Qualys, Inc. · NASDAQ:QLYS
Qualys — Investor Day (November 2016)
89 slides from Qualys's investor day presentation, Nov 17, 2016
Slide 1: QLYS Investor Day
QLYS Investor Day Philippe Courtot, Chairman and CEO Sumedh Thakar, Chief Product Officer Amer Deeba, Chief Commercial Officer Melissa Fisher, CFO New York City, November 17th, 2016
Slide 2: Today’s Schedule
Today’s Schedule 08:30 - 09:00am EST Check-in 09:00 - 09:20 am EST Introduction by Philippe Courtot, Chairman and CEO 09:20 - 10:00am EST Presentation and Product Demo by Sumedh Thakar, Chief Product Officer 10:00 - 10:15am EST Break 10:15 - 10:35am EST Presentation by Amer Deeba, Chief Commercial O
Slide 3: 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 4: 2017 The Year of Consolidation in Security
2017 The Year of Consolidation in Security Philippe Courtot, Chairman and CEO QLYS Investor Day, November 17th 2016, New York, NY
Slide 5: 2017 The Year of Consolidation in Security
2017 The Year of Consolidation in Security Key Drivers How Well is Qualys Positioned? What we Want to Achieve in 2017 5
Slide 6: Key Drivers
Key Drivers Multiple Drivers are at Play Evolving Threat Landscape Computing Shift to the Cloud Regulatory Environment Spend Consolidation 6
Slide 7: How Well is Qualys Positioned?
How Well is Qualys Positioned? Impressive Customer Base 7
Slide 8: Blue Chip Global Customers Base
Blue Chip Global Customers Base 60% of the Forbes Global 100 and 24% of the Forbes Global 2000 9,200+ Customers 8 of top 10 in Software 8 of top 10 in Technology 8 of top 10 in Biotechnology DAIMLER 8 of top 10 in Retail 7 of top 10 in Banking 7 of top 10 in Media 6 of top 10 in Telecommunications 6
Slide 9: How Well is Qualys Positioned?
How Well is Qualys Positioned? Impressive Customer Base Scalable Go-to-Market Model 9
Slide 10: Scalable Go-to-Market Model
Scalable Go-to-Market Model Market Segmentation & Key Strategic Partners ENTERPRISE SME & SMB 2015 REVENUES Large Enterprise Small / Medium Business (Over 5,000 employees) (Up to 5,000 employees) Direct 60% New Existing New Existing Customers Customers Customers Customers Channel 40% 10
Slide 11: How Well is Qualys Positioned?
How Well is Qualys Positioned? Impressive Customer Base Scalable Go to Market True Extensible Cloud Platform 11
Slide 12: True Extensible Cloud Platform
True Extensible Cloud Platform Consolidates 10+ on-premise Solutions Integrated Suite of Applications 3B Scans Qualys API Reporting & Dashboards Remediation & Workflows 100B Detections Analytics and Reporting Distributed Correlation ElasticSearch Clusters 1T Engines Solr Lucene Idexing Oracle & BFFS
Slide 13: Disruptive Cloud Agent Platform
Disruptive Cloud Agent Platform Continuous Security Across On-Premise, Endpoints and Elastic Cloud Environments Lightweight 3Mb Beam-up info Agents in real-time Centrally managed Delta-based and self-updating approach
Slide 14: Now Adding Passive Scanning
Now Adding Passive Scanning Enriching and Correlating the Data We Collect Analyzing network Correlating it with traffic a new the information cloud-sensor type we already have
Slide 15: Impressive Suite of New Services
Impressive Suite of New Services 2016 Releases 2017 Releases Cloud Agents Platform (CAP) File Integrity Monitoring (FIM) ThreatPROTECT (TP) Detection of Indication of Compromises (IOC) Security Assessment Questionnaires (SAQ) Digital Certificate Management (CERT) Web Application Firewall (WAF 2.0) P
Slide 16: AssetView Brings 2s Visibility Across Millions of IT Assets
AssetView Brings 2s Visibility Across Millions of IT Assets Provides Customizable, Dynamic Dashboards Instant query Vulnerability across million Risk Analysis of IT assets dashboard Unified Synchronization assets’ view with Splunk, ServiceNow Dynamic and & Others customizable dashboards 16
Slide 17: How Well is Qualys Positioned?
