Qualys (QLYS) 1 May 192019 Q1 Earnings call transcript

Good day, everyone, and welcome to the Qualys First Quarter 2019 Earnings Conference Call. This call is being recorded. [Operator Instructions]. I would now like to turn the call over to Vinayak Rao, VP, Corporate Development and Investor Relations. Please go ahead.

to Quarter welcome Earnings and afternoon, Qualys XXXX First Call. Good

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

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

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

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

and to million Furthermore, month Service, the the recurring our year Gateway Agents our extremely Asset now our strategy continuing Vulnerability help subscriptions cost product than and as everyone, on because welcome, activities, Patch that Thank now Agents very solid progress a Inventory scale. beam to X as Cloud well you, ubiquitous, go-to-market now make of pleased the are, trillion We're earnings to agents, to the and over as new new Policy another Agent and call. now points. our we with will our Melissa difficult Cloud such are deploy traditional subscriptions great solution we Agents eliminates to our Vin, report of with also can ago. double and more continue to costly map Cloud make of and Cloud Agents Compliance, a our foundation is effectively pleased the which quarter effortlessly terms report need to up Cloud This the secure profitability. profitability. our as consolidate on deploy huge it Cloud of and at also our and capabilities, of which this and With We're QX in now, Platform, enable indexes deploy enterprise customers FIM, IOC, of capture I to data to a grow Management, good release report our Management, proxy our all to manage. plethora us to data road nearly XX such continuously our revenue growth revenues know, we progression that to pleased costly customers

at a expanded already For agents cost quarter by they been Vulnerability solution. to achieved traditional times, deployed have deploy fraction example, solution monitoring FIM would FIM the of deployment for Management. our these of large leveraging effortlessly credit a X they its service enterprise over Significantly, had it a this

Container of of well see the unique market nature by the as greenfield also driven momentum Security, early capabilities We Cloud the in as Platform. our

into view. pane provides therefore in point solution natively solutions, of built quarter, because our large and a this platform them For with visibility full their it entire deployed is selecting against Container financial example, single it Security hybrid a our across institution environment competing

vulnerabilities identification help allowing to as buy and well we profitable These protection are announce our well also development and In addition, how we happy positioned are from thus against at sustainable own Microsoft selected to element expand with for growing at highly our Azure that own Container solution examples revenues minimizing our churn, their to model. customers, their base key scale. is while user Security customers early behind illustrate which to to a new our our as teams pace, gain

let's talk about product now So innovation.

up previously and Management spread environments map to -- IT to and complex IT road Database, global of are asset hybrid Cloud truth have IT assets we released delivering security CMDBs, recently capabilities their interconnected provides on IT teams the to a shared, Configuration have synchronization for single for our we and source Asset with availability which As App, product recently general across Inventory keep released and data date. have

common earlier, cloud IT assets Agent critical one vulnerabilities Cloud and quickly DMZs, Platform, and major Agents remediation, and SecOps extension Second, across demands to reducing Service Qualys from securely enabling like Agent deploy the of to enabling endpoints, customers as the Cloud the deployments. environment mentioned app, console. while large-scale drastically then patches finally, bandwidth Gateway connect all Cloud our also of verify sensitive And Management exposures, target the Patch App, or on-premise from

make including progress to other to innovative assets the continue also GA Asset will to existing is the our visibility Nevis from passive good and enhance IT on global offering unknown go acquisition, of Management which solutions, based capabilities solution, analysis early in adding which We expected QX. network the on technology by

by more will prioritization malware is customized capabilities QX. and will alerting the for bring app, activity-based also of GA IOCs X.X IOC platform of Splunk. a expected and into the which directly comprehensive bring orchestration integrated to scoring coverage go enhanced malware threat with into include malware the to It integration end and to Second, additional remediation unique feeds

leveraging mobile planned platform beta during we XMobility go and into Third, Security app, X-second is Secure to devices which run-time QX. from to Container Fourth, the extend the to which Layered QX. capabilities, to the Enterprise Mobility which technology which our and finally, by we from analysis beta direct the acquired app, in visibility coming app threat in expect Insight expect the And include will acquisition, QX. go release X.X, CloudView remediation

vendors have during in current have beta leverage of needed we with into multiple collect, are incident and already normalize response milestone new cloud the for opportunity bring and RSA, IoT correlate important we requiring and we solution event quite use currently robust investor environments. unique in developing expect early lake its our that SIEMs beginning Qualys' data is and OT data our of can organizations collect and across advantage sensors, at their an solutions is XXXX. our costly, contextual shared as points soon full it complex we -- new which scalable company to a to the data As of to information. on-premise, become and This backend array that and enrich, trillions

our by have we bolstered the made the successful years. product Let last me has been add acquisition in that X innovation

Platform expect can technology We new deliver help accelerate our customers. that small our to companies continue acquiring to of our with Cloud time-to-market solutions innovative then can

look go-to-market our let's Now initiatives. at

Given initiative comprehensive to breadth our allows leveraging Internet. Cloud our Suite, have solution the increased deliver efficiency of us of the go-to-market and of effectiveness Platform, embarked on all product we the a now which over our

speak Internet and call announced who third, about We include: organizations and opportunity targeted scalability their click the while about create solution SSL/TLS customers optimistic they and very we Center on developing expanding the account in websites, Information a and of whereby enable Security, to building to finally, facing future, journey; with Qualys support Sharing applications; its their multicity partnership have practice Our utilizing customers recently will to built-in remain whereby externally to which their enabling CIS best into team a and onboard account and prospective overall hybrid go-to-market We their their CertView Center learned CIS, the activities across own spend. the environments, which our our and certificates member its digital integrate our transformation conference, because and configuration. with of easily visibility, increase partnership. greater campaign, technical for ultimately accuracy representative, technical customers new one, accounts; growth representative, TARs, will Analysis reduce Multi-State provide a offer trial visibility new

