Slide 1: Investor presentation
Investor presentation Securing the digital transformation and helping build a safer world - one app at a time Philippe Courtot, Chairman and CEO Melissa Fisher, CFO February 12th, 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 2
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 3
Slide 5: Large Expanding Market Opportunity
Large Expanding Market Opportunity Driven by Increasing Apps on Qualys Cloud Platform 12% CAGR $21.3B CAGR $2.8B 8% IT Asset Management 14% Cloud Security $12.1B $10.0B 6% Endpoint Management (1) $1.9B 8% Web Security: SaaS (2) $5.3B $0.6B $0.7B 16% Network and Edge $1.3B $0.5B $2.5B 10% Security Po
Slide 6: Blue Chip Global Customer Base
Blue Chip Global Customer Base 70% of the Forbes Global 50, 47% of Global 500, and 25% of Global 2000 standardized on Qualys 12,200+ Customers DAIMLER Note: Customers include active users 5
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% 6
Slide 8: Attractive Value Proposition for Partners
Attractive Value Proposition for Partners High-margin recurring revenue with no capex Outsourcing VAS MSSPs telcos Consultants providers resellers 7
Slide 9: Strong Global Presence
Strong Global Presence 12,200+ 130+ 7 76 48 Customers Countries Shared Platforms Private Clouds Locations Qualys Shared Platforms Qualys Locations Note: Customers include active users 8
Slide 10: Qualys Cloud Platform and Roadmap
Qualys Cloud Platform and Roadmap 9
Slide 11: Global Visibility Across Environments Enables Superior Security
Global Visibility Across Environments Enables Superior Security Scalable, self-updating & centrally managed Active Scanners Cloud Agents 3+ billion 50,000+ 16+ million 2+ trillion IP Scans/Audits a Year Scanner appliances Cloud Agents across Security Events servers, endpoints, collected in real-time
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 11
Slide 13: Robust Pure Cloud Platform Serves as a Scalable Distribution Channel
Robust Pure Cloud Platform Serves as a Scalable Distribution Channel Scalable, Micro-services, DevOps VM PC WAS WAF FIM Scanner Service Qualys Streaming Data Backbone Cloud Agent Asset Service Indexing Reporting Analytics IOC Tagging Service Service 12
Slide 14: Qualys Cloud Platform Enables Vendor and Stack Consolidation
Qualys Cloud Platform Enables Vendor and Stack Consolidation IT Security Compliance Monitoring Web App Security New Services 13
Slide 15: Increasing Number of Apps Delivered Through the Qualys Cloud Platform
Increasing Number of Apps Delivered Through the Qualys Cloud Platform 14
Slide 16: 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 Patch Management Streamline and accelerate vulnerability remediation for all IT assets Secure Access Control Respond to threats automatically by controlling
Slide 17: Scalable Business Model
Scalable Business Model © Qualys. Asset Inventory DASHBOARD INVENTORY @ or Jan 20180. ¥ CATEGORY BREAKDOWN I Computers fl Networking TOP CLIENT OPERATING SYSTEM Microsoft windows 7 1 Microsoftwindows 101 OPERATING SYSTEM DISTRIBUTION TOP HARDWARE MANUFACTURER 272 view Del n AI Windows 165 a se lS =a
Slide 18: Strong and Consistent Organic Revenue Growth
Strong and Consistent Organic Revenue Growth Outperforming market and gaining share ($ in millions) $320-323 18% CAGR $279 Revenues $231 $198 $164 2015 2016 2017 2018 2019 Note: CAGR based on midpoint of guidance 17
Slide 19: Adoption of New Solutions (APPS) Fuels Growth and Profitability
Adoption of New Solutions (APPS) Fuels Growth and Profitability ($ 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 $0 2008 2013 2018 Quarterly revenues Customers 18
Slide 20: Multiple Levers of Revenue Growth
Multiple Levers of Revenue Growth Multi-Product Adoption Drives Increased Stickiness New Existing 99% 97% 45% 91% 55% 2 Products 3 Products 4 Products LTM Q3 2018 2018 Enterprise Gross % of Bookings Dollar Retention Rate Growth Note: Dollar Retention Rate is the retention rate of prior year Enterpri
