Qualys (QLYS) 10 Aug 202020 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and welcome to Qualys Incorporated's Second Quarter 2020 Investor Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. I will now hand the conference over to your speaker today, Vin Rao.

Good afternoon and welcome to Qualys' second quarter 2020 earnings call.

discuss and are CFO. Joo to Chairman Courtot, today CEO; and Mi me the Philippe results our Joining Kim, our

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

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

a remarks, and spreadsheet call prepared financial to the historical our to investor available like the reminder, Philippe. on would supplemental With are press website. over presentation, turn that, As I release,

our QX you you, and everyone, and call. welcome, Thank your We hope Vinayak, that families earnings to and safe. healthy are

environment a for globe. changing workforce organizations ongoing Qualys, pandemic Our have the the at our of The operation aspects needs support business, security the mid-March, environment and to of of to well-being including have COVID-XX the on unprecedented development, customers. seen address priority our deliver uncertainties and to across health remains and transition our individuals all created and employees, support product a we continuing Since services. seamless while has remote and continued effectively with

networks explosion from We securely challenge believe existing onset remote is the productively security these responding we providing cloud architecture endpoints days. and Cloud ensuring the of promptly proliferating Upon free visibility files deliver malicious and Malware in file that at cloud-based endpoints. never-before-seen QX, delivery IT that website the threat for endpoints, known extend well protecting of organization, using assets work security additional there continuous were malware our delivered and releasing ensuring on we eminently their is these the could to bandwidth. as remote network, for VPN to XX-day misconfigurations, vulnerabilities clear This an enterprise external their instant cloud-based capabilities are companies endpoints from that and service detection capabilities and service, well-positioned workloads. to of its directly able remote for ineffective evolution and all and vendor classification on remotely no little leverages as and few are architecture. traditional this priority becoming market to service organizations' security the COVID-XX, of a our it these platform remote one the the of securing of will connecting the customers Agent location, are are their Qualys critical employees patches investing days, detect the securely that patches already remote of and computers, are experiencing XX installed inside and applications, address endpoint In we XX for content a obtain paramount. license companies are and which due As is customers our deployed endpoints. missing addressed and vulnerabilities. solutions to critical is help solution, expansibility impact them Qualys of needs These of real-time that quickly critical no of to protection in and detection reputation challenge to uses view by deploy of of our cost added servers to team

Protection addition, service using pilot. to this We The Agent, no-cost US free to which available Cloud offering. companies, currently with based service quickly is security provide detects actively XX-day federal have XXX the on cost. multifunction manages a agencies is proactively endpoints, including Endpoint now nearly and prospects remote hygiene Remote this no customer In over Qualys visibility at patches vulnerabilities, them their XXX instantly

Integrity Cloud compliance XX is Agent Management, Patch and Asset the paid of strong we QX, Compromise, now, our growth quarter. for IT security almost the Policy technology Compliance, Cloud Agent Our Vulnerability prior-year Certificate more upcoming, XX% have and to of in and Management, with platform Inventory see File seven from representing come. million we our Management, to Monitoring, subscription, continued solutions, the In Indication growth

continued or not platform, customers XX%. solution products. – on additional required We have achieving retention strong solution our to breadth adopted to at to Agent the offer (XX:XX:XX) multi-product growth rate ease of demonstrated of adoption or and of adoption. subscribe for for by is expand who Cloud our do additional increases ubiquity naturally our Agent. stands makes our the progress them us competitors of our of with organizations have same our helps Furthermore, We After more once, five frictionless no same do to the paid the dollar the competitors. that the applications This solutions impenetrable make goal fact because enterprise is infrastructure not Cloud offer this stickiness it's download our to

entire of patch in seamless an the called a Response, Qualys combined scanners application Cloud solution Platform, into effective went Management to vulnerability providing allowed level, Management, Vulnerability power assessment, also which management next success with Cloud have VMDR key VMDR, powerful includes it's Management prioritization of which April. respond driving continuously real-time that a scanning, Currently, network further approximately and platform the Cloud environment by incorporates already Our XXX our and in general with the the detect Agent. Cloud new our of with Detection customers, on vulnerable single and lightweight and has VMDR, solution to availability and to are analysis penetration XXX a passive and orchestration. single virtual across been Agent, adopted customers. discovery, misconfiguration remediate Vulnerability takes into building capabilities global to the Vulnerability compromised four assets The elements IT our huge hybrid the – or and that us customers create

agent VMDR, In but fact, million other were has proliferate further have roughly of come VMDR out also our only foundation helped subscriptions which subscription. million from Cloud XX for upsell X Cloud our X.X million of paid Agent, of new paid a not sets Agent the applications.

