Qualys, Inc. · NASDAQ:QLYS
Qualys — Investor Day (June 2018)
68 slides from Qualys's investor day presentation, Jun 13, 2018
Slide 1: Securing our Networks and Enabling the Digital Transformation
Securing our Networks and Enabling the Digital Transformation One app at a time Philippe Courtot Sumedh Thakar Melissa Fisher Chairman and CEO Chief Product Officer CFO Online Investor Day – June 13th 2018
Slide 2: Agenda
Agenda Where are we now and where are we going? Qualys Cloud Platform 2018 Deliverables and Demos Financial Highlights and Long Term Model
Slide 3: Increasing our TAM
Increasing our TAM One app at a time 20% Qualys growth CAGR $20.7B New Services Coming (IOC, FIM, PM, 12% CertView, CloudView, ITAM…) CAGR $1.0B Web Security: SaaS (WAF) (2) $0.7B Other Security $5.3B $1.3B Network and Edge (PS) $0.9B $2.5B Security Policy and Compliance $0.5B $0.6B (PC, PCI, SAQ) $
Slide 4: Building a Global Customer Base
Building a Global Customer Base One customer at at time 74% of the Forbes Global 50, 47% of Global 500, and 25% of Global 2000 standardized on Qualys 10,300+ Customers 9 of the top 10 in Software 8 of the top 10 in Consumer Discretionary DAIMLER 8 of the top 10 in Consumer Staples 8 of the top 10 in
Slide 5: Expanding our Cloud Platform
Expanding our Cloud Platform Unified approach to detection, prevention & response Integrated Suite of Applications CA AI VM CM TP FIM PC PCI SAQ IOC WAS WAF … Analytics and Reporting Engines Distributed Sensors Hardware Virtual Cloud Agent Passive API Environments On-Premises Endpoints Cloud 4
Slide 6: Enabling vendor/stack consolidation
Enabling vendor/stack consolidation One application at a time IT Security Compliance Monitoring Web Application Security New Services
Slide 7: Platform adoption is accelerating
Platform adoption is accelerating 67% 34% 16% 67% 62% 34% 59% 27% 21% 16% 9% 3% Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 FY16 FY17 FY18 FY16 FY17 FY18 FY16 FY17 FY18 2+ solutions 3+ solutions 4+ solutions % of Enterprise customers with select number of solutions 6
Slide 8: Disruptive Go to Market
Disruptive Go to Market The Platform is the Distribution Channel
Slide 9: Disruptive Go to Market
Disruptive Go to Market Recently Launched Community Editions
Slide 10: Disruptive Go to Market
Disruptive Go to Market New Community Editions to be launched end of June 2018
Slide 11: Disruptive Go to Market
Disruptive Go to Market Introducing a groundbreaking new app going beta end of June 2018 Qualys’ Global IT Asset Inventory (ITAM) with CMDB Synchronization
Slide 12: Global IT Asset Inventory
Global IT Asset Inventory A Foundational Technology for Security With this new App the Qualys Cloud Platform now uniquely offers CIOs and CISOs - 2s visibility across ALL of their global IT assets (across On-Premise, End-points, Clouds and Mobile environments) - Continuous view of their Security and
Slide 13: Now Entering the Federal Market Qualys Gov Cloud Platform
Now Entering the Federal Market Qualys Gov Cloud Platform Launch June 6th 2018 Washington DC Platform can be deployed within agencies or partner datacenters to ensure data sovereignty Hardware, virtualized or Cloud versions FedRAMP Authorized, NIST CSF and 800-53compliant Announced on 06/04/18 the i
Slide 14: Expanding our Channels and New Business Sales Teams
Expanding our Channels and New Business Sales Teams ENTERPRISE SME & SMB 2017 Large enterprise Small / medium business REVENUES (Over 5,000 employees) (Up to 5,000 employees) New Existing New Existing Direct customers customers customers customers 60% Channel 40%
