Slide 1: Investor Presentation: Securing the Digital Transformation
Investor Presentation Securing the Digital Transformation Building a safer world - one app at a time Philippe Courtot, Chairman & CEO Joo Mi Kim, CFO August 10, 2020
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
Slide 5: Expanding Market Opportunity
Expanding Market Opportunity Driven by Increasing Apps on Qualys’ Cloud Platform 12% CAGR CAGR $21.3B 8% IT Asset Management $2.8B 14% Cloud Security $12.1B 6% Endpoint Management (1) $10.0B 8% Web Security: SaaS (2) $1.9B $0.6B 16% Network and Edge $5.3B $0.7B $1.3B $0.5B 10% Security Policy and Co
Slide 6: Blue Chip Global Customer Base
Blue Chip Global Customer Base 66% of the Forbes Global 50, 46% of Global 500, and 24% of Global 2000 standardized on Qualys 15,700+ Customers DAIMLER Note: Customers include active subscribers of our free services 6
Slide 7: Scalable Go-to-market Model
Scalable Go-to-market Model Market segmentation & key strategic partners ENTERPRISE MID-MARKET 2019 REVENUES Large enterprise Small / medium business (Over 5,000 employees) (Up to 5,000 employees) 58% New Existing New Existing Direct customers customers customers customers CHANNEL 42% Indirect 7
Slide 8: Attractive Value Proposition for Partners
Attractive Value Proposition for Partners High-margin recurring revenue with no capex /maintenance costs Outsourcing VAS MSSPs Telcos Consultants Providers Resellers 8
Slide 9: Global Presence
Global Presence 15,700+ 130+ 8 82 54 Customers Countries Shared Platforms Private Clouds Locations Qualys’ Shared Platforms Qualys’ Locations Note: Customers include active subscribers of our free services 9
Slide 10: Scalable Business Model
Scalable Business Model Strong and Consistent Performance 2Q17 LTM - 2Q20 LTM CAGR 35% 29% 17% Revenue Adj. EBITDA FCF 10
Slide 11: Strong Organic Revenue Growth
Strong Organic Revenue Growth Outperforming market and gaining share ($ in millions) 18% CAGR $322 $279 13% $231 Revenues $198 $175 $154 2016 2017 2018 2019 Q2 2019 Q2 2020 YTD YTD 11
Slide 12: Adoption of New Solutions Fuels Growth and Profitability
Adoption of New Solutions Fuels ($ in millions) Growth and Profitability Quarterly revenues vs. customers 20 APPS VM, WAS, PC, TP, CM, PCI, FIM, $100 AI, CS, PM, IOC, CSA… 4 APPS VM, PC, PCI, WAS $50 2 APPS VM, PCI $0 2008 2013 2019 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 43 38 31 28 LTM LTM LTM LTM Q3 2019 Q4 2019 Q1 2020 Q2 2020 13
Slide 14: Platform Adoption Accelerating
Platform Adoption Accelerating 76% 54% 38% 24% 76% 71% 54% 68% 63% 44% 38% 37% 28% 24% 24% 19% 11% 13% 5% 8% Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q2 FY17 FY18 FY19 FY20 FY17 FY18 FY19 FY20 FY17 FY18 FY19 FY20 FY17 FY18 FY19 FY20 2+ Solutions 3+ Solutions 4+ Solutions 5+ Solutions % of Enterp
Slide 15: Multiplier Effect
Multiplier Effect Enterprise customers with 4+ solutions spend over 5x that of 1-solution customers 5+X $300 $274 $270 of 1-solution Avg. LTM revenues $257 $238 average per customer $207 $220 $200 $182 $218 $100 $50 $52 $50 $41 $0 LTM LTM LTM LTM Q2 2017 Q2 2018 Q2 2019 Q2 2020 Enterprise customers
Slide 16: Multi-Product Adoption Drives Increased Stickiness
Multi-Product Adoption Drives Increased Stickiness 99% 98% 97% 94% 2 Products 3 Products 4 Products 5 Products 2019 Enterprise Gross Dollar Retention Rate Note: Dollar Retention Rate is the retention rate of prior year Enterprise ARR (excluding upsell and downsell) averaged over the last four quarte
Slide 17: Increasing Number of Large Customers
Increasing Number of Large Customers ($ in millions) 99 83 $100 $113 80 Aggregate Revenues 60 $91 Customers $80 60 45 $60 $67 40 $40 $43 20 $20 $0 0 LTM LTM LTM LTM Q2 2017 Q2 2018 Q2 2019 Q2 2020 17 Note: Customer count is defined as customers with greater than $500K in annual revenue
Slide 18: Cloud Platform Enables Scalable Operational Model
Cloud Platform Enables Scalable Operational Model % of Customer Support, Revenue per Operations, and R&D S&M headcount headcount in India $1.2M 69% 36% $1.0M 2015 2019 2018 2015 2019 2018 High sales leverage Leveraging low cost geos 18
Slide 19: Expanding Margins
Expanding Margins ($ in millions) 27% 44% CAGR 27% 40% $141 50% $140 37% 46% 45% $120 $112 40% 34% 41% $100 $85 $81 35% 30% $80 $68 $64 25% $60 20% $40 15% 10% $20 5% $0 0% 2016 2017 2018 2019 Q2 2019 Q2 2020 YTD YTD Adjusted EBITDA Adjusted EBITDA margin (%) 19
