Qualys (QLYS) 12 Feb 202019 Q4 Earnings call transcript

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

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

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

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

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

investor the website. remarks, are release, prepared available supplemental and a reminder, financial As on historical press our presentation spreadsheet

like call Philippe. over turn that, to to With I'd the

Melissa to of good and and Vinayak, earnings profitability. report growth Thank you, I to our and quarter QX pleased welcome, revenue everyone, are terms call. another in

year from prior with Agent are million We the in acceleration now, prior also very pleased almost XX subscriptions -- growth continued paid Cloud to our report XX% from quarter.

and quarter using end-of-life assets We well order well. strong IT have known paid Inventory application fact, software. almost signed customers this with We continue our existing unknown Solutions. over and their up their aerospace this gain company across quarter companies to adoption IT Inventory in of Discovery as as the and as multiple procured growth it now to in We the -- visibility X,XXX from Discovery free all service. solution good saw the XXX our of And Asset installed a XXX leading Inventory Asset see environments over using of new Global and

solutions, growth as capabilities saw software in Integrity robust terms our Compliance to utilized cloud do our Qualys' from well deployments, with could order as these this management, into Monitoring. newer Security other as management In their build FIM, of quarter Container which existing we File FIM simple and A they Policy vulnerability they and Cloud products large environments, company and also selected again deployment DevOps competitive was existing not the Agents. vulnerability and

strength ramp Management has our In addition, newest among that customer application, highest seen with mid-market noting it's segment. Patch the worth particular in the

progress innovation. achieving let's Agent. Now we our to ubiquity look our of at make continue for strong our in QX, product Cloud In goal

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app. vulnerable scanners and global and Patch the It's unveiling continuously accomplishments and and to and fully are misconfiguration lightweight call virtual Discovery entire as already a a as Cloud with, saving that bundled our deploy software course, scale and IT power real quarter hybrid detect which key global administration conference respond deployment, to the Vulnerability Asset QSC. to Detection Response, vulnerability of across providing or by takes environment easy adoption solution, to Cloud that self-updating vulnerabilities Detection and are mitigate level Agents to VMDR Agent subscription our drive next VMDR the assets as remediate time Assessment costs real-time well. on and or drastically compromised. Our and in user Vulnerability included we Inventory priced deploy VMDR, and bundles effortless to Management, management at this in the single a

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

effectiveness growth, driving cloud we a of key and launch on our RSA, few customers of and leverage embarked element value profitable the product that of our during breadth This Given the shareholders. VMDR additional our fact, efficiency go-to-market platform. in initiative our for both suite of a have is, now increased the and

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targeted campaigns, which support easily And new suite who which our global Qualys with and into a and continuous services create service chose the cloud-based new provider of monitoring integrate free TARs, security Qualys management provider, -- and Center Also provide fully Systems customers configuration. expand selected Internet and built-in capabilities; Creating integrate click its the finally, of response X own which externally-facing account detection selected Qualys applications. and we the Security, partnerships: solutions to management, team accounts. utilizing and secure the building on with call trial to capabilities launching the automation Proficio's onboard to representative, enable continents. operation Coalfire customers technical vulnerability prospective global award-winning CIS, Canadian websites, Also, three Cloud, locations certificates expanding an Qualys members for services; of managed Proficio, Qualys cloud to SSL/TLS visibility to their

now mid-market. running a EMEA. And Enterprises colleague increasing small Americas team. Barahona we're Chief business our market the marketing announce new VMDR, enterprise Marketing the and XXXX who been for for as Dan team previously delighted on focus now medium segments and back to VP, was to our Michael are with significantly Officer, I'm has welcome and and since also happy expanded the the Michael the Small has Medium and our Solomon of Additionally, to promotion sales

and website. we research forward our a number meaningfully game-changing Ovum, Looking marketing of which highlighted expand consulting by XXXX, And can to find the given solutions, efforts, Very on report our plan our data, was market-leading our you that. and to get to a recently sales report including increased VMDR, easy in firm.

