Qualys (QLYS) 13 Feb 192018 Q4 Earnings call transcript

Good day, everyone, and welcome to Qualys Fourth Quarter 2018 Earnings Conference Call. This call is being recorded. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions for asking a question will be given at that time. I would now like to turn the call over to Natasha Asar, Investor Relations. ma'am. ahead, go Please

welcome call. fourth and year and XXXX earnings to afternoon quarter Qualys’ full Good

today discuss our me and Joining to CEO, our Philippe and chairman Courtot, Melissa Fisher, CFO. our results are

today's materially statements. would results Actual Before we remarks and or statements our set will materially and results are make today, future on release a future as may forward-looking include financial events. to statements XX-K. to to these you in press that based relate or the that differ our new today of generally these we like SEC, latest Any Factors we result of filings statements events in undertake including on get that cause our remind future or differ that I and are as could started, with our this no forth call Form operating information from obligation XX-Q performance. assumptions update forward-looking to

present GAAP non-GAAP earnings included During this non-GAAP release. GAAP both is and A call, financial reconciliation in press measures today's to of will we measures.

press over prepared As that, the our like With investor the are available release, supplemental reminder, remarks, on website. accompanying and I’d turn to presentation to a Philippe. with call an information

At we expand on-premises we the native that growth with everyone User IoT share increasingly Conference revenue Natasha November, partner. base observed our mobile our our in assets strategic growing across a customers single-pane-of-glass cloud-based and report I well new security are devices. are in profitability. well and compliance our another With IT, a in earnings XX OT trusted results Thanks pleased to customers. leading soon welcome security to gain of cloud as and that call. unifies These and our two-second Qualys to in clouds and year as strong user our view within we wallet as QX our positioned apps Melissa view believe platform, and as position terms and and compliance quarter platform underscore visibility and

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to enable within app, hybrid offer and mobile, customers our all IoT Our AI for IT us on-premises soon, assets of endpoints, a cloud truth' launched 'source environments. OT environments, single assets, and formally yesterday, covering clouds,

expanding Asset our IT capability solution We into complete visibility Management We inventory, us base; (deep Passive compliance enable capabilities. customer scale. of both the which adaptive our will the unknown of leader assets policy. in the Layered of acquisition at Insight, fingerprinting also offering delivering customers as pioneer visibility and demonstrated Cloud adding new insight response mobile natively enhance which (now will on container inspection, runtime QX, as images, by analysis security, existing the will in containers, security, acquired Network data our IT to analysis and into a that global This in further provide and global automated of to employee-owned beta) container enforcement running network footprint completed Qualys XMobility, devices, correlation) completed our also device packet provide Platform, and we discovery, within functions Analysis enterprise-owned integrates well enterprises and

into App, which We allow are Qualys to currently Container integrating will us Security orchestration transparent Layered the container Insight’s uniquely technology security. to bring

expand this vulnerability to In Vulnerability introducing on client will Security IBM announced remediation we the existing have FedRAMP-authorized AWS a containers; vulnerability attaining now the distribute We XXXX, expanded quarter, Vulnerability certification. (NYSE:PM) and we launched Qualys critical We with the complete partnerships to into Red second findings expect in prioritization and this deeper to capabilities are continued resources Earlier partnership an Security deployment. solution Services on Web market FedRamp Qualys within a Management relationship patching, its for market, with using Qualys simplify Platform, enables Patch our with who Management Scanning in been and of the X-Force This (VMS) compliance in to Red vulnerabilities today automate clients Carahsoft and the along Qualys AWS Management to Application Gov and integration time. expanding X-Force (VM) deploy policy sell the new most global our Marketplace integrating expansion Container AWS (WAS) Hub, Hub. year. and their environments Security Federal half enabling fix fourth and with we and working with less vulnerability

partners, globe, with for Security Connect). our Microsoft integration Assessment with Red, releasing App, Cloud Qualys within platform an We Agent the with our into an IBM’s by the which first assessment Cloud adding an hybrid and IBM Security and (IBM Stack, for Apps (NASDAQ:CSA) broadening integration relationships adding and Cloud integration including across Foundations key (Center monitoring Azure Azure adding are cloud deploy will and into Microsoft open environments the Microsoft’s CIS client Qualys Benchmark Internet X-Force Cloud Security) cloud,

provide digital a ability platform compliance, as cloud resources. perform engagements to comprehensive single, Consulting service track new ongoing other releasing the We self-updating are centralized certificates free monitor a platform. our security a as results we Community assessment CertView, and instant and from offering, managed of two services, free vulnerability track all organizations view version to consulting providing MSPs, consultants of (MSPs) SMBs, including Edition, Qualys well CloudView multiple companies well providers IT, with and launch cloud these and enabling and Edition, as And a organizations consultants, them and Qualys and and our for to of unified sizes

