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. Please be advised that today's conference may be recorded. I would now like to hand the conference over to your host, Blair King, Investor Relations. Please go ahead.

Thank you, Latif and good afternoon and welcome to the Qualys fourth quarter 2021 earnings call. Joining me today to discuss our results are Sumedh Thakar, our President and CEO; and Joo Mi Kim, our CFO. Before we get started, I'd 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 10-Q and 10-K. 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'll 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 all available on the Investor Relations section of our website. So with that, I'd like to turn the call now over to Sumedh.

Thank you, Blair and welcome, everyone, to our fourth quarter earnings call. We are very pleased to report another quarter of strong financial performance, reflecting a year of progress in our efforts of advancing our go-to-market initiatives, significant platform innovation and strong momentum heading into 2022. In Q4, Cloud Agent subscriptions grew 34% year-over-year to $75 million purchased over the last 12 months. There was also a steady adoption of our Vulnerability Management, Detection and Response, or VMDR solution which is now deployed by 36% of our customers worldwide. These results continue to validate our security consolidation approach and the power of single agent as customers increasingly transition to VMDR. Our go-to-market enhancements are starting to yield results as we are executing well to seize on heightened demand trends and opportunities we see in the market. The customer stories I will share with you today not only highlight our growing leadership among large enterprise customers but also the growing desire among CISOs and CIOs to consolidate their security stack and leverage automation in their security and compliance operations to achieve expedient remediation of risk in their organizations. Recent high-profile ransomware attacks and critical vulnerabilities like Log4Shell have highlighted organizations' need for a scalable vulnerability management solution like Qualys VMDR that not only accurately detects these vulnerabilities but also helps reduce exposure time with integrated asset discovery and remediation capabilities. Within days of Apache announcing Log4Shell vulnerability, the Qualys research team, engineering team and product teams released a free 30-day log shell detection and remediation service, leveraging multiple Qualys capabilities like Cybersecurity Asset Management, VMDR, Patch Management and web application scanning. Since the Log4Shell announcement in early December of last year, the Qualys Cloud Platform has detected millions of unique Log4Shell vulnerabilities, underscoring the strategic relevance of our platform in our customer environment. Additionally, given the extensive impact of Log4Shell, our research team released multiple open source tools to help discover and remediate this vulnerability for the global community, further demonstrating both our leadership and commitment to the industry. A few illustrative wins in the quarter include an existing Global Fortune 200 customer in the EMEA region which standardized on Qualys VMDR policy compliance, Patch Management and Asset Inventory Capabilities to cost-effectively consolidate its stack of legacy enterprise security and compliance solutions into a natively integrated platform, linking multiple data center and endpoint environments. In addition, a new Fortune 600 customer selected VMDR and Cybersecurity Asset Management over several competing solutions. The ability to uniquely provide comprehensive asset discovery for security-centric visibility, CMDB synchronization, alerting and accurate response capabilities once again stood out among vulnerability detection-only solutions in the market and was a key differentiator in our win. We believe these new wins and the early success we are experiencing with our newer applications characterized that when customers are ready to rearchitect and consolidate their security stack, Qualys is the best cloud-native multi-solution platform to meet their needs. Looking back at 2021, I believe the Qualys team has responded incredibly well to unexpected challenges and opportunities demonstrating the transformative value of our newer solutions, the depth of our customer relationships and the extraordinary abilities of our global and diverse team. We continue to broaden our platform and grow our business, building a strong team with additions of new executives, including a new CRO, CMO, CPO and CIO. More recently, Bill Berutti joined Qualys Board in December. Bill has extensive go-to-market experience in enterprise software sales and marketing and we believe he will be a great asset to the team as we build out our go-to-market motion in 2022. With this foundation in place, over the next several quarters, we plan to increase our sales and marketing investment with a focus on digital marketing programs to drive pipeline and customer reach, grow our sales team to further leverage our opportunity in the market and expand our channel by recruiting and enabling partners. With respect to platform innovation, our goal is to remove friction for customers while making product expansion simple and hassle-free. A customer, who may currently only use VMDR, should be able to adopt all of our other applications with the click of a button. In 2021, we executed well against this objective while changing the game in security as we brought together asset inventory, risk mitigation and threat detection and response into a natively integrated cloud-based platform. We believe these platform innovations help customers remediate vulnerabilities much faster than alternative siloed detection-only solutions. Further advancing our platform innovation agenda, I am pleased to announce that our Context XDR solution is now generally available. As many of you know, this is a natural extension to the Qualys Cloud platform and our next-generation security analytics and incident response application. Our Context XDR application natively integrates and correlates asset and risk-based vulnerability context, patching, EDR, file integrity monitoring and security telemetry with additional third-party data integration to provide high-fidelity detection and response. Customers are telling us they want a simplified solution for security analytics and response. We believe this solution satisfies that demand as it leverages our scalable backend and its array of sensors which already collect, enrich, normalize and correlate trillions of data points across all environments on a single cloud agent for Qualys customers. While the overall market for this solution is still in the early innings, we are excited about this product and its potential, especially in light of the positive feedback we have received from customers who have been early adopters of our XDR capabilities. Looking ahead to 2022, we plan to maintain a dual innovation strategy. Primarily, we will continue to invest in internal R&D and scale our organization to further differentiate our automation detection and response capabilities and we will further expand our product portfolio into EDR, cloud container security and industrial control system security. Secondarily, making highly targeted and opportunistic acquisitions to enhance our platform and accelerate our time to market. As a reminder, in 2021, we completed the acquisition of TotalCloud to bring visual cloud remediation workflow technology to the Qualys Cloud platform. To further support our growth agenda, we plan to invest more broadly in the business to expand our cloud platform presence and to enhance our business processes, tools and systems to help drive better operational efficiency and business outcomes. In summary, we believe the Qualys Cloud Platform is the go-to solution for agent consolidation, cost savings, increased user productivity and better cyber-protection. We believe we are well positioned to continue our market momentum and expand our leadership as we build out our success, enhance our platform capabilities and further extend our reach into new and adjacent markets. With that, I'll turn the call over to Joo Mi to further discuss our fourth quarter results and outlook for the first quarter and full year 2022.