Slide 20: Increasing Free Cash Flow
Increasing Free Cash Flow ($ in millions) 43% 41% CAGR 6% 36% 50% $140 $131 30% 45% 43% 40% $120 $101 40% $100 23% 35% 30% $80 $70 $66 $70 25% $60 $45 20% $40 15% 10% $20 5% $0 0% 2016 2017 2018 2019 Q2 2019 Q2 2020 YTD YTD Free cash flow Free cash flow margin (%) 20
Slide 21: Industry-leading Margins
Industry-leading Margins QLYS 2019 Adjusted EBITDA margin vs. 44% select Security and SaaS peers Security SaaS Peer Median: 12% YE BS X G D R IL LO W AM P T D X E N N ZS YC PT BR LK TY EV BO EW N RN O IM O W RP SA ZE SP FE N HU TW PF PA BL FT PC SP SH CS CY VE TE SC PA M O N O M A KT S CT N D B O VR
Slide 22: Industry-leading Performance
22 CR W D TW LO PA YC VE EV TE AM ZS 59% QLYS CY BR PC TY SH O P FT N T SP LK RN G N EW R HU BS ZE N M IM E PA N W 2019 Rule of 40 vs. PF PT O KT select Security and SaaS peers A RP D O SP N CS O D SA IL BO X TE N B Industry-leading Performance FE YE SC W X FS Rule of 40 CT SaaS M Security O BL VR N
Slide 23: Qualys Cloud Platform & What's Coming Next
Qualys Cloud Platform & What’s Coming Next 23
Slide 24: Qualys Sensor Platform
Qualys Sensor Platform Scalable, self-updating and centrally managed 24
Slide 25: Qualys Cloud Platform: One Platform. One Agent. One View.
Qualys Cloud Platform One Platform. One Agent. One View. 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 & Do
Slide 26: 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+ 43 million 2+ trillion IP Scans/Audits a Year Scanner appliances Cloud Agents across Security Events collected servers, en
Slide 27: Cloud Platform Enables Vendor & Stack Consolidation
Cloud Platform Enables Vendor & Stack Consolidation Vulnerability Management Compliance Monitoring Web App Security New Services 27
Slide 28: 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 AI Global IT Asset Inventory CI Cloud Inventory WAS Web Application Scanning SYN CMDB Sync CSA Cloud Security Assessment WAF Web App
Slide 29: 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, incidents for future A new ap
Slide 30: 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 software and hardware inventory Malware & exploit protection Automated deployment of security tools Detection & analysis on MITRE Security incident ana
Slide 31: 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 32: 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 33: 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 33
Slide 34: Additional Apps to Come in 2020
Additional Apps to Come in 2020 Certificate Management* Secure Access Control Automated renewing and management of Respond to threats automatically by digital certificates controlling access to critical resources Cloud Security Management* Secure Enterprise Mobility Remediation and management of clo
Slide 35: 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 36: Appendix
Appendix
Slide 37: Increasing Number of Apps Delivered Through the Qualys Cloud Platform
Increasing Number of Apps Delivered Through the Qualys Cloud Platform IT SECURITY ASSET MANAGEMENT WEB APP SECURITY Vulnerability Management, PM Patch Management AI Asset Inventory WAS Web Application Scanning Detection & Response Streamline and accelerate vulnerability Maintain full, instant visibi
Slide 38: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA ($ in millions) Q2 2019 Q2 2020 2017 2018 2019 YTD YTD Net income $40.4 $57.3 $69.3 $29.5 $45.0 Depreciation and amortization of property 19.8 25.2 25.1 12.8 12.6 and equipment Amortization of intangible assets 0.8 3.7 6.1 3.0 3.0 Provision for (benefit from) income
Slide 39: Reconciliation of Non-GAAP Free Cash Flow
Reconciliation of Non-GAAP Free Cash Flow ($ in millions) Q2 2019 Q2 2020 2017 2018 2019 YTD YTD GAAP Cash flows provided by operating activities $107.6 $125.5 $160.6 $81.3 $81.6 Purchases of property and equipment (37.8) (22.8) (27.6) (14.1) (11.6) Principal payments under capital lease obligations
Slide 40: Revenue by Geographic Area
Revenue by Geographic Area ($ in millions) 2Q 2019 2Q 2020 2017 2018 2019 YTD YTD United States 162.7 185.9 206.6 99.3 112.0 70% 67% 64% 64% 64% Foreign 68.1 93.0 115.1 54.9 63.1 30% 33% 36% 36% 36% Total Revenues $230.8 $278.9 $321.6 $154.2 $175.1 40