continued almost Global see over Management and Inventory, using solution, of adoption signed with In good companies up Management strong continue to term free our XX,XXX We our adoption companies of IT to Asset we see our X,XXX actively customer newer Patch a solution, service. In limited endpoints of other have the firm gateways. patch Patch both mid-market well in bandwidth competing ability available VPN selected on IT over the solutions, segment, QX, our large with its effectively without given using large and service several easily as remote customers. application as to

saw that a video across application infrastructure, This robust VMDR with already again provider has Security our the for Container growth its deployed major solutions. communication adopting enterprise quarter, we also

they to Monitoring, large Cloud for solution airline, momentum Integrity competing File had leverage with application, our Agent already FIM selected Asian Vulnerability see having effortlessly in FIM, a a the our point Management. addition, continues Qualys over deployed order In to solid solution

and handled data. are scale diving – the importance to the building Now on also analysis of telemetry storing than data sensors recognize Cassandra in computing our million petabytes while we pumping needed handle our million deeper, clusters, Kafka writes a messages to bus, our X capturing early X XXX Today, per more volume Internet objects of of our indexing also in day data, of search with via than clusters second back-end more elastic recognize points to were a early billion such the our XX we engine. Ceph log large all the necessary we moving and and capabilities trillion X on

highly that and the next of the makes IoT response Providers market endpoints and Large reduction all our and on-premise we Security costs. and mobile platform providing enable and four of EDR Cloud activate environment. assets, scalable to solution Managed Service and address result, to view cloud-based response environment, across single-pane-of-glass greatly cloud reduce a Providers, OT beyond easier Last generation well month, also it endpoints, introduced us new a only segments, Enterprise, for the allows goes but times false-positive, not Multi-Vector our the As

startup chain The has multi-vector focused expertise a Spell fully be solutions visibility investigating endpoints, in and the EDR As software to hunting attack have Multi-Vector accuracy to against machine Platform and EDR comprehensive learning. and billions To strengthen by Qualys and unique Security, from visibility in as into research, joined intelligence, have Qualys of very the attacks. entrance and entire scale They approach in threat platform. and providing faster, collecting provides on an security and context provide and app, Qualys Traditional malware on the innovative critical as response a that the attacks. data and a will Qualys security hunting threats automated, we will activities, natively understanding employee. and security with unprecedented market, all into global hunting more of well protect of EDR threat telemetry integrated deep into our power, products now leverages asset full team malicious acquired employees and by endpoints, correlating events Cloud (XX:XX:XX) context also analytics those cyberattacks. the singularly India the our Multi-Vector

the Multi-Vector managed interest – delighted VMDR is security generating of and our EDR are with customers by adoption the by in by them. with and We interest the service providers, strong Multi-Vector now both

to of automatically of instantaneous Multi-Vector Multi-Vector the (XX:XX:XX). pleased our update application Cyber almost enabled. We're to now Agent, CISO services also it Salvi, as from Cloud an which a our by managed here's is only EDR. announce Vishal Infosys adopted Moving VMDR is (sic) from is VMDR [Cyber and Practice] And once Security requires done Head platform and that security Practice Infosys both quote has EDR

its our network At pleased intelligence, to clients Defense Cloud Qualys agents we to upcoming solution organizations of the and highly the bring scalable Center. discussed company our and response to globally end new allows costly, and us multiple needed consolidate and collect, become Hat, SIEM deliver with it complex Qualys' current expect need trillions (XX:XX:XX) of is provides and Qualys that Multi-Vector XXXX. and at information. VMDR effectively advantage an Data important sensors, EDR points and The we we soon that quite normalize unique endpoints, We collect protect in can milestone use back-end which and Infosys to beta the solutions our requiring have displaced leverage Cyber [ph] analytics contextual with to and are data Lake/SIEM stack. early data with capabilities IoT correlate with for environments. as our OT will mobile, also incident Platform partner forthcoming our our into and of via across vendors solutions be security new Black scalable array opportunity incident to This is distributed we response on-premise, to have fully us its of sensors cloud, robust and their enrich,

Joo the will expand back company. as Her Kim continue and and hiring Platform welcome On Cloud the expertise the planning of grow be front, investor Qualys. Officer Chief finance, to to as extensive Financial we Qualys pleased strategic are instrumental we Mi

leader interchange and also risk guidance Qualys' Chief our security Information Qualys, strategy. of Ben of XX and Officer. Carr responsible years more experience executing IT as leading Qualys At executive are with security to customers, Ben delighted and in strategies information long-term he is thought a has CIO/CISO securing is that Security and cybersecurity joined infrastructure. proven the We providing than

of John Zangardi digital Finally, and board in to modernized DHS successfully their the cybersecurity as welcome of we and experience both also has are the well honored transformed infrastructure as transformation has DOD, directors. operation. extensive John the to our

insight fact highly is innovative We as our a our summary, we security gain are security become valuable and mention cash-generating Platform have business that to a recurring, visibility model. deliver continue In such guidance in our than time, compliance greater which very critical, even difficult in other and of nearly to business software. not companies industry Cloud solutions XXX% of the and we profitable his to grateful the and mission nature because have our many to model, expand

for and And highly achievements to and call Joo spend. profitable XXXX. third discuss continued progress the our Mi drastically and fiscal customers model our I'll lay recurring year Thank foundation Our we've With to financial and results importantly is growing compliance consolidate you. the built. platform for guidance enable reducing security, that, turn full quarter product revenue it the over and IT to to by the core stack their to their