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 noted otherwise. We're pleased to report continued growth acceleration and strong profitability as reflected in the following financial and operational highlights. Revenues for the fourth quarter of 2021 grew 16% to $109.8 million, up from 13% growth in Q3. While the majority of the beat was due to outperformance in renewal and upsell, with our net dollar expansion rate increasing to 108%, up from 103% last year, a higher-than-expected growth in new business also contributed to the revenue acceleration. With our Q4 LTM calculated current billings growth at 18.5%, up from 16% in Q3 and 13% in Q2, we are entering the year with strong momentum and increased confidence in our ability to drive shareholder value. We believe the investments we've made in platform innovation in a single-agent approach enhance our value proposition with customers and help win new business opportunities throughout the year. This quarter was no different. We're excited by the continued adoption of VMDR, with total customer penetration now at 36%, up from 32% in Q3 and 19% a year ago. Continued adoption of Qualys Solutions increased large customer spend, with over 125 customers now spending $500,000 or more with us. This represents a 17% growth from 2020. We attribute this success to our position as a leading security and compliance cloud-based platform that essentially manages and self-updates allowing our customers to consolidate their stack while helping to build security and compliance into their digital transformation initiatives. Our scalable platform model continues to drive superior margins and significant cash flow. Adjusted EBITDA for the fourth quarter of 2021 was $49.6 million, representing a 45% margin. EPS for the fourth quarter of 2021 was $0.84 and our free cash flow for the fourth quarter of 2021 was $35.5 million, representing a 32% margin. In Q4, we continued to invest the cash we generated from operations back into Qualys, including $4.3 million on capital expenditures and $35.1 million to repurchase 273,000 of our outstanding shares. Looking back on the year, we are proud to have continued our product leadership while growing revenue, earnings and cash flow for shareholders. In 2021, with focused execution, we finally crossed a growth inflection point and started on our journey of revenue acceleration. We operated effectively through the pandemic and management changes in the company to reverse course in delivering better-than-expected results on both new and existing customer experience. Cloud Agent adoption grew over 34% from 56 million Cloud Agent subscriptions a year ago and VMDR now accounts for 46% of total bookings. This is a testament to our success in continuing to build relationships with customers and opportunities ahead to seamlessly cross-sell other Qualys solutions such as Patch Management, Cybersecurity Asset Management, Multi-vector EDR and recently launched XDR. Notably, this was achieved even before a meaningful increase in investment with an EBITDA margin of 46%. The leverage we generate demonstrates the efficiency of our model and gives us confidence in stepping up ongoing investments in the business. Last year, we grew EPS by 12% and generated strong free cash flow, ending the year with a 43% margin and over $500 million of cash, cash equivalents and marketable securities on our balance sheet. This is after returning $130 million of cash to shareholders by repurchasing approximately 1.1 million of shares. Given our highly scalable business model, even with incremental additional investments in 2022, we believe that we will continue to deliver industry-leading margins relative to peers. Shifting now to guidance for 2022. Our success validates our thesis that organizations of all sizes are increasingly looking to consolidate their security stack into a single agent with their solution. With an executive leadership team in place, armed with powerful new cloud platform capabilities, we believe the time is right for us to flip the power of the platform in the market and invest more in the business. Given that, we anticipate operating expenses to increase as we expand our sales organization and our channel efforts, as well as focus on digital marketing and demand generation initiatives. Additionally, as a leading vendor of security and compliance solutions, innovation remains a top priority. So incremental investment in our platform is anticipated to enhance automation and cloud security capabilities for our customers. To support our growth expectations, we expect to make investments in our infrastructure and our people throughout the year. We believe these planned investments will position us to further accelerate our growth and maximize shareholder value. With that framework in line for 2022, we expect full year revenues to be in the range of $482 million to $485 million, which represents a range of 17% to 18% growth. In terms of profitability, we expect full year EPS to be in the range of $2.87 to $2.92. This implies EBITDA margin in the high 30s with higher incremental increase and expense in the second half of the year. For the first quarter, we expect revenues to be in the range of $112.5 million to $113.1 million which represents a range of 16% to 17% growth. We expect EPS to be in the range of $0.80 to $0.82. Our planned capital expenditures in Q1 is approximately $67 million. And for the full year 2022, we expect to invest in the range of $25 million to $30 million. In conclusion, as we enter 2022, we remain excited about our opportunity to drive durable top line growth while leveraging our highly scalable model to maintain industry-leading profitability and margin expansion in the long term.

