Qualys, Inc. · NASDAQ:QLYS
Qualys — Q3 2024 Earnings Presentation
28 slides from Qualys's earnings presentation, Nov 5, 2024
Slide 1: Investor Presentation
Investor Presentation Security and Compliance for the Digital Transformation Sumedh Thakar, President and CEO Joo Mi Kim, CFO November 5, 2024
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: Investment highlights
Investment highlights Industry-leading cloud security and compliance platform for comprehensive risk management Multiple levers of recurring revenue growth Scalable business model and industry- leading profitability Uniquely positioned to capitalize on stack consolidation and cloud transformation 3
Slide 4: Challenges of measuring and reducing risk
Challenges of measuring and reducing risk With every tool measuring risk differently, what are the top 10 Risks? Disparate Security Tools Disparate Measurement Tools SaaS Code Qualitative Severe / Critical Category 1,2,3 etc.. Urgent / Low Medium / High IT / IOT Vuln Management Pass / Fail Quantitat
Slide 5: Extending the security eco system
Extending the security eco system Multiple siloed tools send endless alerts Qualys Enterprise Network TruRisk Platform Exposures API out- of-the-box Aggregates and Normalizes Cloud connectors Misconfiguration Siloed Data Points Collects, unifies and correlates risk Excessive IAM CSV Discovers, Quant
Slide 6: The Enterprise TruRisk Platform
The Enterprise TruRisk Platform End-to-End Cyber Risk Management Qualys TruRisk™ A natively integrated single agent, single source of truth Discover all assets, Detect and prioritize Remediate cyber risk Monitor, detect, Enforce and report on including external vulnerabilities, with automated respon
Slide 7: The Enterprise TruRisk Platform: Asset Management
Asset Management Asset Management Vulnerability Remediation Threat Detection TotalCloud The Enterprise TruRisk Platform CyberSecurity Asset Management Discover All Assets Get inside-out and outside-in visibility of all assets with an attackers view of the network Get Complete Asset Context & Visibil
Slide 8: The Enterprise TruRisk Platform: Vulnerability Management
Asset Management Vulnerability Vulnerability Remediation Threat Detection TotalCloud The Enterprise TruRisk Platform VMDR Measure Cyber Risk Quantify risk across vulnerabilities, assets, and groups of assets helping organizations proactively reduce risk exposure and track risk reduction over time wi
Slide 9: The Enterprise TruRisk Platform: Remediation
Asset Management Vulnerability Remediation Remediation Threat Detection TotalCloud The Enterprise TruRisk Platform Advanced Remediation Eliminate Cyber Risk Deploy the right remediation or mitigations based on Qualys research, Qualys TruRisk, and 25+ threat feeds Save time and reduce MTTR Leverage s
Slide 10: The Enterprise TruRisk Platform: Threat Detection
Asset Management Vulnerability Remediation Threat Threat Detection Detection TotalCloud The Enterprise TruRisk Platform Threat Detection and Response Protect Against Zero-day threats Leverage behavior & AI/ML-based antivirus to thwart exploits, ransomware, phishing attacks, and zero-days Unify VM, P
Slide 11: The Enterprise TruRisk Platform: TotalCloud (CNAPP)
Asset Management Vulnerability Remediation Threat Detection TotalCloud The Enterprise TruRisk Platform TotalCloud (CNAPP) Unified Multi-Cloud Security Unified vulnerability, threat and posture management from development through runtime in cloud and container environments Extended TruRisk Insights T
Slide 12: The Enterprise TruRisk Platform: Enterprise TruRisk Management
Asset Management Vulnerability Remediation Threat Detection TotalCloud The Enterprise TruRisk Platform Enterprise TruRisk Management Centralized Risk Aggregation Visualize the entire attack surface with unified asset inventory, integrate data from Qualys and third-party sources, consolidate risk fin
Slide 13: Qualys Enterprise TruRisk Platform advantages
Qualys Enterprise TruRisk Platform advantages One view across the entire global hybrid-IT environment, allowing customers to consolidate their stack for better security outcomes Available as a Public or No hardware to Lower Easy to deploy buy or manage operating costs and maintain on-premises Privat
