Company: QLYS
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001107843-25-000031
Chunk: 265

Company: QUALYS, INC.
Filing Date: 2025-08-05
Form: 10-Q
Item: Part I, Item 2
Chunk 265
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Other Income (Expense), Net

Our other income (expense), net consists primarily of interest and returns from our cash equivalent, short-term and long-term marketable securities, non-marketable securities gains and losses, and foreign exchange gains and losses.

Income Tax Provision

We are subject to federal, state and foreign income taxes for jurisdictions in which we operate, and we use estimates in determining our income tax provision and deferred tax assets. Earnings from our non-U.S. activities are subject to income taxes in the local countries at rates which are generally similar to the U.S. statutory tax rate. We regularly assess the realizability of our net deferred tax assets. As of June 30, 2025, valuation allowances remain in certain jurisdictions where we believe it is necessary to see positive evidence, such as sustained achievement of sufficient profits, to meet a more likely than not stance that the valuation allowance should be reversed. The exact timing and amount of the valuation allowance release is subject to change based on the level of profitability achieved in future periods. Release of the valuation allowance would result in the recognition of deferred tax assets and a corresponding decrease to income tax expense in the period the release is recorded.

On July 4, 2025, the United States enacted tax reform legislation through the One Big Beautiful Bill Act (OBBBA). Included in this legislation are provisions that allow for the immediate expensing of domestic United States research and development expenses, immediate expensing of certain capital expenditures, and other changes to the United States taxation of profits derived from foreign operations. As the legislation was signed into law after the close of our second quarter, the impacts are not included in our operating results for the six months ended June 30, 2025. We continue to evaluate the impact of OBBBA, but currently do not expect it to have a material impact on our estimated annual effective rate in 2025.

Results of Operations

The following table sets forth selected condensed consolidated statements of operations data for each of the periods presented as a percentage of revenues:

Three Months EndedJune 30,Six Months EndedJune 30,2025202420252024Revenues100%100%100%100%Cost of revenues18 18 18 18 Gross profit82 82 82 82 Operating expenses:Research and development18 18 18 19 Sales and marketing22 22 21 21 General and administrative11 10 11 10 Total operating expenses51 50 50 50 Income from operations