compliance competitive as XXXX, groundbreaking to increase talent our leveraging and advantage very by upon a will building now as acquired continue releasing new security we our technologies. both well applications, successful So base

availability to all verify The plans new and general Certificate console. endpoints, Control, critical one in Cloud include, and from common announced of enabling remediation then Passive current Management. across the Management as target XXXX cloud release quickly Discovery, Security Our teams the vulnerabilities today, IT Management, of exposures, deploy SecOps Network or such and solutions Secure and on-premises patches assets Access Patch

bringing two invested trillion indexed X-second our query Software Continued in the as security In in clusters, backend, what almost January, of the acquisitions our completed points suite. SaaS Adya, second companies applications administration Indian believe policies cloud to security security. so report their We providing have the to audit we provides gives single and XXXX XX% This solution scalable a as And Lambda and one costs AWS be scale SaaS they the on audits of with solution we solution Adya’s to organization enables by finally, to The that becoming we enhance significantly are of as increasingly instant cloud-based innovative enterprise number support into all continuing we data rely To and to consolidate applications, most to license we on significant elastic are visibility, to and do the accuracy of have additional console, enforce (SaaS) place our almost activity Service results a and one year. now the alerts. in increased cloud-based ability customers a across market. and platform. and solutions, continue our we tool. compliance the next search will and know, on security our applications, and which keystone we in our visibility, Adya with software. the acquisition of market, startup believe over set built over all is manage of platform critical sizes small product half their sales in robust of

producing growth of to levels expect profitability. outperform market We to in high while XXXX continue

profitable and Policy financial bookings element move Threat adoption. solutions, because opportunity which meaningful value a growth guidance its the to very future We for increases that, Agent increase clearly advantage customers, of to shareholders. for well Cloud and competitive to Management our our are turn vulnerability call solves results, key Thank management newest and the Compliance. over stickiness, metrics. Vulnerability and With multi-product of fraction Qualys are are priced our Policy naturally example driving you. Compliance I’ll is our at and of Protection which similar Management through which to optimistic to acceleration priced our to and problems discuss a continues beyond about premium our Vulnerability the Melissa for in the This our growth, the increase and

and Thanks, good Philippe afternoon.

and start, except based year to are the on revenue, note prior like to I'd comparisons that, rates Before are unless financial for period, stated figures I all non-GAAP otherwise. growth

of to percentage Our financial adoption as in $XX.X reflect from four grew quarter percentage following rose with results solutions solutions and financial Qualys to XX% operational of more million. from Cloud to increased the XX% Revenues and the Qualys fourth is enterprise for Platform. to evidenced Platform and XX% scalable the XXXX This for continued with of operational three continue demand or enterprise QX robust more XX% customers solid or to healthy increase highlights. customers the the and XX%. our

PCI and contributed customers to higher QX, the number bookings This the grew our similar average result from and total historical orders New average however, since from year-over-year. XX% size our deal approximately in of SME total increase year-over-year we size products deal XX%; XXXX XX% in X%; released down customers. up for quarter, enterprise saw the growth positive our pulled of to

model to and flow. versus margin platform for the drive Adjusted XX%. representing million, Our superior scalable XXXX continues XX% cash generate margins was $XX.X EBITDA fourth a quarter of significant

capital XX%. Layered million, on generated expenditures, $XX.X QX fourth For repurchase Insight; operations strong from true-up; the XXX normalized under invest impact cash EPS capital increase back flow quarter of to principal of Adjusted XX%, obligations; XXX,XXX operating this, for comparability and including QX normalized million have we In our into grew the EPS payments software XXXX of QX XX% for would purposes, we and a continued of $XX.X have the an of million And QX, including generated Qualys shares. would tax EBITDA $X acquisition the on healthy of of XX%. including benefit the capitalization. we for grown cash to margin million lease $XX been a

XX.X at XXX% from enjoyed customers for year-over-year to over growth. performance almost back first the XXXX normalized XXCrunch. XX%, business, up our adoption of we from and despite growth bookings XXX acceleration our XX% had growth of which, in investment of you positive Cloud released operating Cloud X.X products achieved year and spending XXXX twelve in the normalized new of double acquisitions million Saw impact benefit, XX% the EBITDA FX. margins capitalization grew XXXX. number minority and subscription Looking XXXX $XXX,XXX from at cash enhancements, features Benefited or as on new more; revenues And released prior Agents by completed Agent the last months, continued and our contributed we software when record since an strong million, over we the with headcount XX% investment purchased investment. a Qualys in in our All products, continued the this flow the several in including for two XX%, successful year, of made

revenue year million a million expect range to to in represents we million, revenue which XXXX, Looking and represents which of XX% to in growth the $XXX XX% $XX.X of rate of XX% a range $XXX QX of growth the to rate $XX.X million, to XX%. full