How Well is Qualys Positioned? Impressive Customer Base Key Strategic Partners True Cloud Platform Impressive Engineering Capabilities 17
Slide 18: Impressive Engineering Capabilities
Impressive Engineering Capabilities Extensible Cloud Platform Unique Organizational Structure Indian Operation (Pune) 18
Slide 19: How Well is Qualys Positioned?
How Well is Qualys Positioned? Impressive Customer Base Key Strategic Partners True Cloud Platform Impressive Engineering Capabilities Global Presence 19
Slide 20: Qualys Global Presence
Qualys Global Presence Expanding our Sales Capacity Customers Countries Data Centers Private Clouds Locations 9,200+ 137 5* 30 27 * Data centers include the one upcoming in India Note: Marked are Qualys locations. 20
Slide 21: How Well is Qualys Positioned?
How Well is Qualys Positioned? Impressive Customer Base Key Strategic Partners True Cloud Platform Impressive Engineering Capabilities Global Presence Industry Leading Profitability 21
Slide 22: Industry-Leading Margins and Scalable Business Model
Industry-Leading Margins and Scalable Business Model SaaS 2015 EBITDA Margin vs. Qualys Select Security Peers and SaaS Peers Security 34% Peer Avg: (2%) * Source: JPMorgan 22
Slide 23: What We Want to Achieve in 2017
What We Want to Achieve in 2017 Continue Investing for Growth (Balanced Approach) Elevate our Messaging Reach out to CIOs 23
Slide 24: Qualys Cloud Platform
Qualys Cloud Platform Unique Benefits Provides 2s visibility across ALL global IT assets Provides continuous view of their security & compliance posture, across on-premise, endpoints and elastic cloud environments Identifies those assets that have been already compromised or suspicious Drastically r
Slide 25: Thank You
Thank You pcourtot@qualys.com Qualys, Inc. Confidential
Slide 26: Qualys Cloud Platform: New Extensions & Services Roadmap
Qualys Cloud Platform New Extensions & Services Roadmap Sumedh Thakar, Chief Product Officer QLYS Investor Day, November 17th 2016, New York, NY Qualys, Inc. Confidential
Slide 27: Agenda
Agenda 2016 Cloud Platform Updates Live Demos 2017 New Services Roadmap 27
Slide 28: Global Visibility in a Perimeter-less World
Global Visibility in a Perimeter-less World VMware On Premise Endpoints Cloud 28
Slide 29: Interconnected Systems
Interconnected Systems Hybrid Infrastructure – Single Pane of Glass Visibility Application Web servers VMware Application Application Cloud Database Admin Console 29
Slide 30: Qualys Real-Time Security Sensors
Qualys Real-Time Security Sensors Coverage Across All Type of Infrastructure Physical Virtual Cloud Cloud Agents Passive API Legacy data centers Private cloud Commercial IaaS & Light weight, multi- Passively sniff on Integration with Threat infrastructure PaaS clouds platform network Intel feeds Cor
Slide 31: Qualys Extensible Cloud Platform
Qualys Extensible Cloud Platform Sensors Data Analytics Incidence Response Vulnerability & Threat Intel Physical Virtual Malware Infections Vulnerabilities Apache Cassandra Elasticsearch Clusters Cloud Agents Policy Configuration Missing Patches Cloud RabbitMQ & Kafka issues Oracle & BFFS Storage Pa
Slide 32: Scalable Cloud Platform
Scalable Cloud Platform Key New Extensions Integrated Suite of Applications 3B Scans Qualys API Reporting & Dashboards Remediation & Workflows 100B Detections Analytics and Reporting Distributed Correlation ElasticSearch Clusters 1T Engines Solr Lucene Idexing Oracle & BFFS Storage Security Datapoin
Slide 33: Qualys Private Cloud Platform