good Thanks, Philippe, afternoon. and

that are comparisons I'd growth strong We're foundation like prior profitability. are revenue Before period rates based penetration our I except start, otherwise. lays Cloud VMDR, as and future industry-leading to on stated figures a and all financial multi-product growth for non-GAAP subscriptions note unless increasing for delighted of the with which adoption revenue, year to the well as Agent and

market financial the to include, was highlights as requests of subscriptions, timing and duration conditions. for second for revenues XX% our Please quarter of QX XXXX next negatively QX to calculated current continue operational to $XX.X note shorter prepaid by impacted given we current as the quarter invoicing, amount and XXXX million. Our expect well multiyear billings which the grew

a platform three and the Cloud XX% customers Paid to in more enterprise the increased in solution with XX%. X%, of customer increased Agent percentage months, renewal renewed enterprise the for a increased from or size four quarter, solution up percentage as X% up of ended a the more XX to deal for into subscriptions the months XX% XXXX, VMDR average or of rose XX subscription, Qualys increase end adoption to continued XX million with QX XX% last to from customers in million XX% from Our Qualys XX up QX. from over and

under free EPS million, and cash current platform environment. was superior due XX% drive versus $X.X $XX.X to capital flow of revenues the our scalable the was for XXX% margin recent and margin model driven principal for on including margin the significant EBITDA to up business we representing the lease Our shares. a and quarter in and million of given flow XX%. our a down $XX.X expanding free our and representing We XX% to QX obligations, Adjusted XX% suite payment cash terms flow. billing grew in of cash In outstanding invest from to quarter second into XXXX including QX, payments million our X%. confident and XXXX nearly XX% continued operations capital continues $XX.X second foundation selected cash of our XXX,XXX back million, margins expenditures repurchase XX%, customers, generated remain macroeconomic model, primarily for Year-to-date, of changes is recurring is we and for applications. by Qualys, operations, generate

our earnings. raising year be and for to revenues XXXX delighted are guidance We full both

to raising the prior of are end guidance the bottom full $XXX year in and $XXX be our $XXX revenue the We the range top range from to million for million to now million. of million to $XXX.X of

our $X.XX the $X.XX non-GAAP are to the of to now year be $X.XX. in EPS of raising from guidance $X.XX full We range prior range to

for $XX.X flow. expect to to and EPS non-GAAP guidance We $X.XX. margins industry-leading million continue $X.XX XXXX maintain cash QX and strong revenue is produce And for is in to our to $XX.X million

headquarters range of of $X of spend our be expect includes out million $X a quarter, the spend Pune headquarters. in will the the half delays, of COVID-XX for in now approximately million the the has few we $X expect Pune $X to timing million, on which months second our been For planned our million Because of build-out we expenditures original and third year. related capital the that of pushed to occur

any scalable questions. our model. I our and operational well of robust due and to by well-positioned are We the answer that, adoption application. and With the happy as this launch early very our XX the Multi-Vector your during uncertainty of EDR by mentioned, Philippe we our profitable Platform of Cloud apps, very underlying are to highly As excited of provided period VMDR and feel value as Philippe

is first Suppiger Securities. Thank our you. from Please go And ahead. Erik JMP with question

out taking Hi. the Thanks you How did play for through the bit question. little the linearity? about Can talk quarter? a pandemic

that take I'll Yeah. question.

linearity, highlights under So, It note any see last we to to material quarter. didn't similar linearity. was

how about Patch component a talk to that? of can And Management with on little VMDR, seen the you've Okay. using you adoption then bit – much

So demand... we have big a

think go I Philippe. Yeah, ahead,

No. ...I can – yeah.

an We fingertips. is that is coming at patch last VMDR Patch for that much There's makes your it's the easier have it because Management. you mile up is a really big this obviously application question no demand and and

So, the large but we significant. (XX:XX:XX) what it's interesting both as as yeah, very And enterprise. is we're on see well with mid-market,

the that mentioned which I fact, Management. In big VMDR also on call of adapted large had we Patch only enterprise the adapted not but really they a deployment

Is on patching displacing you see And you front? who BigFix? or that who are that do

interesting It's it's course is with the endpoints. patch become much our starts it of is to to example, it's it's more of the Yeah. fact so that easier, solution – not adding, much like that – for displacement,

what we, fact, So it solutions. it's on they solution, example, to more in discovering entire much continue which to remediation, it's other Qualys, and cases, so remediate. (XX:XX:XX) they to in SCTM other And doing. do adding with to – Qualys, Management integrates could some assets at and for easier on see endpoints, essentially and solution from vulnerabilities for essentially are a those the new believe to move the identifying – the then more prioritize using, their But Patch assets, we but appetite

some patches their that the pushing they take the by Management the also, all and full take they with that solution. customers, solution, have we continue Patch Management but so information integration them so provide the Patch don't forth, own the into superseding they We with way, can

Thank good. Very you.

Thank you.

