Qualys (QLYS) 11 Feb 222021 Q4 Earnings call transcript

Thank you for standing by and welcome to Qualys Fourth Quarter 2021 Investor Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference may be recorded. [Operator Instructions] I would now like to hand the conference over to your host, Blair King, Investor Relations. ahead. go Please

and fourth Latif and to welcome Thank XXXX good earnings Qualys quarter call. the you, afternoon

Joining me our today our to discuss our results CEO; Joo President are and Mi Kim, CFO. and Sumedh Thakar,

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

During GAAP Relations non-GAAP this earnings And call, we'll the Investor A as are in remarks investor our all a the non-GAAP press press website. presentation is to reconciliation on available today's release. and reminder, of and included measures. financial prepared measures release, section present both GAAP of

with Sumedh. So now like the over turn call I'd that, to to

our Thank to Blair you, and call. welcome, fourth earnings quarter everyone,

platform million progress is deployed customers or Vulnerability pleased Cloud single agent also of by year-over-year VMDR to strong We XX% and was of QX, increasingly of of the grew performance, purchased to results adoption our power customers approach XX% solution in to worldwide. financial the XXXX. There initiatives, our innovation continue These our transition over last months. our validate Management, security and year Detection are XX as into to a steady of and VMDR. Response, efforts significant now consolidation which a very our report subscriptions another strong quarter $XX momentum reflecting of Agent In advancing heading go-to-market

like Qualys days to to VMDR and in desire in growing yield trends are and expedient a security with scalable executing remediation and large the growing [Indiscernible] and starting critical but leverage LogXShell see to operations heightened their stories are enhancements seize market. risk only solution remediation that team detects product not vulnerability, today organizations. platform ransomware with in the you leveraging results and need integrated I our share organizations consolidate we capabilities highlight the application customer LogXShell well go-to-market millions Apache automation asset also and and announcing to have customers LogXShell stack Management VMDR, Our compliance year, the Within the remediation these log free released a environment. last detection our Cloud shell helps teams detected vulnerabilities team, multiple XX-day also time Qualys exposure like strategic and of and announcement vulnerabilities, LogXShell discovery web Patch only Qualys service, relevance of of research early the scanning. their Recent enterprise attacks management CIOs among accurately Cybersecurity of in of security we but engineering demand leadership reduce Management, in our like their among has underscoring unique Qualys on vulnerabilities December The Platform Asset CISOs highlighted customer opportunities not as and Since high-profile will achieve vulnerability capabilities. for

include into legacy demonstrating compliance, Qualys on Additionally, to of an leadership integrated commitment environments. both it's and compliance source open enterprise Asset the released in platform, our cost consolidate discover endpoint research Inventory EMEA center given multiple Patch and which the the help solutions Global policy Capabilities standardized our the data wins industry. for effectively Management tools existing linking natively the global region multiple global community, team customer Fortune extensive organization, A further and impact this to vulnerability LogXShell, a security in to stack the few remediate of XXX and illustrative VMDR and quarter

a are Cybersecurity comprehensive provide their our with and wins asset in these needs. we our best competing capabilities differentiator accurate among that to solutions. experiencing newer in the Management when once key new rearchitect a the several believe and selected consolidate market applications Qualys Asset In is security-centric and their are and addition, only The CMDB ability Fortune VMDR cloud-native over early platform to security customer success customers was again detection meet response win. stood ready discovery the new to visibility, characterized alerting stack, We XXX uniquely multi-solution for solutions vulnerability synchronization, out and

well Looking of our global back and demonstrating incredibly to at opportunities extraordinary newer unexpected value solutions, of depth believe customer the responded of the has Qualys challenges relationships our abilities and the transformative the team and XXXX, our I diversity.