Slide 15: Launching the CIO/CISO Interchange Forums
Launching the CIO/CISO Interchange Forums In participation with the Cloud Security Alliance (CSA) Federal CIO/CISO Interchange Oct 16th 2018 - Washington DC Enterprise CIO/CISO Interchange December 10th 2018 – Orlando, FL
Slide 16: Securing the Digital Transformation
Securing the Digital Transformation “Security must be re-invented as we simply cannot continue layering an ever increasing number of security and compliance solutions”
Slide 17: The New Tenets of Security for enabling the Digital Transformation
The 5 New Tenets of Security for enabling the Digital Transformation In this new complex, Highly Interconnected and hybrid world
Slide 18: Visibility Accuracy Scale
The 5 New Tenets of Security for enabling the Digital Transformation Visibility Accuracy Scale Immediacy Transparent-Orchestration Building-in - N T Bolting-on
Slide 19: Thank You
Thank You pcourtot@qualys.com
Slide 20: Our Journey into the Cloud: The Qualys Platform and Architecture
Our Journey into the Cloud: The Qualys Platform and Architecture Sumedh Thakar Chief Product Officer, Qualys, Inc. Online Analysts & Investors Day June 13th 2018
Slide 21: Visibility Accuracy Scale
The 5 New Tenets of Security for enabling the Digital Transformation Visibility Accuracy Scale Immediacy Transparent-Orchestration Building-in - N T Bolting-on
Slide 22: Qualys Cloud Platform Architecture
Qualys Cloud Platform Architecture Integrated Suite of CA AI VM CM TP FIM PC PCI SAQ IOC WAS WAF Applications Analytics and Reporting Engines Distributed Sensors Hardware Virtual Cloud Agent Passive API
Slide 23: Qualys Cloud Platform Backend
Qualys Cloud Platform Backend Scalable, Micro-services, DevOps VM PC WAS WAF FIM Scanner Service APIs Qualys Streaming Data Backbone Cloud Asset Agent Reporting Analytics IOC Indexing Tagging Service Service Service
Slide 24: Qualys Sensors
Qualys Sensors Scalable, self-updating & centrally managed Cloud/Container Cloud Agents Passive Physical Virtual API Commercial IaaS & Light weight, multi- Passively sniff on Legacy data Private cloud PaaS clouds platform network Integration with centers infrastructure Threat Intel feeds Pre-certifi
Slide 25: Qualys Cloud Platform
Qualys Cloud Platform Unified approach to detection, prevention & response across on-premise, cloud and endpoints On Premise Endpoints Cloud VMware
Slide 26: Qualys Mobile Security Platform
Qualys Mobile Security Platform 1Mobility Acquisition Cloud Agents on iOS, Android & Windows Mobile EMM (Enterprise Mobility Management) Realtime Asset Inventory AV, VM, PC & Threat detection Policy enforcement Beta Q4 2018 7
Slide 27: Cloud Agent Platform
Cloud Agent Platform Lightweight agent (3 MB) for on premise servers, dynamic cloud environments and mobile endpoints Secure scalable architecture for millions of devices Centrally managed, self updating 7.3 Million Cloud Agents purchased over last 12 months Architecture for IoT device security (Mar
Slide 28: Integrated Cloud Apps
Integrated Cloud Apps ASSET MANAGEMENT AI Asset Inventory SYN CMDB Sync CI Cloud Inventory CRI Certificate Inventory Maintain full, instant visibility of all Synchronize asset information from Inventory of all your cloud assets Inventory of TLS/SSL digital your global IT assets Qualys into ServiceNo
Slide 29: Single Pane of Glass