Seyrafi Our Please with FBN go next from Shebly question Securities. ahead. comes

so had script, the duration by two like in XX% I growth much. from versus prior to saw And down grew billings I down said would what looks not current want drill XX% you have XX% what you reported or year-to-year, changed the Thank been quarters. the current very declined? on it Yes. billings. It

Yeah.

be a in as negative impact also we've rate because to growth terms year as multiple of normalize reasons could terms done have a little initial changes fluctuation. deal. renewal, basically that (XX:XX:XX) (XX:XX:XX) that pre-pay There duration different It's amount impacts is first renewals difficult that the highlighted in billings half anniversary one at of well in example, upon we you the So were of of the see the not specifically because, billing for shorter (XX:XX:XX) business. the year subscriptions why have

supports bookings confirming our of at our current proxy in current best the look our business we And this our to from is especially year-to-date our this last consolidated if year so a better is this revenue And bookings – what did raise expected actually for we'd guidance. to from – revenue annual prior take up terms with and low XX% this current is like you guidance from momentum trajectory point billings annual high and end of why basically in new. guidance, actually came the end, quarter, than is our

when the normalize XX% I to to few or was I'm X%. half, think long? billings billings because quarters I something the historical that go want for to And quarters. correct know looks it's back for next to just growth can two or like, may expect these you said, Like long want quarters first current current such see myself, you you parts linger, moving so, do your you things but up the trying like XX% think to four

renewal. which the late financial time, that at a it's accommodate to customers as of strong too of we well time our the duration factor done think leveraging Basically to the is in end are for the I shorter we addition asking position at to not for another this account talk, environment. that being take given the early little as into like us renewals should are uncertainty billings, invoices

company? you Okay. have expenses Last and me for incremental estimated is that Spell for revenue Do one Security.

Yeah.

We Security, see what small before. to similar a line So it's don't for from acquisition, tuck-in we've Spell to material that impact expenses acquisition. top our a done or

Thank you. Okay.

Thank you.

next ahead. comes Please from Our question go with Alex Henderson Needham.

$XXX the bought units, it if you How free And customers? actually the it highest more as declining was – statistics that you're solutions Thank you – you're and in top average from the million, at number the of customer. why $XXX million looking revenue revenue very even why were revenue those associated the I revenue shows that much. I wondering adding including was the have any declining to per on offering. is of your with customers is

customers Yeah. top is to on that move consider the that different we're make another factor Average that metrics we all all revenue And should fluctuate depending it their could categories. the customers, relevant they're relooking into sure on category as customers. still to

highlighted one think the that the is we've that of I adoption. multi-product metrics before

of (XX:XX:XX) as counting launch really the we're VMDR, product. With as it – VMDR floor counting is

some other several bit collect And it be for we example, expect less. before VMDR, customers generally said to do products, VM-only what they for spending Qualys used renew we to be impact, into so, revenue them see they – expect neutral we a where is a as other like customers, who because, little may some uplift to

you in are number solutions So, in the including solutions? that included that the of not any or free of is

includes only solution the It that's and incremental No. on solutions it's paid (XX:XX:XX).

Great.

obviously got question the market second with the on – you've the a today. of free stuff out lot So,

You Patch about Asset a of and the number Management talked programs. Inventory, free

extent of What you were chunk to are that through And nut paid up, of of be? runs to free what we a the September? tally roll what that's predominantly If starts I conversion rate business And type most of version – that How those customer big it some about? in that not you I'm fourth of do that of free the would think assuming expect? mostly to talking off of subscriptions since type the into it. is quarter all

Right.

usage Protection pace. And it's Customers Inventory. service subscription our service, it, we (XX:XX:XX) because Endpoint both respect that continue And don't for our at great Asset to free same the of the some we're which a time if surprised highlight not Protection] that it's as offer tracking new, are paid. and wouldn't Discovery half-baked expect that at and to use We a the products renewal Remote push well for we to seeing the active because often business, we as their really of everyone – the we've with as then We customers' bit trials as we're (XX:XX:XX). really So, time realize a do I and people adoption products Endpoint existing. don't products allow think the that launched, expect is (sic) on we our is need, several And with do model of some of one traction that don't convert we that's but convert. to thing to we like the in we to to customers. offering. expand is [Remote a based that I'd to kind of early some customers to do own buy then like at fine, be given lot see free do the little are fairly new. terms

would ...any those decision? products then make that them a force to of

Yeah.

me very, happy XX we there's that let fact, add estimate So on a can the day very we (XX:XX:XX) customers. and projection see in (XX:XX:XX)

have very some In largely. fact, deployed even

the convert So which to Then, now paid we VMDR. when customers fully which Asset will mentioned, Inventory IT you the is of will expect Global the have other are like to today subscription, using Asset up, for that September, see with at of services, be as more integrated the end have and lead essentially. that we some Inventory, end been these are successful, we free Global IT the that very generation, program

Inventory with Asset IT VMDR. comes course, the of Global So,

that. all that's So

way. these lead just we've – looking then, the is well. course, to them So exposing onboard to of see, power of to (XX:XX:XX) upsell add can a at as platform course them, of try of services paid cat customers. way skinned and in that to as as One we course, looking team of creating, different And them generation our to have you then, essentially at

the So, us, yes, thanks of so marketing software our of this a our cost-effective the is strategy. strategy can we for universe, I cost-effective. very because, at a to course, say, four platform, very deliver part would cloud-based marketing of It's corners

you. Okay. Thank

Thank you.

