Company: QLYS
Filing Date: 2025-05-06
Form Type: 10-Q
Source: 0001107843-25-000017
Chunk: 56

Company: QUALYS, INC.
Filing Date: 2025-05-06
Form: 10-Q
Item: Part I, Item 4
Chunk 56
---
, delay paying their obligations to us, which would increase our credit risk exposure. Our business could be harmed if the financial condition of some of these channel partners substantially weakened and we were unable to timely secure replacement channel partners.

46

A significant portion of our customers, channel partners and employees are located outside of the United States, which subjects us to a number of risks associated with conducting international operations, and if we are unable to successfully manage these risks, our business and operating results could be harmed.

We market and sell subscriptions to our solutions throughout the world and have personnel in many parts of the world. In addition, we have sales offices and research and development facilities outside the United States and we conduct, and expect to continue to conduct, a significant amount of our business with organizations that are located outside the United States, particularly in Europe and Asia. Therefore, we are subject to risks associated with having international sales and worldwide operations, including:

•foreign currency exchange fluctuations;

•trade and foreign exchange restrictions;

•economic or political instability in foreign markets;

•greater difficulty in enforcing contracts, accounts receivable collection and longer collection periods; 

•changes in regulatory requirements;

•tax laws (including U.S. taxes on foreign subsidiaries);

•difficulties and costs of staffing and managing foreign operations;

•the uncertainty and limitation of protection for intellectual property rights in some countries;

•costs of compliance with foreign laws and regulations and the risks and costs of non-compliance with such laws and regulations;

•costs of complying with U.S. laws and regulations for foreign operations, including the Foreign Corrupt Practices Act, import and export control laws, tariffs, trade barriers, economic sanctions and other regulatory or contractual limitations on our ability to sell our solutions in certain foreign markets, and the risks and costs of non-compliance;

•heightened risks of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact financial results and result in restatements of, and irregularities in, financial statements;

•the potential for political unrest, acts of terrorism, hostilities or war;

•management communication and integration problems resulting from cultural differences and geographic dispersion; and

•multiple and possibly overlapping tax structures.

Some of our business partners also have international operations and are subject to the risks described above. Even if we are able to successfully manage the risks of international operations, our business may be adversely affected if our business partners are not able to successfully manage these risks.

Our business, including the sales of subscriptions of our solutions, may be subject to