We different security is will use which the that also believe and that rapidly broad rapidly market evolve all a we will require believe X compliance at into cloud-based will cases. market -- segments, platform serving security crossroad, the

first consolidating Only more stack migrating enterprises achieving while greater drive assets, application large the to protect digital effectively to they clouds transformation, to enterprise have and the segment. their business flexibility. The their own their and will by so the one, largest resources do

cloud framework offering to the center Cloud a providers an in. in segment, only Companies customers the about providers worry provider second probably segment. now The have need security security will developed now and -- to their moving which cloud all already cloud environment built have via endpoints. fully is compliance

generation The security third in-house managed and resources, generation lack security segment, to services security next remaining to will the their outsource companies have the The managed service of a environments, next providers. of hybrid due providers. will

the scalable the OT to and environment. finally, midsized fully to data because and agents retool in to market one have and for to of and of required MSSPs while While our small a market analyze the security in combination that Cloud be requires and of OT needs security IoT forthcoming is and the build will MSSPs in and a generation Qualys This We and of made emerging Qualys agents, Platform And also existing to evolution. MSSPs integrated sensors. own of few that capabilities positioned passive an will an it address time, architecture of suppliers their the where security analysis. and hybrid our cloud-based highly priority with provide the is new providing invest -- existing our extensibility their real Qualys SOCs, well fully leveraging we must IoT SDK be believe is companies the passive the environment. emerging platform, will built-in, customers

market discuss cloud to mobile, glass financial highly across With soon us of the IoT scalable assets, address single enables to our on-premise results. environments. cloud-based Thank and endpoint, that, platform providing I segments, turn will you. and pane call to X Melissa a over OT all and Our

and afternoon. good Philippe, Thanks,

more to XX%. Cloud Cloud Qualys XX% adoption QX XX% or to rose of XX.X Agents last to period purchased the growth that its start, I'd like our following Cloud This solid proposition for financial applications. I comparisons and non-GAAP, financial which first reflect of continued for operational $XX.X more the solutions increased otherwise. the million X to pleased adoption Qualys We're in in X percentage with XX are QX customers results, Platform note enterprise to believe from Agent we XX% highlights. and with with quarter from or for ended increase up orchestrated with evidenced unique XXXX. percentage And is stated over the enterprise million. grew of figures of all rates the prior-year the Revenues to value our XX revenue, except based months, are solutions the a on our unless Before months XX.X XX%. XXXX increased customers from as million Platform and

released products XXXX XX%. up continued New of from growing XX%. the quarter, bookings XX% And approximately in since increase, sale contributed average size total to

were generate $X.X EBITDA cash significant model the remain scalable Adya; to into million confident Normalized margins QX outstanding acquisition $XX.X margin Adjusted from operations quarter and was drive expanding Our XXXX platform obligations; cash generate Qualys, model, and for XX%. $XX.X $XXX,XXX million, under of capitalization first representing the a capital continues versus greater. foundation payments software billings we revenues including superior principal by for or in XX% comparability we our of In $X margin quarter XX%. grew expenditures, flow would of driven QX EPS million. invest of repurchase XX% Current QX for first on applications. operating QX, our We for capital EBITDA we the to million have and the continued our lease shares. million of strong to $XX.X cash including purposes, been suite XX%. adjusted recurring in And of flow. back XX,XXX generated of in XXXX

rate Our in deals anniversary in than that QX at benefited current rather billings XXXX. this growth from invoiced were large year their QX

quarterly therefore we focused our do to billings long-term and our business. are fiscal As we on year the the end revenue our consistently communicated, low guidance midpoint. growth have manage of We're and of raising XXXX not

guidance million $XXX revenue range a of current XXXX is year million. $XXX.X Our fiscal now to

from to guidance for And $X.XX million a the to range raising to are $X.XX. of be the to in expect capital $X.XX expenditures fiscal to $X.X quarter, of $X.XX year we range XXXX EPS million. $X.X We second range non-GAAP a of

integrated, to unique mentioned well strong and in XXXX. compliance Philippe as of suite as security scalable we the in earlier, we IT, our highly of our given believe Platform As Cloud our ones are well new applications and markets, nature positioned come

of would to Our your answer solutions questions. accelerate by be new that, opportunity as the in the to any highly happy provide scalable and expand I revenue as growth us Philippe future, margins model. well With our driven

[Operator Instructions].

Our first question comes Suppiger Erik JMP. of line of from the

Can about products? talk Congratulations was bit that from from contribution up continue on as was up will comment, you was a around -- or good forward? the year I it a which quarter. level Could hover is last just but this quarter. XX% XX% going from to at is we think little ago, that it XX%, It new to the expand you go a