over additions programs with go-to-market the we We in broaden marketing including of new quarters, and and will extensive on customer a several Qualys more opportunity sales and pipeline to partners. a continue the he executives, plan innovation friction strong In expand may able software and great reach, sales Bill with drive making who has platform in A CPO our should business. cloud-based our goal asset expansion together grow enterprise CMO, CRO, a our in grow recently, in response marketing further we our our be platform. Berutti customers to joined remediate remove inventory, leverage sales to to of believe now platform agenda, investment focus objective brought customers help in a believe experience solutions. our alternative marketing well to digital market as use as innovation, team channel out while XXXX. other platform threat much only vulnerabilities go-to-market we build product new of Board customer, solution against team team We and With to a to is next the detection-only and our the this asset siloed pleased to CIO, Bill applications increase XXXX, risk building and our December. innovations VMDR, our I and we motion security these our simple foundation we place, platform integrated in mitigation all GA. this announce am a our Context hassle-free. that respect with to game by detection for click faster Further currently adopt than button. enabling XDR With and executed be recruiting natively while and the changing and advancing into

incident Qualys extension As many of natural a Cloud and security response our is application. know, the you next-generation to platform analytics this and

collect, and asset and vulnerability telling security and integration they for provide context, integrates backend a with data natively analytics our of simplified already and response. response. We application on this file correlate integrity are us patching, it's data risk-based Qualys sensors single for to normalize it cloud telemetry EDR, detection as XDR Customers environments trillions believe which customers. agent scalable a correlates Context and satisfies all points solution and of security Our leverages array third-party and monitoring solution want additional that high-fidelity enrich, demand across

of product we customers been in this early solution potential, overall in from are received adopters the have of market light positive it's about early innings, XDR the and we still feedback capabilities. for who the our excited this especially have is While

to in a continue and organization Looking differentiate to innovation strategy. plan Primarily, will control automation R&D further system we cloud dual internal maintain product will ahead to industrial invest security capabilities our security. scale response XXXX, and we our our further portfolio into and and to EDR we expand detection container,

acquisitions opportunistic enhance and to accelerate targeted highly market. making to Secondarily, platform our our time and

we acquisition expand expand to consolidation, of in Platform adjacent cloud further build to further user support As that, to business our visual a go-to remediation the the cost believe more the first broadly our drive the business and continue capabilities reminder, further agent productivity We platform. our Qualys systems TotalCloud our plan presence enhance we outcomes. operational are completed Cloud we our and we and agenda, and to platform and we extend as the leadership technology invest In well increased our in cloud outlook our to positioned business XXXX. the better Cloud Joo out and workflow platform Qualys growth quarter enhance XXXX, solution and results markets. year better to the for tools over savings, quarter efficiency and bring processes, reach is market to fourth to to help cyber-protection. full call success, and into summary, for momentum our our Mi new turn discuss With believe I'll To

Thanks, Sumedh and afternoon. good

pleased all Before operational that rates the noted and note otherwise. strong report as I'd growth up to continued to I except acceleration grew figures to from the XXXX highlights. based for quarter million, non-GAAP comparisons financial and like the financial of fourth start, profitability on prior unless XX% We're for growth to QX. in and year period, are revenue, are in Revenues reflected $XXX.X following XX% growth

While proposition in the XXX% shareholder new from QX confidence increased revenue approach QX and customers with we a also platform growth enhance from with business believe the XX% the help value. the outperformance last of our growth new strong our drive year, the our calculated and expansion XXX%, in LTM up in single-agent and year ability We XX% billings are net was at XX.X%, with business the made entering to current opportunities value majority upsell, to we've in to year. QX, to our in renewal and up increasing due in rate beat momentum acceleration. innovation to higher-than-expected in win dollar a throughout contributed investments With

that increased success to managed We're us. XX% with compliance XXX total XXXX. digital spend, penetration into XX% or spending adoption and leading different. and as XX%, continued position no a and now to to security And compliance security year ago. a Solutions from excited of represents at in growth by now adoption customer self-updating allowing this consolidate initiatives. the with up over $XXX,XXX customers helping cloud-based platform Qualys their of continued was quarter their build our more transformation our attribute This and This customers with essentially We while from VMDR, customer a large stack XX% QX

