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 and CEO Melissa Fisher, CFO February 12th, 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, 46% 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 97 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: Qualys Cloud Platform and Roadmap
Qualys Cloud Platform and Roadmap 9
Slide 11: 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 3+ billion 50,000+ 30.7 million 2+ trillion IP Scans/Audits a Year Scanner appliances Cloud Agents across Security Events collected in server
Slide 12: Qualys Cloud Platform
Qualys Cloud Platform Scalable, Extensible, Micro-services, DevOps Integrated Suite of … Applications 11
Slide 13: Cloud Platform Enables Vendor and Stack Consolidation
Cloud Platform Enables Vendor and Stack Consolidation Vulnerability Management Compliance Monitoring Web App Security New Services 12
Slide 14: Increasing Number of Apps Delivered Through the Qualys Cloud Platform
Increasing Number of Apps Delivered Through the Qualys Cloud Platform 13
Slide 15: Qualys Ubiquity Play
Qualys Ubiquity Play Introducing our Global IT Asset Discovery and Inventory as a Free Service Qualys Global IT Asset Inventory (AI) gives you a “single source of truth” for IT assets of all types, whether on-prem (devices and applications), mobile endpoints, clouds, containers, OT and IoT. “You can
Slide 16: Qualys Ubiquity Play
Qualys Ubiquity Play Single source of truth for IT and Security teams managing assets in hybrid environments. Free Features: • Real-time inventory of known and unknown assets across global IT footprint • Search across millions of assets and obtain full visibility of any device in seconds • Instantly
Slide 17: Introducing Qualys VMDR
Introducing Qualys VMDR Next Generation Vulnerability Management Solution Bringing Vulnerability Management to the Next Level VMDR takes vulnerability management to the next level by providing the power to continuously detect vulnerability and misconfigurations across the entire global hybrid IT env
Slide 18: 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 19: Scalable Business Model
Scalable Business Model Strong and Consistent Performance 2016-2019 CAGR 43% 27% 18% Revenue Adj. EBITDA FCF 18
Slide 20: Strong Organic Revenue Growth
Strong Organic Revenue Growth Outperforming market and gaining share ($ in millions) 18% CAGR $322 $279 $231 $198 Revenues 2016 2017 2018 2019 19
Slide 21: Adoption of New Solutions Fuels Growth and Profitability
Adoption of New Solutions Fuels Growth and Profitability ($ 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 $0 2008 2013 2019 Quarterly revenues Customers 20
Slide 22: New Apps Enabled by Cloud Agents
New Apps Enabled by Cloud Agents (Units in millions) Number of Cloud Agents Sold 38.0 33.0 30.7 27.9 28.0 23.6 23.0 17.9 18.0 13.0 8.0 LTM LTM LTM LTM Q1 2019 Q2 2019 Q3 2019 Q4 2019 21
Slide 23: Platform Adoption Accelerating
Platform Adoption Accelerating 72% 48% 28% 15% 70% 72% 66% 48% 61% 41% 32% 28% 26% 21% 15% 15% 8% 10% 6% 3% Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q4 FY16 FY17 FY18 FY19 FY16 FY17 FY18 FY19 FY16 FY17 FY18 FY19 FY16 FY17 FY18 FY19 2+ solutions 3+ solutions 4+ solutions 5+ solutions % of Enterpr
Slide 24: Multiplier Effect
Multiplier Effect Enterprise customers with 4+ solutions spend over 5x that of 1-solution customers ($ in thousands) 5+X of 1-solution Avg. LTM revenues $300 $273 $266 $273 average per customer $212 $223 $207 $200 $200 $164 $100 $52 $49 $52 $48 $0 LTM LTM LTM LTM Q4 2016 Q4 2017 Q4 2018 Q4 2019 Ente
Slide 25: Multi-Product Adoption Drives Increased Stickiness