Yes. good the about products We new feel are the doing. how

of was mix to it of the close bookings buy As this every quarter. year-over-year. and growth XX% was actually, The rate you what mentioned, XXX% people shifts quarter,

it's -- talked But expect new hard given time. over it's have So we that solutions the to about product. out, expand coming as in we forecast we've past, that by to do

make a to that little talking it Agent, about terms ubiquitous? Philippe, of of about Okay. in the anything pricing? making Cloud in So ubiquitous. you're talk you Can are that more what go-to-market And then, terms your or your doing the with you bit doing you're of some -- comments

toward more the go-to-market the in pricing. It's than rather

think our could you IoT as I providers more OT which of which as you which you like have -- all about OEMs, building, fine. I two very call in, agent -- them, is well And building the is we're as on pricing the and -- namely believe was that as are cloud aligning, X -- market the I was devices. the mentioned

beauty with So bring continuously their That's our platform the companies SDK, again, up own capture data the doesn't that correlations. end agent At The data agents. the architecture. we of coming could the up agents are build to and do the day, much. an for so of

is which is you agent that the now our important, very that with addition, moving In also Management. into response, and see Patch

everybody today now through angle So penetrate is we one of really different you ubiquity. reach which solution, way push broadly the and course, have segments, many can marketplace single then, you have it. many, and Either for that the we so you that's many

from we the and As you and slightly whole sense this -- do or package terms. that it, and absolutely see engineering what market an as it's but that's critical, case, in are then in packaging, our different we agents pricing

with well at with scale, We're are agents. -- partnerships future around So and again, now the of make we very feel we huge -- already our they agent. announcements positioned more

Our next the of from Needham. Alex comes line Henderson of question

case, your on able of to And the up volume all amount I seems do whether to to cloud? networks bit to up other to of it's that processing you was smartly which data of agents hoping could talked sending up, traffic like relevant, your a are little that bringing on data we've traffic the to some determining you're by content planning the lot your relative the of they're talk of you efficacy. run a about issues lake. sending in relevant traffic some to what's customers' into companies minimize what Or extent what's It not as relevant?

question. a No. Yes, is good That's, this yes. -- in fact very

architecture beam agent changes, is beam beam data of up were up that to that amount if itself. the data reduced we our beauty that because we the than to continuously of fact, have is up only significantly In we

approach. So not in the other we have than the solutions traffic. issue This being so much is significantly less about said, our

the that we your see capacity analyze at any the day don't traffic issue end to enrich, with of data have. So correlate, The of enter, amount that issue with is huge itself. the we

about points, X is about you number on X.X cluster trillions pretty our now we're to later. years our XXX but -- about, ago, see if an is So correctly, idea years million is recall around and under is X.X current about ElasticSearch index give that of I -- data backend but the

where obviously, and don't backend. extensible. the highly of cloud And they that's have So anymore need you work need have traditional solution, enterprise you this your kind to to a backend,

to they that's answer them And problem for that take all do which to you now becomes analysis, with generation one And into is and so their correlation, the forthcoming our our the significant have And data do communicate into all that costs solutions, we data their course, inject solution, lake, essentially have now on. question data the the multiple for data your to very data a then, SIEMs exactly you how moving the current information, all to why lakes next lake. working is fortune, the the data the On well. need into what bring us, Qualys about normalization, also that SIEMs, the the SIEMs, amount exactly we're capture does of other hand, we're data agents bringing of everything. cooking, cetera, SIEM bring and all the which the question themselves et of scanning, and the passive

So communicate where lake. progress about more bit little the are stay on a It's with tuned. we going well. very We're going to data that

We about of that And us design four very, a have we which now it, partners, platform. companies, again very are it's which our the are correct helping are way. extension design natural bullish very and

just I data cloud that the you remind metadata works? correlating lake the is If that in just little -- the could above how bit, then a question expand can us

Yes.

something last that's data like our the now is And our the data. mention building about amount the the data did Almost becomes they the of the because today will it's probably we fact, architecture be go to course, own that where lake conference, do large have would create, of time that their push had, investor where question data in maybe about every because scalability. significant. I lake. communicate also architecture to that we to would could some into another you to company of approach, data lake event, analyst we think for we where -- and the So that I could we at have, what is the At day

about about aspects. storage, the other it's many So

very think well for Sumedh, I Chief Day. and that's time, that much good our then have Officer, And be Product So a Analyst will that our pretty happy we'll our next conversation a deeper defined. architecture subject by

comes from next Capital Robert the Northland Breza of line of Our question markets.

A solid at in into context, it much taking or is much today, how one bought -- you if the give if and quarter. in to came products, take, just se, -- all you that product look more than approximately, customers talk that, coming and Melissa, put when XX%? about I how per I how

Well, depends of the on environment. really size thanks, Rob. It your

about solutions recently and released. or are have we -- the of to So a that cetera, about things could passive think coming were we've talked it that someone if But scanning, et good I either yet they XXx few buy -- think all aren't are to VM. that way includes their out would what is $X said a of including is released out, spend then be the -- this

think the the that's So what about should spend I potential think be. could way you

touched still seems industry you. they're Or marketplace? very That's Got about it his on industry you being thinking out think security that I remarks, overall IoT about perspective, think I Philippe industry. from they market think kind like thinking thinking of a of the ahead the -- that When trend makes that about there, the within and in are yes, little correctly? guess, sense. that early helpful. fact how I curve. the That -- you demand category. they growth stages are with Am IoT prepared and about of I How as But are bit a

No.

it's for on opportunity very in again, fact the companies correct. And Because of market. emerging these and very, the think instead an think, about security facts. to security voting this is you're after yes, Rob, I yes,

amount absolutely deal is because see is, clearly, building And course, you to devices in need of that they'll you the paramount. have this especially Now with of of that very security an put but do an cannot put an that. that's go. One preferably you you need to way agent always agent, everywhere, if you to elements is the agent, X absolutely can

your need in have traffic, also You suspicious detect coming of the so done, platform activity, to the these you also portable. can to say by we of can the one to we, not in Having environment, are to our then whether then all which be XX% let's security the but Because containerize IT, and analyze fused you needs so platform, Amazon that you cloud. that's have it scanning, be here the on the And which Azure whether into why Google anywhere, to have single which the malfunctions, need we the that. there. have And scalability, it's Cloud, cloud, new of on to needs product is passive could whether at got look And own cloud, our out reasons way, platform. solution. one compliance, containerized can it's also platform totally all of and all absorb very you've important. you devices, but what's on deliver it's finally, both We're

very you So we XX let world. today, that are around private our the functioning today which more become platform have remind has than portable. clouds And me

