Company: QLYS
Filing Date: 2025-11-04
Form Type: 10-Q
Source: 0001107843-25-000038
Chunk: 87

Company: QUALYS, INC.
Filing Date: 2025-11-04
Form: 10-Q
Item: Part II, Item 1A
Chunk 87
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 effectively and our business and financial condition may be harmed.

The IT, security and compliance market is characterized by rapid technological advances, customer price sensitivity, short product and service life cycles, intense competition, changes in customer requirements, frequent new product introductions and enhancements and evolving industry standards and regulatory mandates. Any of these factors could create downward pressure on pricing and gross margins, and could adversely affect our renewal rates, as well as our ability to attract new customers. Our future success will depend on our ability to enhance existing solutions, introduce new solutions on a timely and cost-effective basis, meet changing customer needs, extend our core technology into new applications, and anticipate and respond to emerging standards and business models. We must also continually change and improve our solutions in response to changes in operating systems, application software, computer and communications hardware, networking software, shared cloud platform infrastructures, programming tools and computer language technology.

We may not be able to anticipate future market needs and opportunities or develop enhancements or new solutions to meet such needs or opportunities in a timely manner or at all. The market for cloud solutions for IT, security and compliance continues to evolve, and it is uncertain whether our new solutions will gain market acceptance.

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Our solution enhancements or new solutions could fail to attain sufficient market acceptance for many reasons, including:

•failure to timely meet market demand for product functionality;

•inability to identify and provide intelligence regarding the attacks or techniques used by cyber-attackers;

•inability to inter-operate effectively with the database technologies, file systems or web applications of our prospective customers;

•defects, errors or failures;

•delays in releasing our enhancements or new solutions;

•negative publicity about their performance or effectiveness;

•introduction or anticipated introduction of products by our competitors;

•poor business conditions, causing customers to delay IT, security and compliance purchases;

•easing or changing of external regulations related to IT, security and compliance; and

•reluctance of customers to purchase cloud solutions for IT, security and compliance.

Furthermore, diversifying our solutions and expanding into new IT, security and compliance markets will require significant investment and planning, require that our research and development and sales and marketing organizations develop expertise in these new markets, bring us more directly into competition with IT, security compliance providers that may be better established or have greater resources than we do, require additional investment of time and resources in the development and training of our channel partners and entail significant risk of failure.

If we fail to anticipate market requirements or fail to develop