Multi-Product Adoption Drives Increased Stickiness 99% 98% 97% 94% 2 Products 3 Products 4 Products 5 Products 2019 Enterprise Gross Dollar Retention Rate Note: Dollar Retention Rate is the retention rate of prior year Enterprise ARR (excluding upsell and downsell) averaged over the last four quarte
Slide 26: Increasing Number of Large Customers
Increasing Number of Large Customers ($ in millions) 93 $100 80 70 $105 Aggregate Revenues Customers $80 60 51 $79 $60 38 40 $40 $54 $35 20 $20 $0 0 LTM LTM LTM LTM Q4 2016 Q4 2017 Q4 2018 Q4 2019 Note: Customer count is defined as customers with greater than $500K in annual revenue 25
Slide 27: 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% $1.0M 2015 2018 2019 2015 2018 2019 High sales leverage Leveraging low cost geos 26
Slide 28: Expanding Margins
Expanding Margins ($ in millions) 27% 44% 50% $200 CAGR 45% 40% 40% 35% $150 37% $141 30% 34% $112 25% $100 $85 20% $68 15% $50 10% 5% $0 0% 2016 2017 2018 2019 Adjusted EBITDA Adjusted EBITDA margin (%) 27
Slide 29: Increasing Free Cash Flow
Increasing Free Cash Flow ($ in millions) $200 44% 45% 42% $180 CAGR 40% $160 36% 35% $135 $140 35% 30% $120 $101 25% $100 23% $80 20% $80 15% $60 $45 10% $40 $20 5% $0 0% 2016 2017 2018 2019 Free cash flow Free cash flow margin (%) Note: 2017 & 2019 non-GAAP Free cash flow normalized for headquarte
Slide 30: Industry-leading Margins
Industry-leading Margins Q3 CY2019 Adjusted EBITDA margin vs. select Security and SaaS peers QLYS Security 47% SaaS Peer Median: 13% 29
Slide 31: Industry-leading Performance
Industry-leading Performance Q3 CY2019 Rule of 40 vs. select Security and SaaS peers Security QLYS 63% SaaS Rule of 40 30
Slide 32: Unique Advantages of the Qualys' Cloud Platform
Unique Advantages of the Qualys’ Cloud Platform Single-pane-of-glass-view across on-premises assets, endpoints, containers and cloud environments No hardware to Lower Easy to deploy Unprecedented buy or manage operating costs and maintain scaling Nothing to install or manage, With everything in the
Slide 33: Appendix
Appendix © Qualys. WannaCry and Shadow Brokers + Aetions ~ Add Widget Fiterby Asset Tags Gy MISSING MS17-010 PATCH WANNACRY RANSOMWARE DOUBLEPULSAR WINDOWS HOSTS PENDING DETECTED - AUTH ONLY BACKDOORS REBOOT - AUTH ONLY 28. 0 0 17 ns vs All Windows s vs All Windows Systems ve All Windows «hit TOP 5
Slide 34: Increasing Number of Apps Delivered Through the Qualys Cloud Platform
Increasing Number of Apps Delivered Through the Qualys Cloud Platform IT SECURITY GLOBAL IT ASSET MANAGEMENT Vulnerability Management Patch Management Asset Inventory Continuously detect and protect Streamline and accelerate vulnerability Maintain full, instant visibility of against attacks, anytime
Slide 35: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA ($ in millions) 2016 2017 2018 2019 Net income $19.2 $40.4 $57.3 $69.3 Depreciation and amortization of property 16.6 19.8 25.2 25.1 and equipment Amortization of intangible assets 0.4 0.8 3.7 6.1 Interest expense 0.0 0.0 0.2 0.1 Provision for (benefit from) income
Slide 36: Reconciliation of Non-GAAP Free Cash Flow
Reconciliation of Non-GAAP Free ($ in millions) Cash Flow 2016 2017 2018 2019 GAAP Cash flows provided by operating activities $68.1 $107.6 $125.5 $160.6 Purchases of property and equipment (23.2) (37.8) (22.8) (27.6) Capitalized software development costs --- --- --- --- Headquarters office facilit
Slide 37: Revenue by Geographic Area
Revenue by Geographic Area ($ in millions) 2015 2016 2017 2018 2019 United States 115.4 139.7 162.7 185.9 206.6 70% 71% 70% 67% 64% Foreign 48.9 58.2 68.1 93.0 115.1 30% 29% 30% 33% 36% Total Revenues $164.3 $197.9 $230.8 $278.9 $321.6 36