“And with the algorithmic expertise already in-house, over the next few quarters, we expect to further extend these capabilities to transform the user experience on the Qualys Cloud platform, harvesting trillions of data points and rich investigation and remediation using generative AI.”

In context

“Sumedh Thakar (President and CEO): Thank you, Blair. And welcome to our second quarter earnings call. We’re pleased to announce that we delivered another quarter of healthy revenue growth and industry-leading profitability, demonstrating our increasing leadership in cybersecurity risk management and firm foundation to drive future growth. Q2 remained a tough period with customers continuing to scrutinize deals and delay project start dates. Nevertheless, the combination of today’s uneven macro and heightened threat environment is driving the need for security stack consolidation necessary for clear security outcomes, reducing vendor sprawl in customer environments and implementing a long-term security strategy based on cost and value. Our risk management platform positions us well to deliver these outcomes to our customers, and we feel fortunate that many of them are on a long-term transformation journey with us. This was evidenced in Q2 by the steady adoption of our VMDR solution, which is now deployed by 52% of our customers worldwide. Key competitive VMDR wins with TrueRisk include multiple customers, both down market and in the Fortune 1000. Qualys’ VMDR solution continues to garner significant industry recognition. As recently announced, Qualys VMDR with TrueRisk was voted the Best Risk Management Solution at the 2023 Awards Europe. This award evaluates vendors based on inputs from security practitioners and is held in high esteem. We believe Qualys’ placement as the number one vulnerability management solution further validates our investments in the platform and represents the gold standard for securing customer environments today and in the future. Leveraging our VMDR and single agent approach, we have built a blueprint for delivering greater value to our customers with multiple long-term drivers in our business. Let me highlight a couple of early platform successes we’re seeing broader adoption with our customers. In Q2, a Fortune 300 global manufacturing company chose Qualys because of our reputation to deploy across large complex environments quickly. Their existing Patch Management solution was unable to effectively patch OS, iOS, and third-party software, and they became victims of malicious activity. This customer needed to deploy a Patch Management solution quickly to over 40,000 assets to prevent a breach. The ability to deploy our solution the same day using the same agents they had already deployed for VMDR, and without the need for a VPN, saved the company from manufacturing line productivity losses. Through this brief but urgent engagement, Qualys built additional trust with the customer by demonstrating our expertise, professionalism, and technical efficacy. As a result, this customer is now evaluating our cybersecurity asset management solution with external surface visibility to further streamline their security stack. With the Qualys Cloud platform, they are eliminating legacy tools and have considerably improved their response times and security posture. In another example of continued adoption of cybersecurity asset management and external attack surface management, we also expanded our engagement with a Forbes 1000 food manufacturer in Q2. The customer expanded its deployment of VMDR with TrueRisk and selected Qualys’ cybersecurity asset management and Patch Management as additional solutions. The ability to enhance the security program with comprehensive internal and external asset contact risk scoring, CMDB integration, and fast remediation on a single console while consolidating agents on an integrated platform were all key differentiators in this win. Further broadening our platform capabilities, you may recall, in February of this year, we announced total cloud, a unified and extensible cloud-native CNAP solution, featuring agent and agent-less 0 touch assessment scanning options, along with CSPM, CWPP, and cloud detection and response capabilities to simplify workflows and help security teams migrate workloads to public and hybrid cloud environments. With over 30 million cloud agents already supporting workloads in the cloud, we are quite encouraged by the customer feedback and early adoption we are seeing for our total cloud solution. For example, in a recent mid-six figure with a total cloud win, a cybersecurity company seeking better security against advanced threats in multi-cloud and container environments chose our solution over competing cloud security providers, given its flexible scanning options, rapid detection, and unparalleled remediation capabilities from development to runtime, all uniquely supported through our new adaptive subscription model, frictionless platform deployment, and unified dashboard. The wins I have shared here today, along with several others like them, underscore Qualys’ ability to help customers not only detect but also prioritize risk across all assets and environments while remediating vulnerabilities much faster than alternative