accelerate We are are at growth of Many our for mentioned. IoC to and opportunities and Management revenue premium the to about Policy example, Vulnerability to with or excited new similar priced newest Phillipe our AI, FIM, Compliance solutions, solutions. as a

yet As guidance. you their on our referenced in prior have adoption adoption concluded. the these not material the earnings still assuming are QX deal early our newer however multi-product years, new are solutions increased quarter-after-quarter call we not contribution has in we with a and large from seen, consistent Furthermore, has solutions

further to for set we profitability, XXXX investing while revenue of terms future to growth. margins maintain our stage industry-leading the In expect

expenditures achieved the year, employees. headcount result business growth loaded in XX% our in in was our This to we profitability record, and XXXX EBITDA we additional spend driving in XX% we FY. While margin our marketing, XXXX, sales in engineering, building make combined our throughout range in across with the our plan of functions, based a back-end operations particularly team, administrative forecasts. on XXXX of record and current invested XXXX XXX will in to and

We capital a expenditures be operations roughly range million. to $XX of million to $XX with XXXX, expect in from flat

data will center to We locations. earlier office be are but invest our in to growth investments U.S. business, building the continuing of and from benefiting support we the

we Additionally, scanner to less increasingly virtual to scanners. subscriptions customers subscribe hardware expect physical for as purchase

second As Qualys Pune. an in beginning for do build-up new of employee base our in the half to of the have facility additional we expect XXXX increased of significantly Pune, a we million our spend $X in

year-over-year integrated growth capital the million. earnings For flow cash our growth XXXX, We all expect $X.X of unique expenditures guidance. our we given exceed to $X.X these security compliance markets we our feel Even free and IT, in in the range the by the with infrastructure first investments, well-positioned very currently Platform. of be of implied quarter our to Cloud to of nature expect

free added XXXX we almost growth count users solutions. in customer Our active accelerated and our X,XXX to

the scalable new opportunity provide the expand revenue us and, margins model, revenue per growth Our user, our solutions average increase for accelerate to by in highly driven future.

that, maintaining I foundation answer to questions. and to and growing of would continues be of be revenues focus Our our your any happy recurring strong With profitability. Philippe

Thank you. Smith Instructions] [Operator from comes Your first Howard question with First Analysis.

Your line is open.

me? hear you can Yes,

we Yes, can.

in Maybe investments that you. growth kick acceleration. it headcount XXXX in good. to for can that start you guidance years in Thank in and Good context products rate? revenue thinking really the some cause the following making the starts so, for put in and you Okay, in the coming wanted these low idea afternoon, the earnest XX if are still guidance in twenties out with your in sales in the us? you're projection are you'll longer-term about one, now an just and just XXXX comfortable the of of is I to And context of

Yes, I'll Howard. take this

the and Let back me come then XX start XXXX. with the to

So, we of we Multi adoption difficult healthy to very adoption purposes material prudent said as said have the at years guidance a a Having increase pace for solutions our to prior contribution product that new predict. new with I are bookings. we of assuming solutions that, mentioned. contributed given from not business that consistent the of be it's because to and XX% continues can

that growth a at totality XXXX or VM up fact hasn’t the and to come add when changed. all spend least framework the in you that that $XX of framework Now, solutions, $X of ten the them target rate additional times with for the

now a should So don’t model position so now in update we that, changed to us on hasn't basis. everything that. achieve and the that quarterly The doing framework put we're

a of good received eager business, time these And a again know were what In market but to have new good strong very services is But it our I pipeline. bring to add to adoptions of again, weather who very eager very you at new a we pipeline lot to very it minister to said business we time. services very will see strong these are takes bring that Melissa market. stated takes options very that lot

a her we that’s and a such why So, we today, protects why become the company Melissa are. of the growth fuel really in it know earlier and prudent accelerate of we revenues take a agent essentially XXX% been of of and this our solution approach as of services reason have we base indicated pure deliver huge to cloud to as taken term the revenues. threat the being management all you today the combination the our doesn’t two comments prudent. base we them vulnerability of in And because have is are for the only as factors these revenue harder have subscription and course because fraction need to Again, you help so where

we the the are scanning Where backhand So, we significant which the believe again, yet in to business. is going our passive XXXX And to and very you disruptive I think bullish are are, made nature. we if see not prefer even really are to there. more investment add in you about we going things

today lot that’s is now have and scale Tenable we to where to of in ForeScout is us here had and bring on core competition we So platform companies compete walk To being of and the more the with security we -- essentially we scale will and course a not of out while two that’s are a grow have course, against scanning lot of in course, with and But not, of efforts scaling. But that RapidX. the traditional a the single of are competing the Qualys park. a market of you need passive put all of that to feature really others. a which

thorough think to. just I a I’ll I’ll you. there get that’s response. back and I Well Great. Thank need leave in queue it if