And I think major market. so what mentioned my extremely actor in the we a positioned well we're in that's that remarks to be

However, you an emerging this is market, this out. said, as just being pointed

Your next Wedbush. Ives from of of the question line Daniel comes

and deals, Azure terms deals backend-specific the to through, terms technology going this Are maybe with there's 'XX more starting just of of come you sense just budgets in pipeline, that channel. large of deals larger Philippe? into 'XX, a companies deals, of for maybe strategic in different see in sort details So

make cloud like with Is Azure and.... -- that meant to that the sure you mean, the you What you I question. understood platforms mean

Yes.

Okay.

software. really I that's say, we essentially, in fantastic because you our we of soon the solutions, built do. see see we a to plus, innovation. if view universe than continue the to software -- that different security to the with it's We course, platform could you would security more in, is, what want Well, almost very not environment being Like So platform as pace think a deliver as see. of have deliver I platform platform this

of essentially doing also day, could there end the solutions. of be other then ways at security But the delivery so that. deliver to solutions I mean, And many there's

moving places done security security solution. security that containers. our very embed are what we just that's see because conversely our making market. don't we again transparent. unique, I security solution we much all at now primarily it and So delivering where it's we've [indiscernible] them where And as also And We the already see the Azure. totally them I agents with very fit. so essentially And mentioned in. with they way can about the that's also see building our are And that's

We cloud of have remember. some these as providers, large you may

of it's All top. they and agent own fact, of security to, of about customers now ensure and embedding platform. are them use putting And Qualys, technology our their in the our the agents on

So and we could environment capabilities provide same customers. now the their the the of for applications

which been embedding Google, copied infrastructure, easier architecture, into as their of security essentially now environment right long that's very the have. your an into that's view different any sense. solution way you So -- creates the course. build showed and have with becomes Center, you where doesn't And market, the way make It we significantly Security Microsoft have -- we again, by Very the which in. their the well cannot the essentially, as

You inside. take that software sense? could not it make putting an Does enterprise and

Totally. Yes.

So in is terms solutions, of do think how the penetrated customer Qualys platform today? today typical even you mean, newer I and

have, the in we published fact, So data.

everything self-updating. is One, -- customers, reduce few one, because continued it's exact fact, centrally was numbers, our us for I But because got is wrong [indiscernible]. managed, a remind Melissa it us by things. fantastic can: adoption because In solution. everything we significant our they see for me. our not is she's right, their think board is for the of will What And spend,

our thing, they The visibility. increase second

customers, for more us significantly retention have is in is are X which that, of it now customers. solutions, -- recall is if we again these which is what for our gross that's customers, in because correctly, are XX%. from the What So rate than retention more course, it I

and or So how have have we today, Melissa, X solutions customers today now -- many more?

So our XX% enterprise. of

So our XX% of enterprise.

now and And and and et cetera, and looking so at X X, of look X -- then et at we'll X, cetera. we're course,

of now we've the of of the the in that's application we India, remind production energy. that offices today, pool our this course, model created We've QA, then, significant And amount that I I time about of building and course, on customer spent of XXX So top are we people you, and which significant in support the platform. engineering, essentially there. with have engineering, Pune and have talent power think is of in it. a

And Yes. to Dan, could you our think is low view me just give is And penetration it few on, what let I specific -- be. rather relative the to examples. add that to

for about you VM, terms which of the still think longest endpoints on product even in endpoint. So the example, many and very early is companies company, more tenured when the server. major for have it's And deployment

Cloud at XX% the statistics, more we customers that'd us. or more very significant is -- low opportunity solutions, that's And the product only XX% have. for with be and still felt about progress we're we So -- -- there. customers, enterprise penetration about we so have The easily applications on customers making. good But like again, about when Agent you we're that than think itself the in could metric XX customers only of of talked then X multiproduct

large are very So currently relative we would say the where opportunity penetrated. to we

the Our Analysis. First Smith comes next from Howard of of question line

here year. technical the kind account the reps call with is augmentation? or current more Or about Maybe for added start you're as you deals what's onboarding to the TARs, or a question or Is strong that. My of customer currently little a changed on Congratulations what first that doing? service it replacing them. team

favorite Very subject. good This is question. my

scalable designing essentially. delivery So model

distributed, we packaging can -- our we solution could So be campaign but consumable. started, we is already now -- be of so easily are what part we're easily that this easily now that here have it a are they that doing not only

version, version you -- as not is Internet-facing we repackaged of devices special of certificates few today, service, example, et reliably, as of in free a the all security cetera of launched that on For additional which discover to SSL, special, our your all a a CertView, the weeks, your repackaged a well allowing implementation.

application, So and now you way a request a And the then configure you the link you currently everything have you do so today, we to then click we yourself. are Qualys on trial. and do then campaign, the on that,

new to immediately be e-mail you banner this we're link One, own account. can ad, create going that you in link [indiscernible]. you're to to or on So that automatically the on and or and place it's where click different going on your the the designing, campaign be directed the the

then have only do. prepared thing is already pre-populated Then you -- your do And dynamic to will put to have domain really You dashboards have the nothing for to names. you. we'll

have collect we as you results. the So data, the all

by meant absolutely I what that's immediately consumable information. So

to do. nothing You have

just populated You then have and becomes click your automatically data you the account automatically and on link, for create the essentially, you results. the

what Now technical essentially. category, which people call the today, account is technical our is another in we parallel, representative we what have TARs,