Slide 21: Increasing Cloud Agent Adoption
Increasing Cloud Agent Adoption (Units in millions) Number of Cloud Agents Sold 16.2 14.5 7.9 8.7 LTM LTM LTM LTM Q1 2018 Q2 2018 Q3 2018 Q4 2018 20
Slide 22: Platform Adoption Accelerating
Platform Adoption Accelerating 70% 41% 21% 10% 70% 66% 41% 61% 58% 32% 26% 21% 20% 15% 8% 10% 6% 3% 0% 3% Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q4 FY15 FY16 FY17 FY18 FY15 FY16 FY17 FY18 FY15 FY16 FY17 FY18 FY15 FY16 FY17 FY18 2+ solutions 3+ solutions 4+ solutions 5+ solutions % of Enterpris
Slide 23: Multiplier Effect
Multiplier Effect Enterprise customers with 4+ solutions spend over 5x that of 1-solution customers ($ in thousands) 5+x $300 $273 of 1-solution $266 average Avg. LTM revenues $207 $200 $212 per customer $200 $164 $142 $140 $100 $49 $52 $49 $52 $0 2015 2016 2017 2018 Enterprise customers with 1 solu
Slide 24: Accelerating Number of Large Customers
Accelerating Number of Large Customers ($ in millions) 70 $79 $80 60 51 $60 38 $54 40 Customers Revenues 27 $40 $35 $25 20 $20 $0 0 2015 2016 2017 2018 Note: Customer count is defined as customers with greater than $500K in annual revenue 23
Slide 25: Platform Enables Scalable Operational Model
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% $1.0M 58% 46% 36% 2015 2016 2017 2018 2015 2016 2017 2018 High sales leverage Leveraging low cost geos 24
Slide 26: Increasing Adjusted EBITDA & Operating Cash Flow
Increasing Adjusted EBITDA & Operating Cash Flow ($ in millions) 40% 47% 45% 37% 40% 34% $126 34% 34% $112 $108 $85 $68 $66 $68 $57 2015 2016 2017 2018 2015 2016 2017 2018 Adjusted Adjusted EBITDA Operating Operating cash EBITDA margin (%) cash flow flow margin (%) 25
Slide 27: Industry-leading Margins
Industry-leading Margins Q3 CY2018 EBITDA margin vs. select Security and SaaS peers Security QLYS 45% SaaS Peer average: 14% Source: JPMorgan 26
Slide 28: Industry-leading Performance
Industry-leading Performance Q3 CY2018 Rule of 40 vs. select Security and SaaS peers Security QLYS 65% SaaS Rule of 40 (40%) Source: JPMorgan 27
Slide 29: Unique Advantages of the Qualys Cloud Platform
Unique Advantages of the Qualys Cloud Platform Single-pane-of-glass-view across on-premises assets, endpoints, and cloud environments No hardware to Lower Easy to deploy Unprecedented buy or manage operating costs and maintain scaling Nothing to install or With everything in the cloud, Easily perfor
Slide 30: Appendix
Appendix © Qualys. WannaCry and Shadow Brokers ~ Actions Add Widget Friterby Asset Tags MISSING MS17-010 PATCH WANNACRY RANSOMWARE DOUBLEPULSAR. WINDOWS HOSTS PENDING DETECTED - AUTH ONLY BACKDOORS REBOOT - AUTH ONLY 28 0) 0) 17 ve All Windo vs All Windows Systems vs All Windows Systems. ve All Wind
Slide 31: Increasing Number of Apps Delivered Through the Qualys Cloud Platform
Increasing Number of Apps Delivered Through the Qualys Cloud Platform IT SECURITY COMPLIANCE MONITORING Vulnerability Management Policy Compliance Security Configuration Continuously detect and protect against Assess security configurations of IT Assessment attacks, anytime, anywhere systems through
Slide 32: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA ($ in millions) 2014 2015 2016 2017 2018 Net income $30.2 $15.9 $19.2 $40.4 $57.3 Depreciation and amortization of property 11.5 14.0 16.6 19.8 25.2 and equipment Amortization of intangible assets 0.4 0.4 0.4 0.8 3.7 Interest expense 0.0 0.0 0.0 0.0 0.2 Provision fo
Slide 33: Reconciliation of Non-GAAP Net Income
Reconciliation of Non-GAAP Net Income ($ in millions, except per diluted share metric) 2017 2018 GAAP Net income $40.4 $57.3 Stock-based compensation 27.0 30.1 Intangible asset amortization 0.7 3.7 Acquisition-related expense (1) 0.1 3.0 Tax adjustment (24.5) (20.7) Non-GAAP Net income $43.7 $73.4 N