Just on the reports. look for Ovum

CVE-based does In that uniquely provides real also and with combine rely entire false vulnerability the VMDR certificate take unfortunately, visibility prioritization exposure. vulnerabilities management engine solely provides IT essence, customers of environment that into across which, a program consideration VMDR score, comprehensive and and can for state-of-the-art security risk Thus, full give risk-based with the not security. this sense global arbitrary on foundation misconfiguration

as at at Francisco. Four as can again, conference You planned that our the to more will VMDR where solution San the new Seasons, which to can can well to as And you again, we're as innovation, go to website learn some bringing XXXX. register. register we initiative user showcase And really about in during our VMDR going well day, RSA for be other you market of the

data and also an the on called robust and correlates OT scalable into with already enrich, fatigue, will is data costly, company provide which the data important and and false that EDR solutions our solutions our bring its are information, response update This and collect, an we is mobile, vendors we sensors, conference, and industry and our needed leverage normalize the to soon, will of know, conceptual as points on-premise, cloud all to trillions for current transformational many array the and use resulting, organization what of collect positive. too in new multiple requiring lake back complex environments. opportunity as IoT is SIEM full At our that across alert it incidence quite end

investor a Additionally, -- demonstration product to by there. a we're and luncheon website. update event XX. an on can register our Fisher. our map application host our discussion newest financial of road President on XXXX Again, Melissa Financial Chief Thakar, happy you Officer, Sumedh we Officer, Friday and our on you will Chief Product analyst by This Please, February have will and and a on our include

With to that, I will to turn Melissa our discuss results. call the financial

and Philippe, Thanks, afternoon. good

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

Cloud which subscriptions industry-leading revenue profitability. for delighted and Agent increasing with the and adoption, future We're growth foundation our multiproduct lays

over XX%. Platform or highlights of XXXX the QX customers from solutions increased the to to XX%, enterprise grew rose XX% million the Our Paid accelerated more customers of QX XXXX. and with from adoption to XX.X enterprise X XX% as Agent of for in XX quarter for XX% continued and percentage Cloud up the operational subscriptions revenues or percentage $XX.X to XX months to XX.X with million ended from fourth include Qualys more months, X million. financial solutions increase the last Qualys

since products up X%. size contributed increase, approximately bookings to XX% New in growing released the And quarter, annual total XXXX continues XX%. average our of deal from

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

Excluding grew onetime the cash free CapEx XX%. and flow M&A-related payments, our our of build-out to related headquarters Pune

Pune our continued Qualys, obligations million lease capital capital in as of and generated from into for we QX, on XXX,XXX to invest headquarters including expenditures as payments cash our well expenditures operations build-out back capital $X.X shares. million under principal million operations, for the In repurchase the of $XX.X to we including $X.X

Looking leadership Cloud back year, XX% Agent proud grew more to XXXX, shareholders. In and cash XX.X the The are flow Agent new product on enhancements. subscriptions $XXX,XXX features XX.X accelerated. almost spending and several customers while meaningfully million. we our number we released products, earnings million our have continued adoption from of to or for Cloud growing

New margins of EBITDA record products and for from XXXX, approximately released cash achieved free up XX% to approximately since invest sharply we XX% continued grew XXXX of even increased to as XX% flow XX%. growth. We

our flow Pune build-out payments, our outstanding related repurchase free headquarters cash cash XX%. Excluding offsetting to approximately to CapEx onetime dilution And to equity of of $XX.X we our utilized and shares, million our our of from X grants. the shareholders M&A-related million increased

growth increase and app, we Agents an compliance opportunity from Cloud our the ability VMDR. XXXX, to as the technology our IT response excited and detect future we the of to Because the VMDR our new vulnerabilities revenue rates. solutions, platform our upcoming well further because single about deployment to drive of with including renewal for it Adoption lays packages solutions opportunities Agent is important foundation solution as see in for X a the strong Looking is Cloud are growth. revenue security our

to growth XXXX to in in of the $XXX which rate range revenue XX% $XXX a year XX%. to of full expect million million, be represents We

a that deals large in QX did current Our year this benefit invoiced than at XXXX their from QX in rather anniversary few QX calculated billings were XXXX.

to expect model maintain our In revenue further to profitable drive highly to preserving invest future ability the operational growth. XXXX we terms leveraging profitability, margins, industry-leading while of

XXXX the expect in full to XXXX year EPS in and range to the GAAP $X.XX. full We in be $X.XX, expect EPS $X.XX of year of $X.XX we to be in non-GAAP to range

first an in half to We of in spend in to our $XX capital from additional expect $XX expenditures expect we million the of operations XXXX million, build-out and the million be headquarters. XXXX $X the of to range Pune for

we includes million the headquarters. be $XX capital expenditures of For to for which the million in expect million, XXXX, to Pune $X range first of quarter our $X

of luncheon analyst Philippe As we many Francisco. seeing during look at the in mentioned, RSA forward you to San and investor

I any Philippe that, of to questions. are your With and happy answer

[Operator comes Instructions]. Ives from from I Daniel show Wedbush. first question our

Quarter and to the year.