We again are India, these technical we sell, schools, which which in and Q. their Pune, technical the young we above highly coming, the not is, team call is people have now going if people going in essentially take that building ensure to so from which to is agents, the Mr. job have would questions,

all So you, you needed, Mr. have technical answering onboard the when at representative, and question try if augment which account product. you, you the Q will come this and you behind

to you as can So increase velocity. see, this all the is

we and are going of solutions through are packaging. taking today we that So all our

CIO well, of Cloud making aware prepared the to and then, the Platform. power people remark, to all we're preparing that of go mentioned to the which CISOs bottom-up And also to that's make to is campaign, solutions So have the that my the a them explain I them. top-down we for the do now embarking and more approach now as in

applications. I is needed didn't to scalability, the of combination these to have this do the X. want because So that early, And a we platform, the all

to to you we need go than tell that, something enough So be good, but you have our and been tell, industry. not -- our it's we're know tell it's so has good create philosophy rather unfortunately, vaporware better when in always, much you that to all all hearing

management you That's of I'm your and hiring you chime The internal you your Melissa, marketing for very spend in where very expense you on own curious just plans? although helpful to relative can color. Maybe continues Philippe, kind to good. maybe want. be are if

have, people did there a we where in call what a both of XX%. from yet. well we being a that the done and this quarter we originally haven't was closer factors: person we what do EBITDA will on to the we as expense I come QX top as think we We earnings versus line lower our very roughly India, good. being have number the Obviously, -- margins some year of on the later XX% found of headcount believe benefited model now right in variety our quarter, to hired getting hires reflects positions for across performance feel XX.X% from scalable provided the XX% to areas

do we the for benefit year. So expect

times, and huge here. Yes. have model way, few that have cloud Is I is that in a we this mentioned I may really something the of which since effort And a a the offers then something very we advantage fact scalability add to been more quite pure you also subscription model, the understand and the predictable. of a having beginning, is, -- put in

know We well, we expenses. our know could a we -- better. significantly so expenses can our our ahead we revenues result So manage as pretty

were On the having others have just recurring fascinating, it's that perpetual if revenues of it and we if X% to effect and revenues through very mix -- only turn take hand, have incredible a them is absolutely of of exercise the numbers. X% recurring absolutely on like would perpetual, went our our today you we many license, and into I mixture a recently, will and other will

we growth example, XX% So growth. will from to earnings XX for earnings -- come XX% XX%,

XX%. to go will revenues Our

the if essentially opposite do them exactly it effect. the companies, be of other would mix will perpetual revenues, you of purely you realize a which moving and if some you have And reverse have back recurring, as license, so that recurring these take

as will losses course, their bigger be significantly of will be lower revenues their and, well. So

So pay go because expenses the that a be we reason that's recurrent the had execute and profitable why very our in very in to try -- to question got that price I'm is point us your making in have to essentially to fact, because and disciplined such allowed model, to a highly approach beginning you've not to of the model. ahead answering the ourselves

So think because to that's something very people unique Qualys. to want about that's

next Your of line Melissa of Franchi Morgan the comes from question Stanley.

still bookings is and said that's of think maybe products, or in the months be new XX previously, contribution the wondering the some from products had Cloud you the from if coming I new if I'm to released XXXX. may XX% that the past see Agent starting just Protection. Threat Philippe, case you're in

about still. vary, but same that the It's changes can starting the it's to see But however, we taking are place.

X mentioned have essentially see more to totally getting For now solution today is example, alerting, complete, we make features essentially the that which FIM maturity. to yet. can FIM need still We the don't earlier, FIM, add which -- see we we the are the we

we the the it's that and have now so some need certain reporting forth. alerting. We of kind tune to to Then for APIs in regulations

see so but then traction. a a what they after And that see to we deploy Difficulty] at to that, But evaluate off. Container people hot larger which market, again, our much Remember do to I FIM we it, we they We be one Containers the very -- thing that typically, a it again, which takes see requires of they [Technical is starting is we But early take do, good and FIM -- the is the starting patient for finally And mean scale. product. mentioned then is which deploy a time. small first becoming this success. So us customers, really the mentioned, do -- as days. now is is also Security, they deployment,

could -- of we I term in coming. see but the move needle So yet, don't them they --

year. wanted I Okay. on up with to the on That's great. EBITDA for just margins follow And commentary this then Melissa

timing force hiring, you investment? better-than-expected Or I Is your maybe sales your plans guess, that just was that sales moderate in at maybe like that can such a You seeing are slower dynamic? for noted productivity QX. there you

Yes.

couple let answer of points. a with me that So

So first of all, it's really of a variety factors.

think it's I later, India and are and what not sales I hires because people about operations. talked getting just that of it's R&D also hired some marketing, in just was about

said think On I with a using happy we're platform, as front, Philippe as earlier, remember and sales channel. we're we're leveraging it had very our the marketing the And distribution sales force.

is not product So our about just customers. heads onto adding pushing and model

add will be focused on area background, So we our are looking that a in solution people who and business sales, of focus. the selling of have new area to

The from Talpaz Gur the Stifel. next line comes question of

color broad VM device in terms Philippe, life could including interest customers you from go of only all kind focus customer kind doing that you some that broad of when meaning vendor and full cycle the give right have? discovery management, you inventory. Patch, way from you're get map pretty days to of set. us sort It's with more them now the product that these can approach you What response a a and pretty do road end-to-end of