siloed solutions. In today’s current macroeconomic environment, we believe our value proposition becomes even stronger as customers seek multiple security offerings from a single Qualys platform. With more and more customers beginning to pursue Qualys as a leading risk management platform that consolidates multiple security point solutions across all environments, we remain confident in our ability to drive long-term growth and gain market share. This confidence was again bolstered in Q2, as customers spending $500,000 or more with us grew 21% from a year ago to 168. Continuing our disruptive innovation, I am pleased to announce today our groundbreaking launch of our first-party software risk management solution. With nearly every organization today becoming a software development house, most of them lack proper tools to detect, prioritize, and remediate high-risk vulnerabilities and misconfigurations within their proprietary codebase. This new capability now allows organizations to leverage our existing Qualys VMDR platform deployment to not only detect CVEs and third-party software, but also manage it in their own first-party software using a single platform. Additionally, given the high prevalence of embedded open-source software like Log4Shell in these applications, this new capability allows customers to manage risk from these components and get a complete picture of their true risk. This new capability will be demonstrated at Black Hat next week. Encouraged by the early adoption of Total Cloud, we have further harnessed technology from our recent acquisition of Blue Hexagon to extend our cloud-scale deep learning AI-based CDR capabilities into container images by flexing the power of the Qualys Cloud platform to discover and identify relationships and patterns within our highly integrated data lake. We are now enabling organizations to rapidly predict, detect, prioritize, and remediate anomalous activity that is invisible and undetectable in traditional signature-based solutions in the cloud. This latest advancement empowers our customers to proactively respond to zero-day threats spanning cloud and container environments from development to runtime. This advanced AI-based capability is already in action with some of our customers helping transform their security operations center, magnifying our competitive differentiation in the market. Looking ahead, we are further integrating our deep learning AI and ML technologies into our TruRisk management and remediation solutions to provide predictive insights of unknown vulnerabilities, misconfigurations, and instances of exploitation. And with the algorithmic expertise already in-house, over the next few quarters, we expect to further extend these capabilities to transform the user experience on the Qualys Cloud platform, harvesting trillions of data points and rich investigation and remediation using generative AI. In terms of our go-to-market initiatives, investing in our partner ecosystem continues to be a key priority. In Q2, we expanded our relationship with several key cloud providers, including AWS, which is now making our new product bundles aimed at SME/SMB available in its marketplace. Additionally, we entered into a new relationship with a leading global MSSP who chose Qualys over a competing detection-only solution given our ease of orchestration, native integration, and single agent, to simplify its operations and significantly reduce remediation time for its customers. Finally, I’m pleased to highlight that Dino DiMarino has joined Qualys as our new CRO. Dino has an established track record in driving new business development and leading channel partnerships in high-growth SaaS cloud and cybersecurity companies, most recently with Snyk. He will be responsible for all aspects of revenue performance with a focus on delivering sustainable customer value and business outcomes, the leadership of the worldwide sales and partner organization, and accelerating Qualys’ growth with both new and existing customers. Dino has over 20 years of executive sales experience and demonstrated success in bringing out the most in the teams which successfully align sales with the product organization in support of the customer. He shares in our passion for product-led growth and we are looking forward to his contributions at Qualys. In summary, our leadership is a trusted risk management platform of record and strong financial performance stands as a testament to Qualys’ dedication to innovation, protecting customer environments and transforming the value proposition of traditional vulnerability management technologies with cyber risk posture assessment and response prioritization capabilities. With the unique opportunity in this environment, to further strengthen our strategic position as the partner of choice for customers looking to re-architect and consolidate security tools to solve modern security challenges, we believe we can continue to grow long term, maintain best-in-class profitability, and invest in key initiatives as we further extend the gap between Qualys and the competition. With that, I will turn the call over to Joo Mi to discuss in more detail our second quarter results and outlook for the third quarter and the full year 2023.”