Qualys, Inc.

Good day and thank you for standing by. Welcome to the QALY's third quarter 2021 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. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to your first speaker, Mr. Blair King, Investor Relations. Sir, please go ahead.

Thank you, Rachel. Good afternoon and welcome to Qualys' third quarter 2021 earnings call. Joining me today to discuss our results are Sumed Thacker, our president and CEO, and Jumi Kim, our CFO. Before we get started, I would like to remind you that our remarks today will include forward-looking statements that generally relate to future events or our future financial or operating performance. Actual results may differ materially from these statements. Factors that could cause results to differ materially are set forth in today's press release and our filings with the SEC, including our latest form 10Q and 10K. Any forward-looking statements that we make on this call are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events. During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in today's earnings press release. And as a reminder, the press release, prepared remarks, and investor presentation are available on the investor relations section of our website. And with that, I'd like to turn the call back to Sumedh. Sumedh?

Thanks, Blair, and welcome, everyone, to our third quarter earnings call. Continuing to build on our momentum, we are pleased to report another quarter of solid financial performance while further advancing our strategic agenda to re-accelerate growth and drive continued platform innovation. Taking a closer look into Q3, cloud agent subscriptions grew 40% year over year to 70 million, reflecting steady adoption of our vulnerability management detection and response, VMDR solution, which is now deployed by 32% of customers worldwide. Further validating our security solution consolidation approach and the power of a single agent, several of our top new customers not only purchased VMDR, but also made additional quality solutions as part of their first purchase. Highlighting a few of these notable new wins in this quarter, a multinational bank selected VMDR and patch management together to continuously detect and prioritize vulnerabilities and misconfigurations across its hybrid IT environment. The ability of the Qualys Cloud Platform to respond rapidly to remediate and patch assets that are vulnerable or already compromised from a single platform with built-in orchestration stood out among several competing solutions. We believe this approach will help them to reduce their risk much faster than siloed point solutions. Our newly released cybersecurity asset management application received a lot of interest from customers and we are pleased with the early momentum we are seeing. This early momentum illustrates our ability to understand our customers' evolving pain points, respond quickly with updated roadmap, and accelerate our time to market with differentiated security solutions that help fuel our growth. A Forbes 2000 company selected VMDR along with cybersecurity asset management over several competing solutions. The ability to provide comprehensive asset discovery across its infrastructure to uniquely add context for integration, alerting, and response capability was a key differentiator compared to other vulnerability detection solutions, vulnerability detection-only solutions in the market. And to reduce the number of agents in its network and secure an increasingly remote workforce that could no longer effectively leverage on-prem solutions, a large government agency in the APAC region decided to purchase both VMDR and EDR. Our ability to provide a prioritized risk-based vulnerability and malware detection response with a single agent was a key factor in our win. Beyond these new customer wins, several large existing enterprise customers significantly expanded their respective breadth of paid applications on our platform, further validating our platform approach. For example, in the quarter, a Fortune 100 customer selected VMDR policy compliance, container security, and file integrity monitoring cost-effectively consolidate their stack of legacy enterprise security and compliance solutions with a single pane of glass view of all assets spanning on-prem endpoint and cloud environment. We believe that these new wins and expansions illustrate that when customers are ready to re-architect and consolidate their security stack, Qualys is the best cloud-native multi-solution platform to meet their needs. We are working toward having The right go-to-market motion in place, which includes a strong focus on digital marketing, winning new business, expanding our offerings with existing customers, and building our partner network. To complement our direct and channel sales initiatives with an aligned product focus on security solutions across endpoints, cloud, container, mobile, and SaaS environments, we recently hired a seasoned chief product officer. As I mentioned on our prior call, we also brought in a new chief marketing officer to ensure we're top of the mind as customers around the world look to consolidate their security stack. And to continue to improve our business processes, tools, and systems, we recently added a new CIO as well. It's great to have these experienced executives join Qualys as we continue to make investments to accelerate growth and find the right balance with profitability. As an example of focus on enhancing our channel strategy, I'm pleased to announce that TD Cinex has recently selected Qualys as its North America distribution partner. TD Cinex is currently offering the Qualys Cloud Platform to its extensive base of resellers in the region, including our game-changing VMDR solution and patch management capabilities to help customers simplify security operations and lower compliance costs. In Q3, we released a zero touch patch as an extension to our patch management application to help IT and security teams further automate the remediation of vulnerabilities. Our automated patch management solution enables customers to set up patching in advance with predefined policies while leveraging the Qualys Cloud Platform to correlate and prioritize vulnerabilities while bypassing the need for IT and security team intervention after the fact. In the current environment of rapid exploitation of vulnerabilities, This functionality changes the game in patch management with real-time remediation and significantly reduces the exposure window as well as legacy IT costs. Garnering broad industry attention, we have received positive initial feedback from our customers. Further extending our value proposition in the market of risk-based vulnerability management, we recently launched our 60-day free ransomware risk assessment service. CISOs are looking for something actionable and measurable when it comes to ransomware. Powered by VMDR and our award-winning research on curated ransomware-specific vulnerabilities, this service includes comprehensive asset inventory, prioritized vulnerability and misconfiguration detection, and remote patching of ransomware vulnerabilities in a single unified workflow, along with executive dashboards, enabling enterprises to track this in a measurable way. We continue to evolve capabilities of our container security solution, Recently in collaboration with Red Hat, we have containerized the Qualys cloud agent to extend security visibility into its operating system. Qualys is the first solution to scan Red Hat Enterprise Linux Core OS and Red Hat OpenShift to reduce the risk. Qualys container security delivers comprehensive visibility from the host operating system through to images and containers running on OpenShift and other containerized platforms. Looking ahead, As the industry continues to move towards cloud-native solutions, misconfigured resources have evolved into number one reason for threat incidences in the cloud. We are currently in beta with our infrastructure as code IAC assessment capabilities, which will enable customers to catch cloud security issues from the time code is written to the time it is deployed. With this extension to our cloud security posture management cloud view solution, customers will have complete visibility into both DevOps pipeline and runtime security posture. We look forward to our extended detection and response XDR solution going GA by the end of this year. XDR is our next generation security analytics and incident response application, which natively integrates and correlates asset inventory, risk-based vulnerability management, patching, EDR, and FIM security telemetry with additional third party data integration to provide high fidelity detection and response. We will showcase these and other new solutions at our upcoming quality security conference QSC. I encourage you to attend this conference, which will be a four day live and virtual event from November 15th to 18th and will have many informative product sessions as well as customer presentations. We already have over 3000 people registered to attend. You can access the agenda and register for the conference at qualus.com slash QSC. Big picture, our market position is strong. We're focused on executing on our immediate opportunities and with prioritized go-to-market investments while advancing new product initiatives that create further competitive differentiation and will ultimately expand our addressable market. With that, I will turn the call over to Jumi to discuss our third quarter financial results and outlook for the fourth year and full year 2021.