Qualys Private Cloud Platform Data Sovereignty/DOD 24x7x365 Monitoring and Support Qualys Security Platform in a Box Daily Vulnerability Feeds SOC Bi-quarterly Platform Updates Deployed within customer or partner datacenters to maintain data sovereignty Same codebase as shared platform VMware Hardwa
Slide 34: Qualys Private Cloud Platform Appliance (PCP-A)
Qualys Private Cloud Platform Appliance (PCP-A) Small & Medium Enterprises Scale up to 30K VM/30K PC/3K WAS Leveraging container technology Managed by Qualys 34
Slide 35: Cloud Agent Platform
Cloud Agent Platform Lightweight agent (3MB) for Secure scalable architecture on-premise servers, dynamic for millions of devices cloud environments and Centrally managed, endpoints self updating 35
Slide 36: Cloud Agent Platform
Cloud Agent Platform Versatile Capabilities Query endpoint data instantly with AssetView Real-time asset inventory Vulnerability Management Policy Compliance File Integrity Monitoring Indicator of Compromise Detection Patch Deployment 36
Slide 37: Passive Network Analysis
Passive Network Analysis Centrally Managed and Self-Updating Sensor Plug into switch mirroring port Discover every IPv4, IPv6 and web app OS Fingerprinting Port mirroring Identify ports and protocols used Discover Applications & Services on device Profile device type based on traffic pattern 37
Slide 38: 2016 Deliverables
2016 Deliverables AssetView (AV) FEDRAMP ThreatPROTECT (TP) WAS SmartScan Linux & Mac Agent GA Azure Agent & Scanner ServiceNow CMDB Sync Security Assessment Splunk TA Questionnaire (SAQ) PCP-A 38
Slide 39: Demo
Demo Actionable Threat Intelligence AssetView ThreatPROTECT 39
Slide 40: 2016-17 Enhancement & Roadmap
2016-17 Enhancement & Roadmap Q4 16 Q2 17 WAF Reinvented Patch Deployment Q1 17 Passive Network File Integrity Monitoring Analyzer IOC Detection Q3 17 SSL View CloudView 360 Note: Dates represent Beta. 40
Slide 41: Single Platform Multiple Solutions
Single Platform Multiple Solutions Cloud-Based Architecture for a Perimeter-less World Vulnerability Management Patch Deployment Policy Compliance AssetView Continuous File Integrity Monitoring Monitoring Malware Protection Enterprise Certificate IOC detection Management Web Application Security Ass
Slide 42: Thank You
Thank You sthakar@qualys.com Qualys, Inc. Confidential
Slide 43: Global Go-to-Market Strategy & Execution
Global Go-to-Market Strategy & Execution Amer Deeba, Chief Commercial Officer QLYS Investor Day, November 17th 2016, New York, NY
Slide 44: Platform Enables Cost-Effective Service to All Customer Segments
Platform Enables Cost-Effective Service to All Customer Segments ENTERPRISE SME SMB Consultants Enterprise Suite Express Suite Express Lite Suite Consultant Suite 5,000+ 250 – 5,000 Below 250 Consultant Employees Employees Employees Groups 44
Slide 45: Scalable, Global and Balanced Sales Model
Scalable, Global and Balanced Sales Model ENTERPRISE SME & SMB 2015 REVENUES Large Enterprise Small / Medium Business (Over 5,000 employees) (Up to 5,000 employees) Direct 60% New Existing New Existing Customers Customers Customers Customers Channel 40% 45
Slide 46: High-Margin Recurring Revenue with No Capex
High-Margin Recurring Revenue with No Capex Highly Attractive to Partners MSSPs Outsourcing VAS Consultant Telcos Providers Resellers Auditors 46
Slide 47: MSSPs and Telcos
MSSPs and Telcos Instantly Higher expands margins their MSS recurring offerings services Zero CAPEX 47
Slide 48: Global Outsourcing Providers
Global Outsourcing Providers Uniquely Compatible supports their across public cloud-based clouds and business model co-located datacenters Zero CAPEX Accessed remotely Higher margin from recurring delivery services locations Leading Outsourcers and Service Providers 48
Slide 49: Value Added Service Resellers