Slide 14: Large expanding market opportunity
Large expanding market opportunity 1.43x $72B Expand $50B $18.1B $12.3B $26.7B $18.6B $5.8B $3.7B $7.9B $5.9B $5.0B $4.0B $5.9B $8.6B CY2024E CY2027E VM & Assessment Compliance IT Asset Management Cloud Security Endpoint Security Security Analytics & Orchestration Source: IDC, Qualys estimates Qualy
Slide 15: Blue chip global customer base
Blue chip global customer base Forbes 70% of the Global 50 10,000+ Forbes Subscription customers 54% of the Global 500 Forbes 32% of the Global 2000 Note: A customer is defined as any customer with subscription revenue at the measurement date 15
Slide 16: Scalable go-to-market model
Scalable go-to-market model Market segmentation & key strategic partners ENTERPRISE MID-MARKET 2023 REVENUES Large enterprise Small / medium business (Over 5,000 employees) (Up to 5,000 employees) 57% New Existing New Existing Direct customers customers customers customers CHANNEL 43% Indirect 16
Slide 17: Attractive value proposition for partners
Attractive value proposition for partners High-margin recurring revenue with no capex / maintenance costs Cloud Provider Outsourcing Value Added MSSPs Partners Providers Resellers Consultants 17
Slide 18: Balanced revenue growth and profitability
Balanced revenue growth and profitability ($ in millions) Revenues Adjusted EBITDA 16% CAGR $554 $490 16% $448 CAGR $411 $410 $259 $219 $209 $191 $193 2021 2022 2023 Q3 2023 Q3 2024 2021 2022 2023 Q3 2023 Q3 2024 YTD YTD YTD YTD Y/Y Adj growth 13% 19% 13% 14% 9% EBITDA % 46% 45% 47% 47% 47% Revenues
Slide 19: Platform adoption driving higher customer spend
Platform adoption driving ($ in millions) higher customer spend 12% Growth $247 $220 Revenues Aggregate $179 $142 LTM LTM LTM LTM Q3 2021 Q3 2022 Q3 2023 Q3 2024 Number of 117 151 174 200 customers Note: Customer count is defined as customers with $500K or more in annual revenue 19
Slide 20: 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 $1.4M 81% $1.3M 78% 2020 2023 2020 2023 Leveraging low cost, High sales leverage high talent geos 20
Slide 21: Strong cash flow generation
Strong cash flow generation Returning capital to shareholders ($ in millions) Free Cash Flow (FCF) Share repurchase amount $317 16% CAGR $236 $204 $190 $176 $183 $171 $148 $130 $98 2021 2022 2023 Q3 2023 Q3 2024 2021 2022 2023 Q3 2023 Q3 2024 YTD YTD YTD YTD FCF Diluted Margin % 43% 37% 43% 50% 42%
Slide 22: Industry-leading margins
Industry-leading margins QLYS 2023 Adjusted EBITDA margin vs. 47% Security select Security and SaaS peers SaaS Peer Median: 19% Source: FactSet 22
Slide 23: Achieving rule of 50+: growth + profitability
Achieving rule of 50+: growth + profitability 2023 Rule of 40 vs. Security select Security and SaaS peers SaaS QLYS 60% Rule of 40 Source: FactSet Note: 2023 Revenue Growth % + Adj EBITDA Margin % 23
Slide 24: Appendix
Appendix
Slide 25: Qualys IT, security & compliance solutions
Qualys IT, security & compliance solutions ASSET MANAGEMENT RISK MITIGATION CLOUD SECURITY CyberSecurity Asset Management (CSAM) TruRisk Eliminate (TE) TotalCloud (CNAPP) See entire attack surface, continuously maintain your CMDB, and Balance business continuity with effective risk reduction Cloud-N
Slide 26: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA ($ in millions) Q3 2023 Q3 2024 2020 2021 2022 2023 YTD YTD Net income $91.6 $71.0 $108.0 $151.6 $111.0 $129.7 Depreciation and amortization of property 26.6 29.2 28.9 23.9 18.8 12.1 and equipment Amortization of intangible assets 6.3 6.7 5.7 3.1 2.3 2.3 Income tax
Slide 27: Reconciliation of Non-GAAP Free Cash Flows
Reconciliation of Non-GAAP Free Cash Flows ($ in millions) Q3 2023 Q3 2024 2020 2021 2022 2023 YTD YTD GAAP Cash flows provided by operating activities $180.1 $200.6 $198.9 $244.6 $210.8 $196.4 Less: Purchases of property and equipment, net (29.6) (24.4) (15.4) (8.8) (7.3) (6.5) of proceeds from dis
Slide 28: Revenue mix
Revenue mix Geographic Direct vs. Partner 39% 40% 40% 40% 41% 41% 42% 43% 43% 46% 61% 60% 60% 60% 59% 59% 58% 57% 57% 54% 2021 2022 2023 Q3 2023 Q3 2024 2021 2022 2023 Q3 2023 Q3 2024 YTD YTD YTD YTD US Foreign Direct Partner 28