just I see your Philippe, I pipeline. where on specifically to the to Maybe of just we mean months versus So you you what X, talk to can know -- size. we're can talk that in today think maybe in of you just when seeing larger and more you are strategic deal scope ago. don't about guide XX deals. maybe start terms about difference deals you about

very the of truly Fortune the as Well, high standardized on we clearly, know, market, are which significant of XX% about Qualys. end No. have Yes. XXX, a at the very with penetration you

seeing these really only absolutely to that's so has and significantly forth, you've across that and now makes pay more vulnerability entire Not attention just us across but companies, term. And them And strategic. with but been we people strategic. traditional so servers got by not the -- more only your vulnerabilities, realize are what to

to the is inventory, a them. ability IT asset And very for foundation, which attractive a of global create course, is also

end what sometime and of really are and road strategic. year, are course, deliver to this EDR in the we even like, currently makes as at and which the hoping next-generation is SIM to market we of strategic. us that of more SIM, And So course, and the more more also seeing bidding it our map, more

more stack. the our the world at They same line of become perfectly aggressively more the fits the disjointed consolidate that of of At time product transformation and world solution then continue result a for strategic many into And also the -- the DevOps security what cannot enterprise as traditional course, deployment, the So moving have of and absolutely we them. digital with time, to their they DevOps. environment.

another been only addition VMDR large it's seamless, in everything for And per that solutions, orchestration what all has all fact don't it's have more see and so it Now to to on a course, VMDR price one integrated, you course, to much it's which interesting transparent received received many to simplify. we call especially what single app customers, a our have add not now that, extremely and it of -- global. we the this further of all also, consolidate very asset because into today is application done complex that for and like presented well but corporation, have of you, we already it's lot -- a of a and we basis, with which environment even

also marketplace clearly competitive is lower us extremely packaging, we the What pricing also very of the VMDR see but of today end the makes at well. of again because as its

and the from big So our mid-market also SME, VMDR as well. demand very SMB see from a we business

just Okay. you, here for And a Melissa. question Great.

just a you've balance job look great as is about just obviously which into done into and plugging spending, terms of this that you and containing But on on in focus terms well obviously, margins year going costs, to more known. just continuing ahead, while In marketing margins. sales of talk

about talk different about maybe is it some the that balance. of opportunities? that. talk just Or Just now just And given

Yes.

continue bit us So highly over is the operational strong EPS we invest -- we're still well the implied allows a guidance while to further margins. XXX of to a margin And have fact guide as model profitable proud modest from maintaining contraction, our points. that that little as basis

as we'll do expect technical side expanding frankly, while sales Philippe the strong. be in margins remarks, holding well mentioned to as efforts. as, prepared able broadly on marketing and we be his And investing, So to still that

cetera, mean you we're this trial, available of that's everything we is and the course, and et creating that, of pure significant being And solution, lot the our need because And expensive. in lead for the can of don't I a is cloud-based generation of why try minimum self-updating, solution itself. of installation, model advantage lot course, so of we have putting investment a cost, is campaigns, the a buy. make

professional need services, don't You cetera. et et cetera,

makes that -- essentially that's it comes the chunk back new. of end proven of I and a the line, have not over time. is down that comes all big something additional at So and bottom the into we growth this model that -- and built the mean

Company. Nick comes and question Cowen from Our next Yako from

focus on going mentioned Great. increasing your mid-market forward. Philippe, the you

so in have Just you to or wondering more if past. leverage the community expect the maybe channel you than partners

know, today major are as first, a question good adjust. channels one on well very it the you are to you the have they we and -- a which the That's takes have shift, when computing change because

some So and what these a is to move see traditional really that channel interest from we significant renewed today MSSP. of becoming

that in sense, the service very deliver they because we absolutely become to building them worry don't all them quickly a Qualys, solution or so have about And managed we to providers enable security can made.

answer sense, to in security these a yes, service solution bring our So typically, to companies. that large huge especially managed question, customer They the base, with have opportunity we to providers the your see mid-market.

solution, a are just that of it's ready-made available which market. so bringing and to already And our question

So that. see Absolutely. we

and And and you the helpful. remind mid-market customer maybe today? of us could Melissa, between That's Okay. revenue enterprise mix

Melissa. Yes,

-- and because it Yes, right, It's XX% roughly it's of enterprise, XX% significantly. of bigger hasn't moved the revenues the the customers dollars.