And which, has is as I I it's very the -- to fact, Well, us, from That we is opportunity. for so the the This something as again, mean coming we is [indiscernible] together, and it. not customers ServiceNow well our so VR all is from the for that in we forth. is do been that think variables the issue at The of there. side have their customers do with big that knew. the put you absolutely something, to that a response well significant customer. integrate new And demand many our as to this solution, needed that always this demand scale other to see see we

are obviously, to So do customers further integration. asking us our

Vulnerability that So as large absolutely for well that's very companies environment the then you have an because And different really Management companies environment where issues. they have small have full you important as for cycle. --

pretty the They this need they more they don't resources. fast. that large vulnerabilities complexity of that automation, have small packaged. available, readily more they totally the have hybrid The things and environment For want all course, companies, of the already companies, critical especially to fix

X packaging it's easy and it's these -- easy we done have again, And but that I the -- think to do. dynamics. packaging, say, are that's so And to the not

So very like think deployment bigger the to response, A story Again, are that that. deployment. we and doing happy now with smaller evaluations, I do beginning, very big now the at a again, same then put going really we're that. let's still

us to as augment noted and maybe Could other you Okay. give in then where expand That's color strategy? doing to current looking helpful. interest little bit the be acquisitions. transcript, you And maybe you in the on some a that small might

So the the think think see for technology two why really India, so other which I in as be companies for in myself, India really that fact, significant mentioned I how why," established And that a discussion. but reasons. to another because, "I strategy some in have now reason to I to learned yes, is said talks, is a will in One, to image think things. fantastic I've bring us we we understand technology. And the coming that I to need U.S. some I

of very the the why already think do I technology. not found India good I companies have has There to there, done. reasons what which was able were lot U.S. a

Of the as strategy, fact, course, the they there's job, but so. bring them the could a lot fantastic of well to U.S. there, doing as they in not good are engineers really

they come to guts. for that's now today, So because And so us, us for acquisitions.

of to So them, don't different. to is, come which course, have go they us, to very we

India good having quite looking advantage, a which if doing were essentially were loyalty, you cost well, than in because we currently more that few the U.S. if well of of with a join them the -- there of So are essentially as as that the as we but to have in prefer, discussion acquisition of for then significantly we company. represent company very lower we them course, in if a

So the and really of making we now years thanks to ago -- Pune XX big a investment. made ago that's effort or -- years like XX selecting

up campus early going to to currently you we we're move have could next people. XXX where a We remind X,XXX have year in new me also people. into Pune Let

more we their as and investors, they and them, be We big by see of see, also that which that we see really call multiples. more this companies we kind course, block to except the I'll entertaining the on significant. now So more company and feature U.S., in want very put of

quite not ready candid. that, for be I'm So to

Our next question the from comes of RBC Hedberg Markets. Capital line of Matt

step to of broader you As kind to solutions ramp the a though, even hire when done of you're farm and on sales to sales? your your few scaling follow-up more I'm about view expert. an hunt wondering be billion back mentioned things to are multiproduct question take to there and $X.X about earlier kind and Melissa, kind additional of a or as thinking you business beyond, an force, think looking need you continuing strategy to that

around more Yes. bottoms-up. selling and join I'll to as more so will we start, essentially focus Philippe sell in. as much these behind more we background. And from to have the The consult that's top-down, about, I team background sold business was who we mentioned, sell platform, sales really want have and people new the because

buying key a is I our which of that evolution a kind sale, view that the more will of becoming more strategic revenues. people us is represents the solutions So -- significantly us, think then add to from

in Melissa could done model, add side Yes. that researching essentially the some to renewal And what process said have are on our already I which people. is we the

that we is them, now working We MASAs, solution well. account and very this call architects, major have the

multimillion best already to accounts. well significantly that's Melissa as go is accounts dollar our on mentioned. bigger which technical we We is role, essentially to promoted have that accounts, well above take And of more progressed, essentially can but managers some -- manage, less having account the

TARs, a On business technical. between a very of lead discussed now, which we as expanding That's to suite, we're side, also about still to is we how just higher difference people is who us we more call which them know the velocity -- sell business. the most and our and for have them And earlier to the new generation as much C and competitors. velocity big or high these business SMB, want

a side technology is earlier, mentioned hope. I in relatively we strategic have have different. as And are a well, of is group more the will which we, soon, announcement OEM now discuss with while. establishing we alliance then VP, answer that the which we a to Qualys embedding model other to see, now some been the we're as about So another really And we Qualys where for into there's this starting which the has which make can investing component, fantastic partnership. our tuned you And solutions, lot

maybe if that this -- just I'm then And more calling appreciate can the as color in how deals last the terms value. color bit maybe say, some I multiproduct out maybe a or can these and Great. dollar versus, pipeline quick QX a deals color then large around you more holistically, increase, this many you the little quarter. of little more in year? just time sales closed in a perhaps And provide put for deal Melissa. bit one the general curious of

Yes.

one, first managing the I'll to really not hard are because and billings take there's done handle would initial be normalize what because quarterly same I'll the multiple time deal really So second at as let perfectly Philippe the scenarios It's to part. where billing. we're not renewals the

for our So billings shared deal QX our the since we to large one was into QX, see it negatively shared benefit the in fact appropriate and that's with when we've it's that we we large to share a from QX because collaboration we customers think impact deals positive made billings, the some proxy as because why of not bookings of former is said, this fact best revenue business we're the constant billings, guidance believe annual because momentum and we our impact. movement managing the is the our But guidance. current and to I really trajectory that of quarterly

we are customers we're of Melissa billings, do saying say customer. not is say I And the We add type two and we the to deals the it all-we-can-eat follow -- things when our essentially, bring we let what One, of Yes. say will to pace customer managing pushing the upfront. things. said deals, way big of to another not

realign they Sometimes to their times. want renewal customers, our

"Okay, only then a contract X-year X So do months," we say, we'd renew they but to for later like on.