Our first question comes from Erik Suppiger of JMP. Your line is open.

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

Thank you, Erik. Great question. I think when we look at the work that we have done with our customers over a period of time, I think today, a lot of organizations are dealing with siloed solutions, including a lot of the platforms that are out there are either only focused on threat detection, somewhat focused only on inventory, others maybe on risk mitigation. And so I think where we see really the core advantage that we have and as you saw in the release that we did with ContextXDR is that we believe that we have a platform that is highly scalable with the cloud native platform. But it also brings a lot of the additional context that typically detection-only solutions don't offer where they're mainly focused on correlating logs. So a lot of times, analysts really need to find out the context of the asset, the business context, the criticality, what is the posture of those assets, are they running end-of-life software, etc. And that context is often missing from any of these XDR solutions out there. And so that's why as we work with our customers and we saw the challenges that they are facing, we focused on creating a solution on top of our platform that not only does the log aggregation and does this very natively on our platform, not trying to put together different technologies through acquisition. It's something that we felt like we needed to develop natively on the platform to provide that native correlation, which comes with having a strong inventory capability, strong risk assessment capability, and the ability to patch. Ultimately, what we bring together is various elements of security that CISOs are looking for which is first, knowing what you have; second, finding and remediating your risk; and then third, threat detection and response, all together in a single platform. So that ability for us to not only detect the threat actor and take response using the same agent and platform, while helping to patch things proactively, so you're not getting compromised, is a significant advantage over other solutions or platforms that have cobbled together their solutions through different technologies.