Thank you.

you. Thank

question Suppiger JMP from Erik from next comes Your Securities.

line Your open. is

it’s are Burge Erik walkthrough like Hi. doing really Suppiger. inventory guide. going shocks on on the had help lower are little This word street? asset new It on scanning for Michale and beta upon deeper Can products We some is X% your the well the good bit tester. traction. light Quick process initial question that suggested why down you seems us into I’m dive to almost IT

So, describe just can guide? the why you to us lower

let to purposely so you. the Yes, being QX. remind the meaningful We me Because QX guidance has as on impact for full our guidance year. the year a

were earlier early first This have mentioned, business. for very I time year. not a expectations our our And the So, is healthy as firm guidance guidance. setting the we

said the doing of we look key solutions products are are products will Vulnerability the that coming multi in what product the out to are growth purpose be. priced compliance products accelerate the contribution But like those to patient premium because material call predict Management. the you policy I’ll in and that for at been a of the contribution opportunity very bookings uptake, like Agent assuming are Cloud actually policy with least Management. solutions the newer revenue new the As at from similar guidance, only to fraction future. and difficult new what these the The into we the metrics That’s not well to to have adoption Threat it’s priced or and Vulnerability revenue new earlier older mentioned compliance of adoption Protection

is understanding? that the the gauging it's accelerating and you XX is in my on sounds correctly I'm XX you're happened still the if what So, based for XX like plan just fourth hearing quarter that growth revenue it numbers,

clarify something. me Let

today. giving So, XX before all, guidance first for we've or of never XXXX

it mentioned if June XXXX we back a one at was in our give us most well always we able you really long-term QSC, as been So, had for rate to actually that both it's then. all way. look provided at prudent we've to for presentation our would precise growth the guidance time have up know that of until at years point the and as we a think you the frankly as because target in for in the be And

So, an additional achieved year well we we this the revenues in and example other quarters as that will of solutions. as with this for obviously rate and continue guidance levels had XXXX, regards have order base to impact at we the contribution QX need for from customers in large these to growth and

do which and answer contribute here which customers services the Yes, that will in course anticipate in VM, bigger to be that dollar adopted by will your directly to these question is fact a we yes, future. much that, carries new value accelerate growth the of

my answer question. helps That Thank you. Okay.

Thank you.

Daniel from comes Securities. with Ives question Wedbush next Your

Your open. lines is

thank Yes, you.

appreciate to yet regard in question QX that. the first obviously talked closed So, your large, hasn’t which about

in in XXXX embedded larger guidance your of sizes those any QX specifically to in terms factored deals that and deal have of XXXX? In the of close you

We prudent Thanks we take our guidance. be those we should don't Dan. again type that opportunities of guidance into outside with believe because our

additive to So, would, are would those that something of deals have assumed. be we that what sizes close

it development about Yes, specific one one could a get which would which of until cloud a something order have that specific and the in his is cloud That course time be the kind deal we to to we customer, into a making a deal. us selected like we materialize. deal, the business cloud complete of have migrating the for solution that to are don't essentially essentially at the that happens put that but infrastructure to bit about obviously that yet of into our is lot than they done this that

because in for of the terms year leverage guidance margin strong. next real obviously And Okay.

for there going In Because just even some strategy? the you strong could given margins thoughts term guidance lot you that. as just you about just left terms model, on of Maybe talk a the just model continue is ahead? in know the to leverage just have more year, not obviously longer I next but maybe

thanks Yes, Dan.

the and in are achieved we outlook EBITDA on adjusted in We past outlook delighted provide with gave margin our of industry We the are margins to conjunction EBITDA, leading of with year. an so XX% XX%. what XXXX we did range margins which the for XXXX we provided and proud margin

I higher think the drive this the we is very you actually the as saw the more scalable revenue a to growth XXXX and more in margins. we picture model big expand be

to we Melissa to we lot leverage what and of have in fact because some because that these year that at model a in the salesforce highly really we add said second just increase have. we’ll our you and effectively XX%. all of And see leverage and that did about model we last by half services significantly absolutely salesforce continue Yes, expanding of our can build new

us fact a invite we you campaigns we two try are market add In what our whereby have mini we point. as going see people I solution. to will call of One are specific to campaigns lot strategy this launching which

Qualys the to now to CIO we to have going and solution is etcetera to of the are approach We top explain essentially down and XX then a top which come them the more and platform. going to build value

this really still the So, making that profitability a absolutely that’s the you fact has because to see the the model the in cloud, inherent in absolutely is model components that and we adopted model all of of a generates leverage significant leverage. could lot the that on and despite

served talent operation with also I in give to leverage now relationship significant Pune positioned. and the visited we're there that do there plus ton there - is also of the well as work and about extremely addition just in is are people Pune leverage a course, think last a of so partners, XXX us Of year

you. Thank

Thank you.

