Company: QLYS
Filing Date: 2025-05-06
Form Type: 10-Q
Source: 0001107843-25-000017
Chunk: 195

Company: QUALYS, INC.
Filing Date: 2025-05-06
Form: 10-Q
Item: Part I, Item 8
Chunk 195
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 benefit and an increase in research and development tax credit.As of March 31, 2025, the Company had unrecognized tax benefits of $12.7 million, of which $5.7 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 various factors, including uncertainties of administrative and regulatory processes in certain jurisdictions, the timing of the resolution of these unrecognized tax benefits is uncertain. It is reasonably possible that the Company may recognize approximately $1.9 million of its unrecognized tax benefits within the next twelve months if the statutes lapse in certain jurisdictions without an examination. The Company does not believe that its estimates, as otherwise provided for, on such tax positions, will materially increase within the next twelve months.

NOTE 11.                            Segment and Geographic Area Information

Under ASC 280 Segment Reporting, operating segments are defined as components of an entity about which separate financial information is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company operates in one operating segment and has only one reportable segment. The Company’s chief operating decision maker is the Chief Executive Officer, who makes operating decisions, assesses performance and allocates resources on a consolidated basis. All of the Company’s principal operations and decision-making functions are located in the United States.The key measure of segment profit or loss that the CODM uses to allocate resources and in assessing performance is the Company’s consolidated net income, as reported on the Condensed Consolidated Statements of Operations. The CODM uses net income to monitor actual results against budgeted and prior period operating results for the purpose of evaluating operational efficiency, and to evaluate income generated from the assets in making strategic decisions on organizational resource allocation, as well as to benchmark segment performance against industry competitors. The CODM manages the business using consolidated expense information. The following table sets forth the Company's reported segment revenue, segment profit or loss, and significant segment expenses:

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Three Months EndedMarch 31,20252024(in thousands)Revenues$159,899 $145,805 Less: Significant segment expensesCost of revenues (exclusive of stock-based compensation and amortization of intangible assets)26,196 24,431 Research and development (exclusive of stock-based compensation and amortization of intangible assets