Value Added Service Resellers Security Zero CAPEX Consulting Firms are Higher moving to margin Managed recurring Services services Over 600 VAS Partners Worldwide 49
Slide 50: Consultants and Auditors
Consultants and Auditors Leverage the Qualys Cloud Building Platform for client mindshare engagements and reporting Higher margin Supports recurring Internet-connected Services or air-gap Over 1600 Consultants Worldwide environments 50
Slide 51: SaaS Platform Enables Cost-Effective Marketing Through Try and Buy
SaaS Platform Enables Cost-Effective Marketing Through Try and Buy AssetView FreeScan SSL Labs Free service for FreeScan generates Most popular Asset Inventory and 25% of leads inflow SSL/TLS Test on CMDB integrations the Internet Free tool to test Connects security drive all Qualys’ 250K unique use
Slide 52: Customer and Partner Case Studies
Customer and Partner Case Studies Hi-Tech Healthcare Global Global Scalability Breadth MSSP - 1 MSSP - 2 52
Slide 53: Market Leading Software Company
Market Leading Software Company Problem We Solved Replaced legacy security and compliance tools Initial Deployment 2004: Pilot for Internet-facing devices 2009: Expanded to internal scanning Growth 2012: Deploying Web Application Scanning (WAS) 2015: Global MSA, 3 PCPs Vulnerability Management (VM &
Slide 54: Leading US Healthcare Organization
Leading US Healthcare Organization Helped them build very successful vulnerability and web application Problem We Solved scanning and remediation program. Initial Deployment 2010: Small deployment of 513 VM IPs and 2 scanners. 2011: Expanded VM to 75,000 IPs 2012: Expanded VM to 130,000 IPs Growth 2
Slide 55: Global MSSP - 1
Global MSSP - 1 Problem We Solved Addressed scalability issues created by internally built solution using a competing product Initial Deployment 2011: Transitioned to Qualys as the core security and compliance platform Qualys enabled launch of several new service offerings with minimal Growth invest
Slide 56: Global MSSP - 2
Global MSSP - 2 Problem We Solved Outdated VM, PCI and policy compliance offering Initial Deployment 2016: Transitioned to Qualys as the core security and compliance platform to deliver MSS VM and PC services Qualys enabled immediate transition of existing customer base and upsell Growth opportuniti
Slide 57: Thank You
Thank You adeeba@qualys.com Qualys, Inc. Confidential
Slide 58: Financial Highlights and Business Model
Financial Highlights and Business Model Melissa Fisher, Chief Financial Officer QLYS Investor Day, November 17th 2016, New York, NY
Slide 59: Investment Highlights
Investment Highlights Leading SaaS Security and Compliance Solutions Cloud Platform Uniquely Positioned to Capitalize on Move to Cloud and Stack Consolidation Multiple Levers of Recurring Revenue Growth Industry-Leading Profitability 59
Slide 60: Overview of Qualys
Overview of Qualys
Slide 61: Diversified, High Margin SaaS Subscription Business
Diversified, High Margin SaaS Subscription Business SaaS Subscription Model Annual subscriptions, paid in advance Subscriptions charged to deferred revenues and amortized over term Average contract length 1.1 years Large Global Customer Base, 9200+ Diversified, high penetration of Forbes Global 1000
Slide 62: Large Market Opportunity
Large Market Opportunity Qualys is gaining share 11% 22% Qualys Growth (1) CAGR CAGR $6.1B CAGR $0.8B 1% Other Security $0.7B $3.6B 12% Web Security: SaaS $1.7B $0.8B $0.4B 10% Security Policy and Compliance $1.2B $1.1B Vulnerability Assessment: Application $0.6B 16% $1.6B $0.8B Vulnerability Assess
Slide 63: Strong Organic Revenue Growth