let try don't follow really to that onto our We we happen. We anything push So them. customers.

end. to more And if normalize about the if that's impossible the is almost billings, different, are you key billings. This revenues not very affect so the revenues, point that's prefer, it's doesn't really -- why It's here. it prefer what these about it's you But them. at

the that large we fact, large look fundamentally in thing on have very -- we think expanding if mentioned we deals second -- I presentation nicely. Now see the could are deals, our at so the you that is our earning

are million take, a into If don't We fundamentally now that multimillion-dollar because amount. having becoming not sell other We go they our could again, solution the I'm our more Trying and will trying it customer deals. are guess are than What to very sell is how can realize so we strategic. that, we companies, going $XX this that We more deals. not it us So makes we healthy other do not renew to a model while you base, more do cetera. more sticky. absolutely We And XXX% against customers pushing they et still of deal, more we having And some hearing want. will them want down-sell. what then can to customers. they of are we onto what that shove renewal happen? Remember, avoid don't That's for to model. we but compensate?

the software, license, X.X contracts you the as with Now period are of that -- pain of were certain a we see which big would do length have quickly. time. other market, a perpetual playing If of pretty years. part enough long you long our for of you is games, get average When these we the Qualys, as can

of why course, So it. that's not are doing we

So does that make sense?

Yes, does. it

around it. put to just And numbers some Yes.

And investor with think monitor, to we slide I it's revenues. something that numbers, which up $XXX,XXX deck So XX% XX, of -- there's customers a that is than in greater our the year-over-year.

about good with our growing feel customers we So us.

of Berenberg. line Tilton the Joshua from comes of question next Our

the will understanding, be with From used technology. for was my In to regards agents analysis to Agent operational the passive this you seems leverage I Gateway, like allow it to Cloud OT. thought

So how work two maybe could will explain these you together?

Yes.

you're So very so -- that's right. a

Cloud things expensive, in terms they with about problem you're proxies proxies. What have one is now here we are is speaking that this And are done companies of Agent that of by already technology. $XXX,XXX. have in is IT. very managed is the that The So new they nothing also proxy, the

So will the it, have build -- cetera. and et then into to you security

we agent the much of of easier need they solutions," $X,XXX "Guys, So priced side. more, It's a high well proxy more less slightly and and virtual kind totally we're we extremely packaged, a which the starting and more on created say, availability, It's at per than and the ourselves, we so year. customers, it to a attractively. our demand deploy secure,

allow and better agent deploy absolutely that to more much So -- will broadly. us more the and

OT Now as are and far concerned. as IoT

on you the most are thing really can the So put agent same OT put on IoT. can only put you likely and that an themselves environment, -- person the agent cannot vendors if the really

So that's what we have introduced.

We an have have we but already will really or published introduce we have -- already it. not SDK, we

an So SDK. will we we publishing -- have be

vendor the agent, these of is either now build easy. which can the pretty So devices

we agent customer So a it today, or of currently we or only as X-megabyte and course, And the remember, that whatever we that as only distribute IoT vendor again like. have then, build wants, platform cloud advantage data in takes have the the a can of it, which either up. environment, you it's essentially that the wants big deliver

platform. on that and one the fact -- combination fact that an have cloud have have the and of, the fact that we and that integration where the SDK that got full that's the we and the Scanning so a hand, have an that agent Passive we we Service, And fact Gateway

for realize the the at quite So to have that ourselves. working have by a you we been we barrier significant created entry since way, time. long And

these all pieces are together. not by that So coming accident it's

It though helpful. more hearing sticking quick, relatively securing just still even is like That's with keep OT low the real convergence. these And seems environments operational maybe and of we IoT then spend Okay. about technology.

to just securing I'm your spend customers So environment. their for wondering catalyst on what is the OT increase

small you today this I -- said, is market. think as very a very well I think

already requirement. already fact, have, which we large So have customers, in that

of are and with So manufacturer the we others. car some working

are they with in have so at So greater in looking them, could visibility we environment. are what they working this

et just need packaged, be it's it you has in. to well a of and well So technology the built to question cetera, again get matured,

directly and cannot that all the we're this This after discussion. way, discover You when also was nightmare unless environment, resolving well, but -- that's software go and really -- connects new going another on is another the just the as challenge, all everything fact. network, Internet, enterprise things by which to you're air-gap to you of okay, the are the we is say, the almost

people So market. to a a noise of of make lot that about me, lot

And I require architecture. it a I time as the packaging market a from going think company some -- think for it's take and will to ours. that in like of that's having lot to mature right

devices, are view have their they not will of them but going really our to OT again, the has we're and fully fundamental well of that we of So with there, to entire wants feel would fulfillment existing more which by essentially of our one one, customers solutions these they who new positioned, do center, sell have that full work some of to that build to absolutely kind absolutely with to you, are have add center. the customers, we'll their today all with us on the could like I one of absolutely -- which their to our customers example. And automated fulfillment give into to which mounts inventory I way, you, so think There's kind wall of across we a the these which lot security are Internet by explain environment. could the view one