Okay. And Joo Mi, in the past, I think you've given a customer count at the end of the year. Do you have a customer account for 2021?

Yes. Before when we disclosed over 19,000, it actually included three customers. If you look at just our paid customers, it's over 10,000. The growth in the customer base has been in single digits. And so in 2022, our focus and priority is to increase market share and new customer plans and we're planning to do that by increasing our quota carrying sales reps in addition to working on some of the other performance metrics, including the win rates and attainment per rep.

Did you say that historically, it's been growing in the 10% range? Or what was the growth that you said?

It's in the single digits. It's less than 5% for this year.

Okay. All right. Last question. Any updates on your web app security or your cloud container security business? Some of the smaller companies have been showing some good growth in that space. Any updates in terms of your progress on that front?

Yes. I think we continue to see early conversations and adoption of some of these solutions by our existing customers. And I think it really comes down to the same conversation that we have: A lot of the smaller players, they focus only on the cloud aspect of it, when almost all organizations have to deal with a hybrid environment that includes on-prem assets, assets that are remote, and cloud and multi-cloud and container environments. When they are looking for risk, for example, with Log4Shell, they don't want to go to four different solutions, one for the cloud to detect exposure, one for on-prem, and one for endpoint. So we do see that trend continuing with consolidation and providing these capabilities on the same platform, which we plan to enhance in 2022 with additional updates to those products. Customers will be looking for more consolidated visibility rather than having cloud silo, cloud-only solutions and endpoint-only solutions.

Very good. Thank you.

Thank you. Our next question comes from Matt Hedberg of RBC Capital Markets. Your question, please.

It's great to see the revenue growth for 2022 and the positive momentum at the start of the year. Joo Mi, in your prepared remarks, you mentioned that some of the growth may have come before additional sales and marketing spending. I'm curious if that led to any changes in your planned investment areas, or if the areas you targeted were set based on what you observed at the time. How did you decide on the appropriate level of investment?

Yes, it's a great question. With the new executive team in place, we've had some in-depth discussions with the CRO, CMO as well as CPO and other executives to determine the right priorities to focus on and how we can maximize our ROI. For 2022, we have multiple levers we are working on. A key priority is attracting and retaining great talent, which includes our quota carrying sales reps. If you look at our sales and marketing headcount, in 2021, we ended the year slightly over 300, which is single-digit growth over the prior year. We think there is definitely room to increase our sales force, which should help increase our bookings growth, since 60% of our revenue comes from the direct sales force versus 40% from the channel. This hasn't changed. In terms of the magnitude, we are planning to increase investments to the extent possible. We've even increased our recruiting team to ensure that we're taking advantage of the opportunity out there. Given the inflationary pressures many companies are facing, we are fortunate to have a robust business model that allows flexibility to increase spending at this time to not only gain market share but to scale the team and business to target a higher longer-term margin. We believe that, given our business model and strong fundamentals, there is a possibility to get our margins back up to 40% plus in the long term, but this will depend on our ability to accelerate growth momentum.

Okay, great. Given the elevated threat environment, you mentioned the 30-day web application scanning trial around Log4Shell in December in the prepared remarks. Just curious around the reception of that free service that drive new customers and more generally, did Log4Shell benefit the quarter? Does that persist through '22?

Yes, I can take that. As you've seen with some of the services we have released throughout the year with ransomware or even SolarWinds earlier, our focus generally is to create solutions that will help our customer base, existing customers, and other non-customers protect themselves. That's why we also released open source tools this time that were not targeted specifically at our existing customers. Our goal is to showcase the capabilities of the platform and demonstrate how quickly we can spin up a new service. In the case of Log4Shell, we wanted customers to be able to engage with the cloud-based solution, detecting vulnerabilities in a matter of minutes or hours. This generates engagement with various customers and prospects, allowing them to experience Qualys capabilities. While it may not lead to immediate changes in existing solutions or acquiring new solutions, it does create opportunities for engagement, especially when existing products come up for renewal. We look at this more as an engagement strategy that allows us to have multiple points of interaction with customers. Log4Shell highlighted the need for a professional vulnerability management solution. More importantly, it illustrated that customers need not just vulnerability management but also solid asset inventory to track software that contains vulnerabilities like Log4Shell. Overall, our platform serves to not only detect vulnerabilities but also track and manage those assets, patch them, and monitor for threats using our EDR capabilities. I believe the engagement and showcasing multiple capabilities were important.

