Company: QLYS
Filing Date: 2025-11-04
Form Type: 10-Q
Source: 0001107843-25-000038
Chunk: 173

Company: QUALYS, INC.
Filing Date: 2025-11-04
Form: 10-Q
Item: Part I, Item 1
Chunk 173
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 differs from the U.S. statutory rate of 21% primarily due to non-deductible stock-based compensation expense, state taxes, the benefit of U.S. federal income tax credits, enacted tax legislation, and the benefits related to foreign-derived intangible income ("FDII") deduction.

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On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was signed into law. The OBBBA permanently extends and modifies certain domestic and international provisions from the 2017 Tax Cuts and Jobs Act ("TCJA") and phases out certain provisions from the 2022 Inflation Reduction Act. Beginning in 2025, the OBBBA provides an elective deduction for domestic research and development expenses and a reinstatement of elective 100% first-year bonus depreciation. Some international provisions of the OBBBA will not be effective until 2026 and forward. The Company has recognized the effects of the OBBBA provisions in its financial results to the extent they are applicable to the three and nine months ended September 30, 2025. The Company will continue to monitor the impact of the OBBBA and the range of potential outcomes, which will depend on facts in each year and anticipated guidance from the U.S. Department of the Treasury.The Company recorded an income tax provision of $14.9 million and $6.1 million for the three months ended September 30, 2025 and 2024, respectively, resulting in an effective tax rate of 22.9% and 11.7%, respectively. The increase in income tax provision for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, was primarily due to the tax effect of a decrease in the benefit from FDII deduction as a result of the enactment of the OBBBA and a decrease in tax benefits arising from discrete adjustments in the period. The Company recorded an income tax provision of $37.2 million and $26.3 million for the nine months ended September 30, 2025 and 2024, respectively, resulting in an effective tax rate of 20.4% and 16.8%, respectively. The increase in income tax provision for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, was primarily due to the tax effect of a decrease in the benefit from FDII as a result of the enactment of the OBBBA, along with a decrease