Melissa Stanley. from Franchi Our Morgan comes next from question

I on Yes. ask VMDR. wanted to

like end enterprise could for within well. is there enterprise, seems potential low be that compelling the the as mid-market, noted space You but it it

kind what just you from are what versus uplift of And VMDR know in get a expecting sale? adoption? but regular terms early, VM it's of you I enterprise so And then do

first me the answer first. let question So

will explain and is a second I bit that. The more complex,

and from significant is have had in traditional deliver mid-market that our returning engineering effort and and a as the they just That's platform you everything. trillion expand have and on the one milliseconds, They have for the And to interest a both times. cloud to easy. that, significantly, we been realize the because containers significant we absolutely It's first what cover currently also we data as exactly major X what to expanding so us to large long We time. on hand, -- enterprise. results asking one many ElasticSearch, only us points but index scale and as that not well for mentioned it was wanted. not The network XXX to

So that technological a huge was effort.

best-of-breed In to eliminate this the of we are essentially makes essentially have that best-of-breed false being have able we receive the anybody that, really data building addition sources that false and than because which is best-of-breed. to application negative, application positive today from multiple data benefit that so can security a consider correlate and because we they better what

build depending on mentioned we as our second, extension that or I -- have what built some have single up; environment, as one made say. then now all doing from we CVEs so is workflow, into X there, That's And talk, all kind solely that that's automatically. platform speak. which in it and up, asset are global engine, one on connects and would them unlike, what and that we are now prioritization application of inventory IT said instantly of in certainly we're can to to, finishing scores integrated. can we that, single made relating would those the we're we my are with -- identify doing are significant device there, I which entire one, any And vulnerabilities and from hybrid that now allows VMDR bringing we across Then with together now you the that pick all I

today with correlate ability which lot we with Now information in that very to is those mitigated essentially the come of during about mediation, soon can must to a a remediation, and we few first. weeks. the which Patch prioritize vulnerabilities, device, which quarantine have And be course, Management remediate do then to absolutely we the -- essentially of or the

the solution end-to-end what vulnerability so well have the complete we beyond market. has management on for And anybody

So significantly nature. different that's a markets, so to appealing both

one, the don't course, do. to so different, little So is for an for And count they they that. got the is agents and the That's that and the well-priced large and went now at are you can all to asset-based have enterprises, and this price low today, of this it's very as know, which, end. also packaging fact why of the that mid-market the number there an that resources, we very in they

So reporting it's on and know that's which in customers. will adoption we be new And our VMDR, customers of on both today, significant. the fact, adoptions, for going the be we to existing the

If which populate will the VMDR we that of hand, upsell it prioritization help the which, increasing these absolutely will to to do like is Now hand, already in agent. to potential of see ability on our all upsell sales. terms the the in of agent in other we services, can everywhere, course, terms us FIM, depend of other it therefore, what the one upsell to engine, on ThreatProtect, on now bundle end point, things

net-net it that, a believe management the that long, It's totally is been game road. Fundamentally, has so and a we game. have of the the should It it changer vulnerability And really been. changed what long make VMDR all of foundation.

the which, that and were, and fact, as scale. is the solution our RapidX, course, the solution, know, where against always would vulnerability their the as allow is management more to displace us low-end would when we we expanding have we customers were a as market the historically competing you we the easily one simplify and Tenable bring well we of today, more essentially. the mid-market, going So displace in lives value which believe to in more displacement having to much market solution it's To because typically the -- and

the from one cover we the marketplace very with very, large market. end low of today, to single VMDR, the solution, So very

So this is significant.

what wondering year. wanted the just talk how investing if about and on Okay. to versus sales year. you're head Melissa, like on Yes, growth next marketing and next sales it. in part I'm you in comments follow-up particularly, marketing investing I you're in sounds of expecting terms sales could your

Yes.

So happy we're with force. our sales

Laurie, we of our discussed North sales. VP quarter, worldwide promoted last head to Americas, we our As

have lot there's people force. We're needs not significant of to looking but significant here and a not to always We sales there add place. -- in the

people. just look on mentioned we the sales added be places we've right there'll the in, the significantly marketing nothing so and for but Philippe side, on few to so And side significant. fill a

And partnerships I essentially you also and To more Yes. because into will are the really really thing becoming moving we mentioned -- we I to needs. ability a is that's the really also respond. and good mean MSSPs see not they only detect application ideal a solutions provide -- partners. absolutely but for today, response, that to are because the MSSP the

capabilities significantly to responding. have we expanded of more. going our We're So do

do certainly some agent, example, remotely also processes, for we being term capabilities remove could which could want And English, we'll things. you remotely, is in As so give I interventionalist, have if now soon the important had automate our to processes. really the to be microsurgery of if very capable you

it's us. have we these coming who -- need of our then done the few of -- partners more, think already, the So all and don't a We to We that. scale. way build need quite there's which for time today are I and we the a see have that all because

have providers, I it's managed we as companies, for and service because you And so -- well RapidX, as like profitable, Because should very not tell can which don't we example, security never know, are competing you profitable will or and other have we a unlike one. them. I really not say. with

their not is that what service SIM also competing their all existing as they all are do deliver they're to because to very So so SIMs solution, which mention, they don't us they that for which see I the see need our problem And added are SIM, business scale. don't have additional value. can expensive is them and very, using with we the they a looking and

ability few today. a also partner, solution our be solution our existing EDR cost having plus embarked design much very, lower will have this of very as game a already and changer as a do think scalable at the them I we So another well, than SIM to

in of is All that the making.