That's great. Thank you.

Thank you. Our next question comes from Yun Kim of Loop Capital Markets. Your question, please.

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

I think it's a mix of different things. Some customers, as they see the value of VMDR, will increase the licenses for VMDR. Others, as they adopt the agent, see value in the remediation. Some look for patch management while others have compliance requirements and seek file integrity monitoring. I think our advantage is that we have multiple capabilities on the platform, allowing us to meet customers based on their business needs. Each quarter may drive different needs, whether it be patch management or compliance. We look at this more holistically, maintaining our belief that VMDR is a powerful capability. The single agent will lead customers to consolidate their existing toolset. We are encouraged by the initial momentum we are seeing, and will continue to track our customers' needs and ensure our capabilities are available.

Has the timing between the initial upgrade to VMDR and then the additional purchase once they're on the platform shrunk over the nearly two years now? If you look at the cohorts of the first wave of customers who upgraded to VMDR, what is their expansion rate in the second year?

I think we focus on it holistically. There’s nothing material there to discuss right now. However, we continue seeing customer conversations regarding platform consolidation. This drives the desire to move to vulnerability management while allowing future expansion into additional capabilities, which is one of the drivers we’ve identified, and we will keep tracking this.

Yes. To add a bit of color there, you could see that the magnitude and speed of adoption has been much faster than what we anticipated with 36% of our customers now having VMDR. It hasn't been that long since we launched VMDR, and the contribution of VMDR to total bookings is now nearing 50%. Given this holistic assessment, you can see the net dollar expansion rate shared earlier is 108%, up from 103%. This is partially driven by our strategic move in launching VMDR and resonating its value proposition with our customers.

Can you provide insight into how the mix between new and existing customers has trended, especially since the introduction of VMDR?

We're seeing that in 2021, the acceleration in bookings growth translated into revenue growth was primarily driven by existing customers. However, that said, new bookings also exceeded our expectations. We see multiple levers showing that the business is turning around. This is evident in the increase in average deal size for both new and existing customers. Upsell and retention rates are higher for existing customers. Looking ahead to 2022, we think the material impact on our bookings and revenue could be driven by new customer wins. Our investment to increase sales and marketing will support this goal.

Regarding your revenue guidance for fiscal year '22, should we expect fairly linear growth throughout the year compared to the strong sequential ramp in Q4?

Yes. Our revenue growth always lags, so taking a look at our current billings to revenue is a good indicator. For example, last year, we saw current billings trend up from 8% to 13%, 16%, ending the year strong at 18.5%. Meanwhile, revenue growth was 12%, 12%, 13% and 16% respectively, with Q1 guidance at 16% to 17%. We expect this trend and momentum to continue, which implies that our revenue guidance for the full year reflects an acceleration to 17% to 18%.

Thank you. Our next question comes from Andrew Smith of Berenberg Capital. Your line is open.

Hi. Just with regard to the step-up in investments for fiscal year '22 to further that growth. I've heard the comments on increasing quota-carrying reps in digital marketing to drive new sales and I believe you also briefly mentioned investments in the channel, too. Can you just break out how you're thinking about that investment? Is investment in increasing quota-carrying reps a higher priority at the moment than furthering investment into the channel?

Yes. We look at it holistically. We have decided to invest broadly across the board in our people and talent, focusing on sales and marketing. This includes quota-carrying sales personnel, digital marketing, and even investment in product management to support better sales enablement, enhancing productivity for our sales reps. Our overall focus is on acquiring new logos and increasing investment in partnerships as well. We are also investing in solution architects, as customers deploy various solutions, requiring additional technical expertise for proof of concepts and support. It's a comprehensive investment across the company, including R&D and product management to continuously advance our platform with new solutions.