Single Pane of Glass Dynamic and customizable dashboards Centrally managed, self-updating, integrated Cloud Apps 1+ trillion 250+ billion Security Events Data Points Indexed on Elasticsearch Clusters 3+ billion 99.9996% IP Scans/Audits a Year Six Sigma Scanning Accuracy
Slide 30: Journey into the Cloud
Journey into the Cloud Hindered by the Silos Datacenter Infrastructure Security Corporate User Endpoint Security Cloud Security Web Application Security (AppSec) CI/CD security automation (DevOps/DevSecOps) IT Asset Configuration Compliance & Audit
Slide 31: Multiple Point Security Solutions
Multiple Point Security Solutions Both Legacy and Next-Gen SIEM Console Console Console Console Console Console Console (FIM) (Compliance) (EDR) (PATCHING) (VM) Agent Agent Agent Agent Agent Agent Agent
Slide 32: End-to-end Security Architecture
End-to-end Security Architecture Automated Continuous Monitoring & Response Discovery Detection Response Prevention On-Prem Endpoint Activity Security Orchestration Cloud Security Hygiene Cloud Infra Monitoring Incident Response Mobile Devices Vulnerability Assessment Network Activity Quarantine OT/
Slide 33: DevOps and SecOps
DevOps and SecOps Accelerating Digital Transformation More Dev than Sec or Ops Built-in not bolted-on
Slide 34: Transparent-Orchestration Built-in Not Bolted-on
Transparent-Orchestration Built-in N T Bolted-on Microsoft Azure Seamless Integration
Slide 35: Bake Qualys Security into Gold Images and AMI
16 CapitalOne: Introduce Security at the Source Bake Qualys Security into Gold Images and AMI OS GOLD IMAGE QUALYS ASSESS APPROVE and and HARDENDED ON DEV PUBLISH AMAZON MACHINE INSTANCES INSTANCES CI/CD PIPELINE IMAGE (AMI) Qualys Scanner Qualys Qualys Scanner VM PC WAS Agent Public OS OS Fix Verif
Slide 36: Qualys Private Cloud Platform Data Sovereignty/MOD
Qualys Private Cloud Platform Data Sovereignty/MOD Deployed within customer or partner 24x7x365 Monitoring and Support datacenters to maintain data SOC Daily Vulnerability Feeds Bi-quarterly Platform Updates sovereignty Same codebase as shared platform Hardware, virtualized or AWS versions VMware Fu
Slide 37: Qualys Cloud Platform Operations
Qualys Cloud Platform Operations Signature Software Raleigh, NC Updates Updates France, EU Redwood Shores, CA Pune, India Operation, Administration Private Clouds as a 6 Public Clouds online in and Maintenance Platform Appliance or a US, EU and IN Virtual Data Center Global Infrastructure (65 plus)
Slide 38: New Apps Releases and Roadmap
New Apps Releases and Roadmap H1 2018 H2 2018 CertView Patch Management Beta - Q3’18 GA CloudView Passive Network Discovery Beta - Q3’18 GA Global IT Asset Inventory GA – Q3’18 Container Security GA Secure Access Control Beta - Q4’18 Global IT Asset Inventory Beta Secure Access Control Beta - Q4’18
Slide 39: Community Editions
Community Editions Launched April 2018
Slide 40: Community Editions
Community Editions Q3 2018
Slide 41: Container Security
Container Security GA – June 2018 CI/CD pipeline Integration with Jenkins Assess Images Monitor running containers Track drift of containers from images Fully Integrated on Qualys Platform 22
Slide 42: Global IT Asset Inventory
Global IT Asset Inventory Beta – June 2018 Source of truth for assets on the network Discover all assets in global hybrid infrastructure Asset information is normalized and categorized for hardware and software Enriched with metadata and indexed for 2 second visibility Sync with CMDB 23
Slide 43: Demo