As XXX are allow you in built know, engineering in a which we people into moving have now where force to brand-new who headquarter, more than a significant have India, us. is we May going

expanding process, a capabilities, go to we are to expanding building I call what marketing specific, be marketing in We our a we've of so way, are technical platform, the by that platform. the built

building we're out of leverages in India, with a business media. marketing new all that scale the could platform we really Now really and part so

media a just hired marketing to In fact, in are as we're who director digital we India -- new VP of of platform a looking about hire well.

gearing So we're now really up.

made, of extremely the As not careful always I've that mentioned the to to in instead so taken that been have which profitable I've always the have always, approach the reason. before any in all times, grow cart been many and company I've you all trying at cost before for put horse. have the solutions,

We've fantastic got got a cart. we've horse so the now. And

more you packaged. money and much model, that's spend our on, Now do that, the and you And why and -- the continue we are you while because sales when have as marketing. margin is product expanding putting the on that's and marketing horse, very But efforts. have don't good we on can delivery to showing and the good

about document going And to that. write I'm a

do course, I there. the -- of to to technology. I'm explain to that model been But going today, leveraging cloud, we didn't that have want So really of the power the we're until

Gur from comes Talpaz question Stifel. next Our from

want Okay. of Philippe, commentary actually that you some I on follow up your to just offered.

think in that's to table very do significant markets what these different going out and what's security, in You're of across the large those general. are SIM how very into EDR, really new pushing and markets, already think you enterprise push bring about your kind than differentiation, your into about X there? and to When and you're you ultimately

it's very at And good question. a differentiation So it's a multiple levels.

forth, So AWS on is which of of we and instead of, way. scalability, scalability done, a in example, you, that we the so for have. What the so an back the unique instant first gives course, depending have course scalability one end

have infrastructure -- low structure. is certainly you're don't you the problem to But it more the on that You them more now pricing dependent yourself. and much gives be that

So when prefer, really we using everything engine. source open scalability, microservices, own, building took ourselves the AWS, route metal, growing other you our absolutely building of if huge bare essentially

own gives see, us to is offered of why using then the Oracle, so platform. unique -- their Amazon, as us can they're And Google, capabilities. And reason us and you that, secure Microsoft, that because all

data So our -- anywhere, in of put and without their platform much centers solutions. Amazon, own what if we -- dependent can in so our also Azure, being we as

is have which very we look more So much you scale. when important global the at flexibility,

So know. element. above the It's anybody we scalability. that's far We're one that

element second much have they anybody, information. more that don't. fact the We the data that, The unlike collect we is

you of environment, point. of look idea then EDR only challenge, and the of more the know that the they challenge have you scale end the And positive, remediation. have rest the and solution, course, and of at the context the some is rest into the cetera. et thing If They of of no false led

so shortcuts, we there. going get more instead And very now the in detail in So But always much are confident fact, to there. road of we that the Qualys discussed longer we prefer, element these the taken deliver are the at us, When of already almost point well Day. looking as true one that's Investor are platform. these right that it's are solutions. today, are the we an Qualys we if platform. another today it EDR broad look as for at has when a X of to you And our all not essentially find you of solution, on single the trying why and the an very problem application point that's things took extension It's and us major all They're platform. way to solution, new other architecting time solution again, applications, which with

this Melissa, notion on competitive that touched match to the ability renewal. very Last just of That's some your one for quarter Philippe. to on you quarter, Did -- question helpful, of in sort dynamics pricing see any upon front? you changes you. changes and

certain cases, in that aggressive. to leveraging fact we the was quarter our were last about position talked we be What more Right.

because remediation. going app. package the I I life make through impenetrable think it is management single VMDR bundled vulnerability the of is all solutions these end-to-end way think to cycle providing a us the of in more we're itself Really,

provide a that'll lot with think strength. we So of us

does, that and see not it's the it And we app. all but yes, will the I because, see use see bundle, when term single already. will as one bundle Yes, we more itself. integrated you in It's app than bundle, it's