So some it be of course, "What into if will they their us?" and kind worst cripple delivering. nightmare malware not comes of is to say, Then

the But doing so probably that right is you essentially realize secure. thing, to you really about talk it's everything that and the another easy gain It's ensure -- can it. again, thing impact. then of visibility So and

work. So lot that's of a

question comes line JPMorgan. of from of Our next Auty Sterling the

I time to Just front at get and of look for When you them revenue understand the the connect kind customers, ramp, them to guidance get XXXX, set new kind for get want in the products it needed dots. the one waiting about those question. the just of And front the it, to I out, if relative to talk the drove step and on to drive connected milestones consensus until of and Is products? are estimates. you're Or to line gas marketing that unrelated? on our certain marketing I big sales the pretty those two think where development part a beat on just of

many model very more unrelated, ways, than Sterling. in is and This to your it's to according ours

So no.

to us, better. made we know, end think say to fundamentally would growth. believe as much And continue I I you I I for equal. as line much, we going the But and we will the are fact get that the business, flow at have license, mention pretty we in and we what But it come top think earlier. day, perpetual look wish do of made we're about where not accelerated were. our we don't the would earlier we any the of much all which that growth on could essentially are I

which growth, more You bumped, I is have are may you good have the and say other which ours; so. growth, essentially if

this us, our so for is So everything is here. coherent model,

take on -- Yes. Think talked in what need many of about accounts, you about our salespeople we've to do two that. the will past add And double it maybe is just to that. their don't that doesn't salespeople to

tied necessarily as have isn't the the solutions of that acceleration people adopting sales to the expense So come marketing. of going to are be more

want incentivize to top can the take. we the on force don't than absolutely heresy sales Yes. create bigger for what want some -- others. don't customer that, to And of deals our that sounds We

even our -- is ultimately adding model. -- effective, young, it's that's business us. of on better for have for them, and call side, that's taking better the what the And we So as customers growing new it's customers more tendency the which cost we it, then the significantly and

Research. line Our of next Patrick the from Colville question of comes Arete

over growth Can market is market growth, I just -- vulnerability look I -- in RapidX. Tenable, ask growth color would any that would the to just go love buoyant. of think the insight I you about you as it very could great. if the periods you the see what management at And it's to driving your of the be where and -- coming the aggregate? know I looks or mean

the which Now as other mentioned makes it's numbers it know then we I still management earlier, when are -- a more of healthy, follow are accelerating. very it's in And teens. some the there market people the I like I healthy, vulnerability vulnerability marketplace, market IDC, who growing. that which and believe we I is think -- low it's is

would with -- pump pretty of like course, growth easily numbers Again, the you So when a significantly take all in current revenues be you mentioned look recurring present present again, can equal. market then perpetual the it's if the not value. would have And of multiply are And recurrent your license way, different. essentially X.X, I we our because we the you and that value really are revenues, created you we dwarfing our in when subscription-based. are you by everybody

significantly bigger it's And our any competitor. so than closest of

earlier we'll mentioning we in we that profitability if taking And that's it and just a on do we'll $XX our our so that to XX%, of be because at into will license, was could then X% line. turn perspective and go add people which I were them million perpetual beat, to the certainly, their lose roof growing where revenues bottom the

are Oh -- be extremely So "Guys, profitable. too we'll say, sometimes today, my are profitable." God, we at you people

oranges here of day. end the comparing with you're the apples at So

that's is the we very very going a marketplace, see. the not I to that. again, healthy. roof. grow with teens it's is marketplace We which think But low And and don't it's certainty, reasonable, to what I buy think So

Now million this soon take the the that sell yes, anytime to those front. XX able devices, be could don't get? to IoT, for OT going is It's see to OT few what and the how you IoT future of market revenues but going you about So growth And we but on Yes, much market, devices? time. going the to coming it's years. take are a

I can Why just of tool the an And use that I what versus advantages on main would follow-up enterprise are as Understood. kind tool? quick of very cloud-based on-premise a an deployment on-premise kind ask mean the of vulnerability -- scanner? a model?

architecture client problem have, are that on the factors you on-premise on-premise architecture. the database you no -- would the limited system, only the there's the limited are by of at lot Because of no, advantage tell the So to the is server inherent of I all this by on-premise solution, why. you a and solution you

you cloud different architecture, and et scalability, which more a cetera. you the gives give So really

when in hybrid more fact, digital, no to a there you more interest critical have, have devices, you you So do not today servers. whatsoever have just environment, your

to go to enterprise have model. it do an You to all

of these managing could So lose their which And people the of the they say, reallocate one these and question. FTEs. to have you didn't job their FTEs there recommend that not were don't why they we the very could were XX quickly to they replaced in When evaluation ones was because in needless see Because -- services our fast? doing the their in solutions pretty are are bank, a McAfee large moving customers job. that want people, the replacement,

natural -- course. that you that's these So change are the to see, resistance of

you Now and so architecture -- from what we uniquely to still time, take our even some is very did cloud. to into private turn it have very a cloud a and albeit successfully

have push you network. fact, we in all have installation but also So one the can that of now on-premise. And we even benefits cloud and, today, delivered an the to air-gap are architecture done looking into successful then model

be And cloud networks going don't provide Internet air-gap access you. the yet any where could capable so scalability with architecture we provides have those and the still the that into of customers to the

session closing back question-and-answer for Mr. the does the Vinayak I'd And to conclude Rao over turn today. our conference like remarks. that for to

We'll for our forward month seeing Los also earnings to York first Lynch attending New Services Boston. quarter Conference Thank in America Jefferies later Thank Software Global Francisco be We Conference Consumer, the you in of Bank JPMorgan at look Technology at in Global Angeles TMT all Conference this Baird's Technology Conference Merrill call. & in you San you. Global XXXX and and in June.

you. Thank

participation your thank gentlemen, does and for This you program. in the conference. today's Ladies conclude

may a have day. Everyone, disconnect. great now You