“From the prior range of $3.50 to $3.55.”

In context

“Joo Mi Kim (CFO): Thanks, Sumedh, and good afternoon. Before I start, I'd like to note that except for revenue, all financial figures are non-GAAP and growth rates are based on comparisons to the prior year period, unless stated otherwise. We're pleased to announce another quarter of strong revenue growth and healthy cash flow generation. Revenues for the third quarter of 2022 grew 20% to $125.6 million, up from 13% growth in the year-ago period. LTM calculated current billings grew 18%. And the net dollar expansion rate speaks to the power of our platform and improving land and expand sales model driving year-over-year increases over the past several quarters. In Q3, a net dollar expansion rate on a constant currency basis was $111, up from $104 a year ago. Our LTM average deal size increased 18% as organizations continued to turn to Qualys to solve modern security challenges through cloud-native platforms that aggregate and analyze data in the cloud, operate at web scale, leverage network effects to produce superior outcomes, and are easy to deploy and simple to manage. Vulnerability management continues to be a cornerstone of customer security programs by enabling real-time visibility of their security posture. Qualys’ unified platform approach differentiates itself from other vulnerability reporting-only solutions through an integrated combination of capabilities, including comprehensive asset discovery, rapid risk detection, prioritization and remediation on a single agent. In Q3, total customer penetration for VMDR was at 45%, up from 32% a year ago. We're also pleased with the continued adoption of our newer products like Patch Management and Cyber Security Asset Management. In Q3, on an LTM basis, the two products combined contributed to 8% of total bookings and 15% of new bookings with both applications growing over 50% from last year. Continued adoption of Qualys solutions increased large customer spend with 151 customers spending $500,000 or more with us. This represents 29% growth from the year-ago period and speaks to a strategic role we are playing in our customers' digital transformation initiatives. We remain focused on leveraging our scalable platform model to continue to drive superior margins and significant cash flow. Adjusted EBITDA for the third quarter of 2022 was $54.9 million representing a 44% margin. EPS for the third quarter of 2022 was $0.94 and our free cash flow for the third quarter of 2022 was $40.9 million representing a 33% margin. Year-to-date margin was 40%. In Q3, we continued to invest the cash we generated from operations back into Qualys including $1.2 million on capital expenditures and $95 million to repurchase 684,000 of our outstanding shares. With a long history of demonstrated strong profitable growth through times of uncertainty and volatility, we plan to continue to return excess cash to shareholders. As of the end of the quarter, we had $259 million remaining in our share repurchase program. Shifting now to guidance for the fourth quarter and full year. We are raising the bottom and top ends of our full year 2022 revenue and EPS guidance. While cybersecurity budgets remain largely unchanged, this guidance continues to reflect a pragmatic outlook regarding the uncertain global macroeconomic backdrop. Our guidance also reflects the planned increase in investments this year, while not losing sight of the importance of optimization as we remain committed to driving long-term profitable growth. Specifically, these investments continue to include expansion of our partner programs and enhancing our relationships to leverage their large distribution networks. Alongside this, we will continue to invest in digital marketing initiatives and expand product management capabilities as well as sales capacity and support functions. Additionally, as Sumedh touched on earlier, shortly after quarter-end, we announced the acquisition of Blue Hexagon. This is expected to have a de minimis impact on full year results. With that, full-year revenue is expected to now be in the range of $488.6 million to $489.6 million representing a 19% growth. This compares to prior full-year revenue guidance of $488 million to $489.5 million. In terms of profitability, we are raising our full-year EPS guidance to now be in the range of $3.60 to $3.62. From the prior range of $3.50 to $3.55. This implies an EBITDA margin in the mid-40s. For the fourth quarter, we expect revenues to be in the range of $129.7 million to $130.7 million which represents 18% to 19% growth. We expect EPS to be in the range of $0.89 to $0.91. Our planned capital expenditures in Q4 is approximately $2.5 million to $3.5 million and for the full year 2022, we expect investments in the range of $15 million to $17 million. In conclusion, we believe our product differentiation will enable us to improve a competitive edge and drive durable top-line growth, while leveraging our highly scalable model to maintain strong cash flow and industry-leading profitability. We believe that with customers becoming more cost-conscious with heightened scrutiny of their security spend, we will continue to see higher levels of customer interest associated with the value proposition of consolidating vendors on a single agent and see that dynamic playing well for Qualys long-term. With that, Sumedh and I are happy to answer any of your questions.”