with Your Morgan next Stanley. from question Melissa comes Franchi

open. line Your is

Thank you for taking question. my

sort in the thinking of and So, questions idea the I or circle just want potential future. acceleration acceleration same to to about of previous the back

happening to adoption and could But about and maybe billings talk well. nicely, multi-product are proceed core continues products as did next thinking acceleration assume so, Management? about I'm dynamics fairly you Vulnerability and of what slow wondering in of the bookings what's over just if VM this you're to pricing the health about years new contributing So, the you quarter growth the need core few to business and

I’m take those a going Hi time. at Melissa, it’s and Melissa. try to one

handle So, first me billings question. let of all your

the discussed a a to as the we end business the we mentioned beginning move previously often our with quarter customers have following I quarter on revenue our as ends impact we us from we baked to into of did as this that The to annual pain So, very dare in is deals of and both collaboration revenue healthy lessen and to if QX. the guidance. procurement in a

the think that I health trying the about well into Management, think the think to we investors bigger the the guidance. answer you regards and said way our of the guidance solution from With prospects? So, is of SaaS remain of conversations new baked what the on I is the you're mature based doesn't evaluate would a to it things to healthy. Vulnerability core still revenue these of we that growth to assume you which with question about think uptake I then not do And say how well solutions would contribution so a be couple our as said I revenue are continues which

intent don't basis force products sales play that pushing not so product working they total a dollars about that product they're our the specific don't As turn the with then manage the not to to we versus exactly we and we’ve on and business on -- way they're customers previously, what off. they're use customers and by need to talked provide ourselves going

I say there's number different it's basis assume long-term Management but product accomplish do remains scenarios on of a a could not. that healthy, that we Vulnerability target So, the would in XXXX.

and Melissa what I add to Yes, said. will

are rate customers our XXX% Management, retention today look solution - Vulnerability which the mention as of at the at gross as look you absolutely strong. than larger we is more If for customers percent you which

to than look continuing rather the significantly. and enterprise much today while the competing continue specifically So, mid-market expanding you if VM at at the at more large

for So, today marketplace two that the one is and we have we the X. us believe competitors in Rapid is other Tenable one

low time find the they good hand with we two -- do the more solutions. count every all and you have to X we scale. the That that those actually if that's we is they attacking would they company can typically Rapid which see don’t try of all where job at see the I their more what a more they they end enterprise we the one along packaging So, on growth that and can more we providing still of than to are could them capture than one in off marketplace not we that of lose done deploy pretty their the plank but inside, solution larger, specifically look the customers and customers

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of lose we in one customers recover we scalability what because at or a end wins -- believe compete day on these the price and of two on we so we years don't So, later. really term price, typically

to So, all become more we and what Qualys competition for believe solution business harder we it's as are we and deliver going and harder as more services. compete deliver to we the and with is of harder course gunning

order believe that’s a passive that management the the single a confident. also, scanning do, do. very compete us asset be is that platform. of all really once there in integrated So going can and with inventory patch We to you harder The into makes that you can Qualys what to

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year, know of acceleration those suite. are force for products Got second you the the I but broader in how feel suite? of the do in of to not there on hiring the and That's portfolio terms the do of about some you've or half capabilities selling yet is still a selling the sales helpful. the number work it. sales in broader in about individuals Talking terms fully the the are of selling market, for ramped made they force

technical they sales have et done strategic cetera, why? becoming The substantiate where the fact, our matter and all, sell have If in So, answer the farmers they all we fact and up already understanding the to you our are the to the the that pretty first we new structural ramped prefer, hire our new by I from way, et experts the farmers. for them, them they is of they solutions of and you lot by course if reason customers quickly which that also but the deploy own old reflects of service subject that, what enterprise extremely today takes we would I hunters would have change pick force hunters recall, services, fully SMEs they new of and backed can of course, are solution it train -- post-sales Qualys we one companies. cetera, with between