Securities. Yun from question comes next Rosenblatt with Our Kim

acceleration percentage on pretty welcome, really congrats Philippe, Thank X+, prior that that anything X+, multiple quarter, specifically you. out Actually, X+, customers from solid in X+, the one terms drove is of going quarter acceleration quarter all that Mi. with in X+, Can the in particular in adoption forward? expecting the – metric products. and a in stands Joo growth not are point the the the the you and products, accelerated out trends, that of trend you just what of the

will File What trend very combination reaching of clearly these few a with With is things. that products, continue. we that Monitoring. some these the see So, with of you see we are some maturity these of the Integrity it's – products with

imminently in We are a recall get further of coming to which seeing, the good it's capabilities, that waiting the couple a has also adoption. the course, patch boost while Management, very of are – months, take, will Patch been and also Unix IOS if I correctly. But

what of the all interest where see got in more and more you've course, the and the platform is now integrated. – for we so itself, And the solution

in have also today. all essentially no is So, penetrating not for competitors. current really – success. to VMDR it look other us and solutions helped displacing addresses of only customers a And This huge our reason

remember, with effect is which is, So, EDR. big success much of course, we brand-new, end way, interest a And VMDR go one will anticipate the the with significant early and of EDR, latest GA by on September, (XX:XX:XX) the the at Multi-Vector month, a buy our thing these deployed. the advantage can and us try is that give try that EDR with They for or moving immediately a (XX:XX:XX) to we've all customers, that now all agents of and no-brainer. Multi-Vector is EDR huge (XX:XX:XX) are which

clear I initiatives to major this? perhaps the all go-to-market initial beyond VMDR and, you platform to may us product you with planned that and had, obviously Okay. marketing support launches more any sales we've a success accelerate marketplace now think product with Great. is the focus support in a new plans for initial high-profile in strategy and in Thanks obviously, adoption that positioning to land and sales are core terms your lot have the the any any maybe VM increase you product have Can footprint. And that the on that. on it's of then really update pretty regard, and initiative Perhaps where deals to And and whatnot? launches marketing of that today? you

Yes. question. This is very good a

do have that So, was It really huge – day which has to able been significant a since huge, because been was in we've That close in of ElasticSearch, newer undertaking well, to strategy it India. of It a our walk was cetera. fact, engineering that the as team et technologies the people. to lot very XXX a build multi-platform. in one not now park. we Pune, complex. to the inject had We're was like We

that's our build different good need have. how from not multiple been. And focus data computing you the context, today have So, telemetry. see The same to of that to the application have and that bring order you (XX:XX:XX) with in that – to time, beefing idea has much SIEM only today you security is. platform power up the problem that problem also the not you you need is where for very was to acquire of At that's data

data is but to not that only correlate, So, analyze, to easy. to not it's also that then complex, costly, enrich it's

strategy. So, been overall that has our

to EDR that big platform that we the beta of to is our because sort significantly I to go SIEM we – telemetry. moving what showed essentially now as are EDR our well beyond current finally, planning go have today, is our space mentioned earlier, now in and the integrate So, Multi-Vector solution. end of essentially to course, And all at now, upward, theme which, VMDR the next year. could of solution well as clearly the – the ability more

unique one Qualys to bringing is the create course, that our automatically of all you IT single context, cetera, automatically that the And that that don't and brings of of – Scanning, and that the and if (XX:XX:XX), information essentially ability nobody et how what which story. do Passive all combination I'd that I that you really – repeat of allows – our has provide, the network you platform. having lynchpin Inventory and secure ability all unique is into Asset to end of agent, because get prefer analysis, say Global the that of know, we cannot that us data the One

you obviously the the marketplace is that to that now dollars the And bigger significantly so for the SIEM, that you them. it's have when standpoint. but at we (XX:XX:XX) look many carry are significantly at the more it's endpoints, not EDR example, you when starting So or fact much solutions a then, look EDR prefer of marketplace,

have we And they is services which already answer provides. question, believe as They a marketing of customers. to have are the can of very expand a today sales we to kind managed those anymore now the is yes, bring obviously to take solutions we Then, attractive essentially capabilities past. of because what the to platform large and because we base deliver these monitoring advantage, beyond this means which is So, cost-effectively now customer to that becomes which providers is don't third that response, what need build element course, doing to in solutions huge these the your our have bring security a market. service have – move our today these to our very Qualys we go-to-market been for do absolutely platform the they the to we

managed are is moving And I made using number into all already service the is They think about now are we you adopting solution. VMDR. And Qualys. as a announcement have I saw so EDR well providers, large of security Infosys, that which the which

prefer channel being that is providers. well obviously consume you to as because service our to managed solution, as able bring as this solutions response if see we them to the of core incident So market, security another these

