Company: QLYS
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001107843-25-000031
Chunk: 158

Company: QUALYS, INC.
Filing Date: 2025-08-05
Form: 10-Q
Item: Part I, Item 1
Chunk 158
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 its annual effective tax rate, is subject to variation due to several factors, including variability in pretax income (or loss), the mix of jurisdictions to which such income relates, changes in how the Company does business, tax law developments and possible outcomes of audits. The Company's estimated effective tax rate for the year 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, the impact of mandatory capitalization of research expenses for U.S. tax purposes, and the benefits related to foreign-derived intangible income deduction.

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The Company recorded an income tax provision of $11.5 million and $10.4 million for the three months ended June 30, 2025 and 2024, respectively, resulting in an effective tax rate of 19.6% and 19.2%, respectively. The increase in income tax provision for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, was primarily due to the tax effect of an increase in pretax income and a decrease in excess tax benefits arising from stock-based compensation. The increase in income tax expense was partially offset by an increase in foreign derived intangible income benefit and an increase in research and development tax credit.The Company recorded an income tax provision of $22.3 million and $20.2 million for the six months ended June 30, 2025 and 2024, respectively, resulting in an effective tax rate of 19.0% and 19.5%, respectively. The increase in income tax provision for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, was primarily due to the tax effect of an increase in pretax income and a decrease in excess tax benefits arising from stock-based compensation. The increase in income tax expense was partially offset by an increase in foreign derived intangible income benefit and an increase in research and development tax credit.As of June 30, 2025, the Company had unrecognized tax benefits of $13.2 million, of which $6.0 million, if recognized, would favorably impact the Company's effective tax rate. As of December 31, 2024, the Company had unrecognized tax benefits of $12.1 million, of which $5.3 million, if recognized, would favorably impact the Company's effective tax rate. Due to