-- a single price, really prefer. already giving but not building you it's putting if have putting as transparent bundling app. that a it different it's we all apps where these And It's that and of better more or So and one we orchestration, all essentially orchestration then you together that's call building.

thing. big move all the It's that you next. one you differentiator. app So from single now And to that's one see the will for And yourself.

very this and absolutely seen day already because and big "Wow." screenshot you you at itself customers, of sell application go another And once to see is mean you for market effort will go end need. here the It's the but marketing have that, a there. that to need it, we this videos, one show it what I don't and once the which I already we that done all see at you. look have already say, of and when solution the to some start really

very that's very, so And important.

of just solutions. earlier, them, of and solution. one to many, it So again, come work And the them the doing like platform, trying building said I single of all that. into is what of expand This didn't best-of-breed efforts many we're integrating as many, now is years

comes Hedberg Matt Capital next RBC Our from from Markets. question

Dan Bergstrom Matt for It's Hedberg.

the large in purchases a by agent you've the of past. providers had cloud number So

in GCP the a How to it? guess the recent embed looking originate? What partnership mentioned did currently? What I and the for Agent the Cloud the mean Google with a marketplace Could then you on is little you partnership? that from bit And are more does validation it live about You it from call. talk it perspective?

Yes.

very that own platform. securing cetera, already for So it needs starts using were their the Amazon, Google, Agent simply their Cloud own Microsoft, both for et

of have of the of you So right operate, to the that architecture. at don't right mean have platform, scale course, from this architecture. which I we course, company -- kind there, they means right the have the at you

of speak and the here you day. of the -- And millions at so agents end of

now their now now doing for is to what them customers. and we doing what So to go customers for exactly for did we're us, their

is yes. So the answer

check. has And discussing nobody other it Microsoft. in by it's need not there architecture I cloud it's today, as because with with now, well it's integrated be well we're done. way, think around many has have today I agent exactly I and this we the who Qualys agents. that are remember, done don't done. we We And done. But with again, is very the it's remember. the these to -- I don't vendors patent, will where know -- Google, think if but

So not also to didn't they're that in very many in years And been now that been again we XX get Android, agent our point. And now. the that platform. come that contains secure, goal many, million need agent. making. have ago. very but of out -- to are well. now to which That our long And capabilities, now the as course, starting few the weeks time self-updating work, end every we fact go all a just is this have scale, already many, a easy They is to that's the today, working are and the we the build at the for is an rolling onto on be agent, going agent we And agent have they was mobile soon -- have just of to where

look and to it, again, the all spans and also we as architecture, if agent OT way environments well. prefer, these the it's you across our environment IoT at that's different So essentially

So first else. our time don't time we're agent, I built that on ago. I But long and the again, that. better of I about was that's technology think agents. a the our we don't but agent time, what working remember And exactly ubiquity at would XXXX. beginning. long I who speak the think so agent the been it's remember. this built one It's just have beginning, very -- very, than I these really ago a we we are anybody at just

what's here Melissa, row about year, any about impressive now. margins sequentially Great. about Can through XX%. 'XX? maybe evolving They've model gross the a think calendar this quarter, driving gross into trended year thoughts were you in should then here talk and margins And that? with about And X higher quarters how the we

Dan. absolutely, Yes,

We a did mix from of potentially robust to going very we have lot parts some our margins, gross looking world. more investment of shift in India. benefit we're other the We're So adding proud platforms do but at forward. shared of

very is be cost more there the to line, pressure it of in expect gross putting would on a level. margin. to margin gross guide don't We some downward investment I revenue at So because high

So but that can class at it'll not going at best the necessarily but stay you levels. current to give imagine you of range, a not

on Yes, at the are benefiting architected gross very significant are we also fact cost reduction. the margin, we that and also

metal have and example, containers microservices. with bare our VMware of to go XX% we For eliminated layers and

-- of of our the you beauty that's that So also if engineering-driven, prefer.

did Facebook and what what big on done. copied have guys all these We

cetera, of their how Facebook, and anything costs. students have not we the their did have been but here, Google, the scale reduce et So very good platform we invented

done we Qualys significantly. have transformation our so -- DevOps, and own And in that's the digital

not that and a lot looking so a advantage when of our are started. And big that's forward we even competition have

Howard Analysis. from comes question Smith First next from Our

that account the How do in some to you and last progress appreciated. prepared be or their you date? is development wanted TARs, of seen kind Just reps to are comments which where on you the about new assess year. Just up commentary the follow would for regarding technical

Howard. much, Very

because yes, our it's am every of not just something only scaling something very personally -- aspect that's we that is business. that that really about I So again, this -- not much involved