Strong Organic Revenue Growth Outperforming market and gaining share (in millions) 22% 22% CAGR $164 $146 $134 $120 $108 $91 2012 2013 2014 2015 2015 Q3 2016 Q3 YTD YTD 63
Slide 64: New Solutions Now 26% of Revenues
New Solutions Now 26% of Revenues Other VM Solutions 2013 Q3 2016 Q3 YTD YTD REVENUES REVENUES 9% WAS PC New Solutions New Solutions Solutions 17% Solutions 43% 26% 48% Core VM Core VM 83% 74% Note: Core VM includes VM and PCP; Other VM Solutions include CM, CA for VM, AV, and TP; PC Solutions inclu
Slide 65: Qualys Solutions Continue to Grow 20%+
Qualys Solutions Continue to Grow 20%+ New VM-related solutions contributing to VM growth % Year-over-Year Revenue Growth VM Solutions* Other Security Solutions* 58% 49% 42% 38% 40% 19% 19% 19% 20% 27% 15% 14% 2012 2013 2014 2015 2015 Q3 2016 Q3 2012 2013 2014 2015 2015 Q3 2016 Q3 YTD YTD YTD YTD %
Slide 66: Multiple Levers of Recurring Revenue Growth
Multiple Levers of Recurring Revenue Growth
Slide 67: Powerful Land and Expand Model
Powerful Land and Expand Model Quarterly Revenues vs. Customers (in millions) $55 $50 $45 Current $40 9,200+ $35 $30 Initial Solution $25 $20 Expansion of Initial Solution $15 Additional Solutions $10 2009 2010 2011 2012 2013 2014 2015 2016E* Future Products Quarterly Revenues Customers Note: 2016E
Slide 68: Strong Net Dollar Expansion Rates
Strong Net Dollar Expansion Rates 105% 106% 106% 105% 104% 104% 2012 2013 2014 2015 2015 Q3 2016 Q3 Note: Net dollar expansion rate is calculated by dividing implied monthly recurring revenues at the end of the respective period of customers who were also customers at the end of the one year ago per
Slide 69: Significant Opportunity Remains to Grow Customer Base
Significant Opportunity Remains to Grow Customer Base Qualys Only 3% of Qualys Only 1% of Global Enterprise Market Global SMB & SME Market QLYS QLYS Customers Customers 3% 1% Global Enterprise Company Count Global SMB & SME Company Count 37K 1.4M Note: Global Enterprise Company Count includes compan
Slide 70: Significant Opportunity Remains for Upsell in the Installed Base
Significant Opportunity Remains for Upsell in the Installed Base Customers with subscription to respective Qualys products as of Q3 2016 10,000 9,000 Penetration 8,000 7,000 Customers 70% 6,000 5,000 4,000 3,000 29% 2,000 1,000 8% 0 70
Slide 71: Strong Momentum with Newer Solutions
Strong Momentum with Newer Solutions Based on 2016 Q3 LTM Bookings New Solutions Existing Customers* % of Total #1. Fortune 500 Customer - Retail 56% #2. Fortune 50 Customer - Financial Services 54% #3. Fortune 50 Customer - Technology 25% #4. Fortune 500 Customer - Financial Services 69% 15% #5. Fo
Slide 72: Platform Adoption Increasing
Platform Adoption Increasing % of Enterprise customers with 3+ Qualys products has doubled in the last 3 years Percent of Enterprise Customers with Three or More Qualys Products 23% 20% 18% 15% 12% 9% 2012 2013 2014 2015 2015 Q3 2016 Q3 Note: PCI excluded in the product count for Enterprise customer
Slide 73: Enterprise Customers with 3+ Products Spend More Than 3x
Enterprise Customers with 3+ Products Spend More Than 3x 1-Product Customers (in thousands) $147 $150 2016 Q3 $137 YTD: 3.4x of $124 1 Product $105 $112 Average $100 $100 $84 $76 Revenues $66 $70 $67 $68 $50 $39 $37 $35 $34 $35 $28 $0 2012 2013 2014 2015 2015 Q3 2016 Q3 YTD YTD Enterprise Customers
Slide 74: Increasing Number of Customers with Average Spend >$100K
Increasing Number of Customers with Average Spend >$100K (in millions) $120 420 $120,000,000 420 348 $100 350 $100,000,000 350 Cumulative Revenues 277 286 232 $90 247 280 Customers $80 280 $80,000,000 $76 192 $68 $60 210 $60,000,000 210 $57 $51 $40 140 140 $41 $40,000,000 $20 70 $20,000,000 70 $00 $