you monitor to respond. to need and then need You

an there. we're from market. extremely of ahead well-positioned think to of well architectural that standpoint, – all now, out is course, anything which And, bring we I need to So course of

that sales maybe Great. But have count that on (XX:XX:XX)? do Thanks that the for to your question detail. you one do I plan head for is accelerate addition

going because proportion, now advantage able deals. have be it's we're bigger big The to Yeah. that, to a we is do

not Of We're going our result. deploy again. course, really – our going more salespeople a to you change profitability. you more can get It's as not (XX:XX:XX) spend to

market channels. effective. sales so see is building, our to that we model very buy. of force that put are everywhere. lot I securities and to field, salespeople a but, solutions big the – these a doesn't our to very try and managed new in certainly It's all We need mentioned we as bring channel, Again, Our so mean expanding yes,

Thank Great. Okay. you so much.

Thank you.

Our next Fodderwala Morgan question from with comes Hamza Stanley.

QX. Hi. Management sales can the think cycles you Vulnerability bit of and is visibility on the and far as environment, quite are for Because, providing concerned, in Thank a far as you solutions clearly, efficiency distributed more as reflected wondering that little landscape for taking we're I fully more in but work prioritization my question. the if Philippe, yet. more I increasing, that seeing clearly your competitive as was not results and comment

So, environment. a cycles, aspects, bit could if little of comment wondering sort as the the about those competitive I'm two sales you well

Sure.

changed sales the cycle essentially. So has not

much market. you If more on a enterprise the displacement look is market

the totally on has entrants today, fundamentally competitors, have look rapid two enterprise, the should small more we or less vis-à-vis Tenable with RapidX. solution mid-market now, market, cycle a differentiated say, and While entrance today if VMDR, and I we (XX:XX:XX), the sales today, changed. but forthcoming with not have competitors is, our the the it's What we changed of – main are and much has

on kind Tenable, a as the essentially have has. So, we're moving, you don't Qualys, They essentially have more is we authorized very SIEM them of they course, which VM gave sure in company, are today, a them much a market, I'm and platform, see Vulnerability a company, RapidX, essentially low-end their Management of don't compete that we side. from that SIEM that they the that VM platform and entering much coming that Qualys growth quality (XX:XX:XX) SIEM is market, and know, (XX:XX:XX). the more – don't

So, large what SIEM, the well the we well, after we're well. which as generation mid-market of really coming of up goes the – installations with, very next goes beyond course, call

will scale scale significantly more. SIEM our So,

for they traditional look and and we against ourselves built, ahead around, build with them. and long happy. we course, are has now at today, long of power if really out working it extremely time. that well-differentiated introduction, been Again competitors have and how So, we the really VMDR a these of demonstrated and very overnight, see have the platform we This focus long the how can we're didn't will are anybody, that well because that question happen there done. on we've And we very Qualys take the who we becomes, of what

response soon our entering addition, now, be is Now the early to it's going very and of – year. that we which beta EDR with with end Multi-Vector go alpha the incident to and plan beta at

Mi. quick just Got And it. for follow-up Thank you. Joo one That's helpful. then

Sure.

impacted Any renewal way and impact that you durations quantify perhaps of the toward some billings? the lower the timing shift of could current

the We reasons actually the we a we've flow we expect our that's the Yeah, this at get in in customers so terms impact a expected. as of of paid help with sense. bookings to and that you is the why shorter industry-leading of we're leverage that the that managing this why end where the internally. than it I margin cash where of is not mean, to XX%, do came our tracking experienced to said, quarter, wanted we're reasons why couple (XX:XX:XX), to to of make billings day take we've had margins million sure have that, and duration we it. With the part we what at opportunity great quarterly actively out operating one know, we've the highlighted because, makes higher that

expect And feel accommodate reason not be need or not this to wherein to us is the because we indicative tracking, quarter. And billings just similar customers it we forward, actually don't then that of see really – not we the is bookings billings so, it. performance going for a when

you very Got much. it. Thank

Thank you.

Brian Our your Essex question from open. Sachs. with Brian, Goldman is comes line next

Apologies. a wondering Good I seen Thank just we've having customers, that us was afternoon. maybe of conversations on. Apologies. for after need taking spend, demand initial seeing Yeah. you concerns give in more Philippe, high could the a environment? have particularly you you're with security spend now that what focus that I question. these endpoint to disparate may now mute for identity if of networks sense addressed on any derivative are you more kind distributed they've firewall those posture

I'm so so could the – that question understand question? sure repeat there. I'm not I sure not the you

of perspective, just conversations having and Yeah. particularly spending sense after I with we've seen demand the guess that trying like... you're to high customers solutions of the for work-from-home kind a from get – obvious budgeting a

Okay...

may now issues Are ...endpoint those you that that spend derivative identity addressed? have a been firewall. getting of

Yeah. No.