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all is automated. essentially information So more that and more

pass are a then also want And qualify have to have because they report that them the That leads. fantastic upsell engage salespeople, what our we team helping are to we -- then post-sales today automatically and being we which them people, call are customers we pre- sales account team. one sell now to to the running our that to So will the technical which them. not managers, who but don't us or the

again, the that's have in place. we So system, put

India, we can So scale. in again,

the people the of There to XXX, today that XX we can the already, U.S. impossible. it's number impossible. We is is manpower about and is. California, Trying to to is in whatever a -- bring it have do there. In about about XXX, group almost

they be you even will even if not gone. would later, them could keep A You that. year build

doing So India is good. out it's that think very I now, of very --

countries. of entire lot doesn't it but because cover of a you covers world issue the the have the it Now English-speaking language,

which, partner security managed what so we a the essentially. service Europe, do we do for course, function So do solution that Europe, kind we in hybrid may and with of of is where a

in the Does of that entire sense? we benefit make machine could have that they but -- So place. put

how helpful very That's and and full generate realized leads. hadn't Yes, color. distinction them between they the I the sales

a color. on So that's year. solid Congratulations helpful

next Our JPMorgan. Sterling Auty question from from comes

for on Matt is This Sterling.

the the quarter. that XX.X% guide range So XX%, growth, of same looking at revenue, midpoint this March the the as past about for is

the the mean be seasonality that quarter-to-quarter? does So throughout to year even is that expected

related. Yes. There's don't different necessarily nothing changed think be years. would that's they're that seasonality actually I prior our our than in business

minimum. professional sprinkle seasonality And have pure very anyway We license. not it's we any misleading it's bag. it's recurring, in I for have to either, much the a do kind XXX% the bit perpetual recurrent. hand, of that's remember, there's much grow our -- as we a and having It's the don't but more a And which, have a of not really but services And for know, none on all profitable don't projection little that don't our so of kind more predictable the model. model a think always other course, us, investors, harder it's in you sense recurring in than mixed -- very and case. really we But of pushing it's very take we're -- some, we that.

[Operator Instructions].

from question comes Arete next Our Research. Colville from Patrick

make I Qualys. you what of and and of them you about competition or articulating complementary mean they to are whether their aggressively more about guys ask I are whether features, management wondering see Tenable? as you and kind -- was vulnerability CrowdStrike they Can I those whether

Very question. good Okay.

which let's So is since years. with more Tenable, the competitor direct start of a many many,

between have the disjointed they big difference is and architecture. Qualys So essentially, very that, Tenable a

the these and security on-premise So solution. Then different which Tenable.io, is is very the a have solutions, an other and solutions. which they they have center, are cloud-based

they and different existing platform, been they which have biggest for will them together they them, salespeople very to have push very -- essentially, pushing as to They Today, these with really, customer ahead They expensive. That's lot what pushing essentially to loyal. to take is, have we solutions base. is that really challenge try one Nessus, Tenable.io. for they many of time essentially, their -- a Tenable.io a know, had into of see single their all and They're good people bring So course, marketing. do. been have very base essentially customer have going

again, changer. I us, absolutely VMDR for think a So is game

it that So they the into now tactics is more single to becomes much see one end we able we earlier, anticipate of as happening. the at can I dumping lower mentioned compete are marketplace. going the And And difficult of well did, application. high to already We be marketplace, very we on price of the end you displace. the now some to very that the cannot so which now play offer because that

if it against makes you think prefer, inoculated, more us this of I So kind viruses.

So that's what Tenable.

significantly competitor So world. them more and what the a offer we are do head-to-head, we with than in they

So that's for that.

CrowdStrike is a different. bit little

knowing in that EDR problem with you then which is it, point the a you other then one the as the seven all good a think a on a combination lot which creating good, local have having seas that did but is all player, these CrowdStrike, problem But the know, are so many of a of cornering is security market, that Singapore. So this these morning from also the have job there's differentiating I managed themselves which points, technical top of players. been really other service has Internet. end of the on solution. a at problem that Because done very understand these the the compromise you and end that And strong suddenly, which job is for discover very a.m. good roaming they team, in time, actually EDR X at and very essentially device world

So mitigate, capable So Very companies you quarantine the device? the few their need remediate, prevent, these how devices. everywhere to are world. own end to points do people you watching in have follow

gives -- managed they very it essentially, And And service quite good in are, them so watch, really growth. disguise. by other it's a sorry, revenues of they managed course,

on of top with the your that hand, on security to very and, on the is problem a expensive seven other develop hand, it's managed one service to platform have sea, both, own that The it.