platform representing was and continued flow our Qualys, operations the million, into drive to fourth capital margin. fourth repurchase $XX.X was expenditures and we cash including XXXX EPS superior flow. $XX.X for XX% XXXX for generated outstanding we million, quarter to significant a XXXX the scalable a cash of In for quarter on $X.X cash Our of our XX% free continues representing million invest was of million margin. shares. the $XX.X model margins of to and $X.XX back from QX, XXX,XXX quarter EBITDA the fourth Adjusted

EBITDA for We existing and with in our a crossed customers effectively achieved investments on and In efficiency ongoing and both even success we the experience. operated VMDR testament before to growing Management, results finally from while business. of changes This gives for Notably, XXXX, our the to confidence total in increase other of leadership our million pandemic of a to we stepping management cross-sell grew delivering accounts in growth leverage new the a and reverse XX investment and now XDR. year our Asset XX% a XX% adoption product XX%. acceleration. of focused solutions started point EDR relationships Patch subscriptions through customer launched company model earnings revenue back continued to inflection Management, Cloud Cloud us seamlessly the shareholders. to opportunities in The and such with revenue, and continuing journey have on as this over Cybersecurity flow Agent on course ahead year, execution, and demonstrates Looking with in was are bookings. up meaningful proud Agent better-than-expected generate Qualys cash ago is Multi-vector the recently in we build margin

investments maximize strong executive returning sheet. Last talent shareholders repurchasing across us balance XX% XX% we highly free margin marketable to to to and to market. enable million and returns competitive the we plan new approximately and also With $XXX by increase cash, cash is of and a cash million grew the generated year, in significantly after to remain of flow, functions equivalents cash team, by of business $XXX securities year on the X.X million shares. This with our over EPS ending

now believe even our scalable industry-leading to business highly XXXX. for will to we investments relative incremental continue Shifting we Given peers. deliver XXXX, in model, additional guidance margins that to with

us to to business. invest more the with platform in market Our organizations the consolidate believe success armed in for new With right agent that increasingly security their into the a sizes cloud our we looking flip executive of stack is time and in all solution. an validates leadership of platform thesis are team the with capabilities, single their the powerful place, power

organization increase focus that, our anticipate demand channel generation and as operating and sales digital we Given initiatives. expenses as our expand marketing efforts, we well on as to

a and remains as top Additionally, compliance leading security priority. vendor innovation solutions, a of

further in So year. we platform enhance expect incremental the We in our planned our our our cloud investments to support to value. shareholder and us people in And million. million to XX% a is security customers. XXXX, will growth. for growth these to automation be infrastructure investments investment expectations, and to believe our represents $XXX anticipated throughout $XXX that make position accelerate capabilities and which maximize our we of of XX% revenues in expect for to growth framework year line the full With range to range

XXs This to margin high half higher year. incremental in the implies $X.XX. EPS be profitability, increase of terms to and the In second year full the of of $X.XX the in EBITDA range with in we expense expect

first range $XXX.X the be of a to in $XXX.X expect XX% million we of range which growth. million For revenues represents quarter, to the XX% to

expect of $X.XX $X.XX. to in range the We to EPS be

scalable durable long and to our term. model to growth questions. for I leveraging highly we answer $XX in million excited drive are XXXX, Our and QX as invest your expenditures $XX planned that, maintain $XX happy we capital million. we of full in the Sumedh is opportunity range profitability remain to top industry-leading to our expect the In year million. of about margin approximately And With while in any enter XXXX, line expansion the to conclusion,

[Operator question the JMP. Suppiger from Instructions] Erik of Our comes of first line

line open. is Your

and you Yes, thanks kind you you what of into quarter. Talk into to that you the those little features and do think compete as start a How have some do -- for you'll market Good the taking you and get about SentinelOne have EDR or advantage you as likes expand competitive some think of markets. CrowdStrike of these what you'll you'll against the to question. the functions dynamics bit see of think players? do

