Slide 1: Investor Presentation
Investor Presentation Securing the Digital Transformation Building a safer world - one app at a time Philippe Courtot, Chairman and CEO Melissa Fisher, CFO May 7th, 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/compliance solutions and secure the Digital Transformation 2
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 3
Slide 5: Expanding Market Opportunity
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 $2.5B 10% Security Policy
Slide 6: Blue Chip Global Customer Base
Blue Chip Global Customer Base 70% of the Forbes Global 50, 47% of Global 500, and 25% of Global 2000 standardized on Qualys 15,700+ Customers DAIMLER Note: Customers include active subscribers of our free services 5
Slide 7: Scalable Go-to-market Model
Scalable Go-to-market Model Market segmentation & key strategic partners 2019 ENTERPRISE MID-MARKET REVENUES Large enterprise Small / medium business DIRECT (Over 5,000 employees) (Up to 5,000 employees) 58% New Existing New Existing customers customers customers customers CHANNEL 42% 6
Slide 8: Attractive Value Proposition for Partners
Attractive Value Proposition for Partners High-margin recurring revenue with no capex /maintenance costs Outsourcing VAS MSSPs Telcos Resellers Consultants Providers 7
Slide 9: Global Presence
Global Presence 15,700+ 130+ 8 87 54 Customers Countries Shared Platforms Private Clouds Locations Qualys’ Shared Platforms Qualys’ Locations Note: Customers include active subscribers of our free services 8
Slide 10: Scalable Business Model
Scalable Business Model Strong and Consistent Performance 1Q17 LTM - 1Q20 LTM CAGR 33% 29% 18% Revenue Adj. EBITDA FCF 9
Slide 11: Strong Organic Revenue Growth
Strong Organic Revenue Growth Outperforming market and gaining share ($ in millions) 18% CAGR $322 $279 $231 $198 Revenues 14.5% $86 $75 2016 2017 2018 2019 Q1 2019 Q1 2020 10
Slide 12: Adoption of New Solutions Fuels Growth and Profitability
Adoption of New Solutions Fuels Growth and Profitability ($ in millions) Quarterly revenues vs. customers 19 APPS VM, WAS, PC, TP, CM, PCI, FIM, AI, CS, PM, IOC, CSA… $100 4 APPS VM, PC, PCI, WAS $50 2 APPS VM, PCI $0 2008 2013 2019 Quarterly revenues Customers 11
Slide 13: Number of Cloud Agents Sold
New Apps Enabled by Cloud Agents (Units in millions) Number of Cloud Agents Sold 40.0 38.4 35.0 30.7 30.0 27.9 25.0 23.6 20.0 15.0 10.0 LTM LTM LTM LTM Q2 2019 Q3 2019 Q4 2019 Q1 2020 12
Slide 14: Platform Adoption Accelerating
Platform Adoption Accelerating 73% 50% 32% 18% 73% 70% 67% 50% 62% 42% 34% 32% 27% 22% 16% 18% 9% 11% 7% 3% Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 FY17 FY18 FY19 FY20 FY17 FY18 FY19 FY20 FY17 FY18 FY19 FY20 FY17 FY18 FY19 FY20 2+ solutions 3+ solutions 4+ solutions 5+ solutions % of Enterpr
Slide 15: Multiplier Effect
Multiplier Effect Enterprise customers with 4+ solutions spend over 5x that of 1-solution customers ($ in thousands) 5+X of 1-solution $270 Avg. LTM revenues $300 $279 $266 average per customer $218 $216 $223 $205 $200 $172 $100 $51 $50 $52 $44 $0 LTM LTM LTM LTM Q1 2017 Q1 2018 Q1 2019 Q1 2020 Ente
Slide 16: Multi-Product Adoption Drives Increased Stickiness
Multi-Product Adoption Drives Increased Stickiness 99% 98% 97% 94% 2 Products 3 Products 4 Products 5 Products 2019 Enterprise Gross Dollar Retention Rate Note: Dollar Retention Rate is the retention rate of prior year Enterprise ARR (excluding upsell and downsell) averaged over the last four quarte
Slide 17: Increasing Number of Large Customers
Increasing Number of Large Customers ($ in millions) 96 $100 75 $109 80 Aggregate Revenues Customers $80 57 $84 60 $60 42 $61 40 $40 $39 20 $20 $0 0 LTM LTM LTM LTM Q1 2017 Q1 2018 Q1 2019 Q1 2020 Note: Customer count is defined as customers with greater than $500K in annual revenue 16
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% $1.0M 2015 2018 2019 2015 2018 2019 High sales leverage Leveraging low cost geos 17
Slide 19: Expanding Margins
Expanding Margins ($ in millions) 27% CAGR 44% 25% 40% 37% $141 44% 50% $140 45% $120 34% $112 41% 40% 35% $100 $85 30% $80 $68 25% $60 20% $38 $40 $31 15% 10% $20 5% $0 0% 2016 2017 2018 2019 Q1 Q1 2019 2020 Adjusted EBITDA Adjusted EBITDA margin (%) 18
Slide 20: Increasing Free Cash Flow
Increasing Free Cash Flow ($ in millions) 44% CAGR 42% 35% 36% 35% $135 55% 60% $140 $120 23% 47% 50% $101 $100 40% $80 $80 30% $60 $45 $48 $35 20% $40 10% $20 $0 0% 2016 2017 2018 2019 Q1 Q1 2019 2020 Free cash flow Free cash flow margin (%) Note: 2017, 2019 & 1Q20 non-GAAP Free cash flow normalize