essentially people, So and have on have They do Then back AWS. you also, course, back-end AWS the is of they Splunk end. have as become they essentially very is, scale. dependent not their so which Cassandra on

again, cost, So make the it's of hard not all of all very We, that. to scale on that, do. and depend again, do to

end in In writes fact, end. a today, for second million use Cassandra pumping back X Cassandra back our we per

We again, data ElasticSearch, trillion points. have

technology. all So of own that is our

So now the advantage.

knowing not by but they the the are on course, So just that's that end what -- you is management application trying the vulnerability have, can to yes, they move do enough. of point

need really vulnerabilities have about more you device. the context all And eliminate course, to on that end of so that point potential to

Qualys we of CrowdStrike provides on essentially what happening agent, which -- They in also they don't agent and today that and because So is they their CrowdStrike any the other have many agents interesting, they what have antivirus have the other the fact, need course, points. in capabilities. today customers, our X and end is agent, see agent, these large of all

at Now has X.X. we point. delivering -- are, functionalities IOC today, exactly on all with that have our working very X.X hard CrowdStrike already the end We the

We have franchising capabilities, et cetera.

antivirus what and our other things, entire solution the have advantage, an end So to We're back also context. plus we we missing? are the a but missing few

they into the would can ours all start to then how So have themselves. companies into that acquire But by that's far, be, walk going what say unless do of far that, park. I but integrate differentiate turf essentially who a come is not to do, would they to their we're in they we'll which we before

this we think is I where are. So

want So functionalities a all our will be of we the we we going the we is providers we different, our security are that do and will have, today partners not customers. managed that have And additional are security providing Qualys go-to-market leverage and service towards very who to most the customers. to have working not managed

they which the ones are are enable going services, the will them. And to deliver so so we

difference. is fundamentally this So the

make So does sense? that

current clear. quarter question Yes, was on numbers. a for billings growth, I the Melissa, in XX% based And can I very ask mean very please? The my impressive,

the in mean in idea benefit can on the what or have us growth you closed of have that impact typically may dollars small could quarter give an was closing in those first I large your deals from the mentioned a You contributed? quarter. large there prepared remarks deals

of their my been be deals deals so And slip fact Yes, in. instead we was to touched quarter, some that's just a in invoiced wanted for in that in what remarks, prepared the that correct. move That's anniversary QX. were that as transparent timing we've deals QX when about when I out

to same that the as to the at best when happen -- the revenue that's Given the multiple of for our anniversary or guidance scenarios why revenue initial our point there's as renewal deal, we doesn't really trajectory purposes. time comparison the annual normalize business momentum. happens proxy an And it's of hard for

with the thing -- is Yes. term We of out apply will using quarter. Melissa the were one term. deals not by enterprise for And us, add I Does that clearly well driven is because This the an slip us. customers. it's really

January December from been to and the customer, the sometimes, customer depending changed. had have X deals which we slipping XX on the it's of may of these budget So have which some cycle

are we always they to what And our us, said requesting care we the that's So that revenue. the way really why not because one for us. the impact the don't quarter. billings And representative are the happening -- reason of doesn't really, is we in it

very here disclose why what weak, this is we happened are or very strong we business -- and the explain happened. what as -- that's when So whenever

the may the It change variables. the or deal, Sometimes, many it move absolutely for the so there's revenue, early if the billing renew doesn't cycle. but customers change example,

an the need again, got guys, to of a close "Okay, profitability deal, price. go saying, So of is which, the we me want me because we give at then quarter, way very end that's our procurement, better we the if build this to model, you the when you element

guys. But way, that. the Sorry, renewal is by now, down like The we so the service." really we're care. shut could don't either not we But

quite we close doesn't long other impact it a us makes different revenues. whether And few now that's as so So we renew care really our very companies. what from because don't you and as --

this turn the remarks. and go Philippe CEO closing further for sir. show the I'd to at ahead, for like I call Please over in no Courtot questions time. Chairman -- queue to

Okay.

from the our adoption And really much. well you thank things attending as thank new earlier call fact, again, and -- your as discuss one happy very of for that So or very from you be questions. call earnings to I the of our is that And earnings existing much in for mentioned customers about VMDR customers. next from the we'd

you, So hope. forward you, see looking of I to all

RSA, a our less also noise you to the you see than attend If much that. there. make and customers action, can have than Four with could could beautiful it Also, at more our will and our event, VMDR and customers hotel. Seasons. do there you directly, RSA, if speak welcome you we in to It's you're There's

Okay.

So thank much. you very

Thank you.

Ladies call. for you Thank participating. conference this gentlemen, and concludes today's

You may now disconnect.