cloud Platform
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 $2.0
Slide 6: Blue Chip Global Customer Base
Blue Chip Global Customer Base 66% of the Forbes Global 50, 46% of Global 500, and 25% of Global 2000 standardized on Qualys 19,000+ Customers DAIMLER Note: Customers include active subscribers to our free services 6
Slide 7: Scalable Go-to-Market Model
Scalable Go-to-Market Model Market segmentation & key strategic partners ENTERPRISE MID-MARKET 2020 REVENUES Large enterprise Small / medium business (Over 5,000 employees) (Up to 5,000 employees) 58% New Existing New Existing Direct customers customers customers customers CHANNEL 42% Indirect 7
Slide 8: Attractive Value Proposition for Partners
Attractive Value Proposition for Partners High-margin recurring revenue with no capex / maintenance costs Outsourcing VAS MSSPs Telcos Resellers Consultants Providers 8
Slide 9: Global Presence
Global Presence 19,000+ 130+ 8 85 54 Customers Countries Shared Platforms Private Clouds Locations Qualys’ Shared Platforms Qualys’ Locations Note: Customers include active subscribers to our free services 9
Slide 10: Scalable Business Model
Scalable Business Model 2Q18 LTM - 2Q21 LTM CAGR 27% 23% 15% Revenue Adj. EBITDA FCF 10
Slide 11: Strong Organic Revenue Growth
Strong Organic Revenue Growth ($ in millions) 16% CAGR $363 $322 $279 12% $231 Revenues $175 $196 2017 2018 2019 2020 Q2 2020 Q2 2021 YTD YTD 11
Slide 12: New Apps Enabled by Cloud Agents
New Apps Enabled by Cloud Agents (Units in millions) Number of Cloud Agents Sold 64 61 56 50 LTM LTM LTM LTM Q3 2020 Q4 2020 Q1 2021 Q2 2021 12
Slide 13: Increasing VMDR Penetration
Increasing VMDR Penetration 28% VMDR Customer Penetration (%) 24% 19% 12% Q3 2020 Q4 2020 Q1 2021 Q2 2021 Note: The penetration rate represents the percent of accounts with VMDR divided by total accounts with revenue in the quarter 13
Slide 14: Platform Adoption Driving Higher Customer Spend
Platform Adoption Driving ($ in millions) Higher Customer Spend 14% Growth $120 $129 Aggregate Revenues $100 $113 $80 $91 $60 $67 $40 $20 $0 LTM LTM LTM LTM Q2 2018 Q2 2019 Q2 2020 Q2 2021 Number of 60 83 99 109 Customers Note: Customer count is defined as customers with greater than $500K in annual
Slide 15: 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% $1.0M 36% 2015 2020 2015 2020 Leveraging low cost, High sales leverage high talent geos 15
Slide 16: Continued EBITDA Growth
Continued EBITDA Growth ($ in millions) 47% 43% $170 50% $160 39% $138 45% $140 37% 46% 46% 40% $120 $109 35% $100 $85 $91 30% $81 25% $80 20% $60 15% $40 10% $20 5% $0 0% 2017 2018 2019 2020 Q2 2020 Q2 2021 YTD YTD Adjusted EBITDA Adjusted EBITDA margin (%) 16
Slide 17: Increasing Free Cash Flow
Increasing Free Cash Flow ($ in millions) 41% 41% $160 $150 60% 36% 51% $140 $131 50% $120 30% 40% $101 $99 40% $100 $80 $70 $70 30% $60 20% $40 10% $20 $0 0% 2017 2018 2019 2020 Q2 2020 Q2 2021 YTD YTD Free cash flow Free cash flow margin (%) 17
Slide 18: 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 18
Slide 19: Industry Leading Margins
Industry Leading Margins QLYS 47% 2020 Adjusted EBITDA margin vs. select Security and SaaS peers Security SaaS Peer Median: 13% Source: Nasdaq IR Insight 19
Slide 20: Industry Leading Performance
Industry Leading Performance 2020 Rule of 40 vs. select Security and SaaS peers Security SaaS QLYS 60% Rule of 40 Source: Nasdaq IR Insight 20 Note: 2020 Revenue Growth % + EBITDA Margin %
Slide 21: Qualys Cloud Platform & What's Coming Next
Qualys Cloud Platform & What’s Coming Next 21
Slide 22: Qualys Sensor Platform
Qualys Sensor Platform Scalable, self-updating and centrally managed 22
Slide 23: 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 24: 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+ 64 million 2+ trillion IP Scans/Audits a Year Scanner appliances Cloud Agents across Security Events collected servers, en
Slide 25: Cloud Platform Enables Vendor & Stack Consolidation
Cloud Platform Enables Vendor & Stack Consolidation IT Security Compliance Web App Security Asset Management Cloud/Container Security 25
Slide 26: Natively integrated IT, Security & Compliance Apps
IT SECURITY COMPLIANCE 20+ Vulnerability Management, Policy Compliance Detection & Response Security Configuration Assessment Threat Protection PCI Compliance Continuous Monitoring File Integrity Monitoring Patch Management Security Assessment Questionnaire Natively integrated IT, Multi-Vector Endpo
Slide 27: Qualys CyberSecurity Asset Management
Qualys CyberSecurity Asset Management Discover & build a 2-way Sync & Enrich Detect at-risk assets & Alert, Report & complete CMDB applications with in-context Respond to identified Inventory with Auto enrichment data security risks Categorization Authentication Authorization Subscription Indexing D
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, Correlate and provide context Mitigate the risk with vulnerabilities, malicious response and prevent attacks and incidents future attacks A
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 • Same agent for Inventory, VMDR, Config Compliance, FIM, Patch Cloud 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 API Security XDR: Security Analytics & Response Embed security in development pipeline Coalesce data into a centralized security with comprehensive audit, vulnerability & data lake and provide advanced correlation security assessment of openAPIs against & analytics to generat
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: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA ($ in millions) Q2 2020 Q2 2021 2017 2018 2019 2020 YTD YTD Net income $40.4 $57.3 $69.3 $91.6 $45.0 $21.4 Depreciation and amortization of property 19.8 25.2 25.1 26.6 12.6 14.6 and equipment Amortization of intangible assets 0.8 3.7 6.1 6.3 3.0 3.3 Income tax prov
Slide 37: Reconciliation of Non-GAAP Free Cash Flows
Reconciliation of Non-GAAP Free Cash Flows ($ in millions) Q2 2020 Q2 2021 2017 2018 2019 2020 YTD YTD GAAP Cash flows provided by operating activities $107.6 $125.5 $160.6 $180.1 $81.6 $112.2 Purchases of property and equipment (37.8) (22.8) (27.6) (29.6) (11.6) (12.9) Principal payments under fina
Slide 38: Revenue by Geographic Area
Revenue by Geographic Area ($ in millions) Q2 2020 Q2 2021 2017 2018 2019 2020 YTD YTD United States $162.7 $185.9 $206.6 $230.4 $112.0 $121.1 % of total revenues 70% 67% 64% 63% 64% 62% Foreign $68.1 $93.0 $115.1 $132.5 $63.1 $75.3 % of total revenues 30% 33% 36% 37% 36% 38% Total Revenues $230.8 $