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where the they with enough which -- essentially done, will globally XX and we have of allows we about has large about already have and of of the so And can done country so that's pretty every example, and the So, do banks, what come. course revenues is is that us customers, quadruple grow very these some yet for we course U.S. could implemented, Europe that post-sales. that see, to in but accounts have not but as not much which which essentially, that in an Asia, countries been we typically we triple,

we Now more, investment. make new the side, we are now the business in fact that's expanding, on where

organization we're we people if technical salesforce the consulting to now have together you business Qualys from since sell typically the only solutions which of know-how to into C-suite, now which is again new obviously have be [ph] then, going solution. hiring impetus to one new build is prefer Our which now what single

to that all prefer if many in supported essentially after. go-to you and see that So done what going which I what’s by going we're all that's the is again campaigns flurry mentioned as you earlier, these market

out Okay. well Integrity new of file XX about solution, campaigns. Try Monitoring cetera et those

to been has all and preparing down bottom campaign already are what investment organized big we are going now setting the and the with to at essentially. then top way, us that's to allow which made, On and starting other a we the essentially essentially RSA go have

much. Very helpful. Thank you very

you. Thank

Your Needham. next Alex question comes Henderson with

is line open. Your

wanted ones. just of quick I couple Hi, to hit a

of same And split you be any model that we up? First cost of offered of build would a geo then second in a give think that to revenues off, either into could lines, of terms got geo's, size the growth And I've that rates sense need along the don't in the the a what helpful. follow-up. acquisition, sense the are I was in

it not I was sure second the What -- understood question? that I'm

The size Adya? of

fascinating it of by Adya, company a what way, a interesting small Adya. size a it's This The company. company of is small very is the is

revenue the not with No, it. description we costs I'm looking are needing for and a the company. of associated just

acquire-hire, It's really Alex. It’s not a material. like

correct. Yes, Correct.

Perfect.

AWS is with What is done service have everything them is they the which Lambda that based interesting on architectures. less

-- it’s them deploy because that into effective code platform. So, their they develop to application the only cost you for upload to realize AWS surely have to

answer to Today the previous If you So, look question. your dynamic. at

know, you followed As by market has and always been then then Asia. bigger the by Europe and U.S.

in little very are of for starting significant these the India than are fraction globally these reason a way today to carrying protect services there. the lot course, as the see growth being which as the and all that speaking, U.S. of already threat move cost. has Europe by of to now of We up in U.S. Europe, than only a picking us and all that steam we're all much the deployed see is bit higher rate these the because we market be more But of and -- a

we back. that so while of we huge is that The much new change. can Europe is revert large as and our existing believe these again, large to However, to base going than growing therefore this companies sell we develop services, faster much -- being because U.S.

-- we dynamic that the that's have. that Does So is that clear?

Yes. just for looking But I'm mechanical splits? really wasn't, wanted the that I'm this, --

you that? do mean by What

as, I in portion the mean what U.S., As in Europe? the, what's have what portion -- far you do was was

XX% the about X% in Europe in XX% Asia-Pac. and U.S., in the It's typically

any All it right. was Was normal changes? or as there same the

change. Yes, significantly that

of exogenous Okay. any you're environmental variables you are a Can you or result XXXX geo slower issues? of impact taking from conditions of recent looking terms then of at as change broader result a in us any period. seeing as FX, into activity a condition account those And slowdowns guide what that the you're the economic the sense of some sort thinking for in give of

Yes, but today impact that we from immaterial, know that so believe the things was FX we change. could

healthy. obviously how is our We market products So, do move. the depends it still on rates for very believe that

Thanks Yes, for absolutely. change I Europe. European And much the especially geo don't large side, don't today, strategic our been inventory companies, dynamics have global asset IT see of for -- example, GDPR. we because the on to very

they've of asset One do things inventory. is the got IT their to global

that's So the see help because have, it to product we we going save platform is -- money. we could aspect that them a that traction take take gained to

impact. geopolitical any see don't we So,

see interesting of extremely to think market course With it's well beginning we're India, again, really I the becoming the an exception just us. positioned here. But for to

then you built floor. What leave of and One expect into do and model? I'll sales the the XXXX before last leave and hiring rate in your I Thanks, question, floor?

totally So, our on account force is don't the technical if but revenues to and part our managers, have the of of sales reason existing new don't number, customers. I you. we model is absolutely XX%, farmers, to predictable. be have -- can on business the an our is side. last don't on as is meant the that much that because year, to I I need it's of course course, more by because XX% The we This we the it's the not I reason double best need size the double tell of it's certainly increase increased and exact

say I effort So, on depends I new less new -- going growth the that the that on XX%. the essentially. expanding would on than and more less business business of think quite today continue it and the side the to we're farmers make the it's second it's We half

a ad of and that we've half. lot to had Yes, of that will I sales the add lot come -- the just a would in these as mentioned second

from expense So, obviously an hit perspective, in we're year full XXXX. going to the see

going So, perspective a market. highest from the for sales us you're in to that, R&D, via and basis is and year-over-year there see investment modelling

Thank you.

next comes Morgan. from Your Sterling question Auty JP with

open. is line Your

hi Yes, guys.