Demo
Slide 44: Qualys Cloud Platform
Qualys Cloud Platform A new unified approach to prevention and response 2-second visibility across all of your global IT assets (on premise, endpoints and cloud assets) Continuous assessment of your global security & compliance posture Identify compromise-able and compromised assets Consolidate all
Slide 45: Thank You
Thank You sthakar@qualys.com
Slide 46: Financial Highlights and Business Model
Financial Highlights and Business Model Melissa Fisher CFO, Qualys, Inc. Philippe Courtot Sumedh Thakar Melissa Fisher Chairman and CEO Chief Product Officer CFO Online Investor Day – June 13th 2018
Slide 47: We are in the fastest growing security markets and expanding our TAM
We are in the fastest growing security markets and expanding our TAM 20% 12% $20.7B Qualys growth (1) CAGR $10.0B Cloud Security $11.6B $5.3B $2.8B IT Asset Management $0.7B Web Security: SaaS (2) $1.9B $1.3B Network and Edge $0.5B $0.6B $2.5B Security Policy and Compliance $1.6B $0.8B $1.6B Vulnera
Slide 48: Platform adoption is accelerating…
Platform adoption is accelerating… 66% 32% 15% 6% 32% 66% 61% 26% 58% 20% 15% 8% 6% 3% 3% 0% FY15 FY16 FY17 FY15 FY16 FY17 FY15 FY16 FY17 FY15 FY16 FY17 2+ solutions 3+ solutions 4+ solutions 5+ solutions % of Enterprise customers with select number of solutions
Slide 49: …contributing to higher ARPU
…contributing to higher ARPU 8x of 1-solution 7.9x average customer with select # of solutions Avg. revenues per enterprise benchmarked to 1 solution 6.0x 4.7x 4.7x 4.2x 3.9x 3.1x 2.9x 3.1x 3.0x 2.5x 2.4x 1.0x 1.0x 1.0x FY15 FY16 FY17 Enterprise customers with 1 solution Enterprise customers with 2+
Slide 50: Significant opportunity remains for cross-sell and upsell
Significant opportunity remains for cross-sell and upsell 100% 90% 80% 70% Customers 60% 50% 40% 30% 58% 50% 20% 10% 12% 12% 12% 11% 0% VM WAS CM CA-VM TP PC CA-PC SAQ WAF Customer Penetration by Solution as of Q1 2018 Note: Excludes customers from select MSSPs with limited end customer information
Slide 51: Significant Opportunities for Expansion
Significant Opportunities for Expansion Example: Large UK Retailer ($ in thousands) $1,000 $850K WAS $800 SAQ This customer starting with 1 solution expanded CAP-POL $600 to 8 solutions and 42.5X POL spend in 4 years TP CM $400 CAP-VM $200 $20K VM $0 VM Initial Sale 2013 2017
Slide 52: Significant Opportunities for Expansion
Significant Opportunities for Expansion Example: Major US Retailer $ 2.5M $2.2M CAP-POL $ 2.0M POL $ 1.5M Initial $7k PCI... Over TP time added VM, Policy Compliance, Cloud POL CAP-VM $ 1.0M Agents. VM VM VM VM $ 0.5M $7k PCI VM $ 0M Initial Sale 2011 2014 2017
Slide 53: Significant opportunity remains to grow the customer base
Significant opportunity remains to grow the customer base Qualys only 4% of Qualys only 1% of Global Enterprise Market Global SME & SMB Market Global Enterprise Global SME & SMB Company Count 38K Company Count 1.5M Note: Global Enterprise company count includes companies with more than 5,000 employe
Slide 54: Increased revenue has driven higher EBITDA margins
Increased revenue has driven higher EBITDA margins ($ in millions) Adjusted EBITDA Adjusted EBITDA margin (%) 37% 34% 34% $ 90 $85 40% $ 80 $ 70 $68 20% $57 $ 60 38% 0% $ 50 -20% $ 40 32% $25 -40% $ 30 $ 20 $17 -60% -80% $ 10 2015 2016 2017 Q1 Q1 2017 2018 Note: Non-GAAP financial measure. See Appen
Slide 55: Qualys' operating cash flow margins are also increasing...