Okay, sense. makes

companies the they for obviously, where the of is So has world just enterprise built lot – I today think that are with connected their everything the what – is for that not they highlighted happened the that everything COVID essentially solutions, fact Internet. don't a across security

that. of solutions so, security not enterprise And course, for were designed

a as that very visible. So, so – became

a of visibility is more have you you your more is patch with to outside which how do buy difficulties. network? The (XX:XX:XX) first that. Then, this, VPNs, a more lot system of

call, all wake-up really, security their you these that and (XX:XX:XX). infrastructure layering given has about solutions people essentially that prefer, So on the rethink enterprise security if it's that time

to changing, with be because happening our cloud is question. can very discussions security consolidation. resisting industry. customers, no in the today, our now move (XX:XX:XX) and we reason is so There's is very that to see and cloud It So, of the minds the industry course, the contact was definitively our the and used that forth, are for

applications And cannot people priority number-one They that. to that's They have to have to do the have. even so, many they find that that manage. they don't continue the

serves was longer think this that took so, our that's I vision, than as for and – looking there, essentially to that's build as us when than I but we well. consolidate thought, very platform possible. – may And on all say a far more it I and we they're So solutions complex we was Qualys, us thought that will much think build many we going, if serves you solution kept which like get

needs our You are lot fast a which, because marketplace of a some also that also agent as single agent, today you This is see need is of the view multi global if EDR. but fact interest we – is one growing for, that the prefer, our single you it's a course, that one – agent, lot market of what Multi-Vector described, consolidation also one looking and of see people our agent, our well. in a just – today that very

So we're very I think well-positioned here.

with just That's for it. to Joo And follow-up one super want maybe helpful. I Got Mi.

for down. touched like looks someone about all you're the revenue stack, think customer particularly I coming four over you if but a it look enterprise coming per earlier – LTM slightly, solution question on categories, customers down with at

I'm and sense wondering mix customer issue, what the affected other that? issue categories? guess what the a it's in well. other growth So, I How or just a of just wanted but get to drivers a those are the declines of are as Maybe the are categories

Yeah.

go we now of are the be terms attributed in solutions, the that other it that to of are we've the So, to some fact up some lot coming expecting is priced newer solutions over out out, with the smaller of time. to ARPU categories, rolled that VM, to expecting a similar we're of

example Patch is similar smaller not Monitoring, we've talked like, like launched, that for high. the it's So, – and some solutions we deal of will as as example, Continuous Management, that FIM about have a whereas priced size, IOC, an

has look – per gone that that Is customer Got just mix I it. I issue I just mean at Is mean, it this, not infer I that case? can it the it revenue looks if like or... But, implies down. overall

year-over-year. size overall, the average prepared X% is it up the remarks, mentioned we in Well, deal

All Okay. you Thank right. very much.

Thank you.

Our Talpaz next Gur from comes question Stifel. with

interest more customer And Thanks questions. alongside want I that, is seeing launch threshold added in you your malware what traditional of for you far? of this more markets. you've broadly quarter competing beyond taking my in confidence understand the are here endpoint Great. what noted Philippe, Okay. EDR. thus terms to think that in I detection

big Oh, interest. no. There's a very

because Malware that response the agent, XX-day Protection and capabilities we yet that's not Detection have our build what didn't agent free of into our the we Now, with in Endpoint is response, is added information our today, detection, Multi-Vector our solutions give full about solution And and endpoint the is the which up our coming the solution all that have differentiation only solution endpoint. between with solutions. – they EDR, essentially other you –

is because we important. we very the endpoint, have course, telemetry, of can beyond all look and Now, that the

good think solution access speaking, have a much that more that very have and need to things information, go have you I you easily; have a used so do more because all it, certain don't I technically today advantages as solution. call think So eliminating to fishing significant possibilities, allowing you to that, we I we

to essentially you precisely today agent the can to that all advantage Multi-Vector EDR that's give it's very pretty and because and a about multi-vectored. Now, Agent, attacks here Multi-Vector try it have instant and we the that is And the big solution, look straightforward. of update discussed of the for just them to we I that – And easy have call Cloud usage response is our it's upgrade because already now us to are that capability needed really it's our large large, we for customers our at EDR.

to So of that just device connects and endpoints. because another you device network it's you be need view know view, the that from to what the the to, that's part full attacked need not of only the not could just endpoint, why

kind the on the to think of how we question, average you, just you. That's the will, SIEM ASP or size? about lift, helpful. building like you for serving last And Thank one as should Mi, maybe Joo products EDR if and deal

have customers, ARPU of that and increase coming after by in with at drive so retention VMDR dollar the rate, having the with believe we will something very (XX:XX:XX) our is and acceleration Lake overall EDR followed already drive our We higher, that and Agents we're revenue. that this this about. Cloud SIEM Yeah, optimistic really – installed the Data not launch endpoint, think

you. Thank helpful. That's

from Hedberg Capital our Thank you. RBC Please go is ahead. next And question Matt with Markets.