Great Erik. question. you, Thank

siloed of I look I focused others dealing detection, of only at a are period have our of on platforms there think on think are today, either are a on risk that with done solutions, that organizations only when we with out time, customers inventory, maybe somewhat including lot lot we the over the focused work threat a mitigation.

the see and that have the brings we have that a in they're with solutions as offer platform detection-only cloud release highly that ContextXDR where mainly really you think it I focused did advantage that so that with context obviously saw we that long And have the platform. believe of native on don't is correlating we core we lot is we -- But a additional data. typically scalable also where the we

that etcetera. there. is isn't asset, context times, end-of-life analysts out it the what XDR context, find lot out need of the context of posture a any of And running solutions those the software, these criticality, is from assets, So really to the the of business missing

us give that trying strong developing put we very natively a that's focused not platform very a together ability are saw on of work to we not on patch. the that risk that obviously, comes did we they capability, and platform log why aggregation very through only our a correlation platform, creating that facing, different acquisition. with our on customers the as we something having It's felt And capability, does the that and is on to solution strong so we challenges would with like assessment our really this technologies natively inventory native top

which looking is security that ultimately, brings have. for that you various what what it the of know first, it elements does are CISOs is And so

remediate Second, find together a then your threat is detection and And platform. response, third all and risk. in single

of take their ability not or technologies. see things by are only agent, so helping together So have platforms of and patch the relative advantages to compromised. some key put the taking same for solutions those that that by not same platform We detect us to actor sort threat different other proactively, also you're the response getting solutions

customer think XXXX? Do in a Mi, given I end the have the Okay. past, account at customer And the year. you've Joo for you of a count

Yes.

Before included three when we customers. disclosed over XX,XXX, actually it

a look in The the single customer growth customers, take base in over at our you XX,XXX. has been If just paid it's digits.

our addition attainment XXXX, some on per is to quota and -- other rates well customer in market metrics as planning to by rep. priority as sales to so the focus the increase of increase win And new do in in and that we're reps our carrying metrics, including share, performance working plans increasing

what growing you the that that Did Or range? the been XX% you in say it's growth was said? historically,

It's single digit. It's this than X% for year. less in the

Okay. All on security Any or web container question. updates your your right. security cloud Last app business.

the some of updates in on that Some good in terms Any space. growth of front? progress showing been companies smaller your have that

Yes.

we continue think these of customers. really focusing conversation lot they And our by I on are as cloud of assets, up it, players, that is we I well who early to it a only same home, that includes early existing on-prem down comes some cloud almost the adoption conversations, smaller to see when from are hybrid solutions altogether. still environment have all the and think of as the end that and workers container to with working includes aspect organizations the environments with a multi-cloud have remote that assets of that deal

they're example, endpoint. exposure, to for go to cloud risk, on-prem, the when different LogXShell, your one looking with to for an one want as so four And find for solutions, don't for one

do that rather forward to the having than in I that products. see getting we a do I sort customers solutions. these same XXXX be cloud-only and will with capabilities enhancing of looking to consolidated visibility see and silo, cloud the more with on mean consolidation solutions to continuing platform and those we updates providing additional capabilities that plan So which endpoint-only those

Very good. Thank you.

you. Thank

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

question, Your please.