to in caught still I'm I one products confidence not want so confused the a have including is and for calls, rate -- you between the XXXX what else clear? is still it's pretty two make caught revenue get think the you're days you competitive, bouncing I little the the, it difference I'm but recognition, revenue it maybe not slowdown, sure customers. seeing terms of the about or So guidance I that and explains I'm that from seeing in the slowdown something material the given, new been

threat of today No, And the -- fuelling growth $X cloud agent, what the $X.XX cost we fraction doing VM realize is very a to have the is we're those that of that protects was of of you it's our the products. essentially well. which business for because are essentially and prudent fact they services got

have guns we of where bigger these base because $X exactly such course if now and will VM. more you require far a this that which growing is a services today, today, have we prefer carry that So, huge than new base for

new have multiple -- these $X are we We of have services VM.

was today now at the So, for the of because the will which grind see APIs it themes so this and have grind. the example, they the We beginning. we just starting specifically one to full for services, like product,

extend want prudent, have And that's our we're and thoughts. reason we the fundamental being So, to here. don't

didn't better. add I continuing investing. what is profitability Quite That's not that to is and significantly we want we our we many. maintain yet, and hope do are going of to frankly, avoid So, remarkable that case we will can the but

balance we’ve protect But that think to [indiscernible] we and more could I course, wish large this the it with specifically we populating a prudent. remember been be world services and cetera. and try we say the threat the adopted will greater, again that have that et additional U.S., doing takes I So, with today user some continue such that, of all we by of have which well, base, agents these in well generated Agent pretty way but which that

years, a saying in a couple to over agent. steady you're or gotten and has of But wait new the surge, as last that to you been recur normalized from that VM more core now now the to just growth of for certain you basically, the you've now kick you had of timing again? but kind So, of uplift adoption cloud constant an growth will the products penetration level it's had

Yes, exactly. That's that's exactly it.

know pleasantly Now, are by these very we way, because products we good surprised, be new that. the could

of at So, adoption more of new questioning is all I'm timing here. question product the this not

I our breakdown help grew so Sterling, from to Yes, VM I you, is fairly non-VM grew the guess called give a VM categories good. you a year may revenue XX%, the and XX% perspective, past so

course, of Threat fuelled by cloud agent that's protect and Because Yes. of the point. component exactly the the

Thank you.

Rob with comes from question Markets. next Owens Capital Your KeyBanc

line Your open. is

Yes.

what that get sales with ramped? of those VM fully the slows point the think hiring at do look how So, you the follow-on, do I half, and about slowing force productivity the 'XX to it guess, XX% if back you is or/in relative the year throughout and

So, we need today. are the between the extremely farmers distinguish farmers hunters. and Again, The productivity. what to good we have

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been So that's Qualys. never

the of much the customer. new has start we grow a do, to salesforce that let’s So, of that let's slower. Okay, That result over business the sales been ramping of smaller -- try then is force and as philosophy, our

you. Thank great. Okay,

Thank you.

Your Capital Matt next comes question Hedberg RBC Markets. with from

is line open. Your

excluding I seems following to good how I seems for mean, to on and -- scanned. guess I remain hard I base? to much relative you historical fleet. up In Yes, a of thanks Sterling healthy. in generalize your the sense But your Cloud Agent, like have in being do guys. networks customer I other guess, pretty space how is growth know words, terms VM to base market XX% think question, trends. penetrated is is customer within Rob's it’s dark there

companies, that and scale they can for will I would today really that away take our if our tactic say, more is you the case marketplace they everything that that there more despite the at say in us say what's today in pricing there large and us strong growth, look competition don't -- it's still is but not much, in some fact, the so that large and endpoint. of at I from because is their the market why is that's enterprise reason Qualys

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or space the So, for the us -- green

Dark space.

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Now to today, reason compelling got a go. they've

also different same fully the and to extremely with with their cloud, more essentially integrated in and believe that's space cloud, we cloud. with as more advantage and as we're unique SMB to & Tenable well moving there are a of we have marketplace. time some we at soon really SME Google a or where So is be now see mid-market is and kind market it's are positioned. can market. into new compete integrated well the the also they which a the of And in moving about is as high-end More as with and therefore, mid-market, are with the IBM because way they that's the AWS, of agent RapidX today what The what Azure point we on which where be well. And, The natively small our Alibaba. mid-market the

think where that advantage. Currently if native prefer. in the we're an give and I today us you cloud, fight will So, we that's

lot. Great. Thanks a

Thank you.

from Your with next Stifel. comes Talpaz Gur question

Your line is open.

squeezing this the here inventory us asset the that data? products Hi, you But QX actually customers for Speros [indiscernible]. saw and passive scanning you Thanks received Chris for for as recently speak demand in is to feedback launched from Container in well in can on you've Gur. the the Security as

definitively game Container new the town. the this still in so in Absolutely, Security. It’s early adapting market, Security, are is be the Container will customers

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containers, today we So our that it's life's, very for everybody vulnerability have solution assessment straightforward.