reopen? trends – I of you of guys. domestically to or sort maybe and Hey, Philippe overseas in for here – my the but and did taking then comment terms Thanks questions. economies of missed some geographic it, on start when you could

much is fact, Asia in well. and think market. the all in Europe think the I – we US, in yeah, you today see adoptions we as markets, our We're very, as not I seeing, (XX:XX:XX) good Pac very and see know, between difference fundamentally

simple, an have we reason of our need is seen network still this take I So, nobody economical however, we connects in a not you because is network very continuously example obviously, impact the us we Qualys, – to offices, that the really maintain that's and that our have working together.

essentially So, system. that network nervous like is the

not conversely we we asking we So, course reduction that's see will are payments, as are secure a That's which companies market companies bankrupt to see the why, seen price the demand. lot concession, significant of you going of in a network, course, need have What – et that's this so – getting cetera, dynamic. for of go see. or why We security the is whole, what some bankrupt. that's essentially and

so of (XX:XX:XX) you you and won't instead the in reduction, of change this solution. done have overall, by need integrated, us, you your course, the cost of to is now do way, saying, you and take cloud-based total job, and of we what about debate between dollars that don't the don't the that cost of a these spending why different essentially for solutions. – everything Now, a consolidating? are disparate Qualys to reduced term much try in course, for speaking have is solution like amount many all look about people is worry of You maintaining solutions, where to don't about integration drastically because, It's to worry ownership infrastructure because

think I extremely we're So, well-positioned.

you've then several active but year. Operations a sales Laurie promoted I I to effectively EVP you taken running know believe last And Got for very years, Field sales, in historically role it. Worldwide

I that, just of as the can As I sort anymore. tell, with on far I can comment if you overall initiative. company the think like sales she's don't wonder

know, position Laurie, have forever, the so, Qualys, know, you of we obviously, – I you here. at not and and stays in very not everybody we as fact, – think we but course, have, employees replaced have As long-term (XX:XX:XX)

sales earlier, promoted force who looking at again today. expanding her well, in our have, role somebody I fact, as I very within think and mentioned doing We from so, are to take we is and

well-positioned there. we're getting think at I So

Thanks. it. Got

from And JPMorgan. question Auty our next Sterling with is

guys. Yeah. Thanks. Hi,

If that the mentioned Q&A, on in you reported the was think quarter you Early call of in stronger couple the same actually that's wonder mentioned a was than the revenue wasn't I – I stronger guess times I why were the it quarter. last number? bookings then in the case, than the – linearity the as in expected. call quarter

to $XX.X the when million. it reported revenue, million – was Revenue revenue to and a $XX.X actually we $XX we of guided million

And than so it did come expected. that what in you higher we Sterling? had Is what meant,

end top call Yeah. maybe with more But – what the that slightly were bookings of above guess I expected you the quarter? in line the maybe I in or just would the range

model Yes. are well, on when of sometimes bookings our it And consumption as depends you fact that the really bookings, some on with do we as actually know. coupled based – a

of in somewhere could do yes, we be in consumption-based the but our into (XX:XX:XX) at that partnerships, expecting our be and to midpoint revenue $XX.X in, factored bit little guidance we have overall, Given come revenue coming million. a ended established we – after it, higher up do our that range, were

you pricing this is How contribution then And have take one models, remind think Can about the should it. especially you Got we uptake VMDR the looking with year? – EDR. some different us under pricing follow-up I VMDR. and the and that model, on for like revenue what

different. is model pricing the So,

I'm what. you the sure – understand then the so, old was so which through going we're very had, makes you asset-based which simpler, impact than much your as also la exactly that question it (XX:XX:XX) model know, I system to for and of an simple procure carte in now know, customers we our a on not terms As IP/day that

On revenue year. for the

So, revenue fast year, much this for contribution it knowing slow minimis, meaningful, you a is ramp, is de types... it products, given not expect so ramp? a the Those how total your is new it

well. to multiple those mean, is, everybody for adoption not end the which and either a No, and again bit of is adoption accelerating, agent, those makes relatively (XX:XX:XX) And new course, is have does migrating cheaper of little all the VMDR VMDR our mentioned, customers I base then and we mentioned very little no, numbers. of a we quickly no, VMDR And some deployed have we to we what solution, I very (XX:XX:XX) solutions mean working it's for of – of the as huge is have most solutions, this in who cases, essentially comes because expensive. moving VMDR see have up all-in-all, bit because and sticky now anticipate what totally a more does business much healthy populate what have VMDR customer it a it of it course we absolutely more and that it these integrated. us you course, in

I we success. huge a think huge mean, absolutely So, – VMDR is it's success. a huge a

Thank you.

like showing remarks. Thank final to Courtot questions you. further And I'm not call in any Philippe the to turn queue. back for I his would the

Okay.

know, and coming, bringing So Multi-Vector you solution. – you solution are earlier, it's mentioned EDR. I the excited again, see We're a thank our new all, – we now as been VMDR, this very to fantastic, thank as you

we we looking incident into solution. and EDR, can course, detection response, have response see, are we to now you As our to VMDR, moving come, new are forward launching and more of

you to like for your time, thank very you we'd again, and thank that, with So much.

thank program. ladies And that, today's we in gentlemen, you and participating for with

may Have a You now wonderful disconnect. day.