nice the somewhat revenue some see remarks in here start prepared the maybe acceleration preceded for the spend. 'XX Hedberg. your [Indiscernible] to year. of pointed for Matt and momentum out sales to inflection It's or Joo Mi, acceleration and incremental you marketing

around Just on right curious magnitude were saw targeted for evolved time? areas you maybe more then had budgeting investment or redirected determining with or areas was at the what based that And was previously your you -- any view if the what planned of investment? decided maybe the

it's Yes, great question. a

the CRO, XXXX, is for we're different and CMO in-depth I do had think to in sales as our in part well executives new the should And And great as priorities some and are ROI. working what and discussions And has team where of executive our reps. that place, there carrying retaining right on on that are with determine quota of that we we we've the focus decided maximize With we levers how do CPO other priorities talent. key right now. multiple on one with attracting to the

a If XX% definitely -- help single-digit slightly room sales XX% bookings the if increase which year of XXXX, look revenue our ended increase sales that the over to versus in growth since should We fourth that is direct sales our count, prior think you there from over at year. to where our we actually and able comes head channel. take marketing our we're force XXX from growth, force, there's

changed. So hasn't that

we're extent to increased of recruiting we're actually magnitude, we've out the sure make possible, the investments taking of to to terms the our advantage that opportunity increase there. In planning where team

think inflationary lot of the companies pressures, the facing times. I challenging some are that a given

term. the said a to to to business, where margins but to we able this that, in year. our this think model, for gain we higher and we definitely accelerate the target that business the we our do business that momentum Fortunately highly a us to But to given at share to growth and flexibility be -- only us, that team given we to execute need scale We the spend back plus time we're model, strong. against margin as that think increase before, not so longer-term our for possibility fundamentals remain for there's the to us that XX% can have up do the planning comfortable longer market get

Okay, application great. And mentioned you then around XXX-day web December remarks. trial in environment, scanning certainly an LogXShell prepared in threat the the elevated

that service Just maybe curious LogXShell, that persist the more then something the reception And drive maybe benefited then does and that free generally, 'XX? new through quarter? around that that of customers was was

that. take can I Yes,

source or And I think generally. our our seen to as the some the you've focus earlier, well, in generally remarks the as at a first is protect services solution their have base, released customer we will throughout not our even create you why with released open themselves. ransomware of heard SolarWinds time as ability with that the that's prepared existing year were focus really customer other also we that customers. help targeted to base, And this existing noncustomers specifically tools

So of is the platform a up how our a and definitely to the how start new service scanning value out getting and case of up the in up web customers, can LogXShell, matter of an we in and sign cloud-based quickly a detect and application a show or to example, using the as goal of where quickly capability hours. they can minutes spin this can sign solution, start

a displacement help since Qualys acquiring it have that generates That it solution they focus experience customers existing at to prospects. capabilities but the way as capabilities their the -- that doesn't new solution up and are for products we them ready the changing or at engagement their immediately may create to that for existing for renewal, that, a that us frame which are various come necessarily does etcetera. they is is that them Qualys. of engagement that time opportunity And point And look mean the so experience with the the gives it within

importantly, on not an LogXShell applications really strategy we endpoint asset to is as example. that have vulnerability solution. just quickly more And critical a the it allows they an needed it that that list that inventory, management was be solution, definitely also contain people of to example, an focus management really highlighted have of a track a by But able customers, how the solid I of to multiple look engagement have more to software think released web vulnerability the as on it's and professional that CISA platform, points just on. not of also the to LogXShell So should engagement but as show the highlighted at us the that ability capabilities

So that some not to on platform get the ability broader vulnerable on platform as the and being and same can way track will asset a then also exploits detect if inventory a management scope EDR only patch are provide instance to remediation of done in executed. a those using actually

I the was multiple think showing the power that's the engagement capabilities of important. and

helped to were acquire some that but not these just able bit, some who think say wanted terms So are for that of quickly. XXXX, detect LogXShell platform has a with I authentication are who think we ransomware conversation these with that looking in QX, seeing and point created do would I vulnerability and and say to customers we that focused were and management it's the LogXShell we little elevated around remediation just were -- licenses favorable think think vulnerabilities customers really going of millions environment just a at I helped on to of scrambling XXXX. at material, would to into that helping say. I they conversations in I very to customers on that it of [indiscernible] respond lot are. would they nothing And I in and where customer It help maybe But looking them specifically our

you. Thank great. That's

Thank you.