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

Great. Good afternoon. Thank you for taking the question. Maybe Sumedh, I know last quarter you noted a partnership with Red Hat OpenShift. I was wondering how the traction has been with that, particularly given Log4Shell and impact to perhaps some open-source platforms?

I mean, I think if you look at Log4Shell, the detection that we talked about with millions of detections across the board was not consciously limited to OpenShift. However, what it highlighted is that Log4Shell affected not just traditional servers, but endpoints and cloud and container environments where we have that partnership with Red Hat. Customers leveraging that partnership had an enhanced ability to detect Log4Shell in a closed environment like Red Hat OpenShift. However, it impacted multiple infrastructures where we could discover Log4Shell, including containerized environments. This demonstrates the value of our platform bringing together all these different capabilities because those customers running OpenShift were simultaneously trying to assess all endpoints, cloud resources, and everything exposed to Log4Shell. We provided visibility on these in a single unified platform rather than just focusing on one infrastructure aspect.

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

Yes, in terms of free cash flow, we anticipate it will be lower relative to our EBITDA margins for the prior year due to the increase in cash taxes we expect to pay. With that said, we are uncertain about the potential impact of tax reform. This is one lever. Another lever is the new tax legislation that will go into effect in 2022, mandating the calculation of R&D expenses, and we see pressure there as well as the increased CapEx spend, guiding to approximately $25 million to $30 million this year. Obviously, if incremental bookings acceleration comes in, it might put additional pressure on cash flow, but we do see it remaining stable. Overall, we don't foresee a significant change in our billing and deferred revenue growth this year.

Understood. That’s very helpful. Thank you.

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

Hey guys, thanks for taking my question. Before I begin, I wanted to congratulate you, Sumedh, for the momentum that Qualys has achieved over the past year.

Thank you.

So Joo Mi, maybe a question for you. Do you think this is sort of the final reset, if you will, for Qualys in terms of the investment here? Clearly, you've got line of sight now into 20% revenue growth. It seems like you have the sales leadership and strategy here. Do you think this will be the year where margins finally bottom? If so, where do you see them bottoming? I remember last year, you mentioned 40% EBITDA margin was sort of the floor that you were looking at. It seems like this year is going to be lower. Where do you see that bottoming?

Great question. I'm hesitant to pinpoint the bottom and timing of it in light of the current report just came out. Last year, when I spoke about maintaining EBITDA margins above 40%, I don't think any of us expected the inflationary pressures we're observing with our latest CPI report coming in at 7.5%. One thing we are keeping in mind is that we feel we have a very robust, sustainable model. Our guidance implies a wage adjustment given that attracting and retaining top talent is increasingly important. Without these changes in the macroeconomic environment, I believe our guidance would have indicated margins above 40%. We plan to invest in sales, marketing, R&D, and customer support, but we anticipate these investments must provide a strong ROI to justify further acceleration in 2023 and beyond. Currently, our margins may continue in the high 30s, potentially lower, but must make sense for growth.

Understood. As a follow-up, Joo Mi, on your earlier comment about VMDR. So it's almost 50% of your bookings now and you talked about the higher net retention. So, are you in the phase where the customers who may have bought VMDR at a heavily discounted rate or perhaps even bought it for almost free, you're now going back to that renewal base and saying, 'Hey, you found value from the solution, we're now going to true up that price to what the actual value is'?

That's not how we're approaching it, and that's not the discussion we are having with customers. We view it as a partnership and relationship. As they recognize the value, they're now increasing the Cloud Agent deployment and are more prone to purchase additional solutions as well as increase their spend on VMDR itself. If you take a look at our bookings trajectory and revenue guidance, this reflects our current understanding based on anticipated growth.

Thank you.

Thank you. And this concludes today's conference call. Thank you for participating. You may now disconnect.

Thank you all for joining today. I wanted to briefly reiterate that we believe the future of Qualys cybersecurity resides on a single unified platform driven by solutions designed to solve key IT and security and compliance challenges. We're entering 2022 with strong momentum to accelerate growth along with a balanced approach to profitability. We look forward to sharing continued progress in the coming quarters. Thank you.

Goodbye.