Slide 75: New Solutions Meaningfully Expand Potential Spend per Customer
New Solutions Meaningfully Expand Potential Spend per Customer Qualys 2015 Qualys Future Total Potential Spend is +5.0x of VM Note: Excludes PCP, AV, PCI, SAQ, PAS, and PM 75
Slide 76: Scalable Operational Model
Scalable Operational Model
Slide 77: 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 $1.0M 36% $0.9M 28% $0.8M 15% 2013 2014 2015 2013 2014 2015 High Sales Leverage Leveraging Low Cost Geos 77
Slide 78: Increasing Adjusted EBITDA & Operating Cash Flow
Increasing Adjusted EBITDA & Operating Cash Flow (in millions) $66 $57 $49 $55 40% 34% 34% $41 $32 38% 31% 24% $25 $22 $17 $14 24% 23% 16% 15% 2012 2013 2014 2015 2016 Q3 2012 2013 2014 2015 2016 Q3 YTD YTD Operating Adjusted Adjusted EBITDA Operating Cash Flow EBITDA Margin (%) Cash Flow Margin (%)
Slide 79: Reaffirming Q4 2016 and FY2016 Guidance
Reaffirming Q4 2016 and FY2016 Guidance Q4 2016 Revenue in the range of $51.9 to $52.9 million GAAP EPS in the range of $0.06 to $0.08 per diluted share Non-GAAP EPS in the range of $0.16 to $0.18 per diluted share FY2016 Revenue in the range of $197.6 million to $198.6 million GAAP EPS in the range
Slide 80: Qualys Model Offers Significant Operating Leverage
Qualys Model Offers Significant Operating Leverage When Solutions Scale Incremental Expenses Per $1.00 of Incremental Revenues Annual $ Increase ($ millions) $35 $0.78 $0.78 $30 $25 $20 $0.44 $15 $10 $0.19 $5 $0 2012 2013 2014 2015 $ Increase in Expenses / $ Increase in Revenues $ Increase in Revenu
Slide 81: Industry-Leading Margins
Industry-Leading Margins 2015 EBITDA Margin vs. Qualys Select Security Peers and SaaS Peers SaaS 34% Security Peer Avg: (2%) Source: JPMorgan 81
Slide 82: Summary
Summary Leading SaaS security and compliance solutions cloud platform Uniquely positioned to leverage the adoption of cloud technology and stack consolidation Multiple drivers of recurring revenue growth Scalable profitable business model with industry-leading margins 82
Slide 83: Thank You
Thank You mfisher@qualys.com Qualys, Inc. Confidential
Slide 84: Appendix
Appendix WEB APP SECURITY . 2 COMPLIAN ITORING
Slide 85: Qualys Integrated Cloud Suite
Qualys Integrated Cloud Suite Web Vulnerability PCI Application Management Compliance Scanning Web Continuous Policy Application Monitoring Compliance Firewall Security Certification: AssetView Assessment SSL Scanning Questionnaire File Integrity ThreatPROTECT Passive Scanning Monitoring Indication
Slide 86: Diverse Customer Base: By Industry
Diverse Customer Base By Industry 2016 Q3 Customers 2016 Q3 YTD Revenues 13% 14% 20% 21% 3% 3% 4% 3% 5% 4% 5% 5% 18% 5% 21% 6% 6% 6% 6% 14% 7% 11% Financial Services Technology Services Retail Insurance Manufacturing Healthcare Other Government Media & Communication Education 86
Slide 87: Diverse Customer Base: By Customer Type
Diverse Customer Base By Customer Type 2016 Q3 Customers 2016 Q3 YTD Revenues 4% 21% 14% 23% 73% 65% Enterprise SME SMB Note: Pie chart percentages may not sum to 100% due to rounding 87
Slide 88: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA (in thousands) 9M 2016 2015 2014 2013 2012 Q1 ‘16 Q2 ‘16 Q3 ‘16 Net Income 13,317 15,865 30,244 1,541 2,221 4,783 3,538 4,996 Other (income) expenses, net (438) 286 634 268 425 (168) (40) (230) Provision for (benefit from) 8,417 8,655 (21,631) 500 358 2,982 2,214 3,
Slide 89: Non-GAAP Financial Measures
Non-GAAP Financial Measures In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Qualys monitors operating measures of non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP net income