next comes Yun Our Capital Loop from of question Kim Markets.

question, Your please.

building or see Good additional on guidance. from and Mi, well. attach improving positive Thank velocity and Sumedh, -- VMDR? customers talk like perhaps quarter the on by It solid qualitatively, customers driving your more additional whatnot. you. we should about, once VMDR to timing whether driven at you're looks Joo of benefiting more it obviously, is tracking installed within Sumedh, VMDR and additional you that's a the expansion of upgrade is of Can usage expect business products? that rate and are least continue upgrade attach very that's cycle momentum the your a to expand, congrats to here. the base that the the as And

a it's of different think things. mix I

as will they they see VMDR the increase as value the licenses VMDR. agent of remediation. Some the deployed have value in Others customers, the the see for

needs for compliance etcetera. they another They the need I So their that they and driven is the particular quarter more have patch in is by to from the DVD in been other compliance some management, they or because needs, And for quarter, have quarter driven may they advantage business at file in customer capabilities where look we're driven have requirements in perspective. What meet that, patch maybe driving that be they management quarter. same think have some the of be may many we look others, customer on monitoring. that the able them and platform, so when see I different

agent it tool set. consolidate opportunities capability existing look think is So holistically -- I powerful of single a and our very we more that looking see VMDR their will terms fundamental customers to belief at to have that in the

And customers we're the momentum other. thing are one that track through focusing so the of initial than we're of or that and to make rather their going we're to sort with capabilities needs these seeing and on where only some to encouraged meet available continue them for

rate events -- great. has over the year? mean a year not of customers, on their two time that is in two now? almost platform, the to the between that little VMDR first cohorts has they're the second who and I the purchase upgrade or look between years to expansion -- necessarily -- upgrade the bit Or Okay, the has changed? And wave if once at then VMDR, additional what the of the shrunk second timing initial you timing

there's into we expand to initial desire focus material it the consolidation, anything we is think there even to driving But and additional the right conversations the to now. there we that to don't I drivers -- said, holistically. to continue of think on initial ability of to see this Like these Yes. more. platform so platform I think move about the talk one is continue management we vulnerability I see I the capabilities with the -- future

to and now of we -- total customers just you of of the And long and had we add since magnitude hasn't that Yes. little been adoption the VMDR XX%. is than color faster our And that contribution is bit what now of bookings the VMDR having could launched with anticipated Yun, XX% VMDR. has speed much it see nearing

think on by So given this it driven VMDR the from recognize. that strategic that XXX% the dollar shared. value our at expansion I And basis, in net holistic you in looking rate proposition definitely attracted I customers move that understand that's and launching think a could our up It's by and what partly we're XXX%. we tell

great. going the makes Erik's sense. earlier VMDR? question trended of there just new the the a to how look answer have of at Joo of way Okay, existing especially That back mix customers on. kind Mi, to Is since your kind introduction between to and

existing customers. into the wasn't in that that by the that bookings and growth We're the in revenue think growth acceleration XXXX, in seeing I momentum primarily has driven translated

anticipated better However, what that said, than had with bookings new we as did well.

seeing different multiple itself in around. signs is we're business So and turning levers the that all, all

for at retention Upsell existing look as both new a an increase, taking customers. well customers. higher as you're the well for existing that's deal If average from average size as increase it's size customers as whether deal

And share ahead with could sales We'll that we added bookings to and really and material so impact will at our new help driven point wins. and be our by that. in customer gaining XXXX, market focus on looking this marketing revenue think the investment in

guidance of terms then should throughout great. sequential year? terms fairly should fiscal Or in ramp saw for how we what this think strong revenue we just year the expect for Okay, your in linear a 'XX, growth in QX? And past about QX of in quarter we

Yes.

our billings at at If good lagging, I you take a our current it's a growth, look take indicator. if always right? -- So revenue to revenue you a look think is

at strong ending to a billings XX%, to billings even So though for was for XX%, Taking on XX% at year up QX And it current year, XX%. XX.X%. LTM the an is XX%, example, our XX% our from X% last growth, trended and basis, revenue guidance look XX%, current the XX%.

of will since that trend guidance XX% momentum of It revenue material impact have is the XX%. to year to expect acceleration the we full of a revenue the the in and continue. for kind terms momentum So

Thank you.

from comes Berenberg Capital. question next Our Andrew Smith of

Your is line open.