good very use customers. from a quite cases have We

can the policies, because most then think but still QX you quite not of little we're half they Container and is early. the your complexity, will push will the well game. you time bit integrating likely Security but of do the No revenues, also are only with of extremely we're which of course term maybe new the acquisition have control full QX, do positioned, Now, in I QX solution big frame, and happen which can end run this with that assessment, question, in then time that's you second but because for more inside,

as I delivered. solution. that concerned, am far scanning passive It's get the today, very fantastic is being a As have it's impatient to we

deployable that make We et absolutely easily would are you know, a expect better cetera. of lot there's need it to to you with complexity as technically I because

be GA, is component will and a that be the ForeScout integrated except -- lot that competitor this QX the is we totally with platform. in has going of think Qualys I to

So, single into you agent, platform, all of IT your the time agentless inventory. have the assets -- that same a full view at global

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game. So that's the new

Elasticsearch need our taking are because points you time very scale, are X strategic And Clusters, we believe not is data that's think or mentioning I slow. a passive So build are that scanning good us. is we index Elasticsearch why -- already it for too the to our challenges worth becoming trillion doing big have and on at

new the that's frontiers. So

new into that frontier So, we're really well. as moving

about So, that. will and later this year we talk

Awesome. Thanks guys.

Thank you.

Your from with Berenberg. next question comes Josh Tilton

Your line open. is

thanks my question. taking for Hi,

similar you grow have what products from guidance. then one older And higher. contribution be the to Should maybe we more that just the non-VM guidance to Just of of the rate are new the the a released yet hoping expect upside to product. to price the level If products at on released? revenues being as these new

Yes.

I'm yes, new the assuming sure, I material would revenue that I to -- the your guidance our second should contribution part solutions So, happen, not mentioned, as from contribution be an these additional understood since doesn't a of that guidance. question.

be that to Do you anticipated products contribution to the from revenues have yet any released? total guys new are

farmers We pushing on a force really and all use dollar they're so force and that we those we is we customer on because our sales and they're upsells turn are on as product and a and don't and going renewals going mentioned want don't basis. really, hunter sales basis our just We our force focused that's sales that call -- and not business focused to what done off. on have to Philippe manage farmer are product

don't dollar-base, kept business we've our sales as manage the on as we a product always So, with force, I mentioned basis.

these we the we question Patch all have ramp XXXX was, that Yes, on a really I think and hard the consider that ramp. to that unless meaningful I like new services but of, because the the said to misunderstood and predict as it's revenue adoption Management not

our et cetera. that customers time because budget, will but We some of the confident it, takes adapt are concept, they the it proof find need they very to do

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which of Yes, based of we that's new was to existing. write from how and customers business, portraying I manage a flattered then color the contribution -- on framework growth our is

by in XXXX? similar expecting released products customers guys been you are And relative have that for uptake the older

pace without on the going We going hard maybe to it's adoption of said be to the is some points, to depend data faster, what the and actual some slower. is impart curve maybe any curves what is

Right.

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XX%.

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we which show XX%, now the correct? XX%, and is XX% about

X% X. XX%. to

manage to solutions. it day, that new we of that are to when would in lead administration, on you're That that a teams to to all they your today, want and of while reduce lot got base our never absolutely of single of four you believe platform, XX%. to to of the benefits to a solutions will different these all we course one continue is of instead cost. different start Why you feeling was these all our that integrate all so We that, products XX% going single X% of cost, do these end relying all customer significantly they all because believe can that say self-updating that at adopt as the are

we're in is essentially really cannot So, early ramp days. the whether the confident we very predict that overall

plus you newer which of at that predict as But sense? are so those, going go the have we to are into, less predict more point. way could data course, you they be XX% see to XX%. which today, having trajectory we make the the So harder ones Does because we to can the today at by data tomorrow the they three points, start of today see almost

very you Thank Yes. much.

Thank you.

question Patrick next comes from Arete Colville Your with Research.

Your line is open.

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may of do issue XXX% the that some but that could you [indiscernible], want companies. to operational an of that's become in-between kind have of Now, course not for you steps

very Qualys. unique is of capabilities multi-patching that So,

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so you Thank much. Great.

closing at I Natasha further turn to no time. Asar like to am this over you. questions I'd And the remarks. showing Thank back call for

Thanks, quarter Heather. And thank XXXX you all for attending earnings call. and year our fourth full

on March for our and to PM. event an On AM during from Wednesday, X:XX soon. Xth holding investors Conference. are XX:XX registration And We analysts will RSA be the site

Thank Conference also at Conference look We seeing Securities San later the this Francisco. Technology Morgan to month in TMT you of forward the you. and JMP Stanley many

This participating Everyone and Ladies a thank program all disconnect. have does for in conclude the and you wonderful conference. may gentlemen, day. today's you