Qualys’ operating cash flow margins are also increasing... ($ in millions) Operating cash flow Operating cash flow margin (%) 47% 40% $ 12 0 $108 40% 34% $ 11 0 $ 100 20% $ 90 66% 0% $ 80 $ 70 $66 $68 -20% $ 60 61% $43 -40% $ 50 $32 $ 40 -60% $ 30 -80% $ 20 2015 2016 2017 Q1 Q1 2017 2018
Slide 56: …as well as free cash flow margins
…as well as free cash flow margins ($ in millions) Non-GAAP Free cash flow Non-GAAP Free cash flow margin (%) 35% 28% 23% $ 90 $80 40% $ 80 20% $ 70 $ 60 56% 0% $ 50 $46 $45 52% -20% $ 40 $36 $28 -40% $ 30 -60% $ 20 -80% $ 10 2015 2016 2017 Q1 Q1 2017 2018 Note: 2017 normalized for headquarters offi
Slide 57: Qualys' Industry-leading margins
Qualys’ Industry-leading margins QLYS 38% Security SaaS Peer average: 9% W M R X O ZS O D M VR L FE P BR BS EV A S TY T E YE YC PT PV EW CT S LK W SI IL N B G DS L O O LI N N X A N KT IM D LY TW O ZE VD HU RN CY BO VE SA PC SH PA PA CS SC PF TE FT EL RP IM SP FS M N M Q O Source: JPMorgan Q1 CY2018
Slide 58: Qualys and the Rule of 40
Qualys and the Rule of 40 QLYS 60% Security SaaS Rule of 40 (40%) BL BR SC T PA V YC D W TW S R X LK S PT TY O O S CS T D PV M E N G YE A P LI IL VR I M N O X S ZS LY B C N N IM BO O KT EW W E O RP RN ZE L DS A EL SA VD O N PA PF SP HU PC FS FE VE IM CY FT SH TE Q M M Source: JPMorgan Customer Penet
Slide 59: 2021 Financial Model
2021 Financial Model As the platform adoption continues to increase, we expect to see in 2021: Revenue growth of low 20s to mid 20s Gross margins of approximately 80% EBITDA margins of 40% to 42% Non-GAAP free cash flow margins of 35% to 40% (Assuming a 23% cash tax rate)
Slide 60: QLYS Investment Highlights
QLYS 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
Slide 61: Appendix
0) Qualys Shadow Brokers and WannaCry - isSING 6817-010 PATCH
Slide 62: Q2 2018 and Full Year 2018 Guidance Reminder
Q2 2018 and Full Year 2018 Guidance Reminder Q2 2018 Revenues in the range of $66.8 to $67.3 million, representing 21% to 22% growth over the same quarter in 2017 GAAP EPS in the range of $0.11 to $0.13 per diluted share Non-GAAP EPS in the range of $0.33 to $0.35 per diluted share Full year 2018 Re
Slide 63: Strong Net Dollar Expansion Rates
Strong Net Dollar Expansion Rates 109% 106% 101% Q1 2016 Q1 2017 Q1 2018 Note: Net dollar expansion rate is calculated by dividing implied monthly recurring revenues at the end of the respective period of customers who were also customers at the end of the one year ago period by the implied monthly
Slide 64: Qualys' Balanced Customer mix
Qualys’ Balanced Customer mix SMB 3% SME SMB Enterprise 20% 31% 24% Enterprise SME 77% 46% 2018 Q1 Customers 2018 Q1 Revenues Note: Pie chart percentages may not sum to 100% due to rounding. Excludes revenues and customer count of those with only PCI or scanner subscriptions and those from select MS
Slide 65: Qualys' Diversified Industry Mix
Qualys’ Diversified Industry Mix Education Education 4% 2% Technology 14% Technology 17% Financial Services 19% Financial Services 25% Services & Consulting 9% Services & Consulting Government 19% 5% Retail & Consumer Government Healthcare & Pharma Products 3% Manufacturing & 6% 10% Healthcare & Pha
Slide 66: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA ($ in millions) Q1 Q1 2015 2016 2017 2017 2018 Net income $15.9 $19.2 $40.4 $21.9 $9.1 Depreciation and amortization of 14.0 16.6 19.8 4.7 6.4 property and equipment Amortization of intangible assets 0.4 0.4 0.8 0.1 0.6 Interest expense 0.0 0.0 0.0 0.0 0.0 Provision
Slide 67: Reconciliation of Non-GAAP Free Cash Flow
Reconciliation of Non-GAAP Free Cash Flow ($ in millions) Q1 Q1 2015 2016 2017 2017 2018 GAAP Cash flows provided by operating $66.0 $68.1 $107.6 $32.4 $43.0 activities Purchases of property and equipment (20.1) (23.2) (37.8) (4.5) (6.0) Capitalized software development costs (0.1) --- --- --- --- H
Slide 68: Thank You
Thank You mfisher@qualys.com