Hi.

at to Just you're Can to investments that investment? thinking Is that with investment mentioned reps, higher into quota-carrying regard growth. sales marketing moment channel, new a for and about increasing you break year comments digital increasing investments you briefly drive the quota-carrying further 'XX to how step-up in on I channel? the heard also the out reps in in in investment believe just priority too. I've the furthering the fiscal than

Yes.

it we again, it's at mean, think -- we -- I holistically. look look I at

the that etcetera. as as different to help productivity new technical investment I think partnerships product in we've also with in decided can better sales broadly so sales deploy well marketing board sales focus of folks, customers to additional sales increase and quota-carrying really solution we help digital focus do across invest a and hub reps. investing there acquisition technical the on management with the enablement and logo investment people even can talent -- concepts, in multiple so marketing, sales having the proof architects -- and for our on and Overall solutions, as

a I and acquiring So, retaining the for us it's broad-based the including within the to invest across right company think approach and board talent.

on organic lot of continue as As well. you platform a we the see, development

So mode a we're essentially or something. not maintenance just

R&D Cloud like out. as ago. and The months XDR we additional brand-new CyberSecurity we're have We focusing solutions things six Asset the just that out on continue to bring rest product came management came Management newer solution out the EDR invest we and with about year. in of with

So I look investment broad-based marketing. that on more it a as includes sales focus and at as

Got you. it. Thank

you. Thank

Essex Our next Goldman of go question ahead. comes Sachs. Please from Brian

LockXShell Red Good source know taking Great. last to wondering been was given afternoon. Hat and thank particularly has for partnership noted open that, traction perhaps OpenShift. some quarter with question. And the And I the a you Sumedh, how Maybe you with impact platforms? I

just mean, with detections it not you think concentrated that the I about specifically OpenShift. was across we LockXShell, board, the on at millions look I detection I if talked of think

just have traditional where However, what and LogXShell impacted highlighted we it also points your Hat. servers, impact it not container impacted that that end partnership Red environments cloud did is it with and

that the so that, And a discover of customers detect that's cloud different out of just bringing environment where including better the to to who been them as also, a able we something were aspect resources, Openshift, broad-based closed the infrastructure trying ability see got of endpoints across run we in all the to LogXShell leveraging those an containerized glass the different have everything have show had in instead that OpenShift of who the capabilities figure at to saw -- is that's of in single were that one as they customers sort able these Red we of LogXShell, same were the pane well. platform adopter think I And a something like value because the all environment it that time, But LogXShell the example. many to board infrastructure. and like Hat a customers

margins offset revenue ahead? -- recognition think revenue kind perspective? Super you implied deferred it. is to be there free And guess the our of have and net of maybe, of flow about by models as deferred will difference spend as what just light extent investment how Mi, we baking from billings impact Joo How growth. the some we margins, Got for I do kind and should might to what think just probably fine-tuning a a the we're income of in in helpful. I timing cash operating that the offset And guidance, revenue

Yes.

relative flow, But cash said, tax EBITDA cash lever. free going year than in the know we do prior don't that's margin what's of because mean, increase terms I that we anticipate happen with to have we one the -- we In lower reform. the with paying. just to taxes anticipate that

our there's that there's of so with like too. no [indiscernible], on this change it XXXX tax might as increase significant. But the guiding pressure all, bit R&D there there expenses, additional anticipate in but year. pressure second into actually new a going million overall higher pressure as legislation CapEx Obviously, to this year; effect not might little spend, million the that of in acceleration, $XX well additional in of an The we that's incremental of are tax if we deferred do because terms bookings be in and $XX deferred billing to is lever and said, see the be some there's all revenue that mandatory we calculation