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% W G N R T M P X PT X E D YE BS LK IL LO D N EV BR YC ZS N EW RN O IM BO W SP N TY O A RP SA ZE PF FE FT SP HU SH VE TW TE PA CS CY SC BL PA M O PC N O M A KT S CT N O VR FS
Slide 22: Industry-leading Performance
TW LO PA YC VE EV TE AM ZS 59% CY QLYS BR PC TY SH O P FT N T SP LK RN G N EW R HU BS ZE N 21 M IM E PA N W PF PT O KT 2019 Rule of 40 vs. A RP D O SP N select Security and SaaS peers CS O D SA IL BO X TE N B FE YE SC W X SaaS FS Rule of 40 Industry-leading Performance CT Security M O BL VR N S
Slide 23: Qualys Cloud Platform and Roadmap
Qualys Cloud Platform and Roadmap 22
Slide 24: 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+ 38.4 million 2+ trillion IP Scans/Audits a Year Scanner appliances Cloud Agents across Security Events collected servers,
Slide 25: Qualys Cloud Platform
Qualys Cloud Platform Scalable, Extensible, Micro-services, DevOps Integrated Suite of AI VM CM TP FIM PC PCI SAQ IOC WAS WAF SYN … Applications 24
Slide 26: Cloud Platform Enables Vendor and Stack Consolidation
Cloud Platform Enables Vendor and Stack Consolidation Vulnerability Management Compliance Monitoring Web App Security New Services 25
Slide 27: Increasing Number of Apps Delivered Through the Qualys Cloud Platform
Increasing Number of Apps Delivered Through the Qualys Cloud Platform 26
Slide 28: Introducing Qualys VMDR
Introducing Qualys VMDR Next Generation Vulnerability Management Solution Bringing Vulnerability Management to the Next Level Ø VMDR provides the power to continuously detect vulnerability and misconfigurations across the entire global hybrid IT environment and respond in real-time from a single pla
Slide 29: Introducing Qualys VMDR
Introducing Qualys VMDR Next Generation Vulnerability Management Solution 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. VMDR includes the following Qualys sensors (unlimited): Virtu
Slide 30: Additional Apps to Come in 2020
Additional Apps to Come in 2020 Certificate Management Automated renewing and management of digital certificates* Cloud Security Management Remediation and management of cloud vulnerabilities* Run-Time Container Security Runtime defense and automated policy enforcement to protect against breaches an
Slide 31: Unique Advantages of the Qualys' Cloud Platform
Unique Advantages of the Qualys’ Cloud Platform Single-pane-of-glass-view across on-premises assets, endpoints, containers and cloud environments allowing customers to consolidate their stack and getting better security and compliance visibility No hardware to Lower Easy to deploy Unprecedented buy
Slide 32: Appendix
Appendix 0) Qualys. WannaCry and Shadow Brokers + Actions v Add Widget Fitter by AssetTage — Gy MISSING MS17-010 PATCH WANNAGRY RANSOMWARE DOUBLEPULSAR WINDOWS HOSTS PENDING DETECTED - AUTH ONLY BACKDOORS REBOOT - AUTH ONLY 0 0 vs All Windows Systems. vs All Windows Systems 4061 (0.0 {081 (0.00%) ‘1
Slide 33: Increasing Number of Apps Delivered Through the Qualys Cloud Platform
Increasing Number of Apps Delivered Through the Qualys Cloud Platform IT SECURITY GLOBAL IT ASSET MANAGEMENT VM Vulnerability Management PM Patch Management AI Asset Inventory Continuously detect and protect Streamline and accelerate vulnerability Maintain full, instant visibility of against attacks
Slide 34: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA ($ in millions) Q1 Q1 2016 2017 2018 2019 2019 2020 Net income $19.2 $40.4 $57.3 $69.3 $13.3 $18.7 Depreciation and amortization of property 16.6 19.8 25.2 25.1 6.4 6.2 and equipment Amortization of intangible assets 0.4 0.8 3.7 6.1 1.5 1.5 Interest expense 0.0 0.0
Slide 35: Reconciliation of Non-GAAP Free Cash Flow
Reconciliation of Non-GAAP Free ($ in millions) Cash Flow Q1 Q1 2016 2017 2018 2019 2019 2020 GAAP Cash flows provided by operating activities $68.1 $107.6 $125.5 $160.6 $44.3 $52.4 Purchases of property and equipment (23.2) (37.8) (22.8) (27.6) (8.6) (7.3) Capitalized software development costs ---
Slide 36: Revenue by Geographic Area
Revenue by Geographic Area ($ in millions) 1Q 1Q 2016 2017 2018 2019 2019 2020 United States 139.7 162.7 185.9 206.6 48.6 55.0 71% 70% 67% 64% 65% 64% Foreign 58.2 68.1 93.0 115.1 26.7 31.3 29% 30% 33% 36% 35% 36% Total Revenues $197.9 $230.8 $278.9 $321.6 $75.3 $86.3 35