Okay, very that's helpful. Thank you.

you. Thank

comes next from Our question Please Morgan Fodderwala of Stanley. Hamza ahead. go

for thanks taking my guys, Hey question.

on Before last I over Sumedh, the -- just momentum has had. congratulate Qualys begin, year, I wanted that the you taking accelerating to just

you. Thank

sort the you clearly, Mi, final maybe is into sight question for Because will, the if investment have like a of growth. got think So this leadership. you seems revenue Joo line reset, terms you've now Qualys Do the here? you. It you of for in XX% of sales

You've you remember of XX% where the margins them that It was you see seems like floor year so, you to finally this is lower. you sort will year be where looking at. if I the got do EBITDA going Do strategy last this mentioned bottoming? And be margin here. the were think year, bottom?

you see where bottom? So do that

to inflationary very and why the expected is the report had of now light mind that out the report don't that strong, that EBITDA in year, a model. that with that bottom at of XX%. we seeing we hesitant I latest our don't feel the we're have talked keeping current we're question. one coming in about, sustainable things the see right fortunate that X.X%. us I any margin profitable say a we I came And last above very I'm we are think in and of out, Great think CPI reason pressures one highly just timing maintain I couldn't it when

we And so important have and it's in top attract guidance into and is baked wage that a the increasingly -- light talent. what adjustment to retain for given us

a this EBITDA little just to I been margin. so XX% give think on change that macroeconomic the color have on And is trends, without plus this would our in you guidance the of bit

marketing of and further we margin of this and make for return So I well. see said, think in as kind makes But outside well we sales where that bit and that we and that we accelerate justified in maximize perspective but we that a to XXXX color. have us to gives now, as actually in have onwards. think with sense growth planning R&D the We a continuing think customer sense could support would to of that even little the high or are XXXX on that, to that momentum But is operations. as have as invest ROI or to it XXs lower makes potentially it value. shareholder would I sense a what that gives be right from hope have planned

a just Mi, follow-up, about VMDR. comment on Maybe Joo it. Got your earlier

retention. the talked So it's bookings you of almost now and XX% higher about your net

bought it in phase a are for you the perhaps customers, have or rate who VMDR bought the discounted even where may almost So heavily at free.

that true delivered"? found You're value you that's to going the not going actual we're to from saying, renewal value solution, back the up to base and price "Hey, that being now what

customers. really not not we're that discussion a it that's how think partnership. of and relationship the a That's having we're approaching We and as with

And solutions recognize they're it Cloud additional purchasing so to they as increasing deployment as actually more value, the VMDR how well approaching the the increasing when in their we're Agent itself. and prone spend

that, you think potential the reacceleration bookings the on that, we're we're And a that our I account so we're into that. that our and And and take optimistic of seeing. really about at right if momentum guidance look now that revenue what because keeps seeing trajectory based

you. thank Okay,

Sumedh the I'd Thakar call At for like turn to you. Sir? time, this closing remarks. back to Thank over

as XXXX, and profitability highly expansion durable leveraging our scalable we much. while in remain very margin top line conclusion, you industry-leading growth drive the Thank excited maintain future. opportunity to about enter In we our model to

And this concludes...

Thank briefly Sorry, turn I rest to on Thank we I accelerate to strong page. future had wanted to momentum and cybersecurity approach in We're coming platform my for designed you it, a with of just all growth entering We and to to today. that with forward to XXXX challenges. reiterate resides of look continued single a the unified Qualys along believe joining finish driven over wanted IT to progress to the sharing compliance you. solutions, profitability. quarters. key by balanced security solve

for you Thank call. conference today's concludes participating